The Next War: An Appeal to Common Sense/Chapter 7
CHAPTER VII
THE COST IN MONEY
So far, we have discussed mostly the direct effects of war—the last and the next—on human life. The loss of that accumulated wealth of the world which is property touches human life indirectly in a thousand ways, and is therefore of more than secondary importance. And here, we run into bewildering perplexities. What in the arbitrary terms of money the late war cost the European peoples, we already know. We know also approximately what it cost in out-and-out destruction of houses, fields, factories, mines and railroads by bombardment and conflagration. But the shrewdest economist cannot guess the final cost. It is not enough to compile the national debt, so great as to lie beyond the imagination of the average man. Those debts cannot all be paid; in some manner or other, many of them will be repudiated. The true economic loss, which cannot be repudiated, lies in the disturbance of that delicate machine of manufacture and trade by which modern industrial nations lived and worked before the great war. We see that loss every day in the absurd conditions of the third year after the Armistice. There are three factors to industrial production—labor, machinery and raw materials. In Germany are nearly three million cotton operatives, as expert as any in the world. Standing ready to their hands is a full equipment of the most modern machinery. Half of the cotton operatives of Germany are living in idleness and semi-starvation for lack of raw material. We raise the raw material in the South of the United States—and our southern farmers are in financial difficulties this winter because they have no market for their cotton!
It was agreed in the Versailles treaty that Germany should furnish to France the equivalent of the coal-production destroyed when the Lille and Valenciennes mines were flooded. Germany has nearly fulfilled at least that clause of the treaty. At this moment (January, 1921) German coal in enormous quantities lies piled up on sidings of France, unused. France has the expert operatives; except in the devastated North, she has her intact machinery; she has a great job of building to do, and that involves steel, which is made with coal. But she cannot use that German coal just now, because a combination of adverse exchange, undermined credits and shaken confidence keeps her working men from their machines. There is in Poland and Austria that same combination of strong men and good machines, ready to work for their daily bread. But the men are starving because they have no work by which to earn food; and at the same time our farmers and those of the Argentine are complaining that they have slack markets for their food-products.
What shrewd observers expect of the next few years in Europe may be seen in the present policy of the British Labor Party. Rightly or wrongly, the party leaders believe that they can take over the power in England. But they say frankly that they do not intend to do it now, because the next four or five years will bring such economic consequences of the late war as to swamp and discredit the faction in power. They prefer to let the “old crowd” take the onus. Possibly, the heaviest costs of the late war are still to come.
Nor can we reckon the economic losses of Armageddon without counting in the past—the thirty or forty years of intensive preparation which preceded the explosion of 1914. During that period, when chancellories kept the peace by the old-fashioned system of checks and balances, Europe was traditionally an armed camp. Economically, it was in a state of perpetual warfare. National wealth grew in this period, but national expenditure on armies and navies grew faster. In France, which for various reasons we may study most easily, the military and naval budget increased from fifteen to twenty per cent during each decade; and the indirect appropriations for the army, as for example in the item of strategic railways, even faster. Directly and indirectly, she was by 1905, ten years before the great war, spending between two hundred and ten and two hundred and twenty-five million dollars annually on her army and navy. At the same time, she was paying about a hundred and fifty millions annually in interest on the debts of old wars—she was still financing the campaigns of the two Napoleons. Such figures mean nothing to the average mind; but here is a basis of comparison. France is strongly centralized. Most of her popular education is financed not by the city or county as with us, but by the national government. And in the years when it was paying more than two hundred millions for the next war, a hundred and fifty millions for old wars, the national government spent on education about forty-six millions.
Now this was almost dead economic loss. In the ordinary processes of industry, part of the receipts at least are going to increase the world’s wealth. Take for example the ultimate destiny of a dollar paid into the cotton manufacturing business. Most of it buys someone bread and meat and shelter and clothing. But just so many cents or mills of that dollar buy factories, machinery, swifter transportation—something which will make more wealth and still more wealth. It is like a crop of which the greater part is eaten, the lesser part kept for seed. The money spent on armies and navies in no wise increases the world’s real wealth, even when the shells merely lie and disintegrate in the magazines, the guns grow old-fashioned in the barracks. And when they are used, of course they are actively destroying wealth.
The war came; and it was possible under the urge of national necessity to increase taxation. All did, some more, some less. England crowded on the taxes until the man of an average middle-class income was paying before the end some forty per cent of his income. Germany and France paid less heavily at the time. Each was calculating on victory, and on making the loser pay. France won; and already she realizes that she cannot begin to reimburse herself, even though she milks from Germany her last mark. And Germany the loser—expression fails in the face of her predicament.
But tax as they might, the nations had at once to begin drawing on their future, asking for unprecedented loans both from their own people and from foreigners. Debts piled up beyond imagination.
Let me set down a few figures. They will not mean much to the reader, I suppose, any more than they mean much to the writer; they are too overwhelmingly big. In actual money, paid out over the counter, virtually all taken from the world’s accumulated wealth, the war cost one hundred and eighty-six billion dollars. If you add the indirect cost such as destruction of property, loss of production and the capitalized value of the human lives, the sum reaches three hundred and thirty-seven billion dollars. The national debts of Great Britain rose from three and a half billions to thirty-nine billions; of France from six and a third billions to forty-six billions; of the United States from one billion to nearly twenty-five billions.
By certain comparisons, we may arrive at an understanding of these figures. Again I will take France as the best example at hand. Her total national wealth—farms, mines, factories, buildings, railroads, canals, everything she owns—was estimated in 1920 at ninety-two and a half billion dollars. Her debt, as I have said, is forty-six billion dollars—almost exactly half her total wealth. That wealth was her heritage. When the first Gaul, long before Julius Cesar came, cleared land on the borders of the Seine, he was creating national wealth for the France of 1920. It had been accumulating for more than twenty centuries. Now we will say that you own a factory worth, at current market rates, something like one hundred thousand dollars. There comes a period of unprecedented hard times, in the midst of which you have a fire which—since you carry no insurance—destroys the value of a part of your plant. You find that your business is worth ninety-two thousand and five hundred dollars; and that you have been forced to put upon it a mortgage of forty-six thousand dollars. Then you face another period of hard times, with money tight, markets poor, raw materials hard to get. That, in terms of business, is the situation of France. Great Britain is only a little less affected. Her national 
There again we run into incomprehensible figures. I have spoken already of the growing disproportion between the cost of the cannon and its charge on the one hand and the destruction which it can accomplish on the other. Of that, Northern France stands as the living proof. France lost the most heavily in property, as she did in life. Proportionately to her population and wealth, Belgium’s loss is only a little less; among the greater nations, Italy stands next. Physical destruction of property was very unevenly distributed. But it all comes out of the wealth of the world; and so interlocked are the activities of modern nations that you cannot destroy any considerable body of wealth in one region without causing disturbances in others.
Let us abandon abstract figures and make this the basis of comparison: In 1906, the city of San Francisco was partially destroyed by earthquake and fire. A year or so later, we had a brief financial depression; there were lesser depressions in England and Germany, where insurance companies had been hard hit. And many economists said that it was all due to the loss of wealth and the disturbance of conditions caused by the San Francisco disaster.
In Northern France, about as many buildings were destroyed—omitting those merely damaged—as there are in Greater New York; and New York has twelve or thirteen times the population of San Francisco at the time of the disaster. The region of San Francisco lost no canals, railroads, or improved highways. She was not a manufacturing city; and such factories as she had mostly escaped. But France did lose factories, canals, railways, highways in her most thickly populated country—a belt four hundred miles long, from five miles wide in Alsace to fifty miles wide north and west of Noyon, In the region merely invaded, about Lille, she lost enormous values in machines turned into scrap-iron, and eventually into shells, by the conquerers. The disaster of 1906 destroyed no agricultural land. France lost to agriculture, for at least a generation, from four to five hundred thousand acres—land with its top-soil blown to the winds, or ground into the clay subsoil. Roughly, I estimate that the destruction of visible, physical property in Northern France—to say nothing of Belgium, Italy, Serbia, Greece and East Prussia—was equivalent to twenty or twenty-five San Francisco disasters. Leaving out the direct property loss of other nations, the orgy of spending during four and a quarter years, the incredible national debts and their interest, this belt of destruction in France alone would almost account for the present disturbances of conditions in the whole world.
The war-bill of nations in peace times consists of 
Let us now bring the subject home. We, of all, lost the least in property as in men. We had, indeed, profited greatly in the two years and a half of our neutrality. We held, by the end of that period, almost half of the gold in the world. Of course, we poured all that prosperity and much more into the last two years of the world war. We multiplied our national debt by twenty-four. We are beginning for the first time to know what taxation really means. We grumble at the heavy income tax; yet if we are to meet our obligations, it must continue at something like its present scale for the lifetime of this generation. Fifty years from now, we may still be paying. We experienced during the two years following November, 1918, an era of hectic prosperity—followed by a collapse, in which we are learning that war-gold is fool’s gold. All things considered, we came as near as anyone to winning Armageddon. But everyone loses a modern war, the victors along with the vanquished; economically, we too lost.
Before we entered the great war, we were called a pacifist people and as such were the scorn of European militarists. Indeed, war had troubled us less than any other great people. Since our federation, we had fought only one first-class war, that between the states in 1861–65. The war of 1812, the Mexican War, the Spanish War were, socially and economically speaking, comparable only to the small colonial expeditions of Great Britain and France. Beginning with the eighties and nineties of the past century, we had built up a comparatively strong navy; by 1914, it ranked third or perhaps fourth among those of the great powers. However, 
A HALF TON SHELL
The cost of six such shells would pay the salary of an expert one year in the United States Public Health Service to fight influenza.
It is possible that we shall have to do without an adequate number of public health officers in order to provide adequate protection to our shores against invading armies.
Yet in the year 1920, with the war over and done, with our great army demobilized and our fleets back to the business of manœuvres and visiting, we were spending the greater part of our national revenues on wars, old and new. In 1920, the proportion was ninety-three per cent.
What could our government do with this money? What could it not do!
A little before the Great War, I was talking to an expert, nationally famous, on good roads. He spoke of the highways so vitally important in our great and wide-spreading country and of the staggering costs of road improvement. “We could of course pave every country road in the United States,” he said, “and the economies it would introduce into transportation would make it a paying proposition in the end. But the initial cost and the upkeep—you can’t possibly raise enough money. It would take, I estimate, seventy-five per cent of our Federal revenues.” There you are. This “impossible” but paying proposition would take seventy-five per cent of our revenues; war in 1920 took ninety-three per cent. We could make all the common roads of the United States like the famous main highways of France or Belgium, for the cost of our wars, past, present and future—and still have money in the bank.
In our government are a number of bureaus concerned with increasing production, fighting disease, supervising, as it seems that only governments can supervise, the agencies which conserve life and increase production. Our entomologists have reduced such plant scourges as the San José scale and grape phylloxera almost to impotence, so saving us many millions yearly; they are on their way to conquer the boll weevil in cotton. Our ichthyologists have plans, now only partly realizable from lack of money, greatly to increase our fish supply. Our boards of health, under national supervision, have virtually killed yellow fever and smallpox, greatly reduced malaria and typhoid fever, are beginning to attack those “social diseases” which are next to war the great scourge of the human race.
Go into any of these Washington bureaus and some specialist, some practical dreamer struggling along at a salary running from fifteen hundred dollars to three thousand dollars a year, will tell you what “his people” could do to multiply production and improve human conditions, to lengthen and fortify life, to increase the beauty or usefulness of the world “if we only had the money.” But they haven't the money. For these activities, the 
What could we, “the pacifist nation of the world,” not do with that ninety-three per cent? You remember the Roosevelt Dam in the Far West—hundreds of thousands of acres transformed from desert to fertile farms with a little government money. Millions more are awaiting the same transformation. Here is a chance to increase our true national greatness; but the government, of course, cannot undertake that because it cannot spare the money. Our forests are shrinking; we feel the effect in the rising price of lumber, the shortage of wood-pulp. We need to reforest on a large scale; that work, European countries have learned, can be most cheaply, easily and intelligently done by a central government. We are reforesting, if at all, on a microscopic scale; we are barely keeping down fires. All because we cannot afford the money from our national revenues. Wars, past, present and future, cost too much.
Then comes the period when our long preparation for new wars becomes—action. Then arrives an orgy of spending without return—and a greater war-bill for the future.
But we are treating of “the next war.” By that we mean of course not a little “settling” war such as the present British and French campaigns in the Near East, the skirmishes along the Russian border, nor yet the minor colonial expeditions. We mean a struggle between industrial nations, thoroughly prepared. In terms of economics, will that struggle be less costly than the last, or more?
