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the financing of foreign trade possible without going through London.

Between 70 and 80 per cent. of Russia's population is in the country. That gives a good idea of the great changes that must take place there before that country, with its vast resources, can become a competitor in the world's markets. In France close to 60 per cent. of the population before the war was rural. In Germany only 40 per cent. lived outside of towns. That measured the necessity for the greater commercial leadership of Germany. The population of this country has increased more rapidly than any other, and we have a great advantage in having land enough to support a much larger total.

While it is not always well to read the good things that others say about you, if allowance is made for the fact that the London Statist wished to criticize the financial and trade. policy of the British Government, we may take just pride and get a view of the future from what that leading financial journal said about "the competitor which is growing up across the Atlantic:"

"They are considerably more than twice as numerous as we are in these islands. They are amongst the very best business men that the world holds to-day. And they are in possession of a soil which is capable of maintaining five times the population it has at present. They have, therefore, illimitable room to spread and to multiply, and they have resources, which, with the exception of China, no other country in the world possesses. Under any circumstances, therefore, they would distance us in the long run. But if we had a really capable government we might hold our own for a long time, and we might make adequate provision for the day when we should indeed have to play second fiddle. As it is, three short years of war have suddenly deprived us of our financial primacy, and threatened to land us in a position in which we shall be dependent on the lending power of others and incapable of lending ourselves."

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minute attention to discipline, training, and supply have neglected to protect the soldiers against certain social evils that have always clustered around military camps. In former times a great force of female camp followers regularly accompanied each army on its campaign, and reports that have reached this side from Europe disclose that the evils in question still prevail on altogether too great a scale. It is the boast of the medical services in the modern armies that they have abolished certain diseases that had formerly destroyed more soldiers than the enemies' bullets. A man in the English, French, or American army is less likely to contract typhoid than he is at home. Tetanus, formerly one of the greatest horrors of warfare, has absolutely disappeared, and modern antiseptic methods have freed gunshot wounds from much of their destructive effects. Yet those much more terrible scourges, the diseases that accompany sexual incontinence, are still rampant. It is not necessary to accept on their face value all the sensational accounts that come from the other side; if even a fraction are true, the situation is a serious one.

A soldier who is absolutely sound, physically and morally, is the only fighter that has much value in the present war. Merely from the standpoint of military efficiency, the Nation must exert every effort to protect our men from these disintegrating evils. Fortunately, we are approaching this great problem in the right way. It is something which it is difficult to control by force or stringent regulations. Formerly the Army put away in the guard house the man who had become particularly obstreperous or who had overstayed his leave. But the real trouble has been that the soldier has had plenty of idle time on his hands and has been removed from all the restraints of his former environment. The proposed method of treatment is to establish recreation centres around every camp and cantonment, where the men can obtain wholesome entertainment. If they can be kept busy with movie shows, vaudeville, baseball, football, and a dozen other forms of recreation it is believed that only the most vicious will seek their relaxations elsewhere. The movement now under way to raise money for the establishment of such centres is one that deserves the support of all who are anxious not only that the United States keep its young manhood intact, but that it win the war.

MR. JOHN G. SHEDD ON SAVING AND

INVESTING

Every month the WORLD'S WORK publishes in this part of the magazine an article on investments and the lessons to be derived therefrom

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Mr. Shedd was twenty-two years old when first employed by Mr. Marshall Field. He worked for ten dollars a week for a few months and then for twelve. At the end of the first year Mr. Field came around and asked him. how much he had saved. (Mr. Field used to tell this story to his other employees.) Mr. Shedd replied, "Five dollars a week.' Mr. Field naturally looked incredulous. The young man saw this and remarked: "I want you to see my bank book, Mr. Field." "Oh no, Mr. Shedd, that is not necessary." "But I would like to have you see it," rejoined Mr. Shedd. The bank book showed regular entries of ten dollars for each pay-day, a total of $260 for the year. Mr. Field complimented him highly on this achievement. Passing to a high salaried man in the same department, he asked him how much he had saved. On receiving the reply "Nothing," he announced, "You will not receive another cent increase from me until you have demonstrated your ability to save."

Some time after this Mr. Shedd had his first experience in buying securities. He tells of that incident himself:

"A very close friend, a man of high standing, came to me and asked if I had fifty dollars. I told him I had. He wanted me to buy some silver mining stock at a few cents a share. He said he knew the people in the company and predicted large profits on the investment. Instead of dividends, an assessment was called for. This I did not pay because we had found out more about the com

pany. My friend did know most of the men in it, and they were of good reputation, but had been dupes of an unprincipled man who was at the bottom of the thing. I think I still have those certificates somewhere. I kept them for a long time. They would nearly paper this office in handsome colors.

After that my savings, as they grew, were always invested with a view to safety of the principal. I sought the advice of reliable and well established banking houses, and was satisfied with a moderate interest. If people could only be made to see that a 5 per cent. bond with safety is much better than 10 per cent. with poor security, great good would be accomplished. But it seems a hopeless task. It is certainly an endless one. We see that in our own organization. Although we offer to secure for any of our people the best advice, and urge them to come to us, every year many thousand dollars are lost through the purchase of worthless securities. They hear of some one who has made big profits-who may or may not have done so-or some friend advises them, and they lose their money.

"This is all commonplace talk, and has been heard over and over again. But there seems great need for its continual repetition. Many things have changed since I was a young man. It was then "fight ahead," now it is "dig in." Ways of thinking have changed. The young men of to-day do not have the same thoughts they did in my time in regard to many things. But in this matter of saving and investing, I believe there has been little change. It is the same problem of organizing one's life along lines that provide for building up a competence to provide for old age. I believe the savings bank is the best place to start accumulating. There are, I understand, good bonds in hundred-dollar denominations, but it has always seemed to me that a thousand dollars was the proper unit for investment in securities. When that amount is reached people should seek the advice of a responsible banking house-not simply of any one they

know, but of a house that has been in business long enough to have a well established reputation. They should be satisfied with low interest with safety of principal.

"The first time the advantage of saving was forcefully brought home to me," said Mr. Shedd, "was when as a boy a small pamphlet fell into my hands showing how a dollar in the savings bank would grow; and how much a dollar a week, two dollars, and five dollars a week would amount to in a few years at compound interest. I put the pamphlet in my pocket and profited by it. I still think the use of the savings bank is the best aid to saving. If our young men can be taught to save, between the ages of eighteen and thirty, the money that they do not then need to spend, they will never have to wear trousers frayed at the heel in their old age. It is much better for them, for their families, and for the country, that they wear frayed trousers before they

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are thirty, than after. The man who does not start saving while he is young usually never does start. He is always jumping around from place to place. You can place less dependence on him; he is a poorer citizen. 'In addition to being protected from want, the man with savings is in position to take advantage of opportunities as they arise. Opportunities come to those who are able to grasp them. One of the things I fear most in this country is the growth of paternalism. That means the leveling of endeavor, the quieting of individual initiative and ambition. With our great business organizations and vast possibilities for growth there is a greater need for individual ambition in this country than there has ever been. If we can educate our young men to organize their lives with a definite plan for savings, we will have men with ambition to grasp the opportunities and with means and ability to carry out the work."

THE WAR TO-DAY-AND TO-MORROW

Strategic Conditions on all the Fronts and the Outlook for Next Year

W

BY

J. B. W. GARDINER

HEN the close of 1916 gave Germany pause in which to take stock of the year's war business, every entry on the books, with the single exception of the Rumanian campaign, found its way to the wrong side of the balance sheet. The Italian campaign along the Isonzo, the great Russian offensive in Galicia and Volhynia, the many battles of Verdun, and finally the great Battle of the Somme all had gone decisively against the Central Powers. The beginning of that year had seen Germany thoroughly confident that, as far as the Allies were concerned, the deadlock in the west was absolutely unbreakable. Verdun proved to them that if this were true of the Allies it was equally true of themselves. When their numbers and equipment were at the full flood of the tide, they struck in a last gigantic effort to end matters before the ebb should set in, but, beaten and crushed, their best battalions decimated, they were thrown back, and the

effort from which victory had been expected had been turned into a German holocaust by the gargantuan appetite of the French artillery. While still reeling from the defeat at Verdun, the German lines were suddenly called upon to withstand the terrific impact of the opening charge on the Somme. There was not enough reserve strength to resist it. Little by little, step by step, these lines were forced back as the Allied armies bit deeper and deeper into their positions. By the end of the year, an advance of some ten miles had been made and a wedge driven into the German lines which formed, with the Allied lines along the Aisne from Soissons eastward, the open jaws as of some great Leviathan which threatened, with another effort, to close and consume the German forces still holding the great Noyons salient.

The war must be won and lost in France and Belgium. It is there that are found the great bulk of the contending forces of the most powerful belligerents, and a decision can be

gained only by the defeat of one of this group. It may aid a decision to defeat minor proportions of forces in a subsidiary field. But the object of war is the elimination of armies, and as long as the bulk of an army is still in the field as an effective fighting force, a decision has not been reached. Therefore, as the fighting on the western front goes, so goes the war. Conclusions logically drawn and based on known conditions on this front may then be considered to apply to the war situation as a whole.

Germany had struck at Verdun with her full force mustered for this one great effort. She threw into the fighting the very best she had, but her best was not good enough. From an offensive measure on a gigantic scale, the Verdun battle dwindled down until it had turned into a purely defensive action, the initiative little by little passing to the French. On the Somme there never was a question even for a moment of Germany playing anything else but a defensive rôle. If, therefore, the battle of the Somme proved to be an Allied victory, Germany was not only doomed to carry on a purely defensive war, but a losing defensive as well. It is perfectly obvious that no army can gain a military decision through a defensive programme. Unless there is sufficient strength to strike out at a favorable moment and crush once and for all the opposition, the most that army can hope for is to turn the war into a drawn battle. Germany's chance of emerging victorious passed when the seal was placed upon the Verdun lock. Her hope of producing a stalemate vanished when the Somme proved to be a Franco-British victory.

The situation on the western front as it appeared in December, 1916, may then be briefly summarized. Germany tacitly admitted her own inability to break the grip of the Allies in the west, while at the same time denying the ability of her opponents to gain the decision. The Allies' viewpoint coincided thoroughly with the first part of Germany's opinion, but pointed to the Somme successes as a disclaimer of the second. Putting aside the claims of the belligerents themselves, certain elements of the situation stood out clearly. Germany was first outnumbered, and outnumbered by troops who man for man were in every sense at least the equal of her own in fighting calibre. She was outmunitioned and outgunned. In artillery of all calibres the

Allies had more guns per mile of fighting front and more and better shell to feed them. Finally, Germany had reached the crest of her power and was commencing to slip down the slope.

On the Italian front, the defense, as last year came to a close, still held the upper hand. It is true that after months of struggling the Italians had broken over the barrier imposed by the Isonzo River and had captured the bridge head at Gorizia. At great cost they had pushed beyond and obtained a foothold on the northern and western lips of the Carso Plateau which stretches out along the sea, barring the way to Trieste. But here they appeared absolutely stopped. The Austrian defense, supported by the succession of heights which line the eastern bank of the Isonzo River, appeared too strong to be broken down. In Trentino, the other Italian theatre, Italy was admittedly on the defensive, with no offensive aspirations whatever. At the close of last year, therefore, the entire Italian situation looked painfully deadlocked. Italy's lack of raw materials, the dearth of available shipping in the face of the necessity of importing not alone all war materials but a large quantity of food as well, Austria's apparently impregnable defensive positions along the eastern bank of the Isonzo barrier-all these combined to negative any thought or hope that Italy could initiate an offensive move of sufficient power to alter materially the situation in this theatre. At best, it seemed, Italy's function would be the neutralization of the Austrian forces needed for defensive operations.

RUSSIA'S YEAR OF PROMISE

In spite of the Rumanian débâcle which closed the 1916 fighting on the Russian front, the achievements of the year by the Russian forces held out great promise for the new year. Although still suffering from the Germanism of Stürmer and his traitorous agents, Russia had nevertheless recovered from the great defeat which followed the battle of the Dunajec, and, by a magnificent effort under the able leadership of General Brusiloff, had disastrously defeated the Austrian army, occupied all of Bukovina, captured a half million of Austrian soldiers and destroyed as many more through casualties, and pushed her lines forward almost to the gates of Lemberg. An unexpected reserve strength had been revealed and an army had been recreated which this

time gave evidence of being well equipped and well munitioned. The entrance of Rumania, notwithstanding her defeat, had done much to add to the favorable outlook for the current year. The battle line from Riga southward, already long and therefore thinly held, had been materially increased. Indeed, if Russia could only rid of herself of the horde of vampires which had fastened themselves on official Petrograd, sucking its life blood in the interests of the Central Powers, there were apparently no limits to what Russia might accomplish.

Austria had been, by a succession of defeats, weakened far beyond her powers of recuperation. What forces she still was able to maintain in the field were scarcely sufficient to permit a continuance of her defensive rôle against Italy, leaving nothing for the operations in Russia and Rumania. The entire burden, then, of both main fronts was thrust upon Germany, with such meagre assistance as might be furnished by Bulgaria and Turkey. The prospects were then far from bright for the Central Powers. On other fronts little was looked for. Since the surrender of General Townshend's force at Kut-el-Amara, the Mesopotamian theatre had faded from the limelight completely. There was no indication that any further movement had been planned or was even under consideration. At Saloniki there was complete stagnation. The defeat of Rumania had removed from the list of possibilities any success in this quarter. The troops that were there, numbering about 750,000, were limited to holding back Greece and preventing the Central Powers from gaining free access to the Mediterranean.

GERMANY PERMANENTLY ON THE DEFENSIVE

Germany was everywhere on the defensive and was destined to remain so all through the Spring and Summer of 1917, until the attack on Riga and the drive against Italy. The initiative, and all the advantage which it holds, rested entirely with the Allies. It was theirs to attack when and where they willed. More important than all else, their organization had been perfected and, through the medium of the Allied General Staff, unity of command and control had been established. Instead of haphazard, isolated, and uncoördinated attacks, plans had been formulated and put into execution for combined operations on all fronts. Positive superiority

in the mechanics of war, in guns, shell, and shell production, in air craft, added to an ever-increasing superiority in man

gave promise that 1917, even if it did not bring victory, would at least send Germany well down the slopes toward the valley of defeat, leaving for the next year to bring complete triumph.

Hardly had 1917 dawned when the results of the Allied successes of the previous year began to accrue. Germany was forced to admit her growing weakness. This admission took the form of an announcement of unrestricted submarine warfare, which, in effect, was a declaration of war against all the Powers which still remained neutral. As the German Chancellor himself stated in his attempted extenuation of German savagery and gross international immorality, it was their only chance of victory, a last gamble with fate. As a result of this move, which was of course designed to break up all communication between the Allies and the neutral world, Germany received the greatest blow that has been delivered since England entered the war, the severing by the United States of diplomatic relations and the subsequent acknowledgment of the existence of a state of war with the German Empire. It was the first of a series of German calamities that the new year was to bring.

THE GERMAN RETREAT

The second came when the Battle of the Somme began to blossom and bear fruit. Up to the end of 1916, Germany persistently declared that this battle was a German victory and that nothing that had been accomplished had in any way affected the military situation or had justified the expenditure of shell or of men that the Somme had cost. But hard on the heels of the beginning of unrestricted undersea warfare came the German retreat. Again there was an admission of German extremity. The German explanation of the causes of this retreat are too silly and inconsequential to require mention in a serious analysis. The map tells the story and shows the danger to the forces holding the Noyon salient of an extension of the Somme gains or of a similar blow from the south. We need therefore look no further for the reason. Preparation for this retreat had begun in December, the principal element of which was the fortification of a new line. The old line

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