creased by
$415,000,000.

In 1910 the funded debt of Germany (empire and states) was
$4,896,600,000; of France $6,905,000,000; of England $3,894,500,000,
and of Russia $4,880,750,000. It is a curious psychical and social
phenomenon that, though we are as suspicious as criminals of one
another's good faith in keeping the peace, we are veritable angels of
innocence in trusting one another financially, for back of these huge
debts we keep in ready money, that is, gold, to pay them: Germany at
the present writing $275,000,000 in the Reichsbank; France
$640,000,000 in the Bank of France; England a paltry $175,000,000 in
the Bank of England; and Russia $625,000,000 in the Bank of Russia. We
all live upon credit, an elastic moral tie which seems to be
illimitably stretchable, and both a nation's and an individual's
wealth is measured not by what he has, but by what he is, that is to
say, by his character or credit. It is startling to find how we
distrust one another along certain lines and how we trust one another
along others. The total amount of gold in these four countries would
just about pay the interest at four per cent. for two years on their
total indebtedness!

From what we have seen of the proportion of expenditure that goes to
military purposes, it cannot be denied that Germany is increasing her
liabilities at an extraordinary rate, and largely for purposes of
protection. In the last two years the interest on her increased debt
alone, at four per cent., amounts to $5,000,000; while the interest at
four per cent. upon military expenditures of all kinds amounts to the
tidy sum of $20,000,000 per annum. The German, however, faces these
facts and figures, not as a matter of choice, not as a matter of
insurance wholly, but as a hard necessity. It is what the delayed
conversion of the world is costing him, not to speak of what it costs
the rest of us. He is surrounded by enemies; he is not by nature a
fighting man; his whole industrial and commercial progress and his
amassed wealth have come from training, training, training; and he
sees no alternative, and I am bound to say that I see none either, but
a nation trained also to defence, cost what it may.

The last German estimates (1912) balance with a revenue and
expenditure of $671,222,605. The naval expenditure is put at
$114,306,575; the army expenditure is put at $192,627,080. Both the
army and navy are being largely increased. In the year 1916 the
strength of th