a long time, the deputies of the Opposition consented to attend the sittings when consideration of the constitution was on the order of the day. Their protests degenerated into mere obstruction. Distressing disturbances arose among the deputies themselves. The officers of the Chamber and a commission which was called an 'Arbitration Commission,' making use of its disciplinary powers, announced the exclusion of most of the members of the Opposition in batches of eight to ten, from day to day. It was under these conditions that the new constitution was voted with the same unanimity by the Chamber of Deputies as by the Senate. The promulgation of the constitution took place a few days later by means of a royal message in which the sovereign-without taking an oath in any special ceremony promised to respect the new constitution as he had respected the old one.

On the platform, in the press, and in the street, the deputies of the Opposition raised their categorical protests against the validity of a constitution thus promulgated. The movement reached such proportions that Bucharest had to be put in a state of siege to keep order. There were some tragicomic incidents, but fortunately no blood was spilled. To-day the Parliament is adjourned, but the street manifestations continue.

It is an old and regrettable Rumanian custom for political parties who wish to take office to organize noisy processions in front of the Royal Palace and through the chief streets of the capital, when they think a ministry has lasted long enough. Under the former King Carol, campaigns designed to bring about the downfall of a cabinet were all managed in this way. This is explained by the fact that the cabinet which holds office can control the elections, and any appeal to

the nation would have been in vain if the cabinet had presided over them. It is to be hoped that these evil customs will die out in Greater Rumania. Now, at their height, they offer a spectacle that others will not fail to exploit.

We shall not discuss, article by article, the new constitution, which as a whole reproduces the old one. The Opposition finds fault with it especially because it puts the economic strength of the country in the hands of the Liberal Party, which already holds the chief instrument of influence. The Liberals reply that it is their desire to preserve the national riches, chiefly those of the subsoil, and to prevent their absorption by foreigners. Probably they carry this fear a little too far. Rumania possesses immense unexploited natural riches. Her foreign debt is relatively slight, her budget. balances, and yet her exchange rates are absurdly low. A coalition of interests, not all of them respectable, is directed against the lei, with the object of forcing the Rumanian Government into surrender. We fear lest the constitutional vote, by tying up the Government, may not help very much in cleaning up the financial situation. All Europe is in a period of evolution that requires transition measures.

The solution of the Rumanian difficulties seems to lie in the coöperation of the various parts of the Government. No doubt unity of command is desirable everywhere, yet it must not be sacrificed to the vital elements of the country. It is understood that the Bratiano Cabinet will defend itself energetically against those movements in which one detects the hand of the Orgesch a German organization as well as against certain Magyar organizations; but it would be unwise to unite against itself all the peasants who are not Liberals. National interest is above party strife.

THE ECONOMIC CONSEQUENCES We have now to consider whether, in the field of economics, the peace-policy of the Allies- that is, of France and Great Britain has had satisfactory results, and has contributed to the reëstablishment of prosperity in old Europe. Let us do this without taking sides, but with entire frankness, leaving out of the account the interminable conferences, congresses, and reunions of every kind which for four long years have resulted in a vast economic chaos.

To those who are disposed to chide us for accusing the several French Governments that have succeeded each other since the Armistice of having kept the problem of Reparations upon a too narrowly political basis, we recommend the perusal of an article in L'Echo National by M. Clemenceau, on the occasion of his unofficial visit to the United States. It will be seen clearly enough that economic considerations played but a small rôle in the plans of the French negotiators.

Nothing could throw into such bold relief the economic distress of the ancient continent in general, and Central and Eastern Europe in particular, as the disorganized state of exchange, which, contrary to the opinion of many people, is not the cause but the effect of the economic crisis from which we suffer. When we realize that the money unit of Germany, the greatest economic power of Europe proper, which before the war held the same rank in the markets of the world as the pound

sterling, now is worth but one twothousandth part of the pound; when we see that the nation which was justly considered as the banker of Europe has lost three quarters of its purchasing power we can in some degree measure the immensity of the disaster which has overwhelmed us, and which will infallibly lead to a final cataclysm unless efficacious preventives are speedily found.

THE CAUSES OF THE ECONOMIC CRISIS

Very evidently the prime cause of the economic distress in most continental countries was the war itself. Besides the annihilation of the wealth that had been accumulating for more than a century, it destroyed or rendered practically useless tens of millions of men in the full vigor of their activity, thus affecting production in an enormous degree. The situation to-day, though few have recognized it, is the consequence of the disorganization in raw materials and food. But instead of going to work to remedy this, nearly every European nation has proceeded to aggravate it with all sorts of hampering customs and fiscal measures. The Allies themselves, under the influence of traditional protectionism, a heritage from Colbert's mercantile system, have distinguished themselves in this unwise policy.

Instead of reëstablishing order everywhere and especially the resuming of production after four long years of destruction or useless production war material and so on they have

increased financial disorder, aggravated industrial disorganization, and hemmed in exchange by Chinese walls along the customhouse frontiers of the nations

- all of which has ended in tripling, or even quintupling, the cost of living. The most baleful example of this method has been the isolation of Russia, a country of more than one hundred and twenty million inhabitants, which, before the war, furnished Europe with more than two billion francs' worth of raw materials, and which exported in 1913 raw materials to the value of over seven billions of francs. It is evident that European industry has thus been deprived of a vast storehouse of raw materials and food products, to which, with a wiser and more practical system of diplomacy, Europe might have been helping herself with both hands.

If the war was the primary cause of the present situation, the Treaty of Versailles was the next - a malformed child which its godfathers have one after the other disowned, and which has been and is bound to remain an obstacle to the regulation of the problem of Reparations. As we have already said, the great mistake of the three dictators of the Treaty was in not fixing the amount of the debt owed by Germany.

It may be objected that an exact estimate of the damage done by the enemy could not be determined in so short a time. This might have some weight if an exact technical estimate had ever been furnished, but this, as we know, was not done. And it was a fatal error to force the debtor to sign a blank check, reserving to ourselves the right to add later the sum the enemy must pay, according to our own conclusions. This was certainly the very best way to ensure the dishonoring of the check.

It was a matter of the most elementary justice to demand of Germany full reparation for damage done the Allies,

particularly in France and Belgium; but it would have been justice as well as common sense to allow her the possession of the means to make this reparation. And this is what the Allies refused to do.

THE CRISIS OF PRODUCTION

At the bottom of our economic trouble lies insufficient production of raw materials and food. The most important food-product is wheat, the chief staple of most civilized nations. In 1913, Europe, without Russia, produced 348,000,000 quintals (the metric quintal is about 220 pounds avoirdupois), while the harvest of 1921 was 275,000,000 quintals, and that of 1922 only 225,000,000. The production of other cereals has fallen in like alarming proportion. Sugar tells the same story.

In the industrial field the situation is no less acute. The best indication of this is coal, the world production of which in 1913 was 1,125,000,000 tons, of which the continent received 555,000,000; in 1921 it was 886,000,000 tons, 320,000,000 of which were consumed by Europe. 1922 showed an improvement, though without attaining pre-war proportions.

The figures in regard to iron and other minerals, as well as foundries and melting-plants, show that metallurgic production has fallen from sixty-two per cent in Europe in 1913 to fortyeight per cent in 1921.

Nor has transportation escaped its share of misery, both by land and water. For example, our ports show a fall in traffic from 38,000,000 tons in 1913 to 25,000,000 in 1921. Of ninety docks in our shipping yards, only forty were used in 1922.

THE FINANCIAL SITUATION

Economic distress has naturally been accompanied by a financial crisis unprecedented in history, which has

The debt of France, according to the Senate budget, amounts to 475,000,000,000 francs, not reckoning the recent depreciation, from which we may deduct assets of 139,000,000,000, a large part of which, 124,000,000,000, are supposed to be paid as Reparations by Germany, and 15,000,000,000 from our Allies except Great Britain, the recovery of which has become rather problematic. The state of our treasury department is very critical. M. Bérenger estimates the budget deficit for 1922-23 at something like 66,000,000,000 francs. A rise in the price of raw materials and food products is already indicated.

In Italy the situation is no better. The public debt amounted to some 115,000,000,000 or 120,000,000,000 lire, but in this estimate the lira is reckoned at par, which means that Italy's debt is actually much larger than the above

we seek this remedy primarily in politics.

1. The Great Powers must renounce, in the interest of peace and also in their own interests, every idea of imperialism or hegemony.

2. This political change amounts to the postulate of a general disarmament, under the ægis of a real 'League of Nations,' each nation to retain an armed force only strong enough to ensure its domestic tranquillity. An Utopia? And how about reconciling the many delicate questions which the war created, especially among the smaller nations, where the presence of strong armies had been necessary? Our answer is that it has been precisely these large armaments of the minor nations, encouraged by the Great Powers, which have been the cause of all the difficulties and prevented the arrangement of disputes by pacific

means.

3. The question of racial and national minorities needs a solution different from that provided by the peace treaties, which in many cases apportioned racial groups against their will to nations not of their blood. These must be allowed to decide their own destiny, according to the well-known Allied canon: the right of peoples to rule themselves. Upon this really depends the peace of the world.

4. The freedom of the seas for all nations dependent upon overseas commerce must be guaranteed. It is an intolerable situation that merchant fleets are at the mercy of this or that naval power. The ocean must be free to every nation without exception, provided that, in case of a war between two or more nations, the others observe the laws of neutrality. Beyond this no further restriction is necessary.

Now, it is foolish to believe that the Great Powers will spontaneously give heed to such ideas, legitimate as they

may be. The question therefore arises: which one will take the initiative? It is asking a good deal of heroism of those who have already declared certain political aims. Besides, it is difficult to bring diplomats to acknowledge their own errors, especially when they have been so serious. Again, the eyes of the world have turned hopefully toward a new organization with a sweet and sonorous name, the 'League of Nations,' from which it expected peace and happiness, but which has proved to be, alas! but a pale star in a darksome heaven. It could not be otherwise, considering its origin. The invention of politicians and diplomats, it is but a tool in the hands of the Powers, who make sunshine or rain-mostly rain! on earth at their sweet will. If the League is to be of any use at all, it must be rendered independent of Governments and its members must be elected directly by the several peoples.

And now to determine the remedies that suggest themselves in the field of economics.

1. First of all comes the stabilization of finances, without doubt a very delicate and complex task, into the intricacies of which it is not necessary to enter here, but which, taking for granted the good-will of the interested nations, should soon be crowned with success. The means would include the standardization of monetary units; reëstablishing the equilibrium of the budget by the reduction of expenses, especially military ones; deflation; funding of national debts; suppression of loans and bond-issues for military and treasury purposes; and raising the budgets by taxes alone.

If these means do not, contrary to our opinion, prove sufficient to reëstablish financial stability, then recourse must be had to major operations such as conversion and the annulling of debts and war-loans.

2. We attach hardly less importance to a general reform of obtaining customs systems, which may be compared without exaggeration to Penelope's web. Hardly has one tariff been put in practice before another is proposed. When one reflects that a tariff affects thousands of articles, it seems marvelous that there can be any exchange of commodities at all between the nations. Protectionism also has been grossly abused, and should be radically limited. It would of course be a brutal measure to introduce free trade in Europe overnight; one must not forget the abnormal state of the ravaged portions of France and Belgium, or the new nations, whose economic stability is not yet established. But it is quite possible to begin at once to reduce duties very considerably in all countries having protective tariffs. To preserve the present wicked and demoralizing state of affairs simply means the perpetuation of the economic crisis.

3. These two great reforms, which form a sine qua non of European economic reëstablishment, can be realized only by a successful solution of the problem of Reparations.

REPARATIONS

This problem, tough enough in itself, has become still more complicated by the French and Belgian occupation of the Ruhr, about which we shall say a few words at the end of this paper.

We have already expressed the opinion that the financial abyss into which Germany fell made it impossible for her to fulfill completely the Reparations conditions. Germans in general, and particularly those Germans whom we term industrial magnates, have been accused of the systematic sabotage of the mark. They are also declared to have large sums, in the form of international bonds, stowed safely away in foreign banks. This last charge is