These views founded on a gross and dangerous misconception--What a German victory could and could not accomplish--What an English victory could and could not accomplish--The optical illusion of conquest--There can be no transfer of wealth--The prosperity of the little States in Europe--German Three per Cents. at 82 and Belgian at 96--Russian Three and a Half per Cents. at 81, Norwegian at 102--What this really means--If Germany annexed Holland, would any German benefit or any Hollander?--The "cash value" of Alsace-Lorraine 28-49 CHAPTER IV THE IMPOSSIBILITY OF CONFISCATION Our present terminology of international politics an historical survival--Wherein modern conditions differ from ancient--The profound change effected by Division of Labor--The delicate interdependence of international finance--Attila and the Kaiser--What would happen if a German invader looted the Bank of England--German trade dependent upon English credit--Confiscation of an enemy's property an economic impossibility under modern conditions--Intangibility of a community's wealth 50-67 CHAPTER V FOREIGN TRADE AND MILITARY POWER Why trade cannot be destroyed or captured by a military Power--What the processes of trade really are, and how a navy affects them--_Dreadnoughts_ and business--While _Dreadnoughts_ protect British trade from hypothetical German warships, the real German merchant is carrying it off, or the Swiss or the Belgian--The "commercial aggression" of Switzerland--What lies at the bottom of the futility of military conquest--Government brigandage becomes as profitless as private brigandage--The real basis of commercial honesty on the part of Government 68-87 CHAPTER VI THE INDEMNITY FUTILITY The real balance-sheet of the Franco-German War--Disregard of Sir Robert Giffen's warning in interpreting the figures--What really happened in France and Germany during the decade following the war--Bismarck's disillusionment--The necessary discount to be given an indemnity--The bearing of the war and its result on German prosperity and progress 88-106 CHAPTER VII HOW COLONIES ARE OWNED Why twentieth-century methods must differ from eighteenth--The vagueness of our conceptions of statecraft--How Colonies are "owned"--Some little-recognized facts--Why foreigners could not fight England for her self-governing Colonies--She does not "own" them, since they are masters of their own destiny--The paradox of conquest: England in a worse position in regard to her own Colonies than in regard to foreign nations--Her experience as the oldest and most practised colonizer in history--Recent French experience--Could Germany hope to do what England cannot do 107-130