instanced as examples of the world-wide disturbance of commerce caused by the outbreak of war. One very important obstruction to commerce at first was the restriction placed by the military authorities on cabling. Until early in August, when the use of codes was entirely forbidden, many people could not have realised fully the extent to which codes are used in business. It is no uncommon thing for a single word to express a sentence of eight or ten words; and special codes are employed in the different industries, adapted to the peculiar requirements. In the end the concession was made that each set of ten letters should be reckoned as one word, and then permission was granted to firms to use four specified codes. This limited permission did not please everybody, and finally three more codes were placed on the approved list. A scheme for the relief of traders who were unable to recover debts from abroad was one of the Government's important emergency measures. A Joint Committee, on which the Treasury, the Bank of England, the Joint-Stock Banks and the Chambers of Commerce were represented, was formed, with the object of authorising advances where need was urgent to an amount not exceeding 50 per cent. of the foreign book debts. These advances were to be in the form of bills; and it was agreed that 75 per cent. of any ultimate loss should be borne by the Government and the remaining 25 per cent. by the accepting banks. We may next consider briefly prices as affected by the war. Food prices moved very little. At first wheat advanced rapidly, then declined, and for some weeks was hardly on more than a normal basis. Then prices of wheat and flour began to rise, and the half-quartern loaf advanced from 23d. to 31d. That was one of the few direct ways in which housewives in the South and West of England felt the effect of the war. The rise in wheat was due, to some extent, to the stopping of the Russian supplies from the Black Sea district and also to a short harvest following drought in Australia. Happily, the United States and Canada had good harvests, and were able to ship liberal supplies, which went some way to make up for the deficiency. Prices of meat moved only slightly. At first shipments of chilled beef from Argentina were curtailed through fears of interference by the German cruisers; but confidence was quickly restored, and a steady supply, both for the population at home and the Army in France, has been regularly maintained week by week ever since. Cotton fell heavily, which was bad for those who held large stocks and for some speculators, but it meant cheap raw material for manufacturers. The fall was due to the production of an abnormally heavy American crop, coinciding with the shrinkage in demand caused by the war. Even if there had been no war, cotton would have been very cheap. Wool is one of the commodities which have been most affected by the war. The great source of supply is Australasia; and normally more than half the Australian clip is bought by Germany, France, and Belgium. No exports have been made to Germany; and, as the French and Belgian mills have been in the hands of the Germans, the whole clip must be dealt with by this country and the United States. The immense requirements of the Allies for army clothing have resulted in an unprecedented advance in the price of coarse wools, while the finer wools of merino growth have been correspondingly depressed. The activity in the English mills producing khaki has been very great indeed. Some authorities in the woollen trade go so far as to say that Germany could not face a second winter campaign, since she could not acquire the wool with which to clothe her men. Finally, the enormous orders of the Allies for boots has caused a great advance in the price of boot leather. Leather, being contraband, cannot reach the enemy from overseas in any great quantities. Already it has been reported that the Austrians have been using canvas boots with leather toe-caps and thin soles. As Great Britain holds the command of the sea, it would seem likely that before the end of the year the enemy forces will be on their uppers. CUTHBERT MAUGHAN. Art. 15.-THE EFFECT OF THE WAR ON INDUSTRY AND EMPLOYMENT. Board of Trade Labour Gazette. Report of the Board of Trade on the State of Employment in October 1914 [Cd. 7703]. WHEN Great Britain first declared war on Germany, the nation held its breath and braced itself to meet the industrial upheaval which it was assumed must accompany a great European war. But Christmas has come and gone, and instead of our streets being filled with processions of the unemployed, most employers are complaining that workpeople are more difficult to find than at the height of a trade boom. The man in the street, forgetting his fears of August, has swung completely round and is disposed to think that war spells prosperity for the country fortunate enough to hold command of the sea. The logic of events in this as in the Napoleonic wars proves that to a considerable extent this revised opinion is the correct one; but it is important that this outward calm should not lead us to overlook the very considerable changes that are taking place below the surface. The public generally, among whom we must include economists as well as the Chancellor of the Exchequer, has learned a great deal in the past few months about the economic life of the nation, for there has been taking place before our eyes a remarkable disturbance of the ordinary channels of trade, and sweeping readjustments have been made, some with and some without the aid of active intervention by the State. For a detailed picture of recent industrial changes we shall have to wait until full information is available after the war; but we can perceive the chief outlines. The general course of employment since August, as shown by unemployment statistics of Trade Unions, exhibits the same tendencies, though in a very different degree, in both England and Germany. According to the December Labour Gazette, the proportion of trade unionists in receipt of out-of-work benefit has shown the following changes, the figures in both cases being exclusive of those who have joined the Army or Navy: The Board of Trade is continually warning us against making any absolute comparison between the unemployment returns of German and English Trade Unions; but the story told by these figures is too apparent to be affected by detailed differences in the basis of compilation. At the end of November employment in the United Kingdom was distinctly better than a year ago in all trades affected by war contracts, but in other trades there was a decline. The improvement in the German percentage is stated in the Reichsarbeitsblatt' to be due to the same cause, though other non-war trades, with the exception of building, are said to be better than in the first months of the war. The Trade Unions figures, however, only give us a part of the story, for they throw no light on the extent to which the labour market has been relieved by the withdrawal of men for naval or military service. In view of the mobilisation of eight million men for the armies of the Kaiser, the above figures indicate an extraordinary shrinkage of industrial activity in Germany. The mobilisation, which in this country has acted throughout as a mitigation of unemployment, has probably been itself a cause of unemployment in Germany, through the crippling of certain industries which form an indispensable link in the long chain of production. Moreover, it will probably be found, when we know the facts, that lack of inland transport has ranked with the withdrawal of men and the cutting-off of oversea trade as a chief cause of industrial dislocation in Germany. But while these points are at present a matter of conjecture, we have in the Board of Trade Report on the State of Employment in October a means of estimating the contraction of production in this country. The Report shows for the United Kingdom and for particular districts the extent to which those who were at work before the war in various trades are now working shorttime or overtime, have been discharged, or have joined the forces. It is also shown how far employers have filled the places of recruits, or have been compelled to enlarge their staff. The figures for October, which may be applied to the whole industrial population, viz. 7,000,000 men and 2,250,000 women, are these: CONDITION IN THE MIDDLE OF OCTOBER OF THOSE EMPLOYED IN In order to estimate the shrinkage of production from these figures, the proportion working overtime may be set against a similar proportion on short time, leaving a net 12.1 per cent. of males and 20.1 per cent. of females on short time. These may be assumed (from information given on pages 11 and 12 of the Report) to be losing on the average one quarter of their normal weekly hours. That is to say, we must add to the actual contraction figure a quarter of the 'net' short time, in order to get the total reduction in work done. This gives us 137 per cent. reduction for males and 11.2 per cent. for females. Now the number of females occupied in industry is one-third of the number of males, while their work, as shown by wage statistics, is valued at something less than half that of males. Allowing importance to the work of males and females respectively on this basis, we get a combined percentage of 13.3 per cent. as the probable reduction in the industrial output of the nation. The corresponding figure for September was 16 per cent.showing that the nation was more busily employed in October than in September.t * Some overtime may have escaped the notice of the Board of Trade; and, in cases where no overtime is being worked, the output may be above the normal owing to an increased display of energy by the workpeople under the stimulus of a national emergency. But this tendency, if indeed it exists, is almost certain to be counterbalanced by the astonishingly small amount of work which a factory on short time contrives to do. † Since this article was in type, the Board of Trade Report on Employ. ment in December has been issued, showing that a fortnight before |