financial inconvenience, and their credit is tottering in every neutral country. Already there has been a vast allround piling up of National Debt, necessitating high and burdensome taxation for interest payments extending over several years. And the end is not yet in sight. Every day helps to magnify the bill. Great Britain alone is spending at the rate, including loans to our Allies, of more than six millions a day, and the rest of the belligerents are responsible for at least twelve millions a day. With the increased number of men in the field and an exacerbating fierceness of struggle, these figures will soon be passed. The toll of human life is an even sadder reckoning, for, apart from the tragedies which darken so many homes, it means a serious shrinkage of Europe's manhood and its potentiality of industrial production.

In trying to arrive at the cost of the war for the first three years it is necessary to consider (1) the actual expenditure of the naval and military departments, (2) the prospective interest liability on borrowed money, (3) the capitalized value to their respective States of the killed and permanently disabled, and (4) the material damage by bombardment, mines, torpedoes, and other wilful or incidental destruction. The cost of the last item must necessarily be a reckoning by conjecture, but with regard to the others there are known factors which, if taken in a spirit of conservative caution, should lead to definite approximate results. In February last Count von Roedern, in the German Reichstag, estimated the total cost up to that date, to all the Powers then engaged, at £15,000,000,000, of which, he pretended, the Central Powers accounted for £5,000,000,000 only. A more recent estimate by French financial experts puts the total cost to the beginning of next autumn at

Nearly two years

£18,000,000,000. ago, in an article in the British Review, the present writer wrote: "If the war lasts for three years we may put the total cost (after allowing for Italy's belated entrance) at more than £18,000,000,000," and speculative estimates were given to justify this conclusion. What is the position today? The United Kingdom's share in the total cost has been officially given in Parliament as £3,900,000,000 to the end of last March, including £900,000,000 advanced to the Allies. As these loans are probably included in the expenditure of the Governments to which they were made, it will shut out the possible error of counting them twice over if only the net amount of £3,000,000,000 is dealt with. As we are still spending not less than £6,000,000 a day, the approximate net cost of our share of the war to the end of July (assuming the same proportion of loans) will be about £3,550,000,000. But to the expenditure for which the British Parliament is responsible must be added the amounts spent or advanced by India and our overseas Dominions. These may be put down, on a low estimate, at £250,000,000; and although all the money may not yet be spent, a goodly proportion of it will have been spent, or ear-marked for expenditure, by the third anniversary of the declaration of war. It will not be immoderate to make an addition of £150,000,000 on account of our Colonies and Indian Empire, raising the British total to £3,700,000,000. France, up to the end of 1916, had expended on the war £2,469,480,000, and the additional cost to August at the same rate will be a further £596,000,000, making a total of £3,065,480,000. Italy's outlay for the year ended June, 1916, was £312,000,000, and, allowing for a similar expenditure between that date and next month, we get a total of £624,000,000. Russia's expenditure is

a less ascertainable factor, but it can hardly be under £3,000,000,000 for the three years. Thus without counting

the Central Powers at all we have the huge aggregate of £10,389,480,000. Belgium, Serbia, and Roumania have also spent considerable amounts, the two former since August 1st, 1914, and the last for about a third of the time, partly out of their own resources and partly out of external loans; and if only £100,000,000 is estimated for these countries, it will bring the outlay of the Allies up to 101⁄2 thousand millions. Germany's expenditure, which no doubt includes large advances Turkey and Bulgaria, is believed to amount already to £4,260,000,000, and Austria-Hungary's can hardly be less than £2,500,000,000; so that if the present rate of their military and naval outlay be maintained until August, there seems no reason to doubt that the expenses of the war will considerably exceed £18,000,000,000, independently of Japan's participation in the earlier stages.

to

Nor does this include anything on account of the United States. Some time will elapse before they can be called upon for any big outlay on active war operations, unless Germany's subterranean activities in Mexico should precipitate a subsidiary conflict. Money has, however, been voted by Congress for the necessary preparations, including the useful co-operation of monetary aid to the Allies. A credit of £600,000,000 was quickly arranged. It may be taken for granted that now that the United States, after showing unprecedented patience, have been drawn into the combination against military despotism and mad-dog methods, they will play their part with thoroughness; and the financial weight they will throw into the scale may well prove to be a decisive influence in shortening the conflict.

Eighteen thousand millions for the

three years is a sufficiently stupendous figure. A continuation of the war after July will be accompanied by new expenditure at the rate of much more than £18,000,000 a day, in addition to the costs of the United States. Whether Germany and her allies will be able to prolong their resistance through another winter is more than anyone can say with confidence; they will fight with tenacity and resource to the very last ditch; but it may be taken as proved, so far as figures can prove anything, that the war cannot possibly end with a smaller cost than from £20,000,000,000 to £25,000,000,000. It may help to a realization of what this means to state that if the lower amount could be represented by sovereigns placed edge to edge in a straight line, such a line would be nearly 300,000 miles long.

What the exact individual shares of this total will prove to be in the Clearing House of the war depends very much upon the measure of assistance which is being given by the richer to the poorer States, and on questions of indemnity and restitution. No one, for instance, outside the inner circle of the Porte can say what is Turkey's financial position, how much she has borrowed from Germany, what security she has given, in what form the advances have been made, and when and in what conditions they are repayable. For the purpose of this inquiry it is of no special importance, so long as a good guess can be made at Turkey's expenditure, to know where the money comes from or what is the country's ability to meet the after-war exactions of its taskmasters, more especially as it is not likely to have a voice in the matter.

Assuming the minimum cost, in the event of the war continuing after the autumn, to be £20,000,000,000, the most salient point is that by far the greater part of it has been raised by

loans on which interest will have to be paid for many years to come. This will still be a heavy annual liability even if some of the defeated Powers are driven to the desperate device of a default or,

what amounts to the

same thing, payment in paper of depreciated sinking funds, which is sure to be not less, after eliminating overlappings of principal in the nature of inter-State loans, than £500,000,000, and it may be eventually a good deal more. Although the greater part will fall due outside the three years on which most of the previous calculations are based, the liability has, nevertheless, been incurred, and it cannot be excluded from the estimate of actual cost. The essential fact of this situation is summed up in the word "taxation." Countries that have been piling up debt without proper provision for adequate revenue expansion will feel the blow most severely when it does come. This applies to Germany in particular. Her obligations for interest on war debt and ultimate repayment will amount-indeed, already amount -to well over £200,000,000 a year, and to meet this the war taxes, if they satisfy the most optimistic hopes, will not exceed £60,000,000 a year. The Kaiser, in one of those characteristic displays of bluff employed for deluding the Teutonic peoples, has recently said that the additional expenditure for interest on war loans is secured by new sources of income. Arithmetic is evidently not his Imperial Majesty's strong point. One who seeks to juggle with figures should at least be acquainted with the rudiments of the game.

So much for the present and prospective war expenditure. But money is not the only thing that has been poured out like water from a broken reservoir. There is the ghastly debit of human lives. A comparatively recent return of German losses admits that more than

1,500,000 have been killed, have died, or have been permanently incapacitated for earning a living. Large though the figure is, the observations of our own military authorities warrant the belief that the actual losses are much larger. Even if it be an adequate admission, it constitutes a sufficiently damning record for the official apologists of "cannon fodder." Particulars of the corresponding losses of all the other belligerents are not obtainable, but an unofficial military calculation based as far as possible on published casualty lists gives the approximate number as 4,500,000 up to February last, and this, together with the German figure, gives a total of 6,000,000. The five months from the end of February to the beginning of August will make a formidable addition to the tale of carnage, for the fighting for many weeks past has been fast and furious, and life is still being sacrificed at a frightful rate. There is no fear of exaggeration in assuming that 6,500,000 men in the prime of life will have either been killed outright or rendered incapable of any useful work in the future. In the early part of the war it was reasonable to estimate the average wage-earning power of these men at twenty-five shillings a week, and their actuarial prospect of active employment, after allowing for the probabilities of natural death, at twenty years. Now that a lower standard of service has been reached in all countries, and the limit of age has been raised not only in the British but in the other belligerent armies as well, it will be safer to put the average wageearning capacity at a pound a week, and the normal prospect of active work at fifteen years. This gives us an average potential economic value of £780 for each man of the 6,500,000, or an aggregate of £5,070,000,000. The loss of all this valuable productive power will be felt for some time to come.

Many of the men were skilled craftsmen of the highest class, many others were connected with the liberal professions, some were artists and authors of more than ordinary promise. There would be nothing unreasonable in dwelling upon the loss to mankind of possible literary, forensic, histrionic, or other kindred achievements, or upon the losses of still greater public importance in the realms of scientific discovery and mechanical invention. It is preferred, however, to base the figures on a low standard of industrial work capitalized at no more than fifteen years' purchase. Nor must the civilian losses be omitted from the count-the Belgians and Armenians massacred, the inoffensive travelers sunk by submarines, the East Anglians killed by bombardment, the victims of Zeppelin raids and accidental munition explosions. These are all part of the cost of war. Many of the slain men were bread-winners, and all of them had a potential, if not an immediate, economic value. If all the mints of the world worked day and night for a year on gold coinage they could not turn out an amount that would do more than touch the fringe of compensation so far as the ruthless destruction of civilian life is concerned. It is impossible to measure in money values either the worth of the life itself or the mental agony of the near survivors; and it is therefore in the nature of an anti-climax to put down £50,000,000 as the cost of their untimely removal to agriculture, mining, manufactures, and other branches of industry. War, like Nature, is "red in tooth and claw," and, also like Nature, cares nothing for "the single life" if only the type be preserved. In spite of all this wholesale slaughter the type, in its best and worthiest form, will survive. In time a new generation will grow up, the places of the victims of the war will be filled by other men, and

the world's husbandry and all other kinds of bodily and intellectual activity will go on as they did before the cloud of evil fell upon the earth. This has been the sequel of all wars, and although the processes of recovery may be slower now than formerly by reason of the rending violence of the present struggle, the recovery is none the less certain. Nevertheless, the moral certainty of a flourishing world hereafter cannot rob the present of its bitterness or minimize the stupendous losses which, in half-stunned horror, the warring nations deplore. It almost demands an apology to put down such a paltry sum as £50,000,000 for these.

When it comes to dealing with material destruction, the hardiest spirit of conjecture may well feel abashed. Who can put a value on the Louvain Library, on Rheims Cathedral, on the antique and historic buildings that have been ruthlessly, and in many instances maliciously destroyed? Who can put a value upon some hoary fabric of the Middle Ages, rich in its traceried ornament and encrusted with legend and myth? Our enemies have distinguished themselves in the pre-eminence of wanton destruction. No fane however famous, no museum however priceless, no home of genius, no resort of learning is sacred from the violence of the super-Vandals. When Alexander sacked Thebes, and "temple and tower went to the ground,"

The great Emathian conqueror bid

spare

The house of Pindarus,

but no such chivalrous regard for hallowed shrines, personal distinction, or artistic beauty ever "shines like a good deed in a naughty world" where Germany or Turkey is concerned. The sentimental and antiquarian interests involved in this destruction are incalculable in £ s. d. They cannot be assessed in the same way as ordinary

bricks and mortar, nor can they be entered up, according to any recognized formula, in the ledger of war losses. It is comparatively simple to reckon the cost of rebuilding ruined homes and farmsteads, modern churches and hotels, broken bridges and up-torn railways; or of calling into existence new mercantile shipping; or of crops destroyed and businesses closed down as a direct consequence of acts of war. But material destruction on a wider scale is part of the bill. What does it amount to? Shall we say a hundred millions or a thousand millions? If sentiment is to count, the latter, large as it is, would be an inadequate sum. What is irreplaceable cannot be valued, and it will be better therefore to leave the antique and artistic values alone and to consider only such damage as money can make good. If we take note of the world-wide character of the destruction both on land and sea, of the damage done in Germany's colonies as well as the effects of bombardment in Asia Minor, France, Belgium, the Trentino, Russian Poland, and elsewhere, we shall find no difficulty in accepting £500,000,000 as a conservative estimate of what it would cost to put things right again.

Something must also be allowed for the dislocation of trade. In the earlier part of the war the exports of all the belligerent countries were severely affected. There has been some recovery since in the case of the Western Powers, but the position of the Central Powers, on the contrary, is worse. They have lost through the war, in the stoppage of imports and exports, a volume of trade exceeding in value £530,000,000 a year, much of which, if the Allies are wise, will never be recaptured. Before the war Germany and Austria-Hungary exported goods worth about £86,000,000 a year to the Allies, without including British possessions overseas, and the balance of

trade in their favor was about £50,000,000. Transfer of trade from one country to another cannot be said to be an economic loss, and allowance has to be made for the trade losses of some of the contending States being translated into trade gains for certain neutral nations. But when this allowance has been made, and the stagnation of one country has been interpreted in terms of the abnormal activities of another, we still are driven to the conclusion that there has been an enormous net shrinkage in the output and sale of useful goods as well as in the supply of the raw materials with which to manufacture them. Nor does the throbbing energy devoted to munitions make good the deficiency. Munitions are only made to destroy and to be destroyed; they cannot be classed for utility with the manufactures of pacific industry. A large proportion of the lost trade in the latter can never be recovered. No doubt there will be a revival of trade after the war, production will be stimulated, and some departments will become as busy as they are now idle. No averaging of this kind, however, can recall trade that has missed its due season without being able to supply the demand. In the three years of war this loss beyond recovery, if we only reckon the profit at 10 per cent, will be as much as £150,000,000. Other estimators may put the amount at double, or even treble, as much; where there is no trustworthy rule of guidance or settled principle of calculation, it is better, if one errs at all, to err on the side of moderation.

There are other kinds of war loss, such as the high price of food, depreciation of investments, precautionary defensive measures by neutrals, and further incidental results, that might properly be included in this survey. The second of these would certainly have had to rank but for the doubt as