Current History, Vol. VIII, No. 3, June 1918 / A Monthly Magazine of the New York Times

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PROMINENT IN WAR ACTIVITIES

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American Soldiers in Battle

How They Repelled an Attack at Seicheprey and Fought in Picardy

[Month ended May 20, 1918]

Seicheprey, in the Toul sector, was the scene on April 20, 1918, of the most determined attack launched against the American forces in France up to that time.A German regiment, reinforced by storm troops, a total of 1,500, was hurled against the American positions on a one-mile front west of Remières Forest, northwest of Toul, after a severe bombardment of gas and high explosive shells.The Germans succeeded in penetrating the front-line trenches and taking the village of Seicheprey, but after furious hand-to-hand fighting the American troops recaptured the village and most of the ground lost in the early fighting.

Next morning, after a brief bombardment, the Americans attacked and drove the enemy out of the old outposts, which they had gained, and thus broke down an offensive which, it was believed, was intended as the beginning of a German plan to separate the Americans and the French.The French lines also were attacked, but the Germans were repulsed and the lines re-established.

The losses were the heaviest sustained by Americans since they began active warfare in France.In a dispatch to the War Department General Pershing indicated that the losses among his men were between 200 and 300.According to the German official statement 183 Americans were taken prisoner, so that the American casualties apparently came mostly under the heading of captured.Official reports of the German losses, according to a prisoner captured later, gave 600 killed, wounded, and missing.

IN THE PICARDY BATTLE

"Franco-American positions south of the Somme and on the Avre" were officially mentioned for the first time in the French War Office report of April 24, indicating that forces of the United States were there on the battlefront resisting the great German offensive.The report stated that an intense bombardment of the positions all along this front was followed by an attack directed against Hangard-en-Santerre, the region of Hailles, and Senecat Wood.The Germans were repulsed almost everywhere.

Formal announcement that American troops sent to reinforce the allied armies had taken part in the fighting was made by the War Department in its weekly review of the situation issued on April 29."Our own forces," the statement read, "have taken part in the battle.American units are in the area east of Amiens.During the engagements which have raged in this area they have acquitted themselves well."

UNDER INTENSE FIRE

Another heavy attack was launched by the Germans against the Americans in the vicinity of Villers-Bretonneux on April 30.It was repulsed with heavy losses for the enemy.The German bombardment opened at 5 o'clock in the afternoon and was directed especially against the Americans, who were supported on the north and south by the French.The fire was intense, and at the end of two hours the German commander sent forward three battalions of infantry.There was hand-to-hand fighting all along the line, as a result of which the enemy was thrust back, his dead and wounded lying on the ground in all directions.The French troops were full of praise for the manner in which the Americans conducted themselves under trying circumstances, especially in view of the fact that they are fighting at one of the most difficult points on the battlefront.The American losses were rather severe.

The gallantry of the 300 American engineers who were caught in the opening of the German offensive on March 21 was the subject of a dispatch from General Pershing made public by the War Department on April 19. The engineers were among the forces hastily gathered by Major Gen. Sanderson Carey, the British commander, who stopped the gap in the line when General Gough's army was driven back. [See diagram on Page 389.] During the period of thirteen days covered by General Pershing's report, the engineers were almost continuously in action. They were in the very thick of the hardest days of the great German drive in Picardy.

General Pershing embodied in his report a communication from General Rawlinson, commander of the British 5th Army, in which the latter declared that "it has been largely due to your assistance that the enemy is checked."The report covered the fighting period from March 21 to April 3.The former date marked the beginning of the Ludendorff offensive along the whole front from La Fère to Croisilles.It showed that while under shellfire the American engineers destroyed material dumps at Chaulnes, that they fell back with the British forces to Moreuil, where the commands laid out trench work, and were then assigned to a sector of the defensive line at Demuin, and to a position near Warfusee-Abancourt.

During the period of thirteen days covered by the report the American engineers had two officers killed and three wounded, while twenty men were killed, fifty-two wounded, and forty-five reported missing.

STORY OF CAREY EPISODE

A correspondent of The Associated Press at the front gave this account of the part played by Americans in the historic episode under General Carey:

A disastrous-looking gap appeared In the 5th Army south of Hamel in the later stages of the opening battle.The Germans had crossed the Somme at Hamel and had a clear path for a sweep southwestward.

No troops were available to throw into the opening.A certain Brigadier General was commissioned by Major Gen.Gough, commander of the 5th Army, to gather up every man he could find and to "hold the gap at any cost."The General called upon the American and Canadian engineers, cooks, chauffeurs, road workmen, anybody he could find; gave them guns, pistols, any available weapon, and rushed them into the gap in trucks, on horseback, or on mule-drawn limbers.

A large number of machine guns from a machine-gun school near by were confiscated.Only a few men, however, knew how to operate the weapons, and they had to be worked by amateurs with one "instructor" for every ten or twelve guns.The Americans did especially well in handling this arm.

For two days the detachment held the mile and a half gap.At the end of the second day the commander, having gone forty-eight hours without sleep, collapsed.The situation of the detachment looked desperate.

While all were wondering what would happen next, a dusty automobile came bounding along the road from the north.It contained Brig.Gen.Carey, who had been home on leave and who was trying to find his headquarters.

The General was commandeered by the detachment and he was found to be just the commander needed.He is an old South African soldier of the daredevil type.He is famous among his men for the scrapes and escapades of his school-boy life as well as for his daring exploits in South Africa.

Carey took the detachment in hand and led it in a series of attacks and counterattacks which left no time for sleeping and little for eating.He gave neither his men nor the enemy a rest, attacking first on the north, then in the centre, then on the south—harassing the enemy unceasingly with the idea of convincing the Germans that a large force opposed them.

Whenever the Germans tried to feel him out with an attack at one point, Carey parried with a thrust somewhere else, even if it took his last available man, and threw the Germans on the defensive.

The spirit of Carey's troops was wonderful.The work they did was almost super-natural.It would have been impossible with any body of men not physical giants, but the Americans and Canadians gloried in it.They crammed every hour of the day full of fighting.It was a constantly changing battle, kaleidoscopic, free-for-all, catch-as-catch-can.The Germans gained ground.Carey and his men were back at them, hungry for more punishment.At the end of the sixth day, dog-tired and battle-worn, but still full of fight, the detachment was relieved by a fresh battalion which had come up from the rear.

STAFF CHANGES

Major Gen.James W.McAndrew, it was announced on May 3, was appointed Chief of Staff of the American expeditionary force in succession to Brig.Gen.James G.Harbord, who was assigned to a command in the field.Other changes on General Pershing's staff included the appointment of Lieut.Col.Robert C.Davis as Adjutant General, and Colonel Merritte W.Ireland as Surgeon General.

The General Staff of the American expeditionary forces in France, as the result of several changes in personnel, consisted on May 14, 1918, of the following:

Commander:	General John J.Pershing
Aid de Camp:	Colonel James L.Collins
Aid de Camp:	Colonel Carl Boyd
Aid de Camp:	Colonel M.C.Shallenberger
Chief of Staff:	Major Gen.J.W.McAndrew
Adjutant:	Lieut.Col.Robert C.Davis
Inspector:	Brig.Gen.Andre W.Brewster
Judge Advocate:	Brig.Gen.Walter A.Bethel
Quartermaster:	Brig.Gen.Harry L.Rogers
Surgeon:	Colonel Merritte W.Ireland
Engineer:	Brig.Gen.Harry Taylor
Ordnance Officer:	Brig.Gen.C.B.Wheeler
Signal Officer: Brig.	Gen.Edgar Russell
Aviation Officer:	Brig. Gen. B. D. Foulois

President Wilson on May 4 pardoned two soldiers of the American expeditionary force who had been condemned to death by a military court-martial in France for sleeping on sentry duty and commuted to nominal prison terms the death sentences imposed on two others for disobeying orders.

HEALTH OF THE SOLDIERS

Major Hugh H.Young, director of the work of dealing with communicable blood diseases in our army in France, made this striking statement on May 12 regarding the freedom of the American expeditionary force from such diseases:

In making plans for this department of medical work in France it had been calculated by the medical authorities in Washington to have ten 1,000-bed hospitals, in which a million men could receive treatment, but with 500,000 Americans in France there is not one of the five allotted Americans in any of the hospitals now running, and only 500 cases of this type of disease needing hospital treatment, instead of the expected 5,000.

In other words, instead of having 1 per cent.of our soldiers in hospitals from social diseases, as had been expected, the actual number is only one-tenth of 1 per cent.There is no reason to doubt that this record will be maintained.The hospitals prepared for this special treatment are to be used for other cases.

This means that the American Army is the cleanest in the world.The results, according to Major Young, have been achieved by preventive steps taken by the American medical directors, coupled with the co-operation of the men.

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Overseas Forces More Than Half a Million

Preparing for an Army of 3,000,000

The overseas fighting forces of the United States have been increasing at a much more rapid rate than the public was aware of.Early in May the number of our men in France was in excess of 500,000.A great increase in the ultimate size of the army was further indicated when the War Department asked the House Military Affairs Committee for a new appropriation of $15,000,000,000.

Mr. Baker, Secretary of War, appeared before the committee on April 23 and, after describing the results of his inspection of the army in France, said that the size of the army that the United States would send abroad was entirely dependent upon the shipping situation.Troops were already moving to France at an accelerated rate.

President Wilson, through Mr. Baker, presented the House Military Affairs Committee on May 2 with proposals for increasing the army. The President asked that all limits be removed on the number of men to be drafted for service. Mr. Baker said that he declined to discuss the numbers of the proposed army "for the double reason that any number implies a limit, and the only possible limit is our ability to equip and transport men, which is constantly on the increase."

The Administration's plans were submitted in detail on May 3, when the committee began the preparation of the army appropriation bill carrying $15,000,000,000 to finance the army during the fiscal year ending June 30, 1919.Mr. Baker again refused to go into the question of figures, but it became known at the Capitol that the estimates he submitted were based on a force of not fewer than 3,000,000 men and 160,000 officers in the field by July 1, 1919.The plan contemplated having 130,000 officers and 2,168,000 men, or a total of 2,298,000, in the field and in camps by July 1, 1918, and approximately an additional million in the field before June 30, 1919.

Mr. Baker said that all the army camps and cantonments were to be materially enlarged, to take care of the training of the men to be raised in the next twelve months.The General Staff had this question under careful consideration, and the idea was to increase the size of existing training camps rather than to establish new camps.These camps, it was estimated, already had facilities for training close to a million men at one time.

The Secretary of War also made it clear that the total of $15,000,000,000 involved in the estimates as revised for the new army bill did not cover the whole cost of the army for the next fiscal year.The $15,000,000,000, he explained, was in addition to the large sums that would be carried in the Fortifications Appropriation bill, which covers the cost of heavy ordnance both in the United States and overseas.Nor did it include the Military Academy bill.It was emphasized that, although estimates were submitted on the basis of an army of a certain size, Congress was being asked for blanket authority for the President to raise all the men needed, and the approximate figures of $15,000,000,000 could be increased by deficiency appropriations.

It was brought out in the committee that the transportation service had improved and that the War Department was able to send more men to France each month.It was estimated that if transport facilities continued to improve, close to 1,500,000 fighting men would be on the western front by Dec.31, 1918.The United States had now in camp and in the field, it was explained to the committee, the following enlisted men and officers:

Enlisted men	1,765,000
Officers	120,000
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Total	1,885,000

Provost Marshal General Crowder announced on May 8 that 1,227,000 Americans had been called to the colors under the Selective Draft act, thereby indicating approximately the strength of the national army.Additional calls during May for men to be in camp by June 2 affected something like 366,600 registrants under the draft law.These men were largely intended to fill up the camps at home, replacing the seasoned personnel from the divisions previously training there.With the increase of the number of divisions in France, the flow of replacement troops was increasing proportionately.

In regard to the number of men in France, Mr. Baker on May 8 made the following important announcement:

In January I told the Senate committee that there was strong likelihood that early in the present year 500,000 American troops would be dispatched to France.I cannot either now or perhaps later discuss the number of American troops in France, but I am glad to be able to say that the forecast I made in January has been surpassed.

This was the first official utterance indicating even indirectly the number of men sent abroad.The first force to go was never described except as a division, although as a matter of fact it was constituted into two divisions soon after its arrival in France.

An Associated Press dispatch dated May 17 announced that troops of the new American Army had arrived within the zone of the British forces in Northern France and were completing their training in the area occupied by the armies which were blocking the path of the Germans to the Channel ports. The British officers who were training the Americans stated that the men from overseas were of the finest material. The newcomers were warmly greeted by the British troops and were reported to be full of enthusiasm.

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American Troops in Central France

By Laurence Jerrold

This friendly British view of our soldiers in France is from the pen of a noted war
correspondent of The London Morning Post

I have recently visited the miniature America now installed in France, and installed in the most French part of Central France.There is nothing more French than these ancient towns with historic castles, moats, dungeons, and torture chambers, these old villages, where farms are sometimes still battlemented like small castles, and this countryside where living is easy and pleasant.On to this heart of France has descended a whole people from across the ocean, a people that hails from New England and California, from Virginia and Illinois.The American Army has taken over this heart of France, and is teaching it to "go some".Townsfolk and villagers enjoy being taught.The arrival of the American Army is a revelation to them.

I was surprised at first to find how fresh a novelty an allied army was in this part of France.Then I remembered that these little towns and villages have in the last few months for the first time seen allies of France.The ports where the American troops land have seen many other allies; they saw, indeed, in August, 1914, some of the first British troops land, whose reception remains in the recollection of the inhabitants as a scene of such fervor and loving enthusiasm as had never been known before and probably will not be known again.In fact, to put it brutally, French ports are blasé.But this Central France for the first time welcomes allied troops.It is true they had seen some Russians, but the least said of them now the better.Some of the Russians are still there, hewing wood for three francs a day per head, and behaving quite peaceably.

These old towns and villages look upon the American Army in their midst as the greatest miracle they have ever known, and a greater one than they ever could have dreamed of.One motors through scores of little towns and villages where the American soldier, in his khaki, his soft hat, (which I am told is soon to be abolished,) and his white gaiters, swarms. The villagers put up bunting, calico signs, flags, and have stocks of American "canned goods" to show in their shop windows.The children, when bold, play with the American soldiers, and the children that are more shy just venture to go up and touch an American soldier's leg.Very old peasant ladies put on their Sunday black and go out walking and in some mysterious way talking with American soldiers.The village Mayor turns out and makes a speech utterly incomprehensible to the American soldier, whenever a fresh contingent of the latter arrives.The 1919 class, just called up, plays bugles and shouts "Good morning" when an American car comes by.

Vice versa, this Central France is perhaps even more of a miracle to the American troops than the American troops are to it. To watch the American trooper from Arkansas or Chicago being shown over a castle which is not only older than the United States, but was in its prime under Louis XII. , and dates back to a Roman fortress now beneath it, is a wonderful sight. Here the American soldier shows himself a charming child. There is nothing of the "Innocents Abroad" about him. I heard scarcely anything (except about telephones and railways) of any American brag of modernism in this ancient part of France. On the contrary, the soldier is learning with open eyes, and trying to learn with open ears, all these wonders of the past among which he has been suddenly put. The officer, too, even the educated officer, is beautifully astonished at all this past, which he had read about, but which, quite possibly, he didn't really believe to exist. The American officers who speak French—and there are some of them, coming chiefly from the Southern States—are, of course, heroes in every town, and sought after in cafés at recreation hours by every French officer and man. Those who do not know French are learning it, and I remember a picturesque sight, that of a very elderly, prim French governess in black, teaching French to American subalterns in a Y. M. C. A. canteen.

A great French preacher the other day, in his sermon in a Paris church, said that this coming to France of millions of English troops and future millions of American troops may mean eventually one of the greatest changes in Continental Europe the world has ever known.His words never seemed to me so full of meaning as they did when I was among the Americans in the heart of France.There, of course, the contrast is infinitely greater than it can be in the France which our own troops are occupying and defending.These young, fresh, hustling, keen Americans, building up numerous works of all kinds to prepare for defending France, have brought with them Chinese labor and negro labor; and Chinese and negroes and German and Austrian prisoners all work in these American camps under American officers' orders.Imagine what an experience, what a miracle, indeed, this spectacle seems to the country-folk of this old French soil, who have always lived very quietly, who never wanted to go anywhere else, and who knew, indeed, that France had allies fighting and working for her, but had never seen any of them until these Americans came across three thousand miles of ocean.

Something of a miracle, also, is what our new allies are accomplishing.They are doing everything on a huge scale.I saw aviation camps, training camps, aviation schools, vast tracts where barracks were being put up, railways built, telegraphs and telephones installed by Chinese labor, negro labor, German prisoners' labor, under the direction of American skilled workmen, who are in France by the thousand.There are Y.M.C.A.canteens, Red Cross canteens, clubs for officers and for men, theatres and cinemas for the army, and a prodigious amount of food—all come from America.The hams alone I saw strung up in one canteen would astonish the boches.American canned goods, meat, fruit, condensed milk, meal, &c., have arrived in France in stupendous quantities.No body of American troops land in France until what is required for their sustenance several weeks ahead is already stored in France.Only the smallest necessaries are bought on the spot, and troops passing through England on their way to France are strictly forbidden, both officers and men, to buy any article of food whatsoever in England.As for the quality, the American has nothing to complain of, so far as I could see.All pastry, cakes, sweets are henceforth prohibited throughout civilian France, but the American troops rightly have all these things in plenty.I saw marvelous cakes and tarts, which would create a run on any Paris or London teashop, and the lady who manages one American Red Cross canteen (by the way, she is an Englishwoman, and is looked up to by the American military authorities as one of the best organizers they have met) explained to me wonderful recipes they have for making jam with honey and preserved fruit.The bread, of course, they make themselves, and, as is right, it is pure white flour bread, such as no civilian knows nowadays.

One motors through scores of villages and more, and every little old French spot swarms with American Tommies billeted in cottages and farmhouses. Many of them marched straight to their billets from their landing port, and the experience is as wonderful for them, just spirited over from the wilds of America, as it is for the villagers who welcome these almost fabulous allies. But it is the engineering, building, and machinery works the Americans are putting up which are the most astonishing. Gangs of workers have come over in thousands. Many of these young chaps are college men, Harvard or Princeton graduates. They dig and toil as efficiently as any laborer, and perhaps with more zeal. One American Major told me with glee how a party of these young workers arrived straight from America at 3:30 P. M. , and started digging at 5 A. M. next morning. "And they liked it; it tickled them to death." Many of these drafts, in fact, were sick and tired of inaction in ports before their departure from America, and they welcomed work in France as if it were some great game.

Perhaps the biggest work of all the Americans are doing is a certain aviation camp and school.In a few months it has neared completion, and when it is finished it will, I believe, be the biggest of its kind in the world.There pilots are trained, and trained in numbers which I may not say, but which are comforting.The number of airplanes they use merely for training, which also I must not state, is in itself remarkable."Training pilots is the one essential thing," I was told by the C.O.These flying men—or boys—who have, of course, already been broken in in America, do an additional course in France, and when they leave the aviation camp I saw they are absolutely ready for air fighting at the front.This is the finishing school.The aviators go through eight distinct courses in this school.They are perfected in flying, in observation, in bombing, in machine-gun firing.On even a cloudy and windy day the air overhead buzzes with these young American fliers, all getting into the pink of condition to do their stunts at the front.They seemed to me as keen as our own flying men, and as well disciplined.They live in the camp, and it requires moving heaven and earth for one of them to get leave to go even to the nearest little quiet old town.

The impression is the same of the American bases in France as of the American front in France.I found there and here one distinctive characteristic, the total absence of bluff.I was never once told that we were going to be shown how to win the war.I was never once told that America is going to win the war.I never heard that American men and machines are better than ours, but I did hear almost apologies from American soldiers because they had not come into the war sooner.They are, I believe, spending now more money than we are—indeed, the pay of their officers is about double that of ours.I said something about the cost."Yes, but you see we must make up for lost time," was all the American General said.And he told me about the splendid training work that is being done now in the States by British and French officers who have gone out there knowing what war is, and who teach American officers and men from first-hand experience.This particular General hoped that by this means in a very short time American troops arriving in France may be sent much more quickly to the front than is now the case.

An impression of complete, businesslike determination is what one gets when visiting the Americans in France. A discipline even stricter than that which applies in British and French troops is enforced. In towns, officers, for instance, are not allowed out after 9 P. M. Some towns where subalterns discovered the wine of the country have instantly been put "out of bounds." No officer, on any pretext whatsoever, is allowed to go to Paris, except on official business. From the camps they are not even allowed to go to the neighboring towns. They have, to put it quite frankly, a reputation of wild Americanism to live down, and they sometimes surprise the French by their seriousness. It is a striking sight to see American officers and men flocking into tiny little French Protestant churches on Sundays in this Catholic heart of France. The congregation is a handful of old French Huguenots, and the ancient, rigid French pasteur never in his life preached to so many, and certainly never to soldiers from so far. They come from so far, and from such various parts, these Americans, and for France, as well as for themselves, it is a wonderful experience. I was told that the postal censors who read the letters of the American expeditionary force are required to know forty-seven languages. Of these languages the two least used are Chinese and German.

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American Shipbuilders Break All Records

Charles M.Schwab Speeds the Work

[Month Ended May 15, 1918]

All shipbuilding records have been broken by American builders in the last month.On May 14 it was announced that the first million tons of ships had been completed and delivered to the United States Government under the direction of the Shipping Board.The actual figures on May 11 showed the number of ships to be 159, aggregating 1,108,621 tons.More than half of this tonnage was delivered since Jan.1, 1918.Most of these ships were requisitioned on the ways or in contract form when the United States entered the war.This result had been anticipated in the monthly records, which showed a steady increase in the tonnage launched:

Month.	Number of Ships Launched.	Aggregate Tonnage.
January	11	91,541
February	16	123,100
March	21	166,700

The rapidity with which ships are being produced was shown by the breaking of the world's record on April 20 and in turn the breaking of this record on May 5.On the former date the 8,800-ton steel steamship West Lianga was launched at Seattle, Wash., fifty-five working days from the date the keel was laid.This was then the world's record.But on May 5 at Camden, N.J., the steel freight steamship Tuckahoe, of 5,548 tons, was launched twenty-seven days after the keel was laid.

Ten days after this extraordinary achievement the Tuckahoe was finished and furnished and ready for sea—another record feat.

Charles M.Schwab, Chairman of the Board of Directors of the Bethlehem Steel Corporation, was on April 16, 1918, appointed Director General of the Emergency Fleet Corporation to speed up the Government's shipbuilding program.He was invested with practically unlimited powers over all construction work in shipyards producing vessels for the Emergency Fleet Corporation.Charles Piez in consequence ceased to be General Manager of the Corporation, remaining, however, as Vice President to supervise administrative details of construction and placing contracts.

Mr. Schwab, who was the fifth man to be put in charge of the shipbuilding program, was not desirous of accepting the position when first approached because he considered his work in producing steel of first importance in the carrying out of the nation's war program.But after a conference with President Wilson, Edward N.Hurley, Chairman of the Shipping Board; Bainbridge Colby, another member of the board, and Charles Piez, he decided to accept the new position.

Almost the first thing Mr. Schwab did was to move his headquarters to Philadelphia as the centre of the steel-shipbuilding region, taking with him all the division chiefs of the Fleet Corporation directly connected with construction work and about 2,000 employes.The Shipping Board and Mr. Piez retained their offices in Washington with 1,500 subordinates and employes.As a further step toward decentralization it was arranged to move the operating department, including agencies such as the Interallied Ship Control Committee, headed by P.A.S.Franklin, to New York City.

The original "cost-plus" contract under which the Submarine Boat Corporation of Newark was to build 160 ships of 5,000 tons for the Government was canceled by Mr. Schwab as an experiment to determine whether shipyards operating under lump-sum contracts and accepting all responsibility for providing materials could make greater speed in construction than those operating with Government money, such as the Hog Island yards. The result was to increase the cost of each of the 160 ships from $787,500 to $960,000.

A request for an appropriation of $2,223,835,000 for the 1919 program was presented by Mr. Hurley and Mr. Schwab to the House Appropriations Committee on May 8.

Of this total $1,386,100,000 was for construction of ships and $652,000,000 for the purchasing and requisitioning of plants and material in connection with the building program.

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Third Liberty Loan Oversubscribed

Approximately 17,000,000 Buyers

When the Third Liberty Loan, raised to finance America's war needs, closed on May 4, 1918, the subscriptions were well over $4,000,000,000, a billion in excess of the amount called for.The total was announced on May 17 as $4,170,019,650.Secretary McAdoo stated that he would allot bonds in full on all subscriptions.

The loan was regarded as the most successful ever floated by any nation, not so much because of the volume of sales, but because of the wide distribution of the loan.Approximately 17,000,000 individuals subscribed, that is, about one person in every six in the United States.The number of buyers in the Third Loan exceeded those in the Second by 7,000,000 and those in the First by 12,500,000.

The campaign throughout the country was conducted with all the thoroughness of a great political struggle, with the difference that there were no contending parties and all forces were marshaled to make the loan a success.Nor was the campaign merely a display of efficient organization and vigorous propaganda.It had many features of dramatic and picturesque interest, not only in the large cities, but in almost every smaller centre of the nation.A noonday rally of 50,000 men and women in Wall Street, New York, on the closing day, was typical.An eyewitness described it thus:

The Police Department Band appeared and the band of the 15th Coast Artillery from Fort Hamilton.Taking advantage of the occasion, James Montgomery Flagg now appeared in his studio van on the southern fringe of the Broad Street crowd.A girl with him played something on the cornet.It was a good deal like a show on the Midway at a Western county fair.But this was no faker—one of the most famous artists in America, throwing in a signed sketch of whoever bought Liberty bonds.Those near him began pushing and crowding to take advantage of the offer.

And now, suddenly, a tremendous racket up the street toward Broadway.Who comes?

Cheer on cheer, now.It is the "Anzacs."Twelve long, rangy fellows, officers all, six or seven of them with the little brass "A" on the shoulder, which signifies service at Gallipoli and in Flanders.They are members of the contingent of 500 which arrived here yesterday on its way to the battlefields of France.They run lightly up the Sub-Treasury steps and take their stand in a group beside the soldier band.

And now they all come—all the actors in the drama of the day.Governor Whitman, bareheaded, solemn-faced; Rabbi Stephen Wise, with his rugged face and his shock of blue-black hair; Mme.Schumann-Heink, panting a little with excitement; Auguste Bouilliz, baritone of the Royal Opera of Brussels, who later is to thrill them all with his singing of the "Marseillaise"; Cecil Arden, in a shining helmet and draped in the Union Jack, come to sing "God Save the King," while the sunburned Australian officers stand like statues at salute; Oscar Straus, and then—

"Yee-ee-ee-eee."

Oh, how they cheered!For the "Blue Devils" of France had poured out of the door of the Sub-Treasury and, with the fitful sun shining once more and gleaming on their bayonets, were running down the steps in two lines, past the "Anzacs," past the soldier band, to draw up in ranks at the bottom.

Lieutenant de Moal speaks.What does he say?Who knows?But he is widely cheered, just the same, as he gives way to Governor Whitman.

"There are gatherings like this, though not so large, all over our land today," cries the Governor. "In every town and city we Americans are gathered together at this moment to demonstrate that we are behind our army, behind our navy, behind our President."

The cheers that acclaimed his mention of the President drowned his voice for several moments.

"Here are the Australians," he cries, pointing to the "Anzac" officers."They have brought us a message, but we are going to give them a message, too."

As the Governor stepped back to cheers that rocked the street, Lieutenant de Moal barked a sharp order, and the "Blue Devils" shouldered their guns with fixed bayonets, the six trumpeters ta-ra-ta-raed, and the soldiers of France moved off up the sidewalk lane to the side door of the Stock Exchange, where all business was suspended during the fifteen minutes of their visit on the floor.

Four of the "Anzacs" meanwhile were taken from their ranks on the steps of the building up to the pedestal of the statue of Washington, which was used as speaker's platform, and Captain Frank McCallam made a brief address.

"We haven't many men left," he said simply."And it is up to you people to help us out to the best of your ability."

More cheers, and then Cecil Arden sang "God Save the King."The American regular fired a blank volley over the heads of the crowd, and the kids scrambled for the empty shells.

Following Wise and Straus, Bouilliz, the Belgian baritone, sang the "Marseillaise," and then, after the soldier band had played "Where Do We Go from Here, Boys?"Mme.Schumann-Heink advanced and sang the national anthem, following it up with an appeal that was the climax to the play.

Less exciting but more impressive was the parade on April 26, when thousands of mothers who had sent their sons to the front marched in a column of 35,000 men and women in the Liberty Day parade in New York City.This day had been proclaimed as such by President Wilson for "the people of the United States to assemble in their respective communities and liberally pledge anew their financial support to sustain the nation's cause, and to hold patriotic demonstrations in every city, town, and hamlet throughout the land."

The challenge of the mothers was inscribed on one of the banners they carried: "We give our sons—they give their lives—what do you give?"

Remarkable as was the appearance of these mothers with the little service flags over their shoulders, many of them so old that they marched with difficulty, the spectators who flanked the line of march along Fifth Avenue from Washington Square to Fifty-ninth Street found it even more thrilling to note that so very many of them, whether they were mothers or young wives, or just young girls proud of the brothers that had gone forth to service—so very many of them carried service flags with three and four and five and even six stars, and occasionally a glint of the sun would even carry the eye to a gold star, which meant, whenever it appeared, a veil of mourning for a wooden cross somewhere in France.

Among the minor but ingenious forms of publicity was the Liberty Loan ball which was rolled from Buffalo to New York, a distance of 470 miles, and which ended its journey of three weeks on May 4 at the City Hall.The ball was a large steel shell covered with canvas.

Every community that reached or exceeded its quota to the loan was entitled to raise a flag of honor specially designed for the purpose.At least 32,000 communities gained the honor and raised the flag.

To strengthen the financial basis of the nation's war industries and use monetary resources to the best advantage the War Finance Corporation bill was passed by Congress and approved by President Wilson on April 5, 1918.The two main purposes of the act are to provide credits for industries and enterprises necessary or contributory to the prosecution of the war and to supervise new issues of capital.The act creates the War Finance Corporation, consisting of the Secretary and four additional persons, with $500,000,000 capital stock, all subscribed by the United States.Banks and trust companies financing war industries or enterprises may receive advances from the corporation.

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Former War Loans of the United States

A Historical Retrospect

The United States Government asked for $2,000,000,000 on the First Liberty Loan in the Spring of 1917, and $3,034,000,000 was subscribed by over 4,000,000 subscribers.For the Second Loan, near the end of 1917, $3,000,000,000 was sought, and $4,617,532,300 was subscribed by 9,420,000 subscribers.

The Guaranty Trust Company of New York in a recent brochure reviewed the history of the various war loans of the United States, beginning with the Revolutionary loans, as follows:

When the patriots at Lexington "fired the shot heard 'round the world," the thirteen Colonies found themselves suddenly in the midst of war, but with practically no funds in their Treasuries.The Continental Congress was without power to raise money by taxation, and had to depend upon credit bills and requisitions drawn against the several Colonies.France was the first foreign country to come to the aid of struggling America, the King of France himself advancing us our first loan.All told, France's loan was $6,352,500; Holland loaned us $1,304,000; and Spain assisted us with $174,017.Our loan from France was repaid between 1791 and 1795 to the Revolutionary Government of France; the Holland loan during the same period in five annual installments, and the Spanish loan in 1792-3.

Our first domestic war loan of £6,000 was made in 1775, and the loan was taken at par.A year and a half later found Congress laboring under unusual difficulties.Boston and New York were held by the enemy, the patriot forces were retreating, and the people were as little inclined to submit to domestic taxation as they had formerly been to "taxation without representation."To raise funds even a lottery was attempted.In October, 1776, Congress authorized a second loan for $5,000,000.It was not a pronounced success, only $3,787,000 being raised in twelve months.In 1778 fourteen issues of paper money were authorized as the only way to meet the expenses of the army.By the end of the year 1779 Congress had issued $200,000,000 in paper money, while a like amount had been issued by the several States.In 1781, as a result of this financing and of the general situation, Continental bills of credit had fallen 99 per cent.

Then came Robert Morris, that genius of finance, who found ways to raise the money which assured the triumph of the American cause.By straining his personal credit, which was higher than that of the Government, he borrowed upon his own individual security on every hand.On one occasion he borrowed from the commander of the French fleet, securing the latter with his personal obligation.If Morris and other patriotic citizens had not rendered such assistance to the Government, some of the most important campaigns of the Revolutionary War would have been impossible.Following came the Bank of Pennsylvania, which issued its notes—in effect, loans—to provide rations and equipment for Washington's army at Valley Forge.These notes were secured by bills of exchange drawn against our envoys abroad, but it was never seriously intended that they should be presented for payment.The bank was a tremendous success in securing the money necessary to carry out its patriotic purposes, and was practically the first bank of issue in this country.

With the actual establishment of the United States and the adoption of the Constitution, Alexander Hamilton came forward with a funding scheme by which the various debts owed to foreign countries, to private creditors, and to the several States were combined. In 1791, on a specie basis, our total debt was $75,000,000. The paper dollar was practically valueless and the people were forced to give the Government adequate powers to raise money and to impose taxes. Between that date and 1812 thirteen tariff bills were passed to raise money to meet public expenditures and pay off the national debt.

THE WAR OF 1812.

For some time previous to the actual outbreak of the War of 1812 hostilities had been predicted.In a measure, this enabled Congress to prepare for it.And although the war did not begin until June of 1812, as early as March of that year a loan of $11,000,000, bearing 6 per cent.at par, to be paid off within 12 years from the beginning of 1813, was authorized.Of this, however, only $2,150,000 was issued, and all was redeemed by 1817.The next year a loan of $16,000,000 was authorized and subscribed.This was followed, in August, by a loan of $7,500,000 which sold at 88-1/4 per cent.

At the end of the war the total loans negotiated by the Government aggregated $88,000,000.The nation's public debt, as a result of this war, was increased to $127,334,933 in 1816.By 1835, either by redemptions or maturity, it was all paid.

MEXICAN WAR LOANS

The Mexican War net debt incurred by the United States was approximately $49,000,000 and was financed by loans in the form of Treasury notes and Government stock.The Treasury notes, under the act of 1846, totaled $7,687,800 and the stock $4,999,149.The latter paid 6 per cent.interest.By act of 1847 Treasury notes to the amount of $26,122,100 were issued, bearing interest in the discretion of the Secretary of the Treasury, reimbursable one and two years after date, and convertible into United States stock at 6 per cent.They were redeemable after Dec.31, 1867.Economic developments following this war led to a period of extraordinary industrial prosperity which lasted for several years.A change in the fiscal policy of the Government, with overexpansion of industry, however, resulted in a panic in 1857 and a Treasury deficit in 1858.The debt contracted in consequence of the Mexican War was redeemed in full by 1874.

The situation had not improved to any great extent when Lincoln took office on March 4, 1861, and by mid-November of that year a panic was in full swing.The outbreak of the civil war found the Treasury empty and the financial machinery of the Government seriously disorganized.Public credit was low, the public mind was disturbed, and raising money was difficult.In 1862 the Legal Tender act was passed, authorizing an issue of $150,000,000 of legal-tender notes, and an issue of bonds in the amount of $500,000,000 was authorized.

This proved to be a most popular loan.The bonds were subject to redemption after five years and were payable in twenty years.They bore interest at 6 per cent., payable semi-annually, and were issued in denominations of $50, $100, $500, and $1,000.Through one agent, Jay Cooke, a genius at distribution, who employed 2,850 sub-agents and advertised extensively, this loan was placed directly with the people at par in currency.Altogether the aggregate of this loan was $514,771,600.Later in that year Congress authorized a second issue of Treasury notes in the amount of $150,000,000 at par, with interest at 6 per cent.; in January, 1863, a third issue of $100,000,000 was authorized, which was increased in March to $150,000,000, at 5 per cent.interest.These issues were referred to as the "one and two year issues of 1863."

DEFICIT IN 1862

In December, 1862, Congress had to face a deficit of $277,000,000 and unpaid requisitions amounting to $47,000,000. By the close of 1863 nearly $400,000,000 had been raised by bond sales. A further loan act, passed March 3, 1864, provided for an issue of $200,000,000 of 5 per cent. bonds known as "ten-fortys," but of this total only $73,337,000 was disposed of. Subsequently, on June 30, 1864, a great public loan of $200,000,000 was authorized. This was an issue of Treasury notes, payable at any time not exceeding three years, and bearing interest at 7-3/10 per cent. Notes amounting to $828,800,000 were sold. The aggregate of Government loans during the civil war footed up a total of $2,600,700,000; and on Sept. 1, 1865, the public debt closely approached $3,000,000,000, less than one-half of which was funded.

Civil war loans, with one exception, which sold at 89-3/10, were all placed at par in currency, subject to commissions ranging from an eighth to one per cent.to distributing bankers.The average interest nominally paid by the Government on its bonds during the war was slightly under 6 per cent.Owing to payment being made in currency, however, the rate was, in reality, much higher.With the conclusion of the war, the reduction of the public debt was undertaken, and it has continued with but two interruptions to date.

Heavy tax receipts for several years after the close of the war potentially enabled the Government to reduce its debt.Indeed, from 1866 to 1891, each year's ordinary receipts exceeded disbursements, and enabled the Government to lighten its financial burdens.In 1866 the decrease in the net debt was $120,395,408; in 1867, $127,884,952; in 1868, $27,297,798; in 1869, $48,081,540; in 1870, $101,601,917; in 1871, $84,175,888; in 1872, $97,213,538, and in 1873, $44,318,470.

Through refunding operations—in addition to bonds and short-time obligations redeemed with surplus revenues—the Government paid off, up to 1879, $535,000,000 bonds bearing interest at from 5 to 6 per cent.In this year the credit of the Government was on a 4 per cent.basis, and a year later on a 3-1/4 per cent.basis, against a maximum basis of 15-1/2 per cent.in 1864.

Between 1881 and 1887 the Government paid off, either with surplus revenues or by conversion, $618,000,000 of interest-bearing debt.In 1891 all bonds then redeemable were retired, and on July 1, 1893, the public debt amounted to less than one-third of the maximum outstanding in 1865.In 1900 the Government converted $445,900,000 bonds out of an aggregate of $839,000,000 convertible under the refunding act passed by Congress in that year.And further conversions in 1903, 1905, and 1907 brought the grand total up to $647,250,150—a result which earned for the Government a net annual saving in interest account of $16,551,037.

SPANISH WAR LOANS

The United States is a debt-paying nation.Hence, America's credit, despite occasional fluctuations, has steadily risen, and our national debt has sold on a lower income basis than that of any other nation in the world.

Following the sinking of the Maine in Havana Harbor, in 1898, Congress authorized an issue of $200,000,000 3 per cent.ten-twenty-year bonds.Of this aggregate $198,792,660 were sold by the Government at par.So popular was this loan, it was oversubscribed seven times.During the year 1898, following the allotment to the public, this issue sold at a premium, the price going to 107-3/4, and, during the next year, to 110-3/4.After the war ended, the Government, in accordance with its unvarying custom, began to pay off this debt; but, despite the Secretary of the Treasury's offer to buy these bonds, he succeeded in purchasing only about $20,000,000 of them.

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American Labor Mission in Europe

War Aims of Organized Workers Conveyed to English and French Labor Unions

An American Labor Mission visited England and France in April, 1918, to present the views of American workingmen regarding the war.The delegation numbered eighteen, headed by James Wilson, President of the Patternmakers' League of North America.In his first address at London, April 28, before the British and Foreign Press Association, Mr. Wilson said:

We recognize as a fundamental truth that there can be no democracy with the triumph of the Imperial German Government.The principle of democracy or the principle of Prussian military autocracy will prevail as a result of the world war.There can be no middle course nor compromise.The contest must be carried on to its finality.

The Central Powers have staked everything on the result of this struggle.Their defeat means the destruction of a machine which has been built with remarkable efficiency and embodies the very life of the German race.

On the other hand, every free man instinctively appreciates that if we are to maintain the standard of civilization as worked out by the free men of the world, and if posterity is to be guaranteed political and industrial freedom, the war must be won by the allied countries.Peace now would be the fulfillment of the Prussian dream, for they have within their grasp the very heart of Continental Europe and resources which would make sure further conquest upon the other nations of the world.

The American labor movement, in whose behalf my colleagues and myself have been authorized to speak, declare most emphatically that they will not agree to a peace conference with the enemies of civilization, irrespective of what cloak they wear, until Prussian militarism has withdrawn within its own boundaries, and then not until the Germans have, through proper representatives, proved to our satisfaction that they recognize the right of peoples and civilized nations to determine for themselves what shall be their standard.

Unless reconstruction shall soon come from the German workers within that country, it is now plain that the opportunity to uproot the agencies of force will only come when democracy has defeated autocracy in the military field and wins the right to reconstruct the relations between nations and men.

German freedom is ultimately the problem of the German people, but the defeat of Prussian autocracy in the field will bring the opportunity for German liberty at home.

BRITISH SEAMEN'S ATTITUDE

J.Havelock Wilson, President of the British Seamen's Union, conferred with the American Mission at London, April 30, and informed it of the decision of his union to transport no pacifists to any peace conference.He made the following statement:

On Sept.21, 1917, we formed what we called a Merchant Seamen's League, and declared that if German terrorism on the sea continued we would enforce a boycott against Germany for two years after the war, and that for every new crime from that time on we would add one month to the length of the boycott.The length of the boycott now stands at five years seven months.We have reliable information that this action is making a very profound impression on German manufacturers and shippers.

The British seamen got their first intimation of German treachery when the international transport strike was first proposed by German delegates ostensibly to pledge support.But the British learned later that the German delegates had in their pockets as they talked contracts signed with employers.

After that we watched the German Social Democrats in the Socialists' international.But we never could get the Germans to face the issue.Always they had excuses and evasions.We never had confidence in them.When war came we felt it our duty to take care of the men on our ships who could no longer sail, and also to set a good example.

Here were Germans on our ships who had been in England so long that they had forgotten their language. On Aug. 20, 1914—you see we acted quickly—we bought an estate of thirty-nine acres and built the model internment camp of Great Britain. We asked the Government to give us charge of all interned German sailors, and, let it be known to the credit of Great Britain, that was done. The Government allowed us all 10s. per week per man for upkeep. The camp became a great success. There were 1,000 German sailors interned in it.

Until May, 1915, all went well.On May 1 the interned men celebrated May Day, their international revolutionary holiday.They had their banners, "Workers of the World, Unite," "World Brotherhood," and so on.We had planned a great fête to be held later and I had secured the consent of several well-known persons to attend and help make it a success.On May 7 the Lusitania was sunk.I called the Germans in camp together and told them the terrible thing that had happened.I told them they were not to blame, but that the celebration could not be held.And they made no protest to me.

Now here were 1,000 Germans not under control of the Kaiser.Some of them had been among us twenty or thirty years.As soon as I had got out of the place they sang and cheered and rejoiced over the Lusitania disaster.They kept this up for four hours.They made me conclude that the camp must be handed over to the military as soon as possible, and this was done.Six months after that came the U-boat campaign, and, what made that worse, the fact that the U-boats always turned their guns on open boats.

I have got hundreds of cases of boys whose arms and legs have been blown off by U-boat guns while trying to get away from sinking ships in open boats.I wrote the Secretary of the International Transport Workers' Union protesting against these crimes.His reply attempted to justify every crime.That showed us that not only was the Kaiser responsible, but that the organized trade union movement of Germany was also responsible.

On June 1, 1917, a Socialist congress was convened at Leeds.It was advertised as the greatest conference ever held.We sent two men there to tell our story.Our men found that small bodies of only a handful of members had been delegated, who got the floor easily for the pacifist cause.Our men could not secure anything like a fair chance.

In this conference MacDonald, Fairchild, and Jowett were elected delegates to Stockholm.We at once resolved that no delegates should leave this country.And none did.

That is the history of the seamen's determination to bottle up such British pacifists as may desire to go abroad spreading their doctrine.Mingled with it is the grim, sad story of 12,000 members of the Seamen's Union who have lost their lives on merchant ships through Germany's criminal conduct on the seas.

And while there is here and there one in England who resembles a leader of labor who is a pacifist, the determination of the British seamen to go through with the war to the finish is scarcely more than a reflection of the rank-and-file spirit that is to be found throughout the whole of British labor.

NO PARLEYS WITH ENEMY LABOR

The American delegates met the representatives of labor in London and in Paris.In England they found the sentiment almost unanimous in approval of their decision to favor no conferences with German labor representatives until a victory had been achieved.In France, however, they encountered a group that favored contact with the German and Austrian Socialists.On May 6 there was a conference in Paris between the American labor delegates and the members of the Confederation Générale de Travail, the great French revolutionary labor organization.M.Jouhaux, General Secretary of the confederation, made the proposed international conference practically the sole note of his speech.France, he asserted, had no hatred for the German workers themselves, and he pointed out that if the conference took place it could have only one of two results.Either the workers in the enemy countries would refuse to join in the efforts of the workers of the allied countries for the liberation of the world's peoples, in which case the war must continue, or they would accept the allied view of what was right and would act with the allied peoples for the good of humanity.

The American reply was in these definite words:

"We don't hate the German workers any more than you do, but to give them our hand now would be looked upon by them only as a sign of weakness."

After reminding the congress of the hypocritical professions of the German Socialist Party before the war, the delegation declared itself in entire agreement with Samuel Gompers that American labor men would refuse to meet the German delegates under any circumstances so long as Germany was ruled by an Imperialistic Government. This declaration left Albert Thomas, former Cabinet officer and leader of the group, practically without a word to say. M. Thomas urged the same arguments as Jouhaux, but all the satisfaction the French labor men got was a promise from James Wilson, President of the American delegation, to report the matter to the American workers when he returned home.

Chairman Wilson reaffirmed at a luncheon given at the Foreign Office May 10 that American labor would not discuss the war with representatives of German labor until victory was won, because German labor, which was permitting the war, must do something itself in its own country toward ending the conflict justly before it could debate with labor representatives of the allied countries on what ought to be.

The luncheon was given by Stephen Pichon, Foreign Minister, on behalf of the French Government.With the exception of Premier Clemenceau, all the members of the Cabinet were present as well as other men notable in French public life.Ambassador Sharp was also in attendance.

The mission visited the fighting front and returned to London May 11 to hold mass meetings at English industrial centres.The members were received by the King and dined by the London Chamber of Commerce May 15.

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Progress of the War

Recording Campaigns on All Fronts and Collateral Events From April 18, 1918, Up to and Including May 17, 1918

UNITED STATES

The campaign for the Third Liberty Loan of $3,000,000,000 ended on May 4.The total subscription was $4,170,019,650, as announced by the Treasury Department on May 17.

On April 20 President Wilson issued a proclamation extending to women enemy aliens the restrictions imposed on men.

The Overman bill, giving the President power to consolidate and co-ordinate executive bureaus and agencies as a war emergency measure, was passed by the Senate on April 28 and by the House on May 14.

The War Trade Board announced on May 3 that a general commercial agreement with Norway had been signed.On May 12 it announced that in order to conserve materials and labor and to add tonnage to the fleet carrying men and munitions to Europe, arrangements had been made to have Great Britain, France, Italy, and Belgium pass upon the advisability of releasing proposed exports before granting licenses to shippers.On May 14 an agreement was reached between the United States and the allied nations providing that all imports to the United States should be forbidden unless sanctioned by the War Trade Board.

A conference report on the Sedition bill, giving the Government broad new powers to punish disloyal acts and utterances, was adopted by the Senate on May 4, and by the House of Representatives on May 7, and sent to the President for his signature.

As a result of charges of graft, inefficiency, and pro-German tendencies directed against the military aircraft administration by Gutzon Borglum, President Wilson, on May 15, asked Charles Evans Hughes to aid Attorney General Gregory in making a thorough investigation.Mr. Hughes accepted the invitation.The President also wrote a letter to Senator Martin denouncing the Chamberlain resolution for an investigation of the conduct of the war by the Committee on Military Affairs of the Senate, and on the same day the Senate Committee on Audit and Expenses, to which the resolution had been referred, ordered a favorable report on it, modifying it so as to provide for a limited inquiry.

SUBMARINE BLOCKADE

The American steamship Lake Moor was reported sunk on April 11.

Forty-four Americans were killed when the Old Dominion liner Tyler was sunk off the French coast on May 2.

The British liner Oronsa was sunk on April 28.All on board except three members of the crew were saved.The British sloop Cowslip was torpedoed on April 25.Five officers and one man were missing.

The British Admiralty announced on April 24 the cessation of the weekly return of shipping losses and the substitution of a monthly report.

In a statement made in the Chamber of Deputies on May 11, Georges Leygues, the French Minister of Marine, declared that the total of allied tonnage sunk by German submarines in five months was 1,648,622, less than half the amount alleged by Germany to have been destroyed. He announced that the number of submarines sunk by the Allies was greater than Germany's output.

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LEADERS IN THE IRISH CONTROVERSY

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Twelve German submarines were officially reported captured or sunk in British waters by American or British destroyers during the month of April, and two others were known to have been destroyed.

Ten passengers were killed when the French steamship Atlantique was torpedoed in the Mediterranean early in May.The ship managed to reach port.

CAMPAIGN IN WESTERN EUROPE

April 18—French advance on both banks of the Avre River between Thanne and Mailly-Raineval; Germans deliver terrific assaults upon the British front from Givenchy to the neighborhood of St.Venant.

April 19—Italian troops reach France; British beat off assaults on Mont Kemmel and recover ground west of Robecq; bombardment of Paris resumed.

April 20—Germans hurl force against American and French troops at Seicheprey and get a grip on the town, but are driven out; Belgians give ground temporarily near the Passchendaele Canal, but regain it; British re-establish their positions in Givenchy-Festubert region.

April 21—British drive Germans from some of their advanced positions near Robecq; Americans retake Seicheprey outposts.

April 23—British gain ground east of Robecq and in the neighborhood of Meteren.

April 24—Germans take Villers-Bretonneux, but are repulsed at other places south of the Somme; Franco-American positions at Hangard shelled.

April 25—British recover Villers-Bretonneux; French and British lose ground in the Lys salient before terrific German assaults from Wytschaete to Bailleul, aiming at Mont Kemmel; Germans take Hangard.

April 26—Germans take Mont Kemmel and the villages of Kemmel and Dranoutre and push on to St.Eloi; French recover part of Hangard.

April 27—British and French troops recover some of the ground lost in the Bailleul-Wytschaete sector; Germans repulsed at Voormezeele after hard fight.

April 28—Germans take Voormezeele, but are driven out by counterattack; Locre changes hands five times.

April 29—Germans make heavy attacks upon the entire Franco-British front from Zillebeke Lake to Meteren; British hold their line intact; French yield some ground around Scherpenberg and Mont Rouge, but later regain it; Belgians repulse attacks north of Ypres; Americans take over a sector of the French line at the tip of the Somme salient.

April 30—French recover ground on the slope of Scherpenberg and advance their line astride the Dranoutre road; positions of the allied forces push forward between La Clytte and Kemmel.

May 1—Americans repulse attacks in the Villers-Bretonneux region; Béthune region bombarded.

May 3—French and British improve their positions along the Somme River southward to below the Avre; French take Hill 82, near Castel, and the wood near by.

May 4—Germans repulsed at Locon; French make progress near Locre, and British advance near Meteren; Americans in the Lorraine sector raid German positions south of Halloville and penetrate to third line; French shell disables last of German guns that have been bombarding Paris.

May 5—Franco-British forces, in operation between Locre and Dranoutre, advance their positions on a 1,000-yard front to an average depth of 500 yards; Germans foiled in attempt to occupy former American trenches in the Bois Brûlé.

May 6—Germans launch heavy gas attacks against American troops on the Picardy front.

May 8—Germans gain a foothold at several points midway between La Clytte and Voormezeele, but are repulsed at other points along the line; Australians advance 500 yards near Sailly and 300 yards west of Morlancourt.

May 9—British re-establish their lines and drive Germans out of British trenches between La Clytte and Voormezeele; Germans occupy British advanced positions at Albert on a front of about 150 yards.

May 10—British restore their line at Albert; German artillery fire active in the Vimy and Robecq sectors of the British front, and south of Dickebusch.

May 11—Berlin reports heavy losses inflicted on American troops southwest of Apremont; Germans gain small portion of territory southwest of Mailly-Raineval, but are driven out by French; French gain ground in Mareuil Wood.

May 12—French troops north of Kemmel capture Hill 44 and an adjoining farm; Germans bombard Albert, Loos, and Ypres sectors, and lines southeast of Amiens, but are repulsed by the French near Orvillers-Sorel.

May 13—Americans blow up enemy ammunition dump and start fires in Cantigny, with explosions; Germans resume firing north of Kemmel.

May 14—Hill 44, north of Kemmel, changes hands several times; French advance in Hangard region; British carry out successful raid near Robecq.

May 15—Germans repulsed by the British southwest of Morlancourt and by the French north of Kemmel. May 16—Heavy gunfire in the Lys and Avre areas.

May 17—Official announcement that American troops have taken their place in the British war zone in Northern France; German gunfire increases in the Lys and Hailles region.

ITALIAN CAMPAIGN.

May 3—Heavy fighting reported along the entire front between the Adriatic and the Giudicaria Valley.

May 5—Increase in artillery fire, notably in the Lagarina and Astico Valleys.

May 11—Italians penetrate advanced Austrian positions on Monte Carno.

May 12—Italians wipe out a Coll dell' Orso garrison.

May 14—Austrian attempts to renew attacks on Monte Carno and to approach Italian lines at Dosso Casina and in the Balcino and Ornic Valleys fail.

May 16—Italians enter Austrian lines at two points on Monte Asolone; British make successful raid at Canove.

CAMPAIGN IN ASIA MINOR.

April 21—Armenians retake Van.

April 27—British in Mesopotamia advance north of Bagdad and Kifra.

April 28—British cavalry forces a passage of the Aqsu at a point southwest of Tuzhurmatl.

April 29—British take Tuzhurmatl.

April 30—British advance as far as the Tauk River, and occupy Mezreh.

May 1—Es-Salt taken by the British.

May 7—British enter Kerkuk.

May 12—Arabs of Hedjaz raid Jadi Jerdun station and a post on the Hedjaz Railway, taking many prisoners and destroying tracks and bridges.

AERIAL RECORD.

Trent, Trieste, and Pola were raided by Italian scouts on May 10.

Carlshutte, Germany, was bombed by the British May 3.Saarbrucken was bombed on May 16, and five German machines were brought down.

British aviators raided the aviation grounds at Campo Maggiore on May 4 and brought down fourteen Austrian planes.

German airmen attacked Dutch fishing vessels in the North Sea May 5.

Ostend, Westende, and Zeebrugge were attacked by British seaplanes on May 6.

Many notable air battles occurred on the western front in connection with the fighting in Picardy and Flanders.In one day, May 15, fifty-five German airplanes were brought down by British and French aviators, and on May 16 forty-six German machines were brought down by the British.

NAVAL RECORD.

Early in the morning of April 23 British naval forces, in co-operation with French destroyers, carried out a raid against Zeebrugge and Ostend, with the object of bottling up German submarine bases.Five obsolete British cruisers, which had been filled with concrete, were run aground, blown up, and abandoned by their crews, and two old submarines were loaded with explosives for the destruction of the Zeebrugge mole.A German destroyer was sunk and other ships were shelled.Twenty yards of the Zeebrugge mole were blown up, and the harbor was blocked completely.On May 10 the obsolete cruiser Vindictive was sunk at the entrance to Ostend Harbor, practically completing the work.

An Austrian dreadnought of the Viribus Unitis type was torpedoed by Italian naval forces in Pola Harbor on the morning of May 14.

RUSSIA.

On April 20, Japan ordered reinforcements sent to Vladivostok, as the Bolsheviki had directed the removal of munitions westward.On the same day diplomatic representatives of the allied powers were formally informed by the Siberian Provincial Duma of the formation—by representatives of the Zemstvos and other public organizations—of the Government of Autonomous Siberia.

The Bolshevist Foreign Minister, George Tchitcherin, on April 26, addressed representatives in Moscow of the United States, England, and France, requesting the speedy recall of their Consuls from Vladivostok and the investigation of their alleged participation in negotiations said to have been conducted between their Peking embassies and the Siberian Autonomous Government.He also asked them to explain their attitude toward the Soviet Government and the alleged attempts of their representatives to interfere with the internal life of Russia.Japan was asked to explain the participation of Japanese officials in the counter-revolutionary movement.An official report of the demand for the removal of John K.Caldwell, the American Consul at Vladivostok, was received by the American State Department on May 6, from Ambassador Francis.The State Department announced that Mr. Caldwell had done nothing wrong and that he would not be removed.On the same day a report was received that the Russian authorities at Irkutsk had arrested the Japanese Vice Consul and the President of the Japanese Association on the charge of being military spies.

At a meeting of several thousand peasants of the Ukraine, held on April 29, a resolution was passed calling for the overthrow of the Government, the closing of the Central Rada, the cancellation of the Constituent Assembly convoked for May 12, and the abandonment of land socialization. General Skoropauski was proclaimed Hetman and was recognized by Germany.

The German advance into the Ukraine continued, military rule was established in Kiev, and several members of the Government, including the Minister of War, were removed on the ground that the Government had proved too weak to maintain law and order.Vice Chancellor von Payer, speaking before the Main Committee of the German Reichstag on May 4, attempted to justify Germany's use of the iron hand by declaring that grain had been withheld and that prominent Ukrainians, members of the Committee of Safety, had been caught planning the assassination of German officers.

Rostov-on-the-Don was occupied by Germans on May 9, but was recaptured by the Russians the next day.

M.Tchitcherin, on May 12, sent a wireless message to Ambassador Joffe, at Berlin, instructing him to try to obtain from Berlin cessation of every kind of hostility, and declared that captures of Russian territory violated the terms of the treaty of peace.He also gave assurances that the Black Sea Fleet would not attack the port of Novorossysk, which the Germans threatened to capture.In an evasive reply the Commander in Chief of the German troops in the East said he could only agree to the cessation of naval operations against the Black Sea Fleet, provided that all ships returned to Sebastopol and were retained there, thus leaving the port of Novorossysk free for navigation.

A Swedish report of May 14 told of a German ultimatum to the Bolshevist Government demanding the occupation of Moscow and other Russian cities, the abolishment of armaments, and the effecting of certain financial measures which would practically make Russia a German colony.

Professor H.C.Emery, the American who was seized when the Germans landed in the Aland Islands, was freed from prison, but was still detained in Germany, according to a report received on May 5.

The British Foreign Minister, A.J.Balfour, announced in Commons on May 5 that Great Britain was ready to grant temporary recognition to the Esthonian National Council.

Transcaucasia proclaimed its independence on April 26, and a conservative Government was formed, headed by M.Chkemkeli.

Ciscaucasia proclaimed itself an independent State on May 14.

The Caucasus proposed peace negotiations with Turkey May 10.

Russian Bolshevist troops crossed the Caspian Sea in gunboats and recaptured Baku from the Mussulmans May 17.

Emperor William issued a proclamation, May 14, recognizing the independence of Lithuania, allied with the German Empire, and saying that it was assumed that Lithuania would participate in the war burdens of Germany.

FINLAND.

Hostilities between the Finnish White Guards and the Germans and the Red Guards continued.Germany protested to the Bolshevist Foreign Minister on April 23 against the landing of allied troops at Murmansk, declaring that such landing was a violation of the Brest-Litovsk treaty.Germany also denied that Germans had participated in the raid of the Finnish White Guards upon Kem.

The White Guards, on April 26, demanded the surrender of a fort on the Finnish coast ceded to Russia by the Finnish Bolshevist Government, constituting part of the Kronstadt defenses.The Kronstadt Council of Workmen's and Soldiers' Delegates refused to comply with the demand, and organized resistance.

Viborg was taken by the White Guards on April 30.On May 3, the Germans in the southwest defeated the Red Guards after a five days' battle near Lakhti and Tevastus.The Finnish flag was raised on the fortress of Sveaborg on May 13.On May 15 the White Guards entered Helsingfors, and on May 17 they seized Boris-Gleb on the Norwegian border from the Russian troops, thus gaining access to the Arctic Ocean.

RUMANIA.

A peace treaty between Rumania and the Central Powers was signed May 6, and supplementary legal, economic, and political treaties were later concluded.

The Rumanian Parliament was dissolved on May 10 by royal decree and new elections were ordered.

POLAND.

The Lausanne Gazette announced on May 12 that Poland was handed over to Germany economically, politically, and militarily, according to a secret treaty arranged at Brest-Litovsk between a Russian delegation, headed by Trotzky, and German representatives.At a conference between the Emperors of Germany and Austria-Hungary, Germany agreed to the solution of the Polish question desired by Austria, in return for certain concessions from Austria.

MISCELLANEOUS.

The Guatemalan Assembly, on April 22, declared the country to be in the same position as the United States in the war, and the following day the Guatemalan Minister at Washington announced that the declaration was meant as a declaration of war against Germany and her allies.

In response to a request from Uruguay for a definition of the relations between the two countries, Germany replied, according to an announcement made public May 16, that she did not consider that a state of war existed.

Nicaragua declared war on Germany and her allies on May 7.

Royal assent to the British man-power bill, providing for conscription in Ireland, was given on April 18.An Order in Council was issued on May 1 postponing the Conscription act.

Lord Wimborne, Lord Lieutenant of Ireland, and Henry E.Duke, Chief Secretary, resigned on April 24.Edward Shortt was appointed Chief Secretary and Viscount French succeeded Lord Wimborne as Lord Lieutenant.

James Ian MacPherson announced in the House of Commons on May 9 that a German submarine had recently landed an associate of Sir Roger Casement on the Irish coast, where he was arrested by Government officials, and that he was now in the Tower of London and would be tried by court-martial.A dispatch dated May 15 revealed that two Germans accompanied him, and that all three were imprisoned.

All the Sinn Fein leaders, including De Valera and the Countess Markievicz, were arrested in Belfast, Dublin, and other cities, on May 17, as the result of the discovery of treasonable relations with Germany.Lord Lieutenant French issued a proclamation dealing with the situation, calling on all loyalists to aid in blocking the German plans and asking for volunteers to provide Ireland's share of the army.

Sir Arthur Roberts, financial adviser to the British Air Minister, resigned on April 24 as a result of a disagreement with Lord Rothermere.The next day Lord Rothermere resigned.He was succeeded by Sir William Weir.Baron Rhondda resigned as Food Controller and Lord Northcliffe resigned as Chairman of London headquarters of the British Mission to the United States and Director of Propaganda in Enemy Countries.

Representatives of the allied nations met at Versailles on May 1 and May 2.

On May 6 Major Gen.Frederick Barton Maurice, formerly Director General of British Military Operations, addressed a letter to The London Daily Chronicle challenging the statements made in the House of Commons by Premier Lloyd George and Andrew Bonar Law with regard to the military situation and demanding a Parliamentary investigation.On May 7 ex-Premier Asquith moved for an inquiry in Commons.After a speech by Lloyd George in Commons in his own defense, May 9, the House, by a vote of 293 to 106, upheld him and the Government and rejected Mr. Asquith's motion.

The Austrian Premier was empowered by Emperor Charles, on May 4, to adjourn Parliament and to inaugurate measures to render impossible the resumption of its activities.

A growing resentment against the domination of Austria-Hungary by Germany was manifested by Austria's Slavic peoples.A dispatch from Switzerland dated May 8 told of serious disturbances in the fleet, caused by seamen of Slavic and Italian stock, which resulted in several changes in the high command.A new Hungarian Cabinet, headed by Dr. Wekerle, was formed on May 10.On May 13 Vienna papers published a declaration by the Czech members of the Austrian House of Lords in which an independent State was demanded.

As a result of a conference between Emperor William and Emperor Charles at German Headquarters on May 10, Austria-Hungary concluded a new convention with Germany.

M.Duval, manager of the Bonnet Rouge, and his associates, Leymarie and Marion, directors of the paper; Goldsky and Landau, journalists, and two minor men named Joucla and Vercasson, were placed on trial in Paris on charges of treason and espionage, on April 29.On May 15, Duval was sentenced to death for treason, and the six other defendants were sentenced to imprisonment for terms ranging from two to ten years.

The British Government replied to the note of the Netherlands Government concerning the taking over of Dutch ships on May 1, and asserted the full legality of the seizure.

A London dispatch, dated April 24, announced that Germany had sent an ultimatum to Holland demanding the right of transit for civilian supplies and sand and gravel.Holland yielded to these demands on April 28, with the stipulation that the sand and gravel should not be used for war purposes.On May 5, Foreign Minister Loudon announced in the Dutch Chamber that Germany had promised to transport no troops or military supplies and to limit the amount of sand and gravel.

Persia informed Holland, on May 3, that it regarded as null and void all treaties imposed upon Persia in recent years, and especially the Russo-British treaty of 1907 regarding the spheres of influence.

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German Losses On All Fronts

One Estimate Reaches 5,600,000

Karl Bleibtreu, the German military statistician, writing in Das Neue Europa of April 22, gives the German losses from Aug.2, 1914, to Jan.31, 1918, as 4,456,961 men.His figures deal exclusively with those killed in action or taken prisoner.They are official from Aug.2, 1914, till July 31, 1917, and are then estimated to Jan.31, 1918.His figures and comment read:

WESTERN FRONT

1914
August	172,500
September	214,500
October	139,600
November	93,000
December	50,200
	————
Total	669,800
1915
Jan.and Feb	66,000
March	(?)61
April	42,500
May	112,500
June and July	152,300
August	105,400
Sept.and Oct	119,450
November	57,500
December	57,750
	————
Total	713,461
1916
January	18,100
February	17,800
March	51,300
April	72,650
May	64,000
June	54,850
July	86,650
August	148,000
September	119,800
October	125,000
November	87,100
December	56,000
	————
Total	901,250
1917
January	48,000
February	39,000
March	39,600
April	59,000
May, June and July	134,850
	————
Total, (7 months)	320,450

These figures give, on the western front, from Aug.2, 1914, to July 31, 1917, an aggregate of 2,604,961 casualties.

EASTERN FRONT
1914	163,900
1915	699,600
1916	359,800
1917	261,200

This gives a total from Aug.2, 1914, to July 31, 1917, of 1,484,550, and for the two fronts combined of 4,089,511.

From Aug.1, 1917, to Jan.31, 1918, Herr Bleibtreu estimates the total losses on both fronts at 367,450, making in all 4,456,961 men.

In adding those who died from illness or wounds, the losses resulting from the colonial and maritime fighting, as well as in the noncombatant and auxiliary services, not comprised in the preceding enumeration, the grand total considerably exceeds 5,000,000.

Estimates of German losses from Jan.31, 1918, to May 20, 1918, range from 400,000 to 600,000.If the above figures are correct, the total German loss in the forty-six months of the war exceeds 5,600,000.The London Telegraph, in analyzing these figures, said:

With regard to the figures given by Herr Bleibtreu, it may be remarked that they are enormously in excess over those compiled in well-informed quarters from the official casualty lists published by the German Government, and issued periodically.Down to July 31, 1918, these lists had contained a grand total of 4,624,256 names, but did not include naval or Colonial troop losses.Of the above figure the following are the permanent losses:

Killed and died of wounds	1,056,975
Died of sickness	75,988
Prisoners	335,269
Missing	267,237
	————-
Total	1,735,469

These statistics are merely the names published down to July 31, 1917, and are not to be taken as the actual total casualties, as the lists are always at least several weeks behindhand. But even allowing for this fact, Bleibtreu's estimate for the killed in action and prisoners alone is considerably more than double those officially acknowledged by Berlin, and nearly equal to the total casualties admitted in the official lists from all causes. Of this remarkable discrepancy there can be only two possible explanations. Either the German Government has throughout the war systematically falsified its casualty lists—and there is good reason to believe that this is the case—or else Bleibtreu has been put up by the German Staff to publish a set of statistics intended deliberately to mislead the Allies.

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Great Britain's Finances

Heavy War Taxes Levied

The new British budget for 1918-19 was introduced in the House of Commons April 23.It included some sweeping changes in taxes and gave important data of expenses.The estimate for 1918 in round numbers is $15,000,000,000; the estimated revenue is $4,200,000,000, leaving a balance to be covered by loans of $10,800,000,000.The actual expenditures in 1917-18 were $13,481,105,000; the revenue was $3,536,175,000; the deficit met by loans was $9,944,930,000.

Under the new budget the tax on incomes is increased from $1.25 in $5 to $1.50 in $5.Under the new rate the increased tax begins at an income of $2,500 a year.On an income that is wholly earned—such as a salary—the tax is as follows:

Income.	Tax.
$2,000 a year	$157
2,500 a year	225
3,000 a year	375
4,000 a year	600
5,000 a year	750
10,000 a year	2,250

Where the income is wholly unearned the tax is as follows:

TAXES ON UNEARNED INCOME

Income.	Tax.
$2,000 a year	$210
2,500 a year	300
3,000 a year	455
5,000 a year	947
10,000 a year	2,635

The super tax in the new law begins at an income of $13,750, and the total taxes paid on the following incomes, including income tax and super tax, are as follows:

TOTAL INCOME AND SUPER TAX

Income.	Tax.
$15,000 a year	$4,802
20,000 a year	6,812
25,000 a year	8,937
30,000 a year	11,187
40,000 a year	15,937
50,000 a year	20,937
100,000 a year	47,187
500,000 a year	255,187

The tax on $500,000 incomes is a little over 50 per cent.In the case of a tax-payer whose total income does not exceed $4,000 an allowance of $125 is granted in respect of his wife and an allowance of a like amount in respect of any dependent relatives whom he maintains; also an allowance of $125 in respect of children under 16 years of age.

TAXES ON COMMODITIES

Checks require a stamp of 4 cents, also promissory notes.The excess-profit rate remains at 80 per cent.The tax on spirits is raised to $7.50 a gallon; on beer to $12.50 a barrel; on tobacco to $2.04 a pound, the effect of which will increase the price 4 cents an ounce, while the cheapest cigarette, now 6 cents for ten, will be 7 cents for ten.The tax on matches is increased so that they will be sold at 2 cents a box instead of 1-1/2 cents.An additional duty of $3 a hundredweight is levied on sugar, so that sugar heretofore selling at 11-1/2 cents a pound will now have to be sold at 14 cents a pound.

A tax of 16-2/3 per cent, is levied on the sale of luxuries, including jewelry, and of articles above a certain price when they become articles of luxury; also on hotel and restaurant bills.This tax will be collected by means of stamps.The new postage rate is raised to 3 cents an ounce; on book packages exceeding one ounce an extra charge of 1 cent will be levied.Letters to the United States will cost 3 cents instead of 2 cents.Post-cards in England will be 2 cents instead of 1 cent, and the parcel rate, under seven pounds, 18 cents, and between seven and eleven pounds, 25 cents.

LUXURIES HEAVILY TAXED

The tax on luxuries is a new tax in England, and is following the method adopted in France Dec. 31, 1917. The tax on luxuries in France is levied at the rate of 10 per cent. on the retail selling price of the scheduled articles. All payments of less than 20 cents are exempted. The schedule consists of two lists, one comprising articles taxed irrespective of price at 10 per cent. , and the other, articles taxed when the retail price exceeds certain specified amounts, as follows:

Taxed Irrespective of Price.—Photographic appliances, gold or platinum jewelry, billiard tables, silk hosiery and underwear, artistic bronze and iron work, horses and ponies for pleasure purposes, curiosities and antiques, sporting guns, books, servants' liveries, gold watches, perfumery, soaps and dentifrices, paintings and sculpture, pianos, (other than cottage pianos,) tapestry, truffles, pleasure boats, and yachts.

Taxed Above Specified Prices, (approximately shown in U.S.money.)—Pet dogs, $8; other pets, $2; smokers' requisites, $2; bicycles, $50; silver jewelry, $2; picture frames, $2; walking sticks, $2; chinaware table service, $40; single pieces, 39c to $3; men's headwear, $4; women's hats, $8; women's footwear, $8; men's footwear, $10; chocolates, 75c per pound; corsets, $10; men's suits, $35; women's costumes or mantles, $50; scissors, $2; lace and embroidery machine made, 35c per yard; handmade, $1.83 per yard; artificial flowers, $2; furs, $20; gloves, $1.58; furniture, $300 per suite; mirrors, $4; motor cycles, $400; watches, $10; handkerchiefs, $3.66 per dozen; umbrellas, $5; feathers, $5; clocks, $20; photographs, $8 per dozen; cottage pianos, $240; curtains, $20; carpets, $3.62 per yard; pajamas and dressing gowns, $16; horse carriages, $200; bird cages, $2.

Payments for goods bought before Jan.1, 1918, are exempt from the tax.

AMERICA'S ASSISTANCE

In presenting the budget the Chancellor of the Exchequer stated that the expenditures in the past year exceeded the estimate by $2,030,000,000.He referred to America's assistance as follows:

The extent of the assistance of the United States and our advances to the Allies last year amounted to $2,525,000,000.In addition to this the United States have advanced to all the Allies no less a sum during the year than $4,750,000,000.Of this sum approximately $2,500,000,000 was advanced to us and $2,250,000,000 to the Allies.

The House will see, therefore, that, whereas this year we advanced to the Allies approximately the same amount as last year, $2,525,000,000 as against $2,700,000,000, the United States advanced in addition $2,250,000,000; that is to say, the total advances by us and by the Government of the United States are $4,775,000,000, as against $2,700,000,000 by us alone last year.

The House would notice that our advances to the Allies are approximately the same amount as the advances made to us by the Government of the United States.This is satisfactory.It means that it is only necessary for us to lean on the United States to the extent that the other Allies lean upon us, or that, in other words, after nearly four years of war we are self-supporting.

But it is almost absurd that we should be borrowing with one hand while we are lending with the other.The result is that our accounts are inflated apparently, and in fact to that extent our credit is weakened.I have therefore been in communication with Mr. McAdoo, the Financial Minister of America, and Mr. Crossley, the head of the United States Financial Mission, and I suggested as regards advances to the Allies a course which, if adopted, will have the effect of lessening to a considerable extent our burden, while in no way increasing the total obligations of the United States.

THE TOTAL BRITISH DEBT

In referring to the total debt the Chancellor of the Exchequer made the following statement:

The national debt, on the estimates which I have submitted to the House, will at the end of the present year, (March 31, 1919,) amount to $39,900,000,000.Previously, in counting our liabilities, I have deducted altogether advances to Allies and Dominions.I do not propose to adopt that course today.We cannot ignore what is happening in Russia; though, even yet, I do not admit—I do not believe—that we should regard the debt of Russia as a bad debt, because, sooner or later, in spite of what is happening now, there will be an ordered Government in that country.

By the end of this year the total amount due by the Allies to us will be $8,110,000,000, and I should hope that we should be able to deduct Dominion and obligation debts, making a total of $5,920,000,000.The amount of our national debt at the end of last year was $29,250,000,000.The amount of our liability on the basis I have stated is $34,280,000,000, and, taking 5 per cent.on this amount as the rate of interest, the total comes to $1,900,000,000.This, added to the normal expenditure, makes a total amount of $3,400,000,000.

Now, how is that to be met? Taking the Inland Revenue taxation alone, it amounts to $2,700,000,000. The Inland Revenue officials have assured me that they have made a very careful and a very conservative estimate. Taking this estimate, there remains a deficit on the full year of $550,000,000.

To make good this $550,000,000 I shall impose new taxation which, on the full year, will bring in $570,000,000.The Inland Revenue, in their estimate of result of existing taxation, take no account whatever of the excess profits duty, but that duty, as I have pointed out, is expected to yield $1,500,000,000.

Assuming—an assumption that may last for half an hour [laughter]—that the income tax remains at 5s, that should reach $375,000,000.Of course, that must be supplemented.It depends upon the state of trade and credit, but I think I am quite safe in saying that this amount, which they have left out of their reckoning, is more than sufficient to counter-balance any error made with regard to existing taxation.

GERMANY'S WAR DEBT

He followed this with a statement contrasting the financial condition of Great Britain with that of Germany, as follows:

Up to June, 1916, according to the statement of the German Financial Minister, the monthly German expenditure was $500,000,000; it is now admitted to be $937,500,000, which means a daily expenditure of $31,250,000, which is almost the same as ours.But it does not include such matters as separation allowances.As to the war debt, the German votes of credit up to July amounted to $31,000,000,000.Up to 1916 they imposed no new taxation at all, and in that year they proposed a war increment levy.Assuming that their estimates were realized, the total amount of taxation levied by the German Government was $1,825,000,000, as against our own amount.

This amount is not enough to pay the interest of the war debt which Germany has accumulated up to the end of the year.The German balance sheet, reckoned on the same basis as ours, will, with interest, sinking fund, pensions, and pre-war expenditures, be a year hence $3,600,000,000; and with additional permanent imperial revenue of $600,000,000 they will make their total additional revenue $925,000,000 per annum, and this amount, added to the pre-war revenue, makes a total of $1,675,000,000, showing a deficit at the end of the year of $1,925,000,000.

If that were our position I should say that bankruptcy was not far from the British Nation.

The German taxes have been almost exclusively indirect, imposed on commodities paid for by the mass of the people and not upon the wealthier classes, who control the Government and on whom the Government is afraid to put extra taxation.

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Trade After the War

Important Report by a Commission of British Experts and Economists

Great Britain's policy with reference to future trade is outlined in the final report of the Committee on Commercial and Industrial Policy After the War, of which Lord Balfour of Burleigh was Chairman, and which included in its membership Arthur Balfour, (ex-Master Cutler of Sheffield,) also the heads of the various Boards of Trade, the textile trades, with representatives of the shipping and shipbuilding industries, finance, engineering, metal trades, coal, electrical, iron and steel associations, national transport workers, and distinguished economists.

Shipping policy after the war is not dealt with in the report, but, in view of the world shortage of tonnage, the committee express the opinion that, while it may be desirable to impose for a limited period some restriction on the use of British ports by enemy vessels, any policy which might tend to check the use of English ports by foreign shipping generally would be inexpedient.They, however, urge that, in accordance with the Paris Conference resolutions, the exaction of reparation in kind from enemy countries should, in the interests of the reconstruction of industry and the mercantile marine, be carried out as fully as may be practicable.

In a general survey of the position of British industry and overseas trade in 1913, prior to the war, the committee found that the United Kingdom had taken only a limited share in the more modern branches of industrial production, and that certain branches had come to be entirely, or very largely, under German control, and in numerous branches foreign manufacturers had secured a "strong, or even predominant, position." They found that British merchants and manufacturers had also been encountering successful competition in overseas trade. They believe that the knowledge gained during the war will be a valuable asset in the development of British industry.

As to the measures which should be adopted during the transitional period, the committee reaffirm the main recommendations of their interim report, namely:

Transition Period

(a) The prohibition of the importation of goods from enemy origin should be continued, subject to license in exceptional cases, for at least twelve months after the conclusion of the war, and subsequently for such further period as may be deemed expedient.

(b) The Paris resolutions relating to the supply of the Allies for the restoration of their industries can be carried into effect if a policy of joint control of certain important commodities can be agreed upon between the British Empire and the Allies.Any measures should aim at securing to the British Empire and the allied countries priority for their requirements, and should be applied only to materials which are mainly derived from those countries and will be required by them.This policy should be applied as regards the United Kingdom by legislation empowering the Government to prohibit the export, except under license, of such articles as may be deemed expedient, and, as regards the British Empire and the allied countries, the Government should, without delay, enter into negotiations with the various Governments concerned, with a view to the adoption of suitable joint measures in the case of selected commodities of importance.

The Government should consider, in consultation with the Allies, the expediency of establishing after the war a joint organization on the lines of Commission Internationale de Ravitaillement for dealing with the orders of the allied Governments for reconstruction purposes, and with such private orders as they may find it expedient to centralize.

It is pointed out that the prolongation of the war and the entry into it of the United States have increased the importance of a considered policy directed toward assuring to the British Empire and the Allies adequate supplies of essential raw materials during the period immediately following the conclusion of peace, and that the extent to which the Paris resolutions which bear upon this vital question can be carried into effect depends upon the co-operation of the Governments concerned.

PROBLEM OF RAW MATERIALS

The committee reports that it will be necessary to continue for a considerable period after the war some portion of the control of home and foreign trade in order to secure adequate supplies of foodstuffs and raw material.It does not regard it as practical to attempt to make the empire self-supporting in respect of numerous raw materials.It notes that the Board of Trade already has set up a committee to investigate the question of the supply of cotton and it recommends special inquiries as regards each commodity."The object to be kept in view should be that the empire may be capable in an emergency of being independent in respect of the supply of every essential commodity of any single foreign country."

The committee advises against the exclusion of foreign (other than present enemy) capital from sharing in the development of the empire's resources, but recommends:

(a) Complete disclosure, as far as is practicable, of the extent of foreign holdings in any particular case.

(b) That mineral and other properties are not secured by foreign concerns in order to prevent the development of those properties, and to check competition in supply; and

(c) That in the case of commodities of great imperial importance, the local Government concerned should have some measure of control over the working of the properties.

These principles, if accepted, should be brought to the notice of the Governments of other parts of the empire, with a view to the adoption of a uniform policy.

ALIENS IN BUSINESS

The committee expresses the opinion that it would not be desirable to impose special restrictions against the participation of aliens in commercial and industrial occupations. It recommends, however, that such occupations as pilot and patent agent should be confined to British-born subjects, and suggests that foreign commercial travelers operating in the United Kingdom should be registered and hold licenses, that the registration of title to property should be compulsory, and that such registration should involve a declaration of the nationality of the owner.

The committee deems it unwise to restrain the establishment or the continuance of agencies or branches of foreign banks or insurance companies in the United Kingdom, but foreign insurance companies should be required to make a deposit proportionate to the business done.Foreign banks should be required to pay the income tax.

The committee considers it necessary to impose special restrictions on the subjects of enemy countries, and that this can best be done by means of stringent permit and police regulations, but it does not believe that attempts should be made to prevent enemy subjects from establishing agencies or holding interests in commercial or industrial undertakings.

A plan for the maintenance and development of industries essential to national safety, called "Key Industries," is proposed, as follows:

Synthetic dyes, spelter, tungsten, magnetos, optical and chemical glass, hosiery needles, thorium nitrate, limit and screw gauges, and certain drugs.

SPECIAL INDUSTRIES BOARD

The committee recommends the creation of a permanent special industries board, charged with the duty of watching the course of industrial development and recommending plans for the promotion and assistance of the industries enumerated above.With reference to industries generally the committee thinks that the individualist methods hitherto adopted should be supplemented by co-operation and co-ordination of effort in respect of

1.The securing of supplies of materials.

2.Production, in which we include standardization and scientific and industrial research; and

3.Marketing.

The report recommends the formation of combinations of manufacturers, strong, well organized associations and combinations, to secure supplies of materials, especially the control of mineral deposits in foreign countries.In order to facilitate increased production it recommends:

That an authority should be set up which should have the right, after inquiry, to grant compulsory powers for the acquisition of land for industrial purposes and the diversion or abolition of roads or footpaths.

That there should be a judicial body with compulsory powers to deal with the question of wayleaves required for the development of mineral royalties and the economical working of collieries and mines.

The committee believes in the formation of organizations for marketing the manufactured products of the country and deems it inexpedient for the Government to enter into any policy aiming at positive control of combinations (trusts) in the United Kingdom.It recommends that combinations be legalized, so as to be enforceable between members.It welcomes the establishment of the British Trade Corporation to co-ordinate and supplement existing financial facilities for trading purposes.As a general rule the members think it would be undesirable that the State should attempt to provide capital for industrial purposes, but as the re-establishment of industry on a peace basis will be profoundly affected by taxation, currency, and foreign exchanges, they recommend that these matters be taken up by the Treasury, in consultation with the banking and commercial interests.

TARIFF REGULATIONS

With reference to tariff the committee recommends a protective tariff only on industries "which can show that, in spite of the adoption of the most efficient technical methods and business organization, they cannot maintain themselves against foreign competition, or that they are hindered from adopting these methods by such competition."

The general fiscal policy as finally adopted by the committee is as follows:

1. The producers of this country are entitled to require from the Government that they should be protected in their home market against "dumping" and against the introduction of "sweated" goods, by which term we understand goods produced by labor which is not paid at trade union rates of wages, where such rates exist in the country of origin of the goods, or the current rates of that country where there are no trade union rates. We recommend that action be taken in regard to "dumping" on the lines (though not necessarily in the precise form) adopted in Canada.

2.Those industries which we have described as "key" or "pivotal" should be maintained in this country at all hazards and at any expense.

3.As regards other industries, protection by means of customs duties or Government assistance in other forms should be afforded only to carefully selected branches of industry, which must be maintained either for reasons of national safety or on the general ground that it is undesirable that any industry of real importance to our economic strength and well-being should be allowed to be weakened by foreign competition or brought to any serious extent under alien domination or control.

4.Preferential treatment should be accorded to the British oversea dominions and possessions in respect of any customs duties now or hereafter to be imposed in the United Kingdom, and consideration should be given to other forms of imperial preference.

5.As regards our commercial relations with our present allies and neutrals, the denunciation of existing commercial treaties is unnecessary and inexpedient, but the present opportunity should be taken to endeavor to promote our trade with our allies, and consideration should be given to the possibility of utilizing for purposes of negotiation with them and present neutrals any duties which may be imposed in accordance with the principles laid down above.

LIMITING PROTECTIVE PRINCIPLES

In view of the danger that the admission of the principle of protection, even to a limited extent, may give rise to a widespread demand for similar assistance from other industries, and consequently to an amount of political pressure which it may be very difficult to resist, the committee further recommends:

That a strong and competent board, with an independent status, should be established to examine into all applications from industries for State assistance, to advise his Majesty's Government upon such applications, and, where a case is made out, to frame proposals as to the precise nature and extent of the assistance to be given.

Before recommending tariff protection for any particular industry it should be the duty of the board to consider forms of State assistance other than, or concurrent with, protective duties, such as bounties on production, preferential treatment (subject to an adequate standard of quality and security against price rings) in respect of Government and other public authority contracts, State financial assistance, and also whether the position of the industry could not be improved by internal reorganization.

The board should also have constantly in mind the safeguarding of the interests of consumers and of labor, and should make recommendations as to the conditions which for these purposes should be attached to any form of Government assistance, whether by means of a tariff or otherwise.

The committee reports adversely on the changing of weights, measures, and coinage to the metric system.

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Finland Under German Control

Events of the Period of Chaos and Foreign Invasion Preceding the Fall of Viborg

Civil war, later complicated by the German invasion, has been the central fact in the history of Finland since the declaration of its independence in December, 1917.The internecine strife was precipitated by the coup d'état which the Finnish Socialists effected in January, 1918.It so happened that the representatives of the propertied classes had the majority in the Diet which severed the century-old connection between Finland and Russia.As for the Government which this Diet has set up to rule the independent republic, all its members belong to middle-class parties.Headed by Mr. Svinhufud, a Young-Finn leader, it includes one Svekoman, two Agrarians, three Old-Finns, and six Young-Finns.

The dissatisfaction of the Socialist elements, which are very strong in Finland, with this régime soon grew so intense that they decided to overthrow it by armed force.The Red Guard, that is, detachments of armed workmen organized by the Finnish Labor Party, seized Helsingfors, dissolved the "bourgeois" Government, and formed a Socialist Cabinet under the leadership of Senator Kullervo Manner.The revolutionists did not, however, succeed in capturing Mr. Svinhufud and his associates.These fled north and established their headquarters at Vasa, (Nikolaystadt,) on the Gulf of Bothnia.Since then the half-starved country has been the arena of bloody clashes between the Red troops and the forces supporting the Vasa Government, which consist largely of middle-class elements and are known as the White Guards.

It is an open secret that Russia rendered substantial assistance to the Finnish revolutionists. Most of the weapons in their possession are from Russian arsenals, and Russian soldiers who lingered on in Finland even after the Bolsheviki had agreed to withdraw the Russian troops stationed there have been fighting shoulder to shoulder with the Finnish Red Guards. It is reported that on several occasions the Finnish Red Guards were reinforced by Red Guards from Petrograd. Moreover, in its organization the Finnish Socialist Workmen's Republic is a copy of the Russian Soviet Republic. The Red Finns have the same hierarchy of Soviets, and they affect the administrative terminology of the Bolsheviki.

RED FINLAND

The Finnish Socialists should not, however, be treated as identical with the Russian Bolsheviki.The difference between them is probably due to a difference of civilization, for culturally the dissimilarity between a Russian and a Finn is as great as it is linguistically and ethnically.It is noteworthy that unlike the Bolsheviki they regard their own rule as a transitional, provisional régime.Speaking on Feb.14, 1918, at the first meeting of the Finnish Central Soviet, Kullervo Manner, President of the Commissariat of the People of Finland, said among other things:

One of the foremost aims of the great revolution of Finland's workers is to build the proud edifice of a political democracy on the ruins of the fallen power of the Junkers.* * * As soon as the enemy of the people has been defeated throughout the country shall the people of Finland be given an opportunity through referendum to accept a new Constitution.The People's Commissariat intends shortly to put before the Central Soviet a proposal for a fundamental law through which will be laid the ground for a real representation by the people and a firm foundation for the future of the working class.

Although the Finnish Socialists are united with Russia by co-operation and common aspirations, they do not desire to join the Russian Federation.Finnish socialism identifies itself with the cause of Finnish nationalism.It was the Socialists that were the stanchest advocates of Finland's secession from Russia, and it was they that, by calling a general strike, forced the Diet to adopt immediately the Independence bill in November, 1917.

The notion of Finland's complete sovereignty forms the basis of the peace concluded early in March, 1918, between the Russian Socialist Federative Soviet Republic and the Finnish Socialist Workmen's Republic, "in order to strengthen the friendship and fraternity between the above-mentioned free republics."According to this pact, published on March 10, Russia hands over to the Independent Finnish Socialist Republic all its possessions in Finland, including real estate, telegraphs, railways, fortresses, lighthouses, and also Finnish ships which had been requisitioned by the Russian Government before or during the war.Article IX.provides for "free and unimpeded access for the merchant ships of the Russian and Finnish Socialist Republics to all seas, lakes and rivers, harbors, anchoring places, and channels" within their territories.The next article establishes uninterrupted communication, without trans-shipment, between the Russian and Finnish railways.Article XIII.contains the provision that "Finnish citizens in Russia as well as Russian citizens in Finland shall enjoy the same rights as the citizens of the respective countries."

GERMAN HAND IN FINLAND

If "Red" Finland has had the support of the Russian Bolsheviki, "White" Finland has found a most enterprising ally in Germany. The Vasa Government has been working in direct and now open contact with Berlin. It is overwhelmingly pro-German. The relation between the two Governments early assumed the character of vassalage on the part of the Finns. This is evidenced by the peace agreement which official Finland concluded with Germany on March 7. Its full text will be found elsewhere in this issue.

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Since the beginning of the war the Germans have been conducting in Finland an active campaign of espionage and propaganda through a host of agents and sympathizers.The propaganda found a favorable soil among the propertied classes, and especially among the landed gentry of Swedish extraction.On the other hand, the persecutions which the Czar's bureaucracy inflicted upon the nation, and against which neither the French nor the British press uttered any adequate protest, drove some of the patriotic Finns into the arms of Russia's enemies.A number of Finnish youths escaped to Germany and entered the ranks of the German Army.The University of Helsingfors played a prominent part in this movement.In 1915 an entire battalion made up exclusively of Finns fought under the German colors, while no Finns served in the Russian Army, exemption from military service being one of the ancient Finnish privileges respected by the Imperial Russian Government.

After the March revolution, and especially after the fall of Riga, the efforts of the German agents, with whom Finland now fairly swarmed, were directed toward fomenting Finnish separatism. In fact, the Swedish press asserted that from the very beginning of the war the Germans had spent large sums of money in trying to fan the Finns' smoldering discontent with Russia. At the same time Germany endeavored to enlist the sympathies of the White Guards, (skudshär,) which the middle classes were hastily organizing, ostensibly for the purpose of assisting the militia and protecting the population from robbers. Berlin was so successful in its task that as early as October, 1917, the head of the Russian Bureau of Counterespionage in Finland spoke of the skudshär as "the vanguard of the German Army." The Finns who served in Wilhelm's army and were thoroughly indoctrinated with German military science and German ideals were returned to their native country, and it was they that took upon themselves to officer the White Guards. Some of the weapons and munitions used by the latter were secured from Sweden, but most of them came from Germany and were probably a part of the Russian booty. The above-mentioned Russian official declared, in an interview published in a Petrograd daily in October, 1917, that German submarines appeared regularly off the Finnish coast and delivered arms and ammunition to Finnish vessels.

ATROCITIES ON BOTH SIDES

The White Guards, commanded by General Mannerheim, fought the revolutionists with varying success but without achieving a decisive victory.Several towns in the south were the scene of prolonged battles in which many lives were lost, notably Tammerfors, the important industrial centre, where fierce fighting raged throughout the second half of March.The factory districts in the north were also the scene of stubborn fighting.A number of women were seen in the ranks of the Red Guards.

The two warring factions created a reign of "Red" and "White" terror in the country.Both committed frightful atrocities.On April 17, Oskari Tokoi, the Commissionary for Foreign Affairs in the Socialist Cabinet, protested to all the powers against the manner in which General Mannerheim treated his Red Guard prisoners.He pointed out that, while the Red Guards regarded the captured White Guards as prisoners of war, the Government troops, having taken a number of prisoners, shot all the officers and every fifteenth man of the rank and file.On the other hand, the corpses of many White Guards were found unspeakably mutilated.

Immediately after the outbreak of the Socialist rebellion, the official Government conceived the idea of appealing for foreign military aid against the revolutionists.On Jan.30 such an appeal was reported to have been sent to Sweden.The cause of White Finland had many sympathizers in that country.The Finnish White Guards had a recruiting office in Stockholm, and a number of Swedish volunteers fought in their ranks.A considerable portion (12 per cent.)of the Finnish population are Swedes, mostly members of the higher classes.In addition, the two countries have common historical memories, for Finland was a Swedish province for six centuries, from the time of Erik VIII., King of Sweden, till the Russian annexation in 1809.

The Swedish Government did not, however, elect to intervene.It is not certain whether Stockholm refused its assistance because Finland refused to cede the Aland Islands to the Swedes as a compensation for their services, or because, as Mr. Branting asserts, Sweden was to intervene "as the creature and ally of Germany."The only step the Swedes took was to send a military expedition to the Aland Islands, in response to several appeals from their population, which is mostly Swedish.This measure was decided upon by the Swedish Parliament on Feb.16 and was effected two or three days later.

The Aland Archipelago, consisting of about ninety inhabited islets and situated between Abo on the Finnish coast and Stockholm, belongs to Finland.Its strategic importance for Sweden is aptly characterized by an old phrase which describes it as "a revolver aimed at the heart of Sweden."The mission of Sweden's troops was to clear the islands, by moral suasion if possible, from the bands of Russian soldiers and Finnish White and Red Guards which for some time had been terrorizing the population.The Bolshevist garrison offered stubborn resistance to the landing of the Swedish forces.

THE GERMAN INVASION

At noon on March 2 a German detachment occupied the Aland Islands. The next day the German Minister at Stockholm informed the Swedish Government that Germany intended to use these islands as a halting place for the German military expedition into Finland, undertaken at the request of the Finnish Government for the purpose of suppressing the revolution. He gave assurances that Germany sought no territorial gains in effecting the occupation and would not hinder the humanitarian work of the Swedish Supervision Corps in the islands. On March 22 the Main Committee of the Reichstag rejected, by 12 votes against 10, the motion of the Independent Social Democrats to evacuate the Aland Islands and cease interfering with the internal affairs of Finland.

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