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for the army and navy and strategic subsidies for the states for thesame purpose. 12 Mr. Alfred Vagts makes a very pregnant observationon this point. "The people," he says, "became inclined to believein a superior kind of planning which the crisis-beset capitalismdid not know how to provide, but which seemed to be inherent insuccessful military institutions." 13 In other words militarism, withoutbeing designed to do so, came to provide Germany with thatinstrument which the later-day planners have been demanding—ameans of increasing national income by public expenditures throughborrowed funds. In truth militarism had become the great acceptedand universally tolerated Public Works Administration of Europe.Had it been a mere burden to the peoples by reason of its tax exactionsit would never have survived. It was because the tax burdenwas at least temporarily offset by the increase in national incomeprovided through maintaining with public funds Germany's biggestindustry that it was permitted to continue.This helps in understanding how utterly futile were those feebleappeals for disarmament that preceded the World War, in 1898and 1907, as well as those made habitually by peace groups since.At these conferences delegates gathered to discuss whether or notGermany and France and Russia—but particularly Germany andFrance—should dismantle the largest single industry within theirborders. The politicians understood this and so did the people, if thesimple-minded reformers did not. In 1898, when the proposal for adisarmament conference was sent to the Kaiser, it came back to theForeign Office with this notation written in the margin: "How willKrupp pay his men?"Mr. Edward Hallett Carr, who writes with such intelligence ofthe world's present dilemma, perceives this. He says: "The economicconsequences of the production of armaments are no different fromthe economic consequences of the production of a pair of silk stockings.... The special features of the demand for armaments whichhave enabled it to be used for a solution of the unemploymentproblem are two. In the first place the demand, being unlimited^"National Debt of the German Empire," by Dr. Adolph Wagner, North American Re*view, Vol. 174, June 1902.The History of Militarism, by Alfred Vagts, W. W. Norton, New York, i937·I06