upon. Every state seeking admission to the federation must give proof that the people are in control of the government. Shall we demand rigid requirements as to the form of government and set no requirements whatsoever as to moral standard and character? Certainly moral prerequisites are quite as important as political prerequisites. There must be moral likeness as well as political likeness in the members

of the league. This principle would exclude Germany from membership in the league until she has repented of her recent crimes, made reparation, and given evidence of a complete change of mind and heart by discarding her barbarian, pagan moral code, based on such principles as "Might is Right," "Necessity knows no Law," and adopted wholeheartedly the moral code of the civilized world.

By Professor Irving Fisher, Department of Political Economy, Yale University.

IN

N view of the large part played by German economists in laying the foundation of the war by indoctrinating the German people with a predatory economics in which property rights had no existence between states and in which "the German State" was the Hohenzollern dynasty, it clearly behooves us, in this country, to guard against the taint of national aggrandizement. If we contrast German and English economics, we cannot but be struck by the narrowness and selfishness of the former as contrasted with the breadth and liberality of the latter. Even before the war Germany's policy of foreign trade was thoroughly selfish. Transportation and manufacturing interests backed by the German banks and the German army and navy have gone into the foreign markets to expel the com

merce of other countries by fair means or foul.

If, now, at the final peace negotiations, the German style of economics is to dominate, the settlement will degenerate into a race for position "and the Devil take the hindmost." If the Allies should repudiate their own ideas, namely the ideas of international reciprocity in trade relations and of the open door and each should merely seek to secure all it can of territory, colonies, tradeconcessions, exclusive ports, coaling stations, canals, railway routes, and discriminatory tariffs, the peace table will turn into a gamblers' table, at which they will simply deal out the cards for the next great game of war, and, as often happens after a war, the ideas and ideals of the conquered will have made conquest over those of the conquerors.

America has a special opportunity, a special mission, to uphold an humanitarian and democratic eco

nomics. The very fact that Germany once inspired us toward an economics in the service of the State should spur us now to avoid the nationalistic perversions of that idea which befell our German colleagues. Any American economist who hereafter lends his talents to serve and inflame a hoggish chauvinism, is betraying the high ideals and purposes of America in the war. The call of the hour is to be just and generous. The concept of international obligation has been born. Henceforth any international arrangements must find their justification in international fairness, not in unfair national advantage. Whatever "place in the sun" we seek for ourselves we must accord to every other nation, small and great, weak and strong, new and old. The golden rule must be the rule between nations as well as within a nation.

The proposed League of Nations is part and parcel of this great idea of international justice now having its new birth and baptism. Such a league is not only a political necessity as a preventative of war; it is also an economic necessity as a preventative of the economic burdens of

militarism.

Like our own league of forty-eight states, it would obviate the necessity of great armaments. Without such a league we must resume competitive armaments. We must, as our Naval men tell us, compete with England in naval strength. We are confronted by the same dilemma as that with which we are so familiar in business -cut-throat competition or combination. In a word, America must com

pete with other nations in armaments or combine with them. Further competition in armies and navies would mean economic ruin to Europe and great impoverishment to the United States. There are two important special reasons why this would be true. One is that the world, especially Europe, is so nearly exhausted economically that even the old military burdens would now be far harder to bear than before the war. The other is that the renewed competition would be far more costly than the old, since we would start off with all the huge equipment which the war itself has brought. Even the upkeep of that equipment would cost billions for each nation; while its increase, to which every first-class power would have to devote itself, would cost many billions more. This mad race would absorb the economic strength of the world. As economists, our obvious duty to mankind is to help save this needless waste. And the only way to save it is by combination. Without combination we may be sure other countries will build bigger fleets and armaments and if they do, we must. Otherwise we shall have no safeguard against another Kaiser or another Napoleon.

Unless, then, we wish to follow Germany's lead and seek the economic ruin of other nations in order, later, to take possession of them, we cannot do otherwise than, as economists, drop the outworn national economy and support wholeheartedly the new world-economy now proposed by the Economist-President of the United States.

I

AM in full sympathy with the idea of the establishment of a League of Nations, and believe that permanent peace can be secured only through the accomplishment of this end. Such a League, however, will have to be formed gradually, to be tested and modified through experience, and to grow into a formal and well-defined organization through a long period of years. If too much is attempted at the beginning, a League of Nations will be a failure, and the idea will be deferred in its fulfilment for many years to come. As I see it, it would be desirable for the Allied Nations, associating with them as many governments as are ready to confer, to agree to a statement of fundamental principles, and to constitute a Court of Arbitral Justice as is mended in the platform of the World's Court League, and to leave to this court the decision of cases and the formulation of principles for the settlement of international controversies. At the same time, I think some form of commercial union should be established among the nations with a similar plan for the development of rules and principles. If these two agencies for determining international controversies were established, and provision made for a permanent Court of Arbitration, with a special arrangement for the

recom

formation of Commissions of Inquiry when necessary, I believe that most of the difficulties which arise in international affairs could be amicably settled.

The ultimate goal should be an international organization with a definite constitution, and an international legislature formed on a democratic basis with representatives from all of the nations of the League; and finally, a code should be formed in which the fundamental principles of International Law and Diplomacy are definitely and specifically formulated. As the constitution for the League of Nations and the formation of the legislature will take time and careful discussion, it necessary that Courts and Administrative Commissions be established immediately to begin a World Organization while the more definite constitution and political machinery are in the process of formation. The steps as above suggested, might be summarized as follows:

seems

economic and commercial adjust

ments:

War organizations to be continued for economic reconstruction.

For adjustment of tariffs and commercial affairs relating to colonies and undeveloped territories.

3. An International Court for the settlement of disputes, with divisions as follows:

(a) Prize Court Division.
(b) Division for Judicial set-
tlement of International
Controversies.

(c) Court of Arbitration for
matters deemed not judi-
cial in nature.
(d) An arrangement for Com-
missions of Inquiry to in-
vestigate and report on
matters preliminary to the
determination of matters

by the Divisions of the
Court.

4. In order to render the above effective, it will be necessary; first, for the separate nations to agree to support the decisions of the Commissions and the Courts; and second, to bring pressure to bear upon a nation that refuses to abide by such decisions through the breaking of diplomatic relations, through economic reprisals, and, ultimately, if need be, by the use of force through military

channels.

5. Immediate steps for the formation of a constitution for a League

of Nations and the establishment of a legislature to deal constructively with the issues and problems which arise in connection with judicial determinations and with the development of new situations and difficulties.

If those who favor a League of Nations insist upon a formal constitution at the outset, and a full definition of powers, duties, and responsibilities, there will never be an agreement, and a League of Nations will not be established. The Declaration of London was not adopted by the nations, and the International Prize Court was not constituted because of the insistence upon the definition of terms concerning which much controversy prevails. These terms, such as blockade and contraband can only be defined gradually and rendered definite in the settlement of concrete cases. It is very important that too much be not attempted at the beginning and that provisional arrangements be made, subject to modifications and changes as experience may dictate. Judging from the lessons of history and the growth of Courts of Justice along common law lines, it seems that the establishment of commissions and courts with authority to decide cases and to develop rules and principles connected therewith, offers a solution in the determination of international controversies which might serve as a preliminary step to the establishment of a wellorganized World State with the political machinery and the administrative commissions to render such an organization effective.