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The following official return of allied merchant ships sunk by the Germans shows how Britain's ton-for-ton claim would suffer if the United States keeps the German ships:

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It should be noticed that, if we estimate according to tonnage, the losses of Italy come second on the list. Before the war Italy had (excepting only Germany) the highest proportion of large liners of any country in the world. It must also be remembered that Norway lost over a million tons. Norway was not our ally. Situated next door to Germany and defenseless, how could she be? But surely, in view of her appalling losses, the loss of her brave seamen and of her ships, Germany owes her a tremendous reparation.

Now, under the conditions of peace Germany is required to surrender the whole of her merchant shipping and to replace the losses she has inflicted, ton for ton. The fairest course would, undoubtedly, have been to allocate the German ships among, the various countries in proportion to the losses suffered by each.

But what happens? As we have pointed out, the United States during the war lost tonnage to an amount estimated at 341,512 tons. If, on the basis of a ton-for-ton policy, she claimed that and no more, her claim would be just, provided that the claims of all other nations had equally been met. But the German tonnage interned in the ports of the United States amounts to 660.000 tons. And, according to Mr. Hurley, Mr. Lansing, and President Wilson, America intends to claim it all. Surely this is "idealism" with a vengeance. It was understood that America was to make no profit by her intervention in the war. But here we have a policy, not of ton for ton, and of equality among the Allies and the associated powers, but of America helping herself first on a basis of 2 tons for 1. And it must be here remembered that the British Navy either drove these ships into the American harbors or kept them there.

But, if we examine it, the booty claimed is far richer than at first sight appears. The German ships interned in the United States are the pick of the German mercantile marine. Among the prizes is the Vaterland, 54,282 tons, the largest ship afloat, and several fast liners of a type far superior to anything America previously owned. Until lately, there was reason to hope that the Vaterland would be awarded to this country as compensation for the Lusitania.

As Mr. J. C. Gould, the Unionist member for Central Cardiff and a well-known shipowner, said in an interview:

“There are 90 German ships of a totaltonnage of 660,000 in American ports and they are the finest ships the Germans had. Announcements have been made in America that they are going to keep the German ships in their ports. If America is allowed to retain these ships, she will have more than double her losses. * * * It will be a serious loss to us if America keeps these vessels and uses them in the trans-Atlantic trade."

It is obvious that these ships will give the United States a big lead in high-class passenger traffic at the very moment when British lines are crippled by severe war losses.

Again, as Sir Alfred Booth, the chairman of the Cunard Line, has pointed out:

"By the fortune of war the Americans had the opportunity of increasing their mercantile marine enormously when we could not. If, on the top of this, they get all the German tonnage interned in the United States, and we get only our proportion with the other allies of the German ships kept in German waters, the United States will have an enormous advantage for immediate business. We must have ships now, if we are to resume our business, so terribly handicapped by the losses we have sustained. The fair way would be to share them in accordance with losses."

The above remarks are abstract and general. To-day we can be more concrete and precise. These ships are to be used for South American business. The United States Shipping Board has chosen from its fleet of former German ships the Mount Vernon, 18,372 tons; the Von Steuben, 14,908 tons; and the Agamemnon, 19,361 tons-originally known as the Kronprinzessin Cecilie, Kronprinz Wilhelm, and Kaiser Wilhelm 11for passenger and mail service between New York and South American ports. These

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vessels will be released shortly from transport service and be refitted luxuriously. It is expected that they will be ready for service in midsummer.

The Shipping Board hopes, says the Daily Mail New York correspondent, that with the establishment of a South American passenger service, 50 per cent faster than any. existing before the war, South American buyers will be attracted to the United States, and the old custom of travel via London between South American and United States ports will be abandoned.

To sum up, America will secure the largest ship afloat, and several fast liners of a type far superior to anything she previously owned. She will use them to capture the trade of South America. And she will have them on the seas, not merely before Great Britain and Italy are able to make good the losses they suffered during the war, but actually before the final peace terms have been signed, i. e., in midsummer.

The allocation, we are told, of all German tonnage is to be regulated by an interallied commission in Paris. But before the commission has begun to sit, before any allocation has been made, the United States seizes the ships, on a basis of 2 tons for 1, and captures the trade of South America.

Surely “idealism” could go no further. Emerson once described Napoleon as the great business man of history. Had Emerson been alive to-day he might have been inclined to apply the words to President Wilson.

And yet perhaps we are wrong in blaming President Wilson. “The President," we are told, "was advised in his stand by American financial experts in Paris." We do not know who these advisers were or what their advice was. But we ought not to forget certain facts.

We ought not to forget that already four years ago, in 1915, the Warburgs of the Old and the New World had tried to have the interned German ships acquired by the United States. Have the Warburgs again to-day sought to obtain their acquisition?

Who are these Warburgs? Max Warburg is the chief of the banking firm, Max Warburg & Co., of Hamburg. He is principal shareholder in the Hamburg-America and German Lloyd steamship lines. During the war he was at Stockholm and carried on some curious intrigues against Poland, endeavoring to set against Poland a Ukraine under German control. At present Max is one of the German plenipotentiaries in Paris.

His two brothers, Paul and Felix, live in New York. They are married respectively to the sister-in-law and daughter of Mr. Jacob Schiff, and are associates of the latter at the head of the Kuhn, Loeb & Co. Bank of New York.

Mr. Jacob Schiff is himself an interesting personality. He was born at Frankfort, and has been, according to Pertinax, the great financial supporter of the "Mutual Society of German Jews," which was linked, and is still probably linked on many sides, with high German circles. In 1916, according to the same writer, he founded the American neutral conference committee, which took upon itself the task of bringing about peace with a victorious Germany.

We have here, as Pertinax says, a financial group which, up to the declaration of war by America in April, 1917, was the most powerful link between the politicians of Washington and those of Berlin. Is it likely that the connection between the Warburgs of the Old and New World has now been broken? Having worked together as brothers in the war, will they not work together, as brothers, in the peace?

Be that as it may, it would be a mistake to consider the policy of two tons for one in isolation. This policy, scandalous as it is, is closely linked with other questions. We should do well to bear in mind the words of Mr. George D. Herron, once the political friend and supporter of President Wilson. “International financiers, who are diplomatically privileged, are the true cause of the present crisis and of all the political and moral failures of the peace conference, on the shoulders of which will fall the responsibility of the ruin which threatens the world.”

British people are disturbed by the policy of two tons for one, which threatens to be realized. But it must not be forgotten that they feel to-day what Italy felt only yesterday and still is feeling. “A financial group," Mr. Herron tells us, “is trying to secure privileges for the development of Fiume and of the Dalmatian ports, to get hold of all the lines of navigation in the Adriatic for the purpose of bringing complete commercial ruin upon Italy and of banishing her mercantile flag from the seas."

He would be a blind man, indeed, who failed to see a connection between the policy of two tons for one and the attempt to bring commercial ruin upon Italy. Is it the same group which is endeavoring, on the one hand, to banish the Italian flag from the Adriatic, and, on the other, to banish the British flag from South America?

And if we turn from the Adriatic to the Baltic, we find another singular coincidence. How is it that Mr. Max Warburg, the principal shareholder in the Hamburg-American and German Lloyd steamship lines, should have been so interested in the Ukraine? It might seem strange to find a great shipping magnate interested in the Ukraine. But-apart from the fact that Germans regard the Ukraine as their stepping-stone to India-all Germans realize that a strong and independent Poland, connected with England by sea, would be fatal to many of their plans. Such a Poland would be rescued from German economic domination. The Baltic might cease to be a German lake. It might become unduly opened to the British mercantile marine. Danzig might compete with Hamburg. Such a policy would not suit the Warburgs either of the New World or the Old. Max Warburg himself has his business between Hamburg and America.

One thing let us never forget. Poland and Italy are linked to England by many spiritual ties. They form, also, if we give them our full support and do not thwart their claims, two strong barriers against any future attempt by Germany to dominate the world. They are the ramparts of France upon the north and in the south. Together the four nations, England, France, Italy, and Poland, form one solid bloc whose unity is essential to the world's stability and peace. We are bound together, no less, by economic ties. The policy of ton for ton concerns us all. Our interests can never clash. And it is in the highest interest of England to witness a new Poland strong upon the seas, and a new Italy strong and secure in the Adriatic. With an allied and friendly Italy adjoining us in Egypt, with a Poland connected with England by sea and bolting the door to the German Drang nach Osten, to the exploitation of Russia, and to the invasion of India, Great Britain possesses two first-class guaranties for the security of her own Empire.

THE QUESTION OF FIUME.

After the long and rather bitter discussions, the disappointing delays, and the dramatic happenings that have hardened the Italian people to the point of being ready to dare almost anything rather than abate their rights, we find the question of Fiume still unsolved. How much longer must we await a decision?

The Italian nation was suddenly confronted with the veto of a single man, a man who has such unbounded self-confidence as to think himself infallible and sole arbiter of the world's destinies. Is this man bound by the chains which his friend, Prof. Herron, denounces? Has he his people behind him? Who can say? For though he is the latest apostle of democracy, he dispenses with parliaments and peoples. Word and act, truth and right, are his, the wise man who would correct the folly of fortythree million Italians.

There are, however, a few rists in the lute. The senates of New York State, Illinois, and Massachusetts have cabled to the President asking him explicitly to fully accept the Italian claims. And the majority leader in the Senate, Mr. Lodge, has championed the same policy. Therefore it is clear that the Italian policy in regard to Fiume has supporters even in America.

Have any new facts come to light to confirm the President in his obstinacy? Dr. Wilson has appealed to the Italian people over the heads of the Parliament and Government, and the Italian people have answered by rallying round the Government and showing that they are indissolubly united. Unmoved by all this the American President continues to dilate on all his old arguments. The chief and one might say the only argument put forward by him is one which has astounded everybody by reason of its lack of logical sense. According to President Wilson, Fiume is an international port, and because it must remain international it ought to be given to the Croats. That is to say, it must become a part of Jugo-Slav nationalism. That method of reasoning is so obviously outside all bounds of reason that we need not bother about discussing it. Evidently President Wilson thinks, and obstinately thinks, that it is a sound and solid dogma.

Now, everybody knows that the Croats are not an international but an entirely nationalistic people. What grounds are there then for supposing that Fiume could be made international by giving it to them rather than to the Italians? Are we to take it that the Italians, whose age-long civilization has been the cradle and is still largely the vital center of all that is best in Europe, would be less alive to their international obligations than the Croats who are only of yesterday? The President argues in much the same way as the Germans argued when they tried to justify their occupation of Antwerp, the natural outlet for the Rhine Provinces. Should Rotterdam, seeing that it is an international port par excellence, be condemned because of its international situation to live under the German yoke? Ought we to make a present of Genoa to Switzerland or South Germany? Surely Dr. Wilson must have other arguments stored away in his portfolio. But he will not tell the world about them. Secrecy, however, only serves to sharpen the curiosity of people who are eager to know the secret of the golden mysteries which have been denounced by Prof. Herron,

the President's confidant and friend. It is not our business to attempt to pull aside the veil that hides the Ark of the Covenant, or perhaps the Golden Calf.

Meanwhile the newspapers come out with another ballon d'essai. Why should Fiume not be given to the league of nations for five years, while another harbor for the Jugo-Slavs is in course of construction? Italians have no objection to the construction of a new Croatian port if that would solve the Fiume problem. They are not after the gold mines of Fiume. They are concerned only for the liberties and rights of their own people. As a matter of fact, the idea of a Croatian harbor at Buccari or Segna has already been mentioned in this Review. At Fiume Italy only seeks to safeguard the freedom of her own people, which is a small thing and valueless as far as outsiders are concerned.

But no one can help noticing it as rather remarkable that people should insist on the necessity of creating a new Jugo-Slav harbor quite close to Fiume, in an entirely out of the way position from the natural Jugo-Slavian trade routes. Leaving Fiume out of the question, the treaty of London gives the Jugo-Slavs a group of ports which in 1910 had a total trade of 12,000,000 tons; that is to say, a bulk of trade double that of Marseille. The total trade of Fiume itself was less than one-fourth of this, because it amounted only to 2,500,000 tons, of which a quarter of a million came from JugoSlavia. Thus only a fiftieth part of the maritime trade of Jugo-Slavia passed through Fiume.

Why are they so insistent on having the new Jugo-Slav port so close to a place where, in spite of all the encouragement given by the Hungarian Government, only a small fraction of Jugo-Slav trade passed? It is difficult to understand the meaning of the insistence on such a demand. There are people who think that behind all this obstinacy there must be some particular reason. Perhaps there is some one entirely actuated by idealistic motives who thinks that great advantages will be reaped in that out of the way corner of the Quarnaro. Where, it is hard to say. Perhaps one might fall back upon Prof. Herron for the answer.

And there is another question. If Italy is to have the Italian city of Fiume after a period of five years, why not now? Why should the league of nations be brought into the Adriatic? Italy has already had proof of how this kind of arrangement would work. A certain international commission has been going up and down the Adriatic and has done things which are not yet publicly known, but which are underlined in black in the annals of the Italian Navy. Is Italy to be put under tutelage? Do the Allies realize how grossly they sin against all good taste, against all the principles of comradeship, and how grossly they offend the susceptibilities of the Italian people when they suggest that a supervising control should be held over the Italian Government during the period of five years, within which Fiume will be the "only” outlet for the Jugo-Slavs? Of what crimes do they think the Italian Government would be guilty against the commercial freedom of the small Jugo-Slav nation? Perhaps not even President Wilson could answer that question. But those who inspire him probably think that behind the cover of the league of nations the dollars could easily ebb and flow at Fiume, and that the economic interests of the city could be more easily handled. Certainly the Italian Government, conscious of its duty, could never allow the usury and exploitation which the Jugo-Slave readily permit, going hand in hand as it does with the corruption of the governing classes.

Dr. Wilson still gazes at Fiume with his thumbs turned down. The whole Italian nation yearns for the redemption of the Italian city. If despotism and dollarism should triumph, we might have an exodus from Fiume of the Italian population; and it is not impossible that the Croats might eventually find there only ruins and desolation. In this Review it has already been said that Fiume is the touchstone of the Allies' policy. That is an important truth, and the sooner its importance is recognized by those who have the direction of the allied policy in their hands the sooner shall we arrive at an Adriatic settlement that will be just and lasting.

IS THE PEACE CONFERENCE A FREE AGENT?-MORE LIGHT NEEDED ON A DARK

QUESTION.

Dr. Herron's telegram to the Italian paper L'Epoca (Apr. 28) reveals the existence of a secret financial coalition practically ruling over the peace conference.

In order to fully grasp the importance and the authentic character of the revelations made by Dr. Herron it is, first of all, necessary to know who Dr. Herron is. The Paris edition of the New York Herald (May 3) gives the following details about his position and career. It says:

“Dr. George D. Herron was appointed in February last, with Mr. William Allen White, as the American delegate to the proposed conference with representatives of the various Russian parties on the island of Prinkipos. A publicist and professor of political economy well known in the United States, he has for some five years past made his home in Geneva, whence he was able to keep the American State Department . and Allied Governments posted on movements centering there. About a year ago he published a volume entitled 'President Wilson and World Peace,' which, following a book on "The Menace of Peace,' issued the year before, attracted much attention.

“For several weeks before his return to Geneva, about a month ago, he was in close conference with President Wilson, Col. House, and other members of the American mission, as well as with Mr. Balfour and the Italian delegation.

"In connection with the above dispatch it is interesting to note that, speaking in the Senate, Signor Tittoni protested against 'the substitution for German hegemony of other hegemonies, less brutal in appearance, but just as tyrannical, and concealing a formidable plutocratic coalition and a colossal financial monopoly for the economic exploitation of the world.'

“The theme was dwelt upon also by Signor Luzzatti and Signor Turail in the Chamber. They referred to the enterprises of international high finance in the Adriatic, notably at Fiume. The revelation of the opposition of financial magnates to Italian claims has made a great sensation in Italy."

Hence it is clear that we are in the presence not only of a competent authority in regard to the facts with which he deals, but also of a man of high moral worth, whose views on the moral side of the situation are of the utmost value and worthy of the utmost respect.

The foļlowing is the text of Dr. Herron's communication to the Epoca:

“As one who can claim to be perfectly acquainted with the nature of the present conflict between Italy and Jugo-Slavia, and as one who has had occasion more than once of acting as mediator between the two parties, I should like to express my conviction that a great injustice iş about to be done to Italy, in the opinion of the public, and that the Jugo-Slav people as well as the Italian people are ignorant of what is hidden behind the scenes of the present crisis. I should like also to add that, as I can safely affirm, there were at least two occasions when an understanding could have been reached were it not for the intervention of intrigues on the part of international financiers who are diplomatically privileged, who are the true cause of the present crisis, and who are the cause of all the policical and moral failures of the peace conference, on the shoulders of which will fall the responsibility of the ruin which threatens the world. The financial group is trying to secure privileges for the development of Fiume and of the Dalmatian ports, to get hold of all the lines of navigation in the Adriatic for the purpose of exploiting the Serbian nation, on the one hand, and on the other to bring complete commercial ruin upon Italy and banish her mercantile flag from the seas.

"Nor would the ruin of her mercantile commerce be the sole damage to be suffered by Italy were she to renounce Fiume. In a very short time her political and commercial relations with Roumania and the Balkans would be severed. By refusing to cede her eastern port Italy is at present struggling for her own existence against the international monopolists. She has no mines. She has no resources to offer to these monopolists, while southeastern Europe is ripe for exploitation. Furthermore, according to the treaty of London, only a small part of Dalmatia is to belong to Italy. Nine ports capable of adequate development will be left to Jugo-Slavia. Moreover, Italy would not have fallen back on the treaty of London had not the evil influences at the back of the Jugo-Slav delegation in Paris aroused her to intransigence. Finally, to call in the principle of self-determination against Italian claims alone is an evident piece of hypocrisy, if one takes account of the territorial gains secured by all the other nations represented at the peace conference England will control a vast empire stretching from India to Egypt; and to pass under English rule is considered the best fortune that can befall the people situated between India and Egypt. France will not only see her aspirations almost completely realized in regard to the left bank of the Rhine, but she will also have Syria and new colonies in Africa. I am the last person to object to what has been given to France. Far from thinking that France has got too much, I think that she has got too little. The Valley of the Saar should have been given by full right of possession to France, and French and Belgian rule should have been extended to the Rhine absolutely and without impracticable compromises. Poland will have a population scarecly one-half of which is made up of Poles. "CzechoSlovakia will include, and justly so, a German population of about three millions. Jugo-Slavia will have a large percentage of people who are not Jugo-Slavs and who do do not wish to come under Serbian rule. But on account of reasons which are understood only by those who know the secret means which serve the ends of international finance, Italy is denied territories which, if granted to her, would bring her only 3 per cent of a non-Italian population.

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