of measurement, whilst other economic influences are at work at the same time, that it is impossible to draw an accurate conclusion as to the net advantage or disadvantage of indemnities to the State which levies them.  But the point to be borne in mind is that the addition of a great debt to the already large burden of an unsuccessful war reacts upon all countries with which the defeated state enters into business relations.  The losses due to this cause will not necessarily be counterbalanced by gains from increased trade with the country receiving the indemnity; and even if they were, the latter trade might be of a different character.  In any case, countries not parties to the indemnity will be affected by it in some way or other; war indemnities, like wars, do not pass by neutral countries and leave them untouched.

[Footnote 1:  See Norman Angell, The Great Illusion, Part I. chap. vi.]

It is important to remember that, though modern warfare is much more costly and more exhausting than in the past, there is another side to the matter.  Society has also gained remarkably in its powers of recuperation.  The blight of war is not as terrible as might be expected.  The accumulated knowledge, the vastly increased productivity of industry, and the high organising ability, which have made the modern industrial and commercial world, will not be obliterated by the war.  And though there will be difficulties in the way of their full operation when peace returns, they will aid powerfully in shortening the period of recovery.  The forces which have transformed mediaeval into modern cities in a few short years will still exist.  Though they can hardly be expected to overcome all the many factors likely to restrain economic activity, they may be relied on to stimulate the revival of normal economic life.  Indeed, the knowledge of science and the faculty of organisation are likely to be applied more extensively than in the past to productive processes.

After the war, when the States of Europe begin to tread the paths of peace again, one of the first things to be done will be to repair as far as possible the damage done by the war.  Take Belgium as an extreme example; leaving aside the irreparable destruction of historic buildings and priceless treasures, there are many million pounds’ worth of houses and farm buildings, shops, warehouses, factories, public buildings, ships, railway stations, and bridges to be replaced.  This work will take precedence over other kinds of production.  Sugar, motor cars, glass, etc., will still be manufactured, but chiefly in order to buy the requisite raw materials and finished goods for the replacement of the wealth destroyed by the ravages of the war.  Speaking generally, Belgium will probably consume less food than ordinarily, wear less clothes, and consume less luxuries.  Savings, which would normally have been devoted to new industrial developments, will be needed to make good the losses in existing industrial