"In art works, for example, the value of_Harper's Pictorial Library of the World War, Volume XII

was only about $11,000,000 against $23,000,000 in 1917, and

$35,000,000 in the fiscal year 1914. In automobiles the value

in 1918 was about $50,000 against nearly $2,000,000 in 1913,

and more than $2,000,000 in 1912, while the average value per

machine imported in 1918 was less than one-half what it was

before the war. Decorated china imported in 1918 was about

$3,500,000 in value against practically $8,000,000 in 1914. Of

cotton laces imported in 1918 the value was about $10,000,000

against $16,500,000 in 1917, and nearly $34,000,000 in 1914. Of

silk laces the 1918 imports were valued at little more than

one-half those of 1914. Of cotton plushes and velvets the

quantity in 1918 was less than 1,000,000 yards against more

than 3,000,000 in 1917, and practically 5,000,000 in 1914. Of

ostrich feathers, in 1918 the imports were valued at nearly

$1,000,000 against nearly $4,000,000 in 1914 and over

$6,000,000 in 1913. In precious stones the total for 1918 was

only about $32,000,000 against $47,000,000 in 1917 and

$50,000,000 in 1913; while of pearls alone the value in 1918

was less than $2,000,000 against over $8,000,000 in 1917, and

more than $10,000,000 in 1916.

"In articles of food usually classed as luxuries there was also

a marked fall. Cheese imported in 1918 amounted to about

9,000,000 pounds against 15,000,000 in 1917, and 64,000,000 in

1914. Of currants the imports of 1918 were over 5,000,000

pounds against 25,000,000 in 1916 and 32,000,000 in 1914, and

of dates only 6,000,000 pounds in 1918 against 34,000,000 in

1914; while olives and olive oil showed totals in 1918 of about

one-half those of the year before the war."

[Illustration: The Nations and Their Wheat Supply

Under the Lever Bill, which became the Food Control Law after the United

States declared war, the President was authorized to fix a reasonable

guaranteed price for wheat.]

GOOD EFFECTS OF PRICE CONTROL

It became accepted on all sides that price control was the one method to

correct the inequalities of war conditions. It was necessary to prevent

the poorer classes in the population from having an inadequate

consumption of wealth. There was the political side, too. Price control

had an effect on the morale of large strata of the population. It acted

as a bulwark against the rising tide of discontent and internal

dissension incident to warfare on a democratic scale. Mr. Sydney Webb, a

well known English student of labor problems, conceded that the British

government had by its system of price control been fairly successful in

staving off any general fall in the standard of life in its people. How

the system worked is summarized by him in the following passage:

"What has been successful in Great Britain in economizing

supplies has been a widespread appeal to the whole nation to

limit its consumption of wheaten bread (4 pounds per week),

meat (2½ pounds per week), and sugar (¾ of a pound per week) to

a prescribed maximum per person in the household; and to make

up the necessary subsistence by the use of substitutes, such as

fish, other cereals than wheat, and other vegetables than

potatoes, of which the crop throughout all Europe has largely

failed. More efficacious still has been the absolute government

monopoly of sugar, secured at the very beginning of the war,

and the drastic restriction of the total quantity allowed to be

issued from store, the aggregate reduction being thus

infallibly secured, and the retailers being left to share what

sugar they obtained among their customers. It has been found

useful, too, to make the wheaten flour go farther by compelling

all the millers to include both an increased proportion of bran

and a certain proportion of other cereals. More drastic

measures are near at hand."

STAY-AT-HOMES WHO MADE MONEY

The important effort, as seen by the _Economist_, was to back up the

armies at the front by a policy of self-sacrifice at home, and it spoke

in drastic terms of the constant evidence of profiteering among certain

classes in England. The contrast in the attitudes of those at the front

and those active in business life is set forth in the following words:

"One of the most curious and interesting psychological facts of

the war is the manner in which one man goes to the front and

becomes a hero and a _preux chevalier_, while another, just

like him in training and blood and outlook, stays at home and

works for spoils, whether in wages or profits, resenting

taxation, grumbling about his food, and seeming to think that

this war for justice was invented to increase his wealth and

comfort."

PRICE CONTROL IN UNITED STATES

Although price control is a measure disapproved of by economists,

experience has shown that for certain products, such as wheat and

flour, it produced good results. In the case of bituminous coal,

Professor Anderson of Harvard said that it had probably done much harm

and little good, because the cut in price was too drastic. One good

feature of the price control system was the ability to apply it to draft

labor from non-essential industries to the production of munitions and

necessities of life. It was possible to do this by refusing coal,

copper, steel and freight cars to the non-essential industries. How the

Food Administration came to be a general price fixing body is explained

in the following article by a member of the Food Administration:

WHEAT AT $2.20 A BUSHEL

"There are many evidences that price fixing has come to lodge

itself as an unwelcome factor in the program of the Food

Administration. Price fixing came to be a fact even while

avoided as a theory, and eventually it has become necessary to

face it, if not to accept it, even as a theory. What are the

evidences that price fixing is essentially involved in the

program of the Food Administration? One piece of evidence lies

in the fact that when once you have fixed the price of one

commodity the condition is bound to be reflected in other

commodities. In fixing the price of wheat Congress fixed as

well, though not so explicitly, the price of corn, and hogs,

and sugar beets. The determining and administering of these

prices it left to the Food Administration.

"A further evidence that the Food Administration could not

avoid the onus of price fixing lies in the reasons for which

the Administration was brought into existence and the services

it was created to perform. The Food Administration is a war

agency. Its chief purpose is the feeding of warring nations,

our own nation and the Allies. All its other activities, its

conservation, its stabilization of trade processes, its

encouragement of production, are tributary to the one purpose

of segregating stocks of food for the effective prosecution of

the war. This latter purpose, in fact, takes the Food

Administration directly or indirectly into the market.... By

Section 14 of the Lever Bill, which became the Food Control

Law, the President is authorized from time to time to determine

and fix a reasonable guaranteed price for wheat and this

section itself fixed the price for the crop of 1918 at not less

than $2 per bushel at the principal interior primary markets.

Pursuant to this section the President has, by two separate

decrees, set the price of 1917 wheat and of the 1918 crop at

$2.20 per bushel. Section 11 of the law authorizes the

President to purchase and store and sell wheat and flour,

meal, beans, and potatoes. Manifestly any purchase so made by

the government would in effect fix the price. Aside from these

delegations of power no authority is given by the Food Control

Law to fix prices. And yet a study of the operations of these

provisions as well as a regard for the implications of other

functions of the Food Administration carry the conviction that

price fixing is a necessary and inescapable corollary of the

effective prosecution of the Food Administration program."

PRICE LEVEL, NOVEMBER, 1918

With the close of military operations there was noted a slight decline

in commodity prices; how far the downward tendency would reach was

considered a moot point. The apparent zenith point in prices was

attained in July, 1918, but _Bradstreet's_ prudently thought it unwise

to indulge in any prophecies regarding low prices. The increased demand

for food products among the stricken peoples of Europe would, it was

believed, prevent any considerable fall in prices. There was not much to

encourage consumers in the study of the index numbers of food

commodities. The writer in _Bradstreet's_ shows a wide range of price

movements in the following table, in which are given the index numbers

based on the prices per pound of ninety-six articles:

1912

January $8.9493

February 8.9578

March 8.9019

April 9.0978

May 9.2696

June 9.1017

July 9.1119

August 9.1595

September 9.2157

October 9.4515

November 9.4781

December 9.5462

1913

January 9.4935

February 9.4592

March 9.4052

April 9.2976

May 9.1394

June 9.0721

July 8.9522

August 9.0115

September 9.1006

October 9.1526

November 9.2252

December 9.2290

1914

January 8.8857

February 8.8619

March 8.8320

April 8.7562

May 8.6224

June 8.6220

July 8.6566

August 8.7087

August 15 9.8495

September 9.7572

October 9.2416

November 8.8620

December 9.0354

1915

January $9.1431

February 9.6621

March 9.6197

April 9.7753

May 9.7978

June 9.7428

July 9.8698

August 9.8213

September 9.8034

October 9.9774

November 10.3768

December 10.6473

1916

January 10.9163

February 11.1415

March 11.3760

April 11.7598

May 11.7485

June 11.6887

July 11.5294

August 11.4414

September 11.7803

October 12.0699

November 12.7992

December 13.6628

1917

January 13.7277

February 13.9427

March 14.1360

April 14.5769

May 15.1208

June 15.4680

July 16.0680

August 16.3985

September 16.6441

October 16.9135

November 17.0701

December 17.5966

1918

January $17.9636

February 18.0776

March 18.0732

April 18.4656

May 18.9133

June 19.0091

July 19.1849

August 19.1162

September 19.0485

October 19.0167

November 18.9110

The groups that make up the index number are as follows:

Nov. 1, Sept. 1, Oct. 1, Nov. 1,

1917 1918 1918 1918

Breadstuffs $0.2105 $0.2077 $0.2026 $0.1999

Live stock .6785 .7400 .7100 .6960

Provisions 4.0285 4.3264 4.5359 4.5889

Fruits .4288 .3725 .3725 .3725

Hides and leather 2.3900 2.2150 2.2150 2.2050

Textiles 5.1179 5.8742 5.7554 5.7029

Metals 1.1477 1.4233 1.3662 1.3062

Coal and coke .0101 .0119 .0120 .0120

Oils .9084 1.3185 1.3121 1.2734

Naval stores .0956 .1295 .1255 .1348

Building materials .1448 .2047 .2047 .2046

Chemicals and drugs 1.4261 1.5153 1.5253 1.5278

Miscellaneous .4832 .7095 .6795 .6870

-------- -------- -------- -------

Total $17.0701 $19.0485 $19.0167 $18.9110

[Illustration: Photo by P. Thompson

A Municipal Canning Station

In city establishments like the one shown above, food that would

otherwise go to waste in the markets was saved, and women were

instructed in the best methods of putting up fruits and vegetables for

winter use.]

FOOD CONDITIONS AND PRICE LEVEL, 1919

A clear summary of the food situation and price conditions in the

half-year succeeding the armistice is to be found in the Federal

Commission's Memorandum on food stocks and wholesale prices, June, 1919:

"The comparative amounts of food stocks on hand June 1, 1919,

as against June 1, 1918, in the case of many important foods,

show that the stocks are considerably larger.

"On June 1, 1918, the United States stocks were in demand for

feeding the armies of the Allies as well as the civilian

population. The fact that stocks of many important foods were

much larger on June 1, 1919, while prices were as high or

higher, apparently, means that they are being withheld

speculatively for a world demand which is not now here but

which is expected when hunger-impelled strikes secure higher

wages with which higher food prices can be paid.

"The statistics of stocks are from the latest and last issue of

the Bureau of Markets 'Food Surveys,' June 27, 1919. We use the

quantities reported by identical firms for 1918 and 1919.

(Stocks held June 1, 1919, by other firms not reporting for

June 1, 1918, increase the actual stocks from 5 or 10 per cent.

up to 20 or 25 per cent. over the comparable stocks). The

stocks are those in warehouses and cold storage houses and in

hands of wholesale dealers. Retail stocks are not reported. The

prices are wholesale prices, furnished by the Bureau of Labor

Statistics, for the first Tuesday in June.

COMMODITIES INCREASING IN STOCKS AND IN PRICE (WHOLESALE PRICES)

=========================================================================

| | Quantity | | Price

|------+----------+----------+--------| |-----------+-----

| | | | | | |

| of | | | in- | Price | 1919 | 1918

| tity | | | 1919 | | |

| | | | 1918 | | |

--------+------+----------+----------+--------+--------+-----------+-----

Wheat |Bushel|41,955,167|15,286,331| 174.5| Dollars| 2.51| 2.20

| | | | | per bu.| 2.46| 2.17

--------+------+----------+----------+--------+--------+-----------+-----

Wheat |Barrel| 3,942,205| 3,236,671| 21.8| Dollars| 12-12.20| 9.80

flour | | | | |per bbl.|11.50-11.80| 9.95

--------+------+----------+----------+--------+--------+-----------+-----

Canned |Pound |99,203,544|82,616,582| 20.1| Dollars| 2.70-2.75| 2.70

| | | | | No. 2 | |

--------+------+----------+----------+--------+--------+-----------+-----

Canned |Pound |81,233,023|42,352,994| 91.8| Dollars| | 1.70

corn | | | | |per doz.| 1.75-(Mch)| 1.75

| | | | | No. 2 | |

--------+------+----------+----------+--------+--------+-----------+-----

Fresh | Case | 5,975,817| 5,441,560| 9.8| Cents| .40-40½| .29

--------+------+----------+----------+--------+--------+-----------+-----

Butter |Pound |29,190,222|12,749,055| 129.0| Cents| .53 .41

--------+------+----------+----------+--------+--------+-----------+-----

Salt |Pound |25,701,138|24,962,881| 3.0| Dollars| 35.00|32.00

Beef | | | | |per bbl.| 36.00|34.00

--------+------+----------+----------+--------+--------+-----------+-----

Frozen |Pound |10,962,670| 2,749,077| 298.8| Cents | .37½| .34½

=========================================================================

COMMODITIES INCREASING IN STOCKS AND DECREASING IN PRICE.

(Wholesale Prices.)

=========================================================================

| Quantity | | | Price

---------+--------+-----------+----------+--------+-------+--------+-----

---------+--------+-----------+----------+--------+-------+--------+-----

| | | | |Dollars| 1.19 - | 1.21

Barley | Bushel | 16,399,396| 7,916,073| 107.2|per bu.| 1.27 | 1.26

---------+--------+-----------+----------+--------+-------+--------+-----

Rye | Bushel | 11,613,127| 3,355,349| 246.1|Dollars| 1.53½ | 1.73

---------+--------+-----------+----------+--------+-------+--------+-----

Buckwheat| Pound | 18,053,230| 5,523,850| 226.8|Dollars| 5.00 | 5.75

Flour | | | | |per cwt| (Apr) | 6.25

| | | | | | |(Apr)

---------+--------+-----------+----------+--------+-------+--------+-----

Canned | Pound |179,101,286|88,531,024| 102.3|Dollars| 2.05 | 2.30

Tomatoes | | | | | per |(Dec'18)|

| | | | | doz. | |

| | | | | No. 3 | |

---------+--------+-----------+----------+--------+-------+--------+-----

COMMODITIES DECREASING IN STOCKS AND IN PRICE. (Wholesale Prices)

=======================================================================

| | Quantity | | Price

| |----------+-----------+--------+ |------+-----

| | | | 1919- | | |

| | | | 1918 | | |

---------+--------+----------+-----------+--------+-------+------+-----

Oats | Bushel |37,827,343| 41,763,555| 9.4| Cents | 69|73½

---------+--------+----------+-----------+--------+-------+------+-----

Corn Meal| Pound |34,231,066|117,674,918| 70.9|Dollars| 3.90| 4.25

---------+--------+----------+-----------+--------+-------+------+-----

Beans | Bushel | 4,252,451| 4,408,686| 3.5|Dollars| 7.75-|12.25

| | | | |per cwt| 8.00|12.50

---------+--------+----------+-----------+--------+-------+------+-----

Rice | Pound |75,134,920| 80,727,516| 6.9| Cents | 6 | 8.5

(Blue | | | | |per lb.| 7-7/8| 8.9

Honduras)| | | | | | 9-1/8| 8½

| | | | | [10][11] 9-5/8

=======================================================================

[10] First week JUNE.

[11] Increase in price.

COMMODITIES DECREASING IN STOCKS AND INCREASING IN PRICE.

(Wholesale Prices)

=========================================================================

| | Quantity | | Price

| | | |

| |-----------+-----------+--------+ +-----+------

| | | | | | |

| | | | 1919- | | |

| | | | 1918 | | |

----------+--------+-----------+-----------+--------+-------+-----+------

Corn | Bushel | 13,260,910| 27,883,361| 52.4|Dollars| 1.76| 1.50

| | | | |per bu.| 1.77| 1.55

----------+--------+-----------+-----------+--------+-------+-----+------

Sugar | Pound |207,622,237|217,632,365| 4.6| Cents | 8.82| 7.30

----------+--------+-----------+-----------+--------+-------+-----+------

Cheese | Pound | 10,174,502| 15,875,236| 35.9| Cents | 31|21½

----------+--------+-----------+-----------+--------+-------+-----+------

Dry Salt | Pound |395,940,437|488,344,838| 18.9|Dollars|58.00| 48-50

Pork | | | | | per |58.50|

| | | | | bbl. | |

----------+--------+-----------+-----------+--------+-------+-----+------

Lard | Pound | 81,275,392|106,649,588| 23.8| Cents |33.80|24.15

| | | | |per lb.|34.30|24.25

=========================================================================

The following data, taken from the _Monthly Labor Review_ of July 1919,

give a survey of the retail prices of food in the United States:

AVERAGE RETAIL PRICES AND PER CENT OF INCREASE OR DECREASE IN THE UNITED

STATES MAY 15 OF EACH SPECIFIED YEAR COMPARED WITH MAY 15, 1913

========================================================================+

| | |

| | Average retail prices, May 15-- |

| +---------------------------------------+

Article | Unit | |

| | 1913|1914|1915|1916|1917|1918|1919|

-----------------------+--------+---------+----+----+----+----+----+----|

| | _Cts.|Cts.|Cts.|Cts.|Cts.|Cts.|Cts._

Sirloin steak | Pound | 25.7|25.9|25.7|27.8|32.2|40.0|44.4|

Round steak | do | 22.3|23.3|23.0|25.0|29.6|38.0|41.6|

Rib roast | do | 19.9|20.1|19.9|21.6|25.7|31.8|35.2|

Chuck roast | do | 16.1|17.0|16.3|17.5|21.8|27.8|29.7|

Plate beef | do | 12.1|12.5|12.3|13.1|16.6|21.9|22.5|

| | | | | | | | |

Pork chops | do | 20.9|22.2|20.9|22.9|30.6|36.7|43.0|

Bacon | do | 27.0|26.7|26.4|28.4|41.6|50.5|56.7|

Ham | do | 26.8|26.8|25.6|31.8|38.8|45.6|54.6|

Lamb | do | 19.4|19.8|21.7|23.2|29.7|36.8|39.6|

Hens | do | 22.2|22.7|21.5|24.1|29.3|37.9|43.5|

| | | | | | | | |

Salmon, canned | do | | |19.8|20.0|25.7|29.6|31.9|

(unsweetened) | [12] | | | | | |15.1| |

Butter | Pound | 35.9|32.7|34.7|37.0|46.5|51.0|67.9|

Oleomargarine | do | | | | | | |40.4|

| | | | | | | | |

Nut margarine | do | | | | | | |35.3|

Cheese | do | | |23.5|24.8|33.8|33.4|42.2|

Lard | do | 15.8|15.6|15.1|20.1|27.8|32.9|38.8|

Crisco | do | | | | | | |33.9|

Eggs, strictly fresh | Dozen | 26.3|26.6|26.3|28.1|39.8|42.4|53.1|

| | | | | | | | |

Bread |Pound[13] 5.6| 6.2| 7.2| 7.0| 9.6| 9.8| 9.8|

Flour | Pound | 3.3| 3.3| 4.5| 3.9| 8.7| 6.6| 7.5|

Corn meal | do | 3.0| 3.1| 3.3| 3.3| 5.4| 7.0| 6.2|

Corn flakes | [14] | | | | | | |14.1|

| | | | | | | | |

Cream of wheat | [15] | | | | | | |25.1|

Rice | Pound | | | 9.1| 9.1|10.5|12.3|13.4|

Macaroni | do | | | | | | |19.0|

Beans, navy | do | | | 7.6| 9.4|19.1|17.8|12.0|

Potatoes | do | 1.6| 1.9| 1.6| 2.5| 6.1| 2.2| 3.3|

| | | | | | | | |

Onions | do | | | 4.3| 5.1| 8.6| 5.6|10.7|

Cabbage | do | | | | | | | 9.6|

Corn, canned | do | | | | | | |19.1|

Peas, canned | do | | | | | | |19.0|

| | | | | | | | |

Tomatoes, canned | do | | | | | | |15.8|

Sugar, granulated | Pound | 5.4|5.0 | 6.8| 8.5|10.0| 9.1|10.6|

| | | | | | | | |

Tea | do | | |54.6|54.6|55.7|63.8|69.8|

Coffee | do | | |27.9|29.9|30.2|30.1|40.5|

| | | | | | | | |

Prunes | do | | |13.7|13.3|15.3|16.5|23.2|

Raisins | do | | |12.5|12.6|14.4|15.1|16.3|

Oranges | do | | | | | | |54.1|

| | | | | | | | |

-----------------------+--------+---------+----+----+----+----+----+----+

=========================================================================

| | |Per cent of increase (+) or |

| | |decrease (-) May 15 of each |

| | |specified year compared with |

| | |May 15, 1913. |

| |---------------------------------------+

Article | Unit | |

| | |1914|1915|1916|1917|1918|1919|

-----------------------+--------+---------+----+----+----+----+----+----|

| | | | | | | | |

Sirloin steak | Pound | | +1|[16]| +8| +25| +56| +73|

Round steak | do | | +4| +3| +12| +33| +70| +87|

Rib roast | do | | +1|[16]| +9| +29| +60| +77|

Chuck roast | do | | +6| +1| +9| +35| +73| +84|

Plate beef | do | | +3| +2| +8| +37| +81| +86|

| | | | | | | | |

Pork chops | do | | +6|[16]| +10| +46|+ 76|+106|

Bacon | do | | -1| -2| +5| +54|+ 87|+110|

Ham | do | |[16]| -5| +19| +45|+ 70|+104|

Lamb | do | | +2| +12| +20| +53|+ 90|+104|

Hens | do | | +2| -3| +9| +32|+ 71|+ 96|

| | | | | | | | |

Salmon, canned | do | | | | | | | |

(unsweetened) | [12] | | | | | | | |

Butter | Pound | | 9 | 3| +3| +30| +42| +89|

Oleomargarine | do | | | | | | | |

| | | | | | | | |

Nut margarine | do | | | | | | | |

Cheese | do | | | | | | | |

Lard | do | | -1| 4| +27| +76|+108|+146|

Crisco | do | | | | | | | |

Eggs, strictly fresh | Dozen | | +1|| +7| +51| +61|+102|

| | | | | | | | |

Bread |Pound[13] | +11| +29| +25| +71| +75|+ 75|

Flour | Pound | |[16]| +36| +18|+164|+100|+127|

Corn meal | do | | +3| +10| +10|+ 80|+133|+107|

Corn flakes | [14] | | | | | | | |

| | | | | | | | |

Cream of wheat | [15] | | | | | | | |

Macaroni | do | | | | | | | |

Beans, navy | do | | | | | | | |

Potatoes | do | |+ 19|[16]|+ 56|+281|+ 38|+106|

| | | | | | | | |

Onions | do | | | | | | | |

Cabbage | do | | | | | | | |

Corn, canned | do | | | | | | | |

Peas, canned | do | | | | | | | |

| | | | | | | | |

Tomatoes, canned | do | | | | | | | |

Sugar, granulated | Pound | |- 7|+ 26|+ 57|+ 85|+ 69|+ 96|

| | | | | | | | |

Tea | do | | | | | | | |

Coffee | do | | | | | | | |

| | | | | | | | |

Prunes | do | | | | | | | |

Raisins | do | | | | | | | |

Oranges | do | | | | | | | |

| | | | | | | | |

All articles combined | | |+ 1|+ 3|+ 13|+ 56|+ 64|+ 91|

-----------------------+--------+---------+----+----+----+----+----+----|

[12] 15-16 ounce can.

[13] Baked weight.

[14] 8-ounce package.

[15] 28-ounce package.

[16] No change in price.

"The total of dry storage stocks, including those that

increased and those that decreased is as follows, all items

being reduced to pounds:

June 1, 1919 7,875,280,040

June 1, 1918 6,336,763,505

"That is the total dry storage stocks reported on June 1, 1919,

were 124 per cent. of those on June 1, 1918.

"The total of cold storage items reported in pounds in June,

1919, and June, 1918 (omitting apples in barrels but covering

eggs; frozen eggs; butter; cheese, frozen and cured beef;

frozen lamb and mutton; frozen, dry salt and pickled pork;

lard; and frozen poultry), was as follows:

June 1, 1919 1,671,777,990

June 1, 1918 1,669,826,166

"That is, cold storage stocks this June are 100.1 per cent. of

those last June.

"None of the above figures include army stores nor the army

excess supply which is to be distributed by the War Department

under resolution of the House of Representatives.

"The sum of dry storage and cold storage (except apples) for

the two periods (combining the figures already given) was as

follows:

June 1, 1919 9,547,058,030 pounds

June 1, 1918 8,006,589,671 pounds

"That is the total stocks reported on June 1, 1919, were 119

per cent. of those on June 1, 1918.

"This as noted does not include Army supplies.

"Grouping the commodities in four classes:

"(1) Those increasing in stocks and increasing in price.

"(2) Those increasing in stocks and decreasing in price.

"(3) Those decreasing in stocks and increasing in price.

"(4) Those decreasing in stocks and decreasing in price; we

have the accompanying significant tables, which indicate that

the 'law of supply and demand' is not working.

III--INDUSTRY AND LABOR IN WARTIME

Unprecedented Conditions and Developments Due to the World War

and How They Were Met

The issue of the great world conflict between autocracy and democracy

rested largely in the hands of the laboring classes behind the lines.

Mr. William B. Wilson, Secretary of Labor, placed vividly before the

public in one of his official statements the views of American labor at

the outbreak of the war:

"During the past decade the sentiment of American labor has

crystallized against resort to arms as a means of settlement of

disputes between nations. War had come to be considered

wasteful economically, socially, and morally. Labor felt that

no national advantage gained through force of arms could offset

the human life sacrificed, the burden of taxation levied upon

successive generations to pay the cost of war, the standards of

life set back or destroyed, which had to be rebuilt slowly and

with infinite sacrifice. In short, war had come to be looked

upon as morally wrong, entirely unnecessary, a calamity that

could be avoided and must be avoided if the race was to

progress. This feeling was shared to a greater or lesser extent

by the workers of all civilized nations, and there was a

universal feeling in world labor ranks prior to the outbreak of

the European war that this sentiment, shared by many thoughtful

people outside the ranks of the wage workers in all civilized

nations, was strong enough to prevent any armed conflict which

would involve any number of peoples. This sentiment was

undoubtedly responsible for the lack of military preparedness,

in the sense that Germany prepared, among the other major

powers now engaged in the world conflict.

"When the war clouds broke in Europe, American labor was

stunned. All its preconceived notions as to the inability of

any great nation to wage war upon another nation because the

working people would refuse either to fight or produce

munitions and supplies of war were shattered when nation after

nation quickly mobilized its armies and the organized labor

movements of each country, without exception, quickly pledged

their men and their resources to the support of their

respective governments. But the fact that America itself might

be drawn into the world conflict was still foreign to the mind

of the American workman. While American labor grieved over the

fate which had befallen its kind in Europe no sense of danger

to this country was apparent. From the beginning of this

Republic it had been our national policy to hold aloof from the

quarrels of the Old World. The splendid isolation of thousands

of miles of ocean protected us. We had no quarrel with Europe

and we asked but to be let alone. We stood upon our rights to

protect the people of continental America from invasion or

aggression as enunciated by the Monroe Doctrine, and further

than that we could not see that the European conflict embroiled

us as a nation. Let Europe settle her own family quarrel. We

were to remain the one great neutral nation of the earth. When

the time came America, untrammeled by participation in the

conflict, with no desire for American aggrandizement or

territorial expansion, would be the natural messenger of peace

to war-worried Europe."

SAFEGUARDS FOR WORKINGMEN

From the moment of the declaration of war the general loyalty of the

laboring classes throughout the United States was apparent. This

attitude of loyalty found a ready response in the immediately declared

intention of the Government to safeguard the interests of the

workingmen. Congress announced its attitude toward standards of legal

protection for workers. It was printed verbatim in _Labor Laws in War

Time_, 201, p. 1, as follows:

"WHEREAS, The entrance of the United States into the World War

appears imminent; and

"WHEREAS, Other countries upon engaging in the conflict

permitted a serious breakdown of protective labor regulations

with the result, as shown by recent official investigations, of

early and unmistakable loss of health, output, and national

effectiveness; and

"WHEREAS, Our own experience has already demonstrated that

accidents increase with speeding up and the employment of new

workers unaccustomed to their tasks, that over fatigue defeats

the object aimed at in lengthening working hours, and that new

occupational poisoning has accompanied the recent development

of munition manufacture; and

"WHEREAS, The full strength of our nation is needed as never

before and we cannot afford to suffer loss of labor power

through accidents, disease, industrial poisoning, and

overfatigue; now, therefore, be it.

"_Resolved_, That the American Association for Labor

Legislation, at this critical time, in order to promote the

success of our country in war as well as in peace, would sound

a warning against the shortsightedness and laxness at first

exemplified abroad in these matters, and would urge all

public-spirited citizens to coöperate in maintaining, for the

protection of those who serve in this time of stress the

industries of the nation (who as experience abroad has shown

are quite as important to military success as the fighting

forces), the following essential minimum requirements:

I. SAFETY

"1. Maintenance of all existing standards of safeguarding

machinery and industrial processes for the prevention of

accidents.

II. SANITATION

"1. Maintenance of all existing measures for the prevention of

occupational diseases.

"2. Immediate agreement upon practicable methods for the

prevention of special occupational poisonings incident to

making and handling explosives.

III. HOURS

"1. Three-shift system in continuous industries.

"2. In non-continuous industries, maintenance of existing

standard working day as basic.

"3. One day's rest in seven for all workers.

IV. WAGES

"1. Equal pay for equal work, without discrimination as to sex.

"2. Maintenance of existing wage rates for basic working day.

"3. Time and one-half for all hours beyond basic working day.

"4. Wage rates to be periodically revised to correspond with

variations in the cost of living.

V. CHILD LABOR

"1. Maintenance of all existing special regulations regarding

child labor, including minimum wages, maximum hours,

prohibition of night work, prohibited employment, and

employment certificates.

"2. Determination of specially hazardous employments to be

forbidden to children under sixteen.

VI. WOMAN'S WORK

"1. Maintenance of existing special regulations regarding

woman's work, including maximum hours, prohibition of night

work, prohibited hazardous employments, and prohibited

employment immediately before and after childbirth.

VII. SOCIAL INSURANCE

"1. Maintenance of existing standards of workmen's compensation

for industrial accidents and diseases.

"2. Extension of workmen's compensation laws to embrace

occupational diseases, especially those particularly incident

to the manufacture and handling of explosives.

"3. Immediate investigation of the sickness problem among the

workers to ascertain the advisability of establishing universal

workmen's health insurance.

VIII. LABOR MARKET

"1. Extension of existing systems of public employment bureaus

to aid in the intelligent distribution of labor throughout the

country.

IX. ADMINISTRATION OF LABOR LAWS

"1. Increased appropriations for enlarged staffs of inspectors

to enforce labor legislation.

"2. Representation of employees, employers, and the public on

joint councils for coöperating elsewhere with the labor

departments in drafting and enforcing necessary regulations to

put the foregoing principles into full effect."

ORGANIZING LABOR FOR WAR WORK

Supplying the man power for industrial action during the war was a

really more complicated task than drafting men for military service. In

the earlier period of American participation labor was distributed more

or less according to the law of supply and demand. The unequal

distribution of workers became a grave problem. To meet this the United

States Employment Service of the Department of Labor took over the

supply of war industries with common labor, and all independent

recruiting of labor by manufacturers having a pay roll of more than a

hundred men was discontinued.

[Illustration: In the Heart of the Bethlehem Steel Plant

H. E. Coffin, Chairman on Industrial Preparedness of the Council of

National Defence, described the conflict as a war of munitions, of

factories, of producing powers, of sweating men and women workers. In

the plant sketched above, 26,000 men toiled and sweated during the war

to make munitions for our troops overseas.]

"On this Board were representatives of the War, Navy, and

Agriculture Departments, the Shipping Board and the Emergency

Fleet Corporation, the War Industries Board, and the Food,

Fuel, and Railroad Administrations. Assistant Director Nathan

A. Smyth, of the United States Employment Service, was quoted

in the New York _Globe_ as saying in part:

"'Today the war industries of the country are short about

500,000 unskilled workers, and the coming requirements of war

production necessitate finding between 2,000,000 and 3,000,000

more.

"'Similarly the demand for skilled workers in war industries is

greater than the immediately available supply. Before long we

will have to take every tool maker and die-sinker in non-war

work and put him in war production.'

"The country was divided into thirteen Federal districts, by

the regulation of labor for war industries, and each was in

charge of a superintendent of the United States Employment

Service, while the States within the several districts were in

charge of a State director. The labor problem this measure was

designed to remedy and control was pictured by Secretary of

Labor Wilson, who was quoted in the New York _Sun_ as saying in

part:

"'The Government found itself in need of men, and on going out

to get them found itself in competition with private industry,

which was equally hard pressed. Men who had never drawn more

than a common laborer's wages found themselves at a premium in

the market, and began to ask and receive extortionate prices,

and to rove from place to place seeking still higher prices.

"'Everywhere industry was hampered by what is known as the

turnover, or the constant shifting of itinerant labor, in some

cases the loss in efficiency running as high as 100 per cent.

This is what is perhaps best described as the evil of the

individualistic strike--the strike by the man, thousands of

him, in different yards and factories all over the country, who

is forever throwing down his tools and wandering away on the

slightest rumor of higher wages elsewhere, who by his habit of

roving never masters the details of any trade, and who in the

mass accounts for a greater loss than all the organized strikes

and walkouts in the land.'"

INFLUENCE OF WAR CONDITIONS

In the United States under war conditions labor unrest did not reach the

intense form manifested in England. Nevertheless a great many strikes

were reported. Surprise was expressed that the labor adjustment

machinery of the War Department and of the Navy Department was not

appealed to. Besides there was the National War Labor Board to take up

mediation. Investigations in Bridgeport, Connecticut, showed an increase

of earnings of 81 per cent. against an increase of living prices of 61

per cent. Yet at one time the Press reported strikes in over 350 machine

shops in New Jersey--nearly all engaged in necessary war work--as well

as trouble in many shipyards. Of course there was the explanation of

foreign propaganda or a tendency toward industrial Bolshevism. Such

explanations failed to account for the fact that American workmen as a

whole were patriotic.

Attention was called, on the other hand, to the warm tribute given by

the Federal Fuel Administrator to the bituminous coal miners who had

brought production past the 13 million ton mark in the second week in

July, 1917, and the exceptional efforts of diligent and patriotic

workers in the shipyard. A portion of the press emphasized the

unreasonableness of striking while the laboring people enjoyed, during

war time, immunity from service and immunity from the pressure of

competition for wages. The Springfield _Republican_ protested against

applying to the workingmen exaggerated standards of economic rectitude.

"It is easy to be harsh in one's judgment even in the case of

the strikes that occur. Why do they strike at all while the war

continues? Have they no capacity for self-sacrifice for the

country? These questions will be asked by many people whenever

war work anywhere is checked in the least degree by workmen

dropping their tools.

"On the other hand, let us not be unjust to labor, for in the

American Army in France labor is represented by multitudes of

youth upon whose gallantry and steadiness all our hopes of

victory depend. No class here at home gives 100 per cent.

efficiency or commits itself to 100 per cent. of sacrifice in

the winning of the war. Why demand it of the wage earners or

the labor unions?

"Simply because of its organization and its machinery of

leadership, however, labor enjoys an exceptional opportunity to

contribute to the winning of the war. This is the first great

war in history in which labor has been organized into an

economic unit, and that is the reason for some special war

problems today which were never encountered by governments in

previous wars. But there can be gains even more than losses to

the national strength by reason of this organization, if the

opportunity be accepted to promote labor's contribution. This

is a task especially for the leadership of organized labor. It

is certainly no exaggeration to say that in no way can labor be

advantaged after the war so much as by the wholehearted

acceptance of its opportunity for loyal service to the nation

during the war. Let labor splendidly do its part in bringing

victory and its future influence will expand beyond the dreams

of its prophets....

"Labor and victory are inseparable; nay more, the one may

command the other, and thus it may control the fate of the

world."

INDUSTRIAL MEANING OF WAR

Mr. H. E. Coffin, Chairman of the Committee on Industrial Preparedness,

described the European War in its last analysis as a war of munitions, a

war of factories, of producing powers, of sweating men and women

workers. When the United States entered the war there were four main

things required of its government and its people, viz., ships, munitions

and materials of war, food and soldiers. It can be seen that three out

of these four factors are matters that belong to the economic history of

the war. Fortunately for our Government, it had the experience of

foreign countries to learn from, and learning was an essential part of

war preparation in spite of the resources in hand in the United States;

as Mr. Coffin said:

"A close observation of the experience in foreign countries has

shown us the vital necessity for a peace time prearrangement

for conversion in all industries. Wars, as now waged, involve

every human and material resource of a belligerent nation.

Every factory and every man, woman, and child are affected.

Every sinew of industry, of transportation, and of finance must

be harnessed in the country's service. In England two years and

a half ago there were three government arsenals. Today

thousands of England's industrial plants are being operated as

government factories for the production of war materials, and

many other thousands of plants, still under private control,

are centering their energies in this same direction.

"We have here in the United States vast resources in

manufacturing and producing equipment, but they are unorganized

and uneducated for the national service. Our observations of

the European War have taught us that it is upon organized

industry that we must base every plan of military defense. In

the event of trouble with any one of the several first-class

powers, between 80 and 90 per cent. of our industrial activity

would of necessity be centered upon the making of supplies for

the government. We have learned also that from one to two years

of time and of conscientious effort are needed to permit any

large manufacturing establishment to change over from its usual

peace-time commercial line to the quantity production of war

materials for which it has had no previous training."

In certain respects the position of the United States was unique, not

only because of its resources but because it was to a certain extent

self-dependent as a belligerent. England was able for some time to

import large quantities of munitions and supplies from other countries.

In the case of the United States when it entered the war, munition and

food supplies had to come from its own resources. Practically all of the

war materials had to be ultimately produced in the United States. Many

observers were optimistic because they had a sanguine opinion of the

efficiency presented by American industrial democracy. But efficiency

alone could not win the war. There were certain limitations to the

sphere of efficiency. This was pointed out by Mr. H. G. Moulton in an

address on "Industrial Conscription," delivered before the Western

Economic Society, at Chicago, in 1917:

"At this point it should be emphasized that the position of the

United States is unique, so far as the allied nations are

concerned. England, for instance, at the outbreak of the

conflict could import vast quantities of munitions and supplies

from other countries. England, therefore, had a fourth

alternative, one denied to us because the struggle is now

world-wide. All of the materials of war that we furnish must

come from the current energy of our own people. We must

ourselves produce these ships, munitions, food supplies, and

stocks in the coming months. There is no one else to do it for

us. In this connection I should like to emphasize with all the

power at my command the argument that we cannot by bond issues

shift the burdens of this war to future generations. The mere

fact that all of us--as represented by the government--borrow

from some of us--as represented by bond purchasers--does not

change the other essential fact that we, the people within this

country, must actually produce practically all the war

materials we are to have for use in the war.

"There is also much current discussion of the wonderful gains

that may be made through increasing efficiency. It is argued

that we should make our patriotic impulses the occasion for the

universal introduction of scientific management. It of course

goes without saying that we should do all that we possibly can

to further the improvement of industrial methods; and doubtless

something may be accomplished."

[Illustration: Forging Armor Plate

"Every man, in the draft age at least, must work or fight," said General

Crowder. And the workers were just as important a factor in winning the

war as the fighters. In the gigantic machine sketched above, ingots of

sixty and seventy tons were pressed into plates of any size and

thickness for use on our super dreadnoughts.]

LABOR DISLOCATION

It is estimated that about 35,000,000 men, women and children in the

United States do the country's work: dig its coal, raise its crops, run

its trains, build its roads, make its powder, turn out its munitions.

There was an increase each year of a million man-power through

immigration. The result of the war was that this source of supply was

cut off. What was the economic significance of this cutting off of

immigration? The immigrant was almost the only source of what we call

day labor--the men who do the building and repairing of railroads, the

mending of streets and roads, mining, and the rough work of steel mills

and other factories. Along with the cessation of immigration came the

withdrawal from labor power of two million men who were drawn into the

Army. These men, incidentally, became large consumers of goods rather

than normal producers of wealth. Some estimates were made that the

United States Government was using for war purposes about one-half of

the entire productive capacity of the country. These figures enable one

to gauge the industrial dislocation caused by the war. In matters

affecting the members of what might be called the labor army, which

still kept up the work of production, the Government laid great emphasis

on the need of securing industrial peace.

A Mediation Commission was appointed by the President to deal with

conditions of labor unrest. This Commission made a report early in 1918,

in which it spoke of the lack of knowledge on the part of Capital as to

Labor's feelings and needs and on the part of Labor as to problems of

management. The program outlined by the Commission was as follows:

"1. Modern large scale industry has effectually destroyed the

personal relation between employer and employee--the knowledge

and coöperation that come from personal contact. It is

therefore no longer possible to conduct industry by dealing

with employees as individuals. Some form of collective

relationship between management and men is indispensable. The

recognition of this principle by the government should form an

accepted part of the labor policy of the nation.

"2. Law, in business as elsewhere, depends for its vitality

upon steady employment. Instead of waiting for adjustment

after grievances come to the surface there is needed the

establishment of continuous administrative machinery for the

orderly disposition of industrial issues and the avoidance of

an atmosphere of contention and the waste of disturbances.

"3. The eight-hour day is an established policy of the country;

experience has proved justification of the principle also in

war times. Provision must of course be made for longer hours in

case of emergencies. Labor will readily meet this requirement

if its misuse is guarded against by appropriate overtime

payments.

"4. Unified direction of the labor administration of the United

States for the period of the war should be established. At

present there is an unrelated number of separate committees,

boards, agencies, and departments having fragmentary and

conflicting jurisdiction over the labor problems raised by the

war. A single-headed administration is needed, with full power

to determine and establish the necessary administrative

structure.

"5. When assured of sound labor conditions and effective means

for the just redress of grievances that may arise, Labor in its

turn should surrender all practices which tend to restrict

maximum efficiency.

"6. Uncorrected evils are the great provocative to extremist

propaganda, and their correction would be in itself the best

counter-propaganda. But there is need for more affirmative

education. There has been too little publicity of an educative

sort in regard to Labor's relation to the war. The purposes of

the government and the methods by which it is pursuing them

should be brought home to the fuller understanding of Labor.

Labor has most at stake in this war, and it will eagerly devote

its all if only it be treated with confidence and

understanding, subject neither to indulgence nor neglect, but

dealt with as a part of the citizenship of the state."

ADVISORY LABOR COUNCIL

In order to prevent lack of coördination in the government's handling of

the labor situation an advisory council was created to help the

Secretary of Labor to organize the new war work. The field of this

advisory council is indicated in a series of memoranda presented to him

in January, 1917.

"1. An Adjustment Service which will have to do with the

adjustment of industrial disputes according to policies and

principles arrived at through the deliberations of the War

Labor Conference Board.

"2. A Condition of Labor Service which will have charge of the

administration of conditions of labor within business plants.

"3. An Information and Education Service which will devote

itself to the establishment of sound sentiment among both

employers and employees and to the establishment in individual

plants of the local machinery (_e. g._, employment management)

and policies necessary for the successful operation of a

National Labor Program.

"4. A Woman in Industry Service which will meet the problems

connected with the more rapid introduction of women into

industry as a result of war conditions.

"5. A Training and Dilution Service which will administer such

training and dilution policies as may be agreed upon.

"6. A Housing and Transportation of Workers Service whose duty

it will be to provide the housing facilities to meet the

nation's needs.

"7. A Personnel Service whose duties it shall be to assemble

and classify information concerning appropriate candidates for

positions in the war-labor administration and make

recommendations for appointment.

"8. A Division for the Investigation of Special Problems which

would be a part of the Secretary's office force and would

conduct investigations in the placing of contracts, in priority

of labor demand, in powers of the Department, in problems of

reconstruction, and would assist in formulating the national

labor policy.

"9. An Investigation and Inspection Service to provide the

field force of examiners and inspectors required by the other

services."

After various stages of experience the War Industries Board secured

something more than an advisory position. This was done only after a

year of warfare. The final situation was explained by Mr. C. M.

Hitchcock in the _Journal of Political Economy_, June, 1918:

"When on March 4th of the present year the President appointed

Bernard M. Baruch Chairman of the War Industries Board and

defined his duties he did not, as certain press reports have

implied, create an industrial dictator. His action did clear

the way for Mr. Baruch's assumption of the duties of a director

of industrial war strategy, of an industrial Chief of

Staff--for the present position of the War Industries Board in

the American Government is comparable in its relation to

national industrial policy to nothing so much as the functions

of the General Staff of the Army in its jurisdiction over

military strategy. After a year of war the direction of

industrial policy is placed in single hands, and a central

planning board is established for dealing not only with the

problems of production and purchase but with the whole attitude

of the government toward the mobilization of business resources

for the prosecution of the war. Leadership has been focused and

an administrative channel opened for the inauguration of a

studied and inferentially constructive industrial policy.

"From the present trend of events the War Industries Board

promises to become the sole directing agency between the

government and industry. Backed by the power of the President

to commandeer, to withhold fuel, and in other ways to force the

halting into line, it can mold the country's industrial system

almost as it will--whether in organizing the nation for war or

in directing the lines along which it shall return to normal

conditions when peace comes. In a system of government such as

ours, where the responsibility for directing the war rests

almost exclusively in the hands of the President, and where his

power ultimately becomes almost absolute, the Board has been

shaped into a very potent instrument.

"Yet powerful as it may become, subject only to the

jurisdiction of the President, it is well to remember that in a

comprehensive national war plan it cannot stand alone. Its

policies must be subject to the administration's general

strategy in the war--for instance, to the amount of munitions

in comparison with the number of men or the amount of food that

it wishes to send abroad at any given time. The munitions

program and the conversion of industry to war purposes must be

governed by the ultimate end in view. In addition, one of the

great factors in production--the labor factor--is being

administered by another government agency, and it is obvious

that priority in the labor supply must go hand in hand with

priority in materials."

WORK OR FIGHT

Military men were as keen as business men in realizing the industrial

factor as a powerful contributory cause in winning the war. General

Crowder's famous "work or fight" alternative was a sufficient witness of

this fact. He said:

"Every man, in the draft age at least, must work or fight.

"This is not alone a war of military maneuvers. It is a deadly

contest of industries and mechanics. Germany must not be

thought of as merely possessing an army; we must think of her

as _being_ an army--an army in which every factory and loom in

the Empire is a recognized part in a complete machine running

night and day at terrific speed. We must make ourselves the

same sort of effective machine.

"We must make vast withdrawals for the Army and immediately

close up the ranks of industry behind the gap with an

accelerating production of every useful thing in necessary

measure. How is this to be done? The answer is plain. The first

step toward the solution of the difficulty is to prohibit

engagement by able-bodied men in the field of hurtful

employment, idleness, or ineffectual employment, and thus

induce and persuade the vast wasted excess into useful fields.

"One of the unanswerable criticisms of the draft has been that

it takes men from the farms and from all useful employments and

marches them past crowds of idlers and loafers away to the

Army. The remedy is simple--to couple the industrial basis with

other grounds for exemption and to require that any man

pleading exemption on any ground shall show that he is

contributing effectively to the industrial welfare of the

nation."

[Illustration: Building Howitzers

A nine-mile howitzer nearly ready for transportation. Beyond are seen

heavy armorplate turrets in the making. The small and large

manufacturers were given equal opportunity to obtain war business.]

Industrial preparation for war was guided by the principle of priority.

This is an old principle, but it began to be applied in unheard-of ways.

When an army is to be moved all means of transport in sight are

commandeered. When an army is to be fed, civilians protest in vain

against the seizure of stores. These practices were always features in

the history of warfare.

A novel factor in priority as applied during the present war was the

breadth of its scope.

"When the whole industry of a nation is mobilized behind the

fighting line, it is not merely finished munitions that must be

given priority in transportation, but also the materials and

fuel for further munitions production. The food supply of the

industrial population, as well as that of the army, has a claim

to priority. So also have clothing supplies, lumber for

housing, and whatever else is essential to working efficiency.

In production it would be impossible to fix definite limits

upon the application of the priority principle. We can not much

longer permit the free flotation of the securities of foreign

enterprises, nor even of the less essential domestic

enterprises, so long as national loans or issues designed to

finance railways or industrial enterprises of prime necessity

are to be floated. Modern warfare, in involving the whole

national life, has made inevitable a control of business

practically coextensive with the economic system.

"The application of the priority principle to transportation

and production is quite in accord with plain common sense. It

is none the less revolutionary in its social economic

implications. What it means is that necessities shall have

right of way. If we have excess productive capacity, the

unessentials and luxuries may be provided, but not otherwise.

And necessities are definable in terms that take account only

of physical requirements. There is no room in the definition

for class distinction. A new country house may seem a matter of

necessity to the man of fortune, but he will persuade no

priority board to permit shipment of building materials while

cars are needed for coal or wheat. Nor will he persuade them to

let him have lumber that could be used for ships or

workingmen's camps, or labor that could be employed to

advantage in production for more clearly national and

democratic needs."

WAR SUPPLIES

The United States, following the experience of other belligerents,

adopted the policy of decentralization in the production of war

supplies. A plan was worked out under which the small and large

manufacturer were given equal opportunity to obtain war business:

"Under the plan that has been worked out for bringing the

manufacturing resources of the country into more effective

coöperation with the government, the country is to be divided

into twenty industrial regions, with the following cities as

centers: Boston, Bridgeport, New York, Philadelphia,

Pittsburgh, Rochester, Cleveland, Detroit, Chicago, Cincinnati,

Baltimore, Atlanta, Birmingham, Kansas City, St. Louis, Dallas,

Milwaukee, St. Paul, Seattle, San Francisco. The following plan

for effecting the organization is suggested by the officials in

charge:

"1. Organize through Chambers of Commerce and other business

associations Industrial Committees with the principal

industrial center as headquarters and such subdivisions as are

recommended by the business association of each district.

"2. Develop such organization in various classes of industry as

well as in area for greatest convenience, to get information of

all classes of products in and between regions.

"3. Having established such region and sub-region, through the

coöperation of the best business men in each district have a

survey of the industries recorded in the hands of the section

in Washington of the War Industries Board for information to

the various procurement sections of the government.

"4. Each region may have in Washington a representative who

through the Resources and Conversion Section of the War

Industries Board may keep in direct contact with his region and

be available to the governmental procurement divisions or the

War Industries Board for prompt action in giving data from his

region.

"The detailed form of organization suggested for each region

(subject, of course, to modifications as desired to meet the

needs of any region) is known as the Cleveland Plan, which has

been for some time in operation. Under this plan each region is

divided into eight sub-regions, an important industrial city in

each sub-region being designated as a center. Each sub-region

has a local War Industries Commission which coördinates all

industry within its territory. Within each sub-region

manufacturing is divided into the following classes: castings,

forgings and stampings; machinery and machine products; rubber

products; clay products, chemicals, oils, and paints; textiles

and clothing, wood and leather; engineering; automotive. Other

classifications may of course be added in important lines of

industry."

Such regional divisions were but one factor in industrial

administration. Government needs and labor shortage made imperative the

regulation of manufactures by the priority system.

[Illustration: Guns and Armaments for United States and Her Allies

Interior of one of the Bethlehem Steel Company's mills--among the

largest plants in the world for the production of munitions during the

War.]

THE PRIORITY SYSTEM

The actual working of the priority system is shown in the following

general classification of industry for the purpose of priority

treatment:

Ships--Including destroyers and submarine chasers.

Aircraft.

Munitions, Military and Naval Supplies and

Operations--Including building construction for government

needs and equipment for same.

Fuel--For domestic consumption, and for manufacturing

necessities named herein.

Food and Collateral Industries--(_a_) Foodstuffs for human

consumption, and plants handling same.

(_b_) Feeding stuffs for domestic fowls and animals, and plants

handling same.

(_c_) All tools, utensils, implements, machinery, and equipment

required for production, harvesting and distribution, milling,

preparing, canning and refining foods and feeds such as seeds

of foods, and feeds, binder twine, etc.

(_d_) Products of collateral industries, such as fertilizer,

fertilizer ingredients, insecticides and fungicides, containers

for foods and feeds, collateral products.

(_e_) Materials and equipment for preservation of foods, and

feeds, such as ammonia and other refrigeration supplies,

including ice.

Clothing--For civilian population.

Railroad--Or other necessary transportation equipment,

including water transportation.

Public Utilities--Serving war industries, Army, Navy, and

civilian population."

But the perplexity of applying this system to such a question as fuel

administration is shown in the following list taken from one of the

trade publications of the Administration for April, 1918:

"The Fuel Administration has therefore arranged the following

list of preferred industries:

Aircraft--Plants engaged exclusively in manufacturing aircraft

or supplies and equipment therefor.

Ammunition--Plants engaged in the manufacture of ammunition for

the United States Government and the Allies.

Arms (small)--Plants engaged in manufacturing small arms for

the United States Government and the Allies.

Army and Navy cantonments and camps.

Chemicals--Plants engaged exclusively in manufacturing chemicals.

Coke plants.

Domestic consumers.

Electrical equipment--Plants manufacturing same.

Electrodes--Plants producing electrodes.

Explosives--Plants manufacturing explosives.

Farm implements--Manufacturers exclusively of agricultural

implements and farm-operating Equipment.

Feed--Plants producing feed.

Ferro-alloys--Plants producing same.

Fertilizers--Manufacturers of fertilizers.

Fire brick--Plants producing same exclusively.

Food--Plants manufacturing, milling, preparing, refining,

preserving, and wholesaling food for human consumption.

Food containers--Manufacturers of tin and glass containers and

manufacturers exclusively of other food containers.

Gas--Gas-producing plants.

Guns (large)--Plants manufacturing same.

Hemp, jute, and cotton bags--Plants manufacturing exclusively

hemp, jute, and cotton bags.

Insecticides--Manufacturers exclusively of insecticides and

fungicides.

Iron and steel--Blast furnaces and foundries.

Laundries.

Machine tools--Plants manufacturing machine tools.

Mines.

Mines--Plants engaged exclusively in manufacturing mining tools

and equipment.

Newspapers and periodicals--Plants printing and publishing

exclusively newspapers and periodicals.

Oil--Refineries of both mineral and vegetable oils.

Oil production--Plants manufacturing exclusively oil-well

equipment.

Public institutions and buildings.

Public utilities.

Railways--Plants manufacturing locomotives, freight cars and

rails, and other plants engaged exclusively in manufacture of

railway supplies.

Refrigeration--Refrigeration for food and exclusive

ice-producing plants.

Seeds--Producers or wholesalers of seeds (except flower seeds).

Ships (bunker coal)--Not including pleasure craft.

Ships--Plants engaged exclusively in building ships (not

including pleasure craft) or in manufacturing exclusively

supplies and equipment therefor.

Soap--Manufacturers of soap.

Steel--Steel plants and rolling mills.

Tanners--Tanning plants, save for patent leather.

Tanning extracts--Plants manufacturing tanning extracts.

Tin plate--Manufacturers of tin plate.

Twine (binder) and rope--Plants producing exclusively binder

twine and rope.

CIVIL WAR CONDITIONS

During the war period labor was much better off than during the Civil

War epoch. The New York _World_ presented the following table from the

_Merchants' Magazine_ of December, 1864, showing the rise of prices

during the Civil War era:

_1862_ _1864_

Copper, 100 lbs $22.00 @ $25.00 $41.00 @ $42.00

Coal, ton 4.50 @ 5.00 9.00 @ 10.00

Iron, pig 21.00 @ 25.00 48.00 @ 49.00

Lead, 100 lbs 6.50 @ 6.75 11.75 @ 12.00

Nails, 100 lbs 3.25 @ 3.75 6.00 @ 6.25

Ashes, pot bbl 5.50 @ 5.75 8.75 @ 8.87

Dry cod, cwt 3.37 @ 4.25 6.50 @ 7.00

Flour, bbl 4.50 @ 5.60 7.30 @ 7.35

Corn, 100 bush 58.50 @ 60.00 131.00 @ 134.00

Hay, 100 lbs .80 @ .85 1.35 @ 1.40

Wheat, bush 1.30 @ 1.45 1.63 @ 1.65

Hemp, cwt 10.00 @ 11.25 14.00 @ 16.12

Barley, bush .85 @ 1.00 1.35 @ 1.50

Oats, bush .37 @ .39 .90 @ .91

Hops, 100 lbs 14.00 @ 20.00 26.00 @ 33.00

Clover seed, 100 lbs 7.50 @ 7.75 12.50 @ 13.50

Lime, bbl .60 @ .65 1.25 @ 1.35

Oil, whale, gal .25 @ .35 .58 @ .60

Oil, coal, gal .48 @ .57 1.10 @ 1.12

Pork, bbl 13.25 @ 13.75 21.75 @ 23.50

Beef, bbl 5.50 @ 8.00 10.00 @ 15.00

Lard, 100 lbs 7.50 @ 8.25 13.59 @ 14.00

Whisky, 100 gals 25.00 @ 25.50 89.00 @ 91.00

Tallow, 100 lbs 8.75 @ 9.00 12.62 @ 12.75

Whalebone, 100 lbs 68.00 @ 70.00 150.00 @ 155.00

Wool, fleece, 100 lbs 52.00 @ 53.00 78.00 @ 82.00

Wool, pl'd, 100 lbs 44.00 @ 45.00 70.00 @ 75.00

Butter, 100 lbs 16.00 @ 21.00 36.00 @ 37.00

Cheese, 100 lbs 5.00 @ 7.00 15.00 @ 18.00

"Wheat flour, one of the prime necessities, 'was at no time

during the Civil War above $7.35 per barrel, which is somewhat

less than four cents per pound,' while at the present time it

is seven cents per pound, 'or close to 100 per cent. higher

than the top notch of the '60s.' Lard has already advanced

about 100 per cent., while its greatest advance during the

Civil War was 75 per cent.

"'The present-day advance in the price of clothing in general

has not been proportionate with the advance of foodstuffs,

though it has been considerable, especially as to the cheaper

grades. Cotton shirts that sold for 48 cents in 1913 are now

bringing 90 cents to $1. Cheap hosiery has also about doubled

in value. Suits that formerly sold for $15 are now bringing

$17, which is about 10 per cent. advance. Cotton goods during

the Civil War were exceptionally high, owing to the difficulty

of procuring the staple. After the stocks on hand at the

beginning of the war were exhausted, New England mills shut

down because of inability to get supplies. In 1864 raw cotton

ruled at 72 cents per pound, while at one time it touched

$1.90. Cotton goods of all kinds were therefore extraordinarily

high.'

[Illustration: Plowing by Night

The number of men drawn from Great Britain into the army and navy during

the war was about 5,000,000. This meant extraordinary efforts of

production were necessary on the part of those who were left behind. By

means of a motor tractor and an acetylene gas generator, the owner of

the farm shown above was able to run day and night shifts.

"The public spirit manifested at present is much more admirable

than that displayed in the '60s, as shown by the following

first-hand description of life in those days, as compared with

what we see on every hand today. Said the New York

_Independent_ of June 25, 1864:

"'Who at the North would ever think of war if he had not a

friend in the army or did not read the newspapers? Go into

Broadway and we will show you what is meant by the word

"extravagance." Ask Stewart about the demand for camel's-hair

shawls and he will say "monstrous." Ask Tiffany what kind of

diamonds and pearls are called for. He will answer "the

prodigious, as near hen's-egg size as possible, price no

object." What kind of carpetings are now wanted? None but

"extra." Brussels and velvets are now used from basement to

garret. Ingrains and three-plys won't do at all.

"'Call a moment at a carriage repository. In reply to your

first question you will be told, "Never such a demand before,

sir." And as for horses, the medium-priced $500 kind are all

out of the market. A good pair of fast ones, "all right," will

go for $1,000 sooner than a basket of strawberries will sell

for four cents. Those a "little extra" will bring $1,500 to

$2,000, while the "superb" 2.40 sort will bring any price among

the high numbers.'"

GREAT BRITAIN'S PRODUCTIVE POWER

To appreciate what industrial mobilization meant in England the best

method is to start with the figures on national production taken from

the British census of 1907, the last accessible for the peace period:

In 1907 the British people are

estimated to have produced

goods to the total amount of,

roughly $10,000,000,000

The nation consumed during that

year in personal consumption 7,050,000,000

It spent on capital purposes at

home:

(_a_) On betterment of its national

plant 950,000,000

(_b_) On maintenance of its national

plant 900,000,000

It used up goods to the value of

(in keeping up and probably increasing

its stocks of material

on hand) 325,000,000

It exported goods in the form of

loans to foreign countries of

about 500,000,000

By 1914 the British Empire had probably advanced its income to at least

$12,500,000,000; and the surplus of goods which it had to export as

loans to foreign countries seems to have increased from about

$500,000,000 to $1,000,000,000. What happened in war-time? First of all

there was an unprecedented manufacture of munitions and war supplies.

This production was needed not only for Great Britain, but also for her

Allies. Seven-tenths of what was produced in Great Britain in the year

1907 was immediately used up in the form of personal consumption by its

population; accordingly war industrial activities meant either that

British production must be increased or British consumption reduced, or

that more goods must be bought from foreign countries through the sale

of British liquid capital assets.

First of all, consumption was cut down; in detail, this was accomplished

in the following ways: 1. By cutting down all normal additions to

England's national plant, _i. e._, by building no more houses,

factories, railways, roads, etc., except for purely war purposes. This

expenditure in 1907 amounted to about $950,000,000. 2. By cutting down

and ceasing as far as possible to spend money on the maintenance of this

national plant, except the minimum required to keep it running. This

expenditure in 1907 amounted to $900,000,000. 3. Most important of all,

by cutting down civil personal expenditure. This was so far the largest

item of consumption that it was here that the most important savings

were made.

A WHOLE POPULATION AT WORK

In England the total number of "occupied males" between the ages of 18

and 44, _i. e._, roughly, the conscription age was, in 1911, 7,200,000.

The number of men from the United Kingdom in the Army and Navy amounted

to over 5,000,000; therefore, out of every seven of these men, on the

average five were soldiers or sailors. These men were lost from the

productive capacity of the nation. It is obvious that if English

production remained the same, or increased, it must have been the result

of extraordinary efforts on the part of the small percentage of occupied

males of fighting age left, on the part of all the other males occupied

or formerly occupied, and on the part of all females.

Mr. R. H. Brand, in discussing the situation in 1918, said:

"Notwithstanding the great difficulties, I think it is probable

that our production is quite as great as before. Measured in

money, and owing to the rise of prices, it would probably be

much greater. This is due to the fact that the whole

population, practically speaking, has been working, and working

intensely. Millions of women who have not worked before are

working now. No one is idle. Every acre of land or garden that

can be used is being used. Methods of production have been

speeded up, labor-saving machinery in industry and agriculture

multiplied. In every direction the wheels have been turning

faster.

"But, perhaps more important still, the _character_ of our

production has entirely changed--almost our entire industry is

producing for war purposes. Ordinary civil needs are no longer

considered. We have of course to produce what is essential for

life, but beyond that all our energies are directed to war

production. The government has of necessity compelled the whole

of British industry to produce for war and to produce what it

is told to produce, because in no other way could our own

armies and our Allies have been supplied. No man is free to do

what he likes with his labor and capital, with his ships, or

with his steel. He has to do what he is told to do. By this

means production for war purposes has enormously increased, and

civil consumption has enormously decreased, because the goods

for the civil population were no longer produced and one cannot

buy what isn't there. Instead of gramophones, the gramophone

company makes fuses; instead of cloth for ordinary clothes, the

woolen factory makes khaki; instead of motor cars, the

motor-car maker makes shells.

BRITISH INDUSTRY ON WAR BASIS.

"Apart from selling our liquid capital assets in return for

foreign goods, and apart from borrowing from foreign countries

for the same purpose, our power to provide our own army and

navy with all they want and have any surplus over for our

Allies has indeed depended entirely on our extraordinary

efforts in production--not in normal production, but in war

production--and also on the extent to which we have been able

to reduce our civil consumption of all kinds. I put production

first because, while economy in consumption is exceedingly

important, increased productive capacity devoted to war

material, in my opinion, is still more important. Our increased

productivity has, as I say, been devoted entirely to war

requirements. We have had to turn over our whole industry from

a peace to a war basis. We have both voluntarily and

compulsorily cut off the production of goods which are

unnecessary for war purposes. Many trades have been actually

shut down and the labor taken from them and handed over to war

industries. Labor itself has been subjected to restrictions

which would have been wholly impossible before the war. Labor

may not leave its employment without government leave; salaries

and wages may not be increased without government approval.

Measures for the control of industry which were unheard of and,

in fact, absolutely impossible before the war have been imposed

upon all industry.

"Fixed prices had been placed on the most important materials;

the government now has the absolute control of the use of

steel, copper, lead, wool, leather, and other materials for

which the war demand is insatiable, and also of all materials

manufactured therefrom. No use may be made of most of these

materials for any purpose whatever without a certificate being

first obtained, no buildings of any kind may be erected without

leave of the Ministry of Munitions. The whole of industry may

now be said to be directed according to the requirements of the

government, its regulation is an enormous task. In the head

office of the Ministry of Munitions alone there are more than

10,000 people.

Mr. R. H. Brand, who is responsible for these statements and used them

in an address to the American Bankers' Association, showed how these

regulations had resulted in a decline of British imports from peace

conditions of 55,000,000 tons annually to war conditions of 20,000,000

tons. The imports were nearly all foodstuffs. England exported large

amounts of munitions and supplies to her Allies. In the year 1916 alone

we supplied them with 9,000,000 pairs of boots, 100,000,000 sand bags,

40,000,000 yards of jute, millions of socks and blankets, and in

addition several thousand tons of leather; also cloth, foodstuffs of

every kind, portable houses, tools, hospital equipment and so on.

LABOR POWER IN ENGLAND

Mr. Lloyd George became the man naturally selected to be Prime Minister

because of his success in directing one of the chief war industries--the

work of munitions. In May, 1915, when he was made head of the newly

created Department of Munitions, the problem before him was no easy one.

The Central Empires were able to turn out 250,000 shells a day, while

the British rate of production was 2,500 high-explosive shells a day,

and 13,000 shrapnel shells. Lloyd George selected a large technical

staff; the work was decentralized as much as possible, and special

committees were formed for the purpose of organizing the work in each

district. The question of raw materials had to be handled and this was

not always easy because there were unscrupulous suppliers trying to make

a corner in their goods. New machinery had to be made for the

manufacture of large shells; all the big machine works were taken under

direct control by the Government. Old factories had to be equipped and

altered and twenty-six large plants had to be created. To provide the

labor power, workmen were recruited by voluntary methods. A hundred

thousand were in this way got together by July, 1915, most of whom were

experts in machinery and ship-building. The result is pictured in the

following extract by a French expert, Jules Destrée:

"On the 20th of December, 1915, Mr. Lloyd George, in a speech

delivered in the House of Commons, summarized the results of

the first six months of his tenure of office. We will take a

few points.

"Orders placed before the formation of the department were

delivered with an increase of 16 per cent. on previous

deliveries. The number of new orders placed increased by 80 per

cent.

"The state regulation of the metal market resulted in a saving

of from 15 to 20 million pounds sterling.

"The present output of shells for a single week is three times

as great as the entire output for May, 1915, which means that

the rate of production is twelve times as great.

"The enormous quantity of shells consumed during the offensive

of September, 1915, was made good in a month. The time will

soon come when a week will suffice.

"The output of machine guns is five times as great; that of

hand grenades is increased forty fold.

"The production of heavy artillery has been accelerated, and

the heaviest guns of the early days of the war are now among

the lightest.

"An explosive factory in the south of England, which on October

15, 1915, started to fill bombs at the rate of 500 a week with

a staff of 60, was in March, 1916, turning out 15,000 a week

with a staff of 250.

"An entirely new factory which started work at the end of

October, 1915, with one filling shed and six girl fillers and

an output of 270 a week, was in March, 1916, employing 175

girls and handling 15,000 bombs a week.

"The Ministry of Munitions has built, or is building, housing

accommodation for 60,000 workers, and canteens and mess rooms

in munition works now give accommodation for 500,000 workers a

day.

"All the workmen were assigned either to the works already in

existence--which in many cases were short of hands and unable

for this reason to fulfill their contracts--or else they were

allotted to the new factories.

"But in view of influence wielded by the labor unions, various

provisions were inserted in the Munitions Act. They related to

the settlement of labor disputes and to the prohibition of

strikes and lockouts the grounds for which had not been

submitted to the Board of Trade.

"To obviate such disputes, which were generally called forth by

the excessive profits accruing to the employers and the demands

of the wage-earners, the system of 'controlled establishments'

was instituted. Every establishment engaged on munition work

was placed, so far as the regulation of profits and salaries

was concerned, under direct government control. Any

modification in the rate of wages had to be submitted to the

Ministry of Munitions, which had power to refer the question to

an arbitration board specially set up by the act.

"To complete this rapid survey it must be added that a

department was created by the Ministry of Munitions, under the

control of an undersecretary, whose special business it was to

examine war inventions."

INDUSTRIAL DISLOCATION IN FRANCE

When war was declared in 1914, the result in France was a complete

disorganization. It must be remembered that workingmen from the age of

19 to 45 were called to the colors. This meant that the labor supply was

reduced by about three-fourths. The revival of trade was very slow until

the beginning of 1915. When it began to be realized that the war would

be a long one, and when the consumption of ammunition and war materials

was beyond all previous records, the Government was forced to prepare a

program for industrial warfare. It was a hard task because much of

industrial France was under enemy occupation. Munition work had to be

undertaken in neighborhoods largely agricultural. Everything was

lacking: labor, coal, raw material and transportation. As it became

evident that the stoppage of industrial work was a serious mistake, an

attempt was made to revive industries not connected with munitions, such

as paper manufacture, glove and silk making. The operations undertaken

by the Government are described in the following passage from M. R.

Blanchard's article in the _North American Review_ (1917):

"The first was to take men out of the army and send them to

industrial work. This was done with great caution during the

winter of 1914--15. The proportion of the men thus taken

increased more and more during the year 1915 and reached its

fullest extent in 1916. The specialists in steel work were the

first to be taken out of the trenches; these were far from

being sufficient, and common workmen were added to them. Then

chemists and workmen trained in the manufacture of explosives

were recalled; electric engineers were sent back to the

hydro-electric plants; miners above thirty-five years of age

who belonged to the territorial regiments were sent to the

mines; paper-makers and cardboard-makers who could be employed

in the preparation of explosives were put to work;

cabinet-makers were put to manufacturing rifle stocks;

wood-cutters were brought back from the front in order to see

that there was no waste in providing the enormous amount of

wood needed in the army. All this recalling of mobilized men

was effected at first according to the need, and without

method. By degrees it became clear that the output would be

greater if these soldier-workmen were assigned to the plants or

factories where they were working before the war. As it would

have been unwise to take too large a number of men out of the

fighting units, hundreds of thousands were taken from the

auxiliary troops of the interior, men who through lack of

physical ability to fight were employed in sedentary tasks.

Thus in 1915 and 1916 auxiliaries were swept away to become

workmen, foremen, secretaries, bookkeepers, accountants, etc.

Finally the administration decided to draw from the oldest

classes of men still under the military law. These were called

in 1915 and sent to the factories--men born in 1868, either

bachelors or married men without children.

"Another draft was made on the civil population. To make up for

the absence of male help, women were called upon for a great

number of occupations. Along with the women the refugees were

to do their part. After a rather long period of unsettled life

these refugees took again to regular occupations, some working

in the fields as agricultural hands, others in factories. Today

it is difficult to find unemployed people among them.

"The alien population for France is also large, considerable

numbers of Italians, Spaniards, and Portuguese being employed

in the southeastern region. A newer element was provided by

natives from French colonies, namely, Morocco and Algeria.

Since the war started large numbers of Greeks and Armenians had

been imported into France; and during the last two years

something like 200,000 Chinamen had been brought to France for

unskilled work. The last resource was the enemy itself. There

were in France more than 250,000 German prisoners engaged in

various work and receiving a salary for it."

Germany's industrial mobilization was picturesquely described by the

head of the General Electric Co., Dr. Walter Rathenau, who was appointed

at the beginning of the war to superintend the supplying of the German

War Office with raw materials. He told the officials at the War Office

that Germany was provided with more war materials only for a limited

number of months. Accurate statistics were prepared in a short time on

the power of production in various German industries. Then all the raw

material was put where it could be commandeered. The flow of products

was restricted, so that the raw material and also half manufactured

products could be automatically diverted to articles needed by the Army.

New methods were discovered and developed. Where former technical means

were insufficient substitutes had to be found. Where it was prescribed

that this or that article was to be made out of copper or aluminum, it

was permitted to make it out of something else. All the laboring power

of the country, including men from 16 to 60, were enrolled and

controlled from the central organization called the War Office,

described by General Gröner as follows:

"The new War Office represents Germany as a colossal firm which

includes all production of every kind and is indifferent to the

kind of coat, civil or military, which its employes wear. The

new measures are intended to mobilize all effective labor,

whereas up to the present we have only mobilized the army and

industry. The whole war is becoming more and more a question of

labor, and in order to give the army a firm basis for its

operations the domestic army must also be mobilized. All the

labor, women's as well as men's, must be extracted from the

population, so far as possible voluntarily. But if voluntary

enlistment does not suffice we shall not be able to avoid the

introduction of compulsion."

THE GERMAN NATION IN ARMS

Sixteen months after this war organization was effected, General

Ludendorff said that when the great spring offensive of 1918 opened the

Germans were superior to the Allies in every form of war supplies. There

was a speeding up all round; the output of shells and cannon was double.

This meant the doubling of the coal and iron production, and could be

done only by increasing the workers necessary to double the output of

basic war materials. Adequate food had to be supplied to the workers;

there was what is known as the Hindenburg "Fat Fund" to which

contributions were sent in from German peasantry and agriculturists.

General Gröner, the head of the German War Office, outlined

optimistically the future of German war industrial production as quoted

in the New York _Times_ of December 14, 1916:

[Illustration: Photo by P. Thompson

A War Time Warning

Dairy production among the Allies decreased 30 per cent. during the war.

The lard supply was also decreased. Kitchen economy in fats was never

more important. Fats were so scarce in Germany during the latter part of

1917 that a "Hindenburg Fat Fund" was organized to which contributions

were sent in from German peasantry and agriculturists.]

"German locomotives are running to the Taurus in Asia Minor; we

are operating practically all the Serbian railways with German

rolling stock; we have thousands of cars in Transylvania and

Rumania, to say nothing of other occupied territories. After

the transportation problem, we are taking measures to double

the production of the auxiliary raw materials and semi-finished

products. As one example, we are doubling our efforts for the

manufacture of nitres from the nitrogen of the air. Not only of

the basic raw materials, coal and iron, but of auxiliary raw

materials we have no lack.

"The brains of our chemists and technicians are supplying the

missing imports, and will continue to do so. Only when we have

accomplished all this will we proceed to the last step of

doubling the production of shells and cannon. Such a war is not

to be won by looking ahead from month to month, but only by

thinking of the distant future. After we have doubled the

pyramid, we shall proceed to treble it.

"By spring we shall be going full steam ahead. After that our

production will increase from month to month; and we have the

labor and raw materials for keeping up the pace indefinitely.

"The male working forces available between the ages of

seventeen and sixty, as provided by the Auxiliary Service Law,

will cover our requirements into the distant future, but

ultimately, aside from the children, aged and sick, every man

and woman will be enlisted for home defense, if necessary. The

home army will be the whole nation.

"What we are engaging on is not alone the progressive

mobilization of all the nation's physical strength and material

resources, but the mobilization of the nation's brains. An army

corps of professors, scientists, chemists, engineers,

technicians, and other specialists is already working with the

Kriegstaat. Our idea is to be eminently scientific and

practical--no theorizing. We are working to show results.

"We are coöperating closely with the war industries of Turkey,

Bulgaria, and Austria. It means doubling and trebling their

ammunition supply, too.

"The military successes achieved in Rumania, which synchronize

with the birth of patriotic auxiliary service, are an advantage

that cannot be overestimated. The Danube means everything to

us. Last year we had to beg Rumania for her oil and grain and

pay our good money for it too. Now we don't need to beg costly

favors of Rumania.

"Lloyd George does not scare us. We have, however, not time for

busying ourselves with politics; we have more important things

to do--supplying Hindenburg with the means of victory."

RUSSIA'S INDUSTRIAL MOBILIZATION

In Russia industrial mobilization was badly managed. Cattle were taken

to the front in herds. Often driven on foot, they were slaughtered on

the spot where the meat was needed for the soldiers. The hides were

thrown aside to rot. As a result of this wasting of hides, the supply of

leather for military uses and for shoes for both the Army and the

civilian population was soon utterly inadequate. Horses were

requisitioned in the most unintelligent way, the result being that

agricultural production decreased and with the lack of transportation

facilities the Army horses could not be supplied with food. They died by

the tens of thousands.

Gross mismanagement marked the war handling of the Russian railway

system. The rolling stock was allowed to deteriorate. Locomotives and

cars were put aside permanently when they needed slight repairs. They

could not be repaired because the railway machine shops had been

converted into munition factories. There was an appalling shortage of

manufactured goods for the civilian population, because the entire

output of many manufacturing concerns was taken over for the Army. It

was almost impossible to get clothing, boots and articles of wearing

apparel. So great was the dearth of cloth at the end of the third year

of the war that one was struck by the contrast between the lines in

front of the bakeries formed in the early morning hours and the groups

of women gathered at eight in the evening before the shops which sold

cloth to stand all through the night in line for the opening of the shop

in the morning.

A bright spot in Russian war administration was the work of the

Municipal and Provincial Councils. The members of these bodies did

valiant service in preventing the growing disorganization of the

economic life of their country. Their activities are described by Prof.

Harper of Chicago University, an actual eye witness of Russian

conditions during the war, in the following passage:

"So these organizations entered upon a campaign of 'saving' and

'production.' They saved the hides that were being thrown away,

collected the discarded boots at the front and repaired them,

and took over the task of supplying the underwear for the whole

army--mobilizing the village coöperative societies to fill the

large orders. And they did much to organize the refugees from

the invaded districts for productive work. In a word, these men

saw that the war was going to extend into years, and they

realized that only foresight and organization of productive

resources would make it possible for Russia to withstand

economically the burdens of a protracted struggle.

"The attitude of the governmental authorities (the bureaucratic

departments) toward the work of these non-bureaucratic, but

public, institutions (the Unions of the Municipal and

Provincial Councils) was one of suspicion and antagonism, and

difficulties were put in their way with the deliberate intent

to block their activities. The institutions were suspected of

pursuing political aims. Only when it became clear that the

ruling group in the bureaucracy was consciously allowing the

country to drift into a state of anarchy in order to bring

Russia out of the war did these leaders venture to risk

revolutionary methods of action.

"The president of the All-Russian Union of Provincial Councils,

the Zemstvo, was Prince Lvoff, the first Prime Minister of the

new Russia after the revolution of March, 1917. In the monthly

reports of the work of the All-Russian Union of Zemstva, Prince

Lvoff, repeatedly issued warnings of the impending economic

collapse of the country. But neither he nor Kerensky was able

to liquidate the heritage received from the old régime in time

to stave off the series of economic and financial crises of

which the Bolsheviki availed themselves."

FOREBODINGS OF RUSSIA'S COLLAPSE

But it was not only foreign observers who were able to detect the

prevailing rottenness in Russia's economic status. The following passage

from an address made by A. I. Konovalov, a member of the Moscow Stock

Exchange, shows that Russian business men were keenly alive to the

dangers of the situation as early as April, 1917:

"The old régime has seemingly done everything deliberately to

destroy and demoralize the trade-industrial apparatus it took

years to build up. As a result the usual course of the

country's economic life was stopped, and at the same time,

through the peculiarly enforced system of regulations, a wide

field for all sorts of abuses and speculations was opened. We

must frankly acknowledge that from these abuses and

speculations a system of oppression grew up which has called

forth fully merited reproach, distrust, and hostile feelings

towards the representatives of the trade-industrial class.

"At the same time there can be no doubt but that under present

circumstances, lacking most of the necessaries of existence,

with the factories and mills forced to cut down their

production due to lack of raw material and fuel, with the

demoralization of the transportation system, and being

compelled, despite all these obstacles, to meet the numerous

requirements at the front--there is no other way out but

government control of private industrial and mercantile

enterprises, and the coöperation of the democratic masses of

the population in the matter of regulating the trade-industrial

life of the country. In addition to fair distribution it should

be the task of all the committees, which are to become parts of

the Ministry, also to regulate the prices.

"Closely connected with this question there is another one

which I personally consider of tremendous importance. I have in

mind the question of limiting the profits of all mercantile and

industrial establishments. Undoubtedly a properly worked-out

solution of this question would have the tendency to check the

unwarranted growth of prices that would appease the masses. The

normal effect of a decree limiting profits is of tremendous

importance, not only in that it would soften the feeling of

ill-will towards the trade-industrial class, but also because

it would afford the government a new, convincing proof that the

commercial and industrial class is ready to make all possible

sacrifices for the common good, a proof which would paralyze

the voicing of any new demands on the part of the masses.

"Now, these are the main ideas, the fundamental points of view

which the trade-industrial class should consider as a starting

point in its efforts to win the confidence of the population

and to safeguard that important position which it ought to

occupy in the life of the country.

"The situation is becoming all the more difficult because of

the ever-increasing famine due to the shortage of means of

production as well as of all the necessaries of life; this

famine will be felt very acutely, not only on account of the

lack of these goods, but also because of the overabundance of

paper money."

LABOR TRADITIONS UPSET

All kinds of economic theories and all varieties of economic experiences

have been overturned by the abnormal industrialism of the war. The world

really passed into a _terra incognita_. Even the firmest foundations of

trade unionism have been shaken. There was no more firmly established

fact before the war than the inability of women to secure a level of

wages equal to that of the male wage earner. Such theories have passed

to the limbo of forgotten things. Prejudice and tradition have given

away before the actual test of facts. Women have taken the place of men

called away to war service in practically all the fields of industrial

activity. Apart from theory, biological and otherwise, it is now seen

that the old exclusion of women from skilled industry was largely the

result of trade union regulation. But the woman war-worker was found in

fields untouched by trade unionism. There was the woman bank clerk as

well as the woman engineer.

There was much discussion, mostly pessimistic, as to what would happen

if the woman labor supply should permanently take the place of man labor

after the war was over. The best solution was thought to be the placing

of the woman worker under a régime of trade unionism. How far such

prognostications went is illustrated in the following quotation from

Miss Mary Stocks in the London _Athenaeum_.

"It has been presupposed that the war will end decisively

before the armies engaged are reduced to inappreciable numbers

of able-bodied men. It has been presupposed that the return of

peace will find British industry based upon the old system of

private ownership of capital and haphazard production in

response to the effective demand of individuals. It presupposes

no change of heart on the part of employers, government or

trade unions. But, in view of possible, if not probable

dangers, the most urgent stress should be laid upon what is an

undoubted palliative, if not a fundamental cure for such

prospective economic ills; that is, the strenuous promotion and

public encouragement of trade unionism among women. What women,

by reason of underlying social and economic causes, are not

able to do for themselves, the moral and financial support of

the public must do for them, and such support should be

regarded not merely as an interference in the old struggle

between capital and labor, but as an attempt to ward off a

national danger.

"The root of the evil is the old incompatibility between male

and female labor in the skilled and semi-skilled grades of

industry. That incompatibility has arisen partly from

fallacious theorizing of the 'wages-fund' type, but largely

from the fact that the industrial woman, in spite of the uphill

and often successful trade union work which has been

accomplished, mainly from above, during the past forty years,

is regarded by her male colleague as nature's blackleg. And in

spite of the short-sighted policy of hostility to women members

displayed by a few trade unions, it is fairly clear that it is

not the woman trade unionist that the man is afraid of, but the

woman blackleg; not the well-paid woman, but the sweated woman.

Now there are three ways of dealing with a blackleg: he may be

elbowed out of the industrial world altogether; he may be

penned up, as women have been penned up, in the lowest and most

undesirable grades; or he may be turned into a trade unionist.

As far as women are concerned, the first two are closed by

national expediency, humanity and justice. The third lies open;

and in view of the peculiar economic rocks which loom vaguely

ahead of us, it may be said without exaggeration that one woman

trade-union leader is worth a hundred welfare workers."

[Illustration: Copyright Underwood & Underwood

Women Workers in America

A field of winter lettuce, with the cloches, or glass bells, which made

it possible during the war to raise plants in cold weather.]

WOMEN WORKERS IN AMERICA

As a result of the labor dislocation due to the operation of the

American Draft Law, a large number of women were employed in railway

work. The experience of the United States Railroad Administration in the

matter of women employes was summarized in a paper read by Miss Pauline

Goldmark, manager of the women's service section of the Railroad

Administration, at a conference at the Academy of Political Science, in

1918:

"The number of women employed on the railroads of the United

States had been 60,000 at the beginning of the year, and

reached approximately 100,000 by October 1st. The greatest

number are in the clerical and semi-clerical occupations. Of

the 81,000 employed July 1st, 61,000 were working as clerks of

all kinds, stenographers, accountants, comptometer operators,

etc. In this class appear women ticket sellers and bureau of

information clerks, who served the public for the first time;

they were found well fitted for this type of work, and special

instruction agencies were opened by the government in various

states to train them in the intricacies of tariffs and routes.

"The next largest group of 4,000, it is not surprising to

learn, appears in women's time-honored occupation of cleaning.

Women have long been cleaning stations, offices, etc., but now

they are employed in the yards to clean coaches and Pullmans,

both inside and outside; and in the roundhouses, doing the

heavier work of wiping locomotives; 800 were so employed. In

personal service, including work in dining rooms and kitchens,

as matrons and janitresses, 2,000 were found. In the railroad

shops, women entered the greatest variety of new occupations.

Three thousand were employed, ranging at one end of the scale

from common laborers, at the other end of the scale of skilled

mechanics earning the machinists' or carmen's rate of pay.

"Many women were employed a year and a half ago, before the

railroads were put under Federal control, because they could be

obtained for less pay than men. They were, for instance,

engaged as common laborers at 20¢ to 22¢ an hour, at a time

when men were receiving 28¢ to 30¢ for the same class of

labor. With rare exceptions where adjustments are still

necessary, the wage orders have absolutely stopped this

undercutting of men's wages by women.

WORK UNSUITABLE FOR WOMEN

"Soon after women began to be largely employed it became

apparent that some of their work was neither profitable nor

appropriate. The use of women as section laborers, for

instance, in a gang of men working along the tracks at a

distance from any house or station was judged to be unsuitable.

This was also found to be the case where women were employed as

truckers in depots and warehouses on account of the

extraordinary physical exertion required of them. In view of

the wages now paid it was believed possible to secure men and

to transfer the women to some class of work suitable to their

strength and with proper regard to their health. The railroads

were accordingly asked to discontinue their employment in both

these positions.

"Comparisons with other industries can probably best be made in

respect to the women employed in the shops. They are operating

a number of machines such as bolt-threaders, nut-tappers, drill

presses, for which no great skill or experience is needed, and

which is classed as 'helpers' work,' and rated at the specified

pay of 45¢ an hour. They are also employed for highly skilled

work. A number have succeeded as electric welders and

oxy-acetylene-burners. They have been found well adapted for

work on the air-brake equipment and are cleaning, testing, and

making minor repairs on triple valves. In some places they are

now working in a separate group on the lighter-weight valves,

weighing not more than forty pounds. After a period of

training they are giving satisfaction without the help of any

man operator.

"A remarkably fine type of woman is now to be seen in many of

the shops, who enjoys the greater freedom of her work as

compared with factory routine, although in many cases the

discomfort, the dirt, and exposure are far greater. It remains

to be seen whether the women will remain in these jobs to any

great extent. The railroads will, of course, recognize the

seniority rights of all their employees returning from military

service, but as far as the new employees are concerned, women

will have the same privileges as other new employees in

retaining their positions or being assigned to other jobs.

There can be no doubt that in the clerical and semi-clerical

positions they have proved their worth, and will to a great

extent be retained."

ALIEN LABOR FOR WAR PURPOSES

The man in the fighting line was only one factor in the prosecution of

warlike operations. The success of strategy and tactics was dependent

upon the organization of the man in the labor line not only at home but

also in the territory behind the miles of trenches in France. For this

purpose Chinese labor was drafted by both the British and the French

Government. Large numbers of British ships sailed with crews practically

consisting of Chinese sailors. The sentiment in favor of Chinese

exclusion had to give way before imperative needs for labor power. There

were tens of thousands of Chinamen in the service of the Allies. In the

_Sunset Magazine_, Mr. G. C. Hodges calls attention to the fact that the

break between the Chinese Republic and Germany was precipitated largely

by the Allied drafting of China's manpower. Even in its beginnings he

says, the French and British mobilization of Chinese labor caused a

diplomatic battle royal. The significance of Chinese labor behind the

battle front is described in the following words:

"They are a war factor. His Britannic Majesty's Chinese Labor

Corps now behind the battle line in France is almost as large

as the total Chinese population in the United States. The

French Republic has recruited a force of similar dimensions,

bringing Chinese manpower overseas for non-combatant and

industrial work. Even teeming Russia, before its tragic

collapse, had drawn upon thousands of Chinese for work as far

west as the Ural mines. In 1914 there were but 7,000 in this

rich country, but a fourfold increase brought the total to

30,000. All told, 200,000 Chinese are 'carrying on' in the war

zone, laboring behind the lines, in munition works and

factories, manning ships.

"Though the pages of no White Book say it, the break between

the Chinese Republic and Germany was precipitated largely by

the Allied drafting of China's manpower. Even in its

beginnings, the French and British mobilization of Chinese

labor caused a diplomatic battle royal."

ECONOMIC VALUE OF AMERICAN ARMY TO FRENCH INDUSTRY

Permanent economic improvements were one result of the presence in

France of the American Expeditionary Force. An industrial movement was

created that will probably continue long after the war is over. In

various French seaports, docks had to be constructed to handle the

enormous tonnage of supplies needed for the American troops. A letter in

the New York _Journal of Commerce_ gives a picture of the transformation

in the transport system in France made in order to handle with speed and

certainty the various supplies on which the American Army depended:

"Our project comprises nearly 1,000 miles of railroad

construction, but not continuous. France already controls on

her lines such facilities that she has been able to support her

great military burden and not break. Their local development in

the way of sidings and so forth is chiefly in the big towns,

and small engines and cars are used. To meet our larger needs,

it is necessary to establish terminals outside the towns for

the change of engines and for our great storage warehouses. Our

great railway construction in France, apart from a few cut-off

lines, is in the way of storage yards. We have practically the

use of two trunk-line tracks. The French run over them, too,

for there is a tremendous civil population to be supported. The

French are necessarily supreme, and we simply have the right to

run over their railroads subject to their rules.

"The French have an arrangement with their railroads by which a

piece of track that is put in for military purposes is paid for

by the French Government. If the civil requirements of the

railroad grow up to the use of that particular piece of track,

then the government is reimbursed by the railroad. We are in

the same position toward these railroads as the French

Government. At the end of the war the improvements which we

make will be surveyed. If they are useful to the railroads our

expenditures will be reimbursed. If not, we are at liberty to

take up the stuff and clear the ground. Two days ago a

semi-official statement was made to the Paris press, reading:

"'Americans, in full agreement with the French authorities,

are making every effort to carry out, by their own means, the

debarkation of their troops in ports, their provisioning as

well as their transportation over our railroads. Sidings, large

stations, and establishments of every kind are being

constructed by the most modern and expeditious processes. One

of the warehouses has an area of about 4,000 acres, and it has

a cold-storage plant capable of holding several thousand tons

of meat. Aviation training camps and repair shops, considerable

in size and with the most improved machinery, are being erected

on every side.'"

FRENCH INDUSTRIAL EXHAUSTION

A realistic picture of the industrial exhaustion of France at the close

of the war was given by M. Tardieu, General Commissioner for

Franco-American war affairs. The war expenses of 120,000,000,000 francs

was only a fractional part of the whole loss. Another 50,000,000,000

would have to be raised to secure raw material destroyed during the war.

M. Tardieu presented in detail the various items indicating to what

extent France had suffered economic disability and paralysis:

"The territories which have been under German occupation for

four years were the wealthiest part of France. Their area did

not exceed six per cent. of the whole country. They paid,

however, 25 per cent. of the sum total of our taxes. These

territories are now in a state of ruin even worse than we had

anticipated. Of cities and villages nothing remains but ruins;

350,000 homes have been destroyed. To build them up again--I am

referring to the building proper, without the furnishings--600

million days of work will be necessary, involving, together

with building material, an outlay of 10,000,000,000 francs. As

regards personal property of every description either destroyed

by battle or stolen by the Germans, there stands an additional

loss of at least 4,000,000,000 francs. This valuation of lost

personal property does not include--as definite figures are

lacking as yet--the countless war contributions and fines by

the enemy, amounting also to billions. I need hardly say that,

in those wealthy lands, no agricultural resources are left. The

losses in horses and in cattle, bovine and ovine species, hogs,

goats, amount to 1,510,000 head--in agricultural equipment to

454,000 machines or carts--the two items worth together

6,000,000,000 francs.

"As regards industries, the disaster is even more complete. Those

districts occupied by the Germans, and whose machinery has been

methodically destroyed or taken away by the enemy, were,

industrially speaking, the very heart of France, the very backbone

of our production, as shown in the following startling figures: In

1913 the wool output of our invaded regions amounted to 94 per

cent. of the total. French production and corresponding figures

were: For flax from the spinning mills, 90 per cent.; iron ore, 90

per cent.; pig iron, 83 per cent.; steel, 70 per cent.; sugar, 70

per cent.; cotton, 60 per cent.; coal, 55 per cent.; electric

power, 45 per cent. Of all that--plants, machinery, mines--nothing

is left. Everything has been carried away or destroyed by the

enemy. So complete is the destruction that, in the case of our

great coal mines in the north, two years of work will be needed

before a single ton of coal can be extracted and ten years before

the output is brought back to the figures of 1913.

[Illustration: Samuel P. Gompers

President of the American Federation of Labor.

THE WORK OF REBUILDING

"All that must be rebuilt, and to carry out that kind of

reconstruction only, there will be a need of over 2,000,000

tons of pig iron, nearly 4,000,000 tons of steel--not to

mention the replenishing of stocks and of raw materials which

must of necessity be supplied to the plants during the first

year of resumed activity. If we take into account these

different items, we reach as regards industrial needs a total

of 25,000,000,000 francs. To resurrect these regions, to

reconstruct these factories, raw materials are not now

sufficient; we need means of transportation. The enemy has

destroyed our railroad tracks, our railroad equipment, and our

rolling stock, which, in the first month of the war, in 1914,

reduced by 50,000 cars, has undergone the wear and tear of

fifty months of war.

"Our merchant fleet, on the other hand, has lost more than a

million tons through submarine warfare. Our shipyards during

the last four years have not built any ships. For they have

produced for us and for our Allies cannon, ammunition, and

tanks. Here, again, for this item alone of means of

transportation we must figure on an expense of 2,500,000,000

francs. This makes, if I sum up these different items, a need

of raw material which represents in cost, at the present rate

of prices in France, not less than 50,000,000,000 francs."

IV--GOVERNMENT CONTROL

Wartime Nationalization of Railways and Shipping--Ship-building at

High Speed--Trade Licensing, Etc.

On April 5, 1917, the day before war was declared, Franklin K. Lane,

Secretary of the Interior, introduced and had passed by the Council of

National Defense the following resolution:

_Resolved_, That Commissioner Willard be requested to call upon

the railroads to organize their business so as to lead to the

greatest expedition in the movement of freight.

Acting in accordance with this resolution, the principal railroad

executives of the country met in Washington on April 11, 1917, and

resolved that during the war they would coördinate their operations in a

continental railway system, merging during such period all their merely

individual and competitive activities in the effort to produce a maximum

of national transportation efficiency. The direction of the continental

railway system thus organized was placed by the railroads in the hands

of the executive committee of the Special Committee on National Defense

of the American Railway Association. This executive committee was also

known as the Railroads' War Board.

Under this resolution the railroads of the United States continued to be

operated under private ownership and private management until December

28, 1917.

On that date President Wilson, exercising his war-time prerogative, took

control of the railways of the country and appointed W. G. McAdoo

Director General.

2. Congress in January passed a railroad-control bill.

3. On April 11, 1918, President Wilson issued a proclamation taking over

for the Government the property of coastwise shipping lines.

4. On May 24th, Director General McAdoo placed in charge of each

railroad property a federal manager whose duty it was to report to the

regional director.

5. On June 29th, the Railroad Administration relinquished from federal

control nearly 2,000 short-line railroads whose control by the

Administration was regarded as not "needful or desirable."

During the first six months after the United States entered the war

statistics showed that the railways not only handled far more traffic

than in any earlier six months of their history but also as much as in

any entire year prior to 1907. It will be remembered that the years 1906

and 1907 marked the climax of a long period of rapid increase of

railroad business which resulted in the longest and most acute

congestion of traffic and shortage that had ever been known prior to the

war period. The grounds offered by the Government for taking over the

railway systems during the war might be explained as the resultant of

the findings of the Interstate Commerce Commission on December 5th, in

which it was stated that the claim of the roads for higher rates could

not be granted.

"From the standpoint of the Government three principal reasons

are seen for the taking over of the lines:

"1. The avoidance of obstructions to transportation due to the

routing and division of freight, intended to give a fair share

to each line in a given territory.

"2. The abolition of preferences to given shippers and kinds of

freight, and the centralization of control over priority in

shipment.

"3. The practical termination of rate controversies and labor

discussions as between private individuals and the placing of

the roads on a semi-military basis.

"The railroads themselves have received the announcement of the

President's action with much greater equanimity than could have

been expected. They undoubtedly see in the step the following

advantages:

"1. Assurance of a moderate if not generous income in a period

of great uncertainty and difficulty, during which they have

been caught between the upper and nether millstones of fixed

rates and advancing costs and wages.

"2. Termination of the danger that threatened them from the

continually maturing obligations which ordinarily they would

have little trouble in refinancing, but which, under existing

conditions, can scarcely be provided for on any basis.

"3. Provision of means for betterment and improvement at a time

when such provision can be had practically only through

government orders designed to place such requirements ahead of

those of private concerns."

OBJECTS OF GOVERNMENT CONTROL

This experiment in government control was discussed and explained by the

Director General after six months' experience in the following statement

issued by him on June 15, 1918:

"The policy of the United States Railroad Administration has

been informed and shaped by a desire to accomplish the

following purposes, which are named in what I conceive to be

the order of their importance:

"_First_, the winning of the war, which includes the prompt

movement of the men and the material that the Government

requires. To this everything else must be subordinated.

"_Second_, the service of the public, which is the purpose for

which the railways were built and given the privileges accorded

them. This implies the maintenance and improvement of the

railroad properties so that adequate transportation facilities

will be provided at the lowest cost, the object of the

Government being to furnish service rather than to make money.

"_Third_, the promotion of a spirit of sympathy and a better

understanding between the administration of the railways and

their two million employees, as well as their one hundred

million patrons, which latter class includes every individual

in the nation, since transportation has become a prime and

universal necessity of civilized existence.

"_Fourth_, the application of sound economies, including:

(_a_) The elimination of superfluous expenditures.

(_b_) The payment of a fair and living wage for services

rendered and a just and prompt compensation for injuries

received.

(_c_) The purchase of material and equipment at the lowest

prices consistent with a reasonable, but not an excessive,

profit to the producer.

(_d_) The adoption of standardized equipment and the

introduction of approved devices that will save life and labor.

(_e_) The routing of freight and passenger traffic with due

regard to the fact that a straight line is the shortest

distance between two points.

(_f_) The intensive employment of all equipment and a careful

record and scientific study of the results obtained, with a

view to determining the comparative efficiency secured.

"The development of this policy will, of course, require time.

The task to which the Railroad Administration has addressed

itself is an immense one. It is as yet too early to judge of

the results obtained, but I believe that great progress has

been made toward the goal of our ideals."

GOVERNMENT CONTROL CRITICISED

The defects of the Government administration of the railways have been

the subject of both criticism and apology. A diagnosis published by the

_Engineering News Record_ of New York states that the whole difficulty

is ascribed to the employment of bankers in high places of railway

management. Railroads, it was asserted, cannot be run by men of the

banking type of mind. The article continues:

"Here was, and is, an agency with daily influence on the life

of every member of the community, performing a service

essential to the nation's life. Yet it has few friends among

the people at large; more now than formerly, however, due to

the number of those whose pity has been excited at the

railroads' plight. The first of the railroads' plagues was the

type of management--manipulation, it would better be

called--which regarded the properties not as carriers but as

media for stock-jobbing operations. Consolidations with the

addition of water, and reconsolidations, with still more water,

were the order of the day; while those operating the properties

danced riotously over their territories waving insolently the

flag of 'The Public Be Damned.' Rebates, car-withholding

tyrannies, all manner of schemes were worked to aid the

favored few, while the purchasing methods honeycombed the

organization with rottenness.

"Then came the day for the people to have their say, and one

national and forty-eight State commissions began to bedevil the

carriers. What the stock-jobbers and the grafters had failed to

do the people in their vengeance helped to complete. The public

at large, which under intelligent management of the properties

would have been the railroads' best friend, had been alienated.

As a result we have had the drift into bankruptcy which has

been railroad history during the past decade. Instances need

not be cited. Each one can supply them from his own

neighborhood. Probably the mention of the New Haven will

furnish sufficient nausea to carry the right impression.

"And that _débâcle_ we attribute to the banking type of mind,

that type of mind that places personal profit ahead of all

other considerations. The engineering type of mind, we hold,

would have analyzed the purpose of the railroads--would have

seen that service to the public at large, and not to any

private interest, was the prime object, would have erected that

as the railroads' ideal and builded a machine for its

attainment."

BRITISH RAILWAY MANAGEMENT

Like American railways the railway system of Great Britain was under

private control prior to the war, but the experiment of Government

direction began to be applied as soon as the war was declared.

Government control did not mean Government ownership. The lines remained

the property of the companies. They retained the management of their own

concerns subject to the instructions of an executive committee appointed

by the Government and the whole machinery of administration went on as

before. At the beginning the sole purpose was to facilitate the movement

of troops, but as the war developed the scope of the railway executive

committee became greatly extended. Working in coöperation with the

acting chairman were twelve general managers of leading British lines.

Under the central body were groups of committees, each made up of

railway experts. The War Office and the Director General of Transport

were in touch with the Central Committee. A writer in the _Railway Age

Gazette_ for December, 1917, explains the arrangements as follows:

"Under the terms on which the railways were taken over for the

period of the war the Government guaranteed to the proprietors

of the railways that their net revenue should be the same as in

1913, except when the net receipts for the first half of 1914

were less than the first half of 1913; in that case the sum

payable was to be reduced in the same proportion. The entire

Government traffic--men and freight--was to be carried without

any direct charge being made for it or any accounts rendered.

This plan was considered satisfactory by both sides. In the

majority of cases there had been a reduction of earnings in the

first half of 1914 over the previous half-year, and companies

were contemplating a still further reduction. The interests of

their shareholders being assured, they were able to devote

themselves to the work of economical and efficient

distribution, quite apart from the usual financial problems.

The one weak side of this agreement was that it made no

allowance to cover increased interest payments on account of

new investments and new capital expenditure since the war

began. This point was afterward met by an arrangement that the

government should pay interest at 4 per cent. on all new

capital invested by the railways since August 4, 1914, on new

lines, branches, terminals, equipment, or other facilities put

into use since January 1, 1913.

"The conclusion of the financial agreement between the

Government and the companies automatically brought about a

great economy in the system of railway accounts. The reports of

the companies were cut down to a bare minimum, and in many

cases even these reduced reports were not sent to the

shareholders unless they specially asked for them."

RAILWAY NATIONALIZATION IN CANADA

A definite proposal to nationalize the railway systems of the Dominion

of Canada was made during the war. Canada has nearly one-sixth of the

railway mileage of the United States, although it has less than

one-fourteenth of the population. Canada has three trans-continental

systems. There is sufficient trade in the Dominion for two good systems.

A royal commission appointed to inquire into the subject reported that

the net returns of the railways were so low as to prove that more

railways had been built than could be justified on commercial grounds.

Large subsidies had been granted by the Government. In the case of the

Grand Trunk Pacific this public subsidy amounted to nearly two-thirds of

the total investment; in the case of the Canadian Northern to nearly

three-quarters. The Canadian Pacific was reported as the strongest

railway in Canada, economically built and well managed. The other

companies, such as the Canadian Northern and the Grand Trunk Pacific,

were facing heavy annual deficits.

[Illustration: Walker D. Hines

He succeeded William McAdoo as Director-General of Railroads after the

signing of the armistice.

The commissioners recommended heroic measures. They did not consider

that operation by a Minister directly responsible to Parliament would be

in the public interest. It would not secure better service nor lower

rates. What the commissioners did recommend was to transfer the three

companies to a new body, a board of trustees to be incorporated as the

Dominion Railway Company and that the Canadian Northern, the Canadian

Pacific and the Grand Trunk Pacific be transferred to this body. The

Government-owned Intercolonial and Transcontinental Railways stretching

from Halifax to Winnipeg were to be transferred to the Dominion Company.

Under the scheme worked out by the commission, the Government would

assume responsibility to the Dominion Railway Company for the interest

on existing securities of the transferred companies. As to the

composition of the board of trustees, the commissioner recommended that

they be five; three railway members, one member selected on the ground

of business and financial experience and one as especially possessing

the confidence of the railway employees. The commissioners laid stress

on the importance of the board being non-political, permanent and

self-perpetuating, and in this connection pointed to the experience of

the Australian state railways.

FRENCH RAILWAYS IN WARTIME

The great strain on a country's railway system caused by war was

illustrated by the French mobilization. Four thousand seven hundred and

fifty trains were required. After mobilization was over the Army still

had a permanent need of railways for two purposes: for its

communications in the rear, and for its movements from place to place.

To bring supplies to one Army corps trainloads aggregating 200 tons a

day were required.

Mr. G. Blanchon in _New Warfare_ explained the situation as follows:

"The preparation of railways for war uses is not confined to

the planning of the system itself. It extends to the provision

and adaptation of stations, to the duplication of the lines, to

the defence of bridges and other structures, to the provision

of rolling-stock. Considerable extension may be looked for in

all these directions. However important the motor-car and the

aeroplane may be in military transport, it is probable that the

railways will always be the most satisfactory means of

conveying heavy material.

"The railway carriage itself can be adapted for military uses.

We have tank cars, cold-storage cars, hospital trains; above

all, we have armored trains and truck gun-carriages.

"In art works, for example, the value of the imports of 1918