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be to finance worthy promotions, whether of new companies or of new projects by old companies. To the extent that the bank attempts to make liquid the 'quick assets' of traders and manufacturers, the method is slow, cumbersome, and expensive; and the magnitude of the task is wholly beyond the capacity of such a bank. Only when 'quick assets' become immediately, readily, and cheaply transferable into bankable credit will the problem of financing British industrial production be solved. Only the great British banks of deposit can effect this object, and only directly on behalf of their own customers. But this must be accomplished at the cost of financing German accepted bills of exchange.

When my Russian friend stated that German success in exploiting Russia depended on British capital, he had in mind the fact that Germany to-day is economically as bare as the palm of one's hand. Everything exportable has been eaten up, shot away, worn out. Germany's exports are and must be manufactured products; and she has neither cotton nor wool nor copper. Nor has she, as any financier will admit, the possibility of payment in gold. She must have great credits even to begin to supply her own internal needs; without external aid, it would be quite hopeless to think of giving long credits to Russia, impoverished as Russia is. Germany will get little if any credit from America, firstly, because America has little machinery for granting large international credits; secondly, because she will need the money herself, and has never been in the habit of lending anything she can use herself; thirdly, because she will never lend money to any one who will use it against her, and it is her habit to examine into the ultimate effect of a

grant of credit. Germany, therefore, must come to London. Come she will, and with her portfolio full of bills drawn and accepted to tickle the niceties of the English banking palate. What is the situation which will then exist and the reception she should receive?

There will be a great diminution in available banking credit after the War. We cannot develope the argument at length; it depends solely on the proposition that there has been a profound and widespread destruction of all forms of saved-up property, that is, of capital; that there is in the world to-day less food, less clothing, less coal,

less steel, less of everything, than in 1914. And it is quite irrefutable that no issues of currency, no inflation of credits, increase capital.

Again, Germany's opportunity to make large profits will be immense. Given the raw wool and cotton, she can sell clothing to Russia at profits many times larger than her ante-bellum return, provided she could obtain from London requisite credits to purchase the cotton, operate her mills, and give the necessary credits to Russian merchants. Equipped as she is, Germany can, in the international money market, pay the highest price for credit. Once obtained, she will use it most profitably; and the security will be adequate and certain.

No other nation in the world will be so well prepared as she to compete in London for banking credits; none will have a banking system so perfectly adjusted to furnish bankable accepted bills; none will have such thoroughly digested information available respecting trading opportunities and pitfalls; none will have a body of workmen so ready to work long hours and to produce so much and so cheaply. In the chaotic and disorganised condition of international trade, Germany will be best prepared to choose aright the path to safety and profit. If British international finance after the War continues to regard banking credit as a huge reservoir, the flow of which may be properly directed to whatever quarter will pay highest, then Germany, whose system is unique in the world, will get most of the money. There will be little left for British trade, which has to-day no organised banking aid whatever, and will not be able to pay, under the conditions of the future, a competitive price. Germany will therefore absorb, first for her own needs, secondly to enable her to finance Russian trade, and thirdly to control the commerce of China and South America, the greater part of the available capital of England. British trade will be drained of its life-blood. The days when, as it might be said, there was enough capital to go round, will then be long past; and an energetic Germany with the banking power of the British Empire at her service, with enhanced profits and cheaper labour, will accelerate the downfall of British commerce. Whatever the glory and profit which her proud position as the world's financial centre has in

the past brought to England, the price in the future may be too high to pay. In the last analysis, it is production which creates capital; and with the loss of industry will disappear the capital that constitutes banking credits.

One might, indeed, concede almost everything till this last point, and then protest. One might agree that the free untrammelled international money market of London before the War was a great national good and glory; one might acquiesce in the wisdom of granting to Germany, under former conditions, credits not given under existing machinery to British merchants; one might prefer free trade in money, insist on British trade being conducted only on its own capital, and answer all objectors by the consideration that to be the financial centre of the world brought its rewards as well as its penalties. But, after the War, British banking, with grossly insufficient capital to supply every need, must lie under the despotic necessity of choice whether the British manufacturer or the German is to go to the wall, whether Russia is to be the economic satellite of Germany or the field for British commercial energy, whether, in short, it is to be Germany or Britain which shall during the next fifty years enjoy commercial supremacy in Europe. Surely, this nation must pause before it permits a system of banking, however hallowed by custom, to determine such a question to the gradual extinction of England's greatness.

The question is simple. Shall the banking world in any form or under any pretence lend English capital to Germany, when English trade must depend for its very life upon the money so lent? The answer is equally simple: the existing banking system of loans secured by accepted bills must be modified to reach a solution. There is only one alternative: the decline and fall of the British Empire.


THE end of the war still seems relatively so far off and the manner of its ending so obscure that it might be rash to speculate upon any of its ultimate and permanent results. But to the conduct of the war itself and of the peace negotiations, whenever that stage shall be reached, it is essential that we should take stock from time to time of its effects upon the great world forces directly or indirectly drawn within its fiery orbit.

One of the greatest of these is Islam, for it is a living religious force which has still preserved some of its original volcanic energy, and still unites upon the common ground of a stern and simple faith many different peoples, sprung from many different stocks, and speaking many different tongues, spread over a large part of the earth's surface, and numbering altogether, on the most moderate estimate, about 150 millions, or one-tenth of the world's population. In Europe itself the Mahomedans not only retain their foothold in Constantinople and the narrow strip of Thrace which was left to Turkey after the Balkan wars of 1912-13, but are still to be found in scattered groups where the receding tide of Turkish conquest left them under alien rule, in Bosnia and Herzegovina, in Albania, Serbia, Greece, Rumania and Bulgaria, as well as in the Crimea and the Caucasus, and even far up the valley of the Volga in what was until recently the great Russian Empire. In Asia they preponderate all over Asia Minor, Mesopotamia and Arabia, Persia and Afghanistan and Central Asia; they form more than a fifth of the total population of our Indian Empire; they penetrate right into Eastern and South-Eastern China, and they reach across the seas into the Dutch East India islands and the Philippines. In Africa the people of Egypt, Tripoli, Tunis, Algeria and Morocco are almost entirely Mahomedan, as are also the tribes of the Sudan and the Sahara and Northern Nigeria; and within the last half century Islam has made many millions of converts among the more primitive pagan populations of Central Africa.

To the vast majority of Mahomedans all over the world their religion is still vital, though, except in Central Africa, it has lost much of its old missionary fervour and fierceness. The ancient feud which arose shortly after

Mahomed's death over the succession to the Khalifate or Vicegerency of the Prophet still subsists between Sunni and Shia Mahomedans. There are a few other sects of much later growth, such as the Wahabis or 'Puritans' of Southern Arabia, and the Senussis of Northern Africa and the Babis of Persia, but they are numerically unimportant and have little influence outside their own borders. The claims of the Ottoman Sovereign to the spiritual headship of Islam since a descendant of the Abbaside Khalifs of Baghdad, who had found refuge in Cairo, transferred his shadowy rights to the Turkish Conqueror of Egypt, Selim I, about 400 years ago, have remained a more or less open question, upon which Mahomedan Doctors of the Law differed and still differ. Neither the Sultan of Morocco nor the Ameers of Western Africa, nor the Ameer of Afghanistan, nor the Khans of Central Asia, nor the Moghul Emperors of Hindustan, nor of course the Shah of Persia, who is a Shia, ever formally recognised the overlordship, either spiritual or temporal, of Constantinople. Constantinople wisely refrained from seeking to extract any such recognition from them; and even the late Sultan Abdul Hamid, when he started a Pan-Islamic movement in the hope of recovering as a spiritual ruler some of the ground he had lost as a temporal sovereign, confined his activities mainly to that part of the Mahomedan world which had passed into subjection to the Christian powers of Europe.

The strength of Islam lies in the essential simplicity of its creed; Allah, the one God; Mahomed, the one Prophet of God; the Koran, the one revelation of God's word; and, in theory at least, the Mahomedans the one people chosen of God to inherit the earth, for the world itself is divided into two parts only, the Dar-ul-Islam, or House of Islam, i.e. those lands which already belong to Islam, and the Dar-ul-Harb, the House of War, i.e. those lands which are still held by the infidel, but which will ultimately pass unto Islam by right of Holy War. These are the foundations upon which the unity of Islam has rested for more than thirteen centuries, rarely and only superficially shaken by the ebb and flow of conquest and defeat, or by political feuds, or by racial jealousies, or by sectarian differences.

Yet, far from inheriting the earth, the Mahomedans

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