Food-lines were as a rule attended by policemen, whose duty it was to maintain order and keep off the human hyenas who were in the habit of loitering about these lines for the purpose of picking out women. That was well enough. But the policeman could not see these women home, nor prevent the man from surveying the crowd, making his selection, and later forcing his attentions upon the woman.
With the need for food and clothing always pressing, the ground was generally well prepared, and the public was inclined to be lenient in such matters anyway—as "war" publics have a knack of doing.
I had scraped up acquaintances with a number of policemen in the district in which I lived. Most of them I had met in connection with my investigation of food-line matters. They were all very fine fellows, and red blood rather than red tape was in their veins. The suffering of the women in the food-lines had made these men more human than is usual in their business.
"Another one of them has gone to the bad," said one of the policemen to me one day, as he pointed out to me discreetly a rather pretty young woman who had come for her ration of potatoes. "A fellow, who seems rather well-to-do,has been trailing her to and from this store for almost two weeks. I had my eye on him, and would have nabbed him quick enough had he ever spoken to the woman while in the line. Well, three days ago I saw the two of them together in the Schwarzenberg Café. The damage is done now, I suppose. You will notice that she has on a new pair of shoes. She must have paid for them at least one hundred and ten crowns."
I suggested that the shoes were not necessarily proof that the woman had done wrong.
"Under the circumstances they are," said the policeman. "Yesterday I managed to talk to the woman. She is the wife of a reservist who is now on the Italian front. The government gives her a subsistence of one hundred and twenty crowns a month. She has no other means. With two little children to take care of, that allowance wouldn't pay for shoes of that sort. It's too bad. She is the second one in this food-line this month who has done that."
Shortly afterward I learned of the case of a woman who had sold herself in order to provide food and fuel for her two children. She was the widow of a reserve officer who had fallen in Galicia. Her own pension amounted to one hundred and ten crowns a month, and for the support of the children she was allowed another one hundred crowns, I believe. The sum was entirely too small to keep the three, being the equivalent of, roughly, twenty-seven dollars, depreciation of the Austro-Hungarian currency considered.At that time life in Vienna was as costly as it is normally in the United States. While her husband had been alive the woman had led a very comfortable life. She had kept a servant and lived in a good apartment in the Third Municipal District. The thing that struck me in her case was that she had not taken the step before. It is extremely difficult to be virtuous on twenty-seven dollars a month when one has not known need before.
The many cases of that sort which I could cite would merely repeat themselves. I will make mention, however, of one which is due to what may be termed the psychology of the mass in war. In this instance it was not want that was responsible. Aggregates involved in war seem to sense instinctively that the violence of arms may draw in its wake social dissolution. The pathology of society is affected by that in much the same manner as is evident in other organisms when a change is imminent or pending. A period of relaxation sets in, which in the case of the human aggregate manifests itself in sexual looseness.
In various parts of Serbia I had had occasion to notice that the women gave themselves readily to the invading soldiers. In the Austrian capital I ran into the same thing, though there was at that time no danger of invasion.
Time lying heavy on my hands when I was not at a front, or occupied with some political situation in one of the Central European seats of government, I decided to pass some of it by takingpiano lessons. I made the necessary arrangements with a master of the instrument near the Kärntner Ring. On the three half-hours a week which I took from themaestroI was preceded on two by a pretty young woman greatly gifted musically. Her parents were well off, so that it was not a question of getting a "good time" in the only manner possible.
After a while the young woman failed to appear for her lessons. TheTonmeisterwanted to know the reason for this. Confused and conflicting answers being all he received, he made up his mind that something was wrong. The poor old man had dealt with nothing but music all his life, and was delightfully ignorant of the ways of the world. He asked my advice. Should he inform the parents of the student?
After I had ascertained that his responsibility as teacher was not weighted by friendship or even acquaintance with the girl's family, I suggested that he confine himself to his proper province by notifying the student that failure in the future to put in appearance at her hour would result in a report of that and past delinquencies to the parents.
A very emotional interview between teacher and student resulted. By this time the girl had realized the folly of her conduct and seemed truly repentant. Being much attached to the old teacher, she made a clean breast of it. Her excuse was most interesting.
"You see, dear master," she said, "these are war times. I thought that it wouldn't mattermuch. If the Russians came to Vienna it might happen anyway."
There is used in the German army a word that comprises every rule of sex conduct to which the soldier is subject, or ought to be—Manneszucht—the moral discipline of the man. Infraction of this rule is severely punished in all cases, though the ordinary soldier may under it cohabit with a woman by her consent. To the officer this privilege is not given, however, it being assumed that as the instrument of military discipline he must be proof against many demands of nature and be in full control of himself at all times. The German officer who would violate a woman in an occupied territory fares badly, and the code forbids that he enter into liaison with a woman of the enemy. Nor may he visit the army brothels which now and then are established by the authorities.
I do not mean to infer that the German army officer always and invariably adheres to these rules. But he does this generally. The abstinence thus practised reflects itself in that unqualified devotion to duty for which the German officer is deservedly famous. It tends to make of him, for military purposes, a sort of superman. He comes to regard the curb he sets upon himself as entitling him to despise the weaklings who satisfy their desires. In the course of time he extended the fine contempt that comes from this to his allied brothers-in-arms in Austria and Hungary, who were deplorably lax in that respect, despite the regulations.
Though I do not especially deal with the latter subject, I must mention it here as a preamble to a certain experience I had one night in Trieste. The experience, on the other hand, showed to what extent war may influence the conduct of men whose station and opportunities might cause one to believe that they were above surrendering to sexual laxness.
In the "Hall" of the Hotel Excelsior of Trieste were sitting at café tables some sixty Austro-Hungarian officers from the Isonzo front who on that day had been furloughed from the trenches for a certain purpose. At the tables sat also a fourscore of women who for the time being were the sweethearts of the officers. High revelry was on. The windows of the room, with all others along the Trieste water-front, had been well blinded, so that no beam of light fell into the inky blackness without through which a fierceborea—northern wind—was just then driving a veritable deluge.
The room was well heated and lighted. I had on that very day walked off a sector on the Carso plateau, and found a most pleasant contrast between the cold and muddy trenches and the "Hall." It was exceedingly snug in the place. And there was the inevitable gipsy music.
Across the bay, from Montfalcone, came the sound of an Italian night drumfire, and in the room popped the bottle of Paluguay champagne—the French products being just then hard to get.
There were three other war correspondentsin the party. An Austrian general-staff man was in charge. The officer was of the strait-laced sort and did not sanction the conduct of his colleagues. But then he was at headquarters at Adelsberg and could go to Vienna almost as often as he liked. The others were poor devils who had been sitting in the Carso trenches for months and had now come to Trieste to have a good time, even if that meant that next morning the pay of several months would be in the pocket of the hotel manager and in the hands of some good-looking Italo-Croat woman.
It was not long before we had at our table some of the "ladies." One of the war correspondents had taken it upon himself to provide us with company. From that company I learned what the frame of mind of the officers was. After all, that attitude was simple enough. Each day might be the last, and why not enjoy life to-day when to-morrow there might be a burial without coffin, without anything except the regrets of comrades? What was etiquette under such circumstances? The champagne helped them to forget, and the women, though their conversation might be discouragingly banal, were, after all, members of the other sex. One of the women was able to take a very intelligent survey of the situation. She was capable of sensing real sympathy for these men. I learned that she had lost her husband in the war. It was the same old story. She had found the small pension for herself and the allowance for her boy entirely insufficient, was not minded to do poorlypaid hard work, and had concluded that it was easy for the well-to-do to be decent. The poor had to do the best they could in these days of high prices.
Out on the Carso the bombardment progressed, satisfactorily, I presume, as the next officialcommuniquéof the Italian government would say. The champagne bottles continued to pop. Men and women drank to one another's good health, the former oblivious, for the time being, that this might be the last good time they would ever enjoy.
It strikes me that not much fault can be found with this, so long as we are human enough to allow those whom we are about to execute for the commission of some crime to choose their last breakfast—or is it supper? To be detailed into the advanced trenches was generally no better than to be sentenced to death.
Only those who have been constantly threatened by the dangers of war can realize what state of mind these men were in. Nothing mattered any more, and, nothing being really important, the pleasures of the flesh were everything. It was so with the little music student I have mentioned. I could not reach a harsh judgment in either case, despite the picture of PrussianManneszuchtbefore my eyes. At the same time, I am not ignorant of the fact that sleek communities living in peace and plenty cannot be expected to understand the moral disintegration which the dangers of war had wrought in this instance.
I made the acquaintance of similar conditions in Berlin and other cities of the Central states. Being a matter-of-fact individual, I cannot say that they shocked me. The relations of cause and effect cannot be explained away, much as we may wish to do it. With some fourteen million men taken away from their families, whose sole support they were in the vast majority of cases, nothing else was to be expected. It speaks well for mankind in general that the resulting conditions were not worse. The responsibility involved falls rather upon those who brought on the war than upon the men and women who transgressed.
And that responsibility was not shirked in the Central states. Before the war broke out there had already been held very liberal views on illegitimacy. The children of Hagar were no longer ostracized by the public, as, for instance, they are in the United States and other countries where social "justice" is still visited upon those whose misfortune it is to have been born out of wedlock. In Germany and Austria-Hungary it was held that a man is a man for all that.
Small wonder, then, that during the winter of 1916, when the crop of "war" babies was unusually large—formed, in fact, more than 10 per cent. of the increase in population—the several Central European governments should decide to give such children and their mothers the allowances provided for the wives and widows of soldiers and their children. The German state governments, that of Prussia excepted, alsoabolished the "illegitimate" birth certificate and gave the unwed soldier wife or widow the right to use the designationFrau—Mistress—instead of, as heretofore,Fräulein, or Miss.
This measure was a fine example of humaneness, seeing that otherwise many thousands of mothers of "war" babies would have been obliged to go through life with the stigma of illegitimacy branding both woman and child. It is somewhat typical of Prussia that its government should be willing to support illegitimate "war" babies and their mothers and yet deny them the comforts of social recognition, when their number was no less than two hundred thousand.
There came up, in connection with this legislation, the question of whether the offspring of unmarried women whose paramours were not in the military service should receive the same liberal treatment. A great deal of opposition was voiced by the clergy and other conservative elements. It was argued that extension of this benefit to all would encourage a general recourse to free love.
But the legislators and governments were less short-sighted. The legitimizing acts were so framed that they included all children, no matter who their fathers were. It was held that it would be absurd to expect the millions of women whom the war had robbed of their husbands, or the chance of getting one, to lead a life of celibacy. Nature would assert itself, and if the subject was not now dealt with in a rational manner, itwould have to be disposed of later when conditions might be less favorable.
There were certain examples to be recalled. At the conclusion of the Thirty Years' War the South German states, being the hardest hit in losses of male population, adopted laws according to which any man with the necessary means could legitimately admit into his house as many women as he cared to support. Though well-intentioned, the law shared every defect which emergency legislation is apt to be afflicted with. The men able to support more than one wife were generally advanced in years, so that the very condition which the state had hoped to meet gave rise to chaos. It had not been the intention to afford the pleasures of the seraglio to the wealthy, but to take the best possible account of a social emergency.
This was borne in mind when the Central states governments dealt with a similar condition in 1916, the factors of which were these: There had been killed in action, crippled for life, and incapacitated by disease nearly five million men who had gone to the fronts in the very prime of life. That meant a serious loss to a community—considering Germany and Austria-Hungary a single unit in this respect—which then had approximately twenty million women in the state of puberty. Reduced to statistics, the situation was that there were only four men of marriageable age for every five women. It was estimated at the time that before the war was over these odds would go to three to five. Recent casualtystatistics show that this stage has been nearly reached.
I must make reference here to the fact that the normal and healthy woman finds life with the physically impaired man a torture. A good many cases of that sort have come to my attention. One of them is so typical of all others that I will give its details.
At a certain Berlin drawing-room I made the acquaintance of a charming young woman of the better class. I may say that she is a writer of considerable merit.
A few months before the outbreak of the war she had married a professional man of quality. When the mobilization came he was drafted as an officer of the reserve.
For months at a time the two did not see each other, and when finally the man returned home for good one leg had been amputated at the knee and the other a little above the ankle. The woman did what most women would do under the circumstances. She received the man with open arms and nursed him back to complete recovery.
Soon it was evident that all was not well with the relations of the two. The woman tried to forget that her husband was a cripple for life. But the harder she tried the more grew a feeling of repulsion for the man. Finally, she decided to live alone.
It would be very simple to label the woman a heartless creature. But it would be quite as unjust. The foes of even that small portion ofrealism which the most logical of us are able to identify may be inclined to take the stand that sex has little to do with what is called love. And yet in the healthy race it forms the socialforce majeure. It is not for me to decide whether the woman in question did well in leaving the man. After all, that is her own affair—so much more her own affair since the man, as yet not reconciled to his great misfortune, began to plague her with most vicious outbreaks of jealousy, when as yet he had no reason for it.
The man is to be pitied by all, and unless he is able to calm his mind with the solace that comes from philosophical temperament, it would have been far better were he among the dead. He may in the end find another mate; but, seen from the angle of natural law, it must be doubted that the pity, which would have to be the great factor in such a love, would in any degree be as valuable as the sexual instinct which caused the other woman to go her own ways. Idealism and practice are always two different things. The former is the star that guides the craft, while practice is the storm-tossed sea.
More than fifty thousand Russian prisoners-of-war petitioned the Austrian government to be admitted to citizenship in the country that held them captive. Many of these men had been sent into the rural districts to assist the farmers. Others were busy around the cities. They had come to be reconciled with their lot, had acquired a fair working knowledge of the language, and association with the women had led to theusual results. The crop of "war" babies increased.
The Russians were willing to marry these women, but under the law could not do so. Hence the petition for admission to the usual civil rights. The Austrian government recognized the situation, but in the absence of the necessary legislative authority could do nothing to admit the Russian to AustrianStaatsangehörigkeit. Yet it was eager to do that. The new blood was needed.
Travel about the country has often brought to my attention that in certain districts intermarriage for centuries had led to degeneration. Goiter, one of the first signals of warning that new blood must be infused in the race, was prevalent. Scientists had drawn attention to this long before the war. But there was nothing that could be done.
The Russian prisoners-of-war came to serve as the solution of the problem. Their offspring were unusually robust, and some cranium measurements that were made showed that the children were of the best type mentally.
A state which was losing men at a frightful rate every day could not be expected to view this increase in population with alarm. So long as the mothers were Austrian all was well from the political point of view, since it is the mother usually who rears the patriot. The Russians, moreover, soon grew fond of the institutions of Austria, and gave return to their own people hardly any thought. Conversation with manyof them demonstrated that, on the contrary, they were not anxious to go home. Russia was then still the absolute autocracy, and these men were not minded to exchange the liberal government of Austria for the despotism they knew.
I may state here that the Austrian government, serving in this instance as the example of all others in Central Europe, had done its level best to promote this very thing. On several trips to prison camps I visited the schools in which the Russian prisoners were being taught German. Thousands of the men were thus given their first chance to read and write, and to the more intelligent was apparent the irony of fate that caused them to read and write German instead of their own language. No more deliberate attempt to win friends could have been devised and executed. Small wonder that on one occasion a Russian working detachment employed in road-making on the Italian front rushed to the assistance of the Austrians who were being overwhelmed, and cut down the last of their allies with their spades and picks.
To what extent Russian blood has been infused in the rural population of Austria and Hungary is at present entirely a matter of conjecture. The same applies to Germany, though I must state that in this case the number cannot be so great.
Dreary as the picture is, it is not without its brighter spots. The mixture of blood which has occurred in many of these countries will improve the human stock. And who would careto gainsay that governments are not in the habit of looking at populations from that angle—the angle of stock? None will admit it, of course, they may not even be conscious of the fact that they hold this view. But so long as governments are interested more in quantity than in quality of propagation they cannot easily clear themselves of the suspicion. I am not at all sure that it is not better thus.
I have so far treated the post-bellum aspect of sex morality entirely from the position of the man. Women will ask the question: What do the women think of it?
That depends somewhat on conditions and circumstances.
"When one is forty, one is satisfied with beingmadame," said a Hungarian lady to me once, when the subject had been discussed. She meant that the woman of forty was content with being the head of a household.
Such an attitude takes a breadth of view altogether unknown in the Anglo-Saxon world. I found it often in Central Europe, especially in Austria, where one day were pointed out to me two couples who not so very long before had changed mates by mutual consent on the part of all four concerned. One of the husbands is a rich banker, and the other, his best friend by the way, is also well off. The double pair go to the same café, sit at the same table, and their friends think nothing of it. They are regularly divorced and married, of course.
While elsewhere in Central Europe the sameeasy view is not taken, it is a fact, nevertheless, that nowhere much puritanical strait-lacedness is to be encountered. I happen to know a certain successful diplomat who closed both eyes to his wife's infatuation for a young naval officer. The wife was young and her husband was past middle age. Rather than lose the woman and have a scandal besides, the diplomatist applied to himself what he had so often applied to others—the deception there is in self-restraint.
The three of them got along well together. Often I was the fourth at table. While the diplomatist and I would smoke our cigars and sip our coffee, the two would sit side by side on the ottoman and hold intimate converse. But in Europe it is considered tactless to speak of such matters.
There will be heartache, of course. Many a good woman will find herself displaced by a younger one. But that will not be without some compensation. The husband who would desert his mate because the charms of youth have flown may not be worth keeping. It may even be an act of mercy that he has rekindled his affection at some other shrine. The forsaken wife may have grown very weary herself of the life conjugal.
In Protestant Germany the readjustment will be easier than in Catholic Austria and Hungary. In the latter countries much double-living will result, and that means that more women will have to sacrifice more self-respect. That is the worst part of it.
But, again, thelégèreviews of Central Europe come into play. So long as the man has sense enough to keep his "war" wife in the background, nobody will take offense, and the legal wife may not mind. Officially, the paramour will not exist. As soon as she has children she will be a "Mrs." in her own right, and I suppose that many will not wait that long before changing "Fräulein" into "Frau."
There is no doubt that the condition is unjust to two women at the same time. But there seems to be no escape from it. Ministers of the gospel have already roundly condemned what seeming sanction the government has given to illicit intercourse. But these good men are theorists, while the government is practical—practical for the reason that a great social problem has to be met in the best manner possible. It is far better to give the thing such aspects of decency as is possible rather than to encourage the growth of the social evil into proportions that might for all time impair the health of the race. Students of the social evil generally agree, throughout Europe at least, that its prime causes are economic. Communities in which the man, by reason of small income, is not able to establish a household early in life have not only the greatest number of loose women, but also the greatest number of free-living bachelors.
The problem, then, has an economic side. In the instance here under scrutiny, the economic side is that more women than ever before must earn their own living in Central Europe to-day.The women will readily do that, so long as society will not entirely deny them the company of the man or place upon such company the stigma that generally attaches to it. Without such privileges many of these women—nature decrees ironically that they should be physically the best of the race—would take to vice in such numbers that society would lose more by being ungenerous than by taking a common-sense view of the problem it has to face.
But logic in such matters is no balm of Gilead. The young married woman will be able to compete with the "surplus"; the older ones, I fear, will not. To them the war will be the thing of the hour, long after the grass has grown over the trenches, long after the work of reconstruction shall have healed the economic wounds.
There will be many who can truly say, "I lost my husband in the war." And the worst of it is that they will not be able to say this with the tenderness that was in the heart at the departure for the field of battle.
During the last three years and a half the political economy of Germany and her allies has strongly resembled that in vogue among certain South Sea Islanders, who are supposed to make a living by taking in one another's washing. The same money has been making the rounds on one of the oddest economic whirligigs mankind has so far seen.
The war has been carried on by means of funds derived mostly from war loans. By means of them Germany has so far raised, roughly, $19,800,000,000, and Austria-Hungary $8,600,000,000, making a total of $28,400,000,000. In addition to that the two countries have spent on the war about $2,300,000,000 derived from other sources—taxation, indemnities levied in occupied territories, and property here and there confiscated.
Within my scope, however, lie only the war loans.
The interest on the German war loans so far made amounts to $762,000,000 per year. To the German public debts the loans have added $293per capita, or $1,082 for each producer in a population which the war has reduced to about 67,500,000 fit individuals. Each wage-earner in Germany will in the future carry a tax burden which in addition to all other moneys needed by the government will be weighted every year by $43.28 interest on the present war loans.
Austria-Hungary's load of interest on war loans will amount to $344,000,000 annually. The burden is $204 per capita, or $816 for each wage-earner, out of a population which war losses have cut down to about 42,200,000. The annual interest each Austro-Hungarian breadwinner will have to pay on the war loans is $32.64, and in addition he must provide the revenues which his governments will need to operate.
This means, of course, that the cry for bread will be heard long after the guns thunder no more. It must be borne in mind that the average yearly income of the wage-earner was a scant $460 in Germany, and $390 in Austria-Hungary. The war loan interest so far in sight will constitute about 9.3 per cent. and 8.2 per cent. respectively—no small burden when it is considered that all other revenues needed by the government must be added to this.
But the bitter cup of economic losses due to the war is by no means full with these figures. The Germans have so far lost, killed in action and dead of wounds, fully 1,500,000 able-bodied producers, and have at this time to care for about 900,000 men, of whom one half is totally incapacitated and the other half partly so. TheAustro-Hungarian figures are 650,000 men dead, and 380,000 totally or partly crippled. In other words, Germany has lost 2,300,000 able-bodied men, and Austria-Hungary 1,030,000. It may well be said that those dead can no longer figure in the economic scheme, because they consume no longer. On the other hand, each of these men had another twenty years of useful life before him. This long period of production has now been lost, and two decades must elapse before the Central states will again have as many producers as they had in 1914. Their propagation has also been lost, though, with the women as strong numerically as before, this loss will probably have been made good within ten years.
Before treating further of the effects of war loans and their influence upon the body politic, I will examine here how these loans were made, in what manner they were applied, and what the system of economy was to which the transaction gave birth.
The figures I have cited may well suggest the question:
How was it possible under such conditions to make war loans?
The superficial reply to that would be:
By raising the money in the country—inducing the people to subscribe to the loans.
The reply has no value, since it does not disclose how the necessary money was made available. The funds invested in the war loans were a part of the national capital, not a portion ofthe national wealth, the term wealth standing for the natural resources of a community. But capital is the surplus of production, and production results only from applying labor to natural resources; for instance, by tilling the soil, mining coal and ore, and engaging in the conversion of the less useful into the more useful, as is done in industry. A surplus of production is possible only, however, when consumption falls below production, for that which is left over of the thing produced makes the surplus. This surplus is capital.
Incomplete figures which I was able to gather in 1916 showed that before the war the average wage-earner of Central Europe had produced and consumed in a ratio of 55 against 48, so far as the scale of pay and cost-of-living showed. The difference of 7 points represented the amount of money he could save if he wanted to do that. The 7 points, then, were the actual increase in the national capital.
In the winter of 1916-17 the figures had undergone a remarkable change. Wages had been increased to 70 points, while the cost of food had risen to 115 points as against 48 formerly. In other words, while the wage-earner was getting 15 points more for his labor, he was paying 67 points more for his food and the necessities of life. The place of the 7 positives in capital production had been taken by 45 negatives, which meant that the national capital of Central Europe had fallen below static, the point where neither increase nor reduction takesplace, by 38 points. The national capital had been decreased 38 per cent., therefore. That much of all present and former surplus production of the two states had been used up in the pursuit of the war.
Governments deem it a safe policy to issue in times of financial stress three times as much paper currency as they have bullion in the vaults. One million in gold makes three millions in paper with that formula. This had been done in Germany and Austria-Hungary to quite an extent by the end of 1916. For every million of gold in the vaults there was a million ofbona fidepaper money. That was well enough. The currency system of the United States adheres to that principle in times of peace even. But upon the same million of metal there had been heaped other paper currency which carried the promise of the government that on the given date it would be redeemed for gold or its equivalent. This method of national finance is known as inflation. It was this inflation that caused the wage-earner to show in his own little budget a deficit of 38 points.
Why the government should have inflated its currency in that manner is not so difficult to understand as it may seem. From its own point of view, the wage-earner had to be lashed into greater effort if the moneys needed for the war were to be available and if the food and material consumed by the army were to be produced. The more the consumer had to pay for what he required to sustain life the harder he had to work. His deficit of 38 points was the yokeunder which he labored for the army in the field, which was consuming without producing anything. These 38 points were only 17 points less than the 55 which had represented his income before the war—in round terms every two wage-earners in Central Europe were supporting in food, clothing, munition, and ammunition a soldier at the front. It could not be otherwise since two political aggregates having then approximately, with the women included, twenty-five million wage-earners, were keeping under arms about ten million soldiers, and were meanwhile providing the heavy profits made by the war purveyors.
Though the 38 points were a deficit, the producer-consumer was not allowed to look at them in that manner. It was his task to cover this deficit. This he did by paying more for his food and necessities, through a channel which the inflated currency had filled with water in the familiar stock-jobbing phrase. The middlemen who owned the barges in the channel were taxed by the government on their war profits, but enough was left them to preserve interest in the scheme of war economy, a friendly act which the middlemen reciprocated by generous subscriptions to the war loans.
The first, second, and third war loans in Central Europe were subscribed to with much, though later dwindling, enthusiasm. Patriotism had a great deal to do with their success. Real money was required by the government, moreover. Bank accounts, government securities,sound commercial paper, and savings deposits were turned over. The loans made later were devoid of many of these features. Those who bought war-loan certificates did so because it was necessary for one reason or another, and many of the war bonds obtained in the first loans were converted. The war and all that pertained to it was now entirely a matter of business with those who could subscribe. The poor were tired of any aspect of war.
The government could not prevent their being tired, but it could see to it that indirectly the masses supported the war policy, no matter what they thought. That was not difficult. The high cost of living took from the producer-consumer what the government needed, and there is no system of discipline that is quite so efficacious as keeping a man's nose to the grindstone.
Sleek bankers used to inform me that there was much prosperity in the country. There was from their point of view. The margin between the wages paid the producer and the prices asked of the consumer was great enough to satisfy the interested parties, government and middleman alike. The war loans had hardly been closed when a good share of them was again in circulation. The whirligig of war economy was spinning lustily, and there was no danger of things going wrong so long as the producer-consumer was kept well in hand.
How the war loans made the rounds is quite interesting. It is the closest approach to perpetual motion I have come across.
Since the Central states could buy in foreign countries only by means of special trade agreements that called for an exchange in commodities rather than for the medium of exchange, the money raised by the war loans remained within the realm. Much of it went to makers of arms and ammunition, of course. In their case a million marks—I am using this small amount as a unit only—would lead to the following results: To the manufacturer would go 60 per cent. of the total and to labor 40. Subdivided these shares paid for raw material, plant investment, operation expenses, and profits so large that the government could impose a tax of 75 per cent. without making it impossible for the manufacturer to subscribe to the next loan. Labor, on the other hand, found itself barely able to sustain life, and if a few marks were saved by some, little or nothing could be bought for them. The man who was earning 70 marks a week, instead of 55, was paying for his food and necessities 115 instead of 48 marks—an economic incongruity at first glance, but perfectly feasible so long as those affected could be induced to live on about 85 per cent. of the ration needed to properly nourish the body, and had given up entirely the comforts of life. That scheme left him hope for better times as the only comfort. No matter how often the money of the war loans rushed through his hands, none of it ever stuck to them.
Before long it was plain that in this fashion the Central Powers could keep up the war forever. Their financial standing in foreign countries neednot worry them so long as they could not buy commodities in them. To be sure, the public debt was increasing rapidly, but the very people to whom the government owed money were responsible for that money. If bankruptcy came to the state they would be the losers, and that responsibility increased as their wealth increased. Capital and government became a co-operative organization, and both of them exploited the producer-consumer, by giving him as little for his labor as he would take and charging him as much for the necessities of life as he would stand for—and that was much. When now and then it seemed necessary to placate the producer-consumer, he would be told that in the interest of the Fatherland the government was compelled to do what it did. But the necessity for this came not often. The small man was generally overjoyed when the government was able to announce that the war loan had been a success or had been over-subscribed. That is all he wanted to know, so long as he was not required to go to the front. The success of the war loan meant that he would have work—and live to see the end of a war which everybody claimed had been forced upon the state.
It is certain that the Central states governments would have been bankrupt long ago had they been able to buy in the foreign marketad libitum, though in that case the foreign trade connections would have also seen to it that war loans were made to the Germans and Austro-Hungarians. There is no doubt at all thata Germany permitted to buy abroad would have later been less able to organize herself as efficiently economically as she did when her financial strength was still unimpaired for internal purposes. To this extent the swift descent of the British blockade is one of the gravest errors booked on the debit side of the Entente's politico-military ledger. Absolutely nothing was gained in a military sense by shutting the import door of the Central states. Far-seeing statesmen would have allowed Germany to import all she wanted and would then have seen to it that her exports were kept to a minimum, so far as the shortage of man-power in the country did not automatically bring about that result.
As it was, the Central states supplanted and substituted right and left, made new uses of their own natural resources, and fitted themselves for the long siege at a time when doing that was still easy. The British blockade, if applied in the winter of 1915-16, would have had effects it could not hope to attain in the winter of 1914-15, when almost any rational being knew that to starve out the Central states was not to be thought of. The Central states would have continued to live very much as before, and by the end of 1915 the governments would have been obliged to shut down on imports of food for the civilian population if the gold reserve was not to be exhausted completely, as would have been the case if exports could not balance imports to any extent. Production and consumption would then not have been as well organized as theywere under the auspices of the premature blockade, and the downfall for which the Entente has until now vainly hoped, and which will remain the greatestspes fallaxof all time, would then have surely come. That bolt was shot too soon by Great Britain.
Though the Central governments were fully aware of this, as some of their officials admitted to me, they had no reason to bring this to the attention of their publics or the world. The BritishAushungerungspolitik—policy of starvation—was the most potent argument the Central governments had to present to their war-tired people. What the German air raids on London accomplished in promoting the British war spirit the blockade of the Central states effected in the German Empire and Austria-Hungary. In a war of such dimensions it was foolish to thus drive the governed into the arms of their governors.
The financial condition of the Central European states to-day is as sound as that of the Entente states. That would not be true if any great share of the Central European war loans had been raised in foreign countries. But, as I have shown, this was not done.
That the war debt is great is a fact. The government's creditors are all in the country, however, and if need be it can set against them the tax-tired multitude. For that there will be no necessity. The depreciation of the currency has automatically reduced by as much as 25 per cent. on an average all state indebtedness, in so far as capital is a lien against the community's naturalresources and labor. But of this more will be said at the proper time.
Early in the summer of 1917 the German and Austro-Hungarian governments were occupied with the question to what extent it would be possible to lighten the burden of the taxpayer. Nothing came of it for the reason that finally it was concluded that the time for financial reorganization was not yet come. Inflated money and high prices would still have to be used to keep the producer at maximum effort and prevent his consuming more than could be permitted.
But the methods of financial reorganization, or we may call it reconstruction, that were discussed are none the less interesting. They involved a reduction of the interest which the government has to pay on war loans, as well as a lightening of the war-loan burden. It was tentatively proposed to either cut into half the rate of interest or to reduce by one-half the principal.
One would think that the Central European bankers would oppose such a step. They did not, however. For the sake of pre-war loans and investments, these men must favor a rehabilitation of the currency, and nothing would do that as effectively as a reduction of the war debt. The mark and crown buy to-day from one-third to one-half what they bought in 1914. With the war debt cut down to one-half they would buy from 60 to 75 per cent. what they bought in that year. As a measure of socio-economic justice, if there be such a thing, the reconstruction proposed would appeal to all who invested moneybefore the outbreak of the war. These people put up money at the rate of 100, while the interest they are getting to-day is worth from 33 to 50. The man who in 1914 invested 100,000 marks would indeed get back 100,000 marks. The trouble is that the mark has depreciated in purchasing power, so that his capital has shrunk to 33,000 or 50,000 marks, as the case may be.
War does not only mortgage the future of a nation, but it also has the knack of tearing down the past.
Tired of hotel life, I had made up my mind in Vienna to find private quarters. In the end I found what I wanted. I ought to have been satisfied with my lodging, seeing that it was the comfortable home of the widow of a former professor of the Vienna university.
I never experienced such mixed feelings in my life as when I discussed terms with the woman. She was a person of breeding and tact and considerable false pride. How much did I want to pay? She did not know what she ought to ask. She had never rented rooms before.
We arrived at an understanding. I moved into the well-furnished flat and the old lady into her kitchen, where she lived and cooked and slept, together with a parrot, until I turned over to her the bedroom and occupied the couch in the parlor.
Before the war the woman had fared better. She was getting a small pension and had a little capital. The income had been large enough to give her a servant. When I moved in, the servantwas gone long ago, and I suspect that since then there had been days when the old lady did not have enough to eat. Still, she was getting the same pension and her little capital was bringing the same interest. The difficulty was that the income bought but a third of what it had formerly secured.
There were thousands of such cases, involving pensioners, widows, and orphans. In their case the world had not only stood still, but it had actually gone backward. The inflated currency left them stranded, and the worst of it was that taxes were growing with every day. The government was levying tribute on the basis of the inflated money. These people had to pay it with coin that was 100 so far as they were concerned.
Real-estate owners were in no better position. The moratorium prevented them from increasing rents, which step had to be taken in the interest of the families of the men at the front. Taxes kept growing, however, and when the income from rent houses was all a person had there was nothing to do but stint. With the currency as low as it was, nobody cared to sell real property of course. It was nothing unusual to see the small rent-house owner act as his own janitor.
While the war loans and government contracts were making some immensely rich, thousands of the middle class were being beggared. But there is nothing extraordinary in this. The socio-economic structure may be likened to a container that holds the national wealth. For purposes of its own the government had wateredthe contents of the bucket and now all had to take from it the thinned gruel. That thousands of aged men and women had to suffer from this could make little impression on governments that were sacrificing daily the lives and health of able-bodied producers on the battle-fields—one of whom was of greater economic value to the state than a dozen of those who were content to spend their life on small incomes without working.
In Cæsar's time the pound of beef at Rome cost 1¼ American cents. At the end of the thirteenth century it was 2½ cents, due largely to the influence of the Crusades. In a Vienna library there is an old economic work which contains a decree of the Imperial German government at Vienna fixing the price of a pound of beef, in 1645, at 10 pfennige, or 2¼ American cents. When peace followed the Seven Years' War the pound of beef at Berlin was sold at 4 cents American. During the Napoleonic wars it went up to 6½ cents, and when the Franco-Prussian War was terminated beef in Germany was 9 cents the pound. The price of bread, meanwhile, had always been from one-tenth to one-quarter that of beef. In Central Europe to-day the price of beef is from 60 to 75 cents a pound, while bread costs about 5¼ cents a pound. The cost of other foods is in proportion to these prices, provided it is bought in the legitimate market. As I have shown, almost any price is paid in the illicit trade. I know of cases when as much as 40 cents was paid for a poundof wheat flour, $2.70 for a pound of butter, $2.20 for a pound of lard, and 50 cents for a pound of sugar. I have bought sugar for that price myself.
These figures show that there has been a steady upward tendency in food prices ever since the days of imperial Rome, and we have no reason to believe that it was different in the days of Numa Pompilius.
Looking at the thing from that angle, we must arrive at a period when food, in terms of currency, cost nothing at all. Such, indeed, is the fact. When man produced himself whatever he and his needed, money was not a factor in the cost of living. The tiller of the soil, wishing to vary his diet, exchanged some of his grain for the catch of the fisherman, the first industrial, who could not live by fish alone. The exchange was made in kind and neither of the traders found it necessary to make use of a medium of exchange—money. The necessity for such a medium came when exchange in kind was not possible—when food and the like began to have time, place, and tool value, when, in other words, they were no longer traded in by the producer-consumers, but were bought and sold in markets.
But the question that occupies us here principally is, Why has food become dearer?
Actually food is not dearer to-day than it was in Rome under Cæsar. The fact is that money is cheaper, and money is cheaper because it is more plentiful. Let me quote a case that is somewhat abstract, but very applicable here.
Why should the farmer sell food when the money he gets for it will purchase little by virtue of having no longer its former purchasing power? He can be induced to sell such food if he is given enough dollars and cents to buy again for the proceeds of his soil and labor what he obtained through them before. That means that he must be given more money for his wares. But that he is given more money does not leave him better off. What difference does it make to him if for the bushel of wheat he gets one dollar or two dollars when the price of an article he must buy also jumps from one to two dollars? The result is a naught in both cases. To be sure, he could save more, apparently, from two than he could from one dollar. That, however, is fiction, for the reason that the twenty cents he may save of two dollars will in the new economic era buy no more than the ten cents he saved from the one dollar.
It is clear now that the farmer has not profited by the increase in food prices. All others are in the same position. Money has ceased to buy as much as before. The worker who is getting twice the wages he received before the outbreak of a war is obliged to pay twice as much for food. Like the farmer, he is no better off than he was. He, too, sees nothing but zero when expenditures are subtracted from income.
The body politic is a living organism for the reason that it is composed of living organisms—men and women. As a living organism this body has the inherent quality to repair or heal the wounds it has received. The men lost in war arereplaced by the birth of others. In our time, at least, the women are no longer killed off, and since the remaining males are able to fertilize them a decade or two generally suffices to make good this loss which the body politic has sustained. It is a well-known fact that the average man is able to produce many times the number of children to which monogamy limits him. At the conclusion of the Thirty Years' War, when polygamy had to be legalized in southern Germany, Nuremberg boasted of a citizen who had thirty-seven children by six women.
But even the economic wounds of the body politic heal rapidly. They begin to heal in war almost with the first day on which they are inflicted. Over them spreads the protecting scab of cheap money and high prices.
The German mark buys to-day about one-third of what it bought in July, 1914; this means that it is worth no more in comparison with its former value as a lien against the wealth of the German nation. The several German governments, however, will continue to pay on their public debts the old rate of interest, and when the loans are called in the depreciated mark will take the place of a mark that had full value. The gain for the state is that it has reduced automatically its old public debt by 66 per cent. in interest and capital.
The same applies to the first war loans. The German war loans up to the middle of 1915 were made with a mark that still bought 90 per cent. of what it had bought before. Interest on themwill be paid and the loan redeemed with a mark which to-day has a purchasing power of only 33 pfennige. If nothing is done to interfere with this relation of currency values, the German governments will actually pay interest and return the loan with money cheaper by 62.97 per cent. than what it was when the loans were made. The fifth war loan was made at a time when the purchasing power of the mark was down to about 50 points, so that on this the "economic" saving, as established with the present purchasing power of the mark, would be only 33.34 per cent. On the seventh war loan, made with the mark down to roughly one-third of its former purchasing power, nothing could be saved by the government if redemption of the loan should be undertaken with a mark buying no more than what it buys to-day.
We are dealing here with the mark as a thing that will procure in the market to-day the thing needed to live. In its time the mark that made up the public debt and the war loans served the same purpose, in a better manner, as it were. But that mark is no more. The several governments of Germany will pay interest and redeem loans in the mark of to-day, without paying the slightest heed to the value of the mark turned over to them when the loans were made.
The result of this is that the older investments, be they in government securities or commercial paper, have lost in value. We must take a look at an investor in order to understand that fully. Let us say a man owns in government bonds andindustrial stocks the sum of 200,000 marks. At 4 per cent. that would give him an annual income of 8,000 marks, a sum which in 1914 would have kept him in Germany very comfortably, if his demands were modest. To-day that income would go about a third as far. His 8,000 marks would buy no more than what four years ago 2,666 marks would have bought. His lien against the wealth of the community, in other words, is 2,666 marks to-day instead of 8,000 marks. Those who had to produce what the man consumed in 1914 have to produce to-day only a third of that. They would have to produce as before if the government returned to the old value of the mark, and since such a production is impossible to-day, with over two million able-bodied men dead and permanently incapacitated, with the same number of women and their offspring to be cared for, and with the losses from deterioration to be made good, the German government cannot take measures that would restore the pre-war value of the mark, especially since it would have to pay interest on war loans with a mark having more purchasing power than had the mark turned over to the government in these loans.
In adopting the policy of cheaper money Central Europe is doing exactly what the Roman government did more than two thousand years ago and what every other government has since then done when wars had made the expenditure of much of the state's wealth necessary. Capital is the loser, of course. That cannot be avoided, however, for the reason that capital is nothingbut the surplus of labor—that part of production which is not consumed. During the European War there was no such actual surplus. The increase in capital, as this increase appeared on the books of the state treasury and the investors, was nothing but an inflation—an inflation which now must be assimilated in figures, since its influence upon actual production isnil.
I have already mentioned that the bankers of Central Europe are well disposed toward a partial cancelation of the public debts. They agree not because of patriotic motives, but for the reason that such a cancelation would better the purchasing value of the currency. A partial repudiation of the war loans would immediately force down prices of food and necessities, in which event the mark or crown would again buy more or less than it bought in 1915, let us assume. For the exigencies incident to foreign trade the step has merits of its own. It should not be necessary to point out that a Germany living on an American-dollar basis, as it is now doing with its depreciated mark, would find it hard to undersell the American competitor. German industrial and commercial interests must bear this in mind, and on that account will do their best to preserve the margin which has favored them in the past. Cheap money and high prices do not make for cheap labor, naturally. Even to-day labor in Central Europe has risen in price to within 70 per cent. of its cost in the United States, while food is about 15 per cent. dearer than in the American cities.
Central Europe, all of Europe, for that matter, will live on what may be called the pre-war American basis when the war is over. The advantages enjoyed by the American dollar in Europe in the past are no more. Gone are the days when an American school-mistress could spend her vacation in Germany or Austria-Hungary and live so cheaply that the cost of the trip would be covered by the difference in the price of board and lodging. The cheap tour of Central Europe is a thing of the past—unless the public debt of the United States should increase so much that some slight advantage accrue therefrom. For what has taken place, or will take place in Europe, will happen in the United States when economic readjustment must be undertaken.
Aside from some damage done to buildings in East Prussia, Alsace-Lorraine, Galicia, and along the Isonzo, the Central states have not suffered directly from the war. The losses sustained in the districts mentioned are relatively small, and much of them has already been repaired. Reconstruction of that sort will not be so great a task, therefore.
Much labor and huge expenditures will be required, however, in the rehabilitation of the railroads and the highroads. It will be necessary to relay at least a quarter of the bed mileage with new ties and rails, and fully one-half of the rolling stock and motive power now in use will have to be discarded before rail transportation in CentralEurope can be brought to its former high standard.
Pressing as this work is, the people of the Central states must first of all increase the production of their soil and bring their animal industry into better condition. For the first of these labors two or three years will suffice; for the second a decade is the least that will be needed. It will be necessary for many years to come to restrict meat consumption. With the exception of South America nobody has meat to sell, and since all will draw on that market high prices are bound to limit the quantities any state in Europe can buy.
On the whole, the damage done by the war to the Central Europeans is not so catastrophic as one would be inclined to believe. In fact, the damage is great only when seen in the light of pre-war standards. In Central Europe, and, for that matter, in all of Europe, nobody expects trains to run a hundred kilometers per hour any more. The masses have forgotten the fleshpots of Egypt, and will be glad to get pork and poultry when no beef is to be had. Enough bread, with a little butter or some cheese on it, will seem a godsend to them for many a year. The wooden shoe has not proved so bad a piece of footgear, and the patched suit is no longer the hallmark of low caste. Enough fuel will go far in making everybody forget that there was a war.
Viewed from that angle, reconstruction in Central Europe is not the impossible undertaking some have painted it. The case reminds somewhatof the habitual drunkard who has reformed and feels well now despite the fact that he has irretrievably damaged his health.
The assertion has been made that the mechanical improvements and innovations made during the war would in a large measure balance the material damage done. I have tried hard to discover on what such claims are founded. The instance that would support such a contention has yet to be discovered, so far as I know. The little improvements made in gasolene and other internal-combustion engines are hardly worth anything to the social aggregate. I hope that nobody will take as an improvement the great strides made in the making of guns and ammunition. The stuff that has been written on the development of the aeroplane in war as a means of communication in peace is interesting, but not convincing.
From that angle the world has not been benefited by the great conflagration that has swept it.
But great hopes may be placed in the mental reconstruction that has been going on since the war entered upon its downward curve. Men and women in the countries at war have become more tolerant—newspaper editors and writers excepted, perhaps. As the war developed into a struggle between populations rather than between armies, the psychology of the firing-line spread to those in the rear. I have met few soldiers and no officers who spoke slightingly of their enemies. They did not love their enemies, as some idealists demand, but they respected them. There isno hatred in the trenches. Passions will rise, of course, as they must rise if killing on the battle-field is not to be plain murder. But I have seen strong men sob because half an hour ago they had driven the bayonet into the body of some antagonist. I have also noticed often that there was no exultation in the troops that had defeated an enemy. It seemed to be all in the day's march.
In the course of time that feeling reached the men and women home. The men from the front were to educate the population in that direction. It may have taken three years of reiteration to accomplish the banishment of the war spirit. When I left Central Europe it had totally vanished. The thing had settled down to mere business.
There is also a socio-political aftermath.
That socialism will rule Central Europe after the war is believed by many. I am not of that opinion. But there is no doubt that the several governments will steal much of the thunder of the Social-Democrats. Some of it they have purloined already. The later phases of food control showed usually a fine regard for the masses. That they did this was never more than the result of making virtue of necessity. Endless hair-splitting in political theories and tendency would result, however, if we were to examine the interest in the masses shown by the several governments. What the socialist wishes to do for the masses for their own good the government did for the good of the state. Since the masses are the state, and since I am not interested in political propaganda of any sort, mere quibbling would result from the attempt to draw distinctions. Politics have never been more than the struggle between the masses that wanted to control the government and the government that wanted to control the masses.