To those of us who can remember the first world war and the high hopes that followed upon its successful conclusion for the Allies, there must come at times the most anxious apprehensions as to the peace which will follow upon the present one. The saying that we won the first war and lost the peace, annoying though it may be, is yet only too true. And even now, while the second struggle still rages, we may feel uncertainty, not that we shall not win in this war, for that is certain, but that once more the fruits of victory may turn to ashes and again we may lose the peace. We do not quail before the foe in the field; but we may well tremble at the thought of what may lie before us when the struggle is over, when we are faced with the awful task of reconstruction.

It is, I apprehend, by no means true to blame everything upon the Peace of Versailles. That settlement was framed with all the wisdom and ingenuity of which the statesmen of that time were capable, and we need not underrate their ability nor doubt their wisdom. It is so easy for anyone to be wise after the event; to find fault and point out the mistakes that were made. Wisdom lies in profiting by the mistakes of the past and determining not to commit similar ones a second time. I have nothing to say of the territorial provisions of the Treaty, because I do not think that they were the cause of the subsequent breakdown. Probably they were as good as the ingenuity of their authors could devise. But rather I would say the real mistake lay in an utter failure to grasp the one essential fact that the monetary set-up of the world was in complete chaos, a chaos more complete and devastating because bankers and finance ministers were still bemused with the preoccupation of the pre-war monetary theory.