long can they do it? Germany may have food enough; but
how long can the stoppage of industry go on?

Moreover, attention must be called to one momentous thing. We are seeing
today, under military law, the greatest experiment in socialism ever
witnessed. All wealth, income, industry, capital, and labor are in the
direct control and use of a military State. Food, everything, may be
taken and distributed in common. I think never before in history have we
had such a gigantic, full-fledged illustration of socialism in actual
operation.

In the meanwhile, even though food may be provided, the reduction of
industry in general has cut incomes right and left. That is, fewer goods
are produced and exchanged. But goods are the basis of all credit. The
less the goods exchanged, the less the credit operations. Nevertheless,
the extraordinary issues of banknotes, the increase of deposits, as a
result of quintupling the loans, means that former commitments in goods
and securities cannot be liquidated. That is, the enormous increase of
bank liabilities, to a considerable and unknown percentage, is not
supported by liquid assets. These assets are "canned." Will they keep
sweet? There is no new business, no foreign trade, sufficient to take up
old obligations and renew those which are unpayable. Lessened incomes
mean lessened consumption and lessened demand for goods. Hence the
credit system is based on an uncertain and insecure foundation,
dependent wholly upon contingencies far in the future which may, or may
not, take the non-liquid assets out of cold storage and give them their
original value.

Moreover, apart from definite destruction of wealth and capital in the
war--which must be enormous, as represented by the national loans--the
losses from not doing business in all main industries during the whole
period of the war (except in making war supplies) must be very great. As
it affects the income and expenditure of the working classes, it may be
roughly measured by the great numbers of unemployed. If they are used on
public works, their income is made up from taxes on the wealth of
others. Luxuries will disappear, and not be produced or imported.
Incomes expressed in goods, or material satisfactions, have been
diminished--which is of no serious consequence, if they cover the
minimum of actual subsistence. The prolongation of the war will, then,
depend on the ability to provide the supplies for war.

The need for a medium of exch