suspicion. He was absent from the Diocese of Malines, of which he is Archbishop, while the German armies were completing their conquest of Belgium, but on his return he issued on Christmas a pastoral letter in which he makes some suggestions in regard to the condition of his country. He gives a list of thirtynine towns and villages in his diocese which he has visited, and says: "The ruins I beheld were more dreadful than I, prepared by the saddest of forebodings, could have imagined." He gives examples of what he means by this general statement: "At Werchter Wackerzeel, 130 houses left standing out of 380; at Bucken, 20 houses out of 100 left standing; at Schaffen, only 11 houses out of 200 left standing." He reports also that thousands of prisoners have been deported to Germany, 3,100 from one town alone. "Hundreds of innocent victims were shot, men and women, old men and sucklings, rich and poor, in health and sickness; 91 shot at Aerschot and 176 in the villages around Louvain," and he gives the names of 36 priests whom he knows to have been executed by the Germans.

Germany was not slow to make answer to these accusations of cruelties and violations of the laws of war established by the common consent of all nations in The Hague Convention. Her apologies stated, in the first place, that these stories of devastation and cruelty were enormously exaggerated, and, in the second place, that they had never shot civilians and burned their villages unless they or their friends and neighbors had fired upon the German troops. To this charge, that the executed noncombatants in Belgium had been killed as assassins who had fought when they had no right to fight, the Belgians made replies of which the following paragraph, taken from the pastoral letter of Cardinal Mercier, may be considered as a favorable specimen:

Wherever it has been possible I have questioned our people, our clergy, and particularly a considerable number of priests who had been deported to German prisons, but whom a principle of hu

ity to which I gladly render homage

has since set at liberty. While I affirm upon my honor, and I am prepared to assert upon faith of my oath, that until now I have not met a single ecclesiastic who had once incited the civilians to bear arms against the enemy, all have loyally followed the instructions of their Bishops, given in the early days of August, to the effect that they were to use their moral ir.fluence over the civil population so that order might be preserved and military regulations observed. The answer of the German authorities to this and similar statements was that noncombatants who had not fired upon the German troops were also shot as hostages, in order that the threat to shoot similar hostages might prevent German soldiers from being fired upon in other villages. Political

The striking changes in the methods cf government of constitutional countries like England, France, and Italy, which were to be forced upon them by the needs of the situation, did not yet appear in the early months of the war which we are considering. From the days of the Roman Republic until now a democracy engaged in a desperate war has found it necessary to lodge dictatorial powers somewhere. This has finally been brought about in the three countries named by the creation of a small Ministerial committee which is practically told to do anything it thinks necessary to be done.

Germany is so admirably organized for war, and public opinion was so prepared for a complete centralization of authority in the hands of the military authorities in the event of war, that no changes were needed.

In this early period only two things need to be pointed out in regard to the political effects of the war in England and France. First, complete suspension in France of the liberty of the press. This may be looked at on two sides: First, the suppression of all military information on the ground that it might prove of value to the enemy, and, second, suppression of all criticism of the action of the Government. Both of these things were at the beginning carried to

the most exaggerated pitch. All France was kept in absolute ignorance of the great Russian defeat at Tannenberg on the 31st of August, and we in Paris knew nothing of the retreat of the French line before the battle of the Marne until the Germans were at the very gate of Paris and the Government was removing to Bordeaux. Twice during the early days of the war the censor made an effort to prevent the sale of The London Times in Paris, because of editorials in it which seemed to reflect upon the joint action of the French and English Governments. This extreme severity has since been somewhat relaxed, but the liberty of the press remains as much suspended in France as it is in Germany.

In England, on the contrary, the liberty of the press was not suspended. The publication of military information which might be of service to the enemy was, indeed, forbidden, although the public were told very much more about military operations than they were told in France. But to an astonishing degree the expression of opinion remained free. During the months we are considering, a storm of bitter criticism upon the action of the Government and the conduct of the war was appearing in many of the English papers. Even those who advocated an immediate peace and opposed the recruiting of volunteers were granted an astonishing degree of freedom, which they could not have had anywhere else. One day in October I stood in a recruiting meeting in Trafalgar Square. One of the crowd, with the evident intention of discouraging volunteering, disputed the statement of the officer who was addressing the meeting. He said he was himself an ex-officer of the English Army. There was, however, in my mind and in the minds of most of those standing around him a strong suspicion that he was not telling the truth, and he refused to produce his card or other means of identification. A big policeman stood placidly by, and no attempt was made by the crowd to prevent the man from asking his questions. It was a scene which could not be witnessed in war time in any other country in the world, including America.

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Although in France and England before the end of 1914 the Government was not reorganized to meet the conditions of war, the Defense of the Realm act conferred upon the English Government many extra legal powers, and in France the commander of the army was given an entirely free hand by the civil authorities. There is no evidence to suggest that General Joffre had to take into consideration anything but the advice of his fellow-Generals in forming his strategical plans. If it had not been so, it is difficult to see how France could have escaped a second Sedan in the Fall of 1914. From the start he began a very drastic reorganization of the higher ranks of the French Army. A General who showed incompetence was unhesitatingly removed, no matter what his political connections might be, and able Colonels or Brigadiers rose rapidly to the command of armies. In September France was filled with a scandal which the strict censorship kept entirely out of the public press. It was repeated everywhere, with infinite variation,. (whether truly or not I do not know,) that the surrender of one of the great French fortresses, as well as the defeat and rapid retreat of the left and centre of the allied line, were due to the incompetence or the treachery of one of the French Generals. Universal rumor was quite sure that he was either in prison or had been executed by courtmartial. The truth will not be known nor can justice be done to the accused man until after the war, but the entire suppression of a scandal about which there was such intense and widespread wrath is an astonishing proof of the strictness of the French censorship.

The financial expedients for carrying the enormous debt which would be rendered necessary by the war were hardly completed in a final form during the months under consideration, but in November Great Britain issued a loan of £350,000,000 with interest at 3% per cent. and sold it for 95, a prophecy of the astonishing way in which English credit and exchange were to be maintained during the war. But she did not yet begin the policy of heavily increasing taxation

which finally has come to provide 27 per cent. of her annual expense and the interest charges.

Germany also made a highly successful issue in these early months of ten-year 5 per cent. bonds at 972, and sold $824,000,000 worth. And the Finance Minister announced they would not raise the expenses of war by heavy increases in taxation. France, during this early period, borrowed the money she needed from the Bank of France. The smaller nations, like Belgium and Serbia, borrowed from France and England.

It was not very long before most Governments of Europe, including neutrals, began to prohibit the free export of gold and even began to call for gold from their citizens. Germany began this appeal to patriotism through the pocketbook, and during a part of our period citizens turned over to the Imperial Government about $20,000,000 a week.

Neutrals

When the declarations of war between the seven belligerent nations were finished, there were four neutrals in Europe who felt that they might easily be involved in the great conflict. Two of these felt they might become involved in it because they would ultimately take sides in the conflict, and two of them feared they might be compelled to fight in order to keep out of the conflict.

Switzerland, fearing that her valleys might become the highroads for invading armies, at once mobilized her entire fighting force, in the neighborhood of 400,000 men, rushed it to her borders, and has kept it there ever since. The conclusion is forced upon every dispassionate observer that nothing but the existence of this well-drilled and well-equipped citizen army, able instantly to take the field, has saved Switzerland from either being absorbed by conquerors, like Luxemburg, or subjected to the worst horrors of the conflict, like Belgium.

Holland also at once sprang to arms and put on a war footing the comparatively large army which her system of universal military training gave her. The Dutch also prepared by cutting the

which defend more than one-third

of her soil from inundation, to call the ocean to their defense as their ancestors had done against Spain and France in the sixteenth and seventeenth centuries. Almost from the beginning the new Government of Turkey, the Young Turks, made it evident that their sympathies in the struggle were strongly with Germany. The war was a foregone conclusion long before it was declared in November. The French and English at once blockaded the entrance to the Dardanelles and early in November conducted a rather harmless bombardment of the Turkish forts. With the exception of the single submarine venture previously mentioned, no attack was made upon Turkey for the rest of the year.

The position of Italy during these months was a doubtful one. For many years she had been bound by treaty with Austria and Germany in what was known as the Triple Alliance. No one knew anything definite about this treaty, except its existence, for its terms had never been published. The Italian Parliament had never considered the question whether Italy's fate ought to be put in the same boat with that of Austria and Germany; the alliance was in many ways simply a dynastic one, and among large factions of the Italian population exceedingly unpopular. The German and Austrian Emperors evidently expected Italy to join. them in this war because of the existence of the Triple Alliance, but, even if the Government had wished to do so, popular feeling was so strongly against joining Italy's hereditary foe, Austria, in an attack upon her friends, France and England, that it could have been done only with grave risk of a revolution.

Though Italian popular opinion seems to have been entirely against fighting on the side of Germany and Austria, it seems to have been decidedly unready to fight against them. But, as time went on, the papers began to be filled more and more with suggestions that the hour had come for Italy to recover those Italians who were still living under Austrian dominion and to secure her Adriatic littoral, which, from the lack of good harbors, is particularly exposed to attacks from across

the sea. When the Parliament met in December one phrase of the Premier's speech, that "the time has come for Italy to realize her national aspirations," was applauded to the echo. The final action of the Parliament, though somewhat vague, was equivalent to giving orders to the Ministry to spend a thousand million of lire in arming Italy by land and sea, and the commission to act as in its judgment seemed best in order to realize her national aspirations. This permission was plainly extended by implication to action which might possibly be equivalent to an ultimatum to Austria. The Italian Government immediately began secret negotiations with the Austrian Government of which the people had no authentic word until the following May.

The most immediate concern of the United States Government on the outbreak of hostilities was to relieve her citizens who were stranded in various belligerent countries. Paralysis of the banking system of the world left them without sufficient money, and the needs of mobilization suspended for many of them the ordinary means of railroad travel. In addition the great transatlantic passenger fleets of Germany were shut up either in New York or the German harbors, a number of the French and German steamers were taken by the Governments for naval service, and almost everybody wanted to come home at once. The pressure upon the means of ocean transportation was tremendous. By September, however, the embassies and legations throughout Europe had mastered the problem, and before the middle of the month almost all the tourists were out of Switzerland and France and rapidly leaving England, Holland, and Italy.

Almost immediately huge orders for food and munitions of war began to be placed in America by the Entente Allies. So far as these orders related to munitions of war they could not be filled at once because the factories to make them had to be built. In fact, with the single exception of powder, which we were already prepared to make on a large scale, no very large shipments of fighting material were made from America for a year after the first orders were given.

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Late in the Fall of 1915 we had scarcely begun to ship any of the large number of rifles which we had agreed to make for the English Army. But when the war began we were just harvesting the biggest wheat crop in our history. There was a shortage in the European crops, and the entire export stock of Russian wheat was sealed up in Russia. By January, 1915, therefore, the value of our grain export had more than made up the decreases in other exports, so that the month's total was greater than that of the preceding year.

During these early months of the war people expected a large amount of poverty and suffering in America, and it was not clearly foreseen that the enormous rise in the price of all farm products, the huge expansion of our manufactures and export trade, the demand for labor almost entirely wiping out the curse of unemployment, would rapidly lead us into an era of wealth, extravagance, and luxury, in the most terrible contrast with the suffering of Europe.

One part of that suffering of Europe, however, appealed very strongly from the first to the imagination of a portion of the American people. And it was in these months that the American Commission for the Relief of Belgium was formed. Belgium is a very thickly populated country which lives by mining and manufacturing. The stoppage of its food supplies and the cutting off of its raw material exposed millions of its people to starvation. Germany agreed that food might be imported to help the Belgians, and the Allies agreed that food might be sent into the German line for that purpose, provided some neutral nation would see that it was eaten by the Belgians and not by the Germans. The handling of the large sums of money loaned and given for the purpose of Belgian relief and the purchase, transportation, and proper distribution of the food bought with it was put into the hands of the American Commission.

In addition to this work of Belgian relief, American citizens of German birth or descent or sympathies began to form organizations for the aid of the German wounded and destitute. Movements were

also begun which have since established American hospitals for the care of the French wounded, and sent large numbers of American young men abroad to drive the motor ambulances that bring the wounded back from the immediate vicinity of the battle line.

Diplomatic

In the first part of our period there is little to remark. It was quite an ordinary thing that we should take over, as we did, the diplomatic interests of the various belligerents in hostile countries; for example, the interests of England in Berlin and the interests of Germany in London. The position of Minister Whitlock in Belgium was, indeed, a novel one. Although accredited to a conquered country, he was allowed, by the courtesy of the Germans, to remain in Brussels, which put him in a position to be of enormous service to the relief of the Belgian population. At the end of December we addressed to England a formal protest, "with a friendly frankness against interference with our commerce, which seemed to us neither in accord with international law nor necessary for England's self-defense." We pointed out, first, that England had stopped copper on the way to Italy, though Italy had prohibited its export; second, that England had taken ships into port to be searched for contraband; third, that our trade with neutral countries was suffering so much that it threatened the friendly feeling between America and England; fourth, that foodstuffs had been seized on the mere suspicion that they were intended for the use of the German Army.

To this England replied in ten days, concurring cordially "in the principle enunciated by the United States that a belligerent should not interfere with neutral trade any more than necessary to protect the belligerent's national safe

"The note pointed out first the enorincrease in our exports of copper "suspicion that the surplus was

not for neutral countries, but nany. Second, they took ships because they could not search sea, especially since copper and

rubber had been concealed in bales of cotton. In addition, the United States had done the same thing during the civil war. Third, American trade had not suffered, because the total exports from the United States stood at a higher figure than at the corresponding date the year before. So far as foodstuffs designed for neutral points were concerned, England pointed out that in the year 1913 we had exported to Denmark no bacon, no canned beef, and no pickled pork, but during September and October of 1914 we had exported to Denmark more than 24,000,000 pounds of these articles so admirably adapted for army rations; besides, when the whole population was in arms it was hard to distinguish between the army and the civil population.

American Finance

The closing of European Stock Exchanges soon after the beginning of the war had rendered it imperative to close the New York Stock Exchange. Steps were at once taken by leading financiers to maintain the credit of the United States abroad. About $80,000,000 of New York City bonds were about to fall due in London and Paris. How could the gold be provided? The New York banks undertook the task, subscribing for $100,000,000 new bonds of the city. The money was forwarded mainly through the Bank of England's branch in Ottawa.

In the middle of September a loan pool was established in New York, to which banks all over the United States subscribed in the ratio of their cash to make the sum of $100,000,000. These expedients enabled the bankers of the United States to send more than $100,000,000 of gold, through Canada, during the closing months of 1914, to pay the maturing debts of the United States in Europe.

In the end of November it was deemed safe to reopen the New York Stock Exchange for bonds and two weeks later for stocks under certain restrictions. It soon became evident that restrictions were unnecessary, and the United States began to enter upon a period of enormous commercial manufacturing and banking expansion.