THE ECONOMIC EFFECT OF WAR.
War is, of course, economically, purely destructive. The men employed produce nothing; the engines prepared are useless, except for killing; the money expended is most of it consumed on objects which can yield no direct return. Enormous quantities of food are wasted in transport, domestic animals are used-up in unproductive labor, and the men slain are necessarily among the strongest in the nation. Nevertheless, the economic loss of war is often not felt for a time; and it is probable that in the war supposed to be coming with Russia this will be the case to an unusual degree. Almost all the possessing classes, to begin with, will at first feel as if the war had made them less poor. Those of them who are lucky enough always to save, find all investments cheaper, which is to them as if their money had directly increased in power. Only six weeks ago you could not buy a solid security to pay quite four per cent., and to-day there are twenty to choose among. The possessing classes have been suffering from the fall in prices, and the fall in prices will cease. Already the owners of land are relieved of apprehension by a rise in the price of wheat which may be taken as equivalent in effect to a five-shilling protective duty; and the farmers, possibly misled by the tradition of former wars, look forward to a rise of at least double that. As the American supply will not be affected, and the Indian supply will be as good as ever, and every rise in price draws new supplies, they may possibly be disappointed; but imagination is a factor in trade, as in all other things governed by human minds, and the prices of things to eat will undoubtedly stiffen. The mere increase in the cost of sea-carriage will secure that; and this increase will be considerable, for a Government at war draws heavily on the surplus shipping for transport; and while freight rises, so also do rates of insurance and competent seamen’s wages. Large as the seafaring class is, the demand made on it in war-time by a great Power sensibly diminishes it, and so increases the value of the remaining seamen. All sea-borne goods must rise perceptibly in price, and so, though the reason is not so apparent, do all metals; and owing to the law which tends to equalise all profits, so in smaller proportion do all other vendible things. The phenomenon called by housewives “dearness” appears at once; and as the possessing and trading classes, distributors excepted, fret under cheapness, this is for the time a satisfaction to them. Landlords, shipowners, planters abroad, farmers at home, mineowners, and manufacturers with large stocks, classes which greatly influence opinion, deem themselves to be, and in some instances are, decidedly better-off. Nor are the distributing classes at first injured. Much of the enormous expenditure of war goes into their pockets; war is recognised as full excuse for heavier prices; and the demand from the well-to-do which so often makes the difference between profit and loss increases rather than diminishes. The currency, too, tends to become inflated by the issue of Government paper, not in the form of bank-notes, but of obligations of all kinds, signed by a firm—the Government—known to be solvent, and passing in large transactions from hand to hand, and inflation always produces the appearance of prosperity. The enormous mass of expense, again, based on borrowed money,—that is, practically, on future earnings,—swells the volume of available money in circulation, and enlarges, sometimes enormously, the profits of certain men, e.g., army contractors, who immediately spend on their own objects till the veins of the community seem full of blood. Even wages rise, and especially the wages of the poorest class, the half-skilled laborers. It is often supposed that this is not the case; but the truth would seem to be that the withdrawal of laborers from production caused by war, falling as it does, not on the whole people, but on a limited section of them,—namely, those who are at once poor, specially able-bodied, and under thirty-five,—greatly diminishes the total supply, and at once raises wages. This is thoroughly recognised on the Continent, where mobilisation affects such a huge mass of men, and even in England the numbers taken away are very serious. In a war of two years at least 100,000 men will require to be replaced, another 100,000 will be hired for garrison duty of all kinds, and a further contingent of unknown numbers will be employed in dockyards, transport services, and the endless forms of hard labor necessary to send armies to the field. If we remember that the half-skilled laborers are only a division of the people, and that agricultural laborers, in particular, upon whom much of the pressure falls, are only 600,000, we shall see that war seriously reduces the available supply of hands, and so sends up one class of wages. In truth, in the beginning of a war in a country not liable to invasion, and not harassed from the first by financial distress, it is difficult to see what class—unless it be soldiers’ wives—suffers economically from the very beginning, and does not rather feel as if it were prospering. Something of this is, no doubt, imaginary, and due to the bustle and interest created by war, and the sense it causes of a necessity for harder work; but most of it has a true economic source. The expenditure is greater, the competition is less, and one new career, rapidly consuming men, has been opened to the discontented. There is more room for those who are not engaged, and more to get, and they therefore feel well-off. So strong is this impression, that in countries where the well-off classes govern—as was the case in England’s war with Napoleon—war is often protracted by their reluctance to lose the advantages which they think, often with reason, they are enjoying, though at the expense of the whole community.
It is by degrees that the economic effect of war comes to be felt, through the agency, usually, of taxation. No nation can throw away perhaps two years’ revenue in one on unproductive effort without becoming gradually poorer,—that is, without having less to spend in giving good wages to great multitudes of men. Suppose a war to cost fifty millions a year—and the American war cost £120,000,000—though much of that is spent in wages, the whole is loss, for even the wages are paid, from the economic point of view, for doing nothing. In the best case, that of a country which is annually heaping-up a reserve in the shape of savings, this reserve must be diminished to an appreciable degree; and the effect, pro tanto, is as if the community were making less profit, or were fractionally less industrious, or were more addicted to consumable luxuries like tobacco or wine. If the process continues long, or the war is excessively expensive, all saving-power is consumed, and the community sinks gradually to the position of a man who is living from hand to mouth, and making nothing to provide against the future. The process, of course, may be slow; it may be retarded, as in England in the Great War, by the sudden rise of new and profitable industries, and it may be diminished in its effect by thrift; but it is inevitable. No nation could expend a second year’s revenue on war continuously for a century without being beggared; and each separate year must of necessity involve some approach towards beggary. Borrowing distributes the loss over future years; but it does not diminish the loss itself, which is positive, and not to be diminished by any financial arrangement. Borrowing involves taxation, and the effect of taxation in the gross is to impoverish. It is often said, for instance, that England could borrow a hundred millions, and then pay for it by a twopenny tax on sugar; and that, as a financial statement, is correct. But then this also is correct, that the three and a half millions a year raised to pay for a loan of that amount expended in a past war, means a loss equivalent to an obligation to keep 100,000 unskilled laborers at £35 a year each in idleness for ever. An unskilled laborer does not earn more than that; and that, therefore, is one expression of what the community gives away through such a tax, without real benefit to its producing-power. It is true that three and a half millions is not an amount sufficient to hurt England; but it is a fresh burden on England, and it begins to fall just when it is hardest, that is, when war expenditure and consequent borrowing ceases. It is on the top of the loss of the great customer who has been throwing away, say, £100,000,000 a year, that the new taxation comes, and is, therefore, often so cruelly felt. We have been told, on high financial authority—that of the late Mr. James Wilson—that after Waterloo, when the era of war ended, and the war expenditure ceased, the people found that just when their mighty customer, the Government, ceased to buy everything, and prices suddenly sank, everybody was paying seven-and-sixpence in the pound of his earnings to the State. The reaction was terrible; every man felt nearly ruined, and for at least four years a spirit of economic dishonesty spread among the people, till the ominous words, “the sponge,” began to be uttered aloud. As it happened, the distress did not matter. An enormous development of industry, the result of new inventions and mechanical appliances, rapidly made England rich again; and, followed as it was by a new system of communication, rebuilt the national fortune; but the economic danger for a few years was terrible. Nothing like that is likely to occur again; but still, a great war will touch every household with its consequences before it is done. A shilling income-tax will be felt even by the rich, and will directly deplete the reservoir out of which those who provide the comforts of life are paid. Duties on edible luxuries or necessaries will be felt by the poor in proportion to their poverty, and this the more because they will come on the back of the general “dearness,” especially of eatables, which is the inevitable consequence of war. When the war stops, therefore, there will be distress, great or little, in proportion to the expenditure; but, great or little, equally inevitable, not to be kept-off by any financial arrangement. It may be rendered short, of course, or even innocuous, by other causes, such as a sudden discovery of a new and cheaper motor which, by reducing the energy to be expended on producing a result, positively adds to the national force, and, therefore, to the national producing-power, or by the opening-up of new channels of industry; but, apart from these, there is no avoiding the economic consequence of war. War is waste; the nation pays for the waste by taxation, and, therefore, every individual in the nation must, pro tanto, suffer. The particular war may be right, or unavoidable, or purely self-defensive, but one of its consequences must be this; and it is never wise to conceal what inevitably must happen.—Spectator.
A MASTER IN ISLAM ON THE PRESENT CRISIS.
Interview with Sheikh Djamal-ud-dîn Al-Hûsseiny Al-Afghany.
Various references have been made of late to a mysterious sheikh who from his lodgings in Paris is believed to hold the strings of the Nationalist movement in Egypt and the religious revolt in the Soudan. We have received the following account of this interesting personage from a correspondent who called on him the other day in Paris:—
Sheikh Djamal-ud-dîn Al-Hûsseiny, for such is his full name and title, was born in Cabul in the year 1837, of a noble and renowned family in Afghanistan called the Seiyidists de Connoire (descendant of the prophet Mahommed). He began the study of Arabic when eight years old, and afterwards he devoted himself to the study of Mahommedan theology and philosophy. When the Mutiny broke out in India he left Cabul and went to that country, travelling through all parts of India, after which he visited Mecca, returning to Afghanistan by Baghdâd and Persia. Sheikh Djamal-ud-dîn joined Abd-ur-rahman Khan, the present ruler of Afghanistan, when civil war broke out between them and Sher Ali Khan. Abd-ur-rahman having been defeated by Sher Ali, Sheikh Djamal-ud-dîn fled to Constantinople, and at this place he was courted by the leading savants and learned men of that city, his literary fame already having attained considerable renown throughout the East. Soon after his arrival in Constantinople he was unanimously elected a member of the Court of Public Instruction. While at Constantinople his spirit blazed into fury at the spectacle of the bad and corrupt administration of the Turks. He delivered lectures and wrote against it in vehement terms, which resulted in his expulsion from Turkey in the year 1871. He thereupon went to Egypt, where he had long been famous for his remarkable knowledge of Arabic, Islamic law, and all branches of philosophy. Hence many of the best men in Egypt and the Soudan flocked around him, and he had several pupils whom he instructed in all branches of Oriental learning. Amongst these pupils of his by far the most notable was Mahammed Ahmad, the Mahdi. At Cairo he attacked Ismail Pasha, denouncing him as the cause of the ruin of Egypt. In short he was one of the principal instruments that caused Ismail’s downfall. When the present Khedive came to the throne he likewise preached in public assemblies against him as the agent of foreign intervention, and consequently in 1880 he was exiled from Egypt. All his possessions, such as his library and papers, were seized at Tewfik’s command by the Egyptian Government. From Egypt he again visited India, remaining there three years, and then two years ago he came over to Paris, in which city he still resides.
His abode is a modest hotel near the Boulevards, where he has apartments modestly furnished. In his habits Sheikh Djamal-ud-dîn is very regular. Rising early in the morning, he enters his sitting room, and peruses the newspapers, smoking his Turkish tobacco in an English pipe. Close by him he generally keeps his Koran, and several Arabic, Persian, Turkish books and pamphlets are scattered about his room, as well as a number of the leading French and English newspapers. Here we may mention that he published for a time an Arabic paper called Al-Urwat-ul-Wuthka, Le Lien Indissoluble, which had an enormous circulation in the East. Sheikh Djamal-ud-dîn has a majestic and commanding presence (as may be seen from the accompanying portrait), and a face of remarkable intelligence. He keeps his head uncovered indoors, contrary to Oriental custom. It has already been mentioned in the papers that Sheikh Djamal-ud-dîn has had and has a sort of communication with the Mahdi. He describes him to be a very intelligent person, well versed in Moslem theology and history. In stature he is of moderate size, rather thin, but muscular and wiry. He grows a small beard, and his color is bronze but by no means black, and he possesses a sedate, pious look. In his early age the Mahdi was remarkable for great religious principle, and was always very abstemious and kindly disposed to the weak and poor. Before he acquired his present position as Mahdi he believed that he felt some sort of inspiration, and certainly now believes himself to be the Mahdi expected by all Islam, nor, in his old master’s opinion, does he do this as a mere political pretext.
The following is a transcript of the notes of the interview between our representative and the Sheikh:—
What does the word Mahdi convey to Mahommedans; in what position does it place them, and what is the effect produced on them?—Mahommedans believe, according to Islamic tradition, that at the end of time there will appear a Mahdi, who will be recognized by certain indications, and his mission is to exalt Islam throughout the world. Consequently the Mahdi’s mission is one of great importance, and its effect on Mahommedans is very great. He who studies the history of Islam will find that many Moslem empires were formed through a Mahdi’s mission.
Is it possible for the present Mahdi to be successful in his enterprise and to be followed by all or a large portion of the Mahommedans?—This matter is but like all others of the sort, and considering the present bad condition of the Moslems, should the Mahdi gain two or three more successes, he would certainly be followed by nearly all the Mahommedans.
Do you think it possible to crush his influence?—Yes, if they do not fight him in his own country, thus forcing him, so to speak, to fight and defend it; and also if they leave the defence of other countries to the Mahommedans themselves. The best method of crushing a religious rising, to my mind, is to allow co-religionists to do it.
As the Sheikh is not merely the tutor of the Mahdi, but also a Cabulee savant and old partisan of Abd-ur-rahman, the conversation turned on the Afghan question.
What is your opinion of the Russian advance?—This is a matter of great complication, requiring for its solution the greatest consideration, for there is no doubt that on the one hand a war between two such great Powers as England and Russia must, besides the enormous loss of life, cause great losses to all the world, and cause great future complications. Further, it would not end in a short time. On the other hand, should Russia come to amicable terms at present with England through the mediation of Germany, or by the means of friendly relations between the present British Cabinet and that of Russia, the result would be more disadvantageous to England, inasmuch as the Russian policy and intentions respecting their advance in India cannot be doubted or misunderstood by politicians. Therefore, should an amicable arrangement and understanding be arrived at at present, Russia will have more time and be better able to arrange her affairs and complete her preparations. They could cause a railway to be made from Exeus to the frontier of Afghanistan. Further, they would be enabled to remove any ill-feeling that may exist between them and the tribes of Turcomans, and try to gain the friendship of the tribes of Djamshîdé and Hûzarah, who are situated near Herat, as well as the Uzbaks, who dwell in Balkh, who are all different in race, particularly the Hûzarah, who differ in religion, they being Shîhists. It would not be difficult for Russia to gain these tribes, as they are not on very friendly terms with the Afghans. After this Russia would try and gain the Afghans to their side by promising them the Punjaub. Russian promises would have greater effect than all the means England can bring to bear, inasmuch as Russian character is more akin to the Oriental than any other. Further, the Russians would by intrigue try to incite Indian hostility towards English, promising them self-government should Russia succeed.
All this, however, requires time, so that if Russia should hurry herself into war at present she would be acting against her interests, which would show the greatest ignorance; but I do not think she would be so foolish seeing what she would risk in a war just now. In short, unless Russia retreats back to the Caspian Sea leaving Turcoman and Buckharah, there cannot be perfect safety for England in India. Although the retreat of Russia so far is difficult, yet in the future it would be more so. It is, however, possible, and this by weakening her power in Europe; or by England uniting with the Afghans, Persia, and Turkey, and forcing Russia to withdraw as above stated; and for England to withdraw from the Soudan leaving it to Mahommedans to arrange their internal affairs. Egypt can undoubtedly improve herself and repair, slowly but surely, the damages done. This, however, I fear the present Government will not do, inasmuch as they slight the Mahommedans, and that Russia will supersede them in the matter and in gaining Moslem sympathy, time will show and prove.—Pall Mall Gazette.