cassé described the position of France at the close of the war with Germany and the way in which that nation had diplomatically made her position impregnable. "Thirty-seven years ago a nation lay, mutilated, bled to the white, alone, oh! quite alone. Who could fear her? It is the victor who deems it advisable to surround himself with alliances. He makes an alliance first with one Power, then with a second. Then he contracts a reinsurance with a third, and he gains the sympathies of a fourth. To such effect that Europe finally gravitates around him. Who considered France's position enviable?" Then M. Delcassé described how friendly relations had been established with England, with Spain, with Italy, while the alliance with Russia had been a guarantee of peace. His conclusion was an appeal to France to have confidence in herself. The speech created a great impression not only in France but throughout Europe. "It has found an echo in French hearts," the London Morning Post remarks, "and will contribute to the strengthening of France. It will not embarrass M. Clemenceau." M. Pichon, the minister for foreign affairs, replying to M. Delcassé, made it plain that the foreign policy of France would remain unchanged, that she would continue her work in Morocco and remain loyal to the agreements made with other Powers. The possibility of trouble in the Balkans causes speculation as to the position of Italy in the event of hostilities. Italy is a member of the Italy and her Allies Triple Alliance, on paper the ally of Austria, and theoretically devoted to her interests, but the Austro-Italian alliance is like one of those marriages in which the wife is more interested in the fortunes of a man other than her husband. The Austro-Italian alliance was not only a mariage de convenance, but it was also a sacrificial marriage, it was a union to prevent war. At the time of the formation of the Dreibund Italy was in none too pleasant a position. She was between the vice of Austria and France, and at any moment the mailed jaws might close and squeeze her to death. The creation of the Dreibund was at one time supposed to have been Bismarck's invention as an offset to the Franco-Russian alliance, but it is now known that it was Crispi who originated the idea, who feared an attack from France and was always suspicious of Austria, and who therefore secured himself against France and disarmed Austria by entering into partnership with her and Germany. That was twenty-five years ago, but in the intervening time much has happened to change the European political situation. There are alliances between nations that are as unnatural as unions between individuals, that entered into purely for selfish reasons bring no sense of satisfaction. The fact that the Italians and the French are Latins furnishes a national sympathy, which does not exist between the Italians and the Austrians. Trade in modern times is the great bond between nations, and the commercial line of least resistance from Italy runs in the direction of France rather than toward Austria. France, on her part, appreciates the importance of the Italian market. The old Italian fear of an attack by France has long since been forgotten. Italy no longer fortifies her French frontier or disposes her navy with a view to check French aggression, but, on the other hand, she strengthens her defences which, if they mean anything, are to defend her from attack by a Power who is her ally by treaty. For many years after the Russo-Turkish War Russia and Austria were regarded as the only European Powers having any great stake in the Balkans, but in the last ten years Italy has displayed a vigorous interest in the affairs of Albania and Macedonia, which is not surprising considering their relationship to the Adriatic. It must be apparent to Austria that when next the Concert of Europe meets in solemn conclave to administer on the Balkan estate she will have to reckon with Italy. Should Both Austria and Italy have to consider what their positions would be in case of an Anglo-German war, which Europe believes is always a possibility. "On the day when Great Britain and Germany find themselves in a serious difficulty-if such a day ever arrive-the Triple Alliance, so far as Italy is concerned, will be merely waste paper," an English writer recently remarked. Possibly the wish is father to the thought, but it may have even greater foundation. "The Italian people will never fight for Germany against Great Britain-a fact of which the Germans appear to be well aware. Germany is not an altruistic country; in that she follows the Bismarckian tradition, summed up in the maxim do ut des. Prussia's real but selfish service in 1866 weighs nothing against the warm sympathy and disinterested help accorded by Englishmen to Italians during the War of Independence. Moreover, the German Emperor is suspected of coveting Trieste, and the German press at times dictates terms to Italy. If it be true that in the last renewal of the Triple Alliance the clause exempting Italy from her treaty obligations in the event of an Anglo-German war was omitted. then that omission constituted a serious menace to the League of the Three Powers. In other words, the Triple Alliance will last so long as it is not put to the test." So complicated and curiously involved are European politics that while on the one hand there is a possibility of a breach between Italy and Austria, on the other hand there may be reasons to bring them in a much closer alliance than they are now. Justly or unjustly, Austria fears that with the death of the reigning monarch, which in the ordinary course of nature cannot be much longer postponed, an attempt will be made by Germany to annex the German-speaking portion of the Dual Monarchy. In that case what would Italy do? Would she acquiesce in this act of spoliation or would she join with Austria in fighting Germany if that country put the issue to the test of war? The natural inclination of Italy would be to resist German overlordship of Austria, because that would be a far greater menace to Italian interests than the maintenance of the status quo, while in the event of a successful war, Italy would undoubtedly receive her reward by the cession to her by Austria of Trieste, the loss of which the Italians have never ceased to regret. Persia in Late in February an attempt was made on the life of the Shah of Persia, which proved unsuccessful because of the precautions adopted for his Majesty's safety. While visiting a town near the capital and passing through a narrow street two bombs were thrown at the royal procession from a house top. Three members of the suite were instantly killed, but the Shah escaped unhurt. The would-be regicides expected the Shah to be in a closed automobile, but anticipating an attempt might be made to assassinate him the automobile was occupied by members of his entourage and he occupied a carriage some distance in the rear. Whether the attempt on the life of the Shah is due to the dissatisfaction of the people who have been demanding a constitutional form of government or was simply the irresponsible act of anarchists is not known, as in the confusion that followed the attempted assassination the men concerned in it escaped, but it is believed that the affair can be traced to the demands of the constitutionalists, who are determined to strip the Shah of his autocratic power and place Persia in the line of modern progress. The reactionaries bitterly opposed the constitution and managed to bring the Shah under their control, which led to great disorder. The struggle between the reactionaries and the constitutionalists is still in progress and may lead to the interference of England and Russia. A. Maurice Low. FINANCE THE RECOVERY FROM THE RECENT PANIC BY ALEXANDER D. NOYES THE last number of THE FORUM was published at a time when visible evidences of panic were still to be seen throughout the banking system of the United States. Cash payments to depositors were still restricted throughout the whole of the United States; a premium was bid for currency on the principal markets of the country; gold was still being bought at a similar premium on foreign markets for import to the United States. This condition of things, which had already lasted longer than any one had expected at the outset, came to an abrupt and immediate end. with the opening of January, and it is the subsequent three months, under the process of slow restoration of normal conditions, which we have now to review. Like all periods of the sort, the three months in question have been characterized mainly by uncertainty and indecision. On both financial and industrial markets, alternations of feeling have carried the popular mind from the depths of depression into something like momentary enthusiasm. Superficially, the course of events has warranted each state of mind, but looking back at the three months which have now elapsed, it should be possible to judge the movement of events in a broader way and to draw from them some deductions as to the probable sequel to the panic of 1907. It was natural, with a people whose habit is to keep their eye constantly on the future, that the question as to the term of duration which should be fixed for the period of depression should have been a matter of active discussion, even at the crisis of the panic. That there would be such a resultant period of dull times, if not of actual hard times, no one thought of doubting. Even after the relatively insignificant financial setback of 1903, it was a full year before either the financial markets or the country's leading trades had resumed the position which they occupied before the financial troubles. In the closing days of 1907 there. were published numerous forecasts from practical financial experts dealing with this very question. As a rule, these judgments were conservatively optimistic. Judge Gary, of the United States Steel Corporation, after pointing out that it required some courage to make specific predictions in this matter, stated his opinion that "the depression ought not to be long continued," and set as the date for a visible improvement in the situation the middle of 1908. Mr. M. E. Ingalls, of the "Big Four" Railway, concurred in this judgment as to the probable shortness of the period of depression, and indicated that, in the natural order of events, its end should be seen by next November's Presidential election. Mr. George E. Roberts, formerly Director of the Mint, predicted "a comparatively early recovery, repeating the experience in 1903-4." Carroll D. Wright, formerly United States Commissioner of Labor, and an economic expert of high standing, gave as his judgment that the depression would be merely temporary and that "the recent financial flurry cannot be dignified by the designation 'financial panic."" Mr. James Speyer-expressing rather a hope, however, than a judgment —indicated that the business contraction might not be so long continued as many people seemed to fear. Against these optimistic opinions there were published numerous judgments of a somewhat different sort, some of them from high economic authorities. M. Paul Leroy-Beaulieu, the veteran French economist, flatly predicted that the duration of the period of depression "must be from eighteen months to two years"; Comptroller Ridgely stated that "we have a long period of readjustment and recuperation before us"-though he qualified this by the opinion that it would not be so long as after other panics. Among practical bankers whose opinions were made public, two of the weightiest were to the effect that curtailment in trade activity was bound to prevail at least during the next two years. Duration of It will be seen then that the judgment of the experts was by no means agreed on this question of how long the sequel to the panicky collapse must be, and the difference of opinion throughout the community was equally great. Probably it may be said that the underlying conviction has been that it will be at least a year before any considerable return of trade activity will be witnessed. Large allowance must be made, in judging all predictions on this matter, first, for the habitual optimism of the American business man, and, second, for the general feeling, under conditions of depression, that the man who endeavors to cheer up his associates is doing better service than the man who even states discouraging or unpalatable news. When, for example, the steel mills, which had almost stopped work during the currency famine and suspension of credit in November and |