arfare is terribly
destructive--as Belgium, Northern France, Poland, and Serbia know.

A manufacturing people whose commercial vessels are driven off the
seas will, of course, suffer the loss of such raw materials of its
industries as habitually came to it over seas in its own bottoms--a
loss mitigated, however, by the receipt of some raw materials from or
through neutral countries. This abridgment of its productive
industries will, in the long run, greatly diminish its powers of
resistance in war; but much time may be needed for the full
development of this serious disability.

Because of the great costliness of the artillery, munitions of war,
and means of transportation used in the present war, the borrowings of
all the combatant nations are heavy beyond any precedent; so that
already all the nations involved have been compelled to raise the
rates of interest on the immense loans they have put upon the market.
The burdens thus being prepared for the coming generations in the
belligerent nations will involve very high rates of taxation in all
the countries now at war. If these burdens continue to accumulate for
two or three years more, no financier, however experienced and
far-seeing, can imagine today how the resulting loans are to be paid
or how the burden of taxation necessary to pay the interest on them
can be borne or how the indemnities probably to be exacted can be paid
within any reasonable period by the defeated nation or nations.

It follows from these established facts that a small nation--a nation
of not more than fifteen millions, for example--can have no
independent existence in Europe except as a member of a federation of
States having similar habits, tendencies, and hopes, and united in an
offensive and defensive alliance, or under guarantees given by a group
of strong and trustworthy nations. The firm establishment of several
such federations, or the giving of such guarantees by a group of
powerful and faith-keeping nations ought to be one of the outcomes of
the war of 1914-15. Unless some such arrangement is reached, no small
State will be safe from conquest and absorption by any strong,
aggressive military power which covets it--not even if its people live
chiefly by mining and manufacturing as the Belgians did.

The small States, being very determined to exist and to obtain their
natural or historical racial boundaries, the problem of permanent or
any durable peace in Europe resolves itself int