This chapter analyzes the role that the dreadnought arms race with Britain began to play in Germany asa surrogate for its largely failed “World Policy” and how that contributed to a growing German debt crisis. In the six years before the outbreak of war, keeping to a set ratio of German and British battleships was increasingly linked with Germany’s “world status” and national honor in the minds of the German public, and Schmoller and his students had played a key role in shaping these perceptions. Even so, it put impossible strains on German public finances, the reform of which became the last major campaign of Bülow’s career and to which von Halle and Schmoller contributed actively. This reform fell far short and ultimately cost Bülow his chancellorship. Matching Franco-Russian military expansion would add additional fiscal burdens and a heightened sense of insecurity. One of the few remaining prongs of "World Policy," the Baghdad railroad, faced impossible hurdles that Karl Helfferich was enlisted to overcome. Ultimately a grand bargain between Britain and Germany around Mesopotamian oil cleared the remaining hurdles for its completion just weeks before the outbreak of war.