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vi cOntents
chapter 7 chapter 10
Securities Law and Agency Liability and Termination 176
Corporate Governance 112 scope of agent’s authority 176
The securities act of 1933 112 spotlight on apparent authority of managers
managerial strategy The SEC’s New Pay-Ratio case 10.1 Lundberg v. Church Farm, Inc. (1986) 178
Disclosure Rule 114 Liability for Contracts 180
case 7.1 Omnicare, Inc. v. Laborers District Council Liability for Torts and Crimes 182
Construction Industry Pension Fund (2015) 118 global insight Islamic Law and Respondeat Superior 184
The securities exchange act of 1934 119 case 10.2 Asphalt & Concrete Services, Inc. v. Perry (2015) 185
classic case 7.2 SEC v. Texas Gult Sulphur Co. (1968) 120 case analysis 10.3 M.J. v. Wisan (2016) 187
case analysis 7.3 Rand-Heart of New York, Inc. Termination of an agency 189
v. Dolan (2016) 124
state securities Laws 127 chapter 11
Corporate Governance 127 Employment, Immigration,
Unit One application and ethics: and Labor Law 195
Business Start-Ups Online 134
employment at will 195
wages, Hours, and Layoffs 196
Unit two ethics today Is It Fair to Dock Employees’ Pay
Human ResouRCes 137 for Bathroom Breaks? 198
case 11.1 Bailey v. TitleMax of Georgia, Inc. (2015) 198
Family and Medical Leave 200
chapter 8 case 11.2 Ballard v. Chicago Park District (2014) 200
Tort Law 138 Health, safety, and income security 202
employee Privacy Rights 204
The Basis of Tort Law 138
immigration Law 206
intentional Torts against Persons 139
Labor unions 208
case analysis 8.1 Blake v. Giustibelli (2016) 141
case analysis 11.3 Contemporary Cars, Inc. v. National
digital Update Revenge Porn and Invasion of Privacy 145
Labor Relations Board (2016) 210
case 8.2 Revell v. Guido (2015) 146
managerial strategy Union Organizing Using a Company’s
intentional Torts against Property 149
E-Mail System 212
unintentional Torts—negligence 151
Defenses to negligence 155
spotlight on the seattle mariners chapter 12
case 8.3 Taylor v. Baseball Club of Seattle, LP (2006) 155 Employment Discrimination 218
Title Vii of the Civil Rights act 218
chapter 9 digital Update Hiring Discrimination Based
Agency Formation and Duties 160 on Social Media Posts 222
case analysis 12.1 Bauer v. Lynch (2016) 223
agency Relationships 160
case 12.2 Young v. United Parcel Service, Inc. (2015) 224
case 9.1 Coker v. Pershad (2013) 162
case 12.3 Roberts v. Mike’s Trucking, Ltd. (2014) 227
ethics today Is It Fair to Classify Uber and Lyft Drivers
Discrimination Based on age 229
as Independent Contractors? 163
Discrimination Based on Disability 230
Formation of the agency Relationship 164
Discrimination Based on Military status 233
Duties of agents and Principals 165
Defenses to employment Discrimination 234
spotlight on taser international
affirmative action 235
case 9.2 Taser International, Inc. v. Ward (2010) 167
Unit two application and ethics:
case analysis 9.3 NRT New England, LLC v. Jones (2016) 170
Health Insurance and Small Business 239
Rights and Remedies of agents and Principals 172
cOntents vii
Unit three chapter 16

CommeRCiaL TRansaCTions Transferability and
and CRediT 243 Holder in Due Course 305
negotiation 305
chapter 13 indorsements 306
case 16.1 In re Bass (2013) 306
The Formation of
case analysis 16.2 AS Peleus, LLC v. Success, Inc. (2016) 308
Sales and Lease Contracts 244 Holder in Due Course (HDC) 313
The uniform Commercial Code 244 spotlight on Holder in due course
The scope of articles 2 (sales) and 2a (Leases) 245 case 16.3 Georg v. Metro Fixtures Contractors, Inc. (2008) 315
digital Update Taxing Web Purchases 247 Holder through an HDC 318
The Formation of sales and Lease Contracts 249
case 13.1 C. Mahendra (N.Y.), LLC v. National Gold chapter 17
& Diamond Center, Inc. (2015) 252 Liability, Defenses, and Discharge 323
classic case 13.2 Jones v. Star Credit Corp. (1969) 259
Contracts for the international sale of Goods 260 signature Liability 323
case analysis 13.3 VLM Food Trading International, Inc. case analysis 17.1 Envision Printing, LLC v. Evans (2016) 327
v. Illinois Trading Co. (2016) 260 warranty Liability 330
Defenses and Limitations 333
case analysis 17.2 Mills v. Chauvin (2013) 335
chapter 14
Discharge 337
Performance and Breach
of Sales and Lease Contracts 267 chapter 18
Obligations of the seller or Lessor 267 Banking in the Digital Age 342
case 14.1 Garziano v. Louisiana Log Home Co. (2014) 268
Checks 342
Obligations of the Buyer or Lessee 272
The Bank-Customer Relationship 344
Remedies of the seller or Lessor 275
case 18.1 Royal Arcanum Hospital Association of Kings County,
Remedies of the Buyer or Lessee 277
Inc. v. Herrnkind (2014) 344
case analysis 14.2 Genesis Health Clubs, Inc. v. LED Solar
The Bank’s Duty to Honor Checks 345
& Light Co. (2016) 280
case analysis 18.2 Legg v. West Bank (2016) 346
spotlight on baseball cards
The Bank’s Duty to accept Deposits 351
case 14.3 Fitl v. Strek (2005) 282
case 18.3 Shahin v. Delaware Federal Credit Union (2015) 353
additional Provisions affecting Remedies 283
electronic Fund Transfers 356
Dealing with international Contracts 284
Online Banking and e-Money 357
digital Update Electronic Payment Systems Are Reducing
chapter 15 the Use of Checks 358
Negotiable Instruments 288
Types of negotiable instruments 288 chapter 19
case 15.1 Silicon Valley Bank v. Miracle Faith World Creditors’ Rights and Remedies 362
Outreach, Inc. (2013) 290
Laws assisting Creditors 362
Requirements for negotiability 292
case analysis 19.1 Picerne Construction Corp. v. Villas (2016) 363
digital Update Pay with Your Smartphone 294
Mortgages 366
case analysis 15.2 OneWest Bank, FSB v. Nunez (2016) 295
ethics today Creditors’ Rights When Debtors Move
Factors That Do not affect negotiability 299
to Another State 367
case 15.3 Charles R. Tips Family Trust v. PB Commercial,
spotlight on Foreclosures
LLC (2015) 300
case 19.2 McLean v. JPMorgan Chase Bank, N.A. (2012) 369
suretyship and Guaranty 370
case 19.3 HSBC Realty Credit Corp. (USA) v. O’Neill (2014) 372
Protection for Debtors 374
viii cOntents
chapter 20 chapter 23
Secured Transactions 378 Administrative Agencies 448
The Terminology of secured Transactions 378 The Practical significance of administrative Law 448
Creation of a security interest 378 agency Creation and Powers 449
case 20.1 Royal Jewelers, Inc. v. Light (2015) 379 case 23.1 Loving v. Internal Revenue Service (2014) 452
Perfection of a security interest 381 digital Update Imposing a 1930s Regulatory Law
digital Update Secured Transactions—Escrow Services on Broadband Operators 454
Online 381 The administrative Process 454
The scope of a security interest 387 case 23.2 Craker v. Drug Enforcement Administration (2013) 458
case 20.2 In re Tusa–Expo Holdings, Inc. (2016) 388 Judicial Deference to agency Decisions 459
Priorities 390 case analysis 23.3 Olivares v. Transportation Security
Rights and Duties of Debtors and Creditors 392 Administration (2016) 460
Default 394 Public accountability 462
case analysis 20.3 Smith v. Firstbank Corp. (2013) 396
chapter 24
chapter 21 Consumer Law 467
Bankruptcy Law 402 advertising, Marketing, and sales 467
The Bankruptcy Code 402 case 24.1 POM Wonderful, LLC v. Federal Trade
Liquidation Proceedings 403 Commission (2015) 468
case 21.1 In re Anderson (2016) 409 digital Update Regulating “Native” Ads on the Internet 471
ethics today Should There Be More Relief for Student case 24.2 Lexmark International, Inc. v. Static Control
Loan Defaults? 412 Components, Inc. (2014) 472
case 21.2 In re Cummings (2015) 413 Labeling and Packaging Laws 474
Reorganizations 414 Protection of Health and safety 475
Bankruptcy Relief under Chapter 12 and Chapter 13 416 Credit Protection 476
case analysis 21.3 In re Welsh (2013) 417 case analysis 24.3 Santangelo v. Comcast Corporation (2016) 478
Unit three application and ethics:
Federal Student Loans—Default and Discharge 424 chapter 25
Environmental Protection 484
Unit Four Common Law actions 484
goveRnmenT ReguLaTion 427 Federal, state, and Local Regulations 485
case analysis 25.1 Friends of Animals v. Clay (2016) 485
air Pollution 488
chapter 22 case 25.2 United States v. O’Malley (2014) 490
Professional Liability water Pollution 491
and Accountability 428 case 25.3 Entergy Corp. v. Riverkeeper, Inc. (2009) 492
Toxic Chemicals and Hazardous waste 494
Potential Liability to Clients 428
ethics today What Are an Attorney’s Responsibilities
chapter 26
for Protecting Data Stored in the Cloud? 429
Potential Liability to Third Parties 432 Antitrust Law 500
case analysis 22.1 Perez v. Stern (2010) 434 The sherman antitrust act 500
The sarbanes-Oxley act 435 section 1 of the sherman act 501
Potential Liability of accountants under securities Laws 437 section 2 of the sherman act 504
spotlight on accountant’s duty to correct mistakes case analysis 26.1 McWane, Inc. v. Federal Trade
case 22.2 Overton v. Todman & Co., CPAs (2007) 439 Commission (2015) 506
Confidentiality and Privilege 442 spotlight on weyerhaeuser
case 22.3 Commonwealth of Pennsylvania v. Schultz case 26.2 Weyerhaeuser Co. v. Ross-Simmons Hardwood
(2016) 443 Lumber Co. (2007) 508
cOntents ix
The Clayton act 509 chapter 29

enforcement and exemptions 512 Intellectual Property 566
case 26.3 TransWeb, LLC v. 3M Innovative Properties
Co. (2016) 512 Trademarks and Related Property 566
u.s. antitrust Laws in the Global Context 515 classic case 29.1 The Coca-Cola Co. v. The Koke Co.
digital Update Google Faces an Antitrust Complaint of America (1920) 566
from the European Union 516 case 29.2 LFP IP, LLC v. Hustler Cincinnati, Inc. (2016) 569
Unit Four application and ethics: Patents 573
Climate Change 520 digital Update The Problem of Patent Trolls 575
Copyrights 576
case analysis 29.3 Winstead v. Jackson (2013) 577
Unit Five Trade secrets 580
international Protection for intellectual Property 582
PRoPeRTy and
iTs PRoTeCTion 523
chapter 30
Insurance 586
chapter 27
insurance Terminology and Concepts 586
Personal Property and Bailments 524 case 30.1 Breeden v. Buchanan (2015) 588
Personal Property versus Real Property 524 The insurance Contract 589
case 27.1 Corbello v. DeVito (2015) 524 Types of insurance 593
acquiring Ownership of Personal Property 526 case analysis 30.2 Estate of Luster v. Allstate Insurance
digital Update The Exploding World of Digital Property 526 Co. (2010) 595
classic case 27.2 In re Estate of Piper (1984) 528
Mislaid, Lost, and abandoned Property 530 chapter 31
Bailments 532 Wills and Trusts 602
Ordinary Bailments 533
case analysis 27.3 Zissu v. IH2 Property Illinois, L.P. (2016) 536 wills 602
special Types of Bailments 538 case analysis 31.1 Peterson v. Harrell (2010) 606
intestacy Laws 610
Trusts 611
chapter 28
case 31.2 Dowdy v. Dowdy (2016) 613
Real Property and Other estate-Planning issues 617
Landlord-Tenant Law 543 Unit Five application and ethics:
The nature of Real Property 543 Business Planning for Divorce 622
Ownership and Other interests in Real Property 545
case 28.1 Main Omni Realty Corp. v. Matus (2015) 546 appendices
Transfer of Ownership 550 a How to analyze Legal Disputes a-1
spotlight on sales of Haunted Houses b answers to the Issue Spotters a-3
case 28.2 Stambovsky v. Ackley (1991) 551 C sample answers for
case analysis 28.3 Montgomery County v. Bhatt (2016) 554 Business Case Problems with Sample Answer a-9
Limitations on the Rights of Property Owners 556
ethics today Should Eminent Domain Be Used to Promote Glossary G-1
Private Development? 557
Zoning and Government Regulations 558
Table of Cases TC-1
Landlord-Tenant Relationships 560 Index I-1
Concept Summaries
4.1 special Business Forms 67 17.1 signature Liability 331

5.1 Classification of Corporations 79 17.2 Transfer warranty Liability for
6.1 Roles of Directors and Officers 95 Transferors who Receive Consideration 332
6.2 Duties and Liabilities of Directors and Officers 101 18.1 Basic Rules for Honoring Checks 352
6.3 Role, Rights, and Liability of shareholders 108 19.1 Remedies available to Creditors 371
8.1 intentional Torts against Persons 148 20.1 Creating security interest 381
8.2 intentional Torts against Property 152 20.2 Perfecting a security interest 387
9.1 Formation of the agency Relationship 166 20.3 Remedies of the secured Party
10.1 authority of an agent to Bind the Principal on the Debtor’s Default 398
and a Third Party 180 21.1 Forms of Bankruptcy Relief Compared 420
10.2 agency Termination by Operation of Law 191 22.1 Common Law Liability of accountants
13.1 Offer, acceptance, and Consideration and Other Professionals 436
under the uCC 255 22.2 statutory Liability of accountants and Other
13.2 The Parol evidence Rule 258 Professionals 442
14.1 Obligations of the seller or Lessor 273 27.1 acquisition of Personal Property 530
15.1 Requirements for negotiability 301 27.2 Rights and Duties of the Bailee and the Bailor 540
16.1 Types of indorsements and Their effect 311 31.1 wills 609
16.2 Requirements for HDC status 319 31.2 Trusts 616
xi
Exhibits
2–1 The FTC’s Franchise Rule Requirements 26 16–7 Taking for Value 314
3–1 Provisions Commonly included 17–1 Time for Proper Presentment 325
in a Partnership agreement 37 17–2 Defenses against Liability on negotiable instruments 333
3–2 a Comparison of General Partnerships and 18–1 a Cashier’s Check 343
Limited Partnerships 48 18–2 an american express Traveler’s Check 344
4–1 Management of an LLC 59 18–3 The Check-Collection Process 355
4–2 Provisions Commonly included 18–4 a sample substitute Check 356
in an LLC Operating agreement 61 19–1 Methods of avoiding Foreclosure 368
5–1 sample articles of incorporation 80 19–2 suretyship and Guaranty Parties 371
5–2 How Do stocks and Bonds Differ? 86 20–1 secured Transactions—Concept and Terminology 379
5–3 Common and Preferred stocks 88 20–2 a uniform Financing statement sample 382
6–1 Directors’ Management Responsibilities 93 20–3 selected Types of Collateral and Methods
6–2 Results of Cumulative Voting 105 of Perfection 386
7–1 exemptions for securities Offerings 20–4 Priority of Claims to a Debtor’s Collateral 393
under the 1933 securities act 116 21–1 Collection and Distribution of Property
7–2 Comparison of Coverage, application, and Liability in Most Voluntary Bankruptcies 411
under seC Rule 10b-5 and section 16(b) 123 22–1 Three Basic Rules of an accountant’s Liability to
7–3 some Key Provisions of the sarbanes-Oxley act Third Parties 434
Relating to Corporate accountability 130 22–2 Key Provisions of the sarbanes-Oxley act
9–1 Duties of the agent 167 Relating to Public accounting Firms 437
9–2 Duties of the Principal 169 23–1 executive Departments and important
10–1 a sample General Power of attorney 177 subagencies 450
10–2 Termination by act of the Parties 189 23–2 selected independent Regulatory agencies 451
11–1 Good Faith versus Bad Faith 23–3 The Formal administrative agency
in Collective Bargaining 213 adjudication Process 457
12–1 Coverage of employment Discrimination Laws 233 24–1 selected areas of Consumer Law Regulated
13–1 The Law Governing Contracts 246 by statutes 468
13–2 Major Differences between 25–1 Major Federal environmental statutes 487
Contract Law and sales Law 257 25–2 environmental impact statements 488
14–1 The Perfect Tender Rule and its exceptions 270 25–3 Pollution-Control equipment standards under
14–2 Obligations of the Buyer or Lessee 274 the Clean air act and the Clean water act 492
14–3 a Letter-of-Credit Transaction 284 26–1 Required elements of a sherman act Violation 501
15–1 Basic Types of negotiable instruments 289 26–2 exemptions to antitrust enforcement 514
15–2 a Typical Time Draft 290 27–1 Mislaid, Lost, and abandoned Property 532
15–3 a Typical Promissory note 292 27–2 Degree of Care Required of a Bailee 535
15–4 a sample Certificate of Deposit 293 28–1 interests in Real Property 550
16–1 a Blank indorsement 306 29–1 Forms of intellectual Property 581
16–2 a special indorsement 308 30–1 selected insurance Classifications 587
16–3 a Qualified indorsement 309 30–2 insurance Contract Provisions and Clauses 590
16–4 “For Deposit Only” and “For Collection Only” 30–3 Typical Fire insurance Policies 595
indorsements 310 31–1 excerpts from Michael Jackson’s will 603
16–5 Trust (agency) indorsements 311 31–2 Per Stirpes Distribution 611
16–6 Converting an Order instrument to a Bearer 31–3 Per Capita Distribution 612
instrument and Vice Versa 312 31–4 a Revocable Living Trust arrangement 612
xiii
Preface
The study of business law and the legal environment of uniform CPa exam.” in addition to more focus on criti-
business has universal applicability. a student entering any cal thinking, authentic applications, and problem solv-
field of business must have at least a passing understanding, the content of the exam will change to an extent.
ing of business law in order to function in the real world. The Fourteenth edition of Business Law: Commercial
Business Law: Text and Cases: Commercial Law for Accoun- Law for Accountants incorporates information on the
tants, Fourteenth edition, provides the information that new topics on the CPa exam, specifically addressing the
students need in an interesting and contemporary way. following:
This exciting text is tailor-made for those entering
• Agency law (worker classification and duties of
the field of accounting and includes topics from Business
principals and agents)
Law that accountants need to know. The text focuses
• Employment law (Affordable Care Act)
on the basics of business law for accountants—including
• Business organizations (corporate governance
subjects on the revised 2017 CPa exam. it has a strong
issues, including sarbanes-Oxley compliance
emphasis on business organizations, securities law and
and criminal liability for organizations and
corporate governance, agency and employment, sales and
management)
lease contracts, creditors’ rights and bankruptcy, profes-
sional liability, government regulation, and property. in addition, the Fourteenth edition continues to
For the Fourteenth edition, i have spent a great deal cover topics that are essential to new CPas who are
of effort making this best-selling text more modern, excit- working with sophisticated business clients, regardless of
ing, and visually appealing than ever before. i have added whether the CPa exam covers these topics. i recognize
twenty-seven new features, sixty new cases, and eleven that today’s business leaders must often think “outside
new exhibits. The text also contains nearly one hundred the box” when making business decisions. For this rea-
and fifty new highlighted and numbered Cases in Point son, i strongly emphasize business and critical thinking
and Examples, and seventy-three new case problems. spe- elements throughout the text. i have carefully chosen
cial pedagogical elements within the text focus on legal, cases, features, and problems that are relevant to busi-
ethical, global, and corporate issues while addressing core ness operations. almost all of the features and cases con-
curriculum requirements. clude with some type of critical thinking question. For
those teaching future CPas, this is consistent with the
new CPa exam’s focus on higher-order skills, such as
critical thinking and problem solving.
Highlights of the
Fourteenth edition a variety of new and exciting Features
instructors have come to rely on the coverage, accuracy, The Fourteenth edition of Business Law: Commercial
and applicability of Business Law: Commercial Law for Law for Accountants is filled with many new features
Accountants. To make sure that this text engages your specifically designed to cover current legal topics of high
students, solidifies their understanding of legal concepts, interest. each feature is related to a topic discussed in the
and provides the best teaching tools available, i now offer text and ends with Critical Thinking or Business Ques-
the following. tions. suggested answers to all the Critical Thinking
and Business Questions are included in the Solutions
Manual for this text.
new Coverage of Topics
1. Ethics Today These features focus on the ethical
on the Revised 2017 CPa exam aspects of a topic discussed in the text to empha-
in 2016, the american institute of CPas (aiCPa) issued size that ethics is an integral part of a business law
its final report on “Maintaining the Relevance of the course. examples include:
xv
xvi PReFace
• Should an Innocent General Partner Be Jointly an actual case and then describe the court’s decision
Liable for Fraud? (Chapter 3) and rationale. These two features are uniquely designed
• Is It Fair to Classify Uber and Lyft Drivers as and consecutively numbered throughout each chapter
independent Contractors? (Chapter 9) for easy reference. The Examples and Cases in Point are
• Is It Fair to Dock Employees’ Pay for Bathroom integrated throughout the text to help students better
Breaks? (Chapter 11) understand how courts apply legal principles in the real
• Should There Be More Relief for Student Loan world.
Defaults? (Chapter 21)
2. Global Insight These features illustrate how other
nations deal with specific legal concepts to give new unit-ending
students a sense of the global legal environment. Application and Ethics Features
subjects include: For the Fourteenth edition, i have created an entirely
• Does Cloud Computing Have a Nationality? new feature that concludes each of the five units in the
(Chapter 5) text. each of these Application and Ethics features pro-
• Anti-Bribery Charges Take Their Toll on U.S. vides additional analysis on a topic related to that unit
and Foreign Corporations (Chapter 6) and explores its ethics ramifications. each of the features
• Islamic Law and Respondeat Superior (Chapter 10) ends with two questions—a Critical Thinking and an
3. new Digital Update These features are designed Ethics Question. some topics covered by these features
to examine cutting-edge cyberlaw topics, such as the include the following:
following:
• Revenge Porn and Invasion of Privacy (Chapter 8) • Business Start-Ups Online (Unit 1)
• Should Employees Have a “Right of Disconnect- • Health Insurance and Small Business (Unit 2)
ing”? (Chapter 11) • Federal Student Loans—Default and Discharge
• Hiring Discrimination Based on Social Media (unit 3)
Posts (Chapter 12) • Business Planning for Divorce (Unit 5)
• Pay with Your Smartphone (Chapter 15) suggested answers to the questions in Application and
• Google Faces an Antitrust Complaint from the Ethics features are included in the Solutions Manual
european union (Chapter 26) for this text.
4. Managerial Strategy These features emphasize the
management aspects of business law and the legal
environment. Topics include: new Cases and Case Problems
• Can a Person Who Is Not a Member of a Pro- For the Fourteenth edition of Business Law: Commercial
tected Class sue for Discrimination? (Chapter 4) Law for Accountants, i have added sixty new cases and
• The SEC’s New CEO Pay-Ratio Disclosure seventy-three new case problems, most from 2016 and
Rule (Chapter 7) 2015. The new cases and case problems have been care-
• Union Organizing Using Your Company’s E-Mail fully selected to illustrate important points of law and
system (Chapter 11) to be of high interest to students and instructors. i have
made it a point to find recent cases that enhance learning
and are relatively easy to understand.
Highlighted and numbered Examples
1. Spotlight Cases and Classic Cases. Certain cases
and Case in Point illustrations and case problems that are exceptionally good
Many instructors use cases and examples to illustrate how teaching cases are labeled as Spotlight Cases and
the law applies to business. students understand legal Spotlight Case Problems. examples include Spotlight
concepts better in the context of their real-world applica- on Baseball Cards, Spotlight on Holiday Inns, and
tion. Therefore, for this edition of Business Law: Com- Spotlight on the Seattle Mariners. instructors will
mercial Law for Accountants, i have expanded the number find these Spotlight Cases useful to illustrate the
of highlighted numbered Examples and Cases in Point in legal concepts under discussion, and students will
every chapter. i have added 103 new Cases in Point and enjoy studying the cases because they involve inter-
43 new Examples. esting and memorable facts. Other cases have been
Examples illustrate how the law applies in a specific chosen as Classic Cases because they establish a legal
situation. Cases in Point present the facts and issues of precedent in a particular area of law.
P R e Fac e xvii
2. Critical Thinking section. each case concludes with The Special Case Analysis questions are designed
a Critical Thinking section, which normally includes to build students’ analytical skills. They test students’
two questions. The questions may address Legal ability to perform iRaC (issue, Rule, application, and
Environment, E-Commerce, Economic, Environmental, Conclusion) case analysis. students must identify the le-
Ethical, Global, Political, or Technological issues, or gal issue presented in the chapter’s Case Analysis, under-
they may ask What If the Facts Were Different? each stand the rule of law, determine how the rule applies to
Classic Case has a section titled Impact of This Case on the facts of the case, and describe the court’s conclusion.
Today’s Law and one Critical Thinking question. instructors can assign these questions as homework or
3. Longer excerpts for Case Analysis. i have also use them in class to elicit student participation and teach
included one longer case excerpt in every chapter— case analysis. suggested answers to the Special Case
labeled Case Analysis—followed by three Legal Analysis questions can be found in the Solutions
Reasoning Questions. The questions are designed to Manual for this text.
guide students’ analysis of the case and build their
legal reasoning skills. These Case Analysis cases may
be used for case-briefing assignments and are also Reviewing Features in every Chapter
tied to the Special Case Analysis questions found in in the Fourteenth edition of Business Law: Commercial
every unit of the text. Law for Accountants, i continue to offer a Reviewing fea-
ture at the end of every chapter to help solidify students’
suggested answers to all case-ending questions and
understanding of the chapter materials. each Reviewing
case problems are included in the Solutions Manual
feature presents a hypothetical scenario and then asks
for this text.
a series of questions that require students to identify
the issues and apply the legal concepts discussed in the
Business Case Problem with Sample chapter.
These features are designed to help students review
Answer in each Chapter the chapter topics in a simple and interesting way and
in response to those instructors who would like students see how the legal principles discussed in the chapter af-
to have sample answers available for some of the ques- fect the world in which they live. an instructor can use
tions and case problems, i include a Business Case Prob- these features as the basis for in-class discussion or en-
lem with Sample Answer in each chapter. The Business courage students to use them for self-study prior to com-
Case Problem with Sample Answer is based on an actual pleting homework assignments. suggested answers to
case, and students can find a sample answer at the end of the questions posed in the Reviewing features can be
the text. suggested answers to the Business Case Prob- found in the Solutions Manual for this text.
lems with Sample Answers are provided in appendix
C at the end of the text and in the Solutions Manual
for this text. Two Issue Spotters
at the conclusion of each chapter, i have included a spe-
cial section with two Issue Spotters related to the chap-
new exhibits and Concept summaries ter’s topics. These questions facilitate student learning
For this edition, we have spent considerable effort and review of the chapter materials. suggested answers
reworking and redesigning all of the exhibits and Con- to the Issue Spotters in every chapter are provided in
cept Summaries in the text to achieve better clarity and appendix b at the end of the text and in the Solutions
more visual appeal. in addition, we have added eleven Manual for this text.
new exhibits.
Legal Reasoning Group Activities
Special Case Analysis Questions For instructors who want their students to engage in
For one chapter in every unit of the text, i provide a group projects, each chapter of the Fourteenth edition
Special Case Analysis question that is based on the Case includes a special Legal Reasoning Group Activity. each
Analysis excerpt in that chapter. These special questions activity begins by describing a business scenario and then
appear in the Business Case Problems section at the ends poses several specific questions pertaining to the scenario.
of selected chapters. each question is to be answered by a different group of
xviii PReFace
students based on the information in the chapter. These problem and then adding in a critical think-
projects may be used in class to spur discussion or as ing section based on “what if the Facts were
homework assignments. suggested answers to the Legal Different?” These now include a third section,
Reasoning Group Activities are included in the Solu- a writing component, which requires students
tions Manual for this text. to demonstrate their ability to forecast the legal
implications of real-world business scenarios.
• Personalized student Plan with multimedia
study tools and videos.
supplements/digital • New Adaptive Test Prep helps students study
for exams.
Learning systems • Test Bank.
Business Law: Commercial Law for Accountants, Four- • Reporting and Assessment options.
teenth edition, provides a comprehensive supplements
package designed to make the tasks of teaching and learn- By using the MindTap system, students can complete
ing more enjoyable and efficient. The following supple- the assignments online and can receive instant feedback
ments and exciting new digital products are offered in on their answers. instructors can utilize MindTap to up-
conjunction with the text. load their course syllabi, create and customize homework
assignments, and keep track of their students’ progress. By
hiding, rearranging, or adding content, instructors con-
mindTap trol what students see and when they see it to match the
Learning Path to their course syllabus exactly. instructors
MindTap for Business Law: Commercial Law for Accoun-
can also communicate with their students about assign-
tants, Fourteenth edition, is a fully online, highly person-
ments and due dates, and create reports summarizing the
alized learning experience built upon Cengage Learning
data for an individual student or for the whole class.
content. MindTap combines student learning tools—
such as readings, multimedia, activities, and assessments
from CengagenOw—into a singular Learning Path that Cengage Learning Testing
intuitively guides students through their course.
instructors can personalize the experience by cus- Powered by Cognero
tomizing authoritative Cengage Learning content and Cengage Learning Testing Powered by Cognero is a flexible,
learning tools. MindTap offers instructors the ability to online system that allows you to do the following:
add their own content in the Learning Path with apps
that integrate into the MindTap framework seamlessly • Author, edit, and manage Test Bank content from
with Learning Management systems (LMs). multiple Cengage Learning solutions.
MindTap includes: • Create multiple test versions in an instant.
• Deliver tests from your LMS, your classroom, or
• An Interactive Book with Whiteboard Videos wherever you want.
and interactive Cases.
• Automatically graded homework with the fol-
lowing consistent question types: Start Right Away! Cengage Learning Testing Powered
• Worksheets—interactive worksheets prepare by Cognero works on any operating system or browser.
students for class by ensuring reading and • No special installs or downloads are needed.
comprehension. • Create tests from school, home, the coffee shop—
• Video Activities—Real-world video
anywhere with internet access.
exercises make business law engaging and
relevant.
What Will You Find?
• Brief Hypotheticals—These applications pro-
vide students practice in spotting the issue and • Simplicity at every step. a desktop-inspired inter-
applying the law in the context of a short, fac- face features drop-down menus and familiar intu-
tual scenario. itive tools that take you through content creation
• Case Problem Analyses—These promote and management with ease.
deeper critical thinking and legal reasoning by • Full-featured test generator. Create ideal assess-
guiding students step-by-step through a case ments with your choice of fifteen question
P R e Fac e xix
types—including true/false, multiple choice, and social media, and discusses stakeholders and
opinion scale/Likert, and essay). Multi-language corporate social responsibility. The chapter also
support, an equation editor, and unlimited meta- provides step-by-step guidance on making ethi-
data help ensure your tests are complete and cal business decisions and includes materials on
compliant. global business ethics. a new Digital Update fea-
• Cross-compatible capability. import and export ture examines whether employees should have the
content to and from other systems. right to disconnect from their electronic devices
after work hours.
• Chapters 2 through 7 (the remaining chapters of
instructor’s Companion web site the Law and Business Management unit)—This
The web site for the Fourteenth edition of Business unit has been thoroughly revised and updated
Law: Commercial Law for Accountants can be found by to improve flow and clarity and to provide more
going to www.cengagebrain.com and entering isBn practical information and recent examples. i have
9781305967281. The instructor’s Companion web site included fifteen new cases and twenty new Cases
contains the following supplements: in Point throughout the unit. after discussing eth-
• Instructor’s Manual. includes sections entitled ics in the first chapter, i start off discussing small
“additional Cases addressing This issue” at the business forms, then move to partnerships, limited
end of selected case synopses. liability companies, and finally corporations. all
• Solutions Manual. Provides answers to all ques- of the chapters in the unit include new features.
tions presented in the text, including the ques- For instance, in Chapter 5, there is a Global
tions in each case and feature, the Issue Spotters, Insight feature on whether cloud computing has a
the Business Scenarios and Business Case Problems, nationality and a Digital Update feature on soft-
and the unit-ending features. ware programs that can predict employee miscon-
• Test Bank. a comprehensive test bank that con- duct. i discuss crowdfunding and venture capital
tains multiple-choice, true/false, and short essay in that chapter as well. i have added new exhibits
questions. and key terms. in the chapter on securities law
• Case-Problem Cases. (Chapter 7), i have updated the materials on
• Case Printouts. Regulation a offerings because the cap went from
• PowerPoint Slides. 5 million to 50 million in 2015. i also discuss how
• Lecture Outlines. to deal with the seC’s new CeO pay-ratio disclo-
sure rule in a Managerial Strategy feature.
• Chapter 9 (Agency Formation and Duties) and
Chapter 10 (agency Liability and Termination)—
For users of the Thirteenth edition These two chapters have been updated to reflect
the realities of the gig economy in which many
First of all, i want to thank you for helping make Business people are working as independent contractors. a
Law the best-selling business law text in america today. new Ethics Today feature continues that emphasis
second, i want to make you aware of the numerous addi- with a discussion of whether uber and Lyft driv-
tions and changes that have been made in this edition— ers should be considered employees rather than
many in response to comments from reviewers. independent contractors. There is also a new
every chapter of the Fourteenth edition has been re- Global Insight feature in Chapter 10 concerning
vised as necessary to incorporate new developments in islamic law and respondeat superior. in addi-
the law or to streamline the presentations. Other ma- tion, five new Examples, five new Cases in Point,
jor changes and additions for this edition include the and five new case problems have been added in
following: these two chapters to help students comprehend
• Chapter 1 (Business Ethics)—This chapter con- the important issues and liability in agency
tains two new cases, two new Issue Spotters, three relationships.
new Cases in Point (including a case involving • Chapter 11 (Employment, Immigration, and
Tom Brady’s suspension from the nFL as a result Labor Law) and Chapter 12 (employment
of “deflategate”), and three new case problems. Discrimination)—These two chapters covering
The chapter includes a section on business ethics employment law have been thoroughly updated to
xx PReFace
include discussions of legal issues facing employ- Summaries, key terms, Examples, and Cases in
ers today. Chapter 11 has three new cases, three Point to better clarify concepts. Chapter 20
new Cases in Point, three new Examples (including (secured Transactions) was substantially reworked
one involving wage claims of the Oakland Raid- to clarify the general principles and exceptions.
ers cheerleaders), and three new case problems. i Chapter 21 (Bankruptcy Law) includes updated
have added two new features—an Ethics Today on dollar amounts of various provisions of the Bank-
whether employees should receive paid bathroom ruptcy Code, six new Cases in Point, and an Ethics
breaks and a Managerial Strategy on union orga- Today feature on whether there should be more
nizing using company e-mail systems. Chapter 12 relief for student loan debt.
has a new section discussing discrimination based • Chapter 22 (Professional Liability and
on military status and new coverage of same-sex accountability)—The discussion of global
discrimination and discrimination against trans- accounting rules has been updated and i have
gender persons. all three cases are new. There included new subheads to discuss actual and
are seven new Cases in Point, five new Examples, constructive fraud. i have created a new exhibit
a new exhibit, and three new case problems. a to clarify the three basic rules of an accountant’s
Digital Update feature discusses hiring discrimina- liability to third parties, as well as three new Cases
tion based on social media posts. i discuss relevant in Point and one new Example. There is also a
united states supreme Court decisions affecting new Ethics Today feature discussing a profession-
employment issues throughout both chapters. al’s responsibilities with respect to protecting data
• Chapter 13 (The Formation of Sales and Lease stored in the cloud.
Contracts) and Chapter 14 (Performance and • Chapter 24 (Consumer Law) and Chapter 26
Breach of sales and Lease Contracts)—The cover- (antitrust Law)—These two chapters include
age of the uniform Commercial Code has been all new cases, and both have been significantly
streamlined and simplified. i have added four updated with new coverage, Examples, and Cases
new cases and ten new Cases in Point to increase in Point. a Digital Update in Chapter 24 deals
student comprehension, as well as new business with “native” ads on the internet, and a Digital
scenarios and case problems. Update in Chapter 26 discusses the european
• Chapters 15 through 17 (the negotiable instru- union’s antitrust complaint against Google.
ments chapters)—The three negotiable instru- • Chapter 27 (Personal Property and Bailments)
ments chapters have been revamped and and Chapter 28 (Real Property and Landlord-
simplified. i have added numerous new Cases in Tenant Law)—i have rearranged the materials in
Point and Examples to clarify difficult topics for the property chapters somewhat and now cover
students. a Digital Update feature discusses pay- fixtures in the real property chapter. each chapter
ing with smartphones. includes two new cases as well as a Classic Case or
• Chapter 18 (Banking in the Digital Age)—I have Spotlight Case. There are six new Examples, seven
updated this entire chapter to reflect the realities new Cases in Point, two new exhibits, and seven
of banking in today’s digital world. all three cases new case problems in these two chapters. Both
are new and recent. There are three new Cases chapters also include new features (an Ethics Today
in Point, a new Issue Spotter, and three new case and a Digital Update).
problems. a new Digital Update feature explains • Chapter 29 (Intellectual Property)—The materials
how electronic payment systems are reducing the on intellectual property rights have been thor-
use of checks. oughly revised and updated to reflect the most
• Chapter 19 (Creditors’ Rights and Remedies), current laws and trends. The 2016 case involves
Chapter 20 (secured Transactions), and Chap- the Hustler Club and a trademark infringement
ter 21 (Bankruptcy Law)—These three chapters claim between brothers. a Digital Update feature
have been revised to be more up to date and examines the problem of patent trolls. There are
comprehensible. each chapter has two new cases eleven new Cases in Point, including cases involv-
and a new feature. we have also streamlined the ing Fedex’s color and logo, Google’s digitalization
materials to focus on those concepts that students of books, and how the sherlock Holmes copyright
need to know. i have added new exhibits, Concept fell into the public domain.
P R e Fac e xxi
Acknowledgments for Previous Editions

since this project began many years ago, a sizable number of business law professors and others have helped us in revis-
ing the book, including the following:
Jeffrey E. Allen Elizabeth K. Brunn, Esq. William H. Daughtrey, Jr.

University of Miami University of Baltimore; University of Virginia Commonwealth University
Judith Anshin Maryland University College
Michael DeAngelis
Sacramento City College William J. Burke University of Rhode Island
Thomas M. Apke University of Massachusetts, Lowell
James Doering
California State University, Fullerton Kenneth Burns University of Wisconsin, Green Bay
Raymond August University of Miami
John V. Dowdy
Washington State University Daniel R. Cahoy University of Texas at Arlington
William Auslen Pennsylvania State University
Michele A. Dunkerley
San Francisco City College Rita Cain University of Texas at Austin
Mary B. Bader University of Missouri—Kansas City
Julia M. Dunlap, Esq.
Moorhead State University Jeanne A. Calderon University of California, San Diego
Frank Bagan New York University
Paul Dusseault
County College of Morris Joseph E. Cantrell Herkimer Community College (SUNY)
John J. Balek DeAnza College, California
Maria Elena Ellison
Morton College, Illinois Donald Cantwell Florida Atlantic University
Michael G. Barth University of Texas at Arlington
Nena Ellison
University of Phoenix Arthur J. Casey
Florida Atlantic University
David L. Baumer San Jose State University, College of
North Carolina State University Business, Organization and Management O. E. Elmore
Texas A&M University
Barbara E. Behr Thomas D. Cavenagh
Bloomsburg University of Pennsylvania North Central College—Naperville, Illinois Robert J. Enders
California State Polytechnic University,
Robert B. Bennett, Jr. Robert Chatov
Pomona
Butler University State University of New York, Buffalo
Corey Ciocchetti Michael Engber
Robert C. Bird
University of Denver Ball State University
University of Connecticut
Nanette C. Clinch David A. Escamilla
Heidi Boerstler
San Jose State University, California University of Texas at Austin
University of Colorado at Denver
Maria Kathleen Boss Robert J. Cox Denise M. Farag
California State University, Los Angeles Salt Lake Community College Linfield College
Lawrence J. Bradley Thomas Crane James S. Fargason

University of Notre Dame University of Miami Louisiana State University
Dean Bredeson Angela Crossin Frank S. Forbes

University of Texas at Austin Purdue University, Calumet University of Nebraska at Omaha
Kylar William Broadus, Esq. Kenneth S. Culott Joe W. Fowler
Lincoln University in Missouri University of Texas at Austin Oklahoma State University
Doug Brown Larry R. Curtis Stanley G. Freeman
Montana State University Iowa State University University of South Carolina
Kristi K. Brown Richard Dalebout Joan Gabel
University of Texas at Austin Brigham Young University Florida State University
xxii PReFace
Christ Gaetanos June A. Horrigan M. Alan Lawson

State University of New York, Fredonia California State University, Sacramento Mt. San Antonio College
Chester S. Galloway John P. Huggard Leslie E. Lenn
Auburn University North Carolina State University St. Edwards University
Bob Garrett Terry Hutchins Susan Liebeler
American River College, California Pembroke State University, North Carolina Loyola University
Gary L. Giese Robert Jesperson Robert B. Long
University of Colorado at Denver University of Houston Oakland Community College
Thomas Gossman Debra M. Johnson Stuart MacDonald
Western Michigan University Montana State University—Billings University of Central Oklahoma
John D. Grigsby Bryce J. Jones Thomas E. Maher
Pennsylvania College of Technology Northeast Missouri State University California State University, Fullerton
Dr. J. Keaton Grubbs Margaret Jones Sal Marchionna
Stephen F. Austin State University Southwest Missouri State College Triton College, Illinois
Patrick O. Gudridge Peter A. Karl III Gene A. Marsh
University of Miami School of Law SUNY Institute of Technology at Utica University of Alabama
Paul Guymon Jack E. Karns Michael Martin, J.D., M.B.A., LL.M.
William Rainey Harper College East Carolina University University of Northern Colorado,
Jacqueline Hagerott Anne E. Kastle Monfort College of Business
Franklin University Edmonds Community College Karen Kay Matson
James M. Haine Tamra Kempf University of Texas at Austin
University of Wisconsin, Stevens Point University of Miami Woodrow J. Maxwell
Gerard Halpern Judith Kenney Hudson Valley Community College,
University of Arkansas University of Miami New York
Christopher L. Hamilton Barbara Kincaid Bruce E. May
Golden West College, California Southern Methodist University University of South Dakota
JoAnn W. Hammer Carey Kirk Diane May
University of Texas at Austin University of Northern Iowa Winona State University, Minnesota
Charles Hartman Nancy P. Klintworth Gail McCracken
Wright State University, Ohio University of Central Florida University of Michigan, Dearborn
Richard A. Hausler Kurtis P. Klumb John W. McGee
University of Miami School of Law University of Wisconsin at Milwaukee Southwest Texas State University
Harry E. Hicks Kathleen M. Knutson Cotton Meagher
Butler University, Indianapolis College of St. Catherine, St. Paul, University of Nevada at Las Vegas
Janine S. Hiller Minnesota Christopher Meakin
Virginia Polytechnic Institute and Lisa Quinn Knych University of Texas at Austin
State University Syracuse University, Whitman School Roger E. Meiners
Rebecca L. Hillyer of Management University of Texas at Arlington
Chemeketa Community College Peter Kwiatkowski, Esq. Gerald S. Meisel
E. Clayton Hipp, Jr. Baldwin Wallace University Bergen Community College,
Clemson University Meg Costello Lambert New Jersey
Anthony H. Holliday, Jr. Oakland Community College— Jennifer Merton, J.D.
Howard University Auburn Hills Campus University of Massachusetts at Amherst
Telford Hollman Vonda M. Laughlin Richard Mills
University of Northern Iowa Carson-Newman College Cypress College
P R e Fac e xxiii
David Minars Thomas L. Palmer Dana Blair Smith

City University of New York, Brooklyn Northern Arizona University University of Texas at Austin
Leo Moersen Charles M. Patten Michael Smydra
The George Washington University University of Wisconsin, Oshkosh Oakland Community College—Royal Oak
Alan Moggio Patricia Pattison Arthur Southwick
Illinois Central College Texas State University, San Marcos University of Michigan
Violet E. Molnar Peyton J. Paxson Sylvia A. Spade
Riverside City College University of Texas at Austin University of Texas at Austin
James E. Moon Carlton Perkins John A. Sparks
Meyer, Johnson & Moon, Minneapolis Texas Southern University Grove City College, Pennsylvania
Melinda Ann Mora Darren A. Prum Robert D. Sprague
University of Texas at Austin The Florida State University University of Wyoming
Bob Morgan Ralph L. Quinones
Eastern Michigan University Elisabeth Sperow
University of Wisconsin, Oshkosh
California Polytechnic University, San
Barry S. Morinaka Carol D. Rasnic Luis Obispo
Baker College—Michigan Virginia Commonwealth University
Brenda Steuer
Melanie Morris Marvin H. Robertson North Harris College, Houston
Raritan Valley Community College Harding University
Craig Stilwell
Joan Ann Mrava
Bert K. Robinson Michigan State University
Los Angeles Southwest College
Kennesaw State University
Dwight D. Murphey Irwin Stotsky
Norberto Ruiz University of Miami School of Law
Wichita State University
Chabot College
Daniel E. Murray Larry Strate
Gary K. Sambol University of Nevada at Las Vegas
University of Miami School of Law
Rutgers State University
Paula C. Murray Charles R. B. Stowe
Rudy Sandoval
University of Texas Sam Houston State University
University of Texas, San Antonio
Gregory J. Naples Raymond Mason Taylor
Marquette University Sidney S. Sappington
North Carolina State University
York College of Pennsylvania
George A. Nation III Thomas F. Taylor
Lehigh University Martha Sartoris
Campbell University
North Hennepin Community College
Caleb L. Nichols Ray Teske
Western Connecticut State University Barbara P. Scheller
Temple University University of Texas at San Antonio
John M. Norwood H. Allan Tolbert
University of Arkansas S. Alan Schlact
Kennesaw State University, Georgia Central Texas College
Jamie O’Brien
Lorne H. Seidman Jesse C. Trentadue
University of Notre Dame
University of Nevada at Las Vegas University of North Dakota
Dr. Kelly E. O’Donnell, J.C.D
California Lutheran University, Ira Selkowitz Edwin Tucker
Thousand Oaks, California University of Colorado at Denver University of Connecticut
Michael J. O’Hara Roscoe B. Shain Gary Victor

University of Nebraska at Omaha Austin Peay University Eastern Michigan University
Rick F. Orsinger Bennett D. Shulman William H. Volz
College of DuPage, Illinois Lansing Community College, Michigan Wayne State University
Daniel J. O’Shea S. Jay Sklar David Vyncke
Hillsborough Community College Temple University Scott Community College, Iowa
xxiv PReFace
William H. Walker, Marshall Wilkerson Norman Gregory Young

Indiana University–Purdue University, University of Texas at Austin California State Polytechnic University,
Fort Wayne Melanie Stallings Williams Pomona
Diana Walsh California State University— Ronald C. Young
County College of Morris Northridge Kalamazoo Valley Community College,
Robert J. Walter Arthur D. Wolfe Michigan
University of Texas at El Paso Michigan State University Bob Zaffram
Gary Watson Elizabeth A. Wolfe Erie Community College, Buffalo,
California State University, Los Angeles University of Texas at Austin New York
Katherine Hannan Wears, J.D. Daniel R. Wrentmore

Clarkson University School of Business Santa Barbara City College
John L. Weimer Eric D. Yordy
Nicholls State University, Louisiana Northern Arizona University
as in all past editions, i owe a debt of extreme grati- who co-authored the Instructor’s Manual and the Test
tude to the numerous individuals who worked directly Bank, for his excellent research efforts. i am grateful
with me or at Cengage Learning. in particular, i wish for the efforts of Vickie Reierson and Roxanna Lee for
to thank Vicky True-Baker, senior product manager; their proofreading and other assistance, which helped to
suzanne wilder, managing content developer; sarah ensure an error-free text. Finally, i thank suzanne Jasin
Huber, content developer; and ann Borman, senior of K & M Consulting for her many special efforts on
content project manager. i also thank Katie Jergens in this project.
marketing and Michelle Kunkler, art director. i am in- Through the years, i have enjoyed an ongoing corre-
debted as well to the staff at Lachina, the compositor, for spondence with many of you who have found points on
accurately generating pages for this text and making it which you wish to comment. i continue to welcome all
possible for me to meet an ambitious printing schedule. comments and promise to respond promptly. By incor-
i especially wish to thank Katherine Marie sils- porating your ideas, i can continue to write a business
bee for her management of the entire project, as well law text that is best for you and best for your students.
as for the application of her superb research and edito-
rial skills. i also wish to thank william eric Hollowell, R.L.M.
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broken. The enemy was panic-stricken and thrown into a mad
disorder.
“Who attacked?” asked German prisoners.
“Foch’s Army of Reserve,” was the answer.
“He has no Reserves!” they said with rage. “It was impossible for
him to have an Army of Reserve.”
It was an Army of Reserve gathered piecemeal, flung together,
hurled forward in a master stroke of strategy, at the last minute of the
eleventh hour. It was the second “Miracle” of the Marne.
That battle broke the spirit of the German people and of the
German army. They knew that only retreat and defeat lay ahead of
them. They had struck their last great blow and it had failed. They
had used up their man-power. They, certainly, had no Army of
Reserve. They could only hope that the French and British were as
exhausted as themselves and that the Americans were still unready.
They prepared for a general retreat when the British army took the
offensive of August, 1918, and never stopped fighting along the
whole length of its line until the day of armistice, while the French
and Americans pressed the Germans on their own front.
The American army, inexperienced, raw, not well handled by some
of its generals, fought with the valour which all the world expected,
and suffered great losses and made its weight felt. The sight of the
American troops was a message of doom to the Germans. They
knew that behind this vanguard was a vast American army,
irresistible as a moving avalanche. However great the slaughter of
these soldiers from the New World, pressing on in the face of
machine-gun fire, and lashed to death, millions would follow on, and
then more millions. The game was up for Germany, and they knew it,
and were stricken. Yet they played the game, this grisly game, to the
end, with a valour, a science and a discipline which was the supreme
proof of their quality as great soldiers. It was a fighting retreat,
orderly and controlled, although the British army never gave them a
day’s respite, attacked and attacked, captured masses of prisoners,
thousands of guns, and broke their line again and again.
The Last Three Months
That sweep forward of the British in the last three months was an
astounding achievement. They were the same men who halted on
the armistice line down from Mons as those who had begun the
attack three months before. They had few reinforcements. They had
gone beyond their heavy guns, almost out of reach of their transport.
Their losses had been heavy. There was no battalion at more than
half its strength. They had been strained to the last fibre of nervous
energy. But they had never slackened up. They were inspired by
more than mortal strength, by the exultation of advance, the
liberation of great cities, the rescue of populations long under
German rule, the fever of getting forward to the end at last.
The delirious welcome of the liberated peoples awakened some of
the first emotions of war which had long seemed dead. The entry
into Lille was unforgettable. The first men in khaki were surrounded
by wild crowds of men and women weeping with joy at the sight of
them. Their buttons and shoulder straps were torn off as souvenirs.
They were kissed by old women, bearded men, young girls, babies.
Once again rose the cry of “Vivent les Anglais!” as in the beginning
of the war. Our men were glad to be alive that day to get the
welcome of these people who had suffered mental torture and many
tyrannies during those four years under German rule. The fire of
gratitude warmed cold hearts, re-lit enthusiasm, made it all seem
worth while after all. Surely the French in Lille, the Belgians in
Bruges, the people of Tournai, Cambrai, Valenciennes, Liége, have
not forgotten those days of liberation. Surely they did not join in the
cynical chorus which rose against England in France, or at least in
the French press, during the years that followed? That to me is
unbelievable, with these memories in my heart.
It was Marshal Foch himself who acknowledged with generous
warmth that in these last months of war it was the hammer strokes of
the British army which did most to break the German war machine to
bits, by enormous captures of prisoners, guns, and ground. General
Ludendorff has said so, squarely, in his books; and history will record
it, though it was quickly forgotten in some countries and never known
in others. It is only for the sake of truth that it is worth recalling now,
for there is no boast of victory in the hearts of men, knowing its cost
and its horror, and no glory left about that war except the memory of
the world’s youth which suffered on both sides of the line.
The Coming of Peace
So it ended, with a kind of stupefaction in the minds of the

soldiers. It was an enormous relief, followed by a kind of lassitude of
body and spirit. Ended at last! Incredible! At the front on the day of
armistice there was no wild exultation, except in a few messes here
and there behind the lines. The men who had fought through it, or
through enough of it to have been soaked in its dirt, were too tired to
cheer or sing or shout because peace had come. Peace! What did
that mean? Civilian life again? Impossible to readjust one’s mind to
that. Impossible to go home and pick up the old threads of life as
though this Thing had not happened. They were different men. Their
minds had been seared by dreadful experience. Now that peace had
come after that long strain something snapped in them.
Many of them had a curiously dead feeling at first. They thought
back to all the things they had seen and done and suffered, and
remembered the old comrades who had fallen on the way. Perhaps
they were the lucky ones, those who lay dead, especially those who
had died before disillusion and spiritual revolt against this infernal
business. A war for civilisation?... Civilisation had been outraged by
its universal crime. A war against militarism? Militarism had been
enthroned in England and France. Liberty, free speech, truth itself,
had been smashed by military orders and discipline over the bodies
and souls of men. A war against the “Huns?” Poor old Fritz! Poor
bloody old Fritz! Not such a bad sort after all, man for man and mass
for mass. They had put up a wonderful fight. The glory of victory?
Well, it had left the world in a mess of ruin, and the best had died.
What would come out of this victory? What reward for the men who
had fought, or for any nation? The profiteers had done very well out
of war. The Generals had rows of ribbons on their breasts. Youth had
perished; the finest and noblest. Civilisation had been saved? To Hell
with a civilisation which had allowed this kind of thing! No, when
peace came, there were millions of men who did not rejoice much,
because they were sick and tired and all enthusiasm was dead
within them. They were like convicts after long years of hard labour
standing at the prison gates open to them with liberty and life
beyond. What’s the good of life to men whose spirit has been
sapped, or of liberty to men deprived of it so long they were almost
afraid of it? Strange, conflicting emotions, hardly to be analysed, tore
at men’s hearts on the night of armistice. Shipwrecked men do not
cheer when the storm abates and the bodies of their dead comrades
float behind them. Nor did our men along the front where it was very
quiet that day after a bugle here and there sounded the “Cease fire!”
and the guns were silenced at last. Peace!... Good God!
II.—THE UNCERTAIN PEACE
Ten years after.... The memory of the war days is fading from the
mind of the world. The ten million dead lie in their graves, but life
goes marching on. Self-preservation, vital interests, new and exciting
problems, the human whirligig, are too absorbing for a continual
hark-back to the thought of that mortality. We are no longer
conscious of any gap in the ranks of youth, torn out by the machinery
of destruction. We do not realise the loss of all that spirit, genius,
activity and blood, except in private remembrance of some dead boy
whose portrait in uniform stands on the mantelshelf. A new
generation of youth has grown up since the beginning of the war.
Boys of ten at that time of history are now twenty, and not much
interested in that old tale. Girls who were twelve are now mothers of
babes. The war! Bother the war! Let’s forget it and get on with life. In
that youth is right. It is not in its nature nor in moral health to dwell on
morbid memories. But it is hard on those whose service is forgotten
—so soon. In England—ten years after—there are still 58,000
wounded soldiers in the hospitals—and in France great numbers
more; but they are hidden away, as a painful secret of things that
happened. Only now and again the sight of their hospital blue in
some quiet country lane, near their hiding places, shocks one with a
sharp stab of remorse. We had forgotten all that. We hate to be
reminded of it.
Fading Memories
Even the men who fought through those years seldom speak of
their experience. It is fading out of their own minds, though it seemed
unforgettable. They are forgetting the names of the villages in
France and Flanders where they were billeted, or where they fought,
or where they passed a hundred times with their guns and transport
under shell fire. Good heavens!—don’t you remember?—that place
where the waggons were “pasted,” where the Sergeant-Major was
blown to bits, where old Dick got his “Blighty” wound? No. Something
has passed a sponge across those tablets of memory—things that
happened afterwards. Now and again at Divisional banquets officers
try to revive the spirit of those days and exchange yarns about
trench warfare and days of battle. It is queer how they remember
only the jokes, the laughable things, the comradeship, the thrill. The
horror has passed.
Something else has passed; the comradeship itself, between
officers and men, between all classes united for a time in common
sacrifice and service, annihilating all differences of rank and social
prejudice and wealth at the beginning of the war. It seemed then as
though nothing could ever again build up those barriers of caste. The
muddiest, dirtiest, commonest soldier from the slums or the factories
or the fields was a hero before whom great ladies were eager to
kneel in devotion and love, to cut away his blood-stained clothes, to
dress his wounds. In the canteens the pretty ladies slaved like
drudges to give cocoa or any comfort to “the boys” from the front. In
the trenches or in ruins under shell fire young officers wrote home
about their men: “They’re too splendid for words!... I am proud to
command such a topping crowd.... They make me feel ashamed of
things I used to think about the working man. There is nothing too
good for them.” The British Government thought so too, and
promised them great rewards—“homes for heroes,” good wages for
good work, “a world safe for democracy.”
The Barriers of Class
Ten years after, the classes have fallen apart again. The old
hostilities between Capital and Labour have been revived with
increasing bitterness in many minds. The old barriers have been
rebuilt in many countries. For a time, even in England, there was a
revolutionary spirit among the men who had served, and a sense of
fear and hostility against those who had said that nothing was too
good for them. “Our heroes” became very quickly “those damned
Socialists,” or those “dirty dogs” who are never satisfied, or those
lazy scoundrels who would rather live on the “dole” than take an
honest job. The men who had saved England were suspected of
plotting for her overthrow, subsidised by Russian money and
seduced by the propaganda of a secret society inspired by the spirit
of Anti-Christ.
Ten years after the closing up of ranks, the surrender of self
interest, and a spiritual union, England is again seething with strikes,
industrial conflict, political passion, and class consciousness. There
are still a million and a quarter unemployed officially registered in
Great Britain, and half a million more not on the registers and worse
off. Instead of “homes for heroes” the working people in the great
cities are shamefully overcrowded. In the agricultural districts of
England young men who fought in the Last Crusade and marched
with Allenby to Jerusalem, or those boys who left their fields in ’14
for the dirty ditches in Flanders—for England’s sake—are getting
twenty-five shillings a week, upon which a single man can hardly live
and a married man must starve. And ten years after they poured out
their blood and treasure without a grudge, without reservation, first in
the field and last out of it, the old “quality” of England or their
younger sons are selling up their old houses to pay taxes which are
extinguishing them as a class, depriving them of their old power and
prerogatives, and changing the social structure of the nation by an
economic revolution which is almost accomplished. On both sides
there is bitterness, a sense of injustice, and an utter disillusion with
the results of victory.
The Great Reaction
Ten years after the beginning of the war there is no sense of

security in Europe or the world. “The war to end war,” as it was
called, has done nothing of the kind. Beneath the surface of the
present peace there is a lava of hatreds and resentments which
bode ill for the future peace of the world. There are larger standing
armies in Europe now than in 1913. There are more causes of
quarrel, and none of the old quarrels have been extinguished—those
racial rivalries, those national ambitions, that commercial
competition. The war settled no argument for more than a period of
exhaustion. The idea of a “world safe for democracy” is falsified ten
years after by a swing-back to extreme forms of nationalism and
autocratic government through the greater part of Europe excepting
the British Isles and France. The German Republic, established after
annihilating defeat, is only biding its time for the return of monarchy,
and its present government is anti-democratic. Parliamentary
institutions, the safeguard of democracy, have been overthrown or
contemptuously treated in many nations. Italy, Spain and Hungary
are under military dictatorships. Russia is governed by a new-
fangled tyranny under which there is no liberty of speech,
conscience or economic life. Turkey, powerful again, is ruled by a
committee of generals. Poland, Czecho-Slovakia, Belgium, are in
military alliance with France which, under Poincaré, ridiculed the
possibilities of peace based on the goodwill of its neighbours, and
relied for safety on a supreme army and the rule of Force.
The Peace Treaty
The Treaty of Versailles, which imposed the terms of peace upon

Germany and her Allies after their complete surrender, was the direct
cause of all the troubles that beset us after the war. It violated the
hopes of all moderate minded people, who believed that the world,
after its frightful lesson, was ready for a new chapter of civilisation in
which militarism might be overthrown as the greatest curse of life,
and in which the common folk of nations might be made secure in
their homes and work by a code of international law and arbitration.
The statesmen who presided over the Peace Conference—
Clemenceau, Wilson, Lloyd George—had the fate of the world in
their hands. Waiting for their decisions, their new plan of Europe,
was a world of emotionalised men and women, ready and eager
then, for a little while, to respond to a generous idealism which would
lift all peoples above the morass of hatred and misery into which
they had fallen. The German and Austrian peoples, starved and
defeated, without a rag of pride left to cover their humiliation, fierce
with anger against their war lords—their Junkers and their politicians
of the old brutal caste—were ready also, for a little while, to join
hands with the world democracy in a new order of life. They were
conscience-stricken, ready to make amends, resigned to an awful
price of defeat—provided they were given their chance of recovery
and the liberty of their national life. They clung desperately to the
words of President Wilson who, before their surrender, had in his
Fourteen Points and other messages to the world outlined a peace
which would be generous to the defeated if they overthrew their old
gods, and would be based on justice, the rights of peoples, and the
commonwealth of nations rather than upon vengeance and hatred.
Fair words, holding out prodigious hopes of a new and better
world! But when the terms of the Peace Treaty were made known
they struck a knock-out blow not only to German hopes but to all the
ideals of people who had looked for something nobler and more
righteous by which the peace of the world should be assured. It was
a peace of vengeance. It reeked with injustice. It was incapable of
fulfilment. It sowed a thousand seeds from which new wars might
spring. It was as though the Devil, in a jester’s cap-and-bells, had sat
beside Clemenceau in his black gloves, and whispered madness into
the ear of Wilson, and leered across the table at Lloyd George, and
put his mockery into every clause. In that Hall of Mirrors at Versailles
the ideals for which millions of men had fought and died—liberty, fair-
play, a war to end war, justice—were mocked and outraged, not by
men of evil, but by good men, not by foul design, but with loyalty to
national interests. Something blinded them.
The Territorial clauses of the Treaty, based theoretically upon “the
self determination of peoples,” created a dozen Alsace Lorraines
when one had been a sore in Europe. The old Austrian Empire was
broken to bits—that was inevitable—but Austria, with its great capital
of Vienna, was cut off from its old source of life, condemned to
enormous mortality—which happened—and many of its people were
put under the rule of their ancient enemies. The Austrian Tyrol is now
the Italian Tyrol. Austrian property and populations are now in the
hands of Czechs and Slovaks and Serbians. Hungary was parcelled
out without consideration of nationality or economic life. Lines were
drawn across its waterways, its railway system and its roads. Its
factories, forests and mines were taken from it. Many of its folk were
handed over to Roumanians and other hostile peoples. The German
colonies in Africa were divided between Great Britain, France and
Belgium, although it is a biological necessity that Germany should
have some outlet for the energy and expansion of her population if
another war may be avoided. The Danzig corridor was made
between one part of Germany and another. Greece was given an
Empire in Asia Minor and Thrace, over Turkish populations which
she could only hold by the power of the sword at the cost of a future
war—which she has already fought and lost, abandoned by the
Governments which yielded to her claims.
The resurrection of Poland, by which one of the greatest crimes in
history was blotted out and national liberty given to the peoples of
Esthonia, Latvia and Lithuania, stand to the credit of the
peacemakers, although these new nations have no security in the
future if Europe relies upon force rather than law. Other frontiers
drawn carelessly across the new map of Europe will be blotted out in
blood if ever again the passions stirring from the Rhine to the Volga
rise against the barriers imposed upon them in this uncertain peace.
The Fantastic Figures
But it was on the economic side of the Treaty and in its

interpretation that the statesmen of the Allies seemed to be stricken
with insanity, which infected many of their peoples until recent
months. Germany, they insisted, had to pay all the costs of the war,
for the damage she had inflicted and the ruin she had caused.
Theoretically, that was just if one took the view that every German
peasant, every German mother in a cheap tenement, every German
worker on starvation wages, every little sempstress, or University
student, ten or twelve years old when the war began, shares the
responsibility of those war lords and militarists who challenged the
world in 1914.
Practically it was not only unjust but idiotic, because it was
impossible, as everybody now acknowledges. It is almost beyond the
scope of mathematics to calculate the losses of the Allies in the war.
The British Government spent more in four and a half years of war
than in two and a half centuries previously. Could Germany pay that
back? England advanced two thousand million sterling to her Allies,
and borrowed nearly a thousand millions from the United States on
behalf of her Allies. Could Germany pay all that? France had
borrowed vast sums from her peasants and shopkeepers which she
debited against Germany; she owed Great Britain nine hundred
millions sterling, she had to restore the great track of ruin, with all its
destroyed homes, churches, farmsteads, châteaux—thousands of
villages wiped off the map so that hardly one stone remained upon
another—at a price which has loaded her with increased burdens of
debt far in excess of actual cost because French contractors desired
enormous profits. It was right and just that Germany should repair
that damage in the war zone, every brick of it and every stone. But
could she do so in money payments, in addition to all those other
claims? Could she pay also for war damage in Belgium, in Poland,
on the high seas, wherever her guns had reached? Italy had great
claims against Austria. Could Austria, brought to the edge of ruin,
amputated, lopped of all sources of wealth, pay that bill of costs?
Could Germany, the chief debtor, pay for the British unemployed in
the “devastated districts” of England and Scotland, whose ruined
trade was due to the war? All that, and then the pensions of
wounded soldiers and the widows of dead men and orphan children?
It would have been splendid if that were so. It might have been just
even to bleed the working folk of Germany, the younger generation,
the old women, the wounded and cripples even, the victims and
heirs of their war lords, to the last pfennig in their purses, if it is
justice that the individuals in a nation and their children and
children’s children are responsible for the guilt of their Governments.
But, justice or injustice apart, the absurdity, the wild impossibility, of
extracting all that vast tribute from the defeated enemy in terms of
transferable wealth, ought to have been manifest to the most
ignorant schoolboy of thirteen or fourteen years of age. Yet it was the
illusion passionately professed by many great statesmen, by sharp-
witted business men, by bankers and financiers, and by the gullible
public who took their word for it, in France, Great Britain, and the
United States.
The Golden Lie

Or was it just one great lie to deceive the people of the victorious
nations and to keep them quiet by golden promises which the liars
knew in their hearts could never be fulfilled? One is tempted
sometimes to think so. It is now so transparently clear that not even
the richest and most powerful nation in the world of commerce—the
United States of America—could pay one tenth of the sum expected
from Germany after her overwhelming defeat, and the ruin of her
world trade, without overwhelming financial disaster, that it is
incredible that the greatest statesmen of the Allies and all their
experts and advisers could ever have believed in such mad
economics. Year after year there were assemblies of financial
gentlemen who solemnly sat round tables estimating Germany’s
capacity to pay. Year after year they reduced their estimates until
they were brought down to 6,600 millions, and then by easy stages
to 2,200 millions, while Europe sank deeper into economic misery;
while British trade declined; while Austria starved; while France grew
desperate for these payments; while Russia was famine-stricken;
while Germany poured out paper money which became worthless,
until her bankruptcy could no longer be concealed.
Future historians will be baffled by that psychology. They will hunt
desperately for some clue to the mystery of that amazing folly which
took possession of many people. They will call it perhaps the Great
Financial Hoax, and argue that it was a deliberate deception on the
part of the world’s leaders, afraid to confess to their nations that after
all their sacrifice there would be no “fruits of victory,” but only heavy
taxation, to pay for the costs of war which could not be shifted on to
enemy nations. I do not think it was quite as simple as all that. I think
in the beginning that sheer ignorance of the most elementary
economic laws led men like Clemenceau and Lloyd George to over-
estimate the power of a nation like Germany to transfer wealth in
money values to other nations. They did not understand that all
transferable wealth—or nearly all—can only be obtained by a trade
balance of exports and imports, and that the potential energy of a
nation, its factories and plant, its public buildings, bridges,
organisation and industry, are not transferable except by a balance
over exchange of goods. They were so hopelessly ignorant of
international finance that they actually did believe that they could
“squeeze” Germany of vast sums of money which could be divided
among the Allies for the settlement of their immense bill of costs,
without damaging their own trade or allowing Germany to trade
unduly in the markets of the world. One British statesman promised
his people that Germany should be squeezed like an orange until the
pips squeaked. French statesmen, like Poincaré, dazzled the eyes of
their people with golden visions. They balanced their budget by the
simple method of assuming that all that war debt would be paid by
Germany when pressure was firmly applied.
It was only later, when the politicians began to get a clear notion of
economic laws, by the painful lessons of reality and disillusion, that
they began to deceive their peoples and keep up the bluff. They
were afraid to tell the truth after all those falsities. In France, long
before the entry into the Ruhr, French economists, business men
and senators confessed privately that France could never hope to
get anything like her claims against Germany, and some of them,
more candid than others, shrugged their shoulders and said: “We
dare not tell the people—the shock would be too great.” The French
Press kept up the conspiracy of this deception, audaciously and
persistently throwing the blame of delay in getting German payments
upon Great Britain who did not stand by them in exerting “pressure.”
In Great Britain, dependent upon export trade for her main source of
wealth, and seeing the deadly stagnation of Europe and its
increasing loss of purchasing power, the truth of economic law was
more quickly perceived, and its statesmen shifted their policy and
forgot their golden promises more rapidly and with more public
candour.
The Downfall of Idealism
Looking back upon the years after the war, one sees that the
idealism, which for a little while might have changed the face of the
world if there had been great and noble leadership, fell with a crash
in many hearts because the interpreters of the Peace Treaty were
appealing not to the highest but to the lowest instincts of humanity;
to greed rather than justice; to vengeance rather than reconstruction;
to lies rather than truth. If only there had been one great leader in the
world who had cried: “We were all involved in this crime against
humanity, although Germany’s guilt was greatest; let us in the hour
of victory put vengeance on one side and so shape the peace that
the common folk of the world will have a better chance of life,” I
believe that in the time when the agony was great and the wounds
were still bleeding the hearts of people would have leapt up to him.
They would have responded if he had pleaded for generosity to the
defeated nations, if he had refused to punish the innocent for the
guilty, if he had asked them to forego the pound of flesh demanded
in the name of Justice, to forget the horror of the past, to escape
from it together, to march forward to a new chapter of civilisation not
based on standing armies, balances of powers, and cut-throat rivalry,
but upon new ideals of international law, business, common sense,
and Christian ethics.
People will say—do say—“It would have been weakness to let the
Germans off. They deserved to be punished. They would have made
a peace of terror, if they had had the chance of victory. There is
Justice to be considered. Justice demands its due, or God is
mocked.”
That is all true. It would have been weakness to let the Germans
off, but the surrender of their Fleet, the destruction of their Army, the
enormous sum of their dead was not a “let off.” They were broken
and punished, in pride and in soul. They would have made a peace
of terror? Yes, that is certain, and they would have aroused,
intensified and perpetuated a world of hate by which later they would
have been destroyed. Their war lords would have made a worse
peace than this of ours; but that is no argument why we should have
imitated their methods and morals.
The League of Nations
There was one institution created by the peacemakers which held

out a promise of a better relationship between nations than that of
military alliances and armed force divided into an uncertain Balance
of Power. All that was wrong in the Peace Treaties might be put right
by the League of Nations. The seeds of war sown by the Treaties
might be made to blossom into the laurels of peace by the League.
Although the Supreme Council set up by the Allies for the
enforcement of its military provisions might act on purely nationalistic
lines, the League of Nations would build up the international moral
sense, and establish a Court of Appeal by which injustice,
aggression, and the war spirit could be extirpated between all
nations subscribing to its code of laws, and the spirit of arbitration.
President Wilson comforted himself for any little defects which
might have crept into the Peace Treaties by this new instrument of
idealism which he had helped to create with a very passionate
enthusiasm. It was his great gift to the world and, as he hoped, the
fulfilment of the promises he had made to the world in his messages
before and after the ending of the war, appealing so poignantly to the
secret hopes of humanity that when he came to Europe as the great
arbitrator of its councils, he was received as the leader, spokesman,
and prophet of the New World which was to be built out of the ruins
of the Old. The rejection by the American Senate of all that he had
done killed Wilson. It also destroyed all immediate hopes of
European recovery based upon the League as an instrument of
reconstruction, co-operation and peace. It was one of the great
tragedies of history. Yet, looking back now upon the reasons of the
American refusal to enter the League of Nations, it is clear that it was
not entirely due to the personal antagonism which President Wilson
had aroused by certain defects of character—his autocratic methods,
his rejection of good counsel, and his mentality in the beginning of
the war, nor to a national selfishness on the part of the American
people, desiring to withdraw rapidly from responsibilities which they
had incurred by their entry into the war. From the American point of
view, at that time, the war had proved more than ever the supreme
good fortune of the United States in being remote from the hatreds
and quarrels of that mess of races in Europe out of which their
people had escaped in the past. They did not understand Europe.
They had no direct interest in its national rivalries. They could not
control or abate its passions. All opponents of the Wilson policy
regarded it as a calamity that the United States should surrender its
geographical immunity from the evil heritage of the Old World and
deliberately involve its future in that arena of ancient feuds. By
entering the League of Nations it seemed to many that the people of
the United States would be dragged into new wars in which they
would have no direct or indirect interest, and that they would have to
support and enforce the maintenance of European frontiers, re-
drawn by the Peace Treaties, and already the cause of passionate
resentment. They did not approve of all that parcelling up of
territories which had taken place under the benignant name of
“mandates”—British dominion in Palestine and Mesopotamia, French
rule in Syria, the gobbling up of German Africa, the Greek Empire in
Asia Minor. Were they to use their strength to support that new
combination of powers which one day was bound to be challenged
and resisted? Above all was the New World to enter into military
alliance with France and Great Britain to support a policy of
domination in Europe which could only last as long as the German
people and their Allies were suffering from war exhaustion—a one-
sided pact which would make for the tyranny of certain powers, or at
least their military supremacy over other nations of the world? That
would be a surrender of the whole spirit of the American people, who
believed their destiny to be that of free arbitrators, and not partisans,
in the future of civilisation; friends of liberty and democracy
everywhere, and not allies on one side of a line. They had come into
the war, they believed, as crusaders for that ideal, defenders of
liberty wantonly attacked. They hated the thought that the ideal
should be narrowed down to the future defence of one group of
powers, who might in their turn attack or oppress the democratic
liberties of their neighbours. For this reason, among others, they
rejected the pact of security given by President Wilson to France in
agreement with England. For these reasons, not ignoble or merely
selfish—although, I think, unsound—they refused to enter the
League of Nations.
This withdrawal of the United States took away the strongest pillar
upon which the League had been founded. Its weakness was
immediately apparent. It was incapable of world judgments backed
by the greatest economic power in the world. The exclusion of
Russia, Germany, Austria and Hungary from its deliberations and
decisions made it seem—to hostile observers—an instrument
designed merely as a partisan body, upholding the opinions of the
victorious Allies and giving a sham morality to their policy.
That was unfair, because the Assembly, and its work behind the
scenes at Geneva, in which forty-three nations were represented, did
very quickly develop a spirit of international co-operation and law
rising above the low moralities of national selfishness. The
representatives of the League included large numbers of men who
were passionately inspired with the purpose of restoring order into
the chaotic conditions of Europe after war, healing its wounds,
creating good will in causes of quarrel by methods of arbitration and
persuasion, for the commonweal of peoples. The work and spirit of
Geneva was one source of light in a world of darkness, in those
dreadful years from which we have just emerged, and for that reason
it raised a standard of idealism round which millions of men and
women in many countries—even in the United States—rallied as the
one hope of the future.
It may be said without exaggeration that for the six years following
the war civilised humanity has been sharply divided into two camps
of thought—those who believe in the spirit of the League of Nations,
with its message of international co-operation and its faith in peace
by arbitration; and those who have no faith at all in this idealistic
purpose, and who believe in Force as the only method of
international relationship and the settlement of quarrels. Those two
camps still exist. The argument between them still goes on, and will
never cease until civilisation gives allegiance to a new code of law.
What frustrated the League in its work and decisions, after the
withdrawal of the United States, was the interpretation of the Peace
Treaties by the Great Powers, and the economic folly which took
possession of European statesmen. The League as one half of the
Peace Treaty found that its other half thwarted it in every possible
way. The left hand worked against the right. It was useless for the
League of Nations to press for the economic co-operation of Europe
when the Supreme Council and the Allied statesmen enforced
decisions which enlarged the area of ruin and thrust stricken people
deeper into misery. It was futile for the League to discuss
disarmament when France was building up a system of military
alliances, creating a Black Army, and lending enormous sums of
money to Poland and other States for maintaining their standing
armies. It was almost hopeless for the League of Nations to offer its
services for arbitration and to talk high moralities about international
justice when, to avenge the murder of some officers by unknown
assassins, Italy bombarded Corfu, killing innocent children; and
when Italy and France were secretly conniving with the Nationalist
Turks for a war against Greece, which was abandoned in its agony
to the horror of Smyrna.
The France of Poincaré
France, under the leadership of Poincaré, scoffed from the

beginning at the League of Nations, although supporting it over the
Corfu incident, and although one representative, M. Léon Bourgeois,
was a loyal friend of the League idea. After the refusal of the United
States to ratify the pact of security for France against another war of
German aggression, followed by the withdrawal of Great Britain, the
France of Poincaré saw no safety except in the power of her Army in
alliance with other forces which she could link in a military chain
around her defeated enemies. No one ought to blame France for that
philosophy, in view of her agony and her future peril. But it resulted
inevitably in actions which checked the recovery of Europe, aroused
all the old hatreds, filled the defeated peoples with a sense of
profound injustice, and raised the old devils of national pride,
vengeance, and belief in force which for a time had been banished to
the houses of the German Junkers and had lain low in German
hearts. It was the cause of increasing friction, spasms of passionate
ill-will, between France and England, and a long campaign of
scurrilous abuse in the French Press which poisoned the old Entente
Cordiale, wiped out the memories of war comradeship, and was a
tragic and painful chapter in recent history.
France under Poincaré demanded her pound of flesh from
Germany, including the lifeblood of the German people in the arteries
of its economic health. Germany could not recover nor, before
recovering, pay. Afterwards, when the Ruhr was invaded, their chief
source of wealth and of payment was strangled. The French objects
of “security” and “reparations” were in hopeless antagonism, and
defeated each other. There could be no reparations, on a large
scale, if French security demanded the expulsion of those who
directed and worked the Ruhr and its railways. There could be no
“security” for France in the long run if, instead of German
reparations, she goaded the German people into nationalism and a
war of vengeance by every means, fair or foul. While the policy of
Poincaré was dominant, Europe sank deep into despair, and the
nations most stricken by war saw no hope of revival.
The first three years after the world war provided terrible proofs of
the disaster which had happened to humanity in that deadly struggle.
Those who wish to convince the future generations of the
devastating effect of modern warfare upon highly organised nations,
as a frightful warning, must summon up the picture of Europe in
1919, 1920 and 1921. I saw it from end to end, and it haunted me.
The Russian Revolution
On the Eastern side of Europe Russia was cut off from the family
of nations and lay prostrate. Civilisation itself had gone down there in
anarchy and misery, and its new government of Bolsheviks were
ruling over a hundred million people, hungry, diseased, stricken,
crushed in spirit, weak in body, overcome by melancholy and inertia.
They had broken first under the strain of war. Four million of their
men had died in the fields of slaughter and their labour had been
taken from the fields. Corruption beyond words, treachery in high
places, inefficiency amounting to murder, had aroused a spirit of
revolt amongst soldiers sent forward without arms to fight against
men with whom, individually, they had no lasting cause of quarrel;
peasants like themselves, gun-fodder like themselves, for ambitions
and hatreds which they did not share. They turned to rend their own
leaders and made a pact at any price with the enemy outside. All the
explosive forces of passion which had been stored up in centuries of
tyranny by a brutal Tsardom and its Governors burst out against its
present representatives, although the last Tsar was a gentle man
who loved his people. Old dreams of liberty, new philosophies of
democracy, united for a time to overthrow the Government and all its
powers. Revolution, bloody and cruel, raged in Russia, and the beast
leapt up in peasant minds. Kerensky tried to control this anarchy but
was swept on one side like a straw by stronger forces. Lenin and his
crowd took command, and their new philosophy of Communism, fair-
sounding, theoretically righteous, based upon the principles of
equality and brotherhood and peace, put a spell upon the simple
minds of the Russian folk. All opponents, critics, doubters, were
destroyed relentlessly. Lenin and his friends, having taken command
of the new machinery of Government by Soviet committees, were in
supreme power over a people unarmed, half-starving, and
submissive to those who had broken their old chains. It was some
time before the Russian folk were aware of the fetters which
enslaved them, and of a tyranny over their minds and bodies more
ruthless than that of Tsardom. They were denied freedom of speech,
freedom of knowledge, freedom of movement. The newspapers
published the news of the world according to Lenin. The schools
taught economic history according to Karl Marx and world history
according to Soviet philosophy. Trotsky fashioned a Red Army in
which discipline was more severe than under the Grand Duke
Nicholas. The prisons were filled with people of all classes who
came under the notice of the secret police. Execution became a
habit. There was a Reign of Terror undoubtedly as bad as that of the
French Revolution of 1793.
For a time the people as a whole were keyed up to a new
enthusiasm for what they believed to be a democratic system of
Government by attacks from the “White Armies” of the old Royalists,
financed, armed and organised by foreign powers, and especially by
France and Great Britain. As Republican France had risen against
the armies of the emigrés, so Soviet Russia rallied against the
armies of Koltchak, Denikin, Wrangel and others, and defeated them
overwhelmingly. After that the Reign of Terror abated somewhat,
internal revolt died down, and the gospel of Communism was seen
at work in conditions of peace.

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Full download Business Law: Text &amp; Cases – Commercial Law for Accountants 14th Edition – Ebook PDF Version file pdf all chapter on 2024

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Business Law: Text & Cases –

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Acknowledgments for Previous Editions

Jeffrey E. Allen Elizabeth K. Brunn, Esq. William H. Daughtrey, Jr.

Lawrence J. Bradley Thomas Crane James S. Fargason

Dean Bredeson Angela Crossin Frank S. Forbes

Christ Gaetanos June A. Horrigan M. Alan Lawson

David Minars Thomas L. Palmer Dana Blair Smith

Michael J. O’Hara Roscoe B. Shain Gary Victor

William H. Walker, Marshall Wilkerson Norman Gregory Young

Katherine Hannan Wears, J.D. Daniel R. Wrentmore

The Coming of Peace

So it ended, with a kind of stupefaction in the minds of the

The Barriers of Class

The Great Reaction

Ten years after the beginning of the war there is no sense of

The Peace Treaty

The Treaty of Versailles, which imposed the terms of peace upon

The Fantastic Figures

But it was on the economic side of the Treaty and in its

The Golden Lie

The Downfall of Idealism

The League of Nations

There was one institution created by the peacemakers which held

The France of Poincaré

France, under the leadership of Poincaré, scoffed from the

The Russian Revolution

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Full download Business Law: Text & Cases – Commercial Law for Accountants 14th Edition – Ebook PDF Version file pdf all chapter on 2024

Full download Business Law: Text & Cases – Commercial Law for Accountants 14th Edition – Ebook PDF Version file pdf all chapter on 2024