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port.

The President wishes the United States to join the World Court set up by the League of Nations at The Hague. Furthermore, he seems sympathetic toward further disarmament conferences, but there is no evidence that it has been possible to work out a program for a new conference such as Mr. Hughes worked out for the Washington Conference, and until that can be done a conference would be futile.

The President sticks to the general proposition that all debtor nations shall pay us in full the principal of what they owe us. He has not disclosed his mind upon the important question of the rate of interest, nor given any indication of his conception of our debtors' ability to pay, the form which the payment is to take, or how the reception of the goods, services, or gold will affect our economy. He seems to feel that the debtors should come forward with an offer and they seem to feel that such a course would be unwise, either because they know what kind of an offer would be acceptable to us and are unprepared to make it or because they do not know and are unwilling to move until they do.

Altogether, for the next four years the President's program means the continuation of Mr. Mellon's able financing, a sound policy of economy and taxationone that will take the full measure of the President's strength to carry into complete execution-two valuable reforms in the machinery of our government: the reorganization of the departments and the extension of the civil service, a continuation of Mr. Hoover's unusual work in the Department of Commerce, and a foreign policy with good predilections but rather difficult to judge because there is no clear indication of how much power Mr. Coolidge intends it to have. It is a program in which there is nothing to fear and much to hope for, and in working for it the President has an unusually

Public Ownership in Our Industrial Democracy

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HE Armours have sold a third of their stock in their packing company to a group of bankers who will sell it to the public. will sell it to the public. If this succeeds, they will sell more. So another personal company is becoming a public company. It has become so common for this to happen that it is almost a general rule of American business to-day that when a company becomes very large the public takes it over. The high risk attending the starting of businesses with the attending high losses or high profits are undertaken by individuals. But if the business largely succeeds, the tendency is to distribute its ownership amongst the employees or the general public or both. The Bethlehem Steel Company is still Schwab's company, but the United States Steel is largely owned by the public. There are few railroad owners now in the sense that Hill and Harriman owned railroads. The public owns the American Telegraph and Telephone Company and most of its subsidiaries, and likewise innumerable electric light and power companies.

The growing phenomenon of public ownership may largely explain the very different attitude the public now has toward the great corporations compared to what it held twenty years ago. A man who owns stock or bonds of a railroad is not likely to be hostile to railroads in the way he might be hostile to a railroad owned by "rich men." The superintendent of a local telephone exchange not long ago received a message like this:

"Does Peter Wright work for the telephone company?"

"Yes," he answered.

"Well, he is home now painting his barn."

The superintendent called Peter Wright's boss and found that Wright had been sent out on two jobs. The superintendent and the boss then jumped

into a car and went to Wright's house. Sure enough, he was painting his barn. A one-sided discussion ensued on the morality of painting the barn on the company's time.

In the old days, Wright's neighbor would have been amused at the barn painting on company time. But now Wright's neighbor is a stockholder in the telephone company and the painting of the barn on his company's time shocked him into reporting it.

The wide distribution of the ownership of stocks and bonds is making us into an economic democracy, giving more and more men a stake in the country and in our industrial system. The encouraging phenomenon has grown more rapidly since the war. The relative income of the working man to his expenses is greater than before. He has more margin, more saving capacity, more chance to save money and to invest it.

From a social and political point of view this is probably the most important thing that has happened in this country since the abolition of slavery. The real test of The real test of a civilization is not its form of government, the development of its resources, the speed of its trains, its mechanical ingenuity-these all may help toward the real criterion, which is the well-being of the mass of the people. Happy is the country that has the good fortune and brains to be able to pay high wages. In this the United States is thrice blessed and particularly has this been true in the last few years. Professor Carver of Harvard rightly says that this increased prosperity amongst the masses in America is the only revolution of any importance that has happened in our time. It is often true of political revolutions that the more they change the more all the essentials remain the same. But this economic revolution is not so. It has changed, and greatly for the better, the standard of living of the people.

The New York Central recently announced that forty-one thousand of its employees own stock in the railroad; the railroad brotherhoods have a chain of banks-these are the signs that arrest

attention. They are indications of a vast increase in the stability of the Republic and an increasing opportunity for its citizens. Neither governmental action nor the ingenuity of business planned this or controlled it; it came under the direction of a Divine Providence and its economic laws. For it we should be eternally grateful.

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The French Debt

HERE have been indications that the settlement of the French debt to the United States would get into the same condition that enveloped the German reparations. The people of the various countries concerned had been given different conceptions of the reparations, each country having a conception favorable to itself. These conceptions were so strongly rooted that the premiers of the different countries could not abandon them and survive. So the nonpartisan committee-the Dawes Committee-was given the onus of telling the different people that a compromise was necessary.

Members of the French Chamber of Deputies and members of Congress have been doing their best to plant diverse rigid conceptions of the debt problem in the minds of their respective peoples. When the settlement comes there will be compromises to make perhaps more than political leaders will have the strength to shoulder. A study of the French ability to pay and of our profit in receiving the payment might be as fair and useful in the case of our friends as it has been in the case of our enemies.

It is of course possible for France to pay the principal of her debt to us if she is allowed to pay it in a sufficient number of instalments-fifty, seventy-five, or a hundred. The real crux of the matter is the rate of interest. The money was borrowed at 5 per cent. interest. No one expects France to discharge the obligation on that basis. The rate on the British debt was reduced from 5 per cent. to 3 per cent. At what rate do we expect France to pay and at what rate does

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France think she can pay? The theoretical discussions about the moral value of payment in full and the terrible dangers of repudiation are not really very important. By changing the number of years over which, the principal sum is to be paid and by raising or lowering the interest rate it is possible to arrange for a sum either within France's abilities to pay each year or utterly beyond it.

There is no convincing picture before the American public either of what France and our debtors can reasonably pay and in what form and on what terms we can profitably receive the payment. Until we get these facts we may all join in the implied wish of the President that the thoughtless, in Congress and out, would cease to demand in simulated patriotic fervor solutions which are not patriotic, not useful to the United States, nor possible from our creditors. We need more light and less heat upon the question of the debts.

What the French Think

N COMING to a debt-settlement with the French it is not necessary to accept their point of view unless it appeals to us as fair, but it is highly important that we know what it is. The following extract from a private letter gives some aspects of the problem as they appear to a well-informed Frenchman who both knows and likes this country.

There are, I am perfectly aware, people who say that America is rich and has no need of money-a childish argument which is not of great importance and which could never serve as a political basis. There are others, like Tardieu, who since the end of the war have never been willing to learn or to forget. They tried in vain, during the war, to have the principle of the financial solidarity of the Allies admitted, without success, and refuse to see that they will not succeed any better now. There are also the politicians who ask themselves what would happen to them if they announced to the public that extra taxes must be imposed over a long period of years in order to repay England and America.

There are also those, and I think they are

numerous, who say simply this: It is quite certain that, as a matter of justice, we ought to repay the United States and England the money we borrowed from them during the war and since the Armistice. We recognize that our two former "associates" have the right to demand it. But if we are ready to recognize that, in justice, the position taken by the two creditor countries is unassailable, there is, nevertheless, something which we cannot understand and which seems to us unjust-at least, up to a certain point. At Versailles, America and England forced us to make certain concessions in placing before us the famous Treaty of Guarantees. We accepted, and neither England nor the United States ratified the treaty. Without doubt, we were stupid; we should have known and understood that Wilson could be disavowed by the Senate and the American people; but, at least, at the time we acted in good faith.

When, in the hope of seeing the Treaty of Guarantees signed, we consented to a first reduction of the money due from Germany, Germany was not willing to pay. England and the United States then started a campaign to make us understand that we were asking too much; we were endangering the peace of Europe and we were assailed on all sides with: "You are really unreasonable. You owe us money, you cannot pay us, you ask for time. We promise nothing, but be reasonable and we will not show ourselves pitiless creditors." We therefore agreed to further reductions of the German indemnity, or rather, reparations, and that was a real sacrifice. They have not ceased to repeat to us: "It is not a matter of determining what Germany owes you but what she can pay; at least admit this principle."

We have admitted this principle, and during this time we have increased our internal debt in a perfectly colossal manner in order to find money for reconstruction. We accepted the Dawes plan. The Dawes plan accepted and beginning to operate, the question of interallied debts once more came up for discussion. We begin negotiations at Washington, or at least we begin to discuss to see whether it is possible to find a common basis of agreement. At first things go pretty well; just when it seems that America is disposed to grant us favorable terms, England intervenes and says:

"The arrangement concluded by Baldwin with the United States is ruinous for us. We should be very greatly hurt if now the United States accords better terms to France than to us."

The question is re-opened and we say to our English friends: "Following the Dawes plan, which we accepted to please you even though it means a big sacrifice for us, we should receive certain sums of money from Germany. Will you agree to be paid from these sums?"

They reply: "No, indeed. Or rather, yes, so long as Germany pays; but if for any reason Germany does not pay it is understood that it will be up to you to arrange to find the

money."

During this time the negotiations with Washington are stopped. On the one hand, and it is very legitimate, America hesitates to wound England by granting more favorable terms to France. On the other hand, America continues to maintain that the reparations and the debt constitute two distinct questions. Germany does not pay France, France must find some way of getting money.

If

France then sees before her the following situation: on the one hand, to show her goodwill and her desire for peace, she accepted

the Rhineland evacuation and the reduction of the German indemnity so that, finally, she is not sure of receiving enough even to pay the cost of reconstruction in the devasted regions. On the other hand, she must pay her entire debt to America (if I am not mistaken, 4 billion dollars-20 billion francs in gold, 80 billions at the actual rate of exchange.)

Germany having failed, having refused to pay what she owes for reparations, having depreciated the mark so as to reduce her internal debt to zero, sees her finances reëstablished and the mark once more at par. No

dignity. What is certain is that, if France does not wish to be reduced before long to the rank of a third-rate power, she will have to arrive at a solution speedily.

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Governing by Consent

HE series of articles on the Philippines by Miss Katherine Mayo recently syndicated in the newspapers and to appear shortly in book form under the title "The Isles of Fear," give a convincing picture of the ina lequacy of the moral perceptions of the small ruling class in the Philippines to carry on what we consider a just or stable. government. It shows equally the utter incapacity of the great mass of the Filipinos to participate in government at all.

A similar study of Porto Rico would unquestionably show a much larger percentage of the public able to participate in government and a more developed political sense amongst the leaders. Still, having just passed an act designed to limit aliens from coming within our borders and sharing our political rights, it is doubtful if we would do well to grant Porto Rico statehood, thereby at one stroke inviting one and a third millions of a different race and culture to send representatives to Congress to help govern this nation. There is no immediate prospect of either Philippine independence or Porto Rican statehood, yet the vocal part of the Philippines asks for

Germany of dishonesty. "It's a new deal,' and the game begins again. But at the same time it is France who is accused of dishonesty. The unfortunate people do not know where they stand and are ready to sell their soul to the devil, or—if you prefer it-to Caillaux.

What is to be done? Repudiate the debts? No one has ever proposed this in France. Those who have gone the farthest have said: "We don't see how we can pay you," or "It is not fair to treat us the way you have done." They have not said: "We do not want to pay." Name a new Dawes Commission to determine France's capacity to pay? That is perhaps what we shall finally arrive at; but at the same time, it must be recognized that that is a pretty humiliating procedure and the French,

for statehood.

Under these circumstances does government derive its "just powers from the consent of the governed"? Or does that noble doctrine pertain only to the politically competent? If so, who is the judge of competence: the people who are being governed or the alien race that is governing them or some third party? On what ground do we justify our control of Porto Rico and the Philippines? The President says:

We extended our domain over distant islands in order to safeguard our own interests and accepted the consequent obligations to bestow justice and liberty upon less favored

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Without question our control has given them great material benefit. It has added to their health, their wealth, and perhaps even to their political wisdom, although that is a quality that perishes easily in transference. Is material benefit a sufficient ground upon which to govern an alien people? If this were true, we should be justified in taking the next excuse Mexico offers us for conquering that country-for its own good. Yet it is as certain that we shall not do this as it is that we shall not give the Filipinos immediate independence.

On what theory is it then that we go? Have we a fundamental policy or do we merely resist taking territory as long as we can and finally, having got it, treat the inhabitants as well as we are able? In our political speeches we are apt to claim that our control of dependencies is entirely altruistic, that we do not acquire them for profit, that we have not exploited them, and that we have administered them to the best of our ability for their own good. In large measure this is true. And yet that does not answer the question: Under what conditions have we the right to benefit people who think they

do not want to be benefited?

The obvious and immediate results of abandoning any of the responsibilities which we have taken upon ourselves are clear enough and bad enough to prevent our abandoning them. But the prospective results of continuing as we are are not sufficiently clear to justify the small attention we give the problem.

report made by the Government of India to the Parliament of Great Britain:

But before the outbreak of the Great War, the aspirations of the Indian Nationalist movement were comparatively restricted. With the exception of a small group, mainly nihilist in inspiration, which sought complete independence, the majority of the class interested in political progress were content to claim for their own countrymen a share in place and power. But in consequence of the moral and material movements set in operation by the World War, a remarkable change came over the spirit of Indian Nationalism. The war gave to India two new conceptions, both of which were destined to exercise a profound influence upon her political future. The first was a new estimate of her potential importance in the civilized world; the second, an enhanced perception of the rights and dignity of nationality.

Concurrently with this, there was an increasing realization on the part of Imperial statesmen of the significance of India to the British Commonwealth. The part which India had played in the war, and the assistance given to the Allies by her immense resources, imperfectly utilized as they were, came as nothing short of a revelation to many. This

impression was deepened when, as a result of

the Allied victory, it seemed probable that the storm center of the world would shift from West to East. Those who pride themselves upon an accurate perception of the future course of world politics, are beginning to envisage a struggle which shall be waged not between rival exponents of Western culture, but between whole races of mankind; and, in fact, we can no longer deny that one of the gravest perils menacing humanity in the near future is the conflict between men of different colors.

Now the possibility of averting such a calamity is plainly increased if India, with her 320,000,000 of people, can be retained within the boundaries of the British Commonwealth of her own free will. Even apart from the influence which her population and her resources would wield when thrown into the balance on the side of world peace, her presence as a member of the greatest association of free nations which mankind has known, would unquestionably serve as a bridge across which the opposing cultures of East and West might advance to a mutual understanding.

Great as is the ideal embodied in this conception, it is by no means beyond the compass