l municipality in any continent that fancy
or information might recommend. He could secure forthwith, if he wished
it, cheap and comfortable means of transit to any country or climate
without passport or other formality, could despatch his servant to the
neighboring office of a bank for such supply of the precious metals as
might seem convenient, and could then proceed abroad to foreign
quarters, without knowledge of their religion, language, or customs,
bearing coined wealth upon his person, and would consider himself
greatly aggrieved and much surprised at the least interference. But,
most important of all, he regarded this state of affairs as normal,
certain, and permanent, except in the direction of further improvement,
and any deviation from it as aberrant, scandalous, and avoidable. The
projects and politics of militarism and imperialism, of racial and
cultural rivalries, of monopolies, restrictions, and exclusion, which
were to play the serpent to this paradise, were little more than the
amusements of his daily newspaper, and appeared to exercise almost no
influence at all on the ordinary course of social and economic life, the
internationalization of which was nearly complete in practice.

It will assist us to appreciate the character and consequences of the
Peace which we have imposed on our enemies, if I elucidate a little
further some of the chief unstable elements already present when war
broke out, in the economic life of Europe.

I. _Population_

In 1870 Germany had a population of about 40,000,000. By 1892 this
figure had risen to 50,000,000, and by June 30, 1914, to about
68,000,000. In the years immediately preceding the war the annual
increase was about 850,000, of whom an insignificant proportion
emigrated.[1] This great increase was only rendered possible by a
far-reaching transformation of the economic structure of the country.
From being agricultural and mainly self-supporting, Germany transformed
herself into a vast and complicated industrial machine, dependent for
its working on the equipoise of many factors outside Germany as well as
within. Only by operating this machine, continuously and at full blast,
could she find occupation at home for her increasing population and the
means of purchasing their subsistence from abroad. The German machine
was like a top which to maintain its equilibrium must spin ever faster
and faster.

In the Austro-Hungarian Empire, which grew from about 40,000,000