More crippling in its effects upon the nation as a whole was the taxation of capital in trade and industry. At a time when it was most necessary to limit the costs of production and to stimulate the adventure of trade, the business world was crushed under a burden of taxation which limited its reserves, put heavy charges upon the cost of manufacture, and reduced the capital available for new enterprise. The price of war, and of victory, lay with an almost intolerable weight upon the spirit of the British people, even before they had to shoulder the burden—rejected by every other nation—the payment of War Debt to the United States of America, amounting to £35,000,000 sterling every year. With an export trade less than 75 per cent. of what it reached before the War, with a population which had increased by nearly two millions in spite of all the slaughter, with new and ruinous expenses, and with a higher standard of life demanded by the labouring class, the people of Great Britain breathed hard, became very anxious, faced up to realities, and saw, with almost blinding clarity of vision, that their own national life depended upon the peace and recovery of Europe, including that of Germany and the defeated peoples. This realisation changed their whole attitude of mind towards the problem of peace. It made them draw farther and farther away from the French policy of Poincaré, which was based upon the prevention of German recovery and “security” by military force. But above all these financial considerations England believed in fair play even to a defeated foe, in generosity rather than vengeance, and in future peace by conciliation rather than by a military combination which one day would be challenged in another “inevitable” war, more ghastly than the last. All that sounded like weakness and treachery to the mind of France. The Entente Cordiale was strained and broken.... PHYSICAL RECOVERY IN EUROPE In many ways the recovery of Europe was more rapid in its fundamental needs of life than seemed possible after the devastation of war. Human energy, faith and hope repaired the material damage of war in an almost miraculous degree. Walking day by day across the battlefields of France and Flanders it seemed impossible to me and to all others that the ground upheaved by high explosives, criss-crossed with deep trenches, and sown with unexploded shells would return within the lifetime of the present generation to harvest fields and pleasant pasture. It was incredible that all those villages blown off the map, so that there were only rubbish heaps to mark their site, should be rebuilt within half a century with new walls and sheltering roofs for the people who had fled from them.