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an employer, but, worse still, it was badly served. Finally, we come to the crucial instance of State credit. Dr. Pearson's remarks on the superstitious trust reposed in a State guarantee are so admirable that they must not be weakened by paraphrase in these pages. It is sufficient to say that he shows with unerring force that a guarantee by the State, to merit confidence, requires as good testimonial to character as that of any other corporate guarantor. We use the phrase 'as safe as the Bank of England.' There is no corresponding Bank of Australia; but the Government Savings Bank takes its place as the nearest equivalent. Yet the State Savings Banks in Australia, as we have seen, are used by the Australian Governments as milch kine; and the deposits in one case have been swept into the national debt. As to State railways and State works, enough has already been said. State balance sheets seem to be at least as dubious in some European countries, where State Socialism is in the ascendant, as in Australia itself. Latterly, State prosecutions have also fallen into disrepute, as they well might, after the Panama scandals in France, and the minor, but equally unpleasant, 'Davies' scandals in Australia. All these things tend to bring the State into contempt, and, more, into well-deserved contempt a dangerous and lamentable thing, even in a free community; a fatal calamity in a country governed according to the standards of State Socialism.

But, in spite of the acknowledged and unacknowledged drawbacks of State Socialism, it is likely, so Dr. Pearson warns us, to be forced upon us by circumstances, e. g. by the limits imposed on the higher races by climate, the consequent closing of present outlets for trade and energy, and the turning of every nation inward upon itself. But, admitting as we freely may, the reality and pressure of these dangers— what deliverance is to be expected from the State? Compulsory military service-a people in arms. I am not one of those who lightly dismiss the advantages of compulsory military service, and condemn it as anathema; but surely efficient military service is as much dependent on national character as any other national service. Surely a people

which throws itself in despair into the arms of an helpless abstraction; which fears the bare idea of the worst going to the wall; which shrinks from the laws of nature and tries to evade, instead of obeying and so subduing them-surely such a people will never win battles. Destruction of family ties (a consummation which is rapidly accomplishing itself) and decay of individual character-are these the stuff of which conquering armies are made? It must be remembered too that highly civilized communities have generally ended by hiring mercenaries to do their fighting for them; and the same may happen now-nay, is more than likely to happen, if the natural outlets to individual energy are closed-with the usual results. State Socialism, in seeking to lessen competition, is destroying the fighting spirit.

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Then once more the question of money crops up-money, the sinews of war. Also there is another consideration to which we are led by Dr. Pearson's vision (amply justified by existing conditions all round us) of future increase of great cities, standing armies and national debts, viz. How are these communities, cramped within their own limits, to be fed? If the town population is for ever to increase at the expense of the country, where is the food to come from? From the inferior races outside those limits? But they may have none to spare, or refuse to spare what they have. State Socialism delights in large towns, for it is in them that the power the State may be most strikingly exhibited, while the sense of oppression born of confinement within streets helps to render men more docile to its teaching. In the country the State can never obtain the ascendency which it may gain in the towns; and it is in the country accordingly that the men who love liberty and independence are most likely to be found. In Australia, as we have seen, State Socialism, which for a time kept town and country alike in subjection, by pampering both at the expense of the British capitalist, has been compelled to transfer all burdens to the country. Whether the country will stand it remains to be seen; but that it will do so without a struggle to assert its political supremacy I do not believe. Thus there is every indication

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that State Socialism, so far from promoting peace and contentment within a community, simply tends to embitter the country against the town; and it is in the combat between the two that we may expect to see it fall, both in Australia and elsewhere. For though we have few clues as to the issue of such strife, we have at least one, and that of no ordinary significance, viz. that life in large towns means physical degeneration. In England the country has now lain for some years under the heel of the towns; but the towns must decline with the decline of foreign trade, which townsmen in their wisdom are doing their best to accelerate. When the 'boom' on which the English towns grew and throve for half a century has been finally broken down (the process of destruction is still going on)-then, perhaps, we may expect the English State to remember that there are country districts and country interests even in England. Whether the country districts will feel as kindly towards the State, and help her in her hour of need, is another question.

Altogether, we are forced to accept Dr. Pearson's conclusion, which is (if I understand it aright) that State Socialism is the death-cry of our civilization. It is only reasonable to assume that our civilization will perish just as other civilizations have perished before it-for it seems to be incontestable that the lower races tend to outbreed the higher, just as curs outbreed pure foxhounds. The tendency of the moment (and it may be of more than the moment) is to abandon all effort and to yield place to the inferior races, provided they will but let us alone to enjoy our State Socialistic dreams. Ireland, it is said, stops the way-is the bar to all English legislation. In that case-long may she stop the way, and keep us from the most ignoble form of national suicide!

J. W. FORTESCUE.

V.

THE INFLUENCE OF STATE BORROWING ON COMMERCIAL

CRISES.

WYNNARD HOOPER.

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