1916

might be given. The Leake and Watts Orphan House, for instance, wants to do for its children much more than it is now doing.

As soon as its circumstances permit it wants to have for all its girls, at least, cottage life, with its special opportunities for training in home-making, leaving for the boys and for administrative and school purposes the congregate central building, which is its heritage from the past. It wants to do more placingout work, for young children especially. Nature means the very little ones to be in mother's arms, rather than in the best of institutions. For both young and older children it

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wants to find more free private homes offered from affection.

Is it Utopian to hope that some day the poverty-stricken, parentless child will make a stronger appeal to our prosperous country than it does now, that we may seek more effectively to find and eliminate the causes of destitute orphanhood, and that in the meantime our great army of charity-supported children-there are over twenty-three thousand from New York City alone-may be given a happy childhood, full opportunity for development, and a chance to fit themselves to run the race of life with those more fortunate than they?

T

HE financial resources of the Allies have been selected as the subject of this article because the recent statement of the Federal Reserve Board in regard to the purchase of foreign loans by our banks has been misunderstood by many as a reflection on the credit of the borrowing governments.

This is not the case, but the result nevertheless has been a slight decline in the market price of the Allied obligations already held here, an abandonment of all efforts to float further loans in this country, and a cessation in the demand for many of the things that the Entente Powers were previously buying of us.

By many it seems to be assumed that we have determined to deny further credit to the Allies, and as this policy, if persisted in, may have portentous consequences for us and for civilization, it is most important that we should understand the questions involved in all their aspects.

Should the German overtures for peace be rejected, as seems probable, and the war go on for another two years, the final issue will be largely dependent upon the financial support that shall be accorded to Great Britain and her Allies in this country.

If we are content that a triumphant Ger

many should menace the world's peace and our own independence until we are drawn into the next war for the protection of our National life and the preservation of international law, then we may be consistent, though short-sighted, in insisting upon a C. O. D. policy in our further dealings with Great Britain and her Allies.

If, on the other hand, we value the Government under which we live and desire to preserve for our posterity the opportunities that it affords, then we must do what we can with the money power that we now possess to protect it from the ambitions of those "Whose game is empires and whose stakes are thrones,

Whose table earth, whose dice are human bones."

The only way in which we can exert this money power is by lending it, and while most well-informed financiers are entirely confident that such loans to almost any amount would be good, the public generally are in doubt concerning the adequacy of the resources that are behind them.

It is to dissipate that doubt that this article is written.

In dealing with the subject an effort will be made to avoid overweighting the discus

'Area Controlled. Square Miles. 29,208,528

MAP OF THE WORLD SHOWING TERRITORY UNDER DOMINION OF THE BRITISH EMPIRE AND ITS ALLIES, THE CENTRAL POWERS, As shown in the accompanying article, the governments of the Allies control more than one-half the world's habitable land, estimated at 52,824,533 square miles, and nearly one-half of its entire population, estimated at 1,751,700,000 souls. The exact distribution is as follows:

By the Allies.

........

Per Cent.

55.29

2,960,082

5.60

164,000,000

3,741,828

7.08

110,000,000

16.914.095

32.03

615,500,000

........

52,824,533

100.00

1,751,700,000

By the Central Powers............
By the United States...........
By the Other Neutrals........
Total...........

BASED ON A MAP PUBLISHED IN THE NEW YORK TRIBUNE"' MAP OF THE FINANCIAL EMPIRE OF GREAT BRITAIN

Showing the British capital invested in each of the more important foreign countries prior to the war. The figures given indicate only the value of the
estimated British holdings of the securities issued by the governments or corporations of the various countries, but do not include the large amount of
English capital privately or "invisibly " loaned to the citizens of those countries. The diagram is not, therefore, statistically complete and is published
simply to give a general idea of the inclusive financial dominion of Great Britain

sion with figures or statistics. In almost his last public utterance the late Pierpont Morgan said that he had more regard for character than for wealth as a basis of credit, and it is in the light of this statement that the right of the Allied Powers to ask and receive credit from us will be chiefly considered.

While what is called the "National wealth" of a borrowing community should not be wholly disregarded in determining the value of its obligations, it is to be remembered that the revenue to be derived from this wealth is almost entirely dependent upon the character, industry, and resourcefulness of the people

who possess it. The National wealth of the

In

United States is to-day estimated at about two hundred and fifty billions of dollars. 1850 it was estimated at only seven billions. This is an increase of about thirty-six hundred per cent. In the same interval our population has increased from 23,191,876 to about 110,000,000, or only four hundred per cent.

The natural resources of the country were quite as great in 1850 as they are in 1916, but they were undeveloped, and their development at a rate nine times as rapid as the growth in population has been largely, if not entirely, due to the intelligence and enterprise of that population. It is the Biblical story of the men with the talents over again.

He who received five talents won his lord's approbation by doubling them, but the servant to whom only one talent was given contented himself with keeping it safely and was condemned as 66 wicked, slothful, and unprofitable," because he failed to add to it.

It is, moreover, exceedingly difficult to know what is meant by "national wealth."

Apparently it includes only such property or assets as may have a market value at which theoretically they could be sold. Good will, admittedly a very important asset, is not included, and the value of the human population is excluded.

This last item-namely, the value of the men, women, and children who compose a nation is obviously the most important item in any country's wealth. Without them everything else would be worthless, and the value of everything else depends upon their activities and intelligence.

Before the Proclamation of Emancipation the estimates of our National wealth included the value of the slaves. In an economic sense the average man, woman, and child are now worth far more than they were in 1860,

963

but they are nevertheless disregarded in all computations of the world's wealth or that of any particular nation. A funded debt is a capitalization of the borrower's earning power in anticipation, and in the case of a nation four factors enter into a determination of this earning power. They are:

1. The units of human energy availablei.e., the population.

2. The intelligence and ambition of this population.

3. The resources and area susceptible of development.

4. The continuity of effort made possible by peace, hygiene, and increased longevity and health.

Inasmuch as the debts now being created will not fall due for almost a generation, and will no doubt be then refunded, at least in part, the present wealth of the borrowers is not an important consideration except as it provides capital for future development and a fund against which present taxes may be assessed. Favored by long years of peace and popular education, the people of the United States have developed the resources of the North American continent with extraordinary rapidity. It is not, however, to be assumed that nature has endowed North America more liberally than Europe, Asia, or Africa, and in calculating the probable earning power of the Allied Powers, the territory they control and the population available for its development are the factors chiefly to be considered.

The latest estimates of the material wealth, area, and population of the world's neutrals and belligerents are shown in the table on the preceding page.

Excluding the uninhabitable portion of the Arctic Zone and seas, the land area of the earth is estimated at about 52,824,533 square miles, and the present population is about 1,751,700,000.

This area and population are controlled as follows: Of the Population.

By the Allies..

Of the Area. Square Miles.

.29,208,528 55.29 862,200,000 49.24 By the Central Powers. 2,960,082 5.60 164,000,000 9.38 By the United States.. 3,741,828 7.08 110,000,000 6.30 By the other neutrals... 16,914,095 32.03 615,500,000 35.08 Total..... 52,824,533 100.00 1,751,700,000 100.00 According to Mulhall, the population of Europe hardly exceeded 50,000,000 before the fifteenth century. It is now about 460,000,000. At its present ratio of gain, the world's population will be about 4,000,000,000 in 2014. If in its political relation.