etween themselves, so the world as a whole could support its
population better if it gave up fighting.

Moreover, we have passed out of the stage when we could massacre a
conquered population to make room for us. When we conquer an inferior
people like the Filipinos, we don't exterminate them, we give them an
added chance of life. The weakest don't go to the wall.

But at this point parenthetically I want to enter a warning. You may
say, if this notion of the rivalry of nations is false, how do you
account for the fact of its playing so large a part in the present war?

Well, that is easily explained--men are not guided necessarily by their
interest even in their soberest moments, but by what they believe to be
their interest. Men do not judge from the facts, but from what they
believe to be the facts. War is the "failure of human understanding."
The religious wars were due to the belief that two religions could not
exist side by side. It was not true, but the false belief provoked the
wars. Our notions as to the relation of political power to a nation's
prosperity are just as false, and this fallacy, like the older one,
plays its part in the causation of war.

Now, let us for a moment apply the very general rule thus revealed to
the particular case of the United States at this present juncture.

American merchants may in certain cases, if they are shrewd and able, do
a very considerably increased trade, though it is just as certain that
other merchants will be losing trade, and I think there is pretty
general agreement that as a matter of simple fact the losses of the war
so far have for America very considerably and very obviously
overbalanced the gains. The loss has been felt so tangibly by the United
States Government, for instance, that a special loan had to be voted in
order to stop some of the gaps. Whole States, whose interests are bound
up with staples like cotton, were for a considerable time threatened
with something resembling commercial paralysis.

While we may admit advances and gains in certain isolated directions,
the extra burden is felt in all directions of commerce and industry. And
that extra burden is visible through finance--the increased cost of
money, the scarcity of capital, the lower negotiability of securities,
the greater uncertainty concerning the future. It is by means of the
financial reaction that America, as a whole, has felt the adverse
effects of this war. There is not a considera