the cheapest market. This country, with its high standard of living, could not compete with other countries, with a result that the area in the United Kingdom under wheat, barley, oats, beans, and peas decreased from 11.3 million acres in 1867 to 8:3 million acres in 1914. During the same period the population of the United Kingdom increased from 30,000,000 to 46,000,000. In face of those two movements, when the need for soldiers arose, something might have been said for a policy which weakened agriculture in order to strengthen the shipbuilding industry, or, perhaps, even for a policy which encouraged agriculture, the shipbuilding industry being allowed to fare as it might, but neither the one policy nor the other was adopted. In a spirit of thoughtlessness, and under the influence of shallow thinkers, we combined the two policies, and even the mines were depleted, and thus we sowed the seeds of the present economic troubles-the scramble for food, the demands for higher wages, the shop queues, and the attempt to control prices.

For over three years an economic storm has been brewing, but the clouds have been hidden by millions of Treasury Notes and elaborate and misleading statistics as to the movement of our foreign trade, the foundation of the nation's economic health. The Board of Trade has issued from month to month a statement of imports and exports based, not on quantities, but on values. The table on the preceding page gives the latest statistics.

We are confronted with an enormous increase in imports and a decline of exports, but the slackening in the outward trade has not been such as to arrest public attention. The figures, both as to imports and exports, must evidently be misleading since in the ten months ending October, 1916, as compared with the corresponding period of 1914, the shipping engaged in foreign trade which entered with cargoes declined by 11,795,332 tons, and the shipping which cleared showed a falling off of 18,999,255 tons. Later statistics have not been issued. It is apparent that, in view of those declines of about 32 and 39 per cent, respectively, there must have been a steady decline in the volume of our imports and exports, and that the figures based on values are, therefore, deceptive. A corrective is supplied by the Economist. In its issue of December 8th, 1917, it published a detailed statement of the movements of wholesale, not retail, prices-from the month before the opening of the war down to November last, from which the following figures are quoted:

VOL. CIII. N.S.

The percentage by which prices have risen since the outbreak of war is useful as showing how the various groups dealt with in the compilation have moved :—

What is the position? For three and a half years our sea power, in the absence of an adequate movement to replace losses, has been steadily shrinking; for a similar period the imports of raw material have been restricted, and that restriction, in association with the loss of tonnage, has crippled our export trade; we have at the same time been engaged in prosecuting the most costly war ever known, borrowing money by the hundreds of millions, and creating paper money by the tens of millions; and, as there has been plenty of money in circulation, large sections of the nation have come to the conclusion that we are prosperous-that nothing pays like war.

The average working man knows nothing of political economy; he studies neither the movement of trade nor the rise and fall of prices nor the causes. He regards the money which he handles every week as wealth, and, if its purchasing power is reduced, he demands more money. Consequently, as soon as he experienced the higher cost of living, he demanded a bigger wage-more of the plentiful and seemingly inexhaustible output of Treasury

Notes. Thus we have become involved in a circus movement going round and round in a kind of economic delirium. What has happened is this: Month by month the available supplies of the necessaries and luxuries of life have continued to decline, owing, in part, to the influence of war in every country of the world, and in part, to the decline of our ship-carrying capacity. One group of workmen have combined to obtain higher wages and have succeeded. For the moment they have been better off than their fellows, who forthwith have put forward demands, believing that they must be conceded, since, at any cost, strikes must be avoided while the war is in progress. The result has been that large bodies of workers have been enabled, one group after another, to resume spending money on the liberal scale to which they became accustomed in the early and seemingly prosperous months of the war, automatically raising the prices against themselves. Within a short time they have been no better off than they were originally, and further appeals for yet higher wages have been formulated, and so the movement has gone on.

The fundamental errors are: first, that there is an inexhaustible reservoir from which money can be drawn, and that money is wealth; and, secondly, that any Government, however wise, can check the workings of the economic law of supply and demand, already subject to interference owing to the increased shortage of tonnage. Every class of worker, except those living on fixed salaries, has fallen under the spell of those delusions, with the result that a concession cannot be made in one direction, either by Government or by private employer, without establishing a case for a concession in another direction. The movement may be illustrated by a concrete instance. Last summer a number of Labour and Radical M.P.'s reached the conclusion that, as many munition and other workers were earning two or three times as much as under peace conditions, the pay of sailors and soldiers ought to be readjusted. Under the pressure of public opinionif ignorant, well meaning, for the nation does appreciate the work of the Navy and Army-the Cabinet agreed to raise the pay of the Services, the sum involved for the first year being £50,000,000 and for the second £54,000,000. It was immediately suggested that the scheme was not sufficiently generous. So it was reconsidered, with the result that new grants were authorised last month to take effect from September 29th in the case of the Army and October 1st for the Navy. These concessions represent a total charge of £65,000,000 for the first year and £69,000,000 for the second year. Did the movement stop there? Not at all. The War Cabinet, for that and other reasons, soon found itself confronted with a demand for an advance of wages from skilled

time-workers engaged in munition establishments, and eventually a decision was reached covering approximately 300,000 men and involving an increase in the cost of production, falling indirectly on the State, estimated at £6,500,000. According to the Minister of Munitions, it was realised that this was not the end of the matter 1:

"It was always foreseen that this settlement of what was known as the 'skilled man's grievance' would undoubtedly lead to requests from the semi-skilled and unskilled time-workers, who, under the restrictions prevailing when the leaving certificate was in force in the munitions works, had been prevented from obtaining the more lucrative forms of piece-work, and whose wages, through the artificial conditions of the war, had fallen below the pre-war ratio between time and piece rates. In consequence, after further full consideration by War Cabinet conferences, attended not only by all the Government Departments concerned, but by representatives of the employers, the War Cabinet decided to extend the 12 per cent. advance to all time-workers on engineering work, on munitions and in the shipyards. This further advance covers an additional 600,000 men, and adds an additional £7,500,000 to the annual cost of production. In the aggregate the two decisions of the War Cabinet, therefore, affect approximately 900,000 men at an ultimate cost of about £14,000,000."

That does not represent the final phase of the movement. On the contrary, railway workers, miners, merchant seamen, and others have all put forward claims for more pay in order that they may continue to live at a high standard of comfort, in spite of reduced production, in spite of the decline of tonnage, in spite of the wasting of capital, and in spite of the direct and indirect results of a war which has probably withdrawn 200,000,000 persons from productive industry in various parts of the world. Since the war began the cost of living has increased by 100 per cent., and the wages bill of the country has mounted up by a sum which cannot be less than £250,000,000 or £300,000,000. Both movements are traceable to an effort to ignore the basic fact that we live in an island and that we are dependent for most of the food we eat and the raw materials with which we work upon ships, and that the volume of shipping has been and is still steadily decreasing.

For three and a half years this country has been attempting to arrest the movement of economic laws which are as inevitable as the rise and fall of the tide. First in one direction and then in another, the Government has intervened, exercising its control first over this industry and then over that. We are thus becoming involved in an economic struggle almost as fierce as the struggle which is being waged at sea and on the various fronts. We have now reached a stage when practically everything is controlled, and the greater the control the more complete the confusion and

(1) Mr. Winston Churchill, House of Commons, Nov. 28th, 1917.

the greater the economic loss. Light was shed on the present conditions by a Return recently issued containing a "List of Certain Commissions and Committees set up to deal with Public Questions arising out of the War." It contains the record of 267 of these bodies, of which thirty-one are reported as having "ceased to exist." Each body has its staff, varying in size, and its office. The following committees only deal, directly or indirectly, with food, fuel, and clothing :

Agricultural and Fisheries Board and Royal Agricultural Society (Joint Committee); Agricultural and Consultative Committee; Cargoes (Diverted) Committee; Cargoes (Delay in Unloading) Committee; Cattle, BritishCommittee on Utilisation of; Coal Exports Committee; Coal Mines (Controller of) Advisory Board; Coal Mines Department; Cotton Control Board; Cotton Exports Committee; Distributing Trades (Scotland) Committee; Exports Committee; Fertilisers Committee; Fish (Coarse) Irish Committee; Fish (Cured) Committee; Fish Food and Motor Loan Committee; Fish Food Committee; Fresh Water Fish Committee; Fisheries, Sea, (Scottish) Committee; Flour Mills Control Committee; Food Ministry; Food Production Advisory Committee; Food Production Department; Food Production in Ireland Advisory Committee; Food Production in Ireland Departmental Committee; Food Production in Scotland Committee; Foodstuffs (Carriage of) Requisitioning Committee; Forage Committee (Farm Produce); Fruits (Import Licences) Committee; Grain and Potato Crops (1917) Committee; Grain Supplies Committee; Import Restrictions Department; Indian Wheat Committee; Kitchen (Central) Committee; Leather Supplies Committee; Meat Supplies, Interdepartmental, Committee; Milk Distribution Committee; Oats Control Committee; Pig-Breeding Industry (Ireland) Departmental Committee; Port and Transit Executive Committee; Poultry Advisory Committee; Production, Committee on; Rationing Consultative Committee; Relief of Distress Committee; Sugar Supplies Royal Commission; Tea-Advisory Committee; Tea Control Committee; Wheat Executive; Wheat Supplies-Royal Commission; Wool Purchase Central Advisory Committee.

There are, in addition, nine committees connected with ships and shipbuilding and the allied industries, apart from the Ministry of Shipping and the Ministry of Munitions; five committees are concerned with prisoners of war; twelve are associated with the munition movement, in addition to the Ministry of Munitions itself; and there are two which have to do with conscientious objectors, and six with aliens, besides a variety of bodies which are concerned with labour, railways, metals, national service, etc. This official Return conveys a picture of the extent to which the State has interfered with industry, but it does not reflect the increasing movement of workers from private to State employment, with all that that movement represents in interference with the normal relations hitherto existing between employer and employed. It has been a comparatively simple matter to set up these committees and to superimpose control over the various (1) Cd. 8741.