partly true, though it is impossible to estimate the exact size of this financial anchor to windward. And if the Germans have inundated the world with paper marks, they have been able to do this only with the selfish assistance of foreign speculators, — and they are legion,- including many French.

Although the situation in which Germany now finds herself is no longer the same as at the time of the signing of the Armistice, nevertheless, since the Reparations pledge must be fulfilled, her situation must be improved by a series of measures which we state here only in general terms, although each one really deserves a long and profound analysis.

1. A moratorium for the period of two years, which should be sufficient for the recovery and stabilization of the mark by means of a foreign loan, guaranteed by cash reserves or by the Reichsbank or by state property such as mines, forests, railways, and other public enterprises, reënforced by private business. The control of this measure should be in the hands of the guarantors themselves. Foreign control of like measures has been proved an expensive failure.

2. Continued and intensified production of coal, chemicals, dyes, construction materials for the devastated regions, and so forth.

3. A new fixation of the German debt, the amount of which shall be used exclusively for the reparation of the devastated regions of France and Belgium, the sum fixed to depend upon the capability of Germany to pay.

4. Annulment, pure and simple, of Interallied debts, with a view to recompensing France and Belgium for the reduction of Germany's payment to them.

5. The decreasing, if not suppressing, of the expenses of the occupation by the withdrawal of a large proportion of

the Allied troops and officials from Germany, the cost of which has hitherto eaten up the amount of the sums received from Germany. To-day it stands proved that Allied occupation has done little or nothing toward the solution of the problem of Reparations. The Ruhr is an added proof.

THE RUHR

The occupation of the Ruhr took place after the failure of the conference held at Paris last January, in which two views of the moratorium to be offered Germany were found to be irreconcilable. The French proposed a moratorium with the payment of a certain cash sum and an amount of natural products, accompanied by guaranties of payment and penalties (sanctions) in case of nonpayment. The British proposed to exempt Germany for four years from cash payments, and to require only deliveries of natural products; but they opposed the guaranties proposed by the French and did not contemplate any penalties except in case Germany failed to take the requisite measures for the stabilization of the mark and the reform of her budget, or in case of the nonpayment of the new debentures. The speeches of Bonar Law and of Poincaré are still fresh in our memory; but it is difficult for the man in the street to grasp clearly the motives of the occupation. As a matter of fact the question of coal- or rather coke - was, in our opinion, the true cause of the occupation of the Ruhr.

By the recovery of Alsace-Lorraine France became the proprietor of the richest mineral-fields on the continent, if not in the whole world, while, at the same time, she remained proportionately poor in coal — that is, in coke, a substance as absolutely essential as minerals for the manufacture of cast iron and steel. But coke is produced in abundance in the Ruhr, which fur

nishes more than eighty per cent of all the coal in Germany, the visible and probable deposits in the Ruhr amounting to hundreds of billions of tons. This treasure is the modern 'Rheingold,' which gives the partition of the world to its possessors, and which the German industrial barons, the modern Alberichs, eluding the vigilance of Cerberus, have ravished in order to forge their colossal undertakings.

Here we have France, then, poor in coke because her coal makes inferior coke. And without this prime necessity the development of our metallurgy will not be commensurate with our mineral production. Moreover, it is a particularly vital question for the iron works of Lorraine, in view of the mediocre results obtained by experiments in coking the coal of the Saar district; not considering the fact that the Saar must be returned to German sovereignty in ten years, in case the prospective referendum turns out against us.

Hence the absolute necessity of an understanding with the industrial chiefs of the Ruhr, which can the more easily be brought about since German metallurgy is in need of minerals in consequence of the loss of the LorraineLuxemburg basin. In fact, German industry itself has realized the necessity of such a plan. One recalls that M. Loucheur - whose inspiration this was

carried on, ever since the Armistice, pourparlers with the German industrials with a view to securing coke for the blast furnaces of Lorraine at a reasonable price.

It is a pity that no permanent arrangement has been arrived at, the more so that, lately, important agreements have been signed, notably by M. Loucheur, M. de Lubersac, and others. We are reminded, for example, that the Chamber of Deputies itself recently confirmed the contract with

the Badische Anilin und Sodafabrik of Ludwigshafen.

It would be premature at present to estimate the results of the Ruhr occupation. The only thing that is certain to-day is that it has rather harmed than helped us. Besides the great runningexpenses which it causes, it has had the effect of almost stopping the delivery of coke to the blast furnaces of Lorraine and the eastern district, many of which have thus been put out of business, to the great benefit of the British.

The question arises: is the game worth the candle? If we had only the great industrials against us, perhaps we might succeed, but the working-classes are also ranged against us, and as long as this is the case, our efforts are bound to be in vain.

We can see but one way to put an end to the unfortunate situation. It consists in reopening discussions with the German Government, which, realizing the disastrous effects of a prolonged foreign occupation of the whole Rhine country, will doubtless be less unyieldingly disposed, and will, on its part, exert the necessary pressure on the German industrial leaders, who themselves have no interest in dragging out a conflict likely to end in their ruin. In this manner a Franco-German compromise might be effected, which would be recognized as vitally necessary by both parties, and be based upon mutual consent.

Whatever steps are taken, it is evident that, even in our own interests alone, we cannot go on persisting in a state of war, for this would amount to deliberately ruining the rich beehive whence alone must come the Reparations which are our due.

It follows that not only the peace of the world, but our own welfare, demands a pacific solution of the Ruhr problem within a short time.

THE intransigeant attitude of the Turkish negotiators at Lausanne does not seem to deter international capital from seeking investment in Turkey, and tenders are being made to the Angora Government from all quarters for public works, and so forth. The opinion of international capital and enterprise, in fact, materially differs from that of the professional diplomats and minor commercial circles. While the diplomats persevere in their inveterate preconception of having a right to interfere in the inner affairs of Turkey, big business accepts the policy of the Nationalists whose aim is the liberation of their country from European tutelage.

The mentality of the Turks and of the Asiatics in general has undergone a great change since the Russo-Japanese War: they insist on being treated on a footing of equality with Europeans. If the European statesmen would take this fact into account, much quite useless friction and bad feeling might be avoided. The politicians by holding to their preconceived notions only undermine the ascendancy of Europe over Asia, which in any case has grown rather precarious since the war.

The aim of the Turkish Nationalists is to become political masters in their own house. Turkey wants to be a modern commonwealth where all inhabitants have equal rights and equal duties. The legal incapacity of the non-Moslem element on the one hand, and the exceptional favoritism on the other, conflict with this principle; and

therefore the one as well as the other is to be abolished.

Formerly the Christian and Jewish inhabitants stood as it were outside the Turkish state. When conquered by the Turks the Christians were left in possession of full freedom with respect to religious, national, and cultural matters. The new rulers only put at their head a Patriarch or 'Vekil' who was responsible for his 'nation.' The Christians had to pay the poll tax, but were for the rest under no obligation toward the state, not even for national defense. On the other hand non-Moslems had no political rights. In the course of time the Christians more and more grew into the state; they were latterly obliged to pay the other taxes, and had to conform to the laws of the country; and with the development of the Turkish judicature their own particular jurisdiction gradually disappeared until at last the Young Turks even forced them into military service. In return the Christians were granted a share in the political administration.

The proposal made at Lausanne that the Christian subjects should be exempt from military service was as inacceptable to the Turkish delegates as the demand for an autonomous 'home' within the empire for the Armenians; and the demand on the part of the Turks to restrict the prerogatives of the Ecumenic Patriarchate to religious matters does not seem unjust.

If therefore the policy of the Nationalists toward Christian subjects is not open to the charge of inequity, espe

cially not in times like ours, where equality, democracy, and so forth, are loudly professed, we cannot blame them for insisting on the abolition of the old capitulations. Aliens in Turkey are to have precisely the same rights as are granted to Turks in the European states. The capitulations are no longer of the same importance for foreigners as in former times. Turkey, too, has advanced in civilization save for occasional relapses; her administration and judicature have improved and will continue to do so.

It is especially the foreign merchant who believes he cannot do without capitulations. He regards Turkey as a colony out of which one seeks to draw the highest possible profits without putting much money into it; and while he is constantly crying for better pavement and illumination, more cleanliness, and so forth, he stoutly refuses to pay a pennyworth in taxation.

The Nationalists have adopted the economic policy of the Young Turks. They expect foreign traders in Turkey to submit to Turkish law, to use the Turkish language in their business, and to employ, with the exception of skilled hands and experts, only Turkish workers and employees. Moreover, in all foreign enterprises Turkish capital, it is intended, will participate to at least fifty per cent.

Such conditions, as already pointed out, do not deter foreign capital from seeking employment in Turkey, for after all even the most extreme Nationalists will be ready to discuss terms if they are convinced of the good will on the part of foreigners to treat them as equals.

Of the grand reconstruction scheme submitted to the Angora Government by Mr. Chester on behalf of the Rockefeller group, a survey appeared in number 37 of this paper (January 1, 1923). Negotiations concerning this project

are still pending. The main point under discussion is now the guaranty which the Americans are expected to give for the performance of their engagements under the contract. The Turkish Government thinks it necessary to insist upon such guaranties, for it has happened on previous occasions that foreign concerns having obtained a concession did not follow it up, either from lack of capital or because they meant from the beginning to consider the concession only as an object for jobbery. Such unpleasant occurrences are to be avoided for the future.

The keenest competitors of the Americans for Turkish concessions are the French and the British. The French chiefly have in view the plain of Adana, which, but for the Nationalist victory, was meant to become a French 'sphere of influence.' Now the French try to gain at least an economic footing in Cilicia with a view to strengthening thereby their position in Smyrna, as Cilicia economically belongs more to Syria than to Asia Minor. A French group has obtained a concession for constructing a seaport at Mersina and intends beginning operations at once. The port of Mersina has good prospects of future development, especially in consideration of the projected railwaylines to the east of Asia Minor.

As the French have also undertaken the construction of the ports of Alexandretta and Tripoli, all the seaports in the eastern Mediterranean from Mersina down to Palestine will be under their influence. By the Franklin-Bouillon agreement the French have secured the control of the Syrian lines of the Bagdad Railway. The French, and more particularly the Société Batignolles, which has already done a great deal of building work in Turkey, are also taking part in the rebuilding of Smyrna. The reconstruction of Constantinople, Smyrna, and the towns

burned down by the Greeks in Asia Minor, if it is to be done quickly, must be undertaken by a first-rate building company.

Smyrna, being the most important commercial place in Asia Minor, cannot be left in ruins for years, like the destroyed quarters of Constantinople; it must be rebuilt quickly, and the Nationalists unquestionably will urge this to be done. Even German firms have tendered for the reconstruction work of Smyrna and Constantinople. The demand for all kinds of building material, especially timber, cement, lime, iron, furniture, and so forth, will probably be very lively. Nearly all these articles must be imported from abroad, even cement, because the two Turkish cement-factories at the entrance of the Gulf of Ismid are out of working order.

The French also lay claim to the construction of the Samsun-Sivas railwayline, which is included in the programme of Mr. Chester; the concession for this line, as the French contend, was acquired by them in 1914 as an equivalent for a loan granted to the Turkish Government. It depends on the stipulations of the Peace Treaty whether this concession is still valid.

Another group is also bidding against Mr. Chester for the Ineboli-Kastamuni line, offering to construct a seaport at Ineboli and a railway to Kastamuni. The chief object of this group is the exploitation of the vast forests in those districts. Before the war Vienna and Budapest firms had a big timber-concession in the vilayet of Kastamuni, and engineers were already engaged in technical preparations when the war broke out. If the French concession for the Samsun-Sivas railway is declared to have legal validity the same must be

the case with respect to the Austrian concessions.

Till now the British have shown little inclination to undertake public work in Turkey; they only built the SmyrnaAidin railway and a few factories; but now their interest seems to be awakened. A company has been formed in London under the name of "Turkish Development Corporation,' which is chiefly concerned in tram- and railwaybuilding, electrical development, and exploitation of naphtha beds. Probably it is the naphtha which chiefly tempts this company, for operations on a grand scale for the exploitation of the oil-fields in the East Tigris country are to begin immediately after the League of Nations has decided the question of Mosul, provided the Nationalists acquiesce in the finding of the League. The Turkish Development Corporation is an appendage of the Russo-Asiatic Consolidated, which has undertaken to coöperate in the reconstruction of Russia.

Should the Peace Treaty of Lausanne be ratified by the Angora National Assembly, which by which by no means is quite sure, then the more important concessions will be assigned with all speed and the reconstruction of Turkey may begin. For Asia Minor this would be a real blessing, because the country has greatly suffered during eight years of war. For the industrial states of the West, moreover, this would imply good openings for export and capital investments as well as for the employment of idle hands. Peace and stable conditions in the Levant would also greatly further the economic recovery of Europe. But whether this much-desired aim will be attained is questionable as long as neither the Greeks nor the Turks are willing to listen to reason and refuse to relinquish extravagant aspirations.