Because of the great costliness of the artillery, munitions of war, and means of transportation used in the present war, the borrowings of all the combatant nations are heavy beyond any precedent; so that already all the nations involved have been compelled to raise the rates of interest on the immense loans they have put upon the market. The burdens thus being prepared for the coming generations in the belligerent nations will involve very high rates of taxation in all the countries now at war. If these burdens continue to accumulate for two or three years more, no financier, however experienced and far-seeing, can imagine today how the resulting loans are to be paid or how the burden of taxation necessary to pay the interest on them can be borne or how the indemnities probably to be exacted can be paid within any reasonable period by the defeated nation or nations. It follows from these established facts that a small nation--a nation of not more than fifteen millions, for example--can have no independent existence in Europe except as a member of a federation of States having similar habits, tendencies, and hopes, and united in an offensive and defensive alliance, or under guarantees given by a group of strong and trustworthy nations. The firm establishment of several such federations, or the giving of such guarantees by a group of powerful and faith-keeping nations ought to be one of the outcomes of the war of 1914-15. Unless some such arrangement is reached, no small State will be safe from conquest and absorption by any strong, aggressive military power which covets it--not even if its people live chiefly by mining and manufacturing as the Belgians did. The small States, being very determined to exist and to obtain their natural or historical racial boundaries, the problem of permanent or any durable peace in Europe resolves itself into this: How can the small or smaller nations be protected from attack by some larger nation which believes that might makes right and is mighty in industries, commerce, finance, and the military and naval arts? The experience gained during the past year proves that there is but one effective protection against such a power, namely, a firm league of other powers--not necessarily numerous--which together are stronger in industries, commerce, finance, and the military and naval arts than the aggressive and ambitious nation which heartily believes in its own invincibility and cherishes the ambition to conquer and possess.