unsatisfactory. To any close observer it must be evident that Europe,
as a whole, is gradually losing its position in the world. Other
nations which are rapidly coming to the front will, in course of time,
displace the European, unless the latter can pull themselves together
and abandon the vicious system which now handicaps them In the economic
rivalry of nations.

The cause of this comparative decline is, in my opinion, to be found in
the fact that all the European countries are arming against one
another, either for defense, or for aggression, for the attack is
frequently the best form of defense. The motive for these excessive
armaments can clearly be found in the jealousy and mistrust existing
among the nations of Europe. Europe is spending on armaments something
like four hundred million pounds sterling per year, and there is a
tendency to increase this tremendous expenditure. In order to bring the
magnitude of this sacrifice more vividly before the reader, let us
assume that a European war is not likely to occur more frequently than
about every thirty years. We then find that the incredible sum of
twelve thousand million pounds sterling has been spent in peace in
preparation for this war, a sum which greatly exceeds the total of all
the European state debts. Such stupendous sums can not be raised
without imposing crushing taxation, and without neglecting the other
duties of the state, such as education, scientific research, and social
reform.

One serious economic result of this heavy taxation is that European
industry is placed at a considerable disadvantage in competing with
that of other nations, notably the United States of America. The late
Mr. Atkinson, an American authority, declared that, compared with the
United States, we were handicapped to the extent of five per cent, in
our production. Since then the figures have changed considerably in
favor of America. I recently had an opportunity of discussing this
point with a great German authority on political economy, and he fixed
the advantage in favor of the United States at nearly ten per cent, as
regards the cost of production.

But this is not all. The European countries withdraw permanently four
millions of men, at their best age, from productive work, thus causing
a terrible loss and waste. Besides, enterprise in Europe is crippled by
fear of war. It may break out at any time, possibly at a few hours'
notice. The present system of Europe must inevi