MASTER 
 NEGATIVE 
 NO. 94-82010 
 
COPYRIGHT STATEMENT 
 
 The copyright law of the United States (Title 17, United States Code) 
 governs the making of photocopies or other reproductions of copyrighted 
 materials including foreign works under certain conditions. !n addition. 
 the United States extends protection to foreign works by means of 
 various mternational conventions, bilateral agreements, and 
 proclarr.ai;ons. 
 
 Under certain conditions specified in the law, libraries and archives are 
 authorized to furnish a photocopy or other reproduction. One of these 
 specified conditions is that the photocopy or reproduction is not to be 
 "used for any purpose other than private study, scholarship, or research." 
 If a user- makes a request for, or later uses, a photocopy or reproduction 
 for purposes in excess of "fair use," that user may be liable tor copyright 
 infringement. 
 
 The Col jmbia University Libraries reserve the right to refuse to accept a 
 copying order if, in its judgement, fulfillment of the order would snvoive 
 Violation ot the copyright law. 
 
Author: 
 
 Gray, Howard Lev' 
 
 Title: 
 
 Wa^ time control of 
 industry 
 
 Place; 
 
 New York 
 
 Date: 
 
 1918 
 
^^-^^.olo-^ 
 
 MASTER NEGATIVE # 
 
 COLUMBIA UNIVERSITY LIBRARIES 
 PRESERVATION DIVISION 
 
 BIBLlOGRAPHir ^iCROFORiVI TARGET 
 
 ORIGINAL MATERIAL AS FILMED » EXISTING FilFJLIOGFmPHIC RECORD 
 
 Business 
 
 D203 
 
 G794 
 
 NNC 
 
 Gray, Hox^rard Lcevi^^ 1873 or 4-1945. 
 
 V/ar time control of industry: the experience 
 of England ... New York, Macmillan, 1918. 
 
 XV, 307 p. 19tfcn. 
 
 1. Industry and state - Great Britain. 
 I. Title. 
 
 m^s^m--s^^'^mimmm~ 
 
 RESTRICTIONS ON USE: 
 
 TECHNICAL MlCf^FOF^M DATA 
 
 FILM SIZE: iSmr^ 
 
 REDUCTIOfj FIATIO 
 
 -7 , / 
 
 IMAGE PLACEfvlENT: lA MA IB IIB 
 
 DATE FILMED: vA/?^ 
 
 iNiflALb: UA 
 
 TRACKING # : 
 
 .'''! 3 II (50 o5^/ 
 
 FILMED BY PRESERVATION RESOURCES. BETHLEHEr/i, PA, 
 
> 
 
 O 
 
 a 
 
 m 
 
 O 
 
 O 
 
 X 
 
 '^, 
 
 
 3 
 3 
 
 DO 
 
 o m 
 Q„ ~n 
 
 (D O 
 
 CTQ ^ 
 
 H-'3-(_ 
 
 00 :^ 
 
 ■^" 
 en _^ 
 
 •-xjO Q 
 
 i ""^ 
 
 <f" .-— — 
 
 ^X < 
 
 X 
 
 ^c^. 
 
 ,<C?' 
 
 
 
 <i^. 
 
 SyM. 
 
 '^ 
 
 s/, 
 
 ^; 
 
 
 e 
 
 ^1 
 
 
 oj 
 
 »\ 
 
 c^Z* 
 
 
 > 
 
 O 
 
 3 
 3 
 
 o 
 o 
 
 3 
 3 
 
 
 O 
 
 
 O 6- 
 
 00 
 
 to 
 
 K) 
 00 
 
 00 
 
 b 
 
 
 
 
 1.0 mm 
 
 1.5 mm 
 
 ':^~' 
 
 2.0 niiii 
 
 ABCDEFGHIJKLMNOPORSTUVWXYZ 
 abcde<ghi|klmnopQrstuvwxyz 1234567890 
 
 ABCDEFGHIJKLMNOPORSTUVWXYZ 
 abcdefghijklmnopqrstuvwxyz 1234567890 
 
 ABCDEFGHIJKLMNOPQRSTUVWXYZ 
 
 abcdefghijklmnopqrstuvwxyz 
 
 1234567890 
 
 rX^ 
 
 
 \^o 
 
 2,5 mm 
 
 ABCDEFGHIJKLMNOPQRSTUVWXYZ 
 abcdefghijklmnopjqrstuvwxyz 
 
 1234567890 
 
 V 
 
 
 k^^ 
 
 W^ 
 
 ^O 
 
 \"cP 
 
 fp 
 
 ^fo^ 
 
 ^o 
 
 <,V 
 
 V 
 
 ^o 
 
 
 & 
 
 ^o 
 
 \<p 
 
 fp 
 
 ^f^ 
 
 m 
 
 MMMk 
 
 O 
 
 o 
 
 TO m "0 
 
 ^^^B ^^3^ «— 
 
 ZLi '"^ <^ 
 
 o '^ ■ 
 
 Zj 33 S! 
 
 o ^ o 
 
 i^V^S^S^ 
 
 Q 
 
 9^^ jmmm "-»>"• 
 
 "0 "^ ^-' 
 
 — p 
 0(/) 5 
 
 m 
 
 O 
 
 m 
 
 ;P 
 
 o 
 
 h- * 
 
 hj 
 
 CJl 
 
 o 
 
 
 — 
 -J 
 
 3 
 -J 
 
 
 
 Qi 
 
 
 cr 
 
 CJ" 
 
 ABC 
 cdef 
 
 ^1 
 
 
 
 
 FGH 
 jklm 
 
 HIJKLMN 
 Tinopqrst 
 
 IJKLMN 
 nopqrst 
 
 OPQRST 
 
 uvwxyzl 
 
 OPQR 
 
 uvwxy 
 
 r^c 
 
 Ni (/) 
 
 00^ 
 
 *•< 
 
 t:t-i 
 
 r^ci 
 
 OiX 
 
 cor; 
 
 ^-< 
 
 OOfsi 
 
 cri^ 
 
 O 
 
 (TiX 
 
 OOM 
 O 
 
 
 ■/^ 
 
 '^ 
 
 ^* *^ 
 
 ^ 
 
 ^ 
 
 '^. 
 
Columbia (HnitJew^fti) 
 
 THE LIBRARIES 
 
 GRADUATE 
 
 SCHOOL OF BUSINESS 
 
 LIBRARY 
 
 From the library of 
 
 John M. Clark 
 
WAR TIME CONTROL 
 OF INDUSTRY 
 
 
WAR TIME CONTROL 
 OF INDUSTRY 
 
 THE EXPERIENCE OF ENGLAND 
 
 0^^ 
 
 THE MACMILLAN COMPANY 
 
 N«W YORK • BOSTON - CHICAGO • DALLAS 
 ATLANTA • SAN FRANCISCO 
 
 MACMILLAN & CO., Limited 
 
 LONDON • BOMBAY • CALCUTTA 
 MELBOURNE 
 
 THE MACMILLAN CO. OF CANADA, Ltd. 
 
 TORONTO 
 
 BY 
 
 HOWAP^•D L..-GRAY 
 
 PROFESSOR OF HISIOP.Y IN BKYS MAWR COLLEGB 
 
 « % 
 
 k\ I 
 
 ITftit fork 
 
 THE MACMILLAN COMPANY 
 
 1918 
 
 AU rights reserved 
 
-^^".^^ Vl/-c.J-i?/' 
 
 
 COPYMOHT, 1918 
 
 By TME-iVf.40SfeII»LAN COMPANY 
 
 f • 
 
 . • « I 
 
 S«t up an/l elcctrotyped. Publislic^ March, 1918. 
 
 
 1 I t . • » 
 I • 
 
 
 Tohr) m. Clark 
 JUN 18 1957 
 
 -J 
 o 
 
 00 
 
 CD 
 
 CM 
 O 
 
 PREFACE 
 
 A part of the information contained in the following 
 pages was gathered for the Commercial Economy Board 
 of the Council of National Defense. Much of it is not 
 
 easy of access. Despite the summary character of the 
 chapters, therefore, they may be not unacceptable to those 
 who are interested, as all during these days must be, in 
 the industrial activities of the state. Although the ex- 
 periments in governmental control of industry here re- 
 corded are due to unusual circumstances, the experience 
 which they yield will scarcely be without influence upon 
 the future. A necessary defect of any account written 
 at this time is its incompleteness. The outcome of the 
 ventures described is not yet known and the end of the 
 tale remains to be told. Even so, the beginning may be 
 worth the telling. 
 
 I am indebted to Dr. Mary Alice Hanna and Professor 
 William Roy Smith for assisting me in revising the man- 
 uscript. 
 
 H. L. Gray. 
 Low Buildings, Bryn Mawr. 
 December, 19 17. 
 
INTRODUCTION 
 
 British control of industry during the war has passed 
 through three phases. The first, extending over some ten 
 months, was a period of tentative action, the Government 
 taking only obvious self-protective measures; the second, 
 lasting for nearly a year and a half, was a period of 
 determined regulation, the Government now being con- 
 cerned to increase, the output of munitions of war, to 
 secure supplies for the army at prices below those of the 
 market, and to regulate shipping; the third, beginning at 
 the end of 1916, has proved to be a period of stringent 
 control, governmental regulation of the production, dis- 
 tribution, and consumption of food being its marked 
 characteristic. The doctrine of laissez fake, still re- 
 spected in 19 14, had by the end of 19 17 passed into at 
 least temporary oblivion. 
 
 These stages in the growing control of industry are 
 marked by corresponding political changes. The period 
 of hesitant and relatively slight control coincided with 
 the regime of the Liberal Cabinet which administered 
 English affairs at the beginning of the war. In June, 
 1915, this Cabinet was enlarged by the inclusion in it of 
 prominent members of the Opposition and became the 
 CoaHtion Cabinet. The change was only one aspect of 
 the general desire for a more energetic prosecution of the 
 
 Vll 
 
Vlll 
 
 INTRODUCTION 
 
 1 
 
 war, which at the same moment led to the increased mo- 
 bilization of industry. A year and a half later it was 
 felt that the Coalition Cabinet was too large a body to 
 act as an efficient executive in war time. In consequence, 
 there was set up in December, 191 6, the smaller War 
 Cabinet, which has since had the immediate responsibility 
 for important administrative measures. A more thor- 
 ough-going control of the prices and consumption of food 
 had, it is true, been decided upon before the War Cabinet 
 was constituted. But both movements w^ere indicative 
 of a new attitude toward the prosecution of the war, and 
 the War Cabinet accepted and carried out with vigour a 
 policy which was the expression of its own convictions. 
 This third political and industrial phase had not yet come 
 to an end in the autumn of 1917. It will lend unity to 
 the following chapters to consider for a moment the char- 
 acteristics of the periods indicated. 
 
 At home, as at the front, the first ten months of the 
 conflict proved to be a time of hurried and somewhat 
 inadequate readjustment. Apart from assuming control 
 over such supplies, industries, and foodstuffs as were es- 
 sential to military needs and the security of civilians, the 
 State showed itself loath to interfere in the economic life 
 of the nation. Ships were, of course, requisitioned for 
 the admiralty and the military, and establishments which 
 could easily turn out munitions were enlisted in the Gov- 
 ernment's service. Further measures were few. Most 
 bold and immediate was the taking over of the railways, 
 the first comprehensive essay in state control. Almost 
 
 'I 
 
 n 
 
 INTRODUCTION 
 
 IX 
 
 as prompt were the measures adopted to insure adequate 
 supplies of food. Since sugar had been imported very 
 largely from enemy countries and would have to be got 
 henceforth in a greatly restricted world market, the Gov- 
 ernment deemed it best to purchase and control all sugar 
 consumed. Wheat, too, it appeared, might become scarce 
 unless a surplus store were acquired. The Government, 
 accordingly, entered the foreign market as a purchaser 
 and bought a supply which before the year had passed 
 proved of great utility. After the adoption of these 
 measures little was done until a winter and spring of war 
 made clear that further action would be necessary. 
 
 This winter of 1914-15 saw a marked rise in the price 
 of foodstuffs and coal. As a result, workmen through- 
 out Great Britain began to reason that there should be 
 either a corresponding increase in wages or an effort on 
 the part of the Government to check rising prices. Since 
 many producers and middlemen seemed to be reaping 
 undue profits, charges of " profiteering " were now heard. 
 The nervousness of labour found expression in a demand 
 for war bonuses, and after February, 191 5, these were 
 secured from employers with more or less friction. 
 Where the friction was great the Government had to in- 
 tervene, and the spring months of 191 5 were marked by 
 vigorous efforts to conciliate labour in order that its 
 active co-operation in the prosecution of the w^ar might be 
 secured. 
 
 There was the greater need of harmony now that the 
 nation was beginning to realize the magnitude of the 
 
^ INTRODUCTION 
 
 task before it. Such episodes as the battle of Neuve 
 Chapelle and the loss of Przemysl by the Russians dem- 
 onstrated the imperative need of abundant munitions of 
 war. Thereupon began a campaign for the complete mo- 
 bilization of such industrial resources as might be directed 
 toward the production of military and naval supplies. 
 It was initiated by the Munitions of War Act of June, 
 1915. the conception and passage of which may be said 
 to mark the beginning of the second industrial period of 
 the war. 
 
 The introduction of the bill in Parliament had been 
 preceded by conferences with representatives of labour. 
 In these conferences the trade unions agreed to relax 
 many of their restrictions and to permit the employment 
 of unskilled workers, but they exacted one concession — 
 the requirement that employers' profits be restricted. 
 Such restriction the bill imposed. On the other hand, 
 provisions for compulsory arbitration of industrial dis- 
 putes and for the securing by munitions workers of 
 " leaving certificates " were to act as checks upon any in- 
 terruption of work. The Defence of the Realm Act had 
 already permitted the conversion of any engineering es- 
 tablishment in the country into one producing munitions. 
 Fortified by the two acts the Government entered upon 
 a period of munitions making quite unprecedented, and a 
 year later remarkable results could be announced. 
 
 In its mobilization of capital and labour for the pro- 
 duction of munitions of war, the Government was more 
 happy than it was in dealing with the coal miners. This 
 
 INTRODUCTION 
 
 XI 
 
 1 
 
 large and influential body of workingmen refused to come 
 under the Munitions of War Act; and, when the Govern- 
 ment relative to a threatened strike in South Wales 
 endeavoured to enforce the measure, industrial revolt 
 seemed imminent. Conciliated for the time by the per- 
 suasion of Mr. Lloyd George and securing for the most 
 part their demands, the South Wales miners returned to 
 work. At the end of 1916, however, they again threat- 
 ened to strike, and this time the Government, unwilling 
 to see necessary supplies imperilled, assumed control of 
 the mines, first in South Wales, soon after throughout 
 Great Britain. Difficulties with the coal miners thus 
 marked the beginning and the conclusion of the second 
 industrial period of the war. 
 
 Still other features than the production of munitions, 
 the conciliation of labour, and the trouble with the min- 
 ers characterize the period. In purchasing clothing and 
 leather for the army the War Office soon saw itself faced 
 with rising prices due in turn to a precarious supply of 
 raw material. In the course of 1916 it decided that the 
 wool clip of Great Britain should be acquired and at the 
 end of the year bought also the far larger one of Aus- 
 tralasia. Purchases of domestic and imported hides, 
 though on a more restricted scale, were similarly carried 
 through. To secure meat supplies for the army at a 
 reasonable price, the Government in the spring of 19 15 
 was forced to requisition shipping space on British ves- 
 sels plying to Australasia and to the Argentine. It was 
 the beginning of the control of merchant shipping 
 
I 
 
 xu 
 
 INTRODUCTION 
 
 prompted by a desire to influence prices. A similar form 
 of control was adopted when, after freight rates for 
 wheat had risen immoderately toward the end of 1915, 
 the Government diverted ships to the North American 
 trade and determined what profits were permissible. By 
 the end of 19 1 6 there was little British shipping that had 
 not been requisitioned or was not controlled. During 
 the same year, also, measures looking toward economy 
 in shipping space became necessary and the importation 
 of certain bulky commodities was restricted. 
 
 It was toward the end of 1916 that public criticism 
 and the exigencies of the shipping situation forced upon 
 the Government a policy of still more stringent control 
 over many branches of industry. Behind all lay the in- 
 creased cost of living. Complaints about this had been 
 rife ever since February, 191 5, when the rising prices of 
 necessities first became oppressive. In the summer of 
 19 1 5 the price of coal at the pit head was limited by statute 
 to a certain advance upon pre-war prices. From the be- 
 ginning of the war the Government controlled the price 
 of sugar, but kept it very high, since there was added to 
 a considerable initial cost a heavy war tax. The price 
 of wheat and of imported meat had to some extent been 
 affected by the Government's control of ocean freights. 
 There remained, however, the possibility of fixing max- 
 imum prices for essential foodstuffs; and, if it should 
 appear that such a policy might discourage the British 
 farmer and deter him from production, inducements 
 to agriculture might well be offered in compensation. 
 
 INTRODUCTION 
 
 XUl 
 
 Upon this somewhat hazardous policy the Government 
 ventured after November, 19 16. At that time the cost 
 of the principal articles of food as compared with the 
 cost at the beginning of the war had advanced about 80 
 per cent. Beginning with a limitation upon the prices 
 which might be charged for milk, the Government in the 
 course of a twelvemonth fixed maximum prices for the 
 most important articles of food. In the case of bread, 
 for which a maximum price based upon the cost of im- 
 ported wheat would still have worked hardship for a 
 large part of the population, a price below cost was 
 eventually established. The loss would be made good, 
 it was explained, by a subsidy from the exchequer. Con- 
 versely, the farmer was encouraged to plough arable 
 land for the sowing of grain by the guarantee of mini- 
 mum prices for wheat and oats during a series of years. 
 Thus with one hand the Government tried to check rising 
 costs, while with the other it endeavoured to stimulate 
 production. 
 
 The stimulus to production was one method of escape 
 from what was to prove an imminent danger of 1917, the 
 shortage of ocean tonnage. Much British mercantile 
 shipping having been requisitioned from the beginning of 
 the war, the activity of submarines more and more made 
 serious inroads upon the part that remained. Not only 
 was it essential that more food be produced in Great 
 Britain, but economy of consumption became imperative. 
 In various ways the Government set itself to induce peo- 
 ple to save food. Making use of persuasion at first, it 
 
XIV 
 
 INTRODUCTION 
 
 Stood ready at the end of 19 17 to resort to rationing if 
 necessary. Indeed, in the case of sugar, rations were 
 imposed at the end of the year. 
 
 Another aspect of the economy forced upon Great 
 Britain during the year was the resort of priority schemes. 
 Particularly in the apportionment of steel to manufac- 
 turers according to the importance of their products from 
 the mihtary or national point of view and in the similar 
 allocation of wool to spinners were priority rulings in- 
 troduced. They were, indeed, a kind of rationing. 
 Whereas, however, for consumers of food the rationing 
 is impartial, it is the essence of priority rationing to show 
 favouritism. Always in the latter the manufacturer of 
 civilian implements or stuffs gets least consideration. 
 All energies of the nation are concentrated upon the pro- 
 duction of what is essential for the war, and other activi- 
 ties receive litde consideration. 
 
 The following chapters have been arranged to show as 
 far as possible the successive stages of governmental con- 
 trol over industry. First to be subjected to it were the 
 railways. Munitions works and the labour which op- 
 erates them were next with great effort directed toward 
 energetic and disciplined production. Coal miners and 
 dealers in coal proved more obdurate, forcing the Gov- 
 ernment to take over the industry. The administration 
 of wool and hides was assumed in order to secure econo- 
 mies in government purchasing and to conserve stocks. 
 Upon the shipping industry depends the existence of a 
 food-importing nation ; and to secure supplies at reason- 
 
 INTRODUCTION XV 
 
 able rates nearly all merchant shipping was eventually 
 requisitioned or put under blue-book rates. Finally, in 
 the last period of governmental control, food was made 
 available for the consumer at maximum prices and pro- 
 duction was stimulated by the promise of possible sub- 
 sidies to the farmer. 
 
 What may be the permanent significance of this gov- 
 ernmental control of industry cannot be foreseen. As- 
 surance is given that all measures are temporary and that 
 with peace the conditions of peace will be restored. 
 What will have been created, however, is precedent and 
 experience; and in the industrial world which emerges 
 from the war these may have more importance than is at 
 the moment anticipated. 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 I Introduction yii 
 
 II The Railways i 
 
 III Munitions and Labour 14 
 
 IV The Coal Mines 61 
 
 V Wool and Woollens iqi 
 
 VI Hides and Leather 129 
 
 VII Shipping 140 
 
 VIII Food.— Sugar, Meat, and Bread .... 167 
 
 IX Agriculture 249 
 
 X Conclusions and Comparisons .... 269 
 Index ^ok 
 
p. D. C. 
 P. D. L. 
 Cd. 
 
 D. F. M. 
 B. T. J. 
 B. T. R. 
 L. T. 
 
 L. E. 
 M. G. 
 
 E. N. 
 A. R. 
 
 ABBREVIATIONS 
 
 Parliamentary Debates, Commons. 
 
 Parliamentary Debates, Lords. 
 
 Paper by Command. 
 
 Defense of the Realm Manual. 
 
 British Trade Journal. 
 
 British Trade Review. 
 
 London Times. 
 
 London Economist. 
 
 Manchester Guardian. 
 
 English Nation. 
 
 Annual Register. 
 
 ti 
 
WAR TIME CONTROL OF 
 
 INDUSTRY 
 
 i 
 
 i 
 
 f 
 
 THE RAILWAYS 
 
 On August 4, 1914, Great Britain was at war; on 
 August 5, His Majesty's Government assumed control of 
 the railways of England, Scotland, and Wales. It was 
 the prompt, almost instantaneous action of the State to 
 secure for itself command of the arteries of traffic. 
 Henceforth administration lay with a committee of gen- 
 eral railway managers, their chairman the President of 
 the Board of Trade. ^ 
 
 In accordance with the Regulation of the Forces Act 
 (1871) under which the Government acted, interposition 
 involved full compensation to the owners for loss or in- 
 jury sustained, the amount of this to be determined by 
 agreement or, if necessary, by arbitration. In Septem- 
 ber the Board of Trade issued a memorandum announc- 
 ing the agreement reached. The Government undertook 
 to pay to the companies " the sum by which the aggre- 
 gate net receipts for the period during which the Gov- 
 ernment are in possession fall short of the aggregate net 
 
 ^ H. J. Jennings, Home Railways during the War. Nineteenth 
 Century and After. Apr. 1915. 
 
2 WAR TIME CONTROL OF INDUSTRY 
 
 receipts for the corresponding period of 1913." If, how- 
 ever, the net receipts of the companies for the first half 
 of 19 1 4 should turn out to be smaller than the net re- 
 ceipts for the first half of 19 13, the sum payable should 
 be reduced in the same proportion. The Government's 
 payment together with the net receipts of all the com- 
 panies was to be distributed among them in proportion to 
 their several net receipts during the period with which 
 comparison was made. The plan in short was the sim- 
 ple one of guaranteeing to the railways the profits which 
 had prevailed during the immediate past. On the other 
 hand, the arrangement covered all special services, such 
 as those in connection with military or naval transport, 
 rendered to the Government by the companies ; it, there- 
 fore, became unnecessary that payments be made for such 
 services.^ Not only did the railways pool their net traf- 
 fic receipts but to a great extent they pooled their rolling 
 stock as well. Arrangements thus made for public ends 
 have persisted with slight readjustments during the war. 
 Having come to terms with the owners of the railways, 
 the Government turned to the men. The railway em- 
 ployes of Great Britain are organized in two large 
 unions, the National Union of Railwaymen and the As- 
 sociated Society of Locomotive Engineers and Firemen. 
 It happened that a scheme of conciliation, worked out 
 between the unions and the owners at a Board of Trade 
 conference on December 11, 191 1, became inoperative 
 after November 30, 19 14. The avoidance of readjust- 
 
 2 B, T. J., Sept. 17, 1914, p. 749. 
 
 THE RAILWAYS 3 
 
 ment and possible industrial conflict at the latter date was 
 imperative. The unions happily showed themselves 
 ready to conclude with the Government in October what 
 is known as " the truce." They agreed that the concilia- 
 tion scheme of 1911 should remain in force, the men's 
 representatives on the existing conciliation boards of each 
 of the several railways continuing to act. The railway 
 companies or either union might, however, give six 
 weeks' notice to terminate the agreement. Otherwise all 
 existing contracts and conditions of service should re- 
 main operative.^ True to the spirit of the agreement, 
 the men showed public spirit, suspended trade union 
 regulations, worked hard and overtime. 
 
 The first occasion for a readjustment came early in 
 191 5. Owing to the increased cost of living, the men 
 asked for an advance of 5 s. per week in their wages. 
 The companies ofl^ered less, and the outcome of several 
 conferences, supervised and directed by the government, 
 was the grant of a war bonus. It was fixed at 3 s. for 
 men whose wages were more than 30 s. a week, at 2 s. 
 for those whose wages were less.^ Mr. A. Bellamy, 
 President of the National Union of Railwaymen, in his 
 address at the annual conference of that body, hailed the 
 outcome as the " largest and widest agreement ever nego- 
 tiated by any union for the benefit of its members in the 
 history of the United Kingdom, if not of the world." ^ 
 
 3 P. D. C, Aug. 15, 1917. (L. T., Aug. 16, p. 8). 
 
 * Ibid. 
 
 «L. T., Je. 22, 191 5, p. 5. 
 
4 WAR TIME CONTROL OF INDUSTRY 
 
 But the triumph was not so much over unwilling em- 
 ployers as over an embarrassed government. For it was 
 the Government which frankly assumed three-fourths of 
 the £4,000,000 added to the wages bill.^ Indirectly it 
 assumed the entire sum, although the companies agreed 
 to pay 25 per cent, of the increase. This was in return 
 for another concession from the Government. The lat- 
 ter had, it will be remembered, safeguarded itself in its 
 arrangement with the companies against the possibility 
 that earnings during the first half of 1914 might be less 
 than during the first half of 1913. This contingency de- 
 veloped into fact with the publication of balance sheets, 
 the northern roads having suffered just before the war 
 from a reaction in the iron trade and from inactivity in 
 the cotton trade. The Government would have been en- 
 titled to reduce its payment to the 1914 basis, i. e., to 
 have decreased it by nearly 3 per cent. Instead it stip- 
 ulated that the companies pay 25 per cent, of the war 
 bonus now promised to the menJ Despite this apparent 
 shifting of part of the burden, the meeting, directly or 
 indirectly, of this first demand of labour for increased 
 wages stood forth in February, 19 15, as one of the first 
 fruits of governmental control. 
 
 Demands of the kind naturally did not end early in 
 191 5. In September unrest was again manifest and a 
 certain section of the National Union of Railwaymen 
 urged the termination of " the truce." Eventually, at 
 
 ® Jennings, op. cit. 
 
 7 B. T. J., Apr. 22, 1915, pp. 223, 224. 
 
 THE RAILWAYS 5 
 
 a meeting between the executive council of this body 
 and the representatives of the companies, the war bonus 
 was increased from 3 s. to 5 s. More ominous was the 
 discontent of August and September, 19 16. The in- 
 creased cost of living had now become oppressive, and 
 a further 10 s. advance in the bonus was demanded. If 
 the State were compelled to find money for increased 
 wages, the men reasoned, it might do something about 
 prices. Such sentiments found expression at a general- 
 delegate meeting of the National Union at Essex Hall, at 
 a demonstration in Hyde Park, at a mass meeting of 
 Welshmen at Cardiff. In September the Welshmen 
 threatened to stop work unless an advance of wages were 
 conceded within a week. The companies on their part 
 offered to extend the 5 s. bonus by 3 s. and to refer to 
 arbitration the demand for a further advance. The men 
 declined the offer. On September 15 the Board of Trade 
 intervened, negotiating alternately with the Executive 
 Committee of the National Union and the General Man- 
 agers of the Railway Companies. Meanwhile at Cardiff 
 the men postponed the strike which had been set for Sep- 
 tember 17, and by the twentieth an agreement was 
 reached. The war bonus for men of eighteen and over 
 was advanced from 5 s. to 10 s., for men under eighteen 
 from 2 s. 6 d. to 5 s.^ The Government, of course, as 
 administrator of the railways, assumed responsibility for 
 the increase. Again, in April, 1917, 5 s. was added to 
 
 «A. R., 1916, p. 166. 
 
4 WAR TIME CONTROL OF INDUSTRY 
 
 But the triumph was not so much over unwilling em- 
 ployers as over an embarrassed government. For it was 
 the Government which frankly assumed three-fourths of 
 the £4,000,000 added to the wages bill.^ Indirectly it 
 assumed the entire sum, although the companies agreed 
 to pay 25 per cent, of the increase. This was in return 
 for another concession from the Government. The lat- 
 ter had, it will be remembered, safeguarded itself in its 
 arrangement with the companies against the possibility 
 that earnings during the first half of 1914 might be less 
 than during the first half of 1913. This contingency de- 
 veloped into fact with the publication of balance sheets, 
 the northern roads having suffered just before the war 
 from a reaction in the iron trade and from inactivity in 
 the cotton trade. The Government would have been en- 
 titled to reduce its payment to the 1914 basis, i. e., to 
 have decreased it by nearly 3 per cent. Instead it stip- 
 ulated that the companies pay 25 per cent, of the war 
 bonus now promised to the men7 Despite this apparent 
 shifting of part of the burden, the meeting, directly or 
 indirectly, of this first demand of labour for increased 
 wages stood forth in February, 1915, as one of the first 
 fruits of governmental control. 
 
 Demands of the kind naturally did not end early in 
 191 5. In September unrest was again manifest and a 
 certain section of the National Union of Railvvaymen 
 urged the termination of '' the truce.'* Eventually, at 
 
 6 Jennings, op. cit. 
 
 7 B. T. J., Apr. 22, 1915, pp. 223, 224. 
 
 / 
 
 THE RAILWAYS 5 
 
 a meeting between the executive council of this body 
 and the representatives of the companies, the war bonus 
 was increased from 3 s. to 5 s. More ominous was the 
 discontent of August and September, 19 16. The in- 
 creased cost of living had now become oppressive, and 
 a further 10 s. advance in the bonus was demanded. If 
 the State were compelled to find money for increased 
 wages, the men reasoned, it might do something about 
 prices. Such sentiments found expression at a general- 
 delegate meeting of the National Union at Essex Hall, at 
 a demonstration in Hyde Park, at a mass meeting of 
 Welshmen at Cardiff. In September the Welshmen 
 threatened to stop work unless an advance of wages were 
 conceded within a week. The companies on their part 
 offered to extend the 5 s. bonus by 3 s. and to refer to 
 arbitration the demand for a further advance. The men 
 declined the offer. On September 15 the Board of Trade 
 intervened, negotiating alternately with the Executive 
 Committee of the National Union and the General Man- 
 agers of the Railway Companies. Meanwhile at Cardiff 
 the men postponed the strike which had been set for Sep- 
 tember 17, and by the twentieth an agreement w^as 
 reached. The war bonus for men of eighteen and over 
 was advanced from 5 s. to 10 s., for men under eighteen 
 from 2 s. 6 d. to 5 s.^ The Government, of course, as 
 administrator of the railways, assumed responsibility for 
 the increase. Again, in April, 1917, 5 s. was added to 
 8 A. R., 1916, p. 166. 
 
6 WAR TIME CONTROL OF INDUSTRY 
 
 the war bonus, which thus became 15 s. a week.^ Since 
 these liberal awards affected some 350,000 men, trade 
 union officials could congratulate themselves. 
 
 In August, 19 1 7, new demands on the part of one of 
 the unions went beyond the simple question of war 
 bonuses. During the summer both unions had made 
 fresh proposals to the companies. The response of the 
 latter proving satisfactory to the National Union of Rail- 
 waymen, a conversion of the war bonus into a war wage 
 was accepted, the effect being an increased payment for 
 overtime and for Sunday duty, which amounted to some 
 £13,000,000 per annum. A like offer was made to the 
 Associated Society of Locomotive Engineers and Fire- 
 men, who represent about one-half of the drivers and 
 firemen and claim a membership of 35,000. This body, 
 however, declined to negotiate regarding a wage or bonus 
 unless the principle of an eight-hour day was first con- 
 ceded. The President of the Board of Trade, Sir Albert 
 Stanley, pointed out that the Government could not con- 
 sider their proposal, since the question did not arise out 
 of war conditions nor could an eight-hour regime pos- 
 sibly be adopted during the war. Inasmuch as the pres- 
 ent system of control, he added, would continue for some 
 time after the war, there would then be an opportunity to 
 deal with the question of hours. ^^^ Mr. Thomas, speak- 
 ing for the National Union in the House of Commons, 
 declared that the 400,000 men whom it represented knew 
 
 » L. T., Aug. 20, 1917, p. 7. 
 
 10 P. D. C, Aug. 15, 1917 (L. T, Aug. 16, p. 8). 
 
 THE RAILWAYS 7 
 
 nothing officially of the threatened strike and were not 
 concerned in it.^^ Elsewhere he explained that while he 
 was in favour of an eight-hour day for all railwaymen, 
 this movement of the smaller union aimed at the securing 
 of special privileges for a single group. Nor was it a 
 genuine eight-hour-day movement, since there was every 
 expectation of working overtime and receiving therefor 
 additional wages. Above all, the demand was in con- 
 travention of the truce made by labour at the beginning 
 of the war to the effect that no pre-war question of dis- 
 pute should be brought forward during the continuance 
 of hostilities.^2 
 
 None the less the engineers and firemen persisted. On 
 Friday, August 17, a meeting of delegates threatened a 
 strike unless the Government within twenty-four hours 
 conceded their demands. Next day Sir Albert Stanley and 
 Mr. George Barnes endeavoured unsuccessfully to dis- 
 suade them. The hour for the strike was left to the de- 
 cision of the executive committee, and at the conclusion 
 of the meeting the younger members lustily sang " The 
 Red Flag.'' The Government at the same time issued a 
 proclamation applying the Munitions of War Act, which 
 declared a strike illegal until resort had been had to the 
 arbitration of the Minister of Labour. ^^ 
 
 Signs of dissent meanwhile appeared within the union. 
 At Plymouth a branch signified that it would not obey an 
 
 " Ibid. 
 
 " L. T., Aug. 20, 1917, pp. 7, 8. 
 
 " Ibid. 
 
8 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 order to strike. Responsible members declared that the 
 extreme Socialist element was not strong, being confined 
 chiefly to South Wales. On Monday wiser counsels pre- 
 vailed at London. Conferences between the executive 
 committee of the union and the Board of Trade were 
 resumed, and in due course an agreement was reached. 
 The strike was declared off, while Sir Arthur Stanley 
 renewed and slightly extended the pledge which he had 
 offered to the delegates on Saturday. After the war the 
 Government would continue the control of railways for a 
 time, and within one month would afford an opportunity 
 for the bringing forward of a request for a shorter work- 
 ing day. Any reasonable request would have the im- 
 mediate and sympathetic consideration of the Govern- 
 ment. During the war the Railway Executive Com- 
 mittee would reduce hours so far as possible, and future 
 demands for wages would be dealt with as liberally as 
 demands in the past had been.^'* With this somewhat 
 generous concession on the part of the Government the 
 unrest of the railway men was for the time quieted 
 and the machinery of state control once more moved 
 smoothly. 
 
 In its dealings with the railways, the Government's 
 prime concern, apart from the problem of labour, was 
 economy in the employment of staff and rolling stock. 
 Added to the normal demands upon the home railways 
 was the enormous task of transporting troops and ma- 
 terials of war. Since these claims of course took pre- 
 
 1* Ibid., Aug. 22, p. 6. 
 
 THE RAILV^AYS 9 
 
 cadence, the result was the frequent delay of civilian 
 freight, especially food. Congestion at the docks be- 
 came a persistent evil and the increased cost of living 
 was at times and in part traceable to the overtaxed trans- 
 portation system. 
 
 At the end of November, 1916, the Board of Trade, 
 preparing to be mandatory, resorted to exhortation. 
 Pointing to the increased demands upon the railways, 
 they noted that civilian traffic had diminished little and 
 urged that each prospective traveller ought henceforth 
 to ask himself whether his journey was necessary. 
 Should matters not improve, the Government, however 
 reluctantly, would have to interfere. Upon traders the 
 Board wished to impress the importance of avoiding de- 
 lays both in loading and unloading wagons. The saving 
 of a day by all shippers would mean a substantial ad- 
 dition to the rolling stock of the country. Commendable, 
 too, was economy in the use of sheets for covering 
 wagons.'^ 
 
 With this admonition the Government, after a fort- 
 night, proceeded to amend the Defense of the Realm Act 
 by Regulation 7 B. This conferred upon the Board of 
 Trade extensive powers. They might henceforth take 
 possession of any private owner's wagons on making 
 due compensation; they might enforce prompt loading 
 or unloading of wagons ; they might curtail statutory re- 
 quirements as to the running of trains and the stopping 
 at stations ; they might restrict or prohibit certain classes 
 
 15 B. T. J., Nov. 30, 1916, p. 656. 
 
lO 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ) 
 
 of traffic, including passengers' luggage; they might 
 modify statutory requirements with respect to maximum 
 fares foi passengers. ^^ 
 
 Luggage and fares were the Board's first objective. 
 Two Orders in Council of December 31, 1916, provided 
 respectively that luggage carried should not exceed 100 
 pounds for each passenger and that after January i, 
 19 1 7, the companies might charge in addition to existent 
 fares a sum equal to one-half of such fares.^^ The com- 
 panies, acting promptly, made new schedules effective 
 with the new year. Passenger trains became fewer, 
 slower, and longer. Through carriages attached to main 
 line trains were decreased in number, passengers had to 
 change oftener. Through traffic between districts was, 
 so far as possible, concentrated on one line. On local 
 services, although morning and evening trains were not 
 greatly changed, others were removed. Reserva- 
 tion of compartments and seats was discontinued, the 
 number of restaurant and sleeping cars curtailed. The 
 London and North Western on its system cancelled 500 
 trains and shut down 44 stations. ^^ Such changes, to- 
 gether with the 50 per cent, increase in fares, were ex- 
 pected to do away with mere travelling for pleasure. 
 
 Hostile criticism was directed not so much against the 
 imposition of restrictions as against their character. 
 Surely it was said,^^ the first thing to do was to cut off 
 
 16 Ibid., Dec. 21, igi6, p. 865 (Order in Council, Dec. 13, 1916). 
 
 " D. R. M., 4th ed., p. 360. 
 
 18 M. G., Dec. 28, 29, 1916; L. T., Jan. i, 1917, p. 5. 
 
 " E. N., Jan. 6. 1917, p. 487; P. D. C, 1916, LXXXVIII, 1818, 1846. 
 
 ) 
 
 THE RAILWAYS jj 
 
 luxuries and of these the most conspicuous were first-class 
 carriages. To retain them while raising fares by 50 
 per cent, was a discrimination against wage earners and 
 poor people. To which it could only be said in reply 
 that workmen's, season, traders', and zone tickets were 
 not subject to the increase. The Government, far from 
 hampenng the movements of people like munitions work- 
 ers, was doing what it could to facilitate them. 
 
 Two more orders under the new regulation, issued on 
 March 16, looked toward economy in the use of freight 
 wagons. If a wagon was not unloaded by a trader within 
 a specified time (two days at inland stations, three days at 
 ports, always excluding the day of arrival or receipt of 
 notice), the railway company might cause the wagon to be 
 unloaded and its contents stored at the owner's risk all 
 expenses to be paid by the trader. For loading, one day 
 was allowed, although two days might be taken in Scot- 
 land should the freight be coal. The order was not ap- 
 plicable to the coal traffic of England and Wales If 
 the second order provided, a private owner's wagon 
 would otherwise be sent on a journey empty, the Board 
 of Trade might take possession of the wagon for that 
 journey, giving such directions for loading as they 
 thought fit and recompensing the owner for its use.^o 
 With these orders the policy of economy, foreshadowed 
 m the new regulations of December, was put into more 
 extended operation. 
 
 Soon after there was outlined a plan for attain- 
 
 20 D. R. M., 4th ed., pp. 364, 367; B. T. J., Mar. 29, 1917. 
 
12 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE RAILWAYS 
 
 13 
 
 t 
 
 ing economy in the transportation of coal. The Con- 
 troller of Coal Mines officially called attention to the sav- 
 ing of haulage which would result if all possible descrip- 
 tions of coal were purchased from collieries situated as 
 near as possible to the points where the coal in question 
 was to be consumed. ^^ By July he had worked out a 
 scheme which, from September 10, 1917, would make 
 compulsory the saving indicated. For purposes of trans- 
 portation, Great Britain was divided into twenty areas 
 indicated on widely distributed maps prepared for the 
 Controller by the railway clearing house. Between 
 these areas transportation was to take place in accordance 
 with certain principles. Consumption should be as near 
 the producing point as possible ; in consequence, coal pro- 
 duced and consumed within one area would be ignored, 
 and an area producing less coal than sufficed for its own 
 needs should not send its product to other areas. Coal 
 passing from one area to another should follow main 
 trunk lines, since these had superior facilities, and should, 
 as far as possible, move in such well defined directions as 
 north to south, north to south-east, north to south-west, 
 east to west. In pursuance of this end the map indicated 
 by straight lines and arrows the approved movements. 
 London and its environs, for instance, form one area, and 
 converging lines from midland, northern, or western dis- 
 tricts show whence it may most economically draw its 
 supply. 
 
 In carrying out the scheme, factors, merchants, and di- 
 
 21 B. T. J., Mar. 15, 1917, P- 725- 
 
 rect consumers were not asked to take any initiative. 
 District Coal and Coke Committees, acting for the Con- 
 troller of Coal Mines, assumed administrative powers. 
 Every colliery owner, on receiving instructions from the 
 Committee in whose area his colliery is situated, was re- 
 quired to inform the Committee of his sales of coal and 
 of the place or region supplied by the purchaser. The 
 Committee in due course informed him what supplies 
 were to be diverted elsewhere after September 10, 1917, 
 and it then became his duty to make this known to the 
 merchants and factors affected. By these seemingly sim- 
 pie arrangements, 700 million ton-miles, it was estimated, 
 would be saved annually.22 
 
 In its administration of the railways the Government 
 has been perhaps more fortunate than in any other of its 
 essays in state control. Acting promptly, it met with no 
 opposition from the owners, and the terms on which it 
 acquired possession cannot be called unfavourable; the 
 successive demands made by the men have led to no very 
 serious deadlocks, owing perhaps to the highly concilia- 
 tory attitude which the Government in each instance even- 
 tually adopted; economies in traffic have since the end of 
 19 16 been secured and this without serious inconvenience 
 to the public. The record is undramatic and enviable, 
 especially when compared with the crises and discontent 
 which marked the advent of government control in other 
 industries. 
 
 22 L. T., Jy. 7, 1917, p. 7; U. S. Chamber of Commerce, War Bulle- 
 tm No. 10, Aug. 3, 1917. 
 
MUNITIONS AND LABOUR 
 
 During the first half of 19 15 events abroad and at 
 home made clear to British statesmen that all was not 
 well either in the trenches or in the workshops. The 
 battle of Neuve Chapelle disclosed British inferiority in 
 guns and shells; a series of strikes announced growing 
 industrial unrest. Obviously the two situations reacted 
 upon each other. The production of munitions could not 
 be increased so long as the producers were indifferent or 
 rebellious; and, on the other hand, the continuance of the 
 war tended to increase the cost of living, the burden of 
 which fell most heavily on the workers and was passion- 
 ately resented by them. For they reasoned that the in- 
 crease was unwarranted, and due to " profiteering '' by 
 capitalists and middlemen. Such exploitation the Gov- 
 ernment could prevent if it would; and prevent it the 
 Government must. The double task of His Majesty's 
 ministers in 1915, therefore, was to increase greatly the 
 output of munitions of war and to arouse labour by an 
 appeal to its patriotism, while conciliating it by a limita- 
 tion of employers' profits. 
 
 At the outbreak of the war the government munition 
 plants for the army (Woolwich Arsenal, Enfield, and 
 others) were far from being in the state of readiness 
 which characterized the navy's dockyards. Nor were 
 
 14 
 
 MUNITIONS AND LABOUR 
 
 IS 
 
 private armament firms better off. Particularly was 
 there a shortage of machine tools, habitually got by both 
 England and France in large measure from America. 
 Although any one can make shells, only skilled workmen 
 can produce tools. In the case of both the belligerents 
 and the United States there was, therefore, a period of 
 delay before the equipment for turning out munitions on 
 a large scale could be installed. 
 
 Already in October, 19 14, Great Britain began to take 
 stock of the military and industrial situation. The old 
 assumption of the Committee of Imperial Defence that 
 an expeditionary force should not exceed six divisions 
 had been discredited and preparations were on foot to 
 send many times this number of soldiers to France. Not 
 only were munitions needed on an unprecedented scale, 
 but the character of them had to be changed. High ex- 
 plosive shells were proving more important than shrap- 
 nel. " I do not know," said Mr. Lloyd George, " that 
 we have got to change the whole of our machinery, but 
 at any rate it makes a vast difference to change the actual 
 character of your ammunition in the midst of a war and 
 begin afresh." ^ A report was got from France and, 
 following French example, the larger armament firms 
 introduced a system of sub-contracting. Larger and 
 more experienced plants retained in their hands the dif- 
 ficult processes and the putting together of parts, exercis- 
 ing likewise supervision over the less experienced estab- 
 lishments. Before mid-spring of 191 5 the Government, 
 
 1 P. D. C, 1915, LXXI, 314. 
 
m 
 
 i6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 either by direct contract or by sub-contract, employed 
 between 2500 and 3000 firms. The War Office and a 
 Cabinet Committee made arrangements by which men 
 from engineering works went to armament firms for some 
 six weeks while their own shops were being adapted ; and 
 the knowledge acquired was in turn valuable in carrying 
 out the adaptation. If 20 be taken as representing the 
 output of artillery ammunition in September, 19 14, the 
 output of succeeding months was : October 90, Novem- 
 ber 90 (since new machines had not yet come into opera- 
 tion), December 156, January 186, February 256, March 
 3S8. By April the Government was free from anxiety 
 regarding munitions and could largely supply its allies. 
 Lord Moulton in particular had done much to increase 
 the supply of high explosives.^ 
 
 In December, 19 14, however, it had been discovered 
 that contractors were likely to be late in fulfilling their 
 orders owing to lack of labour. Efforts were then made 
 through labour exchanges to transfer workers to arma- 
 ment works. At first a considerable number of men 
 came, but during February, 191 5, fewer, and by March 
 it was clear that deficiencies could not thus be made up.^ 
 The Government consequently adopted a " second best 
 course." On March 9, Mr. Lloyd George introduced 
 the Defence of the Realm Bill, the cornerstone upon 
 which was to be reared an elaborate structure of state 
 control. The immediate purpose of the measure was to 
 
 3 IVh" ^^' '^""^^'^' ^P^^^^ ""^ ^''- ^^°>^^ ^^^''^e* Apr. 21, 1915. 
 
 MUNITIONS AND LABOUR 
 
 17 
 
 enable the Government, i. e. the War Office and the Ad- 
 miralty, to take over such private engineering works as 
 would insure supplies for the future. Already they had 
 power to take over works in which war material was be- 
 ing produced, but these were insufficient. No trouble 
 with the owners was anticipated — indeed, the bill was 
 expected to enable owners to get out of difficulties when 
 they were asked to throw everything into the common 
 stock. Mr. Bonar Law said that the Government might 
 have had these powers six months earlier. The debate 
 turned upon the compensation to be made and a com- 
 mission to consider this was promised.^ 
 
 In March, 19 15, however, the owners of possible muni- 
 tions plants were not the group most threatening to the 
 mobilization of industry. Events were proving that it 
 was quite as important and far more difficult to conciliate 
 the workers in munitions and shipbuilding establishments. 
 The unrestricted enlistment of skilled operatives had to 
 a considerable extent impaired productive capacity; and 
 this tendency was intensified by the behaviour of the 
 men who stayed at home. Instead of working harder 
 than in normal times, many of them took advantage of 
 their increased earnings to indulge in idleness, amuse- 
 ment, and drink. 
 
 So serious had the situation become by February 4, 
 
 19 1 5, that the Government appointed a Committee on 
 
 Production. It was to report measures which might 
 
 " ensure that the productive power of the employes in 
 
 * Ibid., LXX, 1271. 
 
i8 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 engineering and shipbuilding establishments working for 
 Government purposes shall be made fully available." 
 This Committee, consisting of Sir George Askwith, Sir 
 Francis Hapgood, and Sir George Gibb, recommended 
 that no stoppage of work by strike or lockout should take 
 place in such establishments and that there should be set 
 up an impartial tribunal to investigate and settle disputes. 
 Deferring the compulsory element in these recommenda- 
 tions, the Government appointed the Committee itself a 
 court of voluntary arbitration.^ 
 
 Before long it had plenty to do. The number of 
 strikes was rapidly increasing with the progress of the 
 new year. Until then the efforts of the three committees 
 which controlled trade unions had had highly satisfactory 
 results. Of the lOO strikes in progress at the beginning 
 of the war only 20 were unsettled at the end of August, 
 1 9 14, and the number had been reduced to 10 by January 
 I. In February, however, industrial unrest, induced 
 largely by the increased cost of food, resulted in 47 
 fresh disputes which involved stoppage of work. During 
 March there .were 74 others, during April 44, and during 
 
 May 63.^ 
 
 The first serious strike of 191 5 was that of the en- 
 gineers on the Clyde, beginning on February 16. In some 
 parts of Glasgow rents had risen 10 per cent., and in 
 general foodstuffs w^ere costing from 20 to 25 per cent. 
 
 5 p. Alclen, Labour Unrest and the War, Contemporary Review, 
 August, 1915. 
 
 6 P. D. C, 1915, LXXII, 1572-3. 
 
 MUNITIONS AND LABOUR 
 
 19 
 
 more than before the war. The men were feeling the 
 strain of the winter's work and they saw their employers 
 reaping large profits. They asked, therefore, for an in- 
 crease in wages of 2 d. the hour. When the companies 
 offered only % d., some 10,000 men resolved to strike. 
 In this they disregarded the advice of their trade union 
 executive, following instead obscure leaders of Syndi- 
 calist tendencies. The Government intimated that w^ork 
 must be resumed, promising that representatives of the 
 men should meet the newly appointed Committee on 
 Production and arrange for arbitration. The meeting 
 was set for March 8, the strike committee meanwhile 
 on March 4 recommending a return to work, which forth- 
 with took place. But the men declared that if they did 
 not eventually receive the 2d. demanded they would 
 adopt the policy of " ca' canny," i. e. remain at work but 
 do as little as possible. The arbitration of the Commit- 
 tee on Production was duly accepted. Its award, how- 
 ever, made known on March 24, disappointed the men, 
 since an advance of only i d. an hour (or 10 per cent, on 
 piece work) was granted. Thereupon they kept their 
 word, although the fact was not generally known.^ 
 
 The Committee meanwhile made three reports. Time 
 available for production was being lost through absen- 
 teeism, through stoppages by strikes and lockouts, 
 through "demarcation" disputes between unions about 
 the allocation of work, and through trade union restric- 
 
 7 A. R., 1915, p. 86; Alden, op. cit. ; A. Shadwell, The Industrial 
 Factor in the War, Nineteenth Century and After, Aug., 1915. 
 
20 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 MUNITIONS AND LABOUR 
 
 21 
 
 tions, which among other things prevented the employ- 
 ment of semi-skilled, unskilled, and female labour. The 
 suspension of these restrictions was recommended. 
 
 To meet the situation, representatives of thirty-five 
 trade unions were summoned to an interview on March 
 17 with the Chancellor of the Exchequer and the Presi- 
 dent of the Board of Trade, -the so-called Treasury Con- 
 ference. Mr. Lloyd George, after demonstrating the 
 need of munitions, announced that the Government in- 
 tended to limit the profits of emplpyers. To the unions 
 he proposed that during the war all restrictions on output 
 should be suspended and that no strikes should take place 
 on Government work, any dispute to be settled by an 
 impartial tribunal nominated by the Government. At the 
 conclusion of the conference on March 20 these proposals 
 were embodied in a memorandum which the representa- 
 tives of the unions agreed to recommend to their fellow 
 members. Trade union practices should be relaxed, but 
 neither this nor the admission of semi-skilled or female 
 labour should affect adversely the rates customarily paid 
 for work. Disputes over wages or conditions were 
 henceforth to be discussed in a conference between em- 
 ployers and employed; if agreement should prove unat- 
 tainable, the matter should be submitted to the Committee 
 on Production, or to a single arbitrator agreed upon by 
 both parties or appointed by the Board, or, finally, to a 
 Court of Arbitration upon which employers and men 
 should be equally represented.^ 
 
 8 P. D. C, 1915, LXXII, 1573; L. T., Mar. 20, 1915, p. 11. 
 
 This memorandum did not have the wide acceptance 
 hoped for, although it was by no means disregarded. In 
 April there were fewer strikes, and a number of impor- 
 tant disputes were referred to the Committee on Produc- 
 tion. This body, transformed into a court of arbitration, 
 showed a tendency to compromise by fixing wages at a 
 figure half way between the demands of the men and the 
 offer of the employers. For the rest, trade union prac- 
 tices were relaxed only in certain trades and localities — 
 not elsewhere. The men were disinclined to follow the 
 lead of their official representatives, nor was there any 
 compulsion which could be brought to bear upon them. 
 If employers discharged them, other jobs were waiting 
 on every hand. In some districts the situation became 
 worse than before.^ 
 
 Scarcely had the memorandum been published when a 
 strike of dock labourers at Liverpool and Birkenhead 
 caused the Government serious concern and was ended 
 only by a semi-military device. The dispute had to do 
 with over-work at week-ends and payment for it. Despite 
 an admonitory letter on March 21 from Lord Kitchener 
 and a patriotic appeal on March 30 from Mr. James Sex- 
 ton, one of their leaders, the men were obdurate. To 
 carry out government work at the port, a Dockers' Battal- 
 ion was formed during the first week in April under the 
 command of Lord Derby. These civilian soldiers, liable 
 to home service only, were subject to military law and re- 
 ceived both civil and military pay with a guarantee to 
 
 »P. D. C, 1915, LXII, 1573-79; L. T., Je. i, 1915, p. 5. 
 
22 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 each man of a minimum wage of 42 s. a week. Mem- 
 bership was Hmited to the Dockers' Union, and trade 
 union rules prevailed. On April 12 the battalion was 
 inaugurated, Lord Derby reviewing the 350 men who 
 had enrolled. At the same time the brief strike of 
 dockers at Birkenhead came to an end.^^ 
 
 During April and May the Government gave much at- 
 tention to the drink question. On March 29 a deputation 
 from leading ship-building firms, received by the Chan- 
 cellor of the Exchequer and the Secretary for Scotland, 
 declared with conviction born of long experience that 80 
 per cent, of the current avoidable loss of time was due to 
 drmk. Mr. Lloyd George summarily described the sit- 
 uation : " We are fighting Germany, Austria and Drink ; 
 and so far as I can see the greatest of these deadly foes 
 IS Drink." The effect of example was tried. On April 
 6 it was announced that by the King's command no wines, 
 spirits, or beer would henceforth be consumed in any of 
 His Majesty's households. Lord Kitchener made a like 
 renunciation. The Government, making inquiries, found 
 that the mischief-making liquors were spirits and the in- 
 ferior but more potent kinds of beer. After Easter pro- 
 posals of a highly restrictive nature were brought before 
 the House of Commons. Taxes on liquors were to be 
 much increased, a greater dilution permitted, and public 
 houses in certain areas were to be closed. Opposition 
 arose particularly from the Nationalists, who deplored 
 the injury which would be done to a great Irish industry 
 i^A. R, 1915, pp. 88, 91. 
 
 MUNITIONS AND LABOUR 
 
 23 
 
 and threatened to use all constitutional means to defeat 
 the bill. Learning of this Mr. Lloyd George met a depu- 
 tation of '' the trade " to arrange a compromise. The 
 taxes were withdrawn and it was agreed that the sale of 
 spirits less than three years old should be prohibited and 
 that existent stores should be put in bond. With this 
 somewhat slight result, the agitation died down and the 
 subject dropped from discussion. ^^ 
 
 The proposed bill had been, of course, symptomatic of 
 the concern with which the Government regarded the 
 military and industrial situation. By the middle of May 
 it was clear that the measures taken in March had not 
 been adequate. Especially was labour still unconciliated, 
 feeling that employers' profits had not yet been restricted. 
 A political and administrative change now marked the 
 initiation of a new endeavour to increase productivity. 
 On May 19 it was announced that a Coalition Govern- 
 ment would be formed and, when the House met on June 
 3, the composition of it was complete. Twelve Liberals, 
 eight Unionists, one Labour member, and Lord Kitchener 
 assumed the administration affairs. ^^ 
 
 That arm of the new Government which was to grapple 
 with the industrial situation was, like the Coalition, an 
 innovation. Mr. Lloyd George was to become Minister 
 of Munitions, and a bill passed by Parliament to estab- 
 lish the ministry received royal assent on June 9. Dur- 
 ing the discussion in the upper house, Lord Stanhope, 
 
 11 Ibid., pp. 90, 97, 98, 103. 
 
 12 P. D. C, 1915, LXXI, 2392. 
 
24 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 about to return to the front next day, described the sit- 
 uation. " I am stating nothing that every German staff 
 officer does not know when I say that, speaking broadly, 
 the French hold their trenches by a few rifles and the 
 support of their wonderful 75 mm. guns; while we hold 
 our trenches, broadly, by rifle fire. The French system 
 is expensive in ammunition; ours is expensive in life." 
 He added that a man who refused to do his duty in the 
 
 workshop should be sent to fight whether he liked it or 
 not.i3 
 
 This application of compulsory measures to labour 
 came up for debate in the House and was subject to sharp 
 criticism. It was said that the new Minister was being 
 given power to tyrannize over the working classes, to 
 conscript labour, to impose slavery on the country. Sir 
 John Simon, in charge of the Bill, replied that, if special 
 powers were needed in respect to labour, they would be 
 asked for from the House. Next day an amendment 
 was accepted, declaring that the Minister of Munitions 
 would have no power to impose penalties upon workmen 
 for doing what they had hitherto been entided to do.^* 
 
 Mr. Lloyd George entered upon the duties of his new 
 office with great energy. On June 10 he received repre- 
 sentatives of twenty-two trade union organizations. On 
 June II and 12 he made important speeches at Cardiff 
 and Bristol. By June 2^ he was introducing in the 
 House a great legislative measure to mobilize industry, 
 
 13 p. D. L, 1915, XIX, 36. 
 
 i*P. D. C, 1915, LXXII, 107-115. 210. 
 
 MUNITIONS AND LABOUR 
 
 25 
 
 and by July 3 this bill had become law. His exposition 
 of the situation and his plans for improving it were as 
 follows. 
 
 The Central Powers were turning out shells at the rate 
 of 250,000 per day. The pouring of 200,000 shells with- 
 in an hour upon Przemysl had driven the Russians out 
 of that fortress. Germany's victories thus far were due 
 to the organization of her workshops, and ultimate vic- 
 tory or defeat would depend upon the supply of muni- 
 tions. In the production of munitions France was crip- 
 pled, since 70 per cent, of her steel plants were in the 
 hands of the enemy. Not only had Germany accumu- 
 lated great stores beforehand, but she had mobilized all 
 her industries since the war. Most marked was her supe- 
 riority in heavy guns, in high explosives, in rifles, above 
 all in machine guns. The last had proved to be about the 
 most formidable weapon of the war, almost superseding 
 the rifle. But, alas, to construct machinery for making 
 them required eight or nine months. The history of ten 
 months of trench warfare, which the Germans had cor- 
 recdy anticipated, was the defence of one's own trenches 
 with machine guns while battering one's enemies' trenches 
 with heavy guns and high explosives. 
 
 To meet the twenty-five fold expansion in its activi- 
 ties,^^ Mr. Lloyd George continued, the War Office first 
 resorted to the existing armament firms and had them is- 
 sue sub-contracts. The method, however, had not resulted 
 
 15 The expenditure of the War Office in time of peace has been 
 £28 million but within ten months had increased to £700 million. 
 
26 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 in the greatest possible productivity, since the firms had 
 not been able to control the subsidiary staffs. A district 
 which he had recently visited produced under sub-con- 
 tracting some 10,000 shells a month, but under his new 
 arrangements at once accepted orders for 150,000 shells 
 a month and would in time double even this output. 
 Areas seemingly unpromising could do much. Showing 
 to the House a fuse for the highest explosive, requiring 
 in its making 100 gauges, the Minister of Munitions de- 
 clared that London could make such delicate parts. 
 
 The first requisite was to find the organizer, the man 
 who could make best use of the expert. Many business 
 men of this type the Ministry had secured, men who 
 would be asked to organize the Central Office and the re- 
 sources of various localities, while, as a Central Advisory 
 Committee, they would assist in dealings with other busi- 
 ness men. To each of these men would be given his 
 special field — to one metals, to another machinery, to 
 another explosives, to another labour, and the like. The 
 country had been divided into ten munitions areas, each 
 under local business men formed into committees of man- 
 agement. In the centre of each area representatives of 
 the Ministry of Munitions would have headquarters 
 where specifications, samples, etc., would be available. 
 Although every opportunity had already been given to 
 British engineers to go through government arsenals or 
 through arsenals of the Elswick Co., of Vickers and 
 Maxims, of Beardmores and the rest, the same facilities 
 ought to be available in every district, where advantage 
 
 MUNITIONS AND LABOUR 
 
 27 
 
 might be taken of them without loss of time. Associated 
 with every local Committee would be an expert engineer 
 and representatives of the Admiralty and the War Of- 
 fice.^^ 
 
 In his Cardiff speech Mr. Lloyd George outlined the 
 three possible methods of utilizing private engineering 
 plants. In any area, from one to three existing works 
 might be converted into national factories directed to- 
 ward nothing but the production of shot and shell. Since 
 new machinery was difficult to get, machinery from the 
 various shops throughout the district would have to be 
 requisitioned to fit out these new arsenals. Leeds and 
 two or three other centres in Yorkshire had proceeded 
 thus. Lancashire preferred a more individualistic 
 method, the one adopted in France with great success. 
 Each workshop there estimated its own capabilities and 
 added such machinery, especially gauges, as would en- 
 able It to turn out some type of munitions. A third 
 methcfd combined the other two. Two or three works 
 might be converted into a kind of national arsenal, which 
 would then serve as finishing plant while the others did 
 preparatory work. This was feasible in South Wales 
 War ^Munitions Committees, like the one first constituted 
 at Newcastle-upon-Tyne, should decide which method 
 was preferable for each district. To engineering firms 
 that offered to convert their works, but objected to trade 
 rivals getting their business, assurance was given that 
 there should be equality of sacrifice.^^ 
 
 i«P. D. C, 1915, LXXII. 1 183-1206. 
 17 L. T., Je. 12, 1915, p. 8. 
 
28 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Although materials of certain sorts were abundant 
 enough, others had to be husbanded. The latter must 
 not be wasted on non-essential work or the Government 
 might be ultimately compelled to take control of the 
 market. That the Ministry might be regularly and ac- 
 curately informed about the stocks of raw or semi-manu- 
 factured metal in the country, it would ask for monthly 
 returns. There were unfortunately indications that in 
 certain quarters supplies were being held for higher 
 prices. Such action caused serious delay and must be 
 stopped. ^^ 
 
 From the question of enlisting private engineering 
 firms in the business of munitions making, Mr. Lloyd 
 George turned to the problem of labour. For this had 
 led him to introduce the new bill. Were he able to fur- 
 nish skilled workmen, the supply of machine guns could 
 be doubled in a few days. A Midland firm could greatly 
 have increased its output had it only been able to set up 
 idle machinery; but it could not find seventy five mill- 
 wrights to perform this task. One remedy was to get 
 such engineers as could be had back from the front. The 
 ministry had issued a circular to engineering firms asking 
 for the names of men who had left them for the war. 
 Lord Kitchener had instructed his Adjutant General to 
 invite such men to return to works turning out munitions 
 of war. Some^men were unwilling to come back and 
 some had unfortunately been sent to India, but the War 
 Office would do what it could. ^® 
 
 18 p. D. C, 1915, loc. cit. 
 " Ibid. 
 
 MUNITIONS AND LABOUR 
 
 29 
 
 As to men who were still at home, difficulties arose 
 from their readily leaving one job for another. Em- 
 ployers were ready to outbid one another or to accept 
 discharged employes; but without control over their 
 workmen, they found that they could not prevent slack- 
 ness or attain a maximum output. What would be most 
 valuable, however, was an increased supply of labour and 
 to this end trade union regulations should be relaxed. 
 Although in France there were great trade unions and 
 the organizer of the munitions supply was a young So- 
 cialist, the employment of women and unskilled labour- 
 ers had already been permitted. Fuse making was done 
 there by female, labour. At home a Bristol firm had re- 
 ported that, if it could eke out skilled labour by unskilled, 
 it could put a night shift on its machinery and double 
 its output. If union rules should be suspended, the na- 
 tion, on its part, must give a pledge that the suspension 
 would be temporary and that the safeguards which the 
 unions had with such difficulty acquired would be re- 
 stored. 
 
 Lastly, there ought to be no strikes. Mr. Lloyd George 
 admitted that he would like to see compulsory arbitra- 
 tion of disputes during the war and still hoped to get 
 it. As things stood, although the cotton operatives and 
 the miners stood out, the men who turn out munitions 
 and ships had assented to such a measure. This had 
 been the outcome of the March conference with the 
 thirty-five trade unions and of other conferences held 
 since then.^^ 
 
 20 Ibid. 
 
30 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Thus prepared for and introduced, the Munitions of 
 War Act, 191 5, met with Httle opposition in ParHament. 
 Carrying to fulfilment the principle embodied in the De- 
 fense of the Realm Act, the principle that the Govern- 
 ment may assume control of any private works which 
 it needs for the manufacture of munitions, the new Act 
 was perhaps the most decisive step in state control of 
 industry taken during the war. The Minister of Muni- 
 tions, it provides, may declare " controlled " any estab- 
 lishment in which munitions work is carried on. Such 
 declaration, as affecting the owner, limits the profit which 
 he may enjoy. His net profit may exceed the standard 
 unit by only one-fifth, and the standard unit is the aver- 
 age amount of his net profit during the two correspond- 
 ing periods before the outbreak of the war. After the 
 war, priority in employment in any establishment will be 
 given to workmen who have been with the Colours and 
 to those employed when the establishment became con- 
 trolled. No change in rules or customs made during the 
 war shall prejudice the position of the trade unions in 
 regard to the resumption of such rules and customs after 
 the war. Notice of any change in working conditions 
 shall be given to the workmen, who, in turn, may request 
 an opportunity for local consultation. The introduction 
 of semi-skilled and female labour shall not affect the 
 wages paid for any kind of work, and the workers so 
 introduced shall receive the wages customary in the dis- 
 trict for the class of work in question. Record of all 
 changes shall be kept and shall be open to inspection by 
 
 MUNITIONS AND LABOUR 
 
 31 
 
 
 the Government. Sucti were the regulations imposed 
 upon the employer. 
 
 Regarding the workmen, the Act embodies provisions 
 tending to apply the restrictions suggested by Mr. Lloyd 
 George in his speeches. Any person whose last employ- 
 ment has been on munitions shall not be engaged by an 
 employer unless he holds a " leaving certificate " from his 
 last employer or from a munitions tribunal. This was 
 to remedy the "pilfering" of workmen. No lockout 
 further, shall be declared by an employer and no em- 
 ploye shall take part in a strike. Instead, any difference 
 shall be referred for arbitration to any one of the three 
 tribunals recognized in the March agreement, viz., the 
 Committee on Production, a single arbitrator agreed upon 
 by the parties or appointed by the Board, or, in the third 
 place, a Court of Arbitration, composed equally of repre- 
 sentatives of employers and of employes, its chairman 
 appomted by the Board of Trade. The choice of tribunal 
 shall lie with the parties or, in default of agreement 
 w,th the Board of Trade.^' To conciliate the miners 
 and the cotton operatives, who objected to this provision 
 for compulsory arbitration in the bill, an amendment was 
 accepted, providing that, if the Minister of Munitions was 
 satisfied that means existed in any industry for settling 
 a dispute affecting work other than work on munitions, 
 no proclamation should be made in reference to the dis- 
 pute. 
 
 No.' ^09^' •''• ^- '^'^' "■ '"= ^- ^- ^- ^°'- "'■■' P"'- P^P". '915, 
 
32 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 While the bill was debated in Parliament and while it 
 seemed that the inadequate supply of labour might lead 
 to the institution of some form of compulsion other than 
 the bill provided for, the trade unions asked for seven 
 days in which to act. They proposed to secure by vol- 
 untary enlistment a mobile corps of munitions workers. 
 With each volunteer the Government was to enter into a 
 contract providing that he be employed where needed and 
 as needed and stipulating that there be no bad time or 
 other slackness. Cases of violation should come before 
 a Munitions Court consisting of an employer, a trade 
 union representative, and a president appointed by the 
 Government. If the volunteer could satisfy the enrolling 
 bureau that he was a skilled engineer (for engineers 
 were the class to be reached), he was to receive a pocket 
 certificate which stated over the signature of the Minister 
 of Munitions that he was *' enrolled as a War Munitions 
 Volunteer in the service of King and country." ^^ 
 
 The Government readily put its machinery at the serv- 
 ice of the unions in this matter, and i8o town halls were 
 turned into recruiting offices. During the first week 46,' 
 000 men were enrolled and eventually the number was 
 raised to almost 100,000. In as much, however, as about 
 four-fifths of the volunteers were already engaged on 
 Government work, the recruits actually available for the 
 new munitions program were scarcely adequate. ^^ It 
 would clearly be necessary to rely upon the dilution of 
 
 22 L. T., Je. 24, 1915, p. 10; Je. 25, p. 9. 
 
 23 Ibid., Jy. 3. A. R., 1915, p. 147- 
 
 MUNITIONS AND LABOUR 
 
 33 
 
 labour promised by the leaders of the thirty-five unions 
 at the Treasury Conference in March. 
 
 In two speeches, one made before the Trade Union 
 Congress at Bristol, and one delivered in Parliament, 
 Mr. Lloyd George summarized the situation at the end 
 of the summer of 191 5.-* Sixteen national factories or 
 arsenals had been set up and, as the result of a conference 
 with French military authorities, eleven more were to 
 be. To secure the supply of machine tools required, es- 
 pecially for shells of heavy calibre, all the great machine- 
 tool makers had agreed to come under government con- 
 trol. For the new arsenals 80,000 more skilled men and 
 200,000 more unskilled were needed. The country was 
 not yet doing its utmost. Only 15 per cent, of the ma- 
 chines for turning out rifles, cannon, and shells were 
 working at night. Trade union practices were reducing 
 the output of munitions by 25 per cent. Although the 
 Government had kept its promise to appropriate war 
 profits, the unions had not carried out their part of the 
 Treasury Conference bargain. In many arsenals and 
 shops semi-skilled men were prevented from doing work 
 hitherto done by skilled, the engagement of women was 
 vetoed, and hard work was discouraged. 
 
 Although Mr. Lloyd George's charges at Bristol pro- 
 duced a great effect upon the Congress, he found it nec- 
 essary to repeat many of them in the Commons just be- 
 fore the Christmas adjournment of 191 5. There and 
 
 2* On Sept. 9 and on Dec. 20. L. T., Sept. 10, 1915, pp. 9, 10; 
 P. D. C, 1915, LXXVII, 95-122. 
 
34 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 11 
 
 again at Glasgow, where on Christmas morning he ad- 
 dressed some 3,000 shop stewards and trade union 
 officials, he dwelt upon the " imperative need of some 
 scheme of labour dilution." Women and unskilled men 
 ought to be employed upon many tasks which still ab- 
 sorbed skilled labour.^^ The same note was struck 
 throughout the first half of 19 16. In March the Board 
 of Trade appointed a Committee to devise measures to 
 extend the employment of women in industrial occupa- 
 tions and to report from time to time on progress made 
 in various localities and industries.^^ In June it called 
 the attention of employers to the possibilities of using 
 women's labour in factories and works.^"^ By August, 
 Mr. Montague, the new Minister of Munitions, could re- 
 port that the number of women employed in munitions 
 works was about 400,000, or nearly double the number 
 employed a year before. In 19 14- 15 the percentage, 
 relative to all such workers, had risen from 9 per cent, to 
 II per cent., during the next year to 17 per cent.^^ Five 
 hundred munition-making processes w^ere performed by 
 
 25 L. T.„Dec. 27, 1915, p. 3. 
 
 26 B. T. J., Mar. 9, 1916, p. 697. 
 
 27 Ibid., Je. 15, 1916, p. 732. 
 
 28 In August, 1917, it was officially stated that, to the 3,298,000 
 women employed in the country before the war, 1,240,000 had been 
 added and that the women who had directly replaced men were 
 1,256,000. Of the latter, 438,000 were employed in industry, 308,000 
 in commerce, 187,000 in government establishments, 32,000 in agri- 
 culture (L. T., Aug. 17, 1917. P- 3)- In November, 1917, Sir 
 Stephenson Kent stated that nearly one million women were en- 
 gaged in munitions work. (N. Y. Times, Nov. 10, 1917.) 
 
 MUNITIONS AND LABOUR 
 
 35 
 
 women, upon two-thirds of which no women had been 
 engaged twelve months before. 
 
 Considering the whole situation regarding munitions, 
 Mr. Montague pointed out that the three national fac- 
 tories of July, 1914, had increased to 95, that the establish- 
 ments " controlled " were about 4,000,2^ that the number 
 of persons employed in them had increased between June, 
 1915, and June, 1916, from 1,635,000 to 2,250,000. Ef- 
 forts to bring back skilled workmen from the army had 
 restored 45,000; the volunteer scheme had yielded 13,500 
 others who had actually been transferred to war work. 
 Men of this sort spent most of their time in setting up 
 machines and in supervising the work of the unskilled, 
 fifteen or twenty of the latter often being assigned to 
 one skilled worker. To educate the unskilled, schools 
 had been set up. Over 500 people had been trained as 
 tool-setters to work on a special type of machine ; nearly 
 200 plumbers had been transformed into skilled lead- 
 burners, 130 jewelers into gauge-makers.^^ Such were 
 the methods and results of diluting labour. 
 
 The achievements of Mr. Lloyd George's new depart- 
 ment during the first twelve months of its existence were 
 impressive. Nearly three times as many rifles, more dif- 
 ficult to produce than any other munition of war, were 
 accepted as during the preceding ten months ; many hun- 
 dred thousand others were resighted and repaired. 
 Nearly twice as many guns for land service were turned 
 
 2» Early in June, 1917, the number was officially stated to be 
 4942. M. G., Je. 7, 1917- 
 30 P. D. C, 1916, LXXXV, 1699, 1694. 
 
36 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 out in a month at the end of the twelve-months as at the 
 beginning of it. The weekly output of machine guns 
 had increased fourteenfold. In the case of ammuni- 
 tion the rate of increase was 6^/^ for i8-pounder, 8j4 
 for field howitzer, 7J/2 for medium artillery, while for 
 heavy shells, the most difficult to produce, it was 22. Of 
 high explosives, the output in June, 19 16, was 66 times as 
 great as at the beginning of 191 5, of bombs 33 times as 
 great as in May of that year.^^ 
 
 The expenditure of the Ministry in the summer of 
 19 1 6 was over £1,000,000 a day. To expend this ad- 
 vantageously it had seldom been obliged to use its ex- 
 tensive powers to examine into the costs of manufactur- 
 ers, but it had made alterations in costs with their concur- 
 rence. The key to the problem of financial control was 
 provided by the cost accounting system introduced into 
 the Government's own factories. From the knowledge 
 so gained, the Ministry had been able to discern the ex- 
 travagance or faulty administration in other factories and 
 to check contract prices. The mere threat to examine 
 the books of one firm had brought the price of a certain 
 material from £30 a ton to £20, thus saving the country 
 one-half a million sterling in a short time. Costs in the 
 Government's own factories, high at the beginning, fell 
 rapidly until they had become much less than the 19 15 
 contract prices. The ensuing reduction in home con- 
 tracts represented in the case of shells a saving of £20,- 
 000,000 a year. American shell contract prices had been 
 
 «Ubid. 1679-1682. 
 
 V 
 
 MUNITIONS AND LABOUR 
 
 37 
 
 1/ 
 
 ) 
 
 I 
 
 I 
 
 
 reduced 15 per cent., Canadian i2>^ per cent., while 
 trench-warfare munitions had fallen 40-50 per cent. 
 The cost of the large factories erected or being erected 
 for explosives and propellants would, Mr. Montague pre- 
 dicted, be completely covered in less than a year by the 
 difference between the cost of their output and the price 
 of similar munitions if imported.^^ 
 
 The method of determining the margin of profit al- 
 lowed a controlled establishment was outlined in the 
 " Munitions (Limitation of Profits) Rules " of Septem- 
 ber 15, 1915. The "standard amount of profits" was 
 defined as the average of the amount of net profits for 
 the standard period ; and the standard period was the two 
 financial years before August 4, 1914. Auditing must 
 be done by a chartered or incorporated accountant or by 
 an accountant approved in any particular case by the 
 Board of Trade. Within six weeks after being requested 
 by the Minister of Munitions, the controlled owner was 
 required to deliver to him such audited accounts and 
 particulars in respect of the controlled establishment as 
 might be required. As soon as possible thereafter, the 
 Rules proceed, "the Minister shall deliver to the con- 
 trolled owner notice of the amount at which the Minister 
 is prepared to agree the standard amount of profits, and 
 unless within fourteen days thereafter the controlled 
 owner shall serve upon the Minister notice of objection, 
 the said amount shall be deemed to have been agreed and 
 to be the standard amount of profits. If objection shall 
 «2ibid. 1696-1697. 
 
38 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 
 be so served and the Minister and the controlled owner 
 are unable to settle the standard amount of profits by 
 agreement, the matter shall be remitted by the Minister 
 to the Referee for determination. The amount which 
 the Referee shall thereupon determine shall be deemed 
 to be the standard amount of profits, whether the amount 
 be greater or less than the amount to which the Minister 
 was prepared to agree as aforesaid." ^^ 
 
 To achieve the triumphant results of the Ministry of 
 Munitions' first year, interferences with the normal course 
 of trade were necessitated which went beyond even the 
 control of employers' profits and the restriction of trade 
 unions' liberties and customs. Raw materials had to be 
 taken in hand and watched at every stage of their con- 
 version into finished munitions of war. " The great 
 lesson of the early months of the War," Mr. Montague 
 concluded in his August (1916) speech before Parlia- 
 ment, '' was that munitions cannot be obtained merely by 
 ordering. You have got to see that the man who takes 
 your orders has the plant and the labour; you have got 
 to follow up the work process by process; you have got 
 to provide from the beginning to the end everything that 
 is necessary. That is the cardinal principle of the Muni- 
 tions Department."^* 
 
 Acting upon this principle, the Government early in 
 19 16 had turned to a consideration of the supplies and 
 prevailing prices of iron, steel, and copper. During 191 5 
 
 33 Pari. Paper, 1915, No. 353. 
 »* P. D. C, 1916, LXXXV, 1702. 
 
 MUNITIONS AND LABOUR 
 
 39 
 
 these metals had advanced rapidly on the market. In 
 part this was due to conditions of the import trade. 
 American supplies, available at the beginning of the year, 
 became subject to the home demand created by orders for 
 munitions and soon semi-steel could scarcely be obtained. 
 Freight rates, too, rose from 15 s. to 65 s. per ton. In 
 consequence, the price of bar-steel, most in demand for 
 making shells, advanced from £7 15 s. in January, 1915, 
 to £11 in July, and to £14 in December. American bil- 
 lets, which early in the war were about £5 per ton c. i. f., 
 commanded, so far as they could be had, about £10 10 s. 
 at the end of the year. In the British pig-iron trade war- 
 rants for hematite, which is convertible into steel, rose 
 from 71 s. a ton in January to 115 s. in December; even 
 warrants for Cleveland, not so convertible, advanced dur- 
 ing the same period from 55 s. to 76 s. 11 d. The in- 
 creased value of the skilled labour needed to transform 
 forge pig into bar pig was reflected in the changed relative 
 prices of the two. Prices were normally as i to 2 ; they 
 had become as i to 3^.^^ 
 
 Such was the situation when, in January 19 16, the 
 Government resolved to check any further considerable 
 rise in prices. Maximum prices for all finished iron and 
 steel goods were fixed,^^ prices which, as regards iron 
 bars and angles, were revised in April and, as regards 
 
 85 L. E., Feb. 19, 1916, pp. 34SH350, quoting M. G. and the Iron 
 and Steel Trades Review. 
 
 3«The Government already in September, 1915, had fixed the 
 prices and controlled the supplies of tungsten and molybdenum. 
 B. T. R., Oct. I, 1915, p. 207; Nov. I, p. 281. 
 
40 WAR TIME CONTROL OF INDUSTRY 
 
 extras, were again revised in November. The stability 
 at once attained is shown by the following quotations, 
 prices fluctuating little during 1916:^^ 
 
 January, 1915 January, 1916 December, 1916 
 
 Steel ship plates, per ton £ 8 £ 11 10 s. £ 11 10 s. 
 
 Iron ship plates £7155. £11 £ 1 1 10 s. 
 
 Steel sheets (singles) £8 5 s. £ 13 10 s. £ 14 
 
 Common iron bars £ 8 £ 10 10 s. £10158, 
 
 Heavy steel rails £ 6 7 s. 6 d. £ 1 1 £ 10 17 s. 6 d. 
 
 At the end of February official maximum rates, con- 
 siderably below those ruling in the market, were set for 
 pig-iron. On Tuesday, February 22, Cleveland No. 3 
 was sold in Glasgow for 98 s. 6 d. ; on Wednesday there 
 came rumours that the Government would insist on trans- 
 actions at 82 s. 6 d. Straightway the market broke and 
 2500 tons were sold at 87 s. 6d. For a month or so 
 private transactions took place at prices above the official 
 rate, but gradually *' settlement quotations " grew mean- 
 ingless and the metal exchanges in London and Glasgow 
 became lifeless.^® 
 
 The fixing of the price of iron involved the stabilizing 
 of that of iron ore, a commodity imported in 19 16 to the 
 extent of 6^ million tons. The Government, accord- 
 ingly, took steps to make foreign ore available at fixed 
 prices, manipulating freights in the process. But it had 
 to give guarantees, both in the rates of freight and in the 
 prices of ore, to meet any differences between the fixed 
 prices and actual costs.^^ When finally stating in April 
 
 »7L. E., Feb. 17, 1917, p. 331. 
 
 38 Ibid. Feb. 26, 1916, p. 435 ; Mar. 4, pp. 484-5 ; Apr. i, p. 655 ; 
 Apr. 8, p. 700; Feb. 17, 1917, P- 3Z2; B. T. R. Apr. i, pp. 201-203; 
 May I, pp. 242-244. 
 
 8» L. T., Jan. 19, 1917. 
 
 MUNITIONS AND LABOUR 4I 
 
 the maximum prices for iron and steel, the Government 
 took the precaution of remarking that they were based 
 upon the abnormal costs and conditions then prevailing 
 and must not be assumed to be indicative of any differ- 
 ence in relative values which may have obtained in the 
 several districts before the war or may obtain again after 
 the war.*^ 
 
 To assure the stability of prices the Government im- 
 mediately, on February 29, 19 16, forbade speculative 
 trading. From that day dealings in iron, steel, copper, 
 zinc, and certain other metals become unlawful unless 
 the metal sold was in the possession of the possessor and 
 unless the buyer made the purchase on behalf of the 
 consumer.^ ^ This action surprised the market as much 
 as did the fixing of maximum prices, although the pos- 
 sibility of such a measure had been hinted at by the 
 Minister of Munitions. During the two months of the 
 year the prices of copper, lead, and iron, owing largely 
 to speculative dealings, had reached the highest level 
 since the outbreak of the war. Copper was higher than 
 since 1907 and the other metals had broken previous 
 records. In comparison with quotations of 1913 the fig- 
 ures were: ^^ 
 
 Highest price Highest price Lowest price 
 
 since the war in igis in igi^ 
 
 Copper, per ton £108 £78 £62 
 
 L^ad 35 22 15 
 
 spelter 120 27 20 
 
 Iron 98 s. 70 s. 6 d. 48 s. 6 d. 
 
 *o B. T. J., Apr. 13, 1917, p. 86. 
 «D. F. M., Regulation 30 B. 
 *2L. E., Mar. 4, 1916, p. 447. 
 
I 
 
 42 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 In contrast with these high levels iron was now 
 to be sold at 82 s. 6 d. The price of copper could 
 not of course be fixed since the supply was imported,*^ 
 but at least profits of home speculators were henceforth 
 eliminated. 
 
 With prices of iron and steel fixed, the Government 
 took its final steps to secure economy and efficiency in the 
 use of these and other metals. In order first to insure 
 to the empire and the Allies the entire home supply, it 
 increased in May, 191 6, the restrictions put upon the ex- 
 portation of iron and steel to neutrals. As early as July, 
 1 91 5, the exportation of high-speed steel except under 
 license had been prohibited, on the suspicion that such 
 steel was getting into Germany through neutral coun- 
 tries of the continent, especially Switzerland. Only a 
 small part of the licences thenceforth asked for were 
 granted.^^ From the spring of 19 16 neutral markets 
 were further closed, except in so far as the Ministry of 
 Munitions through its permits saw fit to adjust the bal- 
 ance of trade by allowing, for example, steel rails to go 
 to South America.^^ 
 
 It was, however, the Government's endeavour to regu- 
 late distribution as between home consumers that gave 
 rise to one of the most remarkable of war-time devices. 
 This is embodied in what are known as Priority Regula- 
 
 *3 Ibid., Feb. 17, 1917, p. 332. Copper (cash standard) dropped 
 to £96 in March as a result of the new order, but by May was back 
 to £145. In June there was another decline to £88, but at the begin- 
 ning of 1917 the price was £153. 
 
 *4B. T. R., Aug. I, 1915, p. 103. 
 
 « L. E., Feb. 17, 1917, p. 331 ; Aug. 11, p. 230. 
 
 MUNITIONS AND LABOUR 
 
 43 
 
 tions. The extension of them to many mdustries and 
 the obstructive part which they can so readily play give 
 them a first-rate importance. 
 
 First outlined in a Memorandum of August 4, 1916, 
 applicable to certain kinds of steel, they were more fully 
 embodied in an Order in Council of November 20, and 
 at the same time were extended to other materials.*^ In 
 the beginning they affected only controlled establishments, 
 but by March, 19 17, more than 90,000 firms had been 
 brought within their scope.*^ Briefly put, their purpose 
 is to secure to industries in the order of war-time im- 
 portance supplies which are essential. They provide, 
 relative to steel and to copper wire, that no order for stee/ 
 made by the Open Hearth or Bessemer Process (other 
 than shell discard quality) or for copper wire shall be 
 accepted by a manufacturer unless the purpose for which 
 the steel or the copper wire is required has been approved. 
 Approval may be evidenced by an Admiralty contract or 
 permit (always with reference or number), a War Of- 
 fice contract, a Marine Department of the Board of 
 Trade permit, a Ministry of Munitions contract, a Com- 
 mission Internationale de Ravitaillement or a Commission 
 Frangaise sanction, or lastly a Ministry of Munitions per- 
 mit. The sanction of the Commissions and the permit 
 of the Ministry of Munitions require an added '' Priority 
 Classification," emanating from the latter Ministry. A 
 manufacturer, in determining what order of priority he 
 
 *6B T. J., Nov. 23, 1916, p. 574; D. R. M., 3rd ed., p. 196. 
 *^ L. T., Mar. 10, 1917, p. 7. 
 
44 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 I 
 
 MUNITIONS AND LABOUR 
 
 45 
 
 should give to the various contracts which come before 
 him, each having some one of these endorsements (as of 
 course it must have to get consideration), asks himself 
 into what " Class " it falls. For there are three Classes 
 — A, B, C — taking precedence in that order. Under 
 Class A fall the first four contracts or permits above de- 
 scribed, together with certain Priority ratings numbered 
 up to 5 which the Ministry of Munitions may give to its 
 own permit or to the sanctions of the Commissions, 
 Class B includes merely Priority rating 6 under a Minis- 
 try of Munitions permit. Class C includes all Ministry 
 of Munitions permits other than these. Behind this 
 somewhat confusing classification is the simple principle 
 that work of immediate importance for the prosecution of 
 the war must either carry with it a contract from the Ad- 
 miralty, War Office, or Ministry of Munitions, or must 
 get for itself a permit from the Ministry of Munitions 
 placing it in Class A; work of indirect importance for 
 the war, or, as the phrase runs, of national importance, 
 must get from the Ministry of Munitions a permit placing 
 it in Class B ; work not contributory to the war will, under 
 its Ministry of Munitions permit, be rated in Class C. 
 
 A manufacturer in executing a contract must give it 
 the priority to which its class entitles it; if it be in Class 
 A, he must also give it the priority to which its priority 
 rating or classification within that class entitles it. Or- 
 ders for steel for guns, mortars, gun mountings, gun car- 
 riages and parts thereof, for instance, are to be executed 
 under Priority Classification i, which comprises most 
 
 J 
 
 urgent war work. Each week manufacturers must make 
 to the Director of Steel Production full returns of all 
 steel manufactured or delivered. They may manufac- 
 ture no steel other than that of shell discard quality for 
 any order below Class B. No steel except of this quality 
 may, in other words, be used in work which is not either 
 direcdy or indirectly of military importance. 
 
 Orders for steel of shell discard quality, if for home 
 consumption, may be accepted without contract reference 
 or Ministry of Munitions permit, although the purpose 
 of the order must be ascertained and entered on the re- 
 turn; if the steel is for export, such orders must have a 
 permit from the Ministry of Munitions and particulars 
 must be given as to purpose and country of destination. 
 If the steel is to go to European neutrals, application is 
 best made first to the War Trade Department, which ar- 
 ranges with the Ministry of Munitions for the issue of a 
 priority certificate and later grants the export licence.^® 
 
 The next step in developing the principle of priority 
 in industrial work was to extend it from the acceptance 
 of contracts to the employment of labour. On Decem- 
 ber 19, 19 16, Mr. Lloyd George, in announcing the policy 
 of the new Government, said that the War Cabinet would 
 put into effect the plan for universal national service al- 
 ready adopted by the late Government and about to be 
 announced. There would be a new Director of National 
 Service, Mr. Neville Chamberlain, Lord Mayor of Bir- 
 mingham. By him industries and services would be 
 
 *8 B. T. J., Nov. 16, 1916, p. 506. 
 
46 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 scheduled according to their essential utility in war time. 
 Labour would at once be invited to enroll for war work 
 and, should it not respond voluntarily, the Government 
 would assume compulsory powers. Workers would 
 thereupon be set free from non-essential pursuits to per- 
 form more essential services.'*^ 
 
 On February 28, 191 7, accordingly, there was issued 
 a Restricted Occupations Order. After calling attention 
 to many trades and occupations which the Government 
 had declared to be of primary importance, trades which 
 were later designated as those to which National Service 
 Volunteers might be transferred, the Order named other 
 trades not thus important. Such, for example, are the 
 making of machines, implements, and conveyances for 
 domestic use, the working of stone and slate, house build- 
 ing and repairing, the manufacture of pottery, bricks, 
 glass, paper, beer, cigars, fancy clothing, millinery, and 
 carpets. In these trades no employer might henceforth 
 take into his occupation, whether to fill a vacancy or other- 
 wise, any man between the ages of 17 and 61, even if the 
 man had been previously so employed. Exceptions were 
 made only if the employer re-employs a soldier properly 
 retired or if he himself is executing work of national im- 
 portance. All employers in these trades must give any 
 government contract preference and must keep the Di- 
 rector General of National Service informed of the na- 
 ture and amount of the work done in their factories.^^ 
 
 *»P. D. C, 1916, LXXXVIII, 1352-3. 
 
 60 B. T. J., Mar. i, 1917, p. 614; Mar. 8, p. 666; Mar. 15, p. ^2'7, 
 
 MUNITIONS AND LABOUR 
 
 47 
 
 Thus in the concentration of all the energies of the na- 
 tion upon industries conducive to military ends, indus- 
 tries not so conducive were pushed to the wall. 
 
 To supervise and extend all these economies, the Minis- 
 ter of Munitions in November, 19 16, appointed a Com- 
 mittee under the chairmanship of Mr. C. W. Fielding. 
 It was instructed to '* consider and suggest the action nec- 
 essary to secure economies in metals and materials as re- 
 gards their use in munitions of war, taking into con- 
 sideration matters affecting design, methods of purchase, 
 stocks, imports, distribution, and control," and it was em- 
 powered " to take such evidence as may be necessary 
 both from the Departments of the Ministry and from 
 manufacturers." ^^ 
 
 By the spring of 19 17 the Government was therefore 
 in pretty complete control of the vast business of manu- 
 facturing munitions, especially in control of the supply 
 of iron and steel. Its first endeavour had been to enlist 
 in its service private engineering and shipbuilding firms 
 and to attempt the mobilization of labour; it had ended 
 by fixing the price of iron and steel, by determining the 
 allotment of these and other metals to the manufacturer, 
 and by directing the supply of labour into essential trades. 
 It had, in short, extended its control from producer to 
 consumer, undertaking almost everything except the ap- 
 propriation of the mines and the works. There remains 
 only to consider the success of its ventures. 
 
 On the side of the employer there was little to complain 
 
 51 B. T. J., Nov. 30, 1916, p. 656; Jan. 4, 1917, p. 27. 
 
48 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 MUNITIONS AND LABOUR 
 
 49 
 
 of, except that non-essential trades were of course pros- 
 pering less and less. A more liberal export policy would 
 have been welcomed in some quarters, since certain com- 
 modities could thus have shared in the higher prices which 
 prevailed in the world market. But all steel, munitions, 
 and shipbuilding works continued to be crowded with 
 orders, chiefly from the Government, and week after week 
 the reports are that business is active. Inasmuch as 
 prices for iron and steel had been fixed at the relatively 
 high figures prevailing early in 19 16 and since all con- 
 trolled establishments had been given a liberal margin 
 of profit, there was little friction between the Govern- 
 ment and the manufacturer. 
 
 Different, however, was the attitude of labour. It has 
 been explained that the conferences of the Government 
 with labour leaders in the spring of 191 5 and the sub- 
 sequent Munitions of War Act made provision for the 
 dilution of labour, for the impossibility of the work- 
 man's leaving his employment without certificate, for his 
 working full time, and for compulsory arbitration. Op- 
 position to these measures led Mr. Lloyd George, it will 
 be remembered, to charge the unions at the end of 19 15 
 with breaking their pledge. 
 
 Open defiance of the Government developed in the 
 strike of the " Clyde Workers Committee " late in 
 March, 19 16. The general purpose of this strike was to 
 force the repeal of the Munitions of War Act and of the 
 Military Service Act by holding up war supplies. Re- 
 sponsible trade union leaders in the Clyde district had 
 
 acquiesced in the dilution of labour, but not so all the 
 men. A dispute arose as to whether stewards should be 
 allowed to interrupt their own work and go into other 
 departments to inspect arrangements for the dilution of 
 labour. The employers objected to such interruption 
 but offered to submit to the Clyde Commissioners and to 
 give the men's representatives facilities for ascertaining 
 what was being done under the dilution scheme. The 
 men struck, but strike and strikers were repudiated by 
 the Amalgamated Society of Engineers. The Govern- 
 ment acted promptly. It arrested nine leaders and con- 
 veyed them to the East Coast on a charge of delaying the 
 production of munitions in a controlled establishment. 
 Its position was in every way stronger than when it tried 
 to apply the Munitions of War Act to the South Wales 
 miners in the preceding June, and within a week the 
 strike was at an end.'^^ Fourteen months later the de- 
 ported men were allowed to return to their homes.^^ 
 
 In the late spring of 191 7 differences arose between 
 the Government and the Amalgamated Society of En- 
 gineers which threw much light upon the two years' work- 
 ing of the Munitions of War Act. Since the Clyde 
 workers' strike there had been relatively few interrup- 
 tions of industry. The workmen had, in general, mani- 
 fested an excellent spirit and their grievances had been 
 adjusted, though often with delay, by such arbitration 
 tribunals as the Committee on Production or the new 
 
 "A. R., 1916, pp. 94-96; P. D. C, LXXXI, 913-915- 
 63 L. T., May 30, 1917, p. 7. 
 
50 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Ministry of Labour. By May, 19 17, however, causes 
 for complaint had developed. It had come about that 
 employers more and more endeavoured to substitute 
 " piece-work " schedules for time schedules, and the re- 
 muneration under these was felt to be unsatisfactory. 
 The inability to change employers without a leaving cer- 
 tificate was irksome. Suspicion was growing that the 
 introduction of labour-saving machines and the employ- 
 ment of unskilled operatives was for ever rendering im- 
 possible a return to pre-war conditions. 
 
 To these general causes of dissatisfaction were added 
 two specific ones. That the execution of the Military 
 Service Act of May, 19 16, might be facilitated, the Gov- 
 ernment had introduced a trade-card system, which gave 
 the trade unions virtual control of exemptions as among 
 their own men. This system was now withdrawn, and 
 distrust arose lest the War Office was planning to enlist 
 skilled workmen. At the same time a Munitions of War 
 (Amendment) Bill was introduced in the Commons, 
 authorizing the dilution of labour in private works as 
 Avell as in munitions establishments. Owing to the great 
 expansion of its undertakings, the Ministry of Munitions 
 explained, it had need of more skilled workmen than were 
 in its service at the moment. The need could be supplied 
 only by withdrawing trained men from private works 
 and compensating for their withdrawal by adding un- 
 skilled workers. Although the Government had two 
 years before promised not to extend dilution in this 
 way, it now asked to be relieved of its promise. To the 
 
 MUNITIONS AND LABOUR 
 
 51 
 
 request many unions assented, but the Amalgamated So- 
 ciety of Engineers did not. When the bill was about to 
 be brought up in the Commons, the engineers began to 
 leave off work and by the end of May a silent but formid- 
 able strike was in progress.'^^ 
 
 At this point the Government took measures to repair 
 the situation. The Minister of Munitions entered upon 
 a series of conferences with the representatives of unions 
 belonging to the Shipbuilding and Engineering Trades 
 Federation, and the Prime Minister announced the ap- 
 pointment of a Commission to inquire into the causes of 
 industrial unrest. As a result, by the middle of June, 
 the engineers returned to work, and important changes 
 were introduced into the proposed Munitions of War 
 
 Bill. 
 
 The suggested changes in the bill were explained by 
 Dr. Addison to some 250 delegates of the Amalgamated 
 Society of Engineers on June 13. The Government, that 
 it might secure the necessary skilled labour where na- 
 tional interest required it, would have to extend, as it 
 had planned, the dilution of labour to certain private es- 
 tablishments, and would have to declare certain classes 
 of work, such as the manufacture of agricultural ma- 
 chinery, munitions work. When, however, such exten- 
 sion was to be ordered, notice of it would be widely given 
 in the newspapers and three weeks would be allowed for 
 the receipt of any protest from the trade unions con- 
 cerned and for action thereon. Prohibition of the right 
 
 5*M. G., May 14, 19, 26, 1917; New Statesman, May 19, Je. 9. 
 
52 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 MUNITIONS AND LABOUR 
 
 53 
 
 to strike would not be extended to workers in these 
 private establishments. Dilution of labour in such es- 
 tablishments would cease at once at the close of the war 
 and any employer seeking to continue it would be liable 
 to a fine of £5 a day for each man affected. Not only 
 were these concessions proposed relative to dilution of 
 labour, but to placate the unions other changes in condi- 
 tions of labour were suggested. A wage award, ap- 
 plicable to the employers of a single firm, might be 
 extended by the Ministry of Munitions to all workers 
 similarly employed upon munitions work. Arbitration 
 tribunals should, if possible, make their award within 
 fourteen days from the date of reference. Compulsory 
 arbitration should not continue for twelve months after 
 the war, as provided in the Munitions of War Act, 191 5, 
 but liberty would at once be restored to the unions. 
 Finally, the leaving certificate would be abolished, al- 
 though an employer might not take on a man leaving 
 munitions work for private work without the consent of 
 the Ministry of Munitions, nor might he " poach," i. e., 
 offer to pay a skilled worker more than he was paying his 
 own men similarly skilled.^^ These were the Govern- 
 ment's preliminary concessions. 
 
 Meanwhile the Commission of Inquiry into Industrial 
 Unrest, appointed on June 12, worked so speedily that 
 its task was finished by July 17. Upon it sat many repre- 
 sentatives of labour and to secure expedition it subdivided 
 itself into eight Commissions, each devoting itself to a 
 
 55 L. T., Je. 14, 1917, p. 2. 
 
 
 different part of England, Scotland, or Wales. Each 
 commission met from ten to thirty times and examined 
 from 100 to 200 witnesses. 
 
 Of its report Mr. G. N. Barnes made a useful prelimi- 
 nary survey, explaining the general causes of unrest as 
 follows.^^ All Commissions agreed that the most im- 
 portant cause — and one colouring subsidiary causes 
 which alone might have brought no complaint — was the 
 high cost of food in relation to wages, conjoined with the 
 unequal distribution of food. Men felt that sections of 
 the community were profiteering. The Commissioners, 
 therefore, recommended an immediate reduction in the 
 price of food, any loss accruing therefrom to be borne in 
 part at least by the state. They also recommended a 
 better system of distribution. 
 
 Much discontent arose from the working of the Muni- 
 tions of War Act and the abrogation of trade union 
 privileges. In the first place, personal freedom was re- 
 stricted by workmen being tied to particular factories. 
 Many so tied were unable to get wages commensurate 
 with their skill, the wages of skilled men often being less 
 than those of the unskilled. In the second place, changes 
 regarding working conditions, especially the introduction 
 of female labour, had been made without consulting the 
 men. Lack of confidence in the Government was thereby 
 generated and a feeling that promises regarding trade 
 union customs would not be kept. Lastly, there had 
 
 56 The Report is Cd. 8662-5869; Mr. Barnes' summary is in L. T., 
 Jy. 2Z, 1 91 7, pp. 7-^- 
 
54 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 been delay in the settlement of disputes. In some in- 
 stances ten weeks had elapsed without a settlement, but 
 a strike put the matter right in a few days. In one case, 
 employers and men came to an agreement, but the Min- 
 istry of Munitions withheld its assent, with the result 
 that fourteen weeks were required to get a decision from 
 the Committee on Production, the men meanwhile stop- 
 ping work. This last episode illustrated another charge 
 brought against the Government — the lack of co-ordina- 
 tion between departments dealing with labour. 
 
 To obviate these occasions for dissatisfaction the 
 Commission offered various remedies. Labour should 
 take part in the affairs of the community as partners 
 rather than as servants ; the leaving certificate should be 
 abolished or modified; the Government should make an 
 authoritative statement when it introduces changes to in- 
 crease output ; it should also make a statement as to vari- 
 ation from pledges already given ; there should be better 
 administrative machinery for dealing with labour — one 
 central authority with local boards for local disputes, or a 
 local commissioner with technical knowledge; lastly, the 
 principle of the Whitley Report should be adopted. This 
 Report, made in June, 19 17, recommended the forma- 
 tion of joint standing industrial councils in the several 
 industries where they do not already exist, councils com- 
 posed of representatives of employers and employed, in 
 the workshops, in districts, and nationally, to strive for 
 closer co-operation between employers and employed. 
 Other causes of unrest the Commission discovered. 
 
 MUNITIONS AND LABOUR 
 
 55 
 
 One, quite as widespread as the cost of food and the in- 
 fringement upon union privileges, was the friction oc- 
 casioned by the Military Service Acts. To be sure, the 
 irritation caused by the hasty and unheralded withdrawal 
 of the trade-card scheme had subsided, but there was 
 fresh anxiety over the working of the Schedule of Pro- 
 tected Occupations, which would need careful handling. 
 Some causes were not general, but were none the less 
 acute. Insufficient housing accommodations, a scanty 
 supply of acceptable beer, inconsiderate treatment of 
 women, whose wages were sometimes as low as 13 s., in- 
 adequacy of the £1 weekly maximum of the Workmen's 
 Compensation Act, delays in granting pensions — all were 
 irritants in one region or another, but for the most part 
 they have no immediate connection with the Govern- 
 ment's wartime control of industry. One which did have 
 such connection the Government to some extent promptly 
 remedied. By an Order, effective August 15, 19 17, 
 women of 18 and over were to receive an advance in 
 wages of 2 s. 6 d. per week and girls under 18 an advance 
 of IS. 3d., provided they were employed on munitions 
 work in controlled establishments or in uncontrolled ones 
 to which orders of the Ministry regulr.ting women's 
 wages had already been applied.^"^ 
 
 While the Commission made its investigations and 
 formulated its report, the new Minister of Munitions, 
 Mr. Winston Churchill, continued the negotiations with 
 the trade unions. Upon these negotiations, and also in a 
 
 " L. T., Aug. 3, 1917, p. 3. 
 
56 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 I <! 
 
 measure upon the Commission's report, depended the 
 form finally assumed by the Munitions of War (Amend- 
 ment) Bill. By the end of August a part of this, but 
 not all of it as at first formulated, became law. The 
 clause upon which the Government had been most intent 
 was at length omitted — the one permitting the extension 
 to private establishments of the dilution of labour. To 
 this provision the Amalgamated Society of Engineers 
 maintained its opposition and refused representation upon 
 the Trade Unions Advisory Committee, which Mr. 
 Churchill was trying to form, so long as the clause was 
 retained. Rather than continue the friction which Gov- 
 ernmental insistance would have produced, the Minister 
 of Munitions yielded, anxious though he was to extend 
 dilution. Further legislation along these lines he post- 
 poned until the autumn session of Parliament. 
 
 On the other hand, the provision which the unions were 
 most anxious to see included in the bill was incorporated. 
 The Minister of Munitions was given the power to abol- 
 ish leaving certificates. Why such abolition could not 
 take place for some six weeks, Mr. Churchill explained 
 in the House. As the Commission had pointed out, 
 many skilled men were at the moment receiving for time- 
 work relatively lower wages than unskilled newcomers 
 were paid for piece work. To abolish the leaving cer- 
 tificate at once would encourage skilled but underpaid 
 men to leave their employment. Arrangements for re- 
 munerating them fittingly, he remarked, were the first es- 
 sential. On the passage of the bill, the readjustment in 
 
 MUNITIONS AND LABOUR 
 
 57 
 
 question was undertaken and soon it was announced that 
 after October 15, 19 17, leaving certificates would be abol- 
 ished.^^ The readjustment involved an advance of 12 
 per cent, in the wages of skilled munitions and ship-yard 
 time-workers. Eventually unskilled time-workers had 
 to be given the same increase to keep them from going 
 over to piece-work. Altogether 900,000 men had their 
 wages advanced by £14,000,000 a year.^^ Thus two 
 of the most irritating grievances growing out of the 
 Munitions of War Act, the inability of workmen to 
 change their employment and the inadequate compensa- 
 tion often received by them in the shop which they 
 could not leave, were satisfactorily remedied. 
 
 At the same time another recommendation of the Com- 
 mittee on Industrial Unrest received the Government's 
 attention. As a result of Mr. Churchill's vigorous ef- 
 forts, a committee of trade unionists was appointed to 
 advise the Minister of Munitions on industrial questions. 
 As soon as the abolition of leaving certificates was an- 
 nounced, this new Trade Unions Advisory Committee 
 exerted its influence and issued an appeal to munition 
 workers. Pointing out that, if a large number of them 
 left their work at once, the output of essential munitions 
 would be impaired, it urged them at least to give notice 
 of intention to leave or, far better, to enrol as War 
 Munitions Volunteers. The volunteer scheme had been 
 so extended, the Committee indicated, as to insure to men 
 
 58 L. T., Aug. 16, 1917, p. 10; Aug. 2-^, p. 8; Sept. 26, p. 3. 
 69 Ibid., Nov. 29, p. 10. 
 
58 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 MUNITIONS AND LABOUR 
 
 59 
 
 t 
 
 <♦ 
 
 working away from home a subsistence allowance if 
 they should enrol and be assigned to the establishments in 
 which they were then working. Railway passes, too, 
 on public holidays would be given.^^ Thus the per- 
 suasion which the Government wished to exert was voiced 
 by an authoritative committee of the men themselves and 
 the creation of a mediatory body at once proved its value. 
 A final step was the adoption of the recommendation 
 of the Committee on Industrial Unrest which related to 
 the establishment of the Joint Standing Industrial Coun- 
 cils proposed in the Whitley report. During the war, 
 the Government pointed out in announcing its decision, 
 authoritative bodies, representative of both employers and 
 employes in a trade, could seldom be found. Frequently 
 it had wished to confer with such bodies, but had been 
 unable to do so. Need for them would exist after the 
 war quite as much as during its progress. At all times 
 they should conduce to insuring a satisfactory under- 
 standing between employers and men. The Government, 
 therefore, proposed to create such councils and in the 
 future regard them as official standing consultative com- 
 mittees. With them it would confer on questions affect- 
 ing the industries which they respectively represented. 
 Each trade should constitute its own council, the councils 
 in turn electing their own officers and determining their 
 own functions and procedure. Where an industry was 
 based on district organization, this might well be reflected 
 in district councils rather than in a national council, which 
 
 •<> Ibid., Sept. 26, 1917, p. 3. 
 
 would be appropriate to a trade organized on a national 
 basis. Members of the councils would be representatives 
 of existing organizations of employers and workmen, al- 
 though the councils themselves might grant representa- 
 tion to new bodies coming into existence. All interests 
 within a trade ought to be given opportunity to express 
 themselves. Co-operation of all elements within an in- 
 dustry, the Government concluded, would do much to 
 setde problems of reconstruction after the war.^^ 
 
 The spirit of compromise and conciliation thus mani- 
 fested by the Government in the adoption of certain rec- 
 commendations of the Committee on Industrial Unrest 
 argued well for the future. One popular grievance, how- 
 ever, surpassed in gravity any discontent arising from 
 the Munitions of War Bill. This was the high cost of 
 living and the belief that the Government had not done 
 all in its power to prevent rising prices. As it happened, 
 the late summer and the autumn of 1917 saw remedial 
 measures adopted in these matters as well. Maximum 
 prices were fixed in one commodity after another, that 
 for bread being so favourable that a state subsidy was 
 mvolved. The description of these measures belongs to 
 another chapter, but the cumulative effect of them should 
 not be forgotten when other action directed toward the 
 same end is considered. The raising of the wages of 
 underpaid munitions workers, the abolition of leaving 
 certificates, the establishment of a Trades Union Advisory 
 Committee, the creation of Joint Industrial Councils were, 
 «i Ibid., Oct. 25, p. 8. 
 
6o 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 quite as much as the new food regulations of 19 17, di- 
 rected toward the conciliation of labour. Without the 
 co-operation of the workmen it was clear that the war 
 could not be won, and the attitude of a large part of the 
 Labour group toward the Stockholm conference brought 
 home to the Government the necessity of a conciliatory 
 policy. If there was to be a further taking of men for 
 the army, every possible concession was desirable; for a 
 measure of this sort would, as had been shown by the 
 temper of the men in the summer, be most unacceptable, 
 and the successful prosecution of the war might easily 
 be involved. 
 
 THE COAL MINES 
 
 Whereas the Government promptly and without ques- 
 tion took over the railways, and less promptly, though 
 with equal decision, assumed control of plants which 
 could make munitions, it took over the mines only after 
 more than two years and then did so with evident re- 
 luctance. Where, too, the administration of the railways 
 and of munitions works involved it in no insoluble difficul- 
 ties, the problem of the mines was intricate and baffling. 
 This assumed three main aspects. The first was a falling 
 off in the output of coal, which affected one of Great 
 Britain's important exports and involved at a critical time 
 the balance of trade. The second was the enhanced 
 price of coal in the home market, creating discontent and 
 a belief that the profits of owners or dealers were unduly 
 large. The third was the revolt of one of the most pow- 
 erful and irreconcilable groups of men in the country, 
 the Miners' Federation, especially the branch of it resi- 
 dent in South Wales. Since difficulties arose in pretty 
 much this sequence, they may be so described. 
 
 By February, 19 15, both the decreased output and the 
 increased price of coal attracted the attention of the 
 House of Commons and of the Ministry. Two Com- 
 mittees were appointed to report, one on each subject. 
 The Committee concerned with output ^ made its first 
 
 1 Committee on Conditions prevailing in the Coal Mining Indus- 
 try due to the War. Appointed Feb. 23, 1915. 
 
 61 
 
62 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 report on May 27, 191 5, another report in December of 
 that year, and a third in September, 1916.^ 
 
 Up to the end of February, 191 5, according to its first 
 findings, the net decrease in the number of persons em- 
 ployed in the mines was 134,186, or 133^ per cent, of 
 the number employed in July, 19 14. The average de- 
 cline in output from August, 1914, to February, 1915, 
 compared with the average output of the twelve preced- 
 ing months, was also 133^ per cent. (3,044,329 tons 
 monthly). The decline was easily accounted for by the 
 enlistments, 191,170 miners having joined the colours up 
 to the end of February. But explanation was not rem- 
 edy and the falling off in output W'Ould, if continued, re- 
 duce the year's production by some 36 million tons. 
 Even if the normal exportation of 24 million tons to Rus- 
 sia, Germany, Austria, and Belgium was deducted from 
 this deficit, there would still remain a shortage of 12 mil- 
 lion tons. The home demand was not likely to decrease 
 since certain industries were very active. 
 
 Under the circumstances the Committee thought it 
 questionable whether further recruiting among the miners 
 should be encouraged — for the miners had proved ener- 
 getic recruiters. Turning to the possibility of increasing 
 the output under existing circumstances, the Committee 
 entertained no doubt that much could be done if the will 
 were not wanting. Absenteeism was the dominant evil. 
 Although it had declined from 10.7 per cent, to 9.8 per 
 
 2 Cd. 7939. 8147, 8345. 
 
 THE COAL MINES 
 
 63 
 
 cent, if the seven months of war were compared with the 
 preceding seven months, still 4.8 per cent of that which 
 still prevailed was avoidable. Were there no unavoid- 
 able absenteeism, the output of coal would be from 13 
 to 14 million tons greater during the year than it then 
 was. The 12 million tons shortage would disappear. 
 Among its recommendations therefore the Committee 
 placed first a proposal that miners be urged, preferably 
 by the executive of the Miners' Federation, to eliminate 
 all avoidable absenteeism. Should this fortunate result 
 be attained, the demands of the home and the existent 
 foreign market could be met. Holidays too might be 
 curtailed. Lord Kitchener's appeals at Easter and Whit- 
 suntide had been not unsuccessful and 1,000,000 addi- 
 tional tons of coal had been raised. 
 
 Other devices for increasing output the Committee con- 
 sidered but with less enthusiasm. A suspension of the 
 Eight Hours Act of 1908 would not affect the Northern 
 coalfields, since before its passage the hewers (not the 
 transit hands) already worked only seven hours and 
 would not now work longer unless serious emergency 
 could be shown. In Lancashire, Yorkshire, and South 
 Wales, however, where men repair their working places, 
 as the hewers farther north do not, the addition of 
 twenty or thirty minutes to the working day would be 
 helpful. No further employment of women or boys was 
 recommended.^ If home needs were not being met, ex- 
 
 3 At the end of 1913, 6554 women were employed on light sur- 
 
64 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 port should be restricted, but not in so far as the ex- 
 ported coal served the British mercantile marine and 
 British allies or secured such essential return cargoes as 
 grain from the Argentine and iron ore from Bilbao. 
 Lastly, the Committee urged economy on the part of the 
 public. The shortage could be met quite as effectively 
 by a wise restriction of demand as by an increase of the 
 supply.* 
 
 Before the report was published, the Government had 
 acted in accordance with one of its recommendations. 
 By order-in-council, effective May 13, 191 5, it assumed 
 powers to prohibit the export of coal to neutral countries, 
 to provide adequate supplies at reasonable prices for the 
 British navy and for the navies, railways, and national 
 requirements of the Allies, and, finally, to ensure a more 
 regular supply for the home market. Thenceforth no 
 coal might be shipped without the assent of the War 
 Committee of the Board of Trade. The amount of coal 
 thus bought under license regulations was large, the nor- 
 mal exportation of the United Kingdom being some 97 
 million tons, about one-third of the entire output. Of 
 the amount exported during the war, neutrals had been 
 getting 2y per cent. Upon them fell the brunt of the 
 new regulation and the decrease in the June exportation 
 
 face work about the mines (2933 of them in Scotland). After the 
 beginning of the war the number of women employed in the Scot- 
 tish coal-fields increased but the Committee could not indicate 
 to what extent. As for boys, none under fourteen might be em- 
 ployed underground, and none under thirteen for more than 54 
 hours a week or 10 hours in one day. 
 * Cd. 7939. 
 
 THE COAL MINES 
 
 65 
 
 compared with that of April was 125,000 tons.^ Li- 
 cences for sending coal to South America, Scandinavia, 
 and Spain were refused. In the case of Spain it was for 
 a time felt that exportation should be permitted, since the 
 coal was used in working mines whence iron and copper 
 were sent to Great Britain. But of late there had been 
 reason to believe that coal reached Germany indirectly 
 from Spain. The restrictions at least affected favour- 
 ably rates for France and Italy .^ 
 
 The second Governmental committee, also appointed 
 early in the spring of 191 5, was instructed to concern 
 itself with the enhanced price of coal, to discover whether 
 there was justification for this, and if not to suggest 
 remedies for it. The Committee was promised by Mr. 
 Runciman, President of the Board of Trade, in response 
 to parliamentary demand. In February, Sir A. B. Mark- 
 ham, supported by Messrs. Rowntree and Bathurst, had 
 urged that the Government forbid by proclamation the 
 sale of coal at prices exceeding those of twelve months 
 before the war by more than from one to two shillings. 
 Mr. Runciman replied that the rise in price was peculiar 
 to London and would be modified by the efforts of the 
 Executive Committee of the Railways.*^ 
 
 The interpretation put by workmen upon the situation 
 was expressed in a manifesto of May 2y, 191 5, issued by 
 the Management Committee of the General Federation of 
 
 5W. H. Renwick, The Coal Industry under War Conditions, 
 Nineteenth Century and After, August, 1915. 
 6L. T., Je. 9, 191 5, p. 5. 
 7 P. D. C, 1915, LXIX, 1 189. 
 
 . 
 
66 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE COAL MINES 
 
 67 
 
 Trade Unions. With the warning that "a fortnight 
 hence may see the whole of Lancashire in the throes of a 
 gigantic industrial dispute," the document charges the 
 Government with ineffectively handling food prices and 
 war profits, but particularly with '* the failure to deal with 
 the coal question when the conspiracy to increase price is 
 so obvious." Not only do high prices for coal endanger 
 comfort and health, it is added, but they decrease the pos- 
 sibilities of employment, since some manufacturers talk 
 of shutting down factories.^ 
 
 The findings of the Committee, made public in March, 
 1915,^ tended to justify both the contention of Mr. 
 Runciman and that of the unions. It appeared that dur- 
 ing the winter of 1914-15 the North and the Midlands 
 had suffered no marked rise in the price of household 
 coal. On the other hand, the Southern counties and Lon- 
 don (whence came most of the Committee's evidence) 
 had witnessed an advance of between 9 s. and 14 s. per ton, 
 according to quality. Behind this might lie either manip- 
 ulation of the market by producers and dealers or such 
 difficulties of traffic as would curtail the supply and send 
 up the price. Examining the first possibility, the Com- 
 mittee did not discover the existence of rings of colliery 
 owners and coal merchants, although it did find that ** a 
 few leading firms decide upon increased prices which 
 without more ado become the public prices of the day and 
 are advertised next day in che newspapers." In London 
 
 8L. T., Je. s, 191S, p. 5. 
 » Cd. 7866. 
 
 the best grades of household coal are sold under a sliding 
 scale, one-half of any advance in the retail price accruing 
 to the colliery owner, one-half to the dealer. The Com- 
 mittee pronounced the system indefensible, but did not 
 attempt to estimate the extent of its responsibility for the 
 increased London prices. 
 
 Regarding another element of the situation the Com- 
 mittee was more specific. This was the hindrance to 
 transportation arising from war conditions. The 
 marked shortage of empty wagons worked less to the dis- 
 advantage of districts near the coal fields than it did to 
 London. Supplies of coal were more readily furnished 
 if the wagons could make a short journey and return 
 quickly. In as much as London was rather far from the 
 mines, 3 s. extra was not improperly charged for delivery 
 there. But the consumer had been asked for much more 
 than this. Such additional demand could in part be 
 explained by a closer scrutiny of conditions of traffic. 
 
 In normal times London imports annually 8,000,000 
 tons of coal by sea from the North, paying about 3 s. per 
 ton for carriage. At the outbreak of the war the Gov- 
 ernment had requisitioned large numbers of the coal boats, 
 finding them exceptionally useful, and had not replaced 
 them. Such as continued to ply from north to south 
 found the sea abounding in dangers — buoys removed, 
 lights extinguished, the channel covered with minefields 
 — and with proper caution extended the time of their 
 voyage threefold. The shortage and the slowness were 
 reflected in an advance of freights to as much as 13 s. 
 
68 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 6d. at times, 7 s. still ruling in the spring of 1915. 
 
 To the Committee the outlook for the winter of 191 5- 
 16 seemed serious. Its recommendations were twofold. 
 The Government should invite the London County Coun- 
 cil and other public bodies to buy supplies of coal and 
 store them during the summer. To be sure, this would 
 enhance the summer price of coal, would require large 
 capital and would involve difficulties of storage, but it 
 would be in the public interest. Should the Government 
 also control the output of the collieries during the war? 
 Despite the magnitude of the undertaking which would 
 involve 1,270,000 employes and an output of 287 mil- 
 lion tons, the Committee were of the opinion that if 
 prices did not return to a reasonable level, it should take 
 steps to do so. Maximum prices, either " recom- 
 mended " or fixed by the Government, it did not 
 favour. ^^ 
 
 Soon the question of the price of coal came up in the 
 House of Commons. Mr. Runciman was urged to do 
 something bold and practical. After explaining in his 
 reply, as the Committee had done, the difficulty of trans- 
 porting coal to London, he admitted that merchants and 
 producers had acted unjustifiably. With the former, 
 who, to be sure, were hampered by loss of horses and by 
 the general disorganization, he had held several con- 
 ferences and had at length arranged that profits should 
 be strictly limited. The producers were less tractable. 
 They urged that rising wages had increased their costs 
 
 10 Cd. 7866. 
 
 i 
 
 I 
 
 K 
 
 THE COAL MINES 69 
 
 to an extent which they professed to estimate at i s. 6 d. 
 per ton, a figure which without doubt was " a gross ex- 
 aggeration." The actual estimate would be nearer pence 
 than shillings and the existing pit-head price of coal was 
 far in excess of what expenses would justify. This dec- 
 laration brought from the Labour members cries of 
 " Hear, hear! " The owners of the collieries, continued 
 Mr. Runciman, urge that their industry is speculative, 
 making good the losses of one year from the profits of 
 the next. To this plea he had responded that the current 
 year should not be regarded as one which might justify 
 the taking of compensatory profits, and he had almost 
 reached an agreement with Midland owners. He hoped 
 soon to announce that the companies had come a litde 
 nearer to what was expected, he might say demanded, of 
 them. For the Government and Parliament would not 
 tolerate exploitation.^^ 
 
 What lay behind this scarcely veiled threat was the 
 Government's determination to limit the price of coal by 
 statute if necessary, a departure from the recommenda- 
 tions of its Committee. At the same moment, however, 
 a series of critical events deferred for a time such action. 
 To the parties thus far active — the Government, the 
 owners, and the public — was added a fourth and more 
 determined one, the miners. 
 
 The spring of 19 15 saw the first demand for war bo- 
 nuses. The successful agitation of the railwaymen in 
 February has been described. By the end of May 986,000 
 
 " P. D. C, 1915, LXXII, 403-419. 
 
 f 
 
70 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE COAL MINES 
 
 working people of one sort or another had received war 
 advances, from ten to twelve millions had not.^^ It was 
 during this same month of May that the miners got their 
 first bonus. In April they had asked for a 20 per cent, 
 increase in their earnings, to which the coal owners had 
 responded by an offer of 10 per cent. Further advance, 
 however, the owners would consider if in any case it 
 were recommended by a local wages board. In this pro- 
 viso lay embedded a principle, clearly gasped by the con- 
 tending parties. The coal owners objected strongly to 
 setting aside machinery established for dealing locally 
 with disputes. Different economic conditions relative to 
 the export and the home trade, they contended, made 
 uniform treatment of the wages problem impossible. 
 The Miners' Federation, on the other hand, demanded 
 that wages be settled on a national basis. The increased 
 cost of living was national, not local. Why should not 
 the antidote be equally national, or in other words, why 
 should not the increase be uniform? ^^ Mr. Asquith was 
 on May i invited to act as arbitrator and his award in- 
 clined toward the view of the coal owners. Although a 
 case had been made out for an immediate advance of 
 wages, the extent of this, he ruled, should be determined 
 by district boards and committees.^^ Thus the first war 
 bonus for coal miners varied from 10 per cent, to 
 20 per cent, according to local conditions. 
 
 12 L. T., Je. s, 1915, p. 5. 
 
 13 Ibid., May 4, p. 10. 
 i*A. R., 1915, p. 141- 
 
 71 
 
 Meanwhile the storm gathered in another quarter. On 
 April I the miners of South Wales seized the war time 
 opportunity to hand in notices terminating on June 30 the 
 existing five-year agreement regarding wages in that dis- 
 trict. Their new demands were far reaching. They 
 asked for a three-year agreement co-terminous with one 
 already current in the Midlands. Specifically they asked 
 that the minimum rate should be higher than was the 
 maximum rate under the expiring arrangements; that 
 there should no longer be a maximum rate; that the 
 standard rates of 1879 ^^^ ^^77 should be raised by 50 
 per cent, and 35 per cent, respectively; that all men em- 
 ployed on afternoon and night shifts be paid at the rate 
 of six turns for five worked ; and that every adult surface- 
 man be paid not less than 5 s. 6 d. a day. At two special 
 meetings of the Conciliation Board, representatives of the 
 employers heard the men's arguments but refused their 
 demands. Negotiations were for the time broken off.^^ 
 On June 9 the men proposed among other things that 
 there be a joint audit of the selling price of coal for each 
 month from July, 1914, to May, 1915. Instead of this 
 the South Wales Coal-owners' Association two weeks 
 later issued its own audit, based on the business of 79 
 firms. Of the total output of these firms (33,983,829 
 tons) 19.8 per cent, was produced either at a loss or with- 
 out profit, 49.4 per cent, at a profit of less than i s. per 
 ton, only 15.4 per cent, at a profit of 2 s. 6 d. per ton.^^ 
 
 " L. T., Je. 10, p. 5. 
 
 "Ibid., Je. II, p. 10; Je. 28, p. 3; P. D. C, 1915, LXXII, 443-448. 
 
 Ml 
 
72 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE COAL MINES 
 
 73 
 
 '!i| 
 
 To such modest returns the owners could refer and could 
 point out too that they were now obliged to give to all 
 colliery workers a war bonus of 17^^ per cent, the equiv- 
 alent of I s. per ton. They felt strongly the unwisdom 
 of entering during such critical times into a three years* 
 agreement. At the cessation of hostilities the condition 
 of the coal trade was likely to be serious. The British 
 Admiralty was at the moment an extensive buyer in 
 South Wales and had accumulated large stocks. On the 
 conclusion of peace it would no longer buy but would 
 sell in order to set tonnage free.^^ This situation the 
 miners also foresaw and made it a ground for their three- 
 year demands. Since their wages varied with the sell- 
 ing price of coal, how could they hope without an agree- 
 ment of some duration to maintain their present in- 
 come? ^^ Thus the future as well as the present fur- 
 nished grounds for the approaching conflict. 
 
 By the end of June the owners had placed their case in 
 the hands of the Government, having held long consulta- 
 tions with Mr. Runciman, President of the Board of 
 Trade, and with Sir George Askwith, a permanent of- 
 ficial of the Board.^^ Mr. Runciman, in consequence, 
 placed before the miners various modifications of their 
 proposals. It was in vain. On July 12 delegates of the 
 South Wales Miners' Lodges in conference at Cardiff 
 summarily rejected them, refused anything short of their 
 
 "General Meeting of the Ebbw Vale Steel, Iron, and Coal Co., 
 Je. 29, 1915 (L. T., Je. 20, p. 15). 
 18 L. T., Jy. 16, 1915, p. 9. 
 i» Ibid., Je. 30, p. 15. 
 
 original demands, and resolved to stop the collieries on 
 July 15 if the concessions were not granted.^*^ 
 
 The Government, rebuffed as a conciliator, determined 
 to use its strong arm. Within a fortnight it had achieved 
 a triumph in the labour world and in the House of Com- 
 mons by the passage of the Munitions of War Act.^^ 
 One of the significant features of this was its provision 
 that all industrial disputes involving the safety of the 
 realm during the war should be subject to compulsory 
 arbitration. Failure to submit to such arbitration was 
 an offence against the state punishable with a fine of £5 
 for each day or part of day during which work might be 
 suspended. The provision was, however, by agreement 
 clearly applicable only to certain trades which had ac- 
 cepted it. To this agreement the miners were not a party, 
 and the Minister of Munitions, Mr. Lloyd George, was 
 at the moment when the South Wales dispute arose, en- 
 deavouring to have them and the cotton operatives come 
 under the Munitions of War Act. In his interview with 
 the Executive Committee of the Miners' Federation of 
 Great Britain, this body had shown itself unwilling, as 
 always, to accept compulsory arbitration. Assurances it 
 would give that everything possible would be voluntarily 
 done to avoid strikes. Mr. Lloyd George, in turn, while 
 saying that he strongly wished the miners to come into 
 his scheme, explained that he would take no steps to force 
 them into it.^^ To this stage the negotiations had come 
 
 20 Ibid., Jy. 13, p. 6. 
 
 21 Cf., above pp. 30, 31. 
 
 22 L. T., Je. 26, 1915, p. 5; Jc. 30, p. IS. 
 
74 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE COAL MINES 
 
 75 
 
 in 
 
 at the end of June, when they were suspended during 
 the settlement of the South Wales dispute. Indeed, ar- 
 rangements were at the moment in progress for holding a 
 great meeting at London during the first fortnight of 
 July. At this gathering, delegates, representing miners 
 and mine-owners from every district in England, were to 
 consider the recommendations of the Home Office Com- 
 mittee on Coal Supplies, and enthusiasm for co-operative 
 action in increasing the output was expected. ^^ 
 
 In view of the Welsh miners' threat of July 12 to stop 
 the collieries on July 15 if their terms were not granted, 
 Mr. Runciman announced in the House of Commons on 
 the 13th that the Government would apply to them by 
 proclamation the Munitions of War Act. The dispute 
 had now become prejudicial to the manufacture, trans- 
 port, and supply of munitions of war. So far as an 
 amendment had excluded the miners from the operation 
 of the Act, it had made the exclusion dependent upon 
 their possessing, in the opinion of the Minister of Muni- 
 tions, other means for the settlement of disputes. The 
 announcement of the President of the Board of Trade 
 was received with cheers, the Labour benches offering no 
 opposition but only requesting that the decision be made 
 known at once to the men in the coalfield. So certain 
 was the Government that a strike would be avoided that 
 it did not set up a South Whales Munitions Tribunal to 
 deal with violations of the Act. It relied rather upon the 
 Executive Committee of the Miners' Federation, for 
 
 this body had given a pledge to Mr. Lloyd George and 
 Mr. Arthur Henderson that there should be no strike 
 in the coalfields during the war. Moreover, the Parlia- 
 mentary Committee of the Trade Union Congress was 
 to meet on the morrow and it was expected that or- 
 ganized labour would put forth every effort.^^ 
 
 So far as the responsible leaders of the miners were 
 concerned, the Government had made no miscalculation. 
 On July 14 the Executive Committee of the South Wales 
 Miners' Federation reported that they had advised the 
 men to go to work on day-to-day contracts until a settle- 
 ment was reached. They therefore requested Mr. Runci- 
 man to resume negotiations. What had not been cor- 
 rectly appreciated in London, however, was the temper 
 of Cardiff. There neither the intimidation of the Gov- 
 ernment nor the reasonableness of their own Executive 
 Committee impressed the men. By a vote of 180 to 113 
 the Conference of South Wales Delegates decided to re- 
 ject their Executive's recommendation that there be no 
 stoppage of work, and thereby they committed themselves 
 to the strike. This legislative body had drifted away 
 from its eminent leaders and had come under the influence 
 of sub-leaders and district agents, several of them apostles 
 of Syndicalism and eager to take any opportunity to 
 force the Government to nationalize the mines. It is 
 possible that a ballot of the coalfield would not have 
 approved its decision. However that be, on July 15 
 200,000 miners ceased work.^^ 
 
 28 Ibid., Je. 26, p. 5. 
 
 2* Ibid., Jy. 14, p. 8; P. D. C, LXXIII, 739, 740. 
 25 L. T., Jy. 15, 1915, p. 7; Jy. 16, p. 9. 
 
nl 
 
 76 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ■ J« I 
 
 m 
 
 
 4 
 
 %\ 
 
 The Minister of Munitions at once set up a General 
 Munitions Tribunal for Wales and Monmouthshire. 
 The men felt, however, that the Government could not 
 enforce the Act and they were angered by the Procla- 
 mation extending its provisions to them. This feeling 
 made it more difficult for the Executive Committee, al- 
 ready repudiated, to negotiate to any advantage. For 
 a time the Committee was hopeful of limiting the strike 
 to twenty-four hours, but its conference on the i6th 
 with Mr. Runciman was barren of result. Nor would 
 the President of the Board of Trade summon the newly 
 accepted leaders of the miners to London. The dead- 
 lock continued until on the 19th Mr. Runciman, Mr. 
 Lloyd George, and Mr. Arthur Henderson went to 
 Cardiff. Next day Mr. Lloyd George's personal appeal 
 to his fellow countrymen availed as nothing else had 
 done.2^ The week's strike was ended not through the 
 operation of the Munitions of War Act nor the leader- 
 ship of the Executive Committee, but through the per- 
 suasiveness of the Minister of Munitions and the grant 
 of concessions not unlike those demanded from the first. 
 Until six months after the close of the war, and longer, 
 unless three months notice be given, a new standard, 50 
 per cent, above the old standard of 1879, was to be set 
 up; and this new standard plus 10 per cent, should serve 
 as a minimum for wages. No rise in wages could, how- 
 ever, take place until a selling price corresponding with 
 the new minimum should be decided. Henceforth there 
 
 26 Ibid., Jy. 15, 1915, p. 7; Jy- 16, p. 9; Jy- 17. p. 6; Jy. 21, p. 7. 
 
 THE COAL MINES 
 
 77 
 
 was to be, as the men wished, no maximum wage. Men 
 employed on afternoon and night shifts were to be paid 
 at the rate of six turns for five — precisely the miners' 
 demand. Surfacemen receiving less than 3 s. 4 d. a day 
 were to have that sum, which, however, was less than had 
 been asked for. No one was to be penalized for the 
 present dispute and every effort was to be made by all con- 
 cerned to maintain and increase the output of coal. The 
 cost of the strike was estimated as about £1,500,000, the 
 falling off in coal mined at about 1,000,000 tons.^*^ The 
 Munitions Act had proved inapplicable to men who had 
 not agreed to its provisions, and responsible labour lead- 
 ers had been repudiated by their supporters. There was 
 much that was ominous for constituted authority in the 
 history of the South Wales coal strike, only the abilities 
 of Mr. Lloyd George showing the brighter for it. 
 
 After this disconcerting fortnight the Government re- 
 turned to its legislation regarding the price of coal. Mr. 
 Runciman had introduced a Price of Coal (Limitation) 
 Bill which on July 19 came up for second reading. Its 
 chief provision was that coal at the pit's mouth should not 
 be sold at prices exceeding by 4 s. per ton the prices which 
 obtained there at corresponding dates in the tw^elve 
 months preceding June 30, 19 14. The Board of Trade 
 might in special circumstances increase the 4 s. The fine 
 for violation of this provision should not exceed £100, 
 or three times the amount which the seller might have 
 received in excess of the maximum.^^ To the criticism 
 
 27 Ibid., Jy. 21, p. 7; Jy- 22, p. 7. 
 
 "Ibid., Jy. 15, p. 8; P. D. C, 191S, LXXIII, 1674. 
 
78 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 that the bill penalized one great industry while allowing 
 to others high war profits, Mr. Runciman replied that 
 without it coal producers would have the market at their 
 mercy. As for other industries, the excess profits tax 
 would be heavy. Only with reluctance, however, did 
 the House accept the principle of the bill, looking upon 
 the measure as one of expediency. At the committee 
 stage debate arose over an amendment to include within 
 its provisions contracts of the summer made before its 
 passage. June was the usual month for such transactions 
 and the contractors who had bought then would, if not 
 protected, be undersold to the extent of 3 s. by merchants 
 who might buy in August. Mr. Runciman, opposing the 
 amendment, declared that it struck at the root of all 
 commercial stability. It was unfortunate, he admitted, 
 that the bill had been delayed, but labour troubles in the 
 coalfields were responsible for this. When the amend- 
 ment was at length withdrawn, he accepted another, pro- 
 viding that, if contract prices had been above those fixed 
 by the bill, the contnact should not be invalid but should 
 be subject to a reduction in the purchase price. 
 
 Another amendment was concerned with retail prices 
 in London, limiting them to a 15 s. advance upon the 
 prices at the pit-head as fixed by the bill. On Mr. Runci- 
 man's declaring that an attempt to fix a flat rate would 
 be a disastrous failure, this too was withdrawn. He had 
 already explained that London coal merchants were un- 
 dertaking not to increase the price beyond a certain num- 
 ber of shillings during the summer, and were prepared 
 
 THE COAL MINES 
 
 79 
 
 to give a similar undertaking for the coming winter. 
 He now added that to protect the poor from hawkers two 
 hundred of the largest coal merchants in London would 
 open depots where coal might be bought in small quan- 
 tities at the price of the day.^^ The bill was passed by 
 the House at the end of July and a month later the Board 
 of Trade in a circular to the London coal merchants urged 
 them to increase at once their stocks to the maximum. 
 Thus the pits could be kept fully at work and demands 
 upon transportation would later be reduced. H house- 
 holders would store what they could, consumers without 
 facilities could be supplied more easily in the winter.^^ 
 Such were the preparations made by the Government 
 in the summer of 19 15 for avoiding another winter of 
 high prices, especially in London. It had embarked 
 upon a career of price-fixing in the trade, and the follow- 
 ing year it was carried further by the current. Although 
 the Price of Coal Act in large measure protected home 
 consumers, no limit had been set to prices which might 
 be asked of foreign buyers. The Government's policy 
 was to provide for home needs first, for those of the 
 Allies next, for those of neutrals last. Licenses to ex- 
 port coal to the Allies were for the most part easily pro- 
 curable, but until May, 19 16, the price at which coal was 
 sold them was very high. South Wales at times sold 
 abroad low grade coals for 50 s. to 55s., although the 
 Government by arrangement was buying better grades at 
 
 29 p. D. C, 1915, LXXIII, 2186, 2187. 
 80 B. T. J., Sept. 2, 1915, p. 669. 
 
8o WAR TIME CONTROL OF INDUSTRY 
 
 less than one-half this amount. The colHeries which pro- 
 duced the lower grades available for export reaped the 
 highest profits, but all collieries realized on small coals, 
 the price of which at times was los. per ton more thaii 
 the authorities were paying for large coals. Early in 
 1916 such heavy shipments of smalls were going to 
 France that in view of the home shortage licenses were 
 for a time held up.^^ 
 
 Against conditions in the export trade France and 
 Italy protested. Not only were the prices for coal very 
 high but freights had l^ecome exorbitant. Rates to 
 French and Italian ports compared with those of 1914 
 were as follows : ^^ 
 
 Marseilles T'' ^. 1?^'"^) ^^' 8/. d. 
 
 Marseilles 85s. 6d. (May) lof 72 c 
 
 Bordeaux 7^ f rMarrh^ Vi' \t 
 
 Rouen ' ^ ^j uviarcn; 7 f . 30 c. 
 
 ^" 41S. 6d. (May) 6s. 3^4 d. 
 
 In May, 1916, the Board of Trade put the needs of 
 France before coal owners and shippers. The interests 
 concerned co-operated cordially and scales of maximum 
 coal prices and maximum freights were drawn up to be 
 effective June i. Henceforth all orders from France for 
 coal were to pass through one central office in Paris and 
 were to be forwarded ultimately to the District Coal and 
 Coke Committees in the various parts of the United 
 Kmgdom. The Committees in turn undertook distribu- 
 tion of the orders, supervision of their execution, and 
 
 31 Iron and Coal Trades Review account of 1916 • L E Feb 17 
 191 7, p. 329. ' » • /» 
 
 32 Ibid. 
 
 THE COAL MINES 
 
 81 
 
 arranging for shipments. Exporters saw their profits 
 decrease but France was able to supply her furnaces and 
 keep warm her homes at reasonable cost. Five months 
 later the arrangements were extended to Italy, corres- 
 ponding schedules being drawn up.^^ 
 
 The passage of the Price of Coal (Limitation) Act in 
 1915 and the setdement of the South Wales strike did 
 not, as it turned out, establish permanendy either the 
 price of coal for home use or the wages to be paid the 
 miners. Since the supply of coal never kept pace with the 
 demand for it, the Act did undoubtedly prevent abnor- 
 mal prices. What might have happened is indicated by 
 the course of the export trade. But it was felt in some 
 quarters that the maximum fixed by the Act was too 
 high, that the exclusion of contract coal from its pro- 
 visions enhanced prices, and that middlemen were still 
 free to increase their profits.^^ The probability that mid- 
 dlemen were suffering litde was supported by reports like 
 that of Messrs. Lambert Brothers, coal merchants, coal 
 exporters, and shipowners in London and Cardiff. In 
 the year 1914-15 they were able to distribute a divi- 
 dend of 20 per cent, free of tax and in 1915-16 one of 
 25 per cent. Since each year they put by a reserve equal 
 to the dividends, the net profits during two years were 
 90 per cent.^^ 
 
 83 B. T J., May 15, 1916, p. 530; Je. i, p. 586; Oct. 26, p. 267. 
 
 3*M. G., Sept. 30, 1916, p. 10 (editorial). 
 
 35 M. G., Sept. 30, 191 6, p. 10. The net profits of this firm for a 
 series of years were as follows: 1909-10, £39,000; 1910-11, £40,000; 
 1911-12, £60,245; 1912-13, £106,476; 1913-14, £84,557; 1914-15, 
 £142,548; 1915-16, £180,246. 
 
82 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 II 
 
 In July, 19 16, the inland prices allowed by the Board of 
 Trade to the South Wales owners were further advanced 
 2 s. 6d.,^^ a concession which seemed to some unwar- 
 ranted.^^ The miners were displeased and, although 
 their wages had been increased 15 per cent, in June, they 
 demanded in November a new advance under threat of 
 strike.^^ The Government, feeling that the output of 
 coal should no longer be thus endangered, took an im- 
 portant and decisive step. As from December i, 19 16, 
 it took possession of the South Wales mines. Other 
 motives than a desire to control the labour situation con- 
 duced to this action. Lord Milner had already pro- 
 posed that the mines be taken over as the railways had 
 been. Neutral trade could the better be directed, since 
 neutral ships stopping for British coal could be required 
 to call on their return at specified ports.^^ It was further 
 pointed out that fixing the price at the pit-mouth was not 
 proving efficacious in protecting the consumer. To 
 achieve this the wholesale and retail trade ought also 
 to be under state control.^^ 
 
 The Government embodied its newly taken resolution 
 in a regulation added to the Defence of the Realm Act. 
 This provided that any designated coal mines might pass 
 into the possession of the Board of Trade and that the 
 owners should thenceforth comply with the directions of 
 
 8« L. E., Feb. 17, 1917. 
 " M. G., Sept. 19, 1916 (editorial). 
 '8L. T., Dec. I, 1916, pp. g, 10. 
 38 M. G., Sept. 18, 1916, p. 4. 
 *oibid., Sept. 19, Dec. 20 (editorials). 
 
 THE COAL MINES 
 
 83 
 
 the Board as to the management and use of their mines."* ^ 
 The Board at once appointed an Interdepartmental Com- 
 mittee, representing the Board of Trade, the Home Of- 
 fice, and the Admiralty, to advise with regard to ad- 
 ministration, and to deal with outstanding questions as 
 to the general rate of wages in the South Wales coal- 
 field. Within a month it was decided to increase wages 
 there by another 15 per cent.^^ 
 
 On December 19, 19 16, Mr. Lloyd George, explaining 
 the policy of the new Government, declared that state 
 control would be extended to the entire mining industry. 
 English and Scottish as well as Welsh miners favoured 
 this extension, and were confirmed in their attitude after 
 the premier assured a deputation from the Miners* Federa- 
 tion that the measures contemplated would not be to the 
 disadvantage of the workmen. By an Order in Council, 
 February 22, 19 17, the Government took possession of 
 the remaining coal mines of the United Kingdom as from 
 March i, 1917. A new department was set up by the 
 Board of Trade to administer the vast business, and Mr. 
 Guy Calthrop became Controller of Coal Mines.*^ 
 
 Immediately the new Controller undertook an investi- 
 gation of the elements which entered into the market 
 price of coal. There came to his notice instances of 
 colliery companies charging London merchants prices 
 which exceeded the limits prescribed by the Price of Coal 
 Act. The intervention of factors, too, enhanced the 
 
 *i Regulation of Nov. 29, 1916, D. R. M. 
 
 *2 B. T. J., Dec. 7, 1916, p. 717; L T., Jan. 19, 1917. 
 
 ♦8L. T., Feb. 15, 1917; B. T. J., Mar. i, 1917, p. <5o8. 
 
!l 
 
 84 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE COAL MINES 
 
 85 
 
 price. For these reasons many small merchants had had 
 trouble in selling to the public at prices agreed upon. 
 The Controller, therefore, at the beginning of April is- 
 sued a notice requiring colliery companies to bring their 
 prices into accord with the Price of Coal Act. Factors 
 were instructed to revise their charges so that these in 
 no case should exceed a provisional maximum of i s. 
 6 d. per ton between colliery and distributor, no matter 
 through how many factors' hands the coal might pass. 
 Pending further investigation, arrangements were made 
 for a reduction of i s. per ton in the prices advertised 
 to the London public.^^ 
 
 In September the Controller took advantage of the 
 introduction of the Coal Transport Reorganization 
 scheme '*^ to cancel all contracts for coal for inland con- 
 sumption and to review colliery companies' and wholesale 
 merchants' prices. Relative to the latter the Wholesale 
 Coal Prices Order of September 5 was issued, specify- 
 ing the maximum profit which factors and wholesale mer- 
 chants would henceforth be allowed. To the pit-prices 
 and transportation costs they might add 3 d. per ton for 
 coal to be used fOr locomotives ; 6 d. for that needed for 
 other railway purposes or in national factories; 9 d. for 
 that consumed in making gas and electric supplies in 
 Great Britain ; i s. for that sold to retail merchants in 
 Great Britain for resale by them from depot or wharf or 
 railway siding to consumers or to hawkers and small 
 
 4* B. T. J., Apr. 5, 1917, p. 14. 
 *^ Cf., above p. 12. 
 
 I 
 
 I 
 
 F 
 
 dealers ; i s. 3 d. for all other coal, including that sold for 
 consumption in Ireland, except that 2 s. might be charged 
 if the quantity was less than thirty tons and was sold 
 from railway wagons to a consumer who had no rail 
 or wharf accommodations but did provide cartage."*^ In 
 general the provisional maximum of i s. 6 d. set in the 
 spring had proved sufficient. 
 
 As to maximum retail prices, no uniform schedule 
 could be constructed. In different localities, colliery 
 prices, transportation charges, local merchants' cost of 
 distribution, all varied. Maximum retail prices should, 
 therefore, it was ordered, be fixed by local authorities — 
 in England and Wales by borough, urban district, and 
 rural district councils, in Scotland by county and town 
 councils, in Ireland by urban district councils, town com- 
 missioners, and rural district councils. Retailers' net 
 profits were prescribed as those of wholesalers had been. 
 The profit for selling coal delivered by a road vehicle 
 from depot, wharf, or si Jng in lots of one ton or more 
 should not exceed i s. a ton, and if delivered at dealers' 
 shops under certain circumstances should be 6 d. less than 
 this charge; if the lot were less than one ton, the profit 
 should not be at a rate of more than 2 s. a ton. A 
 general rule for the guidance of local authorities was 
 formulated. Investigation had shown that retail prices 
 ought not to exceed those prevailing in the twelve months 
 prior to the war by more than 7 s. 6 d. a ton, or 6 s. 6 d. 
 if the district be near a colliery. If increases in price 
 
 "L. T., Sept. 8, 191 7, p. 8. 
 
86 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 did not exceed these limits, nothing should be done. If 
 they did, the circumstances should be reported.^ ^ 
 
 From prescribing the profits of wholesalers and re- 
 tailers, the Government turned to the mineowners and 
 the miners. To the South Wales owners it proposed 
 that their profits should be those of 19 13, as were the 
 profits of the railway companies; but the owners de- 
 murred and pointed to their payment of super-taxes and 
 their subscriptions to the war loans.'*^ At the annual 
 July meeting of the shareholders of the Ebbw Vale Steel 
 Iron and Coal Co. (Limited), a meeting at which a 
 dividend of 15 per cent, less income tax was announced 
 on the ordinary shares, one of the directors declared that 
 the coal trade more than any other had " unhappily come 
 under the blighting influence of governmental control." 
 The Coal Controller had invited representatives of the 
 various coalfields to meet him but deliberations had been 
 held with all the secrecy of a Star Chamber, with all the 
 ferocity of a Council of Ten. Recently he had sent to 
 the chairman of each coal company the outline of a 
 scheme under which 95 per cent, of the excess profits of 
 the coal trade would be taken either by himself or by the 
 Government. The speaker explained the trade's reliance 
 upon " boom years." During the past twenty years he 
 knew of no South Wales colliery of any standing which 
 had " been able to pay a dividend of not less than 10 per 
 cent, per annum," i.e., return to shareholders i s. per 
 
 *'^ Ibid., Sept. 13, p. 8. 
 *8L. T., Feb. 16, 1917. 
 
 THE COAL MINES 
 
 87 
 
 ton on the output. *' Which goes to show how unfair 
 it is to single out a particular trade for harsh treat- 
 ment." ^» 
 
 As the speaker said, a Committee of the Mining As- 
 sociation of Great Britain had entered into negotiations 
 with the Controller. Before an agreement was an- 
 nounced, however, certain owners, feeling that the Com- 
 mittee was going too far, took obstructive measures. 
 Asking counsel's opinion on the question whether the 
 Government had power to take over the mines without 
 Act of Parliament, they were advised that it had not. 
 Though contrary counsel could be quoted, the Govern- 
 ment decided to proceed by statute. The autumn par- 
 liament was, accordingly, asked to pass a bill legalizing 
 the Government's action and sanctioning the agreement 
 which had practically been reached on July 20th between 
 the Controller and the Committee. By this Coal Mines 
 Control Agreement (Combination) Bill every mine- 
 owner acquires the right to make a claim upon the Coal 
 Controller, if during any accounting period his profits 
 are less than they were during the standard period. If, 
 for example, a colliery with an output of 10,000 tons 
 during a standard or pre-war period declines in output to 
 9,000 tons during an accounting period of the same 
 length, the owner becomes entitled to a profit on the basis 
 of 9,250 tons. If, on the other hand, an owner's profits 
 during the accounting period are in excess of his profits 
 during the standard period, he is allowed to retain one- 
 
 *»Ibid., Jy. 26, p. II. 
 
I ri I 
 
 III 
 
 i 
 
 88 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 fourth of the 20 per cent, of excess profits to which the 
 Finance Act entitles him. The remaining 15 per cent, of 
 excess profits goes to the creation of a fund to meet the 
 payments due to owners whose profits have fallen off. 
 If the fund should prove inadequate, Parliament will be 
 asked to make good the deficiency. Although many mine- 
 owners demurred at the surrender of the 15 per cent, 
 excess profits, the majority of them eventually approved 
 of the Government's proposals.^^ Thus a final adjustment 
 between mineowners and the Government was reached 
 only three years after a similar one had been made be- 
 tween the Government and the owners of the railways. 
 
 In the autumn of 191 7 the Government also came to 
 terms with the miners. In July, the Miners' Federa- 
 tion of Great Britain had held its annual conference at 
 Glasgow. Addressing the representatives of 750,000 
 workmen, Mr. Robert Smillie, President of the Federa- 
 tion, referred to the Government's control of the mines. 
 Since the mineowners were, it was understood, to be se- 
 cured in their pre-war profits whatever the price of coal, 
 the miners should be entitled to similar treatment. The 
 question was at the time before the Coal Control Rates 
 Board and might have to be raised in an acute form. 
 The miners, having given the Government a pledge rela- 
 tive to non-stoppage of work, would assist the Board, 
 always, of course, short of compulsory arbitration. Al- 
 though the miners were able to force an increase of 
 wages they were not anxious to do so during the present 
 
 ^^L. T., Oct. II, 1917, p. 6; Nov. 9, p. 10. 
 
 THE COAL MINES 
 
 89 
 
 crisis. It would be better that the cost of living should 
 come down than that wages should go up. After a long 
 discussion the Conference decided to make a " general 
 demand for an increase of 25 per cent, on present earn- 
 ings over the whole Federation area in view of the high 
 cost of living." ^^ Acquiescence in this demand would 
 involve, it was computed, the addition of one-half million 
 pounds to the weekly wage bill of British collieries.''^ 
 
 A week after the Glasgow Conference ended, some 
 50,000 men of Lanarkshire held an " idle day " (August 
 2) as a protest against profiteering and the increased 
 price of foodstufifs and other necessaries. At noon in 
 thirteen centres, mass meetings called for strong and 
 speedy government action.^^ Before the end of the 
 month the demand for an increase in wages was pre- 
 sented by the Executive Committee of the Miners' Fed- 
 eration to the Coal Controller. In the middle of Septem- 
 ber Mr. Calthrop offered an advance of i s. a day to per- 
 sons over 18, and 6 d. a day to those under 18. This of- 
 fer being declined, the proposed advances were raised to 
 I s. 3 d. and 7J4 d. respectively, but conditions were now 
 attached. If the selling price of coal at the pit-head 
 should be raised, this should not operate to secure a 
 further wages advance under local conciliation board 
 agreements, unless the increase warranted an advance 
 greater than the present offer. If the cost of living 
 should fall, there should be a corresponding reduction in 
 
 51 Ibid., Jy. 25, p. 3- 
 
 52 L. E., Jy. 28, 1917, p. 144- 
 
 53 L. T., Aug. 3, 191 7, p. 3- 
 
lull* 
 
 I 
 
 nm 
 
 90 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 THE COAL MINES 
 
 91 
 
 the advance now to be made.^^ This offer too was re- 
 jected, the Federation asking that the advance be i s. 
 9 d. a day for persons over 16, 10 j^ d. for those under 
 16. Next day, however, a compromise was accepted. 
 Wages for workers over 16 and for those under 16 were 
 to be increased by is. 6 d. and by 9 d. respectively. It 
 was estimated that this advance would involve the pay- 
 ment of an additional £20 million annually in miners* 
 wages.^^ 
 
 Having increased the miners' wages, the Government 
 had to seek compensation by raising the price of coal at 
 the mines, an advance eventually to be paid by the con- 
 sumer. It the middle of October it was announced that, 
 to meet the new expenditure, the pit-head price of coal 
 would be increased by 2 s. 6 d. a ton. Coal sent to the 
 Allies would not be affected. ^^ At the same time the 
 provisions of the Price of Coal Act of 191 5 were modi- 
 fied. The " standard amount," i. e., the amount by which 
 the pit-head price of coal may exceed the prices which 
 prevailed during the twelve months preceding June 30, 
 19 14, had been fixed by the Act at 4 s. It was now, in 
 the case of the mines of South Wales, Monmouthshire 
 and the Forest of Dean, made 9 s. : elsewhere it should 
 be 6 s. 6 d. or such lower sum as might be fixed by the 
 Controller.^'' In this way the Government demonstrated 
 
 " Ibid., Aug. 28, p. 3 ; Sept. 27, p. 3. 
 
 55 Ibid., Sept. 28, p. 5. 
 
 «6 Ibid., Oct. 13, p. 6. 
 
 " Ibid., Oct. 16, p. 7- 
 
 that increased expenditure for labour is necessarily re- 
 flected in increased charges to the consumer. 
 
 That the account of the activity into which the Gov- 
 ernment was led through its attempts to limit the price of 
 coal and satisfy the demands of the miners might be con- 
 secutive, its endeavors since the summer of 19 15 to con- 
 serve and increase the output of coal have been neglected. 
 It will be remembered that at the very time of the South 
 Wales strike in 191 5 a great meeting had been planned to 
 rouse enthusiasm on this subject. On July 29, Mr. 
 Lloyd George addressed more than 2,000 representatives 
 of the coal-mining industry in the London Opera House. 
 To repair the decline of 3,000,000 tons a month in produc- 
 tion, the Government suggested that masters and men in 
 the various coalfields consider jointly whether they could 
 suspend the Eight Hours Act and other rules and customs 
 established for the protection of labour. The Govern- 
 ment in its turn was ready to pledge itself to restore the 
 Act, rules, and customs when the danger was past. Mr. 
 Robert Smillie replied that the miners might agree to a 
 suspension of the Act, might even assent to a reduced age 
 limit for boy workers and to the further employment of 
 women ; but he hoped that these would be last steps and 
 taken only if the need were vital. The conference passed 
 a resolution that every effort should be made by owners 
 and workmen to secure the greatest possible output of 
 coal during the war.^^ 
 
 B8 A. R., 1915, p. 149. 
 
92 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 The better to organize the distribution and exportation 
 of coal, the Board of Trade in February, 1916, on the 
 nomination of various coalowners' associations, appointed 
 eleven District Coal and Coke Supplies Committees. 
 Upon them in the future lay the responsibility for seeing 
 that the resources of their districts were utilized and that 
 requirements for important industries and for households 
 were met. To consider their recommendations for 
 economy and for the distribution of coal and coke a 
 Central Committee was set up. Upon it were placed 
 representatives of all the government departments inter- 
 ested in the coal question, and from it emanated decisions 
 relative to the adjustment of home and foreign demand. 
 
 A direct outcome of this desire to direct the supply of 
 coal into the most important channels were the Priority 
 Regulations of June 27, 1916."'^^ These provided that 
 the Admiralty or the Army Council or the Minister of 
 Munitions, after consultation with the Board of Trade, 
 might give directions as to the priority to be given in the 
 execution of orders or contracts for supplies of coal or 
 Coke, with a view to securing precedence for orders or 
 contracts in accordance with their national importance. 
 To protect the contractor who had been directed to di- 
 vert his coal in the national interest, the Board of Trade 
 announced that such diversion would not expose him to 
 legal measures if he was thereby forced to break a con- 
 tract.^^ During the few months preceding, contractors 
 
 50 2 D under the Defence of the Realm Act ; Cf., B. T. J., Je. 29, 
 1916, p. 878. 
 «oB. T. J., Jy. 6, 1916, p. 31. 
 
 THE COAL MINES 
 
 93 
 
 k 
 
 on the advice of the Central Coal and Coke Supplies Com- 
 mittee had been inserting in their contracts a clause mak- 
 ing the contract null and void so far as it prevented the 
 fulfilment of government requirements.®^ This precau- 
 tion now became unnecessary. 
 
 Meanwhile the Government was carefully taking stock 
 of its resources and on September i, 1916, some fifteen 
 months after its first report, the Committee on output 
 published a third report. The aspects of the earlier 
 situation were reviewed in the light of added experience. 
 Until the spring of 19 16 the total output of British coal 
 mines had continued to decrease, but during the few 
 months preceding the report improvement had set in. 
 Up to the end of March the net decrease in the number 
 of persons employed at the mines was 14.8 per cent., one 
 per cent, greater than a year earlier. Measures, however, 
 had by that time been taken and were still to be taken 
 to check this wastage. On November 8, 191 5, the Home 
 Secretary and the Director General of Recruiting had 
 posted notices requiring any miner who enlisted to go 
 back to work until called upon, his readiness to enlist 
 being indicated by an armlet. Only a limited number 
 of volunteers were accepted for tunnelling at the front. 
 On June i, 19 16, more vigorous measures were taken. 
 All miners in the home service units unfit for foreign 
 service and such others as had entered the home units 
 after August i, 191 5, were to be sent back to the mines. 
 It was estimated that the number so returned would be 
 
 «iL. E., Feb. 17, 191 7, P- 329- 
 
 r 
 
m' 
 
 94 WAR TIME CONTROL OF INDUSTRY 
 
 from 15,000 to 16,000 and that their labour would in- 
 crease the output of coal by 4,000,000 tons annually. At 
 any rate the output did expand slightly, though the total 
 for the second year of the war was again far below the 
 normal. The production during three successive years 
 was as follows: 
 
 August, 1913-July, 1914 281,135,000 tons 
 
 1914- ;; 1915 250,368,000 " 
 
 1915- I9I6 250,748,000 " 
 
 The Committee in its first report looked with hope 
 toward the decrease of absenteeism, estimating that, if 
 the 4.8 per cent, which was avoidable were eliminated, 
 the output of coal would increase by 13,000,000 tons. 
 The third report had to admit that no improvement was 
 perceptible. In a final effort the Committee in April, 
 1916, had induced the representatives of the Miners* 
 Federation and of the Mining Association of Great Brit- 
 ain to institute for every pit or colliery-group or district 
 a committee to watch over and deal with absenteeism. 
 On each committee the owners were usually represented 
 by three members, the workmen by an unlimited number. 
 By the end of August '' Absentee " committees existed 
 in all districts except North Staffordshire, West York- 
 shire, and some collieries of South Wales. Should the 
 persuasive power of these new bodies prove ineffective, 
 the situation, reflected the Committee somewhat gloomily, 
 would have to be reviewed. 
 
 More reassuring was the miners' relinquishment of a 
 part of their holidays. The response during the year to 
 
 THE COAL MINES 
 
 95 
 
 the Committee's representation regarding Christmas, 
 New Year's, Easter, and Whitsuntide had been hearty, 
 and normal holidays had been reduced by 50 per cent. 
 The Committee was of the opinion that a further reduc- 
 tion would be unwarranted and would increase absentee- 
 ism. 
 
 Although stoppage of recruiting and curtailment of 
 holidays had done something to check the falling output, 
 and the control of absenteeism might do more, the Com- 
 mittee could not disguise the ominousness of the export 
 statistics. In 1913 Great Britain exported 73^^ million 
 tons of coal, in 1914 59 millions, in 191 5 43^2 millions. 
 The third report ends with the same note as the first, only 
 with increased emphasis. If legitimate requirements are 
 fully to be met, economies must above all be practised in 
 the consumption of coal.^^ 
 
 At a National Conference of representatives of the 
 coal mining industry on October 25, 1916, Mr. Asquith 
 and Mr. Herbert Samuel embodied in their speeches the 
 findings of this report. The diminished output, the dan- 
 gerously low exportation, the persistence of avoidable 
 absenteeism were set forth. To remedy the last the Con- 
 ference passed a resolution pledging its best effort.^^ 
 
 At the same time the National War Savings Com- 
 mittee, co-operating with the Board of Trade, appealed 
 for economy. Since coal was of supreme military value 
 and no substantial increase in output could be expected 
 
 «2 cd. 8345. 
 
 «3 L. T., Oct. 26, 1916, p. 7. 
 
96 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 bli 
 
 during the coming winter, the exigency could best be 
 met by householders restricting their purchases to the 
 minimum. Especially could those householders help 
 whose consumption was large and to whom one or two 
 fires less would mean little. By a saving of one-tenth 
 in fires and lights, the quantity of coal available could be 
 increased by three or four million tons.^* 
 
 The campaign for economy was continued in 19 17. 
 To reduce the consumption of electricity, the linking-up 
 of large electrical systems of England and Scotland was 
 recommended by a Lancashire and Cheshire Committee. 
 Despite the cost, coal would be saved and the price of 
 the electricity could be reduced by the municipalities con- 
 cerned.^5 It was suggested too that central power sta- 
 tions could be set up near the principal collieries.^^ That 
 water gas be substituted for or mixed with coal gas was 
 recommended at the annual meeting of the Institution of 
 Gas Engineers.^^ 
 
 In June and July measures were taken to store up sup- 
 plies in urban centres for the winter. Local authorities 
 first in London and afterward in other municipalities 
 were permitted to acquire stocks up to 1,000 tons for 
 distribution to the poor. That access might be easy the 
 stocks were placed in various depots, and a provision for 
 sales of less than one hundredweight promised employ- 
 
 «*M. G., Oct. 4, 1916. p. 6. 
 
 «5 American Commerce Report, May i, 1917. 
 «« Ibid. 
 
 «^M. G., Je. 6, 1917. 
 
 THE COAL MINES 
 
 97 
 
 ment to women in tending small scales. In general, 
 however, it was felt that distribution could best be made 
 by the merchants, and householders whose means per- 
 mitted them to store coal before winter were urged to 
 place their orders with them. The merchants in turn 
 did their best to meet this early demand, delivering more 
 coal than during the corresponding period of 1915.^^ 
 Not only were efforts of this kind made to prevent diffi- 
 culties of transportation in the winter, but the elaborate 
 plan of the Controller, already described,^^ looked to- 
 ward moving coal along direct routes from producing 
 areas to the nearest consuming centres."^^ During May, 
 June, and July the coal conveyed from the pit-mouth to 
 London exceeded by 250,000 tons the quantity usually 
 transported during these months, and a reserve of 70,000 
 tons was created. It was expected that the reserve would 
 be increased to 200,000 tons by the end of September 
 and would be maintained above this amount during the 
 autumn and winter. 
 
 While much was thus done to ease the task of the rail- 
 ways, the Coal Controller on August 10 took the final 
 step and issued an order to limit the consumption of coal. 
 By this Household Coal Distribution Order, 19 17, effec- 
 tive August 17, London, the metropolitan area, and a 
 number of districts outside were rationed. After Octo- 
 ber I no one might buy for a dwelling house more than 
 
 «8 L. T., Je. 26, 1917, p. 3 ; Jy- 14, p. 3. 
 
 ^^ Cf., above p. 12. 
 
 70 L. T., Aug. 17, 1917, p. 3. 
 
I i 
 
 98 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 2 cwt. of coal a week for four rooms, more than 3 cwt. 
 a week for five or six rooms, more than one ton monthly 
 for seven rooms, more than 2^ cwt. for eight rooms, 
 more than 27 cwt. for nine or ten rooms, more than a 
 ton and one-half for eleven or twelve rooms, more than 
 two tons for thirteen or fifteen rooms, more than two 
 and one-half tons for fifteen or more rooms. This was 
 to be the allowance from October i to March 31 ; from 
 April I to September i, it would be reduced by one-half. 
 Coke might be substituted for coal in the ratio of four to 
 three; the anthracite allowance was two-thirds that of 
 other coal. An additional allotment not exceeding 2 
 cwt. a week might be granted a household in which 
 through the presence of aged or invalid persons, children, 
 or lodgers hardship would otherwise arise. 
 
 To ensure this distribution, every metropolitan dealer 
 in coal was required to take out a licence not later than 
 September 20 registering the place where he dealt out 
 coal. Local authorities were instructed to appoint local 
 coal overseers who should report to the Controller on 
 the facilities for storing and delivering coal within their 
 respective districts and should provide for the safe cus- 
 tody of any reserve stocks. No person might purchase 
 more than 2 cwt. in any week without the consent of the 
 local overseer, nor from October i to March 31 might he 
 buy more than two tons at any one time. During the 
 same six months not more than one ton might be de- 
 livered monthly unless the registered merchant be in a 
 position to fill all orders up to this amount during the 
 
 THE COAL MINES 
 
 99 
 
 month or unless the customer present a priority order. 
 Lastly, the Controller might from time to time determine 
 the maximum price to consumers.*^^ The motive idea of 
 the scheme, so cumbersome in the phrasing, was to guar- 
 antee to each household of seven rooms or more at least 
 one ton of coal a month and to smaller households a cor- 
 respondingly smaller amount. Supervision was provided 
 for and the Controller intimated that prices should not 
 pass a certain point without his intervention. 
 
 Immediately protest against the new scheme was made 
 by the London Coal Merchants' Committee. At least a 
 month beyond October i would be needed to fill the 
 numerous orders now on hand — unless these were to 
 be swept into the waste basket. If as much coal could 
 be brought to London as the Controller indicated, the 
 regulations were unnecessary. The scheme would in- 
 volve the expenditure of additional money and labour. 
 Tickets would require clerical work, and telephone orders, 
 convenient as they are, would cease. The carrying of 
 a reserve equivalent to five weeks' sales would tax mer- 
 chants' docking facilities and leave them in the spring 
 with a stock depreciated through exposure. Delivery of 
 coal in rotation would bring difficulties of carriage. In 
 his arrangements the Controller should have consulted 
 the Merchants' Committee, a group of experienced men, 
 and should have appointed them to carry out the scheme 
 in the districts which should have been formed.^- 
 
 71 L. T., Aug. 13, 1917, p. 4- 
 
 72 L. T., Aug. 18, 1917, p. 8; Sept. i, p. 2. 
 
 V 
 
lOO 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 1 ) 
 
 One concession the Controller made. The reserve 
 necessarily kept was reduced to an amount three times 
 the largest week's sales of the current year. On the 
 other hand, it was stipulated that the reserve must be 
 completed not later than November 30 and that, until it 
 was assured, 25 per cent, of the coal received each week 
 must be carried in stock.^^ 
 
 By these regulations the Coal Controller took a final 
 step in completing the system of state control. In pos- 
 session of the mines and of the railways which carry 
 their product, the actual employer of all labour con- 
 cerned, the supervisor of all factors and merchants, the 
 regulator of prices at every stage from producer to con- 
 sumer, the Government now, in the populous Metro- 
 politan area, became practically a distributor, telling 
 citizens how much coal they might buy and under what 
 conditions they might buy it. With reluctance it had 
 entered upon these heavy administrative tasks. From 
 the summer of 191 5, when a settlement of wages and 
 prices first became imperative, to the autumn of 1916, 
 when the taking over of the mines seemed advisable, it 
 had been content with general and occasional regulations. 
 During 1917, however, with the creation of a Coal Con- 
 troller, wages, profits, prices, transportation, distribution 
 had been closely supervised, and at the end of the year 
 little was required to render the control as complete as a 
 Socialist would desire. 
 
 73 Ibid., Oct. IS. 
 
 WOOL AND WOOLLENS 
 
 In its negotiations regarding the railways, the coal 
 mines, and the production of iron, steel, and munitions, 
 the Government could for the most part neglect the outer 
 world. The questions involved were largely domestic 
 and the Government was master in its own house. To 
 each, of course, there was a foreign side. The railways 
 carried imported products from the ports inland, and the 
 condition of foreign trade was reflected in the congestion 
 of the docks; the decline in the output and exportation of 
 coal created a situation serious for Allied buyers and 
 for the British balance of trade; and the iron ore mined 
 in England was insufficient to meet the demand, making 
 necessary reliance upon Spanish ores. But apart from 
 this last dependence, the situation in foreign countries 
 did not obtrude itself to interfere with the Government's 
 plans. 
 
 Very different are the conditions now to be considered. 
 For in regard to certain commodities Great Britain is de- 
 pendent upon foreign sources of supply. The home out- 
 put of wool and hides is of course considerable, but it is 
 smaller than the imported product. Foodstuffs have to 
 be imported in different proportions — meat consider- 
 ably, wheat and flour extensively, sugar entirely. Cotton 
 and tobacco are got only from abroad. Government con- 
 trol of any of these commodities involves, therefore, the 
 
 lOI 
 
II 
 
 V 
 
 I If 
 
 , Hi 
 
 HI 
 
 m 
 
 IHp 
 
 1 02 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 control of both the home and the imported supply, or of 
 the latter in case this is the only one. If it be a question 
 of price fixing, one source of supply may be easily dealt 
 with, the other may give much trouble. If there be only 
 the imported product, the Government may be able to 
 take this readily into its own hands. 
 
 Another feature of situations of this kind is the need 
 of maintaining the supply of the commodity in question. 
 Since the home product is at best insufficient, the foreign 
 supply will always be the Government's chief concern. 
 If in the foreign supply there be for some reason a world 
 shortage, the state may have to enter the world market 
 as purchaser. Such crises have arisen relative to wool, 
 hides, and many articles of food. If, on the other hand, 
 the supply is comparatively abundant or the commodity 
 relatively unessential, the state may safely leave importa- 
 tion and purchase in private hands. So it has done with 
 cotton and tobacco, commodities which have been af- 
 fected by government control only in their consumption. 
 
 From the beginning of the war the Government has 
 been concerned to maintain in the country an adequate 
 supply of wool. Not only was this in order that civilian 
 needs might be met but also that the men of the army and 
 navy might be clothed. In the spring of 1916 the latter 
 responsibility brought the Government face to face with 
 rising costs, and in the interests of the Exchequer it began 
 to fix prices. The double endeavour to secure adequate 
 supplies and to keep them at a reasonable price has led 
 to a wide-reaching control of the woollen industry. 
 
 fl 
 
 WOOL AND WOOLLENS 
 
 103 
 
 To maintain supplies during the first year and a half 
 of the war was not difficult, and up to the beginning of 
 19 1 6 the supply of raw wool was in general abundant. 
 The reasons for this lay in world conditions. At the 
 beginning of the war, the cessation of a large part of the 
 Continental demand for wool left on the market a surplus, 
 much of which was attracted to the United Kingdom. 
 Nine hundred million pounds were retained in the country 
 during 19 15, although the average annual pre-war con- 
 sumption had been only five hundred and fifty million 
 pounds.^ It would seem that the Government need not 
 have troubled itself to conserve supplies, but for a time 
 extreme caution was shown. 
 
 At the outbreak of the war the woollen trade for a 
 short time suffered from the wide-spread paralysis of 
 industry. The September London sales, at which some 
 120,000 bales of wool are normally disposed of, had to 
 be postponed for a week and then only 50,000 bales were 
 offered. The market, however, proved unexpectedly 
 strong; 43,000 bales were sold and prices maintained.^ 
 Soon government orders began to come in and the crisis 
 was past. In three months the demand for wool ro3e 
 20 per cent. Steadily government needs increased until 
 in 191 7 they closely approached the total pre-war con- 
 sumption of the United Kingdom. In March of that 
 
 1 Cd. 8447, p. 13. Memorandum on War Office Contracts. A 
 paper handed in to the Committee on Public Accounts by Mr. N. F. 
 Wintour, Director of Army Contracts, Je. 7, 1917, P- I3- From this 
 excellent report much of the following account is drawn. 
 
 2 B. T. R., Oct. I, 1914, p. 204 ; Nov. 2, p. 255. 
 
m 
 
 ' * 
 
 ii' 
 
 I- I 
 
 I 
 
 i:* 
 
 IR I 
 
 104 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 year Mr. Forster told the Commons that the army an- 
 nually requires 105,000,000 yards of khaki and 115,000,- 
 000 yards of flannel — '' enough to go four and a half 
 times round the earth at the equator/' ^ 
 
 Foreseeing its requirements, the Government, despite 
 the large quantities of wool coming into the country in 
 the autumn of 19 14, put restrictions upon the export of 
 certain kinds of wool and cloth. Licences from the 
 Board of Trade were required for any exportation. If 
 a cloth were unsuitable for army purposes, the licence 
 was readily granted; if suitable, a licence was refused 
 unless the cloth were for the military purposes of the 
 Dominions. As for wool, the exportation of merino 
 from England or the Colonies was to a considerable ex- 
 tent permitted, but not that of crossbred, more suitable 
 for making army cloths, except that at times this was 
 allowed to go to the Allies.^ Notwithstanding the partial 
 embargo, the home market during the winter was ill- 
 supplied owing in a measure to delays in railway trans- 
 portation.^ At the same time the exportation of Aus- 
 tralian wool to America was forbidden by the Australian 
 Government, there being a suspicion that, thus supplied, 
 America was managing to get a part of her own clip to 
 Germany. With the inclusion of wool in the list of con- 
 traband in March, this situation cleared up and American 
 buying in the Colonies was again permitted.® 
 
 sCd. 8447, p. 13; P. D. C, 1917, XC, 2192. 
 * B. T. J., Nov. 19, 1914, p. 494 ; Dec. 10, p. 693. 
 6B. T. R., Feb. i, 1915, p. 82. 
 6 Ibid., Mar. i, p. 145; Apr. i, p. 211. 
 
 WOOL AND WOOLLENS 
 
 105 
 
 In the summer of 191 5 the Government, having ac- 
 cumulated extensive stocks, could afford to relax restric- 
 tions upon exports. The country had even become em- 
 barrassed by its surplus supply both financially and in 
 the matter of storage. Merinos were, therefore, ex- 
 ported still more freely; crossbreds, already going to 
 France, were released for other Allies and for Norway 
 and Denmark, an embargo on 125,000 bales of them be- 
 ing raised ; ^ East India wool might go to the United 
 States. Crossbred tops were sent more liberally than 
 before to the Allies and, under satisfactory guarantees, 
 to neutrals.^ The year ended with handsome profits for 
 home manufacturers, even the fancy houses prospering, 
 while carpet makers shared in orders for blankets and 
 military webbings.^ 
 
 Nineteen hundred sixteen brought with it a shortage 
 in the world's supply of wool, the effects of which were 
 to be far-reaching. For a time the stocks carried over 
 in England from 19 15 obscured the situation, but later 
 it became apparent that the world's production had fallen 
 off 20 per cent., or 300 million pounds. A serious 
 drought in Australia during 19 14-15 had reduced sheep 
 flocks from 82 million head to 69 million; cattle raising 
 and wheat growing were successfully competing with the 
 production of wool in South America. To intensify the 
 scarcity in Europe, Japanese buying increased and the 
 
 7 Ibid., Sept. I, p. 174; Oct. i, p. 212. 
 
 8 B. T. J., Oct. 21, 1915, p. 173. 
 
 » Weekly Rec, Jan. 25, 1916; Annual Fin. and Com. Review, 
 Jan. 21, 1916. 
 
io6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 I '■ 
 
 United States began to acquire wool on an unprecedented 
 scale. Just before the war American import duties on 
 wool had been removed and war prosperity now gave in- 
 creased purchasing power. In the 1915-16 season, the 
 United States' purchases in Colonial wool markets were 
 nearly ten times greater than the average purchases of 
 the three years preceding the war, amounting to almost 
 20 per cent, of the world's clip. It was estimated, too, 
 that during 1914-15 and 1915-16, 100 million pounds 
 of wool were purchased in South American markets on 
 German account for post-war trade. ^^ There was a 
 feeling in the British wool trade that, although the con- 
 suming power of the United States was great, large 
 purchases there had been speculative, made in the hope 
 of reselling to Germany after the war.^^ The following 
 table shows the changes in production, consumption, and 
 price which occurred during three years of the war.^^ 
 The Australasian and Cape production is about 70 per 
 cent, of the world's exportable wool.^^ 
 
 WOOL AND WOOLLENS 
 
 107 
 
 Exports to Europe 
 and America (in 
 bales) 
 
 Average 
 value 
 per 
 bale 
 
 Consumption (in bales) 
 
 Imported 
 
 into 
 England 
 
 Australasian Cape 
 
 1913 2,296,000 484,000 £ 16^ 
 
 1914 2,33-2.000 499,000 17 
 
 1915 2,157,000 519,000 19 
 
 1916 1,919,000 500,000 27 
 
 English Continental American 
 
 1,043,000 1,675,000 54,000 1,646,000 
 
 968,000 1,689.000 169,000 1,601,000 
 
 1,923,000 212,000 551,000 2,171,000 
 
 1,384 000 273,000 720,000 1,496,000 
 
 By the beginning of 1916 prices in Great Britain re- 
 flected the coming scarcity. According to the quality 
 
 10 Cd. 8447. p. 13. 
 
 11 B. T. R., Feb. i, 1916, p. 62. 
 
 12 L. E., Feb. 17, 1917, pp. 313-314. 
 
 13 M. G., Dec. 29, 1916. 
 
 of the wool the advance was from 40 per cent, to 100 per 
 cent. It was stimulated by the purchases of merchants 
 and manufacturers anxious to protect themselves against 
 the persistent rise, and by the activity of speculators out- 
 side the wool trade but attracted to it by the profits real- 
 ized. British and Allied demand for the finished product 
 contributed. The increased prosperity of the working 
 classes made them better buyers ; the War Office was plac- 
 ing very large orders ; and for a time the Allies competed 
 with the Government. The last factor was at length 
 eliminated by the placing of all Allied orders through the 
 Army Contracts Department, but the other factors re- 
 mained. 
 
 The Government now became concerned for its own 
 purchases. Restrictions were again placed upon exports. 
 Although limited quantities of merino wool were for a 
 time allowed to go to European neutrals,^* no licences 
 whatever for America could be got in London. A month 
 or two later all neutral purchases, first of crossbreds then 
 of merinos, were barred.^^ 
 
 Under normal conditions the Government had pre- 
 ferred to do its buying through competitive tendering; 
 but its rivalry with the civilian and export trades was 
 making this impossible save at exorbitant prices. Even 
 when manufacturers w^ere willing to forego high profits 
 on war work, their competitors in the civil trade could 
 offer higher wages to labour and could outbid them for 
 
 1* B. T. J., Apr. 13, 1916, p. 82. 
 15 L. E., Feb. 17, 1917, p. 312. 
 
I \ 
 
 io8 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 raw material. The Government's first plan under these 
 circumstances was to requisition the output of factories, 
 paying the manufacturer the cost of production and a 
 reasonable profit. An Order in Council of February 15, 
 19 1 6, bestowed upon the War Office power to do this, 
 together with authority to require manufacturers to fur- 
 nish information as to output, cost of production, and 
 profit. A census of machinery, labour, productive capac- 
 ity, and stocks of raw material was accordingly taken. 
 World movements of supplies and prices were investi- 
 gated. War Office accountants examined the books of 
 typical firms to ascertain '' costings." Committees from 
 sections of the trade and trade experts appointed to be 
 'officers of the Army Contracts Department worked over 
 conversion costs at the various stages of manufacture. 
 
 The results were unsatisfactory. Owing to the excited 
 state of the raw wool market and the varying prices at 
 which manufacturers had purchased raw material, the 
 market prices of the day had to be taken as the basis for 
 costings. With a rising market the advantage was al- 
 ways with the manufacturers, always against the Depart- 
 ment. To attain a satisfactory system of costings, con- 
 trol of the raw material was essential ; and the necessity 
 of securing adequate supplies made it desirable as well.^^ 
 
 For these reasons, the Department in May, 19 16, de- 
 cided to take over the clip of the United Kingdom, the 
 wool being crossbred and in the main suitable for military 
 purposes. On June 8 dealings in wool grown on sheep 
 
 i« Cd. 8447, p. 13. 
 
 WOOL AND WOOLLENS 
 
 109 
 
 in the United Kingdom during the season of 19 16 were 
 forbidden. ^^ The prices to be paid to British growers 
 were, after much consideration, agreed upon as those 
 ruling in July, 19 14, increased by 35 per cent., an estimate 
 of the increased cost of production. The Government 
 had at first offered an increase of 30 per cent, but the 
 farmers stood out for the higher figure.^« Throughout 
 Great Britain the normal machinery of the trade was, as 
 far as possible, utilized in carrying out the transaction. 
 Merchants, authorized by the Department and paid in 
 proportion to the weight of the wool which they handled, 
 did the buying, supervised in each of several districts 
 by experienced buyers who had been appointed Deputy 
 Executive Officers. The wool thus acquired was taken 
 to a huge clearing house at Bradford, where it was graded 
 and finally valued. In Ireland the established dealers, 
 who buy from farmers, store keepers, and others, were 
 asked to make the purchase on commission, and a fixed 
 schedule of prices was drawn up for them by the Gov- 
 ernment. The total cost of the 19 16 clip was estimated 
 at from £7,500,000 to £8,000,000.^^ 
 
 Considerable dissatisfaction was expressed in Parlia- 
 ment in November at the methods adopted in taking over 
 the wool. Mr. Prothero, soon to be Minister of Agri- 
 culture, declared, ** You could not have had that purchase 
 carried out in a way that would have given more dis- 
 
 17 B. T. J., Je. 15, 1916, p. 730. 
 
 18 B. T. R., Aug. I, 1916, p. 77- 
 
 i»Cd. 8447, p. 14; B. T. J, Jy. 27, 1916, p. 233. 
 
no 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 content to the agricultural community." In two respects 
 there had been a loss to the nation. The wool was left 
 in places where it deteriorated in quality; and because 
 it was not paid for promptly farmers had been obliged to 
 sell their catde before the latter were fit for the butcher. 
 Mr. Bentham compared the dilatoriness of the Govern- 
 ment with the promptness always shown by the private 
 buyer, who paid on the spot. Sir John Spear asserted 
 that the prices received would not be really 35 per cent, 
 in advance of those of June and July, 1914. It had been 
 understood that the wool would be taken in bulk as had 
 always been the case; but a system of grading was intro- 
 duced which made marked differences. A Devon farmer 
 had proved that he received £14 less than the price prom- 
 ised by the Government. ^^ 
 
 Whether satisfactorily or not, the clip of the United 
 Kingdom was appropriated by the end of the year; but 
 this clip constituted only one-ninth of the British con- 
 sumption of wool in 19 1 5. It was highly desirable, 
 therefore, that action be taken to secure the Australasian 
 clip, which amounted to one-half of the world's exporta- 
 ble crossbred and merino. During the season of 19 15-16 
 the Australasian Governments, at the request of the home 
 Government, had placed an embargo on the exportation 
 of wool to other than Allied countries. Despite this 
 America had acquired almost 25 per cent, of their clip, 
 the embargo proving intermittent. To assure itself of 
 supplies, the home Government now proposed to the two 
 
 20 p. D. C, 1916, LXXXVIT. 878, 870-871 ; 932, 1232. 
 
 WOOL AND WOOLLENS 
 
 III 
 
 Colonial Governments the purchase of all their crossbred 
 wool in 1916-17, about two-fifths of their clip. To this 
 proposal they answered that it would be impracticable 
 to discriminate between growers and users of different 
 kinds of wool and offered to sell the entire clip. After 
 considerable discussion, the home Government in Novem- 
 ber, 19 16, accepted the offer. A proposal to purchase the 
 South African clip also was discussed but rejected, since 
 the quality of the wool blended less well for army pur- 
 poses. As it was, the Government's action was adversely 
 criticized by some sections of the trade and declared un- 
 necessary. 
 
 Before the purchase was arranged, one-fourth of the 
 Australasian clip had been sold at public auction. So 
 far as these sales were on British or Allied account, the 
 wool was allowed to go forward. As for the remainder 
 of the clip, about 500 million pounds, the Governments of 
 Australia and New Zealand were to act as sole agents of 
 the British Government. Wool required by local manu- 
 facturers was unaffected. The prices to be paid were 
 55 per cent, above the average 1913-14 prices realized 
 by growers in Australia, and worked out at about 15^2 d. 
 per pound greasy wool. Should the home Government 
 realize any profit on its sales, this was to be shared with 
 the Colonial Governments. The cost was appraised at 
 £22 millions for the balance of the Australian clip, at 
 £13 millions for the clip of New Zealand.^^ Although 
 the South African clip was not purchased, an Order in 
 
 21 Cd. 8447, p. 14. 
 
112 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Council of April, 191 7, announced that any imported 
 wool must first be offered for sale to the Director of 
 Army Contracts. Thus, in one way or another, most of 
 the raw wool of the Empire, or about 70 per cent, of the 
 world's exportable supply, came under state control. 
 
 The distribution of the wool acquired by the Govern- 
 ment now became a matter of great concern to the trade. 
 The British clip had been apportioned through selected 
 firms of wool merchants to manufacturers who supplied 
 the Government's military needs. Any surplus not 
 needed by Great Britain or the Allies was sold by auction 
 at unreported prices. Brokers had suffered somewhat, 
 but 19 16 had not been an unprofitable year for manufac- 
 turers. New trade rules, such as shorter credit periods 
 and a standard measure (38 inches to the yard), had been 
 adopted.22 Above all, the careful placing of Govern- 
 ment orders, as well as large ones from Russia, in such 
 way as to keep factories steadily running had conduced 
 to prosperity. ^^ There were, to be sure, complaints from 
 worsted manufacturers that the prices allowed them on 
 Government purchases could be accepted only through 
 patriotic motives ; but fine worsteds were in demand from 
 neutral countries, which were undeterred by high prices. ^^ 
 
 In December, 19 16, however, consternation ruled 
 among Bradford and London brokers; for it was an- 
 nounced that the Government would suspend the London 
 auction sales of wool. A deputation of the trade waited 
 
 22 L. T., Jan. 19, IQ17, p. 8; M. G., Dec. 28, 1916, p. 6. 
 
 23 M, G., Nov. 22, 1916, p. 9. 
 
 24 Ibid., Dec. 13, p. 9. 
 
 WOOL AND WOOLLENS 
 
 113 
 
 upon the Financial Secretary of the War Office to urge 
 that the sales be continued. They were told that the 
 Government would deliver the wool for military purposes 
 directly to users and that the remainder would not neces- 
 sarily be sold at auction. During the last twenty years 
 wool so sold had decreased from 70 per cent, to 30 per 
 cent, of that imported ; most wool now went directly from 
 the Colonies to the manufacturers.^^ After consultation 
 with experts, the Government decided to send such wool 
 as could be easily graded directly to the contractors, and 
 to have such as was suitable for top-making combed into 
 tops on commission for the Department and sold in that 
 form at fixed prices. Since it was desired to exercise 
 priority as to the use of all wool, sale to the highest bid- 
 der at auction, regardless of the use which he might make 
 of his purchase, was impossible. Hence, although it was 
 arranged that distribution should in the future as in the 
 past take place in the public auction rooms, no bidding 
 was allowed. Wool was allotted by the London Wool 
 Selling Brokers' Association at fixed prices to approved 
 users in accordance with their requirements.^^ As to 
 priority, after the Government's own contractors, pre- 
 ference was given to manufacturers for the export trade. 
 In 19 1 6 this had been 10 per cent, of the country's total 
 exportation of manufactured products and had rendered 
 great service in helping pay for imports. ^^ 
 
 25 M. G., Nov. 28, 1916, p. 9; Dec. 29. 
 
 26 Cd. 8447, p. 15. 
 
 27 M. G., Dec. 29, 1916. 
 
 »^i 
 
114 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 •I 
 
 The prices at which wool was to be sold by the Govern- 
 ment were fixed at two hvels and the situation created is 
 as follows. If a Depaitment contract is in question, the 
 price is based on the cost, plus a margin for administra- 
 tive and other charges. The Allies, too, may buy wool 
 for military purposes at this price on the understanding 
 that any economy realized will accrue to the Govern- 
 ment concerned. If the wool sold be for civilian use, the 
 price is that of January, 1917, originally 20 per cent, 
 above the military-issue price. The divergence arises 
 from the fact that the Government in initiating its sales 
 in January would have disorganized the trade had it sold 
 at 20 per cent, below market prices. Merchants and 
 manufacturers had already made purchases on the as- 
 sumption that there would be no interference with the 
 civilian trade. It was best for the Department to take a 
 profit. 
 
 The determination of the prices which should be paid 
 to manufacturers for Government work was a more com- 
 plicated matter. In the spring of 19 16 the prices had 
 baffled accountants, because the cost of the raw material 
 was unstable. Under the new conditions technical ex- 
 perts of the Department again set to work on conversion 
 costs, i. e., the costs of converting wool from one stage 
 of manufacture to the next. Difficulties in ascertaining 
 these arise from the shrinkage or wastage of wool as it is 
 changed into finished cloth and from the number of pro- 
 cesses which it undergoes, the profit on each conversion 
 being extremely small. Despite the difficulties, success 
 
 WOOL AND WOOLLENS 
 
 115 
 
 now attended the Department's efforts. In the case, for 
 example, of serge drab-mixture cloth, conversion costs 
 and shrinkage were arrived at which reduced a competi- 
 tive price of 8 s. 3 d. per yard to 7 s. The saving was 
 £20,000 weekly. Conversion costs and shrinkage once 
 ascertained, the manufacturer was allowed a price based 
 on these, on the cost of the raw wool, and on pre-war 
 rates of profit, which averaged about 5 per cent. On this 
 basis the Department estimated that its yearly saving on 
 orders for cloth and hosiery would be about £3,700,000.28 
 Other advantages secured by the Government's pur- 
 chase and sale of all native and Australasian wool at 
 fixed prices can be less exactly stated but are unques- 
 tionable. In the first place, manufacturers in the civil 
 trade were benefited by getting wool at a steady price 
 for a certain period ahead and at one which has been 5 
 per cent, or 10 per cent, below more recent world market 
 prices. How much the price of wool would have risen 
 in 1917 without the Government's action is of course 
 hypothetical. During the previous year crossbreds had 
 gone up 30 per cent., merinos 50 per cent. If it be as- 
 sumed that the further advance would have been no more 
 than 10 per cent., the Government's saving on that part 
 of the Colonial clip required for military purposes was 
 £2,500,000. 
 
 Further economies have accrued to the Government 
 and, in a measure, to the community, from the technical 
 knowledge of expert advisors. In the spring of 19 16 
 
 28 Cd. 8447, p. 16. 
 
"*#! 
 
 w B 
 
 IM 
 
 ii6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 the salvage of old uniforms began, and within a year 
 5,000 tons of worn khaki were turned into shoddy. In 
 November the Department, taking note of the remnants 
 of cloths issued for the making of shirts and of dress 
 clothing, announced that it would take possession of them 
 henceforth. ^^ By the skilful use of wool waste, noils, 
 and rags it appeared that cloth could be made of as 
 great durability, warmth, and strength as similar cloths 
 made entirely from wool and that it could be produced 
 at a greatly reduced cost. Experts with special knowl- 
 edge and experience in blending wool and wool-wastes 
 became officers of the Department and thenceforth in- 
 structed manufacturers in the new art. Particularly 
 happy was the application of the process to the making 
 of greatcoating cloth. Where 10 s. or 10 s. 6 d. per yard 
 had been paid for this material, its cost was now reduced 
 to 9 s. Manufacturers of it were given full information 
 of the particular blend secured and the entire trade 
 profited by the innovation.^^ In the summer of 19 17 
 there was experimenting in the use of smaller spun 
 worsted yarns and of mungo. Drab serge, it was pro- 
 posed, should be made either out of 2-2 1's or 2-24's with 
 the woollen weft of 50 per cent, pure wool and 50 per 
 cent, mungo. The cloth produced would be wearable 
 and would be of excellent heat-retaining quality. Indeed, 
 Bradford cords made as officers' cloths independently of 
 the War Office already contained a far larger percentage 
 
 29 D. R. M., 3rd ed., p. 178. 
 
 30 Cd. 8447, pp. 15, 16. 
 
 WOOL AND WOOLLENS 
 
 117 
 
 of mungo than the Bradford cords required by the War 
 Office.3^ Accordingly, the trade was ready to support 
 the Government in the utilization of substitutes for wool, 
 the more readily as such action promised a great expan- 
 sion in output. 
 
 The Government's success in administering the woollen 
 industry necessarily depends in large measure upon the 
 Committees, representative of the trade or of the districts 
 concerned, which have been set up to assist it. Of these 
 there are several. In the matter of the purchase of the 
 home clip advice is given by a Central Committee on the 
 Purchase of British Wool and complaints from farmers 
 come in through District Committees.^^ Qther District 
 Committees, twelve in number, allocate contracts among 
 manufacturers, and their chairmen compose a Central 
 Advisory Committee on the Allocation of Contracts. 
 The contracts which they apportion are first passed upon 
 by a War Department Cloth Office, set up at Bradford 
 and comprising a large number of business men from the 
 trade, each a specialist in his department. The Bradford 
 Office is in close touch with the Contracts' Department 
 in London, and through it the latter has attempted to in- 
 troduce self-government in the allocation of contracts. 
 Beside these administrative advisory bodies there is an- 
 other which may be called legislative, the Central Wool 
 Advisory Committee. Resulting from an amalgamation 
 of several small committees which advised the Govem- 
 
 81 L. E., Aug. 4, 1917, p- 194. 
 32 B. T. J., Aug. 24, 1916, p. 550. 
 
ii8 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 WOOL AND WOOLLENS 
 
 119 
 
 ment in December, 19 16, when the purchase of the Aus- 
 tralasian cHp and the distribution of it were under con- 
 sideration, this body gives advice on questions of general 
 policy. On it are representatives of all sections of the 
 trade from importing wool houses to exporting cloth 
 merchants, and labour is also represented.^^ In the spring 
 of 1917, it made irfiportant recommendations, the adop- 
 tion of which embarked the Government on a new policy 
 leading in turn to the creation of a new board. 
 
 The new policy, and one not confined to the woollen 
 industry, was that of very carefully conserving supplies, 
 even to the extent of rationing manufacturers or con- 
 sumers. It was induced by the serious state of the na- 
 tion's shipping, and it was to reach to many commodities 
 which are imported in large quantities. On April 19, 
 1917, the Central Wool Advisory Committee recom- 
 mended to the Government that it be applied to the manu- 
 facture of woollens and worsteds. Owing to the existing 
 wool situation and the heavy military needs, the Com- 
 mittee explained, there should be accumulated a consider- 
 able reserve of wool. To achieve this and, as far as pos- 
 sible, to maintain the export trade, production for home 
 consumption should be curtailed. This could best be 
 brought about by applying the priority scheme already 
 worked out by a committee of manufacturers and mer- 
 chants appointed by the Army Council. Substitutes for 
 wool should, as far as possible, be used in the civil trade. 
 As precautionary measures, no distribution of Govem- 
 
 " Cd. 8447. pp. 15, 23. 
 
 ment wool or tops should take place until after the end 
 of May; manufacturers and spinners should be warned 
 that their use of present stocks would affect future alloca- 
 tions; and drastic action should be threatened if manufac- 
 turers and traders attempted to exploit the curtailment by 
 increasing the prices of materials in stock.^^ 
 
 These recommendations meant the pushing of the 
 priority scheme until manufacturers were rationed in 
 their production for home civilian needs. The scheme 
 in question, first applied to munitions of war,^^ was ex- 
 tended in full measure to woollen and worsted goods by 
 an order of the Army Council on April 14, 1917.^^ In 
 this order it was provided that all manufacturers of such 
 goods should give priority to contracts according to a 
 rating of these as of Class A, Class B, or Class C. Class 
 A comprised all military orders of Great Britain or the 
 Allies; Class B, orders for goods destined for export and 
 other orders approved by the Director of Army Contracts 
 as being for work of national importance ; Class C, orders 
 looking toward the supply of civilian needs.^"^ 
 
 A deferring of orders of Class C by manufacturers 
 until orders of the other two classes were filled would 
 have been the normal outcome of this scheme. So it had 
 been with priority in the products of iron and steel. 
 
 3* B. T. J., Apr. 26, 1917. 
 
 35 Cf., above p. 43. 
 
 36 In Oct., 1916, the Army Council had ordered that in all fac- 
 tories, the business of which was wholly or partly the making of 
 worsted or woollen goods, priority should be given to Government 
 orders ; B. T. J., Oct. 26, 1916, p. 269. 
 
 37 B. T. J., Apr. 26, 1917. 
 
I20 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Actual rejection or disregard of orders of Class C might, 
 however, be necessitated if the manufacturer were obliged 
 to curtail the working hours of his factory or if he should 
 have only a limited amount of raw material to work 
 upon. In the woollen industry the Government created 
 both these conditions. 
 
 Again it was the Central Advisory Committee that on 
 May 17, after further consideration of the situation, 
 recommended the measures embodied in an order of the 
 Army Council on May 24. To avoid an almost inevita- 
 ble drastic curtailment of hours of employment in the 
 winter months, the order provided for the immediate 
 reduction of weekly hours by 20 per cent., or from 55^ 
 to 45. It further provided that another group of com- 
 mittees, six District Priority Committees with a Central 
 Committee in London, should lay down the conditions 
 under which crossbred wool or tops might be used after 
 June II and merino wool or tops after July 2, and should 
 in addition ration out to manufacturers, spinners, and 
 others in their respective districts such supplies of wool 
 as might be available for civilian consumption.^^ 
 
 Curtailment of supplies of raw material and limitation 
 of production were thus decreed. The Yorkshire Post 
 estimated that, while one-half of the machinery in the 
 wool-using trades would be engaged in military work, 
 two-thirds of the other half of it, devoted to the civilian 
 trade at home or abroad, would become idle.^^ No 
 
 S8L. T., May 25, 1917, P- 3 ; B. T. J., May 31, p. 469. 
 " U. S. Commerce Reports, Jy. 3, 1917. 
 
 » 
 
 WOOL AND WOOLLENS 
 
 121 
 
 fears, however, were entertained of an immediate short- 
 age in civilian cloths, with which many of the larger 
 houses were well stocked.*^ But when spinners got from 
 the District Priority Committees their June, July, and 
 August allotments for the civilian trade, many of them 
 found that in one month they had consumed more than 
 the allotment gave them for three. It was pointed out 
 that the allocation, which in general was about 60 per 
 cent, of the amount applied for, was in many cases in- 
 sufficient to enable the machinery to run the full 45 hours 
 to which working time had been reduced. Rather than 
 stop it spinners had used what stocks they possessed re- 
 gardless of whether this was authorized or not.*^ To 
 appease discontent Mr. H. W. Forster, M. P., Financial 
 Secretary to the War Office, addressed a large meeting 
 of traders at Bradford, giving the statistics of stocks of 
 wool on hand and of prospective imports upon which the 
 Department had based its restrictive policy. At once 
 the accuracy of the figures was challenged and the out- 
 come of the discussion was the appointment of a Com- 
 mittee to confer with the Department regarding them.*^ 
 Meanwhile the Government's administration was fur- 
 ther criticized. A newly formed Wool Textile Associa- 
 tion of the United Kingdom, through its executive com- 
 mittee, demanded that the w^ool-control scheme in matters 
 of policy and administration be taken out of the hands 
 of officials and be turned over to a board of practical men 
 
 *o M. G,, May 9, 1917, p. 7 ; Weekly Record, May i. 
 *iL. T., Jy. 3, 1917, p. 13; Jy. 13, p. 13; Aug. 4, p. 194. 
 *2 L. E., Jy. 28, 1917, p. 145. 
 
122 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 like the boards set up for the cotton and shipping trades.*^ 
 To this demand the Department in a measure acceded. 
 Ahhough it would make no change in Committees dealing 
 with the purchase and distribution of raw wool, retaining 
 in particular the Central Wool Advisory Committee, and 
 although it would reserve for itself the ultimate decision 
 regarding prices, the necessary reserve of wool, and the 
 allocation of Government contracts, it proposed to re- 
 place the Priority Committees by a Board of Control 
 sitting at Bradford. This Board, upon which an equal 
 number of representatives of employers and of employes 
 should sit beside certain representatives of the Depart- 
 ment under the chairmanship of Mr. Charles Sykes, 
 would deal with questions affecting the manufacture of 
 woollens and worsteds and would have a free hand re- 
 garding civilian production. Mr. Forster claimed that 
 the scheme embodied the essence of partnership and was 
 an honest attempt to give the trade the fullest measure 
 of control compatible with the ultimate responsibility of 
 which the Government could not divest itself.^^ 
 
 In some quarters the proposed Board was regarded 
 with satisfaction, but the Executive Committee of the 
 Wool Textile Association found it inadequate. At a 
 meeting in London this Committee requested that the 
 Board be given control of the entire industry from the 
 raw material to the finished product, that business men 
 representative of all branches of the trade throughout 
 
 *3 Ibid. 
 
 **Ibid., Aug. II, p. 231. 
 
 WOOL AND WOOLLENS 
 
 123 
 
 the United Kingdom constitute not less than one-half 
 its membership, and that it be nominated by the trade and 
 elect its own chairman.^^ Such proposals looked toward 
 a reduced representation of the Department and of la- 
 bour upon the Board, while they greatly increased its 
 functions. 
 
 For a month negotiations went on, until Mr. Forster 
 strongly urged a settlement on the ground that govern- 
 ment supplies were low and the situation serious.^^ At 
 length in September the constitution and functions of the 
 new " Board of Control of the Woollen and Worsted In- 
 dustries " were definitely announced. The Board should 
 comprise not more than eleven men nominated by the 
 Army Council, of whom at least seven should be experts 
 responsible for placing orders for Government supplies, 
 not more than eleven representatives of employers, and 
 not more than eleven representatives of employes; the 
 chairman of the Board should be the Director of Wool 
 Textile Production. Certain functions were withheld. 
 The Army Council was still to determine the amount of 
 raw wool to be maintained as a reserve ; the War Depart- 
 ment was still to make all contracts for Government sup- 
 plies; the Army Contracts Department was still to be 
 responsible for all dealings in raw wool up to and includ- 
 ing the making of tops. The new Board was designed 
 particularly to take over the work of the existing Priority 
 Committees. Officials of the War Department were to 
 
 *5 Ibid. 
 
 *« L. T., Sept. 12, 1917, p. 3. 
 
124 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ask its advice in allocating Government contracts and its 
 chairman, the Director of Wool Textile Production, was 
 to keep it informed monthly of the total quantity of wool 
 required for such contracts. If at any time there should 
 be, for unavoidable reasons, a deficiency in the wool put 
 through the machines for government purposes, the 
 Chairman should release as an additional civilian supply 
 a quantity sufficient to make up the deficiency. The Di- 
 rector of Raw Materials should from time to time furnish 
 statistics as to stocks and information as to the exporta- 
 tion of wools, noils, tops, and yarn. Thus informed and 
 fortified, the Board was henceforth to allocate to dis- 
 tricts, trades, groups, and firms the quantity of wool and 
 tops available for the civilian trade. In so doing it was 
 to have particular regard to securing the most efficient 
 execution of government orders and to employing to the 
 greatest advantage the labour, machinery, and skill en- 
 gaged in the industry, keeping in full use as much ma- 
 chinery as possible.^^ The scheme was much as at first 
 outlined, although the provision regarding the release of 
 additional supplies was a concession. Agreeing to give 
 the new arrangements a trial, the trade promptly elected 
 its representatives and the Board at once went to work. 
 A better feeling quickly prevailed in wool manufacturing 
 centres and there was hope that, with longer hours al- 
 lowed for labour and a larger allocation of raw wool to 
 the civilian trade, business might prosper. 
 
 An increase in hours was announced before the Board 
 
 *^ Ibid., Sept. 20, p. 3. 
 
 WOOL AND WOOLLENS 
 
 125 
 
 was finally constituted. In August the Central Wool 
 Advisory Committee made known that from September 
 I the weekly hours of work would be increased from 45 
 to 50. Such increase tended to allay discontent on the 
 part of employes, who at a meeting of the National As- 
 sociation of the Unions of the Wool Textile Trade in 
 July had considered the advisability of agitating for fur- 
 ther advances in wages and had expressed distrust of the 
 Commission then sitting in Leeds to inquire into indus- 
 trial unrest."*^ The longer working time, too, encouraged 
 the belief that the Government would issue wool and tops 
 in sufficient quantities to keep the machinery employed 
 for the full 50 hours per week.*^ Merino tops, it be- 
 came clear, would be more plentiful, although in the case 
 of crossbreds the demand for military purposes might 
 still for some time restrict the supply available for civilian 
 needs.^® 
 
 Meanwhile the Government continued and extended 
 its policy of purchasing the domestic and Colonial wool 
 clips. Before summer it had completed arrangements 
 for the purchase of the 19 17 clip of the United Kingdom, 
 the prices being 50 per cent, above the 1914 level.^^ 
 Collection and payment this time were far more prompt 
 than in 19 16 and growers expressed their satisfaction. 
 In the middle of July, the Chancellor of the Exchequer 
 explained in Parliament that the Australasian clip of 
 
 48 L. T., Jy. 9, 1917, p. 5; Aug. 31, P- "• 
 
 *9 Ibid., Aug. 14, p. II. 
 BO Ibid., Sept. 25, p. 13. 
 51 Cd. 8447, p. 14. 
 
 f! 
 
126 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 19 1 7 had, on the authority of the War Cabinet, been 
 bought for £40,000,000.^2 This sum represented the 
 same price as that paid in the preceding year, a 55 per 
 cent, advance on the prices of 19 13-14, the total payment 
 being greater because the entire cHp of AustraHa was now 
 secured. In August it became known that the Govern- 
 ment had offered to buy the South African cHp of wool 
 and mohair on the same terms as the Australasian clips. 
 Considerable opposition to the purchase, however, arose 
 in South Africa and the matter became a somewhat acri- 
 monious political issue. 
 
 With the purchases of 191 7 and with the establish- 
 ment of the Board at Bradford, state control of the 
 woollen industry assumed pretty definite shape. After 
 imposing, during a year and a half of the war, restric- 
 tions merely upon the export trade, the Government in 
 the spring of 1916 had been forced to protect itself 
 against rising prices. At first it attempted in its pur- 
 chases to determine a suitable price for the finished pro- 
 duct by investigating costs. Quickly confronted with the 
 varying price of raw wool, it saw the necessity of stabiliz- 
 ing this price by becoming itself the sole purchaser. 
 Thereupon it acquired the home clip. Since, however, 
 this was a relatively small factor in the market and there 
 was danger that the Colonial clips might not be fully 
 available at suitable prices in any other way, the Gov- 
 ernment took the decisive step of purchasing the Austral- 
 asian output of 19 16. It stipulated further that any 
 
 " L. T., Oct. 4, 1917, p. 5. 
 
 MM 
 
 WOOL AND WOOLLENS 
 
 127 
 
 Other wool imported should first be offered for sale to 
 the Director of Army Contracts. Thus in practical 
 control of the supply of raw wool in the United King- 
 dom, the Government was faced with the problem of dis- 
 tribution. Nor was it loath to undertake this, since, in 
 so doing, it could effect essential economies in consump- 
 tion. Acting through various committees, it put into 
 force a priority scheme designed to stimulate manufac- 
 ture for the military and the export demand but to dis- 
 courage the making of civilian products for home con- 
 sumption. Practically, this involved a rationing of the 
 trade and a limitation of the working hours of the ma- 
 chinery. Discontent with governmental administration 
 and restrictions found expression in the summer of 1917, • 
 but much of this was due to a desire on the part of the 
 trade to acquire for itself the functions which the state 
 had assumed. Certain concessions, but not all those 
 desired, the Government made. It persisted in retain- 
 ing for itself and for labour adequate representation on 
 the new Board which was to take charge of distribution, 
 and it refused to yield the ultimate decision of questions 
 of price, of the necessary reserve of wool, and of the 
 placing of its own contracts. It continued its policy of 
 state purchase by acquiring the 1917 clips of the United 
 Kingdom, of Australasia, and of South Africa. Its own 
 savings were large in view of what its expenditure 
 might have been had the price of raw wool been unre- 
 stricted; and these economies were extended by the in- 
 troduction of substitutes for wool proposed by expert 
 

 I 
 
 128 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 advisors. A careful investigation of the conversion 
 costs of manufacturers enabled it further to reduce the 
 sums which it would otherwise have paid for its pur- 
 chases. 
 
 That such extensive governmental control has by no 
 means, despite the complaints of the summer of 19 17, 
 impaired the profits of the trade may be gathered from 
 the remarks of Mr. Charles Booth, Chairman of the 
 Bank of Liverpool. In his annual report of July, 19 17, 
 he comments on the general prosperity in which both em- 
 ployer and employe have shared ; and, making allowance 
 for the reduction in working hours per week as well as 
 for the increased cost of carrying stocks in consequence 
 of the high price of raw material, he concludes that the 
 conditions of the trade generally are sound and that the 
 future is looked forward to with a good deal of con- 
 fidence.^^ 
 
 »3 L. T., Jy. 25, 1917, p. 12. 
 
 HIDES AND LEATHER 
 
 In respect to clothing, boots, after woollens, are the 
 army's chief requirement. For them leather is needed, 
 and not only for them but for harness, saddlery, and 
 equipment. As in the case of coal, munitions, and 
 woollens, the Government, therefore, became an exten- 
 sive purchaser and had an immediate interest in the sup- 
 plies available as well as in the price at which they were to 
 be had. Although the analogy with woollens is closest, 
 there were between the two trades differences in condi- 
 tions, which became manifest m the Government's at- 
 titude toward them. In particular the United Kingdom 
 contained within its borders a greater relative supply of 
 hides suitable for sole leather than it did of raw wool, 
 and, on the other hand, a smaller relative supply of hides 
 suitable for uppers. 
 
 The distinction between these two kinds of hides was 
 operative from the outset.^ Heavy hides were needed 
 not only for sole leather but for harness, saddlery, and 
 equipment; and for such accoutrement the home supply 
 was primarily set aside. The surplus remaining after 
 accoutrement leather had been provided was available 
 for sole leather. Further supplies of the latter had to be 
 
 1 The information regarding hides and leather contained in the 
 following pages is, where not otherwise stated, drawn from a 
 Memorandum on War Office Contracts by N. F. Wintour, Director 
 of Army Contracts. Cd. 8447, Je., 1917, pp. 17-20. 
 
 129 
 
130 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 got by importing hides. At the beginning of the war, 
 when the demand was unusually great, both finished 
 leather and heavy hides were for a time imported in 
 large quantities from Canada and the United States. As 
 soon, however, as the tanning industry got adjusted, it 
 assumed more and more the task of finishing all heavy 
 supplies and the situation in this respect became analo- 
 gous to that prevailing in the woollen trade. 
 
 In January, 1915, the Department of Army Supplies 
 made its first extensive arrangement with the sole leather 
 tanners. The United Tanners' Federation undertook to 
 supply the amount of heavy sole leather required by the 
 Department, prices to be fixed throughout definite 
 periods. The initial price was considerably below that 
 prevailing at the moment. How much was gained by 
 such action speedily became apparent; for the prices of 
 equipment and saddlery leather continued to advance. 
 Tanners could point in extenuation of their prices for 
 leather of the latter sort to a rise in the cost of hides from 
 7 d. per pound before the war to 14 d. in the middle of 
 191 5. The Government thereupon tried again the policy 
 of arranging prices with the tanners, this time for equip- 
 ment and saddlery leather, leaving them to deal with the 
 butchers. Again the device was effective, and the price 
 of hides immediately fell to io>^ d. per pound. A policy 
 of attempting to control prices of finished products with- 
 out similar control over the price of raw materials suc- 
 ceeded here as it had not with woollens and worsteds,^ 
 2 Cf ., above, p. 108. 
 
 HIDES AND LEATHER 
 
 131 
 
 because the manufacturers were in a position to dominate 
 those who brought supplies to them. British butchers 
 had no such market for their hides in the summer of 
 19 1 5 as wool producers had for their wool in the spring 
 of 19 16. The Department was obliged, therefore, to 
 deal only with the finishers of hides and could for a time 
 ignore the raw material. 
 
 This easy control lasted for less than a year. Early 
 in 19 16 the demands for boots greatly increased. In 
 addition to the growing needs of the British army, Rus- 
 sia asked for 7,000,000 pairs of boots and 6,000 tons of 
 sole leather, Italy, Belgium, and Serbia for 1,500,000, 
 150,000, and 60,000 pairs of boots respectively. Since 
 the financial and shipping situation made it imperative that 
 these needs be supplied in Great Britain if possible, meas- 
 ures were at once taken to increase the production of 
 leather and to maintain control of prices. 
 
 Thus far only the heavier classes of sole leather had 
 been taken for army boots, the lighter weights being 
 sold to the civilian trade. At the end of May, 19 16, ten 
 lighter varieties were requisitioned by the Army Council 
 and the list was extended by additional orders in June, 
 August, September, and December, 191 6, and in Jan- 
 uary, February, and March, 1917.^ In the middle of 
 19 1 6, Australian leathers, until then barred, were ad- 
 mitted to military uses and rose 20 per cent, in price as 
 a consequence.* 
 
 s B. T. J., Je. I, 1916, p. 589; D. R. M., 3rd ed., p. 170. 
 *L. E., Feb. 17, 191 7, p. 316. 
 
132 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 HIDES AND LEATHER 
 
 133 
 
 With army demands thus increasing, the price of hides 
 showed a strong tendency to rise. The Government, 
 therefore, in the first half of 19 16 was forced to do what 
 it had avoided a year earHer. It entered into negotia- 
 tions for fixing the market price of heavy hides and se- 
 cured the advantageous one of 10 d. per pound. At prac- 
 tically this figure the price has since remained, although 
 in the world market there was a marked advance during 
 the latter half of 19 16. In the Argentine hides rose to 
 21 d. and in an uncontrolled market native hides would 
 probably have reached 1 5 d. Inasmuch as the home pro- 
 duction is about 2,500,000 hides yearly, each weighing 
 some 60 pounds, £3,000,000 less a year was paid for 
 hides than would have been paid had the Government 
 not intervened. 
 
 Now that all native hides suitable for army boots 
 were to be at the disposal of the tanners who filled con- 
 tracts for the Government or the Allies, a new fixing of 
 the prices for leather was opportune. By the summer 
 of 1 91 6 the Government had learned considerable about 
 the determination of costings, and resolved to apply its 
 knowledge to the processes involved in tanning. The 
 task was not simple, since the value of leather varies from 
 tannage to tannage and prices had to be fixed for some 
 thousands of varieties. A Committee composed of three 
 tanners, a leather merchant, and two boot manufacturers 
 undertook to assess the comparative value of each tan- 
 nage on the basis of prices prevailing at the beginning of 
 the period of contract. At the same time chartered ac- 
 
 / 
 
 / 
 
 countants of the Department investigated, in the case of 
 seven representative tanners, the cost of the production 
 of sole leather and the relation between tanners' pre-war 
 profits and the war profits of the moment. From the 
 knowledge thus acquired prices presumably fair for the 
 tanner and for the country were determined. They were 
 relatively lower than prices ruling in the civilian trade, 
 and, when in November, 19 16, leather of certain lighter 
 weights was released, the prices commanded were in many 
 cases a shilling a pound higher than the prices now al- 
 lowed. Perhaps 6 d. a pound would represent the dif- 
 ference between market prices at the end of the year 
 and the prices now arranged between the Government and 
 the tanners. Tanners' profits were henceforth slightly 
 above the pre-war standard, but considerably below what 
 they had heretofore been during the war. Adjustments 
 at quarterly intervals have since provided for fluctuation 
 in the price of raw materials. 
 
 So far as the raw materials were domestic hides, there 
 was little variation in price. But the foreign supply had 
 to be drawn upon and here the Government did what it 
 could to help the tanners and indirectly protect itself. 
 Pushing aside the middleman, it imported from France 
 and Italy all heavy hides suitable for making sole leather, 
 which those countries could spare. Some £50,000, rep- 
 resenting the importer's profits, were thus saved. British 
 Meat Companies in the Argentine, which were supplying 
 the Government with meat, were induced to grant the 
 United Tanners' Association as favourable rates as pos- 
 
 / 
 
134 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 sible. Finally, to eliminate speculation in imported 
 hides used for military leather, an order was issued on 
 February 2, 19 17, forbidding an increase of more than i 
 per cent, in the price of such hides as they pass from the 
 importer to the tanner.^ Measures of this kind did 
 something to modify the prices of imported hides, al- 
 though in the spring of 1917 those from South America 
 and elsewhere cost about twice as much as did English 
 hides.^ 
 
 While sole leather for army requirements was got in 
 this manner, the securing of upper leather presented a 
 different problem. Of this the home supply was en- 
 tirely inadequate and had before the war been much sup- 
 plemented by supplies from enemy countries. Indeed, 
 Germany and Austria in getting their raw material had 
 captured an industry formerly belonging to Great Britain. 
 For the reservoir upon which they drew was East India 
 kips. At the outbreak of the war, therefore, the De- 
 partment turned to the same source, buying East India 
 kips and distributing them to manufacturers. Up to the 
 end of 19 1 5 army requirements were easily met and it 
 turned out that the leather produced from the kips cost 
 only about 12 d. per foot, whereas corresponding leather 
 from British hides cost 21 d. 
 
 With the demands of Allied armies added to those of 
 the British army early in 1916 the situation changed. 
 Since the new demand revealed insufficient supplies, there 
 
 » D. R. M., 3rd ed., p. 187. 
 
 « Amer. Commerce Report, May 8, 1917. 
 
 HIDES AND LEATHER 
 
 135 
 
 was room for speculation in an uncontrolled market. 
 Indications of it were afforded by the rising price of kips, 
 and it bade fair to increase. The Government there- 
 upon acted as it was soon to act in the case of wool. To 
 insure adequate supplies and to protect itself against 
 speculative prices, it purchased with the assistance of the 
 Government of India all kips suitable for its purposes. 
 Such were East India tanned kips of 6 pounds and up- 
 wards and Bangalore tanned kips of 7 pounds and up- 
 wards. For the entire stock the price paid was that of 
 the market of May 6-1 1, 1916. 
 
 Difficulties soon arose from the heavy civilian demand 
 for those kips which the Department had rejected as un- 
 suitable. Prices offered for them were higher than the 
 prices which the Government was paying for its superior 
 supplies and the tanners in India naturally preferred to 
 work upon them. The Government, therefore, saw it- 
 self forced to purchase unsuitable as well as suitable kips, 
 in much the same way as it had somewhat unwillingly 
 purchased merino along with crossbred wool from Aus- 
 tralasia. Its monopoly of the supply of the raw material 
 for upper leather was thus practically established. 
 
 The methods employed in acquiring and allocating the 
 kips are not unlike those which prevail in the corre- 
 sponding administration of the imported wool supply. 
 The Indian Government acts as intermediary. It buys 
 through selected merchants, who purchase at fixed prices 
 and sell at standard rates, in short, act as commission 
 agents. The Admiralty furnishes requisitioned ships. 
 
136 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 On reaching Great Britain the kips are handled by the 
 estabhshed importing houses, which are paid a commis- 
 sion of Yz per cent, on cost. The Department's inspec- 
 tors select bales to be forwarded to curriers, who in turn 
 are employed at commission rates to carry out the De- 
 partment's specifications and deliver their product to War 
 Office contractors. About 200 firms of curriers, prac- 
 tically all suitable ones in Great Britain, receive Govern- 
 ment work and the number of kips coming forward on 
 government account each month is about 200,000. They 
 constitute about 75 per cent, of the entire supply and 
 cost about £300,000. 
 
 British hides for upper leather, which constitute the 
 remainder of the supply, are also controlled and utilized 
 by the Department but on less advantageous financial 
 terms. Before the war they sold at 15 d. per foot, kips 
 at 10 d. The prices at which the two have been taken 
 over work out at 21 d. and 12 d. respectively, advances 
 of 40 per cent, and 20 per cent. The Government's 
 saving of 9 d. per foot, applicable in 1916 to 20 million 
 feet of upper leather, was £1,000,000. Probably, in 
 19 1 7, twice as many East India kips will be in question 
 and the saving will be twice as great. 
 
 In contrast with these economies of the War Office is 
 the expenditure of the civilian trade. Before kip leather 
 came under control, boot manufacturers paid 16 d. for it, 
 so great was the demand. Since then unsuitable kips 
 have been sold by the Government to tanners and the 
 profit credited to Army Funds. For the Department has 
 
 HIDES AND LEATHER 
 
 137 
 
 the margin between the 12 d. which it pays and the 
 prevailing market price. The latter has steadily ad- 
 vanced and in the spring of 19 17 glace kid was at three 
 times its pre-war price. "^ 
 
 As for sole leather the price demanded for such civilian 
 supplies as are available is uncontrolled. During 19 16 
 miscellaneous hides advanced 50-60 per cent., South 
 American 80-90 per cent. In part this was due to United 
 States buying, home requirements there being large and 
 exports having enormously increased.^ By the spring of 
 19 1 7 the civilian population of the United Kingdom was 
 being more and more neglected, while fully 90 per cent, 
 of the output of English tanyards was controlled by the 
 Government for military purposes.^ Even repairers 
 were at their wits' end for supplies and the price for 
 soling boots had advanced from 6 s. 6 d. to 9 s. 6 d. 
 Two courses were advocated as likely to bring relief. 
 The Government was urged to release stores, which were 
 said to be considerable in the country, and a standard 
 boot was proposed. ^^ 
 
 Yielding to the first request, the Government on Au- 
 gust 31, 19 1 7, released for civilian use various sole and 
 upper leathers made from imported hides. The order was 
 a partial relaxation of an earlier one of March by which 
 the Government had appropriated all sole or upper 
 leathers of certain descriptions made from British or im- 
 
 ^ Amer. Commerce Reports, May 8, 1917. 
 
 8L. E., Feb. 17, 1917, p. 316. 
 
 » Amer. Com. Reports, May 8, 1917. 
 
 10 L. E., Aug. 4, 1917, p. 195; Aug. II, p. 232; L. T., Oct. 12, p. 3. 
 
138 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ported hides then in stock in the United Kingdom. In 
 the case of the leathers released, the Government stipu- 
 ulated that, in as much as they had been bought below 
 market prices, tanners should sell them to the civilian 
 trade at not more than 2 d. in excess of prices paid by the 
 War Department. No one might purchase more than 
 500 bends or the equivalent in butts. To relieve the 
 pressing needs of repairers, half of the purchase, it was 
 stipulated, must be used for repairs.^^ 
 
 Soon after this, provision was made for the manufac- 
 ture of a standard boot. Makers of it were to get leather 
 at 20 per cent, below market prices and on the other hand 
 they were to be content with a profit of 5 per cent. Al- 
 though standard boots were not likely to reach London 
 before 19 18, it was clear that their advent would be a 
 boon to the poorer classes who were paying absurd prices 
 for worthless footwear.^^ 
 
 Since the Government during 1916 had become more 
 and more involved in the administration of the leather 
 industry and since at the end of the year the question of 
 supplies had become more urgent owing to heavy de- 
 mands of the Allies and the shortage of shipping, a 
 Central Leather Supplies Advisory Committee was set 
 up. To this and to its subsidiaries the Department hence- 
 forth communicated all pertinent information at hand — 
 the supplies of hides, leather, and tanning material in the 
 United Kingdom and under Allied control on the one 
 
 11 L T., Aug. 22, 1917, p. 3. 
 ^2 Ibid., Oct. 12, p. 3. 
 
 HIDES AND LEATHER 
 
 139 
 
 hand, the needs of the army, of the Allies, and of the 
 civil population on the other. Thus informed the Com- 
 mittee can give advice on questions which arise. The 
 Government, on its part, has tried to increase the Com- 
 mittee's responsibility and in the opinion of the Director 
 of Army Contracts the policy has been highly successful. 
 " The smoothness with which the elaborate organization 
 of the leather trades has worked," he remarks, " and the 
 ready co-operation which has rendered possible the large 
 changes in methods of trading and production afford 
 ample justification for this policy." Certainly there has 
 been far less friction than arose between the Government 
 and the woollen trade. This may be due to the less com- 
 prehensive interference of the state in the leather in- 
 dustry. Only one branch of the raw material is under 
 that complete governmental control which implies pur- 
 chase and allocation, viz., upper leather; sole leather 
 is controlled only in so far as domestic and imported 
 hides are subject to pre-emption on the part of the Gov- 
 ernment. At times the Government releases certain 
 hides which it has held back and stipulates under what 
 conditions they may be sold. Other hides for civilian 
 use are sold in an uncontrolled market. 
 
SHIPPING 
 
 The Government's attitude toward the shipping in- 
 dustry is significant not only as an essay in state con- 
 trol, but also as a factor in the food situation. Most 
 consumers of food in the United Kingdom came to feel 
 that they were paying too high prices largely because the 
 Government did not control certain producers, middle- 
 men, and shippers. And the greatest offenders were the 
 shippers. 
 
 At the outbreak of war the interest of shipowners cen- 
 tred in two questions — what ships would the Govern- 
 ment requisition, and what would be done for the pro- 
 tection of ships not requisitioned. The answer came at 
 once. On August 3, 19 14, a Royal Proclamation declared 
 that a national emergency demanded the immediate em- 
 ployment of a large number of vessels for use as trans- 
 ports and auxiliaries. Since there could be no delay, the 
 Lords Commissioners of the Admiralty were to requisi- 
 tion immediately any vessel within the waters adjacent to 
 Great Britain. Owners might file their claims with the 
 Admiralty; and in case the Admiralty and the owner 
 failed to agree as to the proper compensation, the Presi- 
 dent of a Board of Arbitration was directed to choose 
 two members of his Board as arbitrators. If the two 
 
 could not agree, reference should be had to the President 
 
 140 
 
 SHIPPING 
 
 141 
 
 as a third member. This Board of Arbitration was to be 
 constituted in seven panels, comprising Government nom- 
 inees, shipowners, bankers, underwriters, marine insur- 
 ance companies, insurance brokers, and average adjust- 
 ers.^ A month later its functions were increased. The 
 President was empowered to authorize from time to time 
 all or a part of the members of a panel to consider ap- 
 proximate monthly rates of hire for vessels of different 
 classes. Arbitrators from the Board might have regard 
 to such rates but need not be bound by them.^ As a 
 result of these arrangements there were gradually drawn 
 up so-called " blue-book " rates for requisitioned ships, 
 rates markedly below those soon prevailing in the market. 
 They were revised in March, 191 5, but since then have 
 been unchanged.^ The rate in the summer of 19 17 was 
 1 1 s. per gross ton per month for " tramp " steamers, 
 somewhat more for " cargo " liners according to their 
 speed.^ 
 
 The number of ships speedily requisitioned by the 
 Government was about 20 per cent, of the total mer- 
 cantile tonnage of Great Britain.^ In June, 1914, this 
 total for vessels of 100 tons and over was 20,523,706 
 gross tons, and the ships of such tonnage numbered 
 10,124. If only vessels of 1600 tons and over be con- 
 sidered, the total tonnage was 16,900,000 gross tons and 
 
 1 B. T. J., Aug. 20, 1914, p. 481 . 
 2 Ibid., Sept. 3, 1914, p. 608. 
 8Cd. 8483, p. II. 
 *B. T. J., Je. I, igi7, p. 219. 
 5 P. D. C, 1915. LXIX, 925. 
 
y> 
 
 142 WAR TIxME CONTROL OF INDUSTRY 
 
 their number was 3900/' The 20 per cent, requisitioned 
 by the Government comprised about 1500 ships, many of 
 them of the larger sort. The commandeering fell at 
 first unequally upon firms of shippers, some being obliged 
 to put a large proportion of their vessels at the disposal 
 of the state while others were able to retain most of their 
 ships free. 
 
 For vessels not requisitioned the Government at the 
 outbreak of war prepared and put into force a scheme 
 of war insurance. Ordinary policies had protected ship- 
 owners only against the usual perils of the sea, not against 
 King's enemy risks. Nor had the state heretofore been 
 willing, although urged, to undertake insurance involving 
 risks of the latter sort. Shipowners had, therefore, been 
 forced to protect themselves in this matter by Protecting 
 and Indemnity Associations. The Government's new 
 proposal, drafted by an expert sub-committee of the Im- 
 perial Defence Committee, was to assume 80 per cent, of 
 the risk borne by the Protecting and Indemnity Associa- 
 tions, receiving in return 80 per cent, of the premiums 
 paid in. The remaining 20 per cent, of the risk was to 
 rest upon the Associations, which in consequence were 
 to receive the corresponding 20 per cent, of the premiums. 
 The rate henceforth was to be a fiat one, administered 
 by a state bureau for insuring cargoes and by an advisory 
 board. Despite this seemingly favourable arrangement, 
 so considerable were the losses suffered that within the 
 first six months shipowners were obliged to pay in war 
 « B. T. J., Je. I, 1917, p. 219. 
 
 SHIPPING 
 
 143 
 
 insurance, it was estimated, 3 per cent, on ships valued at 
 £120,000,000. One firm, managing a fleet of eighteen 
 tramp steamers, paid £14,000 in premiums to cover 
 King's enemy risk."^ 
 
 For a little time after the outbreak of the war freights 
 rose only slightly, merely enough to reflect the added cost 
 of war insurance. But by November, 1914, an increase 
 began which continued for some four months. Several 
 factors contributed, the greatest being the decline in avail- 
 able tonnage. One-fifth of the mercantile tonnage of 
 Great Britain had been diverted to the needs of the navy 
 and army. Many vessels were shut up in the ports of 
 the Black Sea and the Baltic, and in enemy's harbours. 
 A half million tons of shipping had been sunk. Of the 
 w^orld's tonnage, the 14 per cent, represented by German 
 and Austrian ships was in part idle in neutral ports. The 
 production of British shipyards, far from meeting these 
 losses, itself decreased. Labour was hard to get and 
 naval requirements were receiving first attention. The 
 congestion of freight at the docks, upon the railways, and 
 in warehouses was a telling influence, due also to scarcity 
 of labour and to the military needs of the Government. 
 On January 29, 191 5, the London docks were so con- 
 gested that forty vessels lay at Gravesend waiting to dis- 
 charge their cargoes. Since French and Italian ports 
 were in a like condition, the length of a voyage was four 
 or five times as long as under normal conditions. One 
 
 ^ W. H. Renwick, Sea Freights and the Cost of Food. Nine- 
 teenth Century and After, Mar., 1915. 
 
144 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 expert estimated that the loss of effective tonnage through 
 congestion of traffic was lo per cent. For these reasons 
 there arose early in 19 15 a very real shortage in shipping 
 facilities, only slightly remedied by the appropriation of 
 German ships. 
 
 Added to the shortage was the high cost of labour at 
 sea. Some 30,000 alien sailors, formerly employed on 
 merchant ships, were withdrawn, while men of the Royal 
 Naval Reserve went for service with the fleet. Whereas 
 wages in July, 1914, were £5 10 s. a month, early in 1915 
 £7 IDS. was asked and paid on tramp steamers.® 
 
 Freight rates, therefore, by March, 19 15, would natu- 
 rally have risen to some extent; but whether the extent 
 of the actual advance was warranted seems open to ques- 
 tion. It is shown in the accompanying schedule which 
 embodies later increases as well.^ 
 
 The Labour party, considering the freights of early 
 1915 unwarranted and responsible for the higher cost of 
 living, urged the Government to commandeer the entire 
 mercantile marine and fix maximum rates. But the dif- 
 ficulties of administering twenty million gross tons of 
 shipping, engaged to a considerable extent in neutral 
 trade, and the possibility of having to deal with seamen's 
 wages acted as deterrents. Mr. Asquith, on February 
 II, argued that the cost of wheat in the New York mar- 
 ket, not the shipping rates, was responsible for the high 
 price of wheat in England. Of the advance from 36 s. 
 
 8 Ibid. ; Cd. 8483, p. 10. 
 
 9 Cd. 8483, p. 9. 
 
 i 
 
 o 
 
 o 
 
 o 
 
 SHIPPING 
 
 J^^*^ 
 
 OvO On I tx O "^ 
 
 Q H • On I y^ ^x fO 1 vo t>»pO 
 
 I 0< HH 
 
 CO 
 
 to 
 
 I ^""vo >T3 00 CO OiMD C^ O CO O »0 
 ":; "^ Os OS HH d Q 00 p vo VO O 
 
 '. ^iTxi •qONmOstJ-OOCOi-i 
 
 X. g K.H •"• 
 
 _^S h". >-i m i-ivo roOOOOO C^ 
 X.'^^'oi-ii-iVOiOH-it-i -^ 
 
 M M »-( M t-l 
 
 •-( l-H t-l •-( h-l 
 
 ^ s-T H^*^* Tfc^OOO I nijooco 
 
 1^ 
 
 o 
 
 '. J" "^"Q <NOi-<OtxO'-<»OC< 
 
 K^ I^ N ^ »H 01 CO 0\\D 90 O HH 01 
 
 1-1 01 
 
 0< 
 
 to 
 
 
 s 
 
 Co 
 
 u 
 
 ■*-> 
 
 v-. , - w. 
 
 ^ .. o 
 
 l_ (n ■*-' 
 
 o,- ■•-■*- O (u 
 
 G *S O .. 
 Wi----- i_o.i; 
 
 > 
 
 P< 
 
 0^ O 
 
 a 
 ja. rt (u : 
 
 <U r- U 
 
 rt cd ^ 
 
 o :2jj" 
 
 B 
 
 145 
 
146 WAR TIME CONTROL OF INDUSTRY 
 
 3 d. to 57 s. II d. per quarter (8 bushels) for Number i 
 Manitoba (the standard), 18 s. 2d., he said, was the in- 
 crease in New York, only 3 s. 6 d. the increased freight. 
 In the case of Argentine wheat, the shipper, he admitted, 
 got a larger proportion of the high price, but this wheat 
 came on the market only after the advance had taken 
 place. ^^ 
 
 The Committee which at the end of 19 16 investigated 
 food prices and, incidentally, shipping rates, formulated 
 a rule to determine whether increased shipping freights 
 were borne by producer or consumer. If the commodity 
 transported be such that an advance in its price would 
 have little effect on the demand, while a smaller remu- 
 neration to the producer would decrease the supply, the 
 consumer is likely to pay any higher intermediate charges 
 like freights. The consumer, the Committee concluded, 
 did in this way pay from 8 s. to 10 s. per quarter on North 
 American wheat imported during the cereal year 191 5- 
 16, when these conditions were fulfilled. If, on the other 
 hand, the demand is more elastic than the supply, the in- 
 termediate charges are likely to be paid by the producer. 
 Such was probably the case in general with wheat from 
 Argentina, since this sold in England only when its 
 price did not rise above that of North American wheat. 
 Until its price reached such a point, the producer paid any 
 advances in freight rates which might accrue. ^^ When 
 Mr. Asquith spoke in February, 191 5, freight rates were 
 
 10 p. D. C, 1915, LXIX, 764. 
 " Cd. 8483, p. 10. 
 
 SHIPPING 
 
 147 
 
 responsible for only one-fifth of the rise m the price of 
 wheat which had then taken place in England. But the 
 one-fifth was none the less paid by the consumer and was 
 destined to increase in amount until the Government was 
 forced to take cognizance of the situation. 
 
 What the Government did very soon give attention to 
 were the insulated or refrigerated spaces in British steam- 
 ships. Upon these depended the meat supply of the Al- 
 hed forces and it was not possible to allow an unrestricted 
 advance in freights or in the prices of meat.^^ Happily 
 it proved possible to make with the owners satisfactory 
 arrangements, which avoided the exercise of compulsory 
 powers. On April 13, 1915. accordingly, an Order in 
 Council requisitioned all insulated spaces in British steam- 
 ships trading with Australia and New Zealand. Some 
 two weeks later a similar order was issued regarding 
 steamers trading with the Argentine and Uruguay. On 
 December 22 all insulated spaces in British vessels were 
 taken over.^^ xhe tonnage involved was considerable, 
 450,000 tons of meat coming each year from the River 
 Plate and a still larger amount from Australasia.'^ The 
 scheme worked well. The ocean carriage of frozen meat 
 from the Argentine did not henceforth cost more than 
 I d. a pound, that from Australasia not more than 
 
 12 Cf., below, p. 184. ,, , 
 
 WB. T. J.. Apr. 22. 1915, P- 221; May 6, p. 37o; May 27, p. 602; 
 
 Oct. 21, p. 171 ; Dec. 23, p. 809. 
 
 14 p. D. C, 1916, LXXXVI, 499- 
 
 15 L T., Jy. 26, 1917, p. 8 Mr. Runciman in the Commons. 
 
148 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 At the end of 191 5 the poHcy of requisitioning space to 
 insure the food supply was extended. Freight rates, 
 although changing little between April and August, rose 
 sharply in the autumn, and the price of wheat mani- 
 fested a similar tendency.^® The Government, therefore, 
 appointed a Requisitioning (Carriage of Foodstuffs) 
 Committee. It was composed of experts in shipping 
 matters, men who were also advising the Transport De- 
 partment of the Admiralty. To it was assigned the task 
 of securing sufficient tonnage for the carriage of food- 
 stuffs and of preventing freights on them from rising 
 to prohibitive levels. It was empowered to divert or to 
 requisition shipping adequate for the provision of such 
 monthly supplies as the cabinet Committee on Food Sup- 
 plies might prescribe. ^^ 
 
 At once the Committee began to requisition liners and 
 cargo steamers, requiring them to devote from 50 to 75 
 per cent, of their space to the carriage of foodstuffs. 
 Since vessels so ordered could not go into any other trade, 
 the action was effective. The cost of bringing wheat 
 across the Atlantic was reduced from 18 s. a quarter to 
 7 s. or 8 s. by the autumn of 1916.^^ Food prices sim- 
 ultaneously declined and thenceforth wheat, imported for 
 the most part by the Government, paid freights which 
 represented only about J4 d. on the quartern (4 pound) 
 loaf. Since sugar already paid a stipulated rate of Yi d. 
 
 ^6 Cf., above, p. 145 ; below, p. 203. 
 
 17 B. T. J., Nov. IT, 1915, pp. zyz-7S. 
 
 18 P. D. C, 1916, LXXXVI, 505. 
 
 SHIPPING 
 
 149 
 
 \ 
 
 \ 
 
 \ 
 
 a pound, it could now be said that three important arti- 
 cles of food were no longer exposed to the payment of 
 excessive ocean freight rates.^^ 
 
 At the same time that the Requisitioning Committee 
 acquired its power, another Order in Council of Novem- 
 ber 10, 191 5, further regulated the employment of British 
 shipping. Although there was no intention of disturb- 
 ing existing business arrangements, home needs, it was 
 felt, had first claim. Henceforth every vessel exceeding 
 500 tons gross tonnage and trafficking between foreign 
 ports must get a licence. Later the order was extended 
 so that vessels of this tonnage had to be licenced to make 
 any voyage whatever. More and more the movements 
 of British steamships were being interfered with, pre- 
 cisely as their cargo spaces had been taken over. In 
 February, 19 16, several vessels were even released from 
 Government service on condition that they load wheat 
 in North America for Great Britain.^^ 
 
 A final effort of November, 1915, to relieve the ship- 
 ping situation referred to the docks. A Port and Transit 
 Committee was appointed to inquire into difficulties and 
 regulate traffic there, to co-ordinate requirements of all 
 conflicting interests, and to decide questions which might 
 be referred to them, giving orders in such cases to exec- 
 utive bodies at the harbours.^^ If local authorities failed 
 to take suitable action, the Committee might clear con- 
 gested ports. To increase the supply of labour, many of 
 
 19 Cd. 8483, p. 9 ; L. T., Jy. 2, 1917, P- 3. 
 
 20 B. T. J., Nov. II, 1915, P- 373; Mar. i, 1916. 
 
 21 Ibid., Nov. II, 1915, P- 377. 
 
 / 
 
I .1 
 
 150 WAR TIME CONTROL OF INDUSTRY 
 
 the 40,000 dockers who had joined the army were^soon 
 ordered back and it was urged thit more should be.^^ 
 
 By February, 19 16, it was estimated that of every 100 
 ships available for carrying merchandise before the war 
 only 67 were still available and that of these 21 were 
 foreign owned.^--^ New measures for economizing car- 
 rying space were therefore devised. Chief of these was 
 the restriction put upon the importation of bulky com- 
 modities. In principle this was ominous. It implied 
 that supplies of non-essentials would be cut off and no 
 one could foresee what commodities circumstances might 
 eventually force the Government to declare relatively non- 
 essential. For the moment no great hardships were in- 
 volved. A Royal Proclamation of February 15, 191^* 
 prohibited, as from March i, the importation, except un- 
 der licence, of paper and all materials used in its manufac- 
 ture, of periodical publications exceeding sixteen pages in 
 length (except single copies through the post), of raw 
 and manufactured tobacco, of furniture woods, and of 
 stone and slate for building. A month later canned and 
 dried fruits were added to the list, currants excepted.^* 
 The official interpretation immediately put upon these re- 
 strictions explained that two-thirds of the usual impor- 
 tation would be licenced.2« The cutting off of one-third 
 would in the case of paper alone save tonnage equivalent 
 to that of all ships entering British ports during two or 
 
 22 P. D. C, 1916, LXXX, 330. 
 
 23 Ibid., p. 294. Tv^r < n^, 
 
 2*B. T. J., Feb. 17, 1916, p. 451; Mar. 16; p. 773- 
 25 Ibid., Feb. 24, p. 537. 
 
 SHIPPING 
 
 151 
 
 three weeks. Restrictions upon other materials would 
 bring the saving to about one month's tonnage entries. 
 Since the Admiralty had taken 25-30 per cent, of the 
 mercantile tonnage, the order gave back space equivalent 
 to one-third of this. Several commissions were ap- 
 pointed to administer the new order.^^ At the end of 
 March the list of imports requiring licences was increased 
 by several commodities — baskets, cement, cotton yam 
 and manufactures (except hosiery and lace), cutlery, 
 fatty acids, furniture and other manufactures of wood, 
 hardware, oil cloth, soap, toys, games, playing cards, 
 beech, birch, elm, and oak woods, finally woollen and 
 worsted manufactures of all kinds, except yarns.^^ In 
 August glass was added.^^ From the beginning of 1917 
 the allowance of paper and paper materials was still 
 further reduced from two-thirds of the normal supply to 
 one-half of it.^^ The promise of such elaborate regula- 
 tions was high, but their results were, as the sequel will 
 show, disappointing. 
 
 Despite the requisitioning of shipping for the carriage 
 of meat and wheat and the beneficent effect of this action 
 in the spring of 1916, public feeling in the autumn of that 
 year was becoming more and more incensed over the 
 seeming profits of shipowners. To this discontent Mr. 
 Anderson gave voice in Parliament on October 1 7. Quot- 
 ing a recent pronouncement of Mr. John Hill, a trade 
 
 26 Ibid., Mar. 23, p. 854. 
 
 27 Ibid., Mar. 30, p. 938. 
 
 28 Ibid., Aug. 24, p. 546. 
 2» Ibid., Dec. 7, p. 715. 
 
 I' 
 
152 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 union secretary of the Boiler-makers' Society, he declared 
 that, while wages had since July, 1914, advanced less than 
 15 per cent., the average increase in the cost of living was 
 officially stated to be 45 per cent. Ships built had been 
 sold at prices from 500 to 1000 per cent, above the cost 
 of their production in 1914. One ship-building com- 
 pany, not the most prosperous one, on a capital of £360,- 
 000 had within a year made a profit of £240,000, or 70 
 per cent. As for shipowners, Mr. Anderson continued, 
 the shipping journals show South American freights ris- 
 ing from 10 s. at the beginning of the war to 150 s. early 
 m 19 16. In view of this the workmen cannot be per- 
 suaded that profits are not excessive. ^^ 
 
 To counteract this current of public discontent, Mr. 
 Runciman on October 17, 1916, made an important speech 
 in the Commons " giving details now for the first time." 
 " I am doing so,'' he continued, '' because I understand 
 that outside feeling is directed against shipping. I think 
 it about time the country knew that out of a total mer- 
 chant fleet of nearly 10,000 vessels, only iioo [elsewhere 
 1 1 18] ocean-going vessels are free to conduct their own 
 operations." Of the remainder the large number in the 
 service of the army and navy were, he said, under blue- 
 book rates ; others, requisitioned by the Foodstuflfs Requi- 
 sitioning Committee or trading on behalf of the Allies, 
 were under fixed rates far below the open market rates' 
 Of the 1 1 18 vessels not controlled, 297 were permanently 
 employed abroad between foreign ports to maintain Brit- 
 «o P. D. C, 1916, LXXXVI, 468. 
 
 SHIPPING 
 
 153 
 
 ish interests ; 588 were cargo liners or tramps chartered 
 to liner companies to keep alive the connection with other 
 countries, "a mere skeleton of the organization neces- 
 sary"; 233, finally, were free tramps, the recipients of 
 the high freights which occasionally figured in the press 
 and formed the basis of questions asked in the House. 
 If it seems to any one that such freights are taken from 
 the flesh and blood of the people, let him reflect that the 
 number of free vessels engaged in carrying food is about 
 60. 
 
 As to the actual relation between the rising prices of 
 foodstuffs and rising freights, the figures, Mr. Runci- 
 man continued, are as follows : The price of meat up to 
 the autumn of 19 16 appears to have increased by 4 d. or 
 5 d. a pound, American bacon by 8d. or 9d., Canadian 
 cheese by 4 d. or 5 d. ; of these amounts ^ d., Yi d., >4 d., 
 respectively, have been due to increased freights.^ ^ It 
 was the same with wheat.^^ As to purchases of wheat 
 in Australia, the Government could not make such 
 unless it was prepared to divert vessels into that trade. 
 The diversion was uneconomic, since a cargo vessel could 
 make only two and one-half voyages to Australia in a 
 wheat year, whereas tramp vessels run across the Atlan- 
 tic from six to eight times a year. The Government, 
 however, was prepared to be uneconomic in order that 
 supplies might not depend on one market alone. To get 
 the best dispatch from cargo vessels by inducing man- 
 
 31 Ibid., pp. 505-508. 
 
 32 No figures were given. 
 
I 
 
 154 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 SHIPPING 
 
 15s 
 
 agers, captains, and engineers to hurry them, it had been 
 decided to pay for wheat carriage on the basis of voyage 
 charters. At the moment rates were being worked 
 out, not by shipowners, but by those skilled in making 
 such calculations.^^ 
 
 Such was the somewhat belated explanation of the 
 President of the Board of Trade. It was true that the 
 Government had already done much to remedy a situation 
 which for a time allowed to shipowners, as Mr. Lloyd 
 George later declared, prodigious profits.^* Even Lord 
 Furness, the president of a great shipping firm, admitted 
 that for two years earnings had been " greatly in ex- 
 cess of an average pre-war year," and that the companies 
 had, " like other trades been allowed to retain a margin 
 ranging from 50 per cent, to 20 per cent, of such excess 
 earnings." Some owners and some tramp companies 
 after making large profits had, he added, sold their ton- 
 nage at high prices, distributing both earnings and cap- 
 ital.^^ 
 
 The ill-repute which in the eyes of the public attached 
 to such prosperity could not, however, be expected to dis- 
 appear at once. The annual statements, indeed, of cer- 
 tain steamship companies made so late as July, 19 17, 
 continued to reflect their recent gains. The profits of 
 the British Steamship Investment Trust (Limited) for 
 the year ending June 30, 19 17, enabled the directors to 
 recommend a dividend on the deferred stock of 30 per 
 
 S3 Ibid., p. 503. 
 
 84 L. T., Dec. 20, 1916, p. 10. 
 
 S5 Ibid., Jy. 30, 1917. p. 12, 
 
 cent, less tax. This, with a bonus of 10 per cent, less tax 
 and an interim bonus of 10 per cent, paid in January, 
 brought the total distribution for the year to 50 per cent, 
 less tax. At the same time Furness, Withy & Co. 
 (Limited) distributed 20 per cent, tax free as the year's 
 return to shareholders.^^ 
 
 In his annual address, however. Lord Furness sounded 
 a note of warning. During the commercial year, not 
 only had the shipping industry like all others become sub- 
 ject to the increased excess profits tax of 80 per cent, 
 (formerly 60 per cent.), but the Government had requi- 
 sitioned at blue-book rates practically all ocean-going 
 tonnage. It was certain that this remuneration would 
 not leave a profit equal to the pre-war average. Tonnage, 
 too, could now be withdrawn from any route and applied 
 where it would best serve national needs. This was as 
 it should be, but hardship would come with the attempt 
 to recover the neglected routes. For foreign owners 
 w^ere meanwhile making huge profits from uncontrolled 
 freights, being free as well from British competition. 
 Their accumulated reserves would make them formidable 
 competitors in the future. Then, at least, the reserves 
 accumulated by British companies early in the war would 
 be of great avail to the industry.^^ 
 
 In November, 1916, a month after Mr. Runciman gave 
 his " details " in the Commons, the Committee appointed 
 to investigate the causes of the increased price of com- 
 
 86 Ibid., Jy. 20, p. 7. 
 
 87 Ibid., Jy. 30, p. 12. 
 
iS6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 modities made its second report. Discussing the reasons 
 for the rise in wheat, the Committee was led to give a 
 brief account of shipping. The information contained 
 in this is of great value and has already been quoted. 
 At the conclusion of its investigations the Committee 
 makes certain recommendations. If occasion should 
 offer, Governmental control over freight rates should be 
 extended; competition for ships should be reduced, a 
 policy, the Committee understands, already under care- 
 ful consideration ; non-essential imports should be further 
 excluded and certain other commodities should be subject 
 to preferential treatment; lastly, the supply of tonnage 
 should be increased, particularly by new construction.^^ 
 
 The end to be attained by the first two of these recom- 
 mendations was soon realized through the measures taken 
 by the new Controller of Shipping, Sir J. P. Maclay. In 
 the winter of 1917 he applied, first to vessels in the Aus- 
 tralasian trade and then systematically to all liners, 
 a new organization of control. All shipowners were 
 formed into a committee of management on which the 
 Shipping Controller was represented ; and, through the 
 provision that all profits above those allowed by blue- 
 book rates should go to the state, all motives inducing to 
 competition were eliminated.^^ 
 
 In May, 19 17, the Chancellor of the Exchequer de- 
 scribed the existing situation and explained the Govern- 
 ment's final policy toward shipping. After confessing 
 
 38 Cd. 8483, p. II. 
 
 3» L. T., May 3, iQi?, P- 7- 
 
 SHIPPING 
 
 157 
 
 that there had been too long a delay in taking over con- 
 trol of shipping, that shipowners had " had a very good 
 time," and that he himself was not devoid of responsi- 
 bility for what had happened, he stated that, of all ships 
 of i6cx) tons and upwards, 90 per cent, had at length 
 been requistioned or had been notified that they would be. 
 It was true, he admitted further, that even blue-book 
 rates had at first made possible a large return. Owing 
 to increased costs of operation, this was no longer true 
 and, under the terms of requisitioning, ships would no 
 longer secure so much as their pre-war profits. Where 
 it had not been possible to requisition vessels, the Ship- 
 ping Controller had control over rates of freight. In the 
 case of the 4000 or 5000 small coasting vessels, whose 
 masters were often their owners, the Government had not 
 thought it wise to fix a definite scale of profit, lest en- 
 terprise be checked. The nation was too dependent upon 
 them to incur such a risk. 
 
 In one matter the Chancellor of the Exchequer v^ent 
 so far as to call forth the protest of shipowners. One 
 of the provisions of the excess profits law was that if in 
 any year the return from a business was less than the pre- 
 war profits, the deficiency should be made good out of 
 the excess profits taken by the Government in preceding 
 years. This clause Mr. Bonar Law proposed to suspend 
 regarding shipowners in view of their excessive profits 
 in the past.^^ In a Memorandum of June 30 the Ship- 
 owners' Parliamentary Committee protested. In April, 
 
 *o Ibid., p. 9. 
 
158 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 1916, when Mr. McKenna, then Chancellor of the Ex- 
 chequer, had urged them to build and buy at war prices 
 and when they had explained that they could not do so 
 unless the cost were to l)e met out of their war earnings, 
 Mr. McKenna had given them a pledge. He had prom- 
 ised them that, as soon as there could be ascertained the 
 value on a peace basis of the vessels which they might 
 build or purchase at war prices, they would be allowed out 
 of their war earnings as a zvhole the difference between the 
 price so paid and such assessed value. This pledge, the 
 Memorandum continued, was broken by the proposal of 
 the Chancellor of the Exchequer. Whether allowances 
 were to be made them would now depend upon whether 
 the profits of a current year were in excess of the pre- 
 war profits. Since this would seldom happen, the Gov- 
 ernment was doing its utmost to prevent the redemption 
 of Mr. McKenna's pledge. The shippers then explained 
 that rising freights had been forced upon them by the 
 competitive bidding of cargo owners and that rates could 
 have been kept down only by prohibiting the importation 
 of less essential cargoes.^ ^ Whatever the merits of the 
 case, the protest clearly shows that the Government's ac- 
 tion during the last six months had borne hard upon the 
 shippers and that the first two recommendations of the 
 Price of Foodstuffs Committee had received ample at- 
 tention. 
 
 The third recommendation of the Committee, looking 
 to the economy of tonnage by the further reduction of 
 
 *i Ibid., Jy. 2, p. 3. 
 
 SHIPPING 
 
 159 
 
 i 
 
 imports, concurred with the suggestion of the shipowners 
 and was, it appears, pertinent. The policy in question had 
 been adopted at the beginning of 19 16 and had been ex- 
 tended. Owing to a liberal issue of licences, however, it 
 had accomplished comparatively little. A remark became 
 current that the way to increase the import of an article 
 was to issue a prohibition that it should not come in. 
 Although the importation of tobacco was prohibited, the 
 country in September, 1916, bought £880,000 worth of it. 
 Paper imported during the same month was valued at 
 £652,000 (some of it cardboard boxes), manufactures of 
 silk at £1,000,000, earthenware and glass at £188,000.^2 
 
 In December, however, as has been noted, the impor- 
 tation of paper was cut from two-thirds of the normal to 
 one-half, 43 ^j^^^ -^^ February Mr. Lloyd George explained 
 in the Commons that unessential articles of diet must no 
 longer be imported. Aerated waters, apples, and toma- 
 toes came under the ban; oranges, bananas, grapes, al- 
 monds, and nuts were restricted to 25 per cent, of the 
 importation of 1916; canned salmon was reduced 50 per 
 cent; Indian tea was shut out to some extent, foreign 
 teas altogether. Although coffee and cocoa were barred, 
 there were large stocks of both in the country, stocks 
 that would have gone on to Germany had they not got 
 stuck in England. 
 
 When summer came and the submarine was rapidly 
 reducing merchant tonnage, it became clear that staple 
 
 ^2 P. D. c, 1916, LXXXVII, 918. 
 *3 B. T. J., Dec. 7, 1916, p. 715. 
 
;,l,;rfi4fi£!*,. 
 
 i6o 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 SHIPPING 
 
 l6l 
 
 and important imports would have to be restricted. 
 Among these was cotton. The cotton industry in 191 6 
 had suffered from a shortage in the year's supply of raw 
 material which by November 20 had driven the price to 
 12.59 d. a pound, the highest for 50 years. Nor did it 
 thereafter recede, but on May 25, 1917, stood at 12.9 d. 
 At about this time demands for higher wages became in- 
 sistent. Threats of strike on the part of the weavers were 
 on May 26 met by concessions. Soon they were to re- 
 ceive what amounted to a 20 per cent, advance on pre-war 
 wages, an increase already secured by the spinners."** 
 Scarcely had this been settled when the spinners joined 
 with the card-room operatives in demanding a 10 per 
 cent, war bonus. Since the owners threatened a lockout, 
 the Board of Trade intervened to secure arbitration by 
 the Committee on Production. On June 17 such arbi- 
 tration was accepted by the men and a crisis averted."**^ 
 It was during these critical days that the shortage of 
 the crop was intensified by a lack of shipping facilities. 
 Already tonnage for the conveyance of cotton to the East 
 had been restricted and the effect of this had been felt.*^ 
 By the middle of June, considerable machinery was idle, 
 the Government had warned exporters to keep down their 
 engagements, and the trade was prepared for a compul- 
 sory limitation of the consumption of cotton. Supplies 
 
 ^* L. T., Ann. Fin. and Com. RezK, Jan. 19, 1917, pp. 8, 19; M. G., 
 May 29. 
 
 ^•iL. T., May 31, 1917, p. 3; Je. 8, p. S ; Je. 13, p. 7: Je. 18, p. 12. 
 
 *^ Weekly Record of the Woolen and Textile Trades' Association, 
 Apr, 10, May i, 1917; L. T., Jy. 2S, 1917, P- 12. 
 
 of raw cotton on hand were 413,530 bales as compared 
 with 659,350 a year before; on the other hand, stocks of 
 finished goods were accumulating.*"^ At the end of June 
 a Board of Control, chosen almost exclusively from the 
 leading importers, spinners, manufacturers, merchants, 
 and trade unions was set up. Power was given it to 
 ration raw materials, to impose shorj; time, to limit the 
 number of spindles in operation, and to fix prices. Thus 
 fully endowed with authority, it first forbade the purchase 
 of raw cotton abroad except under licence; next it or- 
 dered a census of all cotton supplies in England.*^ On 
 the Liverpool Cotton Market dealings in " futures " 
 ceased and " spot " business, almost for the first time in 
 the history of the market, was marked '' sales nil.'' At a 
 meeting on July 14, the Cotton Control Board decided not 
 to recommend any immediate curtailment of production. 
 On the other hand, it continued for the moment its policy 
 of granting licences for the purchase of one week's supply 
 of spot cotton at a time but these only to spinners who had 
 less than two months' supply in stock.^^ Before a month 
 had passed, however, limitation of production was seen 
 to be a necessity. On August 10 the Board of Control 
 announced its scheme, already approved by the Board of 
 Trade. In as much as the Shipping Controller was mak- 
 ing a great effort to increase the tonnage available for 
 cotton, particularly by arranging with the United States 
 
 *7 M. G., May 29, 1917; Je. 23 (editorial) ; L. T., Jy. 25, p. 12. 
 *8 Ibid., Je. 28, pp. 4, 5 ; Jy. 2, p. 5. 
 *9L. T., Je. 30; Jy. 14, p. 7. 
 
1 62 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Government for the provision of additional tonnage, the 
 new regulations were to be effective for a period of only 
 three months. Cotton-spinning firms were ordered to 
 stop on September 3 all but 60 per cent, of their total 
 spindlage and equivalent preparatory machinery. Li- 
 cences might be got on payment of from ys d. to yz d. 
 per spindle to run as much as 70 per cent, of the spindles 
 and even more if Government contracts were in question. 
 To run more than 60 per cent, of the looms, payment of 
 from 2 s. 6 d. to 5 s. per loom was required. Money re- 
 ceived from these sources the Board of Control would use 
 to prevent depletion of trade union funds, to ameliorate 
 want and distress caused by temporary unemployment, 
 and for any other emergency brought on by the crisis. 
 The restrictions would be administered jointly by the 
 Board of Control, the trade unions, and the employers* 
 associations.^*^ 
 
 This rationing of the cotton industry illustrates per- 
 haps better than anything else the exigencies in which 
 British shipping found itself in the summer of 19 17. 
 The corresponding rationing of the woollen trade,^^ ad- 
 ministered with considerable friction, was due only in 
 part to shortage of shipping. In that case the year's 
 supply of raw material also gave concern. But when 
 two of the most extensive of Great Britain's industries 
 were affected as were these two, the need of increased 
 tonnage became imperative. The fourth recommenda- 
 
 '50 L. T., Aug. II, 1917, p. 6. 
 51 Cf., above, p. 118. 
 
 SHIPPING 
 
 163 
 
 tion of the Committee on food prices accordingly became 
 pertinent. This, it will be remembered, was that the 
 available supply of tonnage should be increased, espe- 
 cially by new construction. The summer of 19 17 saw 
 the Government resolved upon remedial measures of this 
 kind. 
 
 Mr. Runciman announced in November, 19 16, that two 
 and one-fourth million gross tons of shipping, or about 
 three million tons dead weight, had been lost since the 
 beginning of the war.^^ Nor had the tonnage con- 
 structed during the same period counterbalanced this loss. 
 It had, on the contrary, declined markedly in comparison 
 with pre-war production. In 19 13, Great Britain 
 launched 1,977,573 gross tons; in 1914, 1,722,154 tons; 
 in 1915, 649,336 tons; in 1916, 582,305 tons.^^ Actual 
 losses had therefore not been repaired by something like 
 a million gross tons. The same deficiency appears in the 
 statistics which Lord Curzon laid before the Lords in 
 May 5, 1917:^* 
 British ships of 100 tons and over 
 
 in June, 19 14, were 10,124 with a tonnage of 20,523,- 
 
 706 gross tons, but in December, 19 16, were 9757 with 
 
 a tonnage of 19,765,516 gross tons; 
 British ships of 1600 tons and over 
 
 in June, 19 14, were 3900 with a tonnage of 16,900,000 
 
 52 p. D. C, 1916, LXXXVII, 849- 
 
 ^3L. E., Aug. 4, 1917. Mr. Lloyd George on Aug. 15 told Parlia- 
 ment that the construction for 1915 and 1916 was 688,000 tons and 
 538,000 tons respectively, 
 
 5* B. T. J., Je. I, 1917, p. 219. 
 
164 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 gross tons, but on March 31, 19 17, were 3500 with a 
 
 tonnage of 16,000,000 gross tons. 
 
 While the first half of this schedule shows the net loss 
 of nearly a million tons of shipping up to the end of 1916, 
 the second half shows the increasing destruction of larger 
 vessels during the early months of 19 17. The sinking 
 of tonnage due to the new activity of submarines after 
 February i was described by Mr. Lloyd George in Parlia- 
 ment on August 16. In April the loss had been greatest, 
 amounting to 550,000 tons gross; in July it had fallen to 
 320,000 tons and in August it was still declining.'^'^ By 
 the end of September the total losses during eight months 
 approximated the losses before that period,^^ being nearly 
 two and one-half million tons. Only a great acceleration 
 in construction could repair this ruin. 
 
 At the end of 1916 the Board of Trade began to take 
 measures to provide against the recurrence of another 
 year of slight output. A large number of engineers, 
 fitters, and mechanics was recalled from the Colours and 
 from yards doing Admiralty and munitions work. The 
 Admiralty allowed some forty-five merchant vessels near- 
 ing completion to be finished while certain less necessary 
 Admiralty work stood aside. Arrangements were made 
 to have the companies in the shipbuilding ports pool their 
 skilled labour, e. g., the eight or ten shipbuilding yards and 
 the numerous engineering works on the Wear. Skilled 
 men were to concentrate their labour on the vessels near- 
 
 55 L. T., Aug. 17, 1917, P- 8. 
 59 N. Y. Times, Sept. 29, 191 7. 
 
 jl 
 
 11 
 
 SHIPPING 165 
 
 est completion regardless of the yard to which they be- 
 longed. The shortage of steel, it was hoped, would soon 
 disappear as the Ministry of Munitions extended its steel 
 works.^^ In January, 19 17, the Shipping Controller took 
 steps to buy all available tonnage in the United States 
 and Canada, to lay down standard cargo carriers in Great 
 Britain, and to push to completion more than two million 
 tons of unfinished ships. By August Mr. Lloyd George 
 could declare that 480,000 tons had been turned out dur- 
 ing the first half of 1917 and that 1,100,000 tons would 
 be during the second half. Some 320,000 tons would 
 have been bought and the total addition to Great Britain's 
 shipping during the year would therefore be 1,900,000 
 tons. This was very nearly the normal output of 
 1913. The Premier predicted that through production 
 and purchase the acquisition of 19 18 would be 3,000,000 
 tons.^^ But two million tons or even three million tons 
 added to British shipping yearly would not now repair 
 the havoc wrought by submarines. The final exhorta- 
 tion of the Shipping Controller, therefore, was that the 
 United States should build extensively enough not only 
 to transport its troops and its munitions of war but also 
 to create the surplus needed to counterbalance British net 
 losses. He suggested that it set itself to construct six 
 million tons of merchant shipping. To produce three 
 times as much as the British at their best have done and 
 
 "P. D. C, 1916, LXXXVII, 852; B. T. J., Mar. i, 1917, p. 609; 
 L. T., Dec. 23, 1916, p. 3. 
 "L. E., Aug. 4, 1917; L. T., Aug. 17, p. 8. 
 
1 66 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 six times what it itself has previously done, is not a 
 simple task, but it is one of vital importance for the 
 Allied cause/'''^ 
 
 59 N Y. Times, Sept. 29, 1917. 
 
 i 
 
 FOOD 
 
 SUGAR, MEAT, AND BREAD 
 
 To the tnree foodstuffs which Mr. Askwith once men- 
 tioned as essential, government regulation has during 
 the war been applied at different times and from some- 
 what different motives. Sugar was at once taken in 
 hand, since the supply was highly precarious ; before very 
 long much of the meat imported into Great Britain was 
 appropriated that the Allied armies might be adequately 
 fed; but, although from the beginning of the war the 
 Government undertook to regulate the supply of wheat, 
 it did not until after two years make far-reaching regula- 
 tions touching the sale and consumption of bread. 
 
 When on August 4, 19 14, shops reopened after the 
 bank holiday, in certain large provincial cities there was 
 a rush to buy provisions. Next day the alarm spread to 
 London, where many small shops were speedily sold out 
 and several large ones had either to stop the sale of pro- 
 visions or to refuse to customers more than the quantities 
 usually purchased. In the West End and in some resi- 
 dential towns people loaded their motor cars with food- 
 stuffs and turned their dwellings into store houses.^ The 
 prices of certain commodities rose sharply. Compara- 
 tive quotations of July 28 and of August 6 for flour were 
 
 1 A. R., 1914, p. 184 ; p. D. C, 1914, LXV, 2213. 
 
 167 
 
 I 
 
1 68 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 f^^ffi 'W ' 
 
 i^d., i>$d. ; for sugar (cubes) 2d., 4d. ; for English 
 beef 6y2 d., 7>^ d.; for chilled beef 6 d., 7>^ d.; for 
 frozen beef 4>^ d., 6]^ d. ; for English mutton 8 d., 
 8>^ d. ; for Danish bacon 8>4 d., io>^ d. ; for Colonial 
 cheese 6}i d., 8>4 d. ; for butter 13 d., 15 d.^ Flour and 
 English meat, it will be seen, rose comparatively little in 
 price, imported meat, cheese, and butter somewhat more, 
 while the rise in sugar was abnormal. 
 
 A Committee of the Cabinet with Mr. McKenna as 
 chairman acted promptly. It summoned prominent re- 
 tail food dealers, who recommended what might serve as 
 maximum prices for commodities like sugar, butter, 
 cheese, and bacon, and these prices were at once officially 
 adopted by the Board of Trade. After investigation, the 
 Cabinet Committee announced that, including the home 
 crop then being harvested, there was in the United King- 
 dom food for five months. Trade, the Committee pre- 
 dicted, would soon be resumed, and hoarding was 
 deprecated. In the House of Commons a bill was passed 
 enabling the Board of Trade to take possession at reason- 
 able prices of foodstuffs which were being unreasonably 
 withheld or cornered.^ Retail provision dealers under- 
 took not to supply in the future any customer with more 
 food than he normally required. Ships w^ere soon bring- 
 ing in large quantities of wheat, flour, meat, and fruit. 
 The Canadian Government offered a gift of 98,000,000 
 
 2 L. T., Aug. 7, 1914. 
 
 3 A royal proclamation of Sept. 17 carried out this provision ; 
 B. T. J., Sept. 24, 1914, p. 808; Cf. P. D. C, 1914, LXV, 2212-2222. 
 
 FOOD 169 
 
 lbs. of flour to meet the needs of the people and the prov- 
 ince of Alberta undertook to deliver free in English 
 ports 1,000,000 bushels of Alberta oats. Through its 
 control of the railways the Government could regulate 
 the distribution of food supplies and prevent panic prices. 
 The Board of Education made ready to provide meals, 
 during vacations as well as during sessions of school, 
 both for children under school age or already out of 
 school and for those in attendance.* So effectively was 
 the crisis met that the days of panic were soon passed. 
 
 SUGAR 
 
 The extraordinary movement in the price of sugar dur- 
 ing the early days of August arose from the sudden 
 severance of relations between the United Kingdom and 
 the chief sources of its sugar supply, Germany and Aus- 
 tria. In 1913, 80 per cent, of the sugar consumed in the 
 British Isles was beet sugar, and of this 68 per cent, came 
 from the countries in question.^ Henceforth the product 
 thus cut off had to be made good by increased importa- 
 tions from other sugar-producing countries — Cuba, 
 Java, the United States, Mauritius, the British West In- 
 dies, and the Philippines. 
 
 To insure the getting of a supply from these sources, 
 the Government on September 1 1 announced the appoint- 
 
 * P. Alden, War and the Wage Earner, Contemporary Review, 
 Sept., 1914, p. 2,77- 
 
 5 J. W. Robertson-Scott, Opportunities of the War. Nineteenth 
 Century and After, Oct., 1914. The beet sugar consumed was 
 1,570.053 tons, the cane 399,8.34 tons; beet sugar from Germany was 
 938,438 tons, from Austria 359,468 tons. 
 
170 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ment of a Royal Commission. It was empowered to 
 enquire into the amount of sugar in the United Kingdom, 
 to purchase and sell sugar, to control its delivery, and to 
 take steps to maintain the supply.^ The need was im- 
 minent. Imports into the United Kingdom during 
 August, 1 9 14, were only 34,000 tons, compared with 184,- 
 000 tons during August, 1913. At the end of the month 
 the stores in bonded warehouses had fallen to one-half 
 of what they were a year before and were less than suffi- 
 cient for one month's consumption^ Germany mean- 
 while had forbidden the exportation of her beet sugar to 
 the United Kingdom; and His Majesty's Government, 
 replying in kind on September 30, forbade importation 
 from any European port, that trade through Holland 
 might not put money into the enemy's pockets.^ 
 
 The Commission at once and with great secrecy en- 
 tered the market. Acting through a single firm, it bought 
 all the surplus stock of Cuban sugar, although "the 
 Americans wanted the whole lot for themselves." Other 
 sugar was bought from Java, Mauritius, and South 
 America before any one suspected that the Government 
 had "gone into the grocery business." The price de- 
 manded was a pretty high one, " a world price, such as 
 Americans would pay." ^ 
 
 As a result of this activity, the shortage of stocks was 
 remedied by November, 1914, and the maximum price, 
 
 « B. T. J., Sept. 24, 1914, p. 810. 
 
 7 Cd. 8483, p. 20. 
 
 8E. N., Oct. 3, 1914; B. T. J., Oct. 8, 1914, P- 94- 
 
 »M. G., Sept. 29, 1916, p. 12. The phrases are Mr. Runciman's. 
 
 FOOD 
 
 171 
 
 recommended by food dealers and adopted by the Board 
 of Trade, could be reduced from 3J4 d- to 3^ d. Lower 
 it could not be put, since prices paid had been considerable, 
 and the expense of transportation from distant centres 
 with high rates of insurance and high dock charges 
 rendered the cost even to the Royal Commission far 
 above the peace-time price of sugar. A testimony to the 
 efficiency of the Commission, however, was the fact that, 
 although it bought principally in the United States and 
 in Cuba, where American firms had powerful interests, 
 the f. o. b. price of granulated sugar in New York in 
 19 1 6 was higher than the contemporary wholesale price 
 of sugar in bond in London. To the price which was 
 paid, the Commission added, when it sold, only such a 
 fraction of the cost as would meet insurance and working 
 expenses, would create a surplus looking to the mainte- 
 nance of uniformity in price, and would provide a fund 
 to meet any possible reduction in prices at the end of the 
 
 war. 
 
 10 
 
 Not only did the Government become the sole importer 
 of sugar but it assumed control of the refineries. Re- 
 finers received from it raw sugar at certain prices and 
 sold their product at prices prescribed. Profits thus re- 
 stricted were further controlled. Anything in excess of 
 pre-war returns and an additional percentage agreed upon 
 was henceforth recoverable by the Royal Commission. 
 Profits of wholesale distributors were likewise limited to 
 
 i^ per cent, of what they paid. Such the Commission 
 10 Cd. 8483, pp. 20, 21. 
 
1^2 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 found, on investigating pre-war profits, was a fair return. 
 On the other hand, no attempt was made to keep retail 
 prices entirely uniform. They were watched, however, 
 and, if here and there traders exacted excessive prices! 
 action was taken.^^ In this way the Government di- 
 rected the entire sugar trade, controlling all transactions 
 from the sale by the distant foreign producer to the pur- 
 chase by every household in the United Kingdom. 
 
 The prices of a commodity thus controlled should have 
 been, it might be expected, advantageous to the consumer. 
 On the contrary, the cost of no other staple article of 
 food in England advanced so much. By the end of 1916 
 the increase was 170 per cent. The retail price of white 
 granulated sugar in July, 1914, was 2 d. per lb., in Decem- 
 ber, 1916, it was 5j^ d. Much of this advance came at 
 once and was due to the restricted sources of supply. 
 After the sharp August advance of about 100 per cent., 
 the price fell back to one 75 per cent, above the normal 
 — i. e., to 31^ d. retail. There it remained until Septem- 
 ber, 1915. In that month a duty of y^ d. per lb. was 
 imposed, but was counterbalanced in part by a reduction 
 of Ya d. in the margin allowed to wholesalers. The sell- 
 ing price remained at 4 d. until January, 1916. Before 
 April, however, sugar advanced to 4^4 d. and then an 
 additional duty of >^ d. was imposed. The rise during 
 the remainder of the year was slight.^^ Qf the total ad- 
 vance of 3^ d. therefore, i^ d. is attributable to taxa- 
 
 ^^ Ibid., p. 21. 
 
 12 Ibid., pp. 19, 20. 
 
 FOOD 
 
 "^yz 
 
 tion, as much more to the circumstances attendant upon 
 the outbreak of war, and half as much again to the rise 
 of the early months of 19 16. 
 
 The last increase, owing to circumstances which had 
 arisen, was not so much deprecated by the Government 
 as fostered by it. At the close of 19 15, suppHes of sugar 
 in the country were very low and the needs of the army 
 were increasing. To check consumption, therefore, the 
 Royal Commission in January, 1916, advanced the price 
 of sugar and in February issued an appeal to the public. 
 Notwithstanding the high price prevailing since the be- 
 ginning of the war, the Commission declared, the con- 
 sumption of sugar had decreased but little. In 19 15 it 
 was scarcely 5 per cent, less than in 19 13. Owing to 
 shortage of tonnage a restriction of importation had at 
 length become necessary, and the supply of sugar brought 
 into the country might be cut down by 20-25 per cent. 
 In view of this the public were urged to eat less sugar, 
 less jam, less chocolate. The Commission did not add 
 what everybody knew — that the higher wages of the 
 working classes had enabled them to indulge, regardless 
 of prices, in more sweets than ever be fore. ^^ Once more, 
 at the end of February, the Government put up the price, 
 but after that not again during 19 16. The advance in 
 the retail price of sugar from 4 d. to 4% d. early in the 
 year is therefore explained by two official advances, and 
 these were primarily due to the Government's desire to 
 economize shipping facilities. 
 
 13 B. T. J., Feb. 10, p. 388; Feb. 17, p. 457; B. T. R., Feb. i, 1916. 
 
174 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Such efforts were only in part successful. The 25 per 
 cent, reduction in consumption which had been urged was 
 not attained, but 15 per cent, less sugar was used in 1916 
 than in 1915 and 19 per cent, less than in 1913.^* At the 
 end of the year the stock on hand was greater than a year 
 earlier. 
 
 This restriction of the supply was not effected without 
 arousing criticism. It was said that if dealers and manu- 
 facturers had continued to import on their own account, 
 they would in many cases have been able to secure more 
 abundant supplies. To which the Government replied 
 that the question was not one of purchasing in foreign 
 markets but of transporting the purchases to Great Brit- 
 ain. In this respect the Government was in a position 
 to meet the demand better than the private importer. 
 The latter would have to pay abnormal freight rates if he 
 could get any tonnage at all, whereas the Government 
 could and did import at blue-book rates. Without its 
 control, prices would probably be much higher than those 
 which prevailed, as, indeed, they were in New York.^^ 
 Less easily answerable were the charges made relative 
 to the distribution of sugar. In the Commons in No- 
 vember, 19 1 6, Mr. Tickler declared that it was hard to 
 persuade the public that the Sugar Commission had been 
 a success, when thousands of families were unable to 
 get even a moderate supply. What they cannot under- 
 
 14 L. T., Ann, Fin. and Com. Rev., Jan. 19, 1917, p. 13: L. R, Feb. 
 17, p. 299. In 1913 the consumption of the United Kingdom was 
 1,800,000 tons; in 1916, about 1,450,000 tons. 
 
 15 Cd. 8483, p. 21. 
 
 FOOD 
 
 175 
 
 stand, he said, is that they can go into a confectioner's 
 shop and buy as much as fifteen pounds of sweets, but 
 at the nearest grocer's they cannot get one pound. Mr, 
 Runciman already had lamented the situation. " We 
 have rationed sugar, and thousands and thousands of let- 
 ters have come from the poor. God forbid that we 
 should have to ration anything else." ^^ Most irritating 
 during the autumn was the difficulty of getting sugar for 
 making home-made jam. Quantities of fine plums rotted 
 in Nottinghamshire orchards, but the housewife could buy 
 freely only boiled sweets at the confectioner's.^^ 
 
 A part of the difficulty was inherent in any rationing 
 scheme. Since there was little abatement in the demand 
 of the public, a degree of inconvenience was inevitable. 
 But, while the Commission tried to apportion its sup- 
 plies so that the shortage w^ould be everywhere equally 
 felt, its method detracted from its success. Refined 
 sugar, whether that imported by the Government or that 
 turned out by British refiners, was apportioned to whole- 
 sale dealers in proportion to the amount of their purchases 
 in 19 1 5. The wholesalers distributed to retail dealers on 
 the same principle and the latter in turn were expected to 
 sell to their customers as equitably as possible. Only to 
 the jam manufacturers, in view of the size of the home 
 fruit crop, was a special allotment made.^^ This principle 
 of apportionment assumes a relative immobility of popu- 
 
 16 p. D. C, 1916, LXXXVII, 873; LXXXVI, 510. 
 
 17 M. G., Sept. 2, 1916, p. 5 ; Sept. 5, editorial. 
 
 18 Cd. 8483, pp. 21. 22. 
 
176 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 lation and demand which seems not to have existed. 
 Growing businesses were penaHzed in favour of those 
 which were stationary or retrogressive.^^ Well-to-do 
 customers, also, in spite of the principle, succeeded in 
 getting more than their relative share of the allowance,^^ 
 and others achieved the same end by purchasing in a 
 number of shops. To avoid exhaustion of stocks some 
 grocers required that other foodstuffs be bought with 
 sugar — a condition that sometimes proved onerous to 
 the small buyer. Most unfortunate, however, was the 
 working of the principle relative to the poor on the one 
 hand, and to the confectioners on the other. Where 
 shortage demands sacrifice, it is better that luxuries be 
 cut off in greater measure than daily needs ; and it is more 
 serious for the person who lives close to the margin of 
 subsistence to get three pounds of sugar instead of four, 
 than it is for the patron of the sweetshop. These defects 
 in distribution were brought home to the Government by 
 numerous complaints, and early in 19 17 remedies were 
 sought. 
 
 First of all, by orders of January 11, the manufacture 
 of costly sweets and the use of sugar or chocolate for 
 covering cake or pastry were prohibited. Hitherto in the 
 West End of London chocolates costing 5 s. or more 
 had been offered for sale. At first it was proposed to 
 suspend entirely the sale of chocolates during the war; 
 but the Food Controller argued that many thousands 
 
 ^^ New Statesman, Mar. 10, 1917, p. 533. 
 20 L. T., Jy. 21, 191 7, p. 7. 
 
 FOOD 
 
 177 
 
 would thus be thrown out of work and that a valuable 
 food for children would be unavailable.^^ He, there- 
 fore, forbade the manufacture of such chocolate as would 
 sell at retail for more than 3 d. per oz. (4 s. per lb.) or 
 of any other sweetmeat which would sell at more than 
 2 d. per 0Z.22 When Mr. Lloyd George's daughter was 
 married in June, the prohibition relative to f rostings had 
 become effective and the bride's cake had none of the 
 customary icing and sugar decorations.^^ 
 
 More drastic still was another order of January 11, 
 prescribing that no manufacturer of sugar-confectionery 
 or chocolate might use more than 50 per cent, of the sugar 
 used by him during corresponding periods of 191 5. Two 
 months later the amount was reduced to 40 per cent, and 
 the order was made applicable to all manufacturers of 
 articles containing sugar, other than manufacturers of 
 jam, marmalade, and condensed milk. After two months 
 more had passed, the ration was reduced still further to 
 25 per cent, of the amounts used in 191 5, and this was to 
 become effective after June i.^* It could scarcely be 
 said henceforth that confectioners and their patrons were 
 
 unduly favoured. 
 
 Another grievance of 1916 had been that little sugar 
 could be had for home-made jams. In May, 1917, the 
 Government set apart a certain amount of sugar for pre- 
 serving fruit and speedily 250,000 letters asked for ap- 
 
 21 M. G., May 2, 1917. 
 
 22 D. R. M., 3rd. ed., p. 244. 
 
 23 M. G., Je. 22, 1917. 
 
 24 D. R. M., 3rd ed., pp. 244, 421 ; M. G., May 31, ^9i7- 
 
178 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 plication blanks. Toward the end of June, the Commis- 
 sion made its allotments. But only fruit growers could 
 be supplied, no balance remaining for those who wished 
 to purchase fruit for domestic jam-making. The sink- 
 ing of sugar cargoes and the overwhelming need of 
 economizing tonnage compelled such action. To the ap- 
 peals for apportionments which continued to come in the 
 Commission replied curtly that the letters were wasted; 
 and it was only left for the Times to insist that the Gov- 
 ernment had never understood how much jam w^as habitu- 
 ally made at home and to what extent home-made jams 
 were preferred. What the Government actually did as a 
 pis allcr was to train and send out from the Food Produc- 
 tion Department instructors who might teach people to 
 preserve fruit without sugar. Instruction was free and 
 it was hoped that the learners might pass the knowledge 
 on. The Department even made arrangements with the 
 Ministry of Munitions to supply botdes for preserving 
 fruit and vegetables. ^^ 
 
 It was at this time that the Royal Commission took 
 action in line with its policy of early 1916. Willing to 
 limit consumption and impelled by increasing costs, it ad- 
 vanced the price of wholesale sugar on May 30, 1917, by 
 5 s. per cwt. To the consumer this meant a rise of ^ d. 
 a pound, and the price accordingly touched 6 d.^^ The 
 pre-w^ar cost had trebled. 
 
 The last and most difficult phase of the problem of the 
 
 25 L. T., May 28, 1917, p. 3. 
 
 26 M. G., May 31, 1917. 
 
 FOOD 
 
 179 
 
 distribution of food, that relating to equitable apportion- 
 ment of the supply among households, received in the 
 summer of 19 17 the prompt consideration of the new 
 Food Controller, Lord Rhondda. The essence of his 
 solution was local control. Three principles, he declared 
 further, would guide him. Supplies of food must be 
 conserved, they must be shared equally by rich and poor, 
 and prices must be kept down. That the public might 
 know the need for economy, information about supplies 
 would from time to time be published. 
 
 His plan, as applicable to sugar, was announced early 
 in August. Local authorities (the Common Council of 
 the City of London, Metropolitan Borough Councils, 
 Municipal Borough Councils, Urban and Rural District 
 Councils) were instructed each to appoint Food Control 
 Committees of not more than twelve members. Some of 
 the members might be co-opted; one at least must be a 
 woman and one a representative of labour. The ex- 
 penses of the Committees would be a charge upon the 
 Exchequer ; for they would need a special staff, including 
 inspectors to watch out for evasions of the new regula- 
 tions. The penalty for evasion was a heavy fine, with 
 imprisonment and hard labour.^^ 
 
 The rationing scheme which these Food Control Com- 
 mittees were to put into practice and which, it was hoped, 
 would remedy faulty distribution, affected primarily re- 
 tail dealers and householders. No sugar might after 
 October i be sold at retail except by dealers registered 
 
 27 L. T., Aug. 6, 1917, PP- 4, 7. 
 
i8o 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 with the Local Food Control Committee. To all such 
 there would be a reapportionment of supplies before 
 December 30. What allotment each dealer might secure 
 would depend upon the number of households which 
 meanwhile declared themselves his patrons. Each house- 
 hold in a community, accordingly, was required to get 
 from the local food ofhce a sugar registration card, a por- 
 tion of which must be deposited with the retail dealer. 
 Once a week but not oftener the household might obtain 
 its allowance. When record of this had been made on 
 the card deposited with the retailer, the card might, it 
 was suggested, be transferred from one box to another. 
 Weekly allowances would vary, according to the increase 
 or decrease in the nation's store. The customer need 
 not, of course, buy his weekly allowance, though he could 
 not defer taking it until another week. Caterers and 
 others supplying food would have their allowances deter- 
 mined by the number of meals they served and by such 
 other needs as they met. Only with the authority of the 
 Local Food Control Committee could they after Novem- 
 ber 4 get supplies, and these would be apportioned for no 
 longer than four weeks. 
 
 As soon as this scheme was put into operation, however, 
 it was found that changes in the composition of a house- 
 hold and the necessary travel of many persons involved 
 duplication of supplies. Household registration, there- 
 fore, had to give way to individual registration. Reluc- 
 tantly the food ticket made its appearance, although cou- 
 
 FOOD 
 
 181 
 
 pons were attached only for travellers. Travellers might, 
 henceforth, buy their ration from any grocer, but perma- 
 nent residents were to proceed as under household regis- 
 tration. Should a general scheme of compulsory ration- 
 ing become unavoidable, experience would have been got, 
 it was felt, from the sugar cards.^^ 
 
 It thus appears that the Government's control over the 
 refining and distribution of sugar has from the first been 
 more complete than its control elsewhere in the realm of 
 industry except with regard to the railways. At the be- 
 ginning of the war access to the supply of raw sugar was 
 forbidden to private enterprise; prices were promptly 
 fixed and have since been changed at will; taxes have 
 incidentally been collected from all consumers ; finally an 
 imperfect scheme of distribution has been replaced by a 
 more equitable one. The steady shrinkage of available 
 stores has, furthermore, turned this scheme of distribu- 
 tion into a rationing of the population, the first imposition 
 in Great Britain of compulsory economy. 
 
 MEAT 
 
 In certain respects the meat supply of the United King- 
 dom is like the wool supply. There is in each case a 
 considerable home product but one by no means large 
 enough to meet the demand. Ultimate reliance is upon 
 imports, which, as it happens, come largely from the 
 southern hemisphere. During the war, moreover, the 
 
 28 Ibid., Nov. 24, p. 3. 
 
 I 
 
1 82 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 demands of the army for both meat and clothing have 
 encroached upon civiHan suppHes, and any hardship aris- 
 ing from shortage falls eventually upon the civilian con- 
 sumer. 
 
 Differences between the meat trade and the wool trade 
 have also made themselves apparent during the war. 
 Governmental interference in normal traffic became im- 
 perative sooner in the case of meat than in the case of 
 wool ; but, on the other hand, it affected first the imported 
 supply. Not until more than a year after prices had 
 been fixed for the domestic output of wool w^as similar 
 action taken regarding domestic meat. The latter policy, 
 too, met with more opposition than did the former, owing 
 largely to dissastisfaction with the prices set. In meeting 
 its own needs the Government, further, in the case of wool 
 appropriates first the home supply, leaving a part of the 
 imported product for the civilian trade; in the case of 
 meat it uses first the foreign supply, leaving a large part 
 of the home proauct and at times all of it for civilian 
 consumption. 
 
 From the beginning of the war the Government has 
 been concerned to maintain the home production of meat. 
 In order that the large number of cattle in the country 
 might be fed during the winter, it prohibited in September, 
 1914, the exportation of feeding stuffs without licence. 
 The August rise in the price of these foods had led some 
 farmers to sell their cattle and poultry prematurely. As- 
 surance was, therefore, given that the supply of feeding 
 
 FOOD 183 
 
 stuffs in the country was abundant and that, if prices did 
 not remain normal, exportation would be entirely pro- 
 hibited. Since bran was particularly abundant and 
 cheap, farmers were urged to use it more.^^ 
 
 The endeavour to maintain the number of live stock 
 at a high level was successful. Agricultural returns of 
 June, 19 1 6, showed 2 per cent, more cattle and sheep in 
 the United Kingdom than a year before when the num- 
 ber was practically unchanged, and in the summer of 
 1917 there were still as many head as before the war.^^ 
 Soon after the latter date, however, farmers, for reasons 
 to be explained later, threatened to kill off their stock. 
 
 By the spring of 191 5 the Government had turned its 
 attention to the supply of imported meat and for more 
 than two years this was its chief concern. About 40 per 
 cent, of the meat consumed in the United Kingdom is, in 
 normal times, imported. This it was that could most 
 readily be diverted to the needs of the army, and such w^as 
 the policy at once adopted. Military needs proved to 
 be very great. Not only did the men of the British 
 army eat more meat than they did in times of peace and 
 army cooks prove more wasteful than housewives, but 
 the French, and eventually the Italian, Government de- 
 cided to add meat to the soldier's ration. It was a 
 departure from the usage of both countries, bringing 
 
 2» B. T. J., Sept. 10, 1914, p. 674 ; Sept. 17, p. 748. 
 30 L. E., Feb. 17, 1917, p. 302; P. D. L., Aug. 2, 1917 (L. T., Aug. 
 3, p. 8). 
 
1 84 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 them as competitors into the world market. The Brit- 
 ish Government saw that it would soon be forced to buy 
 in markets where demand might readily outrun supply 
 and where an alarming advance in prices might take 
 place. Luckily, imported meat came from Australasia, 
 and the co-operation of the Colonial Governments could 
 be relied upon. Without hesitation these Governments 
 took control of all beef and mutton exported, allowing 
 producers a profit of lo per cent. At a price, equivalent 
 to the cost of production increased by this percentage of 
 profit, the home Government took over these supplies.^^ 
 Unfortunately, however, the drought of 19 15 gready 
 curtailed the Australasian output and it became necessary 
 to rely upon the product of South America. 
 
 The importation of meat from the River Plate is in 
 the hands of seven firms. Two of them are British, one 
 is native, and the others are commonly believed to be 
 owned or controlled by large meat packers in the United 
 States.^2 With these firms the Board of Trade began 
 to treat, but found their prices excessive. The shipping 
 companies, too, demanded very high freights, practically 
 2j^ d. a pound from the Argentine. To curb such de- 
 mands, the Government had one effective rein. The 
 ships which carried South American meat were British- 
 owned. To put itself in control of the situation the 
 Ministry, accordingly, in April, 191 5, requisitioned all 
 insulated spaces in British steamships trading with Ar- 
 
 31 P. D. C, 1915, LXXIV, 493. Mr. Runciman's speech on Sept. 22. 
 
 32 Cd. 8358. First Interim Report on the Increase in the Prices 
 of Commodities. Meat, Milk, and Bacon. Sept. 29, 1916. 
 
 FOOD 
 
 185 
 
 gentina and Uruguay, having already taken similar ac- 
 tion regarding vessels trading with Australasia.^^ The 
 measure affected space for 450,000 tons of meat from the 
 River Plate and for a still greater amount from Austral- 
 
 34 
 
 asia. 
 
 Straightway shipowners and the " meat trust " ac- 
 cepted new terms. Freight rates were cut from 2^ d. 
 a pound to ^ d. ; the price of beef became nearly 2 d. a 
 pound less than the price asked by the beef companies.^^ 
 Under its earlier contracts with the companies, the Gov- 
 ernment had paid the price ruling in the market during 
 the week after the landing of the meat. By its new con- 
 tract for the period from May i, 191 5, to June 30, 19 16, 
 the price agreed upon was only a little higher than the 
 average of the prices previously paid and was actually 
 lower than the price of the moment. The quantity con- 
 tracted for, too, was double that of the earlier agree- 
 ments. This arose from the fact that the Allies had 
 decided to make their purchases as a unit and the British 
 Government had been designated to act for them all.^^ 
 The actual negotiations were put into the hands of busi- 
 ness men, questions of price being referred in particular 
 to Sir Thomas Robinson, Agent-General for Queens- 
 land.37 
 
 33 Cf. above p. 147. 
 
 3* P. D. C, 1916, LXXXVI, 499. 
 
 35 Ibid., 1915, LXXIV, 493. 
 
 36 Cd. 8358. 
 
 37 p. D. C, 1916, LXXXVI, 498. Mr. Runciman's speech of Oct. 
 17. 
 
1 86 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 By this transaction the Government secured its sup- 
 pHes at a reasonable cost and, so far as there remained a 
 surplus to put on the market, it was in a position to ex- 
 ercise a steadying influence upon prices in the civilian 
 trade. For its own expenses in getting beef and mutton 
 from Australasia it charged only i^/^ d. or i^ d. per 
 tb.^^ Instead of allowing the surplus of imports to fall 
 into the hands of speculators, it appointed a committee 
 of three business men familiar with the trade to un- 
 dertake distribution through retail channels. Avoiding 
 sales to middlemen, the committee sold the surplus di- 
 rectly to distributors, who, in turn, were restricted as to 
 what they might add to the price. ^^ 
 
 On the expiration of the fourteen months' contract, 
 another was entered into, providing for a purchase still 
 larger than the former one, and at prices 7 per cent, 
 higher than had been paid. This contract will run 
 until three months after the war, subject to three months' 
 notice on either side. Save for a certain amount of 
 meat imported by the companies on private account, it 
 embraces the entire production from the flocks and herds 
 of Argentina and Uruguay. Experts consider that on 
 the whole the Government buying has been economical.*^ 
 So far as public access to the imported supply is con- 
 cerned, the President of the Board of Trade declared 
 in October, 1916, that no evidence of any exploitation 
 
 38 L. T., Je. 25, 1917, p. 7; Je. 26, p. 7. 
 89 p. D. C, 1916, LXXXVI, 498. 
 *o Cd. 8358. 
 
 FOOD 187 
 
 whatever had come before the Board's investigating* 
 committee.*^ 
 
 However efficiently the Government may have bought, 
 it could not in the end escape the problems created by 
 the rising prices of meat. On August 8, 19 14, prices of 
 meat in England had advanced 15 per cent, but in Sep- 
 tember they fell back one-third of this amount. Since 
 then their rise was continuous, registering advances upon 
 pre-war prices of 35 per cent, in September, 19 15, 65 
 per cent, in September, 19 16, and about 85 per cent, in 
 September of 1917.*^ 
 
 Behind the steady advance lay certain explicable 
 causes. In spite of the restrictions upon the exporta- 
 tion of feeding stuffs, the prices of such stuffs rose, until 
 linseed cake, for example, advanced from £8 5 s. 10 d. to 
 £12 15 s. 9d. in two years. Owing to the shortage of 
 labour, the wages of agricultural labourers had to be in- 
 creased. Above all, perhaps, civilian demands upon the 
 home supply became more insistent than ever before. 
 This was indirectly due to the large consumption of the 
 Allied armies. One expert calculated that, whereas im- 
 ported meat formerly constituted 40 per cent, of the 
 amount consumed in the United Kingdom, after two 
 years of war the demands of the army had reduced the 
 percentage to 20 per cent.''^ By the summer of 19 17 
 this figure had fallen to 10 per cent.** The home sup- 
 
 *i P. D. C, 1916, LXXXVI, 499. 
 
 *2Cd. 8358. L. T., Oct. 17, 1916, p. 4. 
 
 *3 Cd. 8358. 
 
 ** L. T., Sept. 7, 1917, p. 8. Lord Rhondda's statement. 
 
1 88 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ply more and more had to suffice for civilian needs. 
 Since it did not increase in amount, only economy in con- 
 sumption could meet the situation. 
 
 Some economy seems to have been attained by the 
 autumn of 191 6, possibly to the extent of one-sixth of 
 the meat formerly consumed."*^ Rising prices probably 
 lay behind this, but in April, 191 7, the Food Controller 
 decided to try the efficacy of another device. The ob- 
 servance of a meatless day was ordered."*^ After a few 
 weeks, however, it became clear that such economizing 
 of meat resulted only in a greater consumption of bread. 
 Inasmuch as there was at the time a relatively greater 
 supply of meat in the country than of cereals, the meat- 
 less day was discontinued, and consumption w^as left free 
 from direct regulation."*^ Consumption, however, w^as 
 indirectly dependent upon prices, and these at length re- 
 ceived further official attention. 
 
 The rise in prices, as it happened, had been somewhat 
 less for home-grown meat than for the imported prod- 
 uct. From July, 1914, to Septeml)er, 1916, British beef 
 advanced in price 60 per cent, (ribs) and 80 per cent, 
 (thin flank), chilled or frozen beef 80 per cent, (ribs) 
 and 97 per cent, (thin flank) ; British mutton advanced 
 55 per cent, (legs) and 80 per cent, (breast), frozen 
 mutton 84 per cent, (legs) and 117 per cent. ( breast ).^^ 
 
 *5 Cd. 8358. 
 *«L. T., Apr. 3, 191 7. 
 *7 M. G., May i, 191 7. 
 " Cd. 8358. 
 
 I 
 
 FOOD 
 
 189 
 
 Despite the smaller increase in the price of the home 
 product, the profits of home producers and dealers were 
 substantial and by 19 17 popular criticism began to be 
 directed against them.*^ Impelled by this criticism, the 
 Government first restricted the profits of wholesalers. 
 After May 31 they were forbidden to take a profit of 
 more than 3 d. on the stone of 8 Ibs.*^^ A little later a 
 new official interest developed and price fixing in the 
 domestic meat trade began. 
 
 The new interest arose from the fact that at the end 
 of the summer of 19 17 the Government for the first 
 time foimd itself compelled to feed a portion of the army 
 and navy on home-grown meat. For this purpose, it 
 appeared, there would, in September, be need of 150,000 
 cattle from Great Britain and 100,000 from Ireland.^^ 
 That such demands might not disorganize the trade and 
 dislocate prices, it was decided that domestic beef as 
 well as imported meat should come under state control. 
 In July the Food Controller announced that from Sep- 
 tember I certain maximum prices would be paid for live 
 cattle bought for the use of the army and that these 
 maxima would soon be applied to the entire home supply. 
 The scale was graduated. In September the price was 
 to be 74 s. per cwt, in October J2 s., in November and 
 December 67 s., in and after January, 1918, 60s. Such 
 cautious reduction was proposed in order that the farmer 
 
 *»L. E., Feb. 17, 1917, p. 302; L. T., Je. 26, 1917, p. 7. 
 
 50 L. T., Je. I, 1917. 
 
 51 L. T., Jy. 23, 1917, p. 3. 
 
190 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 might adjust himself with as Httle loss as possible to the 
 new conditions. ^^ 
 
 Although the September price was below market quo- 
 tations, it was felt that this and the other autumn prices 
 were tolerable. The January figure, however, was 
 criticized, as discouraging to farmers and likely to in- 
 duce them to sell their stock prematurely. In the Lords, 
 the Earl of Kimberley said that the farming community 
 were dumbfounded by the new prices, especially by that 
 for January and later months. Some farmers had al- 
 ready ploughed up their young turnips, put in for fodder, 
 and had sown wheat instead. Farmers did not mind a 
 small loss, but one of £7 or £8 on a bullock after January 
 I was too much. To this the Food Controller, Lord 
 Rhondda, answered that 60s., the price for 1918, was 
 63 per cent, above the price of January, 19 14. Wages 
 of agricultural labourers had increased by about 50 per 
 cent., the cost of roots and feeding stuffs had not gone 
 up more, the payment for wool, now under Government 
 control, was only 50 per cent, above pre-war quotations, 
 rents had not increased, and prices in general were only 63 
 per cent, above those of 1914. The farmer should 
 therefore be content.^^ 
 
 To make the farmer more content, Mr. Prothero, the 
 President of the Board of Agriculture, explained the 
 new regulations to a Scottish agricultural society which 
 was voicing its disapproval. He recognized the preva- 
 
 52 Ibid., Jy. 21, p. 6. 
 ^ Ibid., Aug. 3, p. 8. 
 
 FOOD 
 
 191 
 
 ), 
 
 tf 
 
 lent dissatisfaction of the farmers with the maximum 
 prices and admitted that he would have liked to see them 
 higher. Indeed, as Lord Rhondda had stated in the 
 Lords, the Board's proposed prices were higher than 
 those which the Food Controller himself had adopted. 
 Mr. Prothero reminded the farmers, however, that the 
 community at large was restive under the high price of 
 meat and that agriculture was likely to suffer " in that 
 they were setting up a bitter and indiscriminating cur- 
 rent of public opinion " against themselves. It would 
 be best to think twice before they showed such resent- 
 ment as to make no further effort. 
 
 As for the seemingly premature sale of cattle, he con- 
 tinued, that was what the Government now desired. 
 Cattle for the army should be like those got from the 
 Argentine, not yet brought "to the degree of finish 
 which in the past has reflected such credit on British 
 graziers and has supplied our public with the finest meat 
 in the world. Prime beef is no longer economical for 
 the country at large. The last stages of fattening are 
 the most expensive in food." In other words, more 
 feeding stuff is consumed to create an additional pound 
 of beef in the later than in the earlier stages of feeding. 
 So reduced had shipping tonnage been by the submarine 
 that little of it could be spared for cattle food. It would 
 be the business of the Department of Agriculture to see 
 that the reduction in stock was not carried to the danger 
 point and to protect, as the most valuable element in 
 future reconstruction, the pedigree flocks and herds.^* 
 
 54 Ibid., Aug. 7, p. 3. 
 
192 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 The recommendation that cattle and sheep should be 
 slaughtered in a much less fat condition than had been 
 customary was further developed in a little book by 
 Professor T. B. Wood, head of the Cambridge School 
 of Agriculture. In this way would feeding stuffs, he 
 argued, best be economized, demand and supply best be 
 equalized.'^^ 
 
 Despite explanations, protests became louder. On 
 September 6 the Central and Associated Chambers of 
 Agriculture declared that, though the country had an 
 excellent President of the Board of Agriculture, the 
 Government did not give him the consideration deserved. 
 They pointed out that in every town whence reports had 
 come, animals were already being put on the market 
 weighing three hundredweight less than usual, and they 
 passed a resolution that the price fixed for home beef 
 ought to be 70s. from October i to January i, 1918.^^ 
 On September 17 four hundred representative butchers 
 expressed serious apprehension for the meat supply of 
 the coming winter and spring. One dealer from Man- 
 chester reported that, whereas he ordinarily got twenty- 
 five lambs a week, he had not been able of late to get 
 more than two.^^ Finally, Mr. Prothero in a speech at 
 Darlington on October 5 professed his conviction that 
 at current prices arable farmers who might stall, feed, or 
 fatten cattle for winter markets would make small profits, 
 
 ^5 The National Food Supply in Peace and War. Camb. Univ. 
 Press. Cf. L. T., Aug. 7, 191 7, p. 3. 
 5« L. T., Sept. 7, 1917, p. 8. 
 57 Ibid., Sept. 18, p. 6. 
 
 FOOD 
 
 193 
 
 if they made any at all. There was, he said, no longer 
 any point in debating the wisdom of three-fourths fat- 
 tening; supplies sufficient for anything else could not be 
 had. Whereas the live stock of the country usually 
 consumed over eleven million tons of feeding stuffs, this 
 year there would be available only about six million tons, 
 and the greater part of this would have to be devoted to 
 dairy cattle. In many parts of the country preparations 
 for winter feeding were suspended, neither cake nor 
 stores being purchased. ^^ 
 
 In view of the almost universal disapproval of his 
 prices. Lord Rhondda yielded somewhat. On October 
 9 he announced that the War Cabinet had responded to 
 the appeal of the farmers. The November and Decem- 
 ber prices of 67 s. per live cwt., instead of being reduced 
 to 60s. on January i, 1918, would be continued until 
 July I. After that the 60s. maximum would become 
 operative.^^ 
 
 While the farmers were thus voicing their protests, 
 the Government on August 29 adapted its schedule of 
 prices for army beef to beef for civilian consumption and 
 added regulations affecting retail prices. The new 
 schedule maxima were for dead weight rather than live 
 weight, but were otherwise like those already announced. 
 Retail prices were to conform to them. No retailer 
 might sell beef at prices higher than those which he had 
 paid by more than 2^^ d. per lb. or by more than 20 per 
 
 58 Ibid., Oct. 6, p. 8. 
 69 Ibid., Oct. 10, p. 7. 
 
 
 
194 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 cent, on his fortnight's purchase, whichever increase 
 might be the smaller. All expenses, as well as profits, 
 were included in this permitted increase. Inasmuch as 
 local conditions of purchase would differ, the Local Food 
 Control Committees were empowered to fix schedules of 
 maximum retail prices for the various points in their 
 respective localities. If any butcher, relying upon a 
 large turnover, was already content with a smaller mar- 
 gin of profit than the one announced, the Local Food 
 Committee should fix prices on this basis. The prices 
 fixed butchers must keep posted in their shops.^*^ For 
 another reason retail prices in different localities might 
 differ. If, for instance, a West End butcher in London 
 were to sell his choice cuts at a high price, he would have 
 to sell the other parts of the carcass at a low rate to 
 keep within the average price prescribed by the order. 
 In working class districts where the demand is for 
 cheaper cuts, the better ones could be sold at a relatively 
 moderate price.^^ It was estimated that the average re- 
 tail price for home-killed beef and mutton would work 
 out at about i s. 3>^ d. per Ib.,^^ and during the month 
 of September prices for domestic beef and mutton did 
 decline by ij4 d. and 2(1. respectively.*^^ Retailers and 
 consumers expressed satisfaction with the Government's 
 new measure. 
 
 <50 Ibid., Sept. 3, p. 8; Oct. 22, p. 3. 
 
 61 Ibid., Sept. I, p. 7. 
 
 62 Ibid., Aug. 31, p. 8. 
 es Ibid., Oct. 16, p. 3- 
 
 FOOD 
 
 195 
 
 ) 
 
 ) 
 
 The situation, however, from the national point of 
 view remained serious enough, as Mr. Prothero pointed 
 out. If account were taken of all two-year old cattle 
 available on September 4 and allowance made for their 
 reduced weight and for the usual number of cows added 
 to them from the dairy herds, the 45,000,000 lbs. of beef 
 normally consumed to the time when cattle again begin 
 to come off the summer grass could, indeed, be supplied. 
 But in May or June of 19 18 beef and mutton were likely 
 to run short. This contingency could be avoided by 
 the slaughter of an increased number of cows, heifers, 
 or veal calves — a dangerous proceeding; it could be 
 forestalled by the importation of more beef, a resource 
 which did not lie in English hands ; it could be obviated, 
 finally, by a reduction in consumption, the only remedy 
 which was safe and within control.^^ The last word 
 here, as with other kinds of food and as with coal, wool, 
 and leather, was an appeal to the customer. Mainly by 
 his economy could the crisis be met and the situation 
 saved. 
 
 At the same time that the Government exerted its 
 control over the domestic nreat supply by fixing maxi- 
 mum prices for beef, mutton, and pork, it turned also to 
 the imported supply of bacon, ham, lard, and butter. 
 Prices of these commodities were less amenable to con- 
 trol. The best that the Government could do w^as to 
 repeat its exploits relative to sugar and wheat. It could 
 
 6* Ibid., Oct. 6, p. 8. 
 
 1 
 
196 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 itself enter the market as purchaser and could so distrib- 
 ute the imported product that the public would pay no 
 undue middleman's profit. 
 
 The situation regarding bacon was in the early au- 
 tumn of 19 1 7 acute, and it seemed impossible by any 
 device to avoid temporary shortage. Supplies from 
 Sweden and Holland had been almost cut off, while those 
 from Denmark had been materially curtailed. In North 
 America, which would now have to be largely relied upon, 
 the number of hogs had been reduced, and the home de- 
 mand for them had increased owing to army needs.^^ 
 To facilitate purchases of bacon, ham, and lard there, 
 the Ministry of Food from Septeml>er 3 began to buy 
 through a single agency. At home a Meats and Fats 
 Executive, modelled on the lines of the Royal Wheat 
 Commission, was created to buy bacon, ham, lard, but- 
 ter, and cheese for Great Britain, France, and Italy. At 
 once it secured several thousand tons of bacon and soon 
 it had a mission under w^ay to set up in New York its, 
 permanently organized executive.^^ 
 
 The supplies once secured, the Government prepared 
 to distribute them through the ordinary channels, allow- 
 ing suitable profits as commission. Since March, the 
 prices of bacon, ham, lard, and butter had been deter- 
 mined by importers', manufacturers', and curers' prices, 
 set every fortnight. The Government now proposed, as 
 from August 30, to fix maximum importers' prices, 
 
 «5L. T., Oct. 2, 1917, p. 3. 
 «eibid., Sept. 27, p. 3. 
 
 FOOD 
 
 197 
 
 \ 
 
 , 
 
 \ 
 
 I 
 
 i 
 
 prices which would necessarily vary as foreign market 
 conditions changed. Wholesalers and retailers, too, 
 were called in to advise about the determination of whole- 
 sale and retail prices. In short, the regulation already 
 formulated for the prices of domestic meat was, so far as 
 possible, to be extended to imported meat products. 
 
 By the end of 19 17, therefore, the state's control of 
 the meat trade was as complete as it well could be. Be- 
 ginning in 191 5 with the purchase of imported meat for 
 the army, the Government, by requisitioning all insu- 
 lated shipping space, assumed control of most of the 
 beef and mutton imported into the United Kingdom. 
 When in 191 7 domestic beef was also needed for the 
 army, the Government indicated the prices which it 
 would pay. Owing to the complaints of consumers 
 about the high cost of meat, it extended these prices to 
 domestic meat produced for civilian needs, and restricted 
 carefully the profits of wholesalers and retailers. 
 Lastly, to protect the consumer still further, it created 
 an agency for the purchase of bacon, ham, and lard in 
 New York, and took measures that no middleman or re- 
 tailer at home should make more than commission profits 
 on these imports. The risk run by fixing prices for 
 domestic meat was the possible falling off of production ; 
 of this danger the Government at the end of 191 7 was 
 sensible, and on account of it gave to the prices set for 
 beef, mutton, and pork most careful consideration. Its 
 next step promised to be an attempt to conserve the meat 
 supply by restricting consumption. 
 
198 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 BREAD 
 
 Since the price of bread depends upon the cost of 
 flour and the price of flour upon the cost of wheat, the 
 three commodities may be treated as one subject. In- 
 creases in the price of wheat will be accurately reflected 
 in the prices charged for flour unless there is profiteering 
 on the part of the millers; increases in the price of 
 flour will be accurately reflected in the prices charged for 
 bread unless there is profiteering on the part of the bak- 
 ers. If, on the other hand, the prices of bread advance 
 less rapidly than do those of flour and the prices of flour 
 less rapidly than do those of wheat, the explanation is 
 that stores of wheat and flour have been bought by con- 
 tract on relatively favourable terms and have been sold 
 at prices based on those terms. This has happened in 
 England during the war. By October, 19 16, it came to 
 pass that the price of wheat had advanced since July, 
 1914, by 130 per cent., the price of flour by 100 per cent., 
 while the price of bread had advanced by only 65 per 
 cent.^^ There would seem to have been no profiteering 
 here; and it crept in only if supplies, bought at relatively 
 low prices, were sold at a high profit, yet one which, even 
 so, was less than the ruling market price would have 
 warranted. 
 
 Great Britain imports roughly four-fifths of the 
 
 ®^ Cd. 8483. Second and Third Reports of the Committee of the 
 Board of Trade to Investigate the Principal Causes which have led 
 to the Increase of the Prices of Commodities since the Beginning 
 of the War. Nov. 15, Dec. 30, 1916. 
 
 FOOD 
 
 199 
 
 wheat and flour which her people consume. At the out- 
 break of the war the exportation of these commodities 
 was, therefore, prohibited. Since it was known that 
 the supply of them in the country was low, an excited de- 
 mand none the less arose and quickly had its inevitable 
 effect on prices. When, however, the Board of Trade 
 called together men who could influence retail prices of 
 foodstuffs, lending its own sanction to their action, prices 
 were in turn steadied.^^ Moving in this manner, the 
 spot price of standard wheat (No. i Manitoba) rose and 
 fell in London. From January to July, 19 H, it had 
 averaged 37 s. per quarter (8 bushels or 496 pounds) ; 
 but early in September it advanced to 50 s., only to fall 
 back by mid-October to 44 s. 
 
 From October, however, there began a rise in the 
 price of wheat, which was not counteracted until the fol- 
 lowing May. During the intervening period wheat sold 
 at 73 s. 6d. the quarter, an advance of 100 per cent, 
 over the average price of the first half of 1914.^^ Al- 
 ready in February, 1915, complaint was loud and called 
 forth a debate in Parliament. Mr. Asquith there ad- 
 mitted that the price of wheat had increased relatively 
 more than that of any other necessity of life except sugar. 
 If comparison were made with the prices of a year be- 
 fore, i. e., those of February, 1914, wheat would be found 
 to have risen 72 per cent, flour 75 per cent., sugar 72 per 
 cent., British meat 6 per cent., foreign meat 12 per cent., 
 
 68 Cf ., above p. 168. 
 6«» Cd. 8483. 
 
200 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 coal 15 per cent. In the case of wheat the change was 
 due to increased demand and deficient supply. To this 
 many factors had contributed. Men in the new armies 
 ate more than they had eaten in civil life; Italy, Hol- 
 land, and France had bought abnormally; the Australian 
 crop was poor, Australia even becoming an importing 
 country; parts of France and Belgium had been devas- 
 tated; the Government of India had put a temporary 
 embargo upon the exportation of wheat; bad weather 
 conditions had delayed the arrival of the crop from Ar- 
 gentina; above all, the closing of the Dardanelles had cut 
 off the Russian crop so that some 10,000,000 quarters of 
 wheat were lying in Russian ports. Difficulties of trans- 
 portation and the rise of freights, the Premier thought, 
 were only subsidiary causes."^^ As to the charge that 
 supplies had been withheld from consumption, the Board 
 of Agriculture and Fisheries declared that periodical re- 
 turns collected since the outbreak of the war showed 
 nothing of the kind. In January stocks were almost ex- 
 actly the same as a month before, and English wheat had 
 been freely offered until the bad weather of December 
 hindered threshing J ^ 
 
 Before the high prices of the spring of 19 15 began to 
 recede, however, the balance sheet of a large firm of 
 millers in South Wales, the firm of Spillers and Bakers, 
 was published. The figures were sensational. After 
 paying its dividends on preference and ordinary shares 
 
 ^0 p. D. C, 191S, LXIX, 759-765. 
 ^1 B. T. J., Jan. 14, 1915, p. 100. 
 
 FOOD 
 
 201 
 
 (preferred and common stock), the company disbursed 
 in extra dividends £80,165, or 17 J^ per cent, on the ordi- 
 nary shares. Yet there still remained from the year's 
 earnings £248,419, a sum which represented a further 
 return of 54 per cent, on the ordinary shares."^ ^ To the 
 public temper, already exasperated by the increasing 
 cost of living, the abnormal profits thus disclosed seemed 
 convincing evidence that profiteering in food was no 
 myth. Mr. Runciman could only admit the existence of 
 these profits while he deplored them. As late as Sep- 
 tember, he reiterated his conviction that the millers as a 
 body had behaved not improperly. Some of them had 
 made a good deal of money owing to forward contracts 
 of the autumn of 19 14, but it was not unlikely that these 
 same men would lose a good deal as a result of the heavy 
 fall of prices which had already taken place when he 
 spoke.^^ Despite the protestations of the President of 
 the Board of Trade, the popular mind long remembered 
 that, while many of the poor were hard pressed to pay 
 for food in the winter and spring of 1915, certain deal- 
 ers in wheat and flour had reaped larger profits than ever 
 before. 
 
 Apart from all questions of profiteering, however, the 
 situation at the end of 191 4 was serious enough from the 
 national point of view. So it appeared to the Cabinet 
 Committee which, from the beginning of the war, had 
 given close attention to the nation's store of wheat. 
 
 72 L. T., May 3, 1915, p. I4- 
 
 "P. D. C, 1915, LXXIV, 488; LXXII, 420. 
 
k 
 
 202 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 203 
 
 Now that there was still risk of an interruption of traffic 
 across the Atlantic, the surplus could not be allowed to 
 fall to a two- or three-weeks' supply. The Government, 
 therefore, decided to purchase a national reserve. From 
 November, 19 14, until the following February, secretly 
 and through the agency of a single firm, a new Grain 
 Supplies Committee bought extensively in the United 
 States and Argentina. All told, it purchased some 
 3,000,000 quarters of wheat and large quantities of flour. 
 This method of acquisition, which involved bidding 
 against home importers, later called forth criticism; but 
 in defence it was urged that such large purchases were 
 at best bound to stimulate prices, that the Government 
 had acquired nearly all its store before its buying was 
 realized, and that events at length fully justified the 
 wisdom and the extent of the enterprise.*^^ Throughout 
 the spring of 19 15 the nation at least knew that its food 
 supply was not imperilled, while the stores held by the 
 Government could, it was felt, be at any time released to 
 steady prices. This feeling that such release might take 
 place had not a little to do with the easier quotations of 
 the early summer of 19 15. 
 
 What actually did most to relieve the situation at that 
 time, however, was the arrival of part of the abundant 
 Indian wheat crop. The price of this had been regulated 
 by the Government of India, which in March, 19 15, co- 
 operated with the home Government to have the export- 
 able surplus shipped to England. In England, the Gov- 
 
 7* Cd. 8483 ; P. D. C, 1916, LXXXVI, 501. 
 
 v. 
 
 emment turned all the firms engaged in importing Indian 
 wheat — some half-dozen there were — into Govern- 
 ment agents, paying them a commission but allowing 
 them no other profit. In this way 2,500,000 quarters 
 of wheat were acquired and distributed.*^^ 
 
 By the time that the cargoes reached England, the out- 
 look had improved in still other directions. The grow- 
 ing American crop promised well and eventually proved 
 to be an enormous one; there was high hope that the 
 Dardanelles expedition might be successful in opening 
 the Black Sea and liberating its stores. Prices reflected 
 the optimism. From June until November wheat fell 
 back to a range of from 56 s. to 60 s. the quarter ."^^ 
 Complaints about the high cost of living were quieted, 
 and the Government seized the opportunity to provide 
 storage facilities in case another emergency should arise. 
 Since England and Wales had small storage capacity, 
 Lord Selborne devised a scheme and made arrangements 
 with a British trade buyer w- hereby large quantities of 
 wheat might be piled up. So excellent was the organi- 
 zation that henceforth the Government could hold on its 
 own account extensive supplies without inconveniencing a 
 single port or warehouse."^^ 
 
 Not until the early winter of 191 5-16 did the situation 
 again become ominous. Then from December to Feb- 
 ruary the price of wheat once more rose from 58 s. 6 d. 
 
 75 p. D. C, loc. cit. 
 
 76 Cd. 8483. 
 
 77 P. D. C.„ loc. cit., p. 502. 
 
204 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 to j}^ s. The Government perhaps to a sHght degree 
 contributed to this advance by again entering the market 
 as a purchaser. Most of its buying, however, was done 
 after the rise had taken place, and this time at least it 
 did not compete in its purchases with the Allies. At the 
 end of the year it had suggested to the French and Italian 
 Governments that co-operative buying was preferable to 
 competition, and a joint committee had been appointed 
 to sit in London and make the requisite purchases. 
 Henceforth this Committee met daily and its agent acted 
 for the Allied Governments."^^ 
 
 What pretty clearly lay behind the rising prices of 
 wheat and flour at this time was not so much Govern- 
 ment buying as the advance in freight charges. From 
 August, 19 1 5, such charges rose rapidly until the New 
 Year."^^ At once the price of wheat responded and after 
 August was higher in London than it was in New York. 
 In November, 19 15, the Government formed its resolve 
 to requisition shipping space. In due course the Requi- 
 sitioning (Carriage of Foodstuffs) Committee made ar- 
 rangements whereby liners and a considerable number of 
 cargo steamers plying to North America were to offer 
 from 50 per cent, to 75 per cent, of their cargo space for 
 the carriage of wheat and flour. The new freight rates 
 were greatly below the old ones and the price of wheat 
 declined some 35 per cent, until in June, 1916, it stood 
 at 48 s. 6 d. Government requisitioning of shipping had 
 
 78 p. D. C, 1916, LXXXVI, 19. 
 ■^s Cf . above p. 145. 
 
 FOOD 
 
 205 
 
 been as effective in preventing a crisis as had Government 
 purchasing of wheat. 
 
 Unfortunately after July, 1916, a new set of circum- 
 stances became operative. The year's wheat crop in the 
 United States had been overtaken by disease, that of the 
 Argentine was suffering from drought, and the harvests 
 of Canada, India, and the United Kingdom were rela- 
 tively poor, the last having fallen off by more than one 
 and one-half million quarters. Only in Australia was 
 the promise good and Australia was very far away. 
 Again the price of wheat rose until in October it stood 
 at 86 s. per quarter. The four-pound loaf of bread, 
 which before the war sold for about 5% d., by November 
 sold at between 9 d. and 10 d.^^ At the Trade Union 
 Congress of September high prices were regarded as the 
 most pressing of grievances, and a resolution was adopted 
 urging the Government either to fix maximum prices or 
 to assume full control over supplies.^^ 
 
 So serious had the situation become that in October 
 another decisive step in state control was taken. A 
 Royal Commission was appointed *' to inquire into the 
 supply of wheat and flour in the United Kingdom, to 
 purchase, sell, and control the delivery of wheat and 
 flour on behalf of His Majesty's Government, and gen- 
 erally to take such steps as may seem desirable for main- 
 taining the supply." ^^ The intermittent action of a Grain 
 
 80 Cd. 8483. 
 
 81 M. G., Sept. 9, 1916, p. 8. 
 
 82 B. T. J., Oct. 12, 1916, p. 91. 
 
2o6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Supplies Committee, which bought reserves in emergen- 
 cies but left the regular trade in private hands, was to be 
 superseded by the continuous control of a body which 
 would largely if not altogether take charge of the im- 
 portation of wheat. The Royal Sugar Commission was 
 to have its counterpart. 
 
 Anticipating the creation of the Commission, the Gov- 
 ernment made a large purchase. It bought 550,000 tons 
 of Australian wheat, paying therefor £4,000,000. Dur- 
 ing the preceding season the world's competition for 
 tonnage had been greater than its eagerness to buy wheat, 
 and the Commonwealth Government had purchased the 
 whole of the native crop. From such full granaries the 
 home Government might draw, if only it could provide 
 shipping facilities. It was not, to be sure, economical to 
 import grain from Australia, since the ratio of freight 
 charges to the price of wheat was one-third, whereas in 
 the case of North American wheat the ratio was one- 
 fifth. Uneconomical, however, the Government was 
 forced to be, and shipping facilities had to be found. 
 
 For nearly a year the Requisitioning (Carriage of 
 Foodstuffs) Committee had been providing trans-Atlantic 
 tonnage with excellent results. The new Royal Com- 
 mission, accordingly, continued its policy, appropriating 
 for the state much of what had once gone as profits to 
 individual importers. One change it made: variable 
 rates of freight gave way to fixed ones. Thereby state 
 requisitioning of shipping at blue-book rates became a 
 completely accepted policy and the consumer could be as- 
 
 FOOD 
 
 207 
 
 sured that so far as British shippers were concerned, no 
 undue profits in grain intervened between the producer 
 and himself. How much was saved on transportation 
 became apparent from payments made to certain neutral 
 vessels, which to increase the tonnage were also chartered. 
 Mr. Runciman designated these freights as " gigantic," 
 and remarked that, if the Government had had to pay 
 open market rates, the charge would have been 50 per 
 cent, higher than what it was paying.^^ 
 
 To avoid the risk that the Government might not buy 
 wheat as advantageously as private merchants, particular 
 attention was given to the personnel of the Commission. 
 It was not drawn haphazard from the House, but was 
 appointed, as the staff of a great firm is selected, with an 
 eye solely to business efficiency. To it were called not 
 only men familiar with the Argentine and America, but 
 others who deal with more distant regions and still others 
 who know about the distribution of grain at home. In 
 the early days of its existence when its tasks were urgent 
 and burdensome, it sat daily — morning, noon, and 
 night.®* In November the Canadian Bankers' Associa- 
 tion offered to extend to it a six-month's credit of $20,- 
 000,000 for the purchase of Canadian grain.®^ In De- 
 cember it signed on behalf of the Allies a contract for 
 3,000,000 additional tons of Australian wheat. If the 
 
 88 p. D. C, 1916, LXXXVI, 19; LXXXVII, 843; M. G., Oct. n, 
 1916, p. 5. 
 84 Ibid., LXXXVI, 501. 
 «5 M. G., Nov. 28, 1916, p. 4- 
 
208 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 209 
 
 prices paid in the two Australian transactions, 32 s. and 
 38 s. per quarter free on board, are compared with the 
 market price of wheat in London, 86 s. in October, it 
 will be seen how advantageously the Commission was 
 able to buy.^^ To its low contract prices there had to be 
 added only the blue-book freight rates of requisitioned 
 vessels. The chairman of the large milling firm of 
 Spillers and Bakers in July, 191 7, complimented the Com- 
 mission. It had, he said, "dealt with a very difficult 
 task in a manner which could only be impugned by the 
 most carping critic." ^^ 
 
 Certain criticisms relative to the Commission were of- 
 fered in Parliament by Mr. Barnes at the time of its 
 creation. Besides experts, representatives of bakers and 
 of consumers might well have been appointed to it; there 
 should be no doubt about its right to purchase the entire 
 imported wheat supply; particularly it ought to be able 
 to buy home wheat at a fixed price. More than two 
 years before, Mr. Barnes continued, a deputation of trade 
 unionists, co-operators, and others representing labour 
 interests had waited upon the Government and had urged 
 not only the step just taken relative to foreign wheat but 
 the further purchase of the home crop. Even since then 
 food speculators, including the British farmer, had been 
 lining their pockets with the pickings of the poor man's 
 loaf. Inasmuch as labour was now tied up in particular 
 workshops under the Munitions of War Act, why should 
 
 86 L. T., Jy. 17, 191 7, p. 10. 
 
 87 Ibid., Jy. 30, p. 12. 
 
 1 
 
 not the economic principle be extended and the farmer 
 dealt with on similar lines ? ^^ 
 
 The question of the wheat grown by the British farmer 
 was, however, hedged about with difficulties. To restrict 
 the price of it might lead to a decline in the output, and a 
 very serious decline of this sort had already taken place. 
 In 19 1 6 the area under wheat in the United Kingdom had 
 fallen off by 250,000 acres and a further falling off of 
 500,000 acres in 191 7 was predicted. Should this take 
 place, the total decrease in output would be some 2,600,- 
 000 quarters. To import an equivalent amount from 
 Australia would require 100 ships of 5000 tons for four 
 and one-half months.^^ In view of the scarcity of mer- 
 chants ships at the end of 19 16, it is comprehensible that 
 the Government was not then inclined to discourage the 
 British farmer by a limitation of his profits. Before a 
 year had passed, it took measures, as will appear, to stim- 
 ulate him to increased production. 
 
 If the Government was unable at the moment to ac- 
 cede to the labour demand that the price of British wheat 
 be fixed, it did within a month adopt another policy which 
 had found favour in the same quarter. On November 
 15, 1916, Mr. Runciman announced in the Commons that 
 there would be created a Ministry of Food with a Food 
 Controller at its head. Commissions had come into be- 
 ing, he explained, to deal with the sugar supply, the im- 
 ported meat supply, the imported wheat supply, while 
 
 88 P. D. C, 1916, LXXXVI, 436, 437. 
 
 89 Ibid,, 458. 
 
2IO 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 branches of various departments dealt with mercantile 
 transactions. But there was no co-ordinating hand. As 
 the problem expanded, the Government felt more and 
 more that some minister must be free to deal with noth- 
 ing but food problems and to co-ordinate all related ac- 
 tivities of this kind. Drastic powers, too, looking in new 
 directions would be conferred upon the new minister. 
 Bit by bit, added Mr. Runciman, the Government had 
 been driven to such a policy against the will of many of 
 its members, himself included. But the easy flow of 
 voluntary operations could no longer be depended upon.®^ 
 Next day, November i6, the new powers referred to 
 were announced by an Order in Council, and were em- 
 bodied in regulations 2F and 2G under the Defence of 
 the Realm Act. These provide that whenever the Board 
 of Trade are of the opinion that special measures should 
 be taken to maintain the supply of any article important 
 for the food or for the wants of the nation, it may apply 
 any one of the following provisions, generally or locally. 
 Foods of national importance may not be wasted or 
 unnecessarily destroyed ; the uses to which they shall or 
 shall not be put may be defined; the manner of their 
 manufacture may be prescribed; the mode of their sale 
 and distribution throughout the country may be deter- 
 mined; to prevent unreasonable inflation of prices, market 
 operations in them may be regulated; their prices may 
 be fixed, i. e., the amount by which the price of any of 
 them may exceed its corresponding price at a specified 
 
 90 Ibid, LXXXVir, 856, 858, 862. 
 
 FOOD 
 
 2X1 
 
 I 
 
 date; supplies of them may be requisitioned by the Board 
 of Trade; and full information as to existent stocks of 
 them may be required.^^ The bill creating the new min- 
 istry was not introduced and passed until a month later, 
 when Lord Devonport became Food Controller; but in 
 the interim several orders carrying out the new regula- 
 tions were issued by the Board of Trade. Hitherto gov- 
 ernmental interference in the food supply had been lim- 
 ited to the control over sugar and to the purchase of im- 
 ported meat and imported wheat. Now, however, a new 
 period opens and governmental restrictions of a varied 
 kind begin to be imposed. 
 
 Under the new regulations, orders of three general 
 sorts were issued. The first series looks toward economy 
 through the introduction of cheaper constitutents into 
 food, various sorts of war bread being prescribed for all 
 consumers. Orders of another sort urge economy in 
 consumption and the avoidance of waste, being always 
 likely, if poorly observed, to culminate in rationing 
 schemes. Orders of the third sort endeavour to protect 
 the consumer by the fixing of prices and by the preven- 
 tion of speculative operations on the market. For con- 
 venience in following the intricate history of a year of 
 food regulation, each group will be considered separately. 
 
 On November 20, 19 16, the first order under the new 
 regulations was issued, and became operative a week 
 later. It provided that henceforth certain percentages 
 
 91 D. F. M., Regulations 2F and 2G; B. T. J., Nov. 23, 1916, pp. 
 566-568. 
 
212 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 of flour, higher than the customary ones, must be ex- 
 tracted from the various grades of wheat. At the be- 
 ginning of the war Sir Francis Fox had urged that from 
 100 tons of wheat not merely 70 tons of white flour 
 should be milled, but 8>8 tons. The product, too, would, 
 he declared, be more nutritious.^2 According to the new 
 order, English wheat must thenceforth yield a " straight- 
 run," i. e., 76 per cent, instead of 70 per cent, of flour, for 
 which reason this first milling order came to be known to 
 the trade as the " 76 per cent, order." On and after 
 January i, 1917, only flour so milled might be used for 
 making bread or any other article of food, and the Board 
 of Trade warned to this effect those who were said 
 to be accumulating stores of the whiter flour for private 
 consumption.^3 j^-^ ^^^^^ ^^^^ .^^ accord with the 
 
 recommendation of certain members of the committee 
 which was investigating the increased prices of commodi- 
 ties, and which made its report relative to bread, flour, 
 and wheat on November 15.^4 The measure was the 
 first step taken toward the creation of a war bread. 
 
 On January 29, 19 17, a new order made compulsory 
 the extraction of 81 per cent, instead of y6 per cent, from 
 English wheat, or, barring this, the addition to the 76 per 
 cent, of a further 5 per cent, of flour made from barley, 
 rice, maize, semolina, oats, rye, or beans. By an order 
 of February 24, the alternative was withdrawn. From 
 
 »2L. T., Aug. 17, 1914, p. ir. 
 
 »3 B. T. J., Nov. 23, 1916, pp. 570-571. 
 
 »* Cd. 8483. 
 
 ' 
 
 FOOD 213 
 
 the wheat milled, 81 per cent, of flour must be extracted 
 and 5 per cent, of the inferior grain must also be added. 
 A further admixture of 10 per cent, was permitted.^^ 
 Again on April 10 the percentages were raised. To the 
 81 per cent, wheaten flour, 10 per cent, from an inferior 
 grain must be added and 25 per cent, might be.^^ Finally, 
 on May 10 the constituents of war bread were definitely 
 regulated. With the 81 per cent, wheaten extraction, 20 
 per cent, of inferior flour must be mixed and 50 per cent, 
 might be.^^ In the same month a Scotchman outdid the 
 Government. In London he produced a bread which 
 contained only 20 per cent, of wheaten flour, the re- 
 mainder being a mixture of oaten flour and rolled oats. 
 It was said to keep well and to improve with keep- 
 ing.^^ 
 
 To supervise the carrying out of the new regulations 
 the Government at the end of April took over all the flour 
 mills in the United Kingdom and appointed a Mills Con- 
 trol Committee. Particularly was the new Committee to 
 see that millers used whatever inferior grain was most 
 readily procurable in any district. Chinese horse-beans, 
 for example, were at the moment abundant in London, 
 maize more available in the North and West. The 
 millers had been inclined to secure whatever grain was 
 cheapest, regardless of how far they might have to trans- 
 port it. If the Committee should be successful in stop- 
 
 »5 B. T. J., Mar. i, 1917, p. 612. 
 86 Ibid., Apr. 12. 
 »7 L. T., Jy. 30, 1917, p. 13. 
 «8 M. G., May 21, 1917, p. 4. 
 
214 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 ping this practice, it was clear that a part of the burden 
 of the railways would be lifted.®^ 
 
 The new bread was far from being an immediate suc- 
 cess. Although the millers in general observed the order 
 for an 8 1 per cent, extraction and a 20 per cent admix- 
 ture, their mills were unaccustomed to the inferior grains 
 and they found it hard to reduce them to the requisite 
 fineness. They were further not required to label their 
 product so as to show the percentage of admixture. 
 The bakers, in consequence, saw a flour of unknown 
 quality coming into their hands and they quickly pro- 
 nounced this quality most unsatisfactory. Owing to the 
 presence of more coarsely-ground grains, the texture of 
 the bread was close and moisture was unduly retained. 
 In warm weather the loaf consequently became *' ropey " 
 and inedible. At the end of June, the London Master 
 Bakers' Protection Society by resolution requested the 
 Prime Minister to prevent the great waste which was 
 being occasioned through the use of inferior flour. 
 Thirty-three of their number complained of waste during 
 the last fortnight, while two bakers had been compelled to 
 destroy 1500 loaves, not being allowed to feed them to the 
 pigs. The bread at best was too harsh for children and 
 elderly people. To a straight run or to the separate 
 milling of the other cereals there would be no objection. 
 Inasmuch as dilution had varied greatly in different re- 
 gions (from 20 per cent, to 50 per cent.), some standard- 
 izing was most desirable.^ 
 
 »9 B. T. J., Je. 29, 1917, p. 204; L. T., May 5, 1917. 
 1 L. T., Je. 29, 1917, p. 3. 
 
 215 
 
 On July 10, Mr. Anderson speaking for the Ministry 
 of Food defended the w^ar bread. Although many 
 millers had not yet well adapted themselves to making 
 the mixed flour, most of them had. The digestibility of 
 bread in which considerable maize is used had been in- 
 vestigated before the order was issued, and the tendency 
 of bread to become ropey is not directly due to the ad- 
 mixture of inferior flours. " Rope " is caused by germs 
 (bacilli maesenterici) generally present in dirt or dust 
 and usually on the outer husk of wheat. Though almost 
 always found in flour, these germs increase in number 
 through closer milling and by the use of inferior grains. 
 Normally harmless, they may under certain circumstances 
 cause fermentation and make the bread ropey and un- 
 wholesome. The recent prevalence of rope was probably 
 due to the warmth and moisture of exceptional weather. 
 Admixture of inferior grains could not be dispensed 
 with, since only by their use could the supply of flour be 
 maintained while shipping facilities were restricted. 
 Nor was standardization feasible. Different grains are 
 more easily got at different places and should be utilized. 
 During the next few months there would not be much 
 maize, but when the pinch came later it was hoped that 
 there would be an abundant supply from America.^ 
 
 A similar answer was returned to the National Associa- 
 tion of British and Irish millers, who on July 4 petitioned 
 that the flour extracted from wheat be reduced from 81 
 per cent, to 76 per cent. The Association was assured 
 
 2 Ibid., Jy. 10, p. 3. 
 
 I 
 
2l6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 that careful investigations were still in progress as to food 
 values and that relatively small adjustments in milling 
 would obviate many difficulties. The Allies would have 
 ground for complaint if the British Government made 
 concessions which they themselves could not afford It 
 would, nevertheless, happen for a time that wheat would 
 be more extensively used. While the supply of maize 
 was running low, stocks of wheat in the country had been 
 increased, owing to the activity of the Royal Commission, 
 and might safely be drawn upon.^ 
 
 The milling of white flour or even " straight-run " 
 flour was thus definitely forbidden in Great Britain. 
 White flour was no longer to be had, and for those who 
 wished wheaten flour only the imported product remained 
 Complaint arose that the supply of this was passing 
 largely into the hands of the wealthier classes. But Mr. 
 Clynes stated in the Commons that the Food Ministry 
 had not found it so, but that the demand came as well 
 from the mining and industrial districts. What imported 
 flour there was, the Ministry was distributing impartially. 
 The new 9 d. loaf would make it impossible for private 
 holders of such flour to sell at a profit, and, as a matter of 
 fact, stocks of it in private hands were very small.-* By 
 August I the Food Controller announced that precautions 
 had been taken to deal with the improper use of im- 
 ported flour and that the Royal Commission had recently 
 assumed control of all supplies arriving in the country.^ 
 
 8 Ibid, Jy. 19, p. 3. 
 
 * Ibid, Jy. 25. 
 
 « Ibid, Jy. 30, p. 13. 
 
 FOOD 217 
 
 Two weeks later the Premier congratulated the Com- 
 mons on the success of the war-bread measures. Closer 
 milling, he said, had saved 70,000 quarters of wheat 
 weekly, or one-seventh of the total consumption.^ From 
 this time, too, little complaint is heard of the quality of 
 the bread. Either the nation had become accustomed to 
 it or millers and bakers had learned to make it more sat- 
 isfactorily. The Government's action had been vindi- 
 cated. 
 
 Along with governmental orders prescribing the 
 quality of bread which might be eaten, there appeared 
 another series looking toward economies in consumption 
 and toward the elimination of waste. Not only were 
 official orders issued to this end from the close of 1916, 
 but appeals for voluntary action became urgent. The 
 orders were directed toward brewers and proprietors of 
 public eating-places ; the appeals were made to all house- 
 holds in the land. 
 
 Most obvious of all economies was a reduction in the 
 brewing of beer. In 1914, 36,000,000 barrels of this 
 beverage were brewed in the United Kingdom. Since 
 after that time men were continually departing for the 
 front and since little beer was exported to France, the 
 Government early in 1916 restricted the brew for the 
 year to 26,000,000 barrels.^ Again, in January, 1917, 
 when shortage of shipping and of food was imminent, 
 further restriction seemed desirable. It was pointed out 
 
 « Ibid, Aug. 17, p. 8. 
 
 ^ L. E., Feb. 17, 1917, p. 309. 
 
2l8 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 in the Commons that during the first twenty months of 
 the war 1,400,000 tons of shipping had been required to 
 convey materials for brewing and distiUing and that 
 300,000 tons of sugar had been used in brewing.^ Lord 
 Devonport explained that the proposed measure was 
 not one of temperance or social reform but that the issue 
 was " bread " vs. " beer." The amount of beer which 
 might be brewed was, accordingly, reduced by 30 per 
 cent., and for the 36,000,000 barrels of 19 14 were sub- 
 stituted 18,200,000 barrels. The saving from this 30 per 
 cent, reduction, Lord Devonport explained, would be 
 286,000 tons of barley, 36,000 tons of sugar, 16,500 tons 
 of grits, to say nothing of the cost of transport, labour, 
 and fuel. The barley saved would yield 50 per cent, 
 flour, while the farmer would get 40 per cent, instead of 
 25 per cent, of the barley offals.^ By an order of March 
 29 a final reduction to 10,000,000 barrels for the year 
 was enjoined, an amount which was less than 30 per cent, 
 of that brewed annually before the war.^^ 
 
 This last measure sent up the retail price of beer so 
 violently that it now exceeded the pre-war price by 100 
 per cent, or 150 per cent. At a public house in Clapham 
 customers, being asked nearly double the price of the pre- 
 ceding week, refused to pay and walked out without 
 touching the liquor served. ^^ During the summer the 
 consumer's discontent grew and was reported by the Com- 
 
 8 P. D. C, 1916. LXXXVII, 911. 
 »L. T., Jan. 25, iQi?- 
 iP B. T. J.. Apr. 5. 1917, p. 18, 
 11 L. T., Apr. 4, 1917, p. 3- 
 
 219 
 
 
 mittee on Industrial Unrest. Mr. Ben Tillett, secretary 
 of the Dockers' union, wrote to the Premier pointing out 
 the danger of curtailing the workingman's supply of 
 beer and stating that already many men in the union had 
 refused on this account to work overtime or on other than 
 certain days in the week. He advocated the brewing of 
 26,000,000 barrels of beer at a specific gravity lower than 
 the one prevailing. There was plenty of foreign malt 
 and barley in the country, he asserted, that could be 
 utilized for brewing light beers.^^ Thus warned, the 
 Government gave the subject attention and soon took 
 measures to provide more beer of light specific gravity for 
 munitions workers and others engaged in heavy work. 
 Already it had granted an increased allowance of beer for 
 the hot months and now considered the extension of the 
 privilege for three months longer.i^ The two restrictive 
 measures of the spring were thus modified and the con- 
 sumers of beer conciliated. 
 
 A second method of economizing foodstuffs, enforced 
 by the Government, had reference to public meals. Al- 
 though at the beginning of the war the big hotels had 
 cut down their menus,i* it was not until December 5, 
 19 1 6, that uniform and more stringent economies were 
 enjoined. By the Public Meals Orders of that date the 
 Board of Trade prohibited the serving in public eating- 
 places of meals which, between 6 :oo p. m. and 9 130 p. m., 
 
 12 Ibid., Aug. 3, p. 3. 
 
 " Ibid., Aug. 13, p. 3. 
 
 " Ibid., Aug. 19, 1914, p. 9. 
 
220 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 consisted of more than three courses or which at any 
 other hour consisted of more than two courses. Plain 
 cheese was not to count as a course and hors d'oeuvres, 
 dessert, and soup were to count as half courses. ^^ The 
 order was promptly enforced. In the Exeter police- 
 court, for example, the landlord of the New London 
 Hotel soon answered two summonses for having served 
 meals of more than three courses at the dinner hour. 
 The Bench dismissed the first charge on the payment of 
 costs, but for the second imposed a' fine of lo s. and 
 costs. ^^ 
 
 After three or four months' trial the order was found 
 to produce unsatisfactory results. All lighter and 
 " made " dishes tended to vanish, the " art of the cook 
 disappeared." People ordered solid courses and the 
 consumption of meat increased. In April, accordingly, 
 Lord Devonport issued a new Public Meals Order, based 
 on the principle of rationing hotels by bulk and restrict- 
 ing them to a weekly allowance. Houses frequented by 
 the working classes, where the cost of a meal does not 
 exceed is. 3d., were exempt. Other hotels and restau- 
 rants were required to observe one meatless day each 
 week, Tuesday in London, Wednesday elsewhere; they 
 might serve no potatoes except on the meatless day and on 
 Friday; to each customer they might allow daily only 12 
 ounces of meat, 8 ounces of bread, 2 ounces of flour, and 
 1/4 ounces of sugar. By this rationing it was hoped 
 
 " B. T. J., Dec. 7, 1916. 
 "L. T., Jan. 13, 1917, p. 6. 
 
 FOOD 
 
 221 
 
 that the saving in meat, as compared with the consump- 
 tion of November, would be 56 per cent. If comparison 
 were made with the period since November the saving 
 ought to be 65 per cent, in meat, 53 per cent, in bread, 63 
 per cent, in sugar. ^^ 
 
 Apart from the restriction placed upon the use of 
 potatoes, a restriction due to a seasonal shortage of that 
 vegetable, the new features in this scheme were the meat- 
 less day and the food ration. The meatless day had 
 already been adopted on February 27 by several Lon- 
 don clubs. Rationing had been introduced more than 
 two months before, but thus far had been of a purely 
 voluntary character. On February 2 the Food Con- 
 troller had issued his appeal. If every consumer would 
 reduce his consumption of bread by one pound a week and 
 of meat by one-half of a pound, over one million tons of 
 these foods would be saved annually. All heads of 
 households were therefore strongly urged to limit per 
 capita consumption weekly to 4 pounds of bread (equiv- 
 alent to 3 pounds of flour), 2j^ pounds of meat, and ^ 
 pound of sugar. 18 i£ g^^ j^^^,j^ ^^^^ ^^^j^ ^^^ ^^ ^^_ 
 
 forded, more bread might be used. By a further appeal 
 of March 7 the allowance of bread was cut to 3>^ pounds, 
 and in April that of sugar to J^ pound. Since on such 
 a basis the United Kingdom would annually consume 
 some 23 million sacks of flour (of 280 pounds each), 
 whereas its normal consumption was more than 40 mil- 
 
 17 Ibid., Apr. 5. 
 " Ibid., Feb. 3. 
 
222 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 lion sacks, the saving would be above 40 per cent. If 
 allowance were made for the 20 per cent, compulsory 
 admixture, the consumption of wheat would be reduced 
 by more than 50 per cent.^^ 
 
 After three months, however, it became apparent that 
 the Food Controller's rations were not being generally 
 observed. Some industrial centres like Keighley set an 
 excellent example of organized economy, reducing the 
 average weekly consumption per head to 3.07 pounds of 
 flour, 2 pounds of meat, and .71 pound of sugar. North 
 Wales did better than any other region of the United 
 Kingdom. But South Wales stood in contrast and col- 
 liery districts in general proved indifferent. Bread was 
 wasted in school-children's dinner pails, which mothers 
 filled too full, in army canteens, where the soldiers bought 
 bread in addition to their rations, and at the Zoo, where 
 people still fed their favourite animals. Round Chelms- 
 ford agricultural labourers consumed on the average 14 
 pounds a head per week.^^ The National War Savings 
 Committee estimated that in the United Kingdom at large 
 the consumption of bread fell off only 2 per cent, in 
 March and 4 per cent, in April. ^^ 
 
 In view of the comparatively slight initial success of 
 the scheme, new measures were taken to enlist wider co- 
 operation. The King made a personal appeal. By 
 Royal Proclamation of May 2, 19 17, he exhorted all 
 
 19 Ibid., Jy. 30, p. 13. 
 
 20 Ibid., May i, p. 8. 
 
 21 Ibid., Je. 2T. 
 
 FOOD 
 
 223 
 
 men and women to practise the greatest frugality in the 
 use of every species of grain, and he charged all heads of 
 households to reduce the consumption of bread in their 
 respective families by at least one-fourth of the quantity 
 consumed in ordinary times, to abstain from the use of 
 flour in pastry, and, wherever possible, to abandon its use 
 in other articles of food than bread. Horses, he indi- 
 cated, should be fed no oats or other grain save under 
 permit, and permits would be given only to maintain in 
 the national interest the breed of horses. ^^ 
 
 The other measure adopted to rouse the public was the 
 entrusting of the campaign for voluntary rationing to 
 a War Savings Committee and to its 1200 local Commit- 
 tees, similarly named. The organization of the latter 
 was flexible and locally adaptable. Economizing schemes 
 of many sorts were devised, the following, for instance, 
 being tried at Swansea. The Market Superintendent 
 was appointed " Intelligence Officer," and was instructed 
 to keep in touch with master millers, food merchants, 
 and fishmongers, publishing on the basis of information 
 thus acquired a daily bulletin which would suggest sub- 
 stitutes for foodstuffs. A central war kitchen and eight 
 or nine ward kitchens were equipped with electrical and 
 gas stoves, all for use free of charge. Cooking lectures 
 and demonstrations were given by chefs of local hotels 
 and by qualified teachers, both afternoons and evenings. 
 To spread broadcast the King's appeal, copies of it were 
 distributed at every cinema show. The pledge cards, 
 22 M. G., May 3, 1917. 
 
224 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 which the Central War Savings Committee was distribut- 
 ing through all its local Committees, were sent to all 
 places of worship and preachers asked hearers at the 
 close of service to sign them.^^ For those who signed 
 here and elsewhere the Government issued gold-coloured 
 buttons bearing the words, " On Voluntary Rations." ^^ 
 In London the Metropolitan Committee issued to London 
 restaurants 10,000 placards on which were printed 
 '' Don't waste bread. If half a slice is enough for you, 
 please cut the whole slice in half ; do not break it. Every 
 one must help to save bread. It is a national duty. Will 
 you help?"^^ In Manchester a campaign for instruc- 
 tion in cooking substitute foods was organized. In the 
 windows of a teaching centre were displayed some forty 
 kinds of cereals, many unfamiliar. The School of Do- 
 mestic Economy furnished teachers. One week the lec- 
 tures and demonstrations were on bread-making, the use 
 of oatmeal, maize puddings, pastry and rice dishes ; next 
 week the preserving of fruits and vegetables was demon- 
 strated. A motor car, fitted up to give open-air demon- 
 strations, could be secured by any local group in the city, 
 which would advertise its coming.^^ Portsmouth sought 
 assistance from the postoffice, the schools, and the 
 distributing trades. The postofifice circulars were dis- 
 tributed to every household, asking occupants to reduce 
 consumption; the teachers in the schools gave lectures; 
 
 23 L. T., May 11, 1917. 
 2* M. G., May 8, 16, 1917. 
 
 25 L. T., May 9, 1917. 
 
 26 M. G., Je. 23, 26, 1917. 
 
 FOOD 
 
 225 
 
 even the bakers, contrary to their interest, induced people 
 to cut down consumption. As a result, this town of 
 230,000 inhabitants reduced its bread consumption to an 
 average of 3 pounds i ounce a head per week, nearly 
 one-seventh less than the official allowance. In view of 
 such an achievement a mass meeting of citizens demanded 
 that, if compulsory bread rationing should be adopted, 
 Portsmouth be exempt.^' 
 
 The possibility of compulsory rationing reacted from 
 the first upon the voluntary scheme. At the time of the 
 inception of the latter Lord Curzon declared it probable 
 that the nation would be driven to compulsory rations 
 and that for his own part he thought they ought to 
 come.^^ When Lord Curzon spoke, however, it was clear 
 that bread cards or other means could not be devised and 
 put into operation until two or three months later. 
 Should the public observe the King's exhortation and re- 
 duce the consumption of bread by at least one-fourth, 
 the need for such devices, people saw, might not arise. 
 That voluntary action should have its reward, a strong 
 movement was soon on foot to exempt from any com- 
 pulsory system which might be adopted such towns as 
 imposed rations of their own will.^* Experiments even 
 in retail rationing were tried. The Pendleton Co-op- 
 erative Society with over 30,000 members provided 
 each member with an order-book in which the principal 
 
 27 L. T., Je. 25, 1917, p. 3. 
 
 28 M. G., May 4, 1917, p. 4. 
 
 29 L. T., May 5, 1917. 
 
22(> 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 articles of food were printed in weekly columns and shop- 
 men were instructed to limit sales where they suspected 
 that food was being bought in excess of a family's im- 
 mediate requirements.^^ It was a premonition of the 
 scheme later adopted for the apportionment of sugar. 
 
 Owing to these various efforts, compulsory rationing 
 was for the time avoided. While the consumption of 
 bread and flour during May was practically the same as 
 during May, 1916, in June there was a reduction of 3>^ 
 per cent, and in July one of 7 per cent, over the figures of 
 a year before. At least such was the first optimistic con- 
 clusion of the Ministry of Food based upon returns from 
 6000 retailers who represented from one-fourth to one- 
 third of the consumers of the United Kingdom. These 
 returns were confirmed by others relating to the delivery 
 of flour from the mills. The reduction, it seems, had 
 been more substantial in large towns than in country dis- 
 tricts, greater in England and Scotland than in Ireland 
 and Wales, greater in Lancashire, Yorkshire, and the 
 North than in the Midlands and the South. There had 
 been, too, a considerable reduction in the use of flour for 
 industrial purposes.^^ 
 
 These gratifying returns, however, were not borne out 
 by later information. In September Lord Rhondda ex- 
 pressed his disappointment at finding how slight had been 
 the fall in the consumption of flour during the last two 
 months. The supply of potatoes was then abundant and 
 
 »o M. G., May 5, iQi?, P- 6. 
 31 L. T., Aug. 21, 1917, p. 8. 
 
 4 
 
 227 
 
 •^ 
 
 I 
 
 i^ 
 
 4 
 
 \ 
 
 considerable substitution had been hoped for. The fact 
 that some persons had saved more than a pound of flour 
 a week showed that in many cases no effort whatever 
 had been made.'^^ \^ ^^g clear, in short, that while the 
 campaign for voluntary economy had had transient and 
 local successes, it had achieved little more. 
 
 Two circumstances now conspired to necessitate a re- 
 newal of effort. In October, as will be explained, the 
 Government put on the market a subsidized 9 d. loaf, 
 thereby reducing the price of bread by one-fourth. Con- 
 sumption, as w^as expected, increased. At the same time 
 it became matter of public information that the world's 
 cereal harvest of the year would be inadequate. The 
 Government had, it is true, by summer purchases acquired 
 a larger reserve of wheat than was on hand a year earlier. 
 Instead of 6,480,000 quarters, there were in the country 
 in August 8,500,000 quarters.33 But official information 
 came from America that the United States and Canada 
 would have 400 million bushels of wheat less than enough 
 for the Allies and neutrals, and that Mr. Hoover had 
 urged Americans to reduce consumption by one pound a 
 week.2* Under the circumstances a diminished con- 
 sumption in England became imperative. 
 
 As earlier in the year, the Food Controller decided to 
 try appeal before resorting to compulsion. Sir Arthur 
 Yapp, who had done admirable work for the Y. M. C. A., 
 
 32 Ibid., Sept. 12, p. 3. 
 
 33 Ibid., Aug. 17, p. 8. 
 3* Ibid., Sept. 12, p. 3. 
 
 ^ 
 
228 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 was prevailed upon to become Director of Food Economy. 
 At once he formulated a plan of campaign. In October 
 an organization should be perfected and conferences held 
 with various bodies whose help it was desired to enlist ; 
 in November a " flood of oratory " was to be let loose 
 over the country and members of Parliament would be 
 asked to address their constituents; in December the 
 kitchen would be invaded and the campaign brought im- 
 mediately into the homes of the people. Throughout the 
 three months, effort would be directed toward the estab- 
 lishment of communal kitchens on a national scale, to- 
 ward the collection of waste materials, toward a mobil- 
 ization of the press.^^ The kitchens would have no 
 charitable aspect, but would endeavour to prepare whole- 
 some meals at moderate prices and to teach people the 
 use of substitutes for bread and meat.^^ The Local Food 
 Control Committees were urged to appoint each a Food 
 Economy Committee of some twelve members representa- 
 tive of all classes in the community.^^ Finally, a League 
 of National Safety was to be desired. At first it might 
 comprise only 10,000, but these first members should by 
 house-to-house visiting bring the membership up to 100,- 
 000 and eventually to 1,000,000.^^ 
 
 The new ration which was to be urged upon the con- 
 sumer was made public in November. The hard and 
 fast lines of Lord Devonport's allowance were replaced, 
 
 35 Ibid., Oct. 10, p. 8. 
 
 36 Ibid,, Sept. 25, p. 5. 
 
 37 Ibid., Oct. 15, p. 3- 
 
 38 Ibid., Oct. 13, p. 3. 
 
 FOOD 
 
 229 
 
 SO far as bread was concerned, by a sliding scale, and 
 this was based upon the severity of the manual work 
 done by the consumer. Men engaged in heavy industrial 
 or agricultural work were allowed 8 lbs. of bread a week, 
 men engaged in ordinary industrial or other work 7 lbs., 
 men unoccupied or engaged in sedentary work 4 lbs. 8 
 oz. ; corresponding groups of women were allowed 8 lbs., 
 4 lbs., and 3 lbs. 8 oz. In the case of other foods which 
 were rationed, there was no differentiation between 
 adults, while no regulations were made touching children. 
 Of cereals other than bread the weekly ration was 12 oz., 
 of meat 2 lbs. (a reduction of Yz lb.), of sugar 8 oz. 
 (unchanged), of butter, margarine, lard, oils, and fats 
 10 oz. The inclusion of the last item was, like the slid- 
 ing scale, an innovation, and was probably due to the 
 shortage in fats which had arisen.^^ 
 
 Behind these varied aspects of voluntary endeavour 
 lay compulsory rationing. It was now much more a pos- 
 sibility than it had been in the summer and Lord Rhondda 
 declared that, if voluntary measures failed, he would have 
 no hesitation in resorting to it. Already in October his 
 department was working out a scientifically graded 
 scheme. Taking into consideration the available sup- 
 plies and the needs of all the Allies, the Ministry of Food 
 was endeavouring to find out what food should be al- 
 lotted to every man, woman, and child in the United King- 
 dom, regard being had to age, occupation, and other con- 
 siderations. Sometimes definite sacrifices might be nec- 
 
 39 Ibid., Nov. 13, p. 6. 
 
230 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 l» 
 
 essary. At the moment, for example, there was great 
 shortage of ham and bacon. Since miners found bacon 
 essential, other people should refrain from eating it as 
 long as the scarcity continued.^^ Such was the rationing 
 scheme which impended in the autumn of 191 7- 
 Whether it should be enforced would depend upon the 
 success of the last energetic appeals to voluntary re- 
 straint. 
 
 While voluntary rationing thus ran its variable course, 
 the Government continued to formulate less comprehen- 
 sive regulations. The Public Meals Order of April pro- 
 duced better immediate results than Lord Devonport had 
 hoped for. Returns from eight large hotels for the week 
 ending April 21 showed six of them using less than 2 
 lbs. of flour per head weekly, one using 2>^ lbs. and the 
 Savoy using 3.39 Ibs."*^ Since the allowance was 3>^ 
 lbs. and the consumption of even all of it would have 
 resulted in a saving of 53 per cent, over the consumption 
 of the preceding November, the order was accomplishing 
 much. Early in May the Government forbade the send- 
 ing of cereal products in parcels to the soldiers at the 
 front. The British soldier's ration, it explained, was the 
 best in the world and there was no present intention of 
 reducing it. Generous gifts of cakes, puddings, and 
 biscuits sent by friends led to undesirable waste.^^ Ger- 
 man prisoners, conversely, were not allowed to buy meat, 
 flour, or sugar, in addition to their allowance or to re- 
 
 40 Ibid., Oct. T3, p. 3. 
 
 41 Ibid., May g, p. 3. 
 
 42 Ibid., May 10. 
 
 FOOD 
 
 231 
 
 ceive any article containing these ingredients.^^ At the 
 same time the Food Controller prohibited except under 
 licence the manufacture of starch from cereals. Sup- 
 plies of starch would henceforth be conserved for collars, 
 shirts being starchless, and the public were asked to dis- 
 pense with starch in table cloths, napkins, and blouses.^^ 
 In May the making of dog biscuits also was forbidden, 
 while the feeding of grain to pheasants and other game 
 had for four months been unlaw ful.^^ 
 
 Cases concerned with the waste of food began to grace 
 the annals of the police courts. At Chester, James Cottle, 
 Limited, restaurant proprietors, were indicted for con- 
 signing to the waste bin two pounds of bread. In de- 
 fence it was urged that the bread consisted of scraps from 
 customers' plates, which could not well be served again. 
 But the sanitary inspector maintained that in the bin 
 were crusts from the ends of loaves, and the magistrate 
 imposed a fine of £5.^*^ Quite as severe was the judg- 
 ment meted out to Louisa Heritage of Bromley. Al- 
 though the Inspector had some weeks before spoken to 
 her about bread and fat found in her dust bin, four pounds 
 of bread in the shape of slices and crusts were again dis- 
 covered there. Interviewed by the Inspector, she declared 
 that she had intended to make a bread pudding of the 
 fragments but had found them mildewed. '* I could not 
 even give it to the poor ducks," she complained. When 
 
 *3M. G., May i, 191 7. 
 
 **L. T., May 11, 1917. 
 
 *5M. G., May i, 1917; L. T., Jan. 12. 
 
 *«M. G., May 24, 1917. 
 
232 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 told that the matter would be reported, she retorted, 
 " Pooh, it is not stolen. It is bread I have paid for and 
 I can do as I please." The Bench, remarking that, while 
 others were doing all they could to save bread, she was 
 wilfully throwing it away, pronounced sentence of two 
 months* imprisonment, or £5 fine."*^ In such ways did 
 the new regulations come home to the recalcitrant, how- 
 ever obscure they might be. 
 
 The two aspects of food regulation thus far described 
 looked toward the economizing of cereals, especially 
 wheat. A third aspect had regard to the protection of 
 the consumer by the establishment of maximum prices. 
 Before November, 19 16, the Government, so far as food- 
 stuffs were concerned, controlled only the price of sugar 
 and influenced only the prices of foreign meat and for- 
 eign wheat. Other imported products and all home 
 products were left to the play of market influences. As 
 Mr. Runciman pointed out in the Commons during his 
 speech of November 15, maximum prices could be easily 
 fixed for such imported foodstuffs as were controlled by 
 the Government. If, however, the commodity was im- 
 ported but not controlled, or if it were a home product, 
 difficulties might arise. In the one case, maximum prices 
 might drive the commodity from British shores; in the 
 other, they might check its production. 
 
 The Government, he went on to say, did not for the 
 time being intend generally to fix maximum prices for 
 foodstuffs not under its control. But there were some 
 
 *7 L. T., May 15, 1917. 
 
 FOOD 
 
 233 
 
 things relative to which it seemed possible to check rising 
 prices yet not endanger the maintenance of the supply. 
 To accomplish this, the method so often employed would 
 be again tried; the cost of production would be ascer- 
 tained and to it would be added a reasonable profit.*^ 
 Commodities, which, he explained, seemed to invite such 
 regulation at once were milk and potatoes. Orders 
 were, accordingly, soon issued prescribing retail prices 
 for both. Since these experiments preceded somewhat 
 any similar action regarding bread, it may be permissible 
 to digress briefly and explain the procedure. 
 
 The case of potatoes was more abnormal than that of 
 milk, since the demand of the army for potatoes was much 
 greater and the potato crop of 19 16 had been very poor. 
 In September, 19 16, Mr. Runciman explained that the 
 Government had had to take possession of enormous 
 quantities not only to feed the army but to distill spirits 
 for the manufacture of explosives.^^ In November he 
 added that it did not help the buying for the army to 
 have it stated in the Commons that a profit of £62 per 
 acre had been made on potatoes in Lincolnshire. At any 
 rate the Government would soon put a stop to undue 
 profits; and the problem was the more urgent since the 
 shortage would most affect Ireland and the poor.^^ 
 
 The first step toward meeting the situation was the 
 order of November 20, requiring a return of stock from 
 any person cultivating more than ten acres of potatoes 
 
 48 P. D. C, 1916, LXXXVII, 859. 
 *^ M. G., Sept. 29, 1916, p. 12. 
 50 P. D. C, loc. cit., p. 854. 
 
234 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 in Great Britain.''^ Next, as a measure of security, po- 
 tatoes needed for seed, a very large percentage of the 
 crop, were withdrawn from the consumer's market and 
 provision was made for their distribution throughout 
 such villages of the United Kingdom as might require 
 them.^^ In the third place, the Government on January 
 9, guaranteed minimum prices for the 19 17 crop. In 
 view of the possibility of an unfavourable season, 115 s. 
 per ton was set as a minimum price for potatoes delivered 
 from September 15, 1917, to January 31, 1918, 120 s. for 
 those delivered in February and March, 130 s. for those 
 delivered during the rest of the season.^^ When Sep- 
 tember, 19 1 7, came, a new order substituted a flat rate 
 for this graduated scale. No grower might after the 
 middle of the month sell potatoes, other than seed pota- 
 toes, for less than 120 s. or for more than 130 s.^^ The 
 fixing of liberal minimum prices had already proved its 
 effectiveness. Farmers had put 100,000 additional acres 
 under potatoes, allotment gardeners had responded, and 
 the 191 7 crop was proving an abundant one.^^ 
 
 On February i, 19 17, the Food Controller had also 
 fixed the retailers' price for potatoes. This was set at 
 ij^ d. the lb., although on the market 2 d. or even 23/2 d. 
 was being charged. At i>^ d. the price per ton was £14, 
 the very sum which retailers at the moment were paying 
 
 51 B. T. J., Nov. 23, 1916, p. 571. 
 
 52 Ibid., Dec. 21, pp. 861, 863. 
 
 53 L. T., Jan. 20, 191 7. 
 5* Ibid., Sept. 14, p. 8. 
 55 Ibid., Oct. 9, p. 9. 
 
 FOOD 
 
 235 
 
 for their stocks. Unless they could buy for £10 10 s. 
 per ton they would be without profit; and at £10 10 s. 
 wholesalers refused to sell, saying that transportation 
 cost them from £3 to £4. The Food Controller had also 
 fixed the price for which growers might sell, but not de- 
 liver, to wholesalers at £8, and had declared that the 
 difference between £8 and £14 was sufficient to cover 
 transportation charges, the profits of wholesalers, and the 
 profits of retailers. Let wholesalers and retailers divide 
 the £6 between them. Adjust the matter the two dis- 
 tributing trades would not and a potato famine impended. 
 On February 19 the Government intervened. The 
 grower was instructed to sell and deliver to the whole- 
 saler potatoes at £9 per ton, the wholesaler to sell them 
 to the retailer at £10 10 s. After March 31 these prices 
 were to change to £10 and £11 10 s. respectively, and the 
 consumer ultimately was to pay the advance by being 
 charged i;^^ d. per Ib.^^ 
 
 It took greengrocers some time to adapt themseWes to 
 the potato orders and from February on charges and 
 judgments against them in the courts were not infre- 
 quent.*'^^ Farmers, too, got into trouble. At Spalding, 
 G. H. Goose, farmer, paid two fines of £50 for selling po- 
 tatoes above the maximum price,^^ and at the end of the 
 season an extremely heavy penalty was inflicted. George 
 Thompson, a Lincolnshire farmer, pleaded guilty to 55 
 summonses. It appeared that he had sold 1320 tons of 
 
 56 Ibid., Feb. 17, 19. 
 
 57 Ibid., Mar. i, p. 9; Mar. 10, p. 3. 
 
 58 M. G., May 16, 1917. 
 
• .^,i(.j!*M>»««»««»*l««>-W»<***'*"^ 
 
 236 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 237 
 
 potatoes at an average of £15 a ton, whereas he should 
 have charged £11 10 s., dehvering them to the retailer. 
 His excess profit since April i had thus been £4620 and 
 another £500 had to be added for earlier transactions. 
 Although the defence urged that Mr. Thompson was a 
 pioneer in potato growing, a self-made man now seventy- 
 four years old, a farmer of some of the finest land in 
 Lincolnshire, that the order made no proper distinctions 
 as to the quality of the produce, and that foreign potatoes 
 brought £40 a ton, the court was firm. A fine of £5500 
 was imposed and the heavy costs of £250 were added. ^^ 
 It was a case to which members of the food administra- 
 tion henceforth pointed with satisfaction when discussing 
 the charge of profiteering. 
 
 The Government had learned that it must intervene at 
 every stage in the process of distribution. Accordingly 
 the Potato Order of September, 191 7, after assuring the 
 grower £6 a ton provided that from October i the profits 
 of wholesale dealers, including overhead charges, must 
 not exceed an average of 7 s. 6 d. a ton except on seed 
 potatoes. From the same date, retailers might not sell 
 at more than i d. a pound if their purchase was made at 
 between 6 s. and 7 s. 6 d. per cwt, or at more than lyi d. 
 if they had paid more than 7 s. 6 d. All dealers other 
 than growers must henceforth be registered if they wished 
 to sell.^^ Thus after a few^ months' experience in price- 
 fixing the Government felt itself able to act with decision; 
 
 «»L. T., Sept. 5, 191 7, p. 5. 
 60 Ibid., Sept. 14, p. 8. 
 
 and the abundant potato crop of 1917, together with the 
 absence of complaint relative to the September order, 
 seemed to indicate that an equitable scale of prices had 
 been established. 
 
 The fixing of the price of milk was prompted by more 
 general motives than was the fixing of the price of po- 
 tatoes. A scanty crop lay immediately behind the potato 
 situation of the end of 19 16, but the slowly rising price 
 of milk was induced by other causes than seasonal short- 
 age. The Committee which reported in September on 
 the high prices of meat, milk, and bacon pointed to the 
 more urgent demand for milk and to the increased cost 
 of production. Manufacturers of margarine, tinned 
 milk, and milk chocolate had added their demands to 
 those of the hospitals, while the high price of cheese re- 
 acted upon the price of milk. Of the heightened costs 
 of production, that of labour was not least, and from 
 sheer lack of milkers many farmers were reducing their 
 herds. 
 
 Whereas the retail price for milk in London before the 
 war had been 4 d. a quart, the Committee continued, it 
 had by September, 19 16, risen to 5 d. in North and East 
 London, to 6 d. in West London. What seemed pretty 
 clear was that the increase had gone largely to the pri- 
 mary producers, not in any considerable degree to the 
 retailers. Even before the war the retailer's margin had 
 been falling, and now dividends were steadily declining. 
 The Express Dairy Company's dividend, for example, 
 had fallen from 8 per cent, in 19 13 to 7 per cent, in 19 14 
 
238 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 and to 5 per cent, in 1915. On the other hand, wholesale 
 distributors had prospered, even allowing for high costs 
 of distribution.^^ 
 
 In Parliament the charge that associations of dairymen 
 were making the profit and manipulating the price was 
 reiterated. The Somerset and Wiltshire Farmers' As- 
 sociation refused to sell its product in Bournemouth at 
 a certain price, but encouraged its members to give the 
 milk to the pigs. Although the Board of Trade had an- 
 nounced that I s. 4 d. per gallon was a sufficient price for 
 milk in London and large towns, the Cheshire Farmers' 
 Association demanded is. 5 d., threatening if this were 
 refused to convert its milk into cheese. The United 
 Dairies Company (Limited), which supplies London with 
 70 per cent, of its milk, was not in the habit of allowing 
 any one of its customers, even should he wish, to sell at 
 a price below that ruling in the district.^^ jy^^ producer, 
 however, had his defenders. No dairyman, said Mr. 
 Prothero, could make a profit of more than J4 d. a quart 
 in producing milk at 4 d. Sir John Spear declared that 
 both feeding stuffs and labour were 50 per cent, dearer 
 than before the war, while milch cows for the dairy cost 
 35 per cent, more.^^ 
 
 In view of all these circumstances the determination 
 of the price of milk became a somewhat hazardous un- 
 dertaking. The order of November 21, 1916, imposed a 
 
 «i Cd. 8358. 
 
 «2 p. D. C, 1916, LXXXVT, 440, 457; M. G., Oct. 20, 1916, p. 4. 
 «3 P. D. C, 1916, LXXXVII, 880, 933. 
 
 FOOD 
 
 239 
 
 double limit. The price might not be greater than that 
 paid on November 15, 19 16, and furthermore might not 
 exceed by more than a specified amount the price in the 
 corresponding month before the war. For retail milk 
 this amount was 2 d. a quart to be added to a pre-war 
 price of 4 d., for wholesale milk from 5>4 d. to 6>^ d. a 
 gallon to be added to a pre-war 12 d. or 13 d.^* A month 
 later the first limitation was removed, and the maximum 
 price of wholesale " accommodation " milk was raised to 
 IS. 8 d. per gal.^^ By March the Food Controller an- 
 nounced that these maximum prices might in time create 
 difficulties for farmers and might lessen production. To 
 prevent the latter contingency the prices for the following 
 winter would, he declared, be fixed early and would make 
 the production of milk profitable in comparison with 
 other farming activities.^^ A Committee appointed by 
 the Food Controller in June recommended that the retail 
 price of milk from June 15 to September 30 be 7 d. the 
 quart, and a Committee of the Board of Agriculture 
 urged the prompt fixing of prices for the winter of 
 1917-18.^^ In July the Council of the British Dairy 
 Farmers' Association sent to the Government its resolu- 
 tion that the price of milk should from August i be raised 
 for both producers and consumers, since at that time pro- 
 duction would be reduced and farmers would be obliged 
 to use high-priced feeding stuffs to maintain the supply. 
 
 6* B. T. J., Nov. 23, 1916, p. 570. 
 
 65 Ibid., Dec. 21, p. 861. 
 
 66 Ibid., Mar. 29, 1917. 
 
 67 L. T., Je. 27, 1917, P- 7. 
 
p^ mi\^ »-^*-^* i» 
 
 240 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Both producers and distributors, the resolution con- 
 tinued, carried on their business with no profit during the 
 last two winters and in many cases with serious loss. 
 From October i a further rise in price for the winter 
 would be necessary to prevent abandonment of the milk 
 trade by many engaged in it. The Government should 
 make announcements at once to prevent dairy herds from 
 being depleted.^^ 
 
 Thus reminded of its promise, the Government early 
 in September issued its scale of prices. For London and 
 other large cities milk would be delivered by retailers at 
 7 d. a quart during October, at 8 d. thereafter until the 
 end of March; within the area of rural district councils 
 in England and Wales and in districts other than burghs 
 in Scotland, the corresponding prices would be 6 d. and 
 7 d. Wholesale prices for the producer were to be 
 IS. 5 d. a gallon during October, i s. jyi d. during 
 November, is. 9 d. thereafter until the end of March. 
 For any other person than the producer, the wholesale 
 prices were i s. 8 d. or, for " accommodation " milk, i s. 
 10 d. a gallon during October, afterward 2 s. or 2 s. 
 2 d.^^ These prices, as had been promised, were liberal 
 for the producer, and the only misgiving to which Lord 
 Rhondda confessed regarding them was that milk would 
 be costly for poor families. For children he hoped 
 to make some arrangement by which it could be had 
 more cheaply.'''^ As in the case of potatoes, govern- 
 
 «8 Ibid., Jy. 14. 
 
 *^ Ibid., Sept. TO, p. lo. 
 
 70 Ibid., Oct. 10, p. 7. 
 
 FOOD 
 
 241 
 
 mental price fixing had been generous to the producer, 
 and any danger of shortage was apparently avoided. 
 
 When Mr. Runciman on November 15, 19 16, told the 
 House of Commons that the Government could probably 
 check the increasing prices of certain commodities not 
 under its control, he had immediate reference only to 
 milk and potatoes. In the case of bread and home-grown 
 wheat there was then no intention of fixing maximum 
 prices.^i Against this resolve and against the dilatory 
 action of the Government, the War Emergency Workers' 
 National Committee soon protested. Pointing out that 
 coal and milk were already high, it went on to demand 
 that the Board of Trade commandeer all stocks of 
 wheat, potatoes, and other necessary produce in the 
 country at prices based upon the actual cost of produc- 
 tion.^2 
 
 The Government, however, adhering to its plan, fixed 
 only the prices of milk and potatoes, the former in No- 
 vember, 1916, the latter in February, 1917. Regarding 
 grains it did nothing until April. Then on the i6th of 
 that month the Food Controller yielded to the long con- 
 tinued popular demand and announced that henceforth 
 the maximum prices of grains harvested in 1916 would 
 be 78 s. per quarter for wheat, 65 s. for barley, 55 s. for 
 oats.^3 Since these prices were considerably below those 
 ruling in the market, farmers, who for one reason or an- 
 other had held back their wheat, suffered a loss of 8 s. or 
 
 Ti P. D. C, 1916, LXXXVII, 860. 
 
 72 M. G., Dec. 2, 1916, p. 8. 
 
 73 B. T. J., Apr. 19, 1917- 
 
.-P-^fflW,™!'*"!!*!^ IWe^ Stc#*»^.fB*^ilf" V- 5Sfei,.-3SKfP--^ 
 
 242 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 10 s. a quarter.'^ In May several maximum retail prices 
 were set. For all forms of maize flour only 3>< d. per 
 lb. might be asked, for oatmeal 4>^ d. in Scotland, 5 d. 
 elsewhere in the United Kingdom. The authorized 
 prices for peas and beans were somewhat under what 
 many retailers had paid for their stores. But grocers 
 had for months reaped the harvest of a rising market 
 and could afford to suffer some loss.*^^ At the end of 
 June all orders of the Food Controller relative to prices 
 were printed in lists which every grocer was asked to 
 post. The commodities affected were barley, beans, 
 cerealine (maize meal), chocolate, hominy, lentils, maize, 
 milk, oatmeal, peas, potatoes, sugar, swedes, sweetmeats, 
 wheat. Meat did not appear on the list, since, although 
 certain restrictions had been placed on middlemen's 
 profits, no retail prices had yet been fixed/^ 
 
 In June, 191 7, Lord Rhondda, a very able business 
 man, succeeded Lord Devonport as Food Controller. 
 New authority was at once bestowed upon him and he 
 acquired many of the powers which the Admiralty, the 
 Army Council, and the Ministry of Munitions had long 
 possessed. He might requisition the whole or a part of 
 the output of any factory, paying therefor a price based 
 on the cost of production plus a reasonable pre-war rate 
 of profit. To determine this price he might examine the 
 factory's books. To a merchant he might pay what the 
 
 7*L T., Aug. 16, 1917, p. 3. 
 "M. G., May 24, 31, 1917. 
 7« Ibid., Je. 28, p. 2. 
 
 FOOD 
 
 243 
 
 merchant paid, plus a pre-war rate of profit, although, if 
 a middleman or speculator had acquired commodities 
 otherwise than in the normal course of his business, the 
 profit might be reduced or refused altogether."^^ 
 
 Soon Lord Rhondda received the War Emergency 
 Workers' National Committee and seemed favourably 
 disposed toward its reiterated demands. These were 
 now comprehensive. After commandeering all ships and 
 controlling all transport facilities, the Government should 
 purchase all essential imported foodstuffs ; it should con- 
 trol all home-grown food products, such as wheat, meat, 
 oats, barley, potatoes, and milk, determining prices for 
 the consumer and apportioning food to families ; it should 
 sell bread during the war and for six months after at a 
 price not exceeding 6 d. per loaf, itself meeting any loss; 
 it should create municipal and other local authorities to 
 exercise food control and should appoint to them repre- 
 sentatives of labour, of co-operative societies, and of 
 women's industrial organizations."^^ 
 
 On June 26, the new Food Director announced that he 
 would control more stricdy the industries engaged in the 
 production of foodstuffs. Later on he summarized his 
 plans as follows : " My policy, broadly speaking, is to 
 fix the price of those articles of prime necessity over the 
 supply of which I can obtain effective control at all stages 
 from the producer down to the retailer. Such prices 
 will, as far as possible, be fixed on the principle of allow- 
 
 ''^Ibid., Je. 30, p. 4. 
 78 Ibid., Je. 23, p. 7. 
 
, WrfaSS'SSIl****'/- '' 
 
 244 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 FOOD 
 
 245 
 
 ing a reasonable profit to those engaged in the production 
 and distribution of the particular commodity. Indeed 
 the policy will in effect be one of determining profits at 
 every stage, though it will take the form of fixing prices. 
 Every effort will be made to prevent speculation and un- 
 necessary middlemen will be eliminated. Existing agen- 
 cies — I make a strong point of this — will be utilized 
 for purposes of distribution under licence and control and 
 under the supervision of local food controllers appointed 
 by the local authorities." '^^ 
 
 In the execution of such a policy the first step was to 
 determine the cost of production and handling. A cost- 
 ings department was accordingly set up in the Ministry 
 of Food and acquired full power to examine books and 
 other sources of information. By August arrangements 
 had been completed. Leading firms of accountants, 
 twelve for England, three for Scotland, and three for 
 Ireland, were invited by the Food Controller to act in an 
 honorary capacity as supervising accountants for their 
 districts. All were placed under the immediate super- 
 vision of Mr. W. H. Peat, Financial Secretary of the 
 Ministry of Food. Prices were worked out with refer- 
 ence to costs and normal pre-war rates of profit.^^ It 
 was the method by which the Army Contracts Depart- 
 ment had been purchasing essential supplies, like woollens 
 and boots, at prices below those ruling in the market. 
 
 79 L. T., Sept. 12, 1917, p. 3. 
 
 80 Ibid., Je. 27, p. 7; Aug. 15, p. 3. 
 
 Soon this activity began to bear fruit. How maximum 
 prices were fixed or revised for potatoes, for meat, and 
 for milk has been described. It remains to consider the 
 fortunes of wheat, flour, and bread. 
 
 In the Commons on July 25, Mr. Clynes, the Assistant 
 Food Commissioner, explained what would be done rela- 
 tive to the price of bread. The measure, even in the days 
 of novelties, was unusual. To quiet the complaint about 
 the rising cost of this commodity, the price of the quartern 
 loaf, about one shilling at the moment, would be reduced 
 to 9 d. Since such a price was not compatible with the 
 prevailing cost of wheat, the Government proposed itself 
 to pay the difference between the cost and the selling 
 price of bread. There should, in short, be a subsidized 
 loaf. To effect this all flour from the mills, which were 
 already under government control, would be sold to 
 bakers at such a price as would enable them to put on 
 the market a 9 d. loaf. The difference between the 
 amount realized by millers from their sale of flour and 
 the price which they would have to pay for British wheat 
 or which the Government would have to pay for imported 
 w^heat would be met by a subsidy from the Exchequer ^^ 
 Mr. McKenna, taking up the subject, estimated this dif- 
 ference at some £38 millions per year, if wheat remained 
 at recent prices. The loaf at 9 d. represents wheat at 
 60s. per quarter, whereas the maximum price paid to 
 farmers at the time was 78 s. The difference, in short, 
 
 81 Ibid., Jy. 26, p. 8. 
 
246 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 would be the equivalent of the yield of a shilling income 
 tax.^2 jj- ^35 ^ iQj^g g^gp jj^ socialistic policy. For the 
 state assumed the responsibility of furnishing to all its 
 people bread not merely at cost but below cost. The ef- 
 fects, too, were to be far reaching. Apart from the new 
 item which was added to the budget, the consumption of 
 bread was bound eventually to increase, and consideration 
 has already been given to new measures necessitated 
 thereby. 
 
 Because of the institution of the subsidized loaf the 
 fixing of new maximum prices for home-grown cereals 
 in August did not have the importance which similar ac- 
 tion had had in April. So far as wheat was concerned, 
 the prices indicated what the Government would have to 
 pay the growers, not what the consumer would eventually 
 pay. The new prices for wheat and rye ranged from 
 y^i s- 6 d. per quarter in the autumn of 1917 to yj s. 9 d. 
 in and after June, 1918.^^ Until June, therefore, the cost 
 of subsidized bread to the Government would be some- 
 what less than Mr. McKenna had computed, afterward 
 quite as much, assuming always that imported wheat 
 could be procured at about 78 s. Since the schedule of 
 maximum prices has greater significance for the producer 
 of cereals than for the consumer of bread, it will demand 
 further consideration relative to its effects upon agricul- 
 ture. 
 
 Not the least among the innovations of the new Food 
 
 82 Ibid., Jy. 25, p. 10. 
 *3 Ibid., Aug. 16, p. 3. 
 
 ji'Wj-^ SWtOftW 
 
 FOOD 
 
 247 
 
 Controller was his enlistment of local support in the 
 guise of Food Control Committees. The responsibility 
 of these bodies for the distribution of sugar by means of 
 the card register scheme has been described. At the end 
 of August their appointment and constitution was pre- 
 scribed, the order not being applicable to Ireland. Local 
 authorities were asked to appoint to each committee not 
 more than twelve persons. No restrictions upon choice 
 were imposed save that one member must be a woman 
 and one a representative of labour. As appointments 
 throughout Great Britain began to be reported during 
 September, it appeared that local bodies often chose as 
 members representatives of the food-distributing trades. 
 Protest often arose in such cases and there seemed to be 
 danger that public confidence in the new Committees 
 might not be so complete as was desirable. Lord 
 Rhondda thereupon urged that appointments be repre- 
 sentative of all classes of consumers and that, wherever a 
 co-operative society existed, at least one representative of 
 it be nominated. In one case where the local authority 
 had chosen a preponderance of traders he asked for a re- 
 vision of membership.^* Gradually more satisfactory re- 
 ports began to come in and the Local Food Control Com- 
 mittees seemed fairly launched upon their careers. No 
 one could underestimate their importance. In their hands 
 lay the immediate administration of all that had thus far 
 been attempted in food control. To secure economies of 
 consumption through subsidiary Food Economy Commit- 
 
 8* Ibid., Aug. 27, p. 3; Aug. 28, p. 3; Sept. i, p. 8. 
 
r-^>*tii;*aBiti,..ii*KS»«.**™ '""'jM! ■ 
 
 248 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 tees was their task ; to administer the one rationing scheme 
 already determined upon, that for sugar, was their duty; 
 to supervise the observance of maximum prices and to 
 determine these prices more precisely in certain com- 
 modities was their responsibility. Local self-government 
 by representatives of the community was an old English 
 tradition, and Lord Rhondda showed insight in making 
 
 it one of the decisive factors in his difficult undertak- 
 ing. 
 
 1 
 
 AGRICULTURE 
 
 The problem of the food supply, as considered in the 
 preceding chapter, has reference either to economy of 
 consumption or to the protection of the consumer against 
 high prices. The latter aspect of it has in turn revealed 
 another phase of the situation. That prices may be kept 
 moderate, the maintenance and even the increase of pro- 
 duction appears to be indispensable. Early in the war 
 the Government saw this clearly and on June 17, 1915, 
 appointed a committee to report on the subject. The 
 committee was instructed to suggest steps which, on the 
 assumption that the war would be prolonged beyond the 
 harvest of 19 16, might be taken to maintain and increase 
 by legislation or otherwise the production of food in 
 England and Wales.^ Lord Milner became chairman of 
 the Committee and its two reports made in July and 
 October of 191 5 admirably describe the condition of 
 agriculture and outline measures looking towards its im- 
 provement.2 They are fundamental for an understand- 
 ing of what was finally done. 
 
 Since the fall in the prices of cereals in the later seven- 
 ties, the Committee pointed out, some four million acres 
 of arable land in England and Wales have been converted 
 to pasture. It might have added, as Mr. Lloyd George 
 
 1 B. T. J., Je. 24, 1915. 
 2 Cd. 8048, 8095. 
 
 249 
 
,iifW*-'Wlr-te» •^'*' I '■?«.' 
 
 250 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 did later that twenty years after the Corn Laws were 
 abolished in 1846, twice as much wheat was still produced 
 as was imported. Today, on the other hand, from 70 
 to 80 per cent, of the cereal supply is got from abroad 
 and the area under wheat has fallen to less than two mil- 
 lion acres. Of the 27,000,000 acres of agricultural land 
 in England and Wales, 16,000,000 acres are in pasture, 
 only 11,000,000 acres in tillage.^ In view of this 
 situation, the Committee recommended that farmers 
 be induced to plough up much of the land laid to grass 
 since the seventies. Thereby not only would the grain- 
 producing capacity of the nation be increased but its 
 capacity to produce meat and milk would in some districts 
 be almost doubled. Each additional million acres under 
 wheat would mean from four to five million quarters 
 grown at home or fully six weeks' supply for the entire 
 United Kingdom.^ 
 
 If farmers were to embark upon such an undertaking, 
 they would need persuasion. To induce them to sacrifice 
 the comparative security of their present profits, to 
 change methods and alter rotations, to increase their 
 arable in the face of a shortage of labour, to run the risk 
 of uncertain seasons and a fall in the price of wheat at 
 the end of the war, the state should guarantee a minimum 
 
 3L. T., Je. 28, 1917, p. 10. Of the 11 million acres in tillage in 
 1916, about 2 millions were in wheat, i^ millions in barley, 2 mil- 
 lions in oats, i million in turnips, i million in peas, beans, potatoes, 
 and mangold, while the remainder was in clover and other rotation 
 grasses. 
 
 * Cd. 8045. 
 
 AGRICULTURE 
 
 251 
 
 price for home-grown wheat for a period of years. The 
 Committee was unanimous in its recommendation that 
 45 s. a quarter ought to be assured to growers for four 
 years. 
 
 There was danger, of course, that not much wheat 
 might be got, while the Government might yet find itself 
 pledged to heavy payments after the war. It had, there- 
 fore, been suggested to the Committee that the price be 
 guaranteed only on increased output. Such a measure the 
 Committee feared would not work in practice and thought 
 more feasible another proposal to limit the Government's 
 liability. This second plan would restrict the state's 
 guarantee to those farmers who might increase their 
 arable by at least one-fifth over the 19 13 area and to those 
 who had at least one-fifth of all their arable and grass 
 land under wheat. Some members of the Committee 
 were of the opinion further that no farmer should have 
 the benefit of a guaranteed price unless he could show 
 that he was paying a fair rate of wages to his labourers. 
 The Committee as a whole, however, feared that such a 
 proviso might defeat the main purpose of the measure 
 and was not convinced that it was as yet necessary to 
 apply compulsion to insure a rise of wages. Wages 
 ought to rise automatically as a result of the scheme and 
 of the demand for labour. Meanwhile an inquiry into 
 the agricultural wages paid throughout the country might 
 well be instituted to serve as a basis for legislation, if 
 legislation should prove necessary.^ 
 
 5 Ibid. 
 
i>,«»*l>««W>JW8b<i!*B*»a*?S 
 
 252 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Shortly after the Committee made its report the food 
 situation so changed that the Government did not feel 
 called upon to adopt the new proposals. The submarine 
 seemed to be under control, immediate shortage of the 
 food supply was averted, cattle and sheep were abun- 
 dant, the area under wheat had, owing to high prices, in- 
 creased by one-half a million acres, and large crops were 
 reported from Canada and Australia. The dearth of la- 
 bour and the need of finding men for the army also re- 
 strained the Government's hand.® 
 
 The recommendations of the Committee's second re- 
 port in October, accordingly, looked to increasing pro- 
 duction without the stimulus which would have been de- 
 rived from a minimum price for wheat. Arable farm- 
 ing, the Committee was informed, had been remunera- 
 tive on all but the wettest and heaviest soils for some 
 years before the war. More profitable it would become 
 by the adoption of new machinery and methods, and to 
 such adoption the state might, under the circumstances, 
 well contribute. Of fertilizers, England produces large 
 quantities of sulphate of ammonia, much of it exported. 
 The Government should arrange with producers to fur- 
 nish a sufficient home supply of it at nearly pre-war 
 prices and should impress upon farmers its value. Meas- 
 ures should be taken to have other fertilizers, nitrate of 
 soda and phosphate rock, imported from Chile, and from 
 Florida and Tennessee. New feeding stuffs, made from 
 palm nuts, cocoanuts, and earth nuts, should be recom- 
 
 6 A. R., 1915, pp. 152, 153. 
 
 I 
 
 AGRICULTURE 
 
 253 
 
 mended and the manufacture of oil-cake should be ex- 
 tended. Inasmuch as agricultural tractors and ploughs 
 were essential in view of the shortage of labour, the Gov- 
 ernment might well permit manufacturers to retain their 
 mechanics and might well declare the making of such 
 implements on a par with Government contracts. The 
 labour of women should be organized and directed to the 
 farms. Economical and valuable was the raising of pigs, 
 since they eat food otherwise largely wasted and pro- 
 vide the meat most widely consumed by the working 
 classes. Plots of unused land near towns and villages 
 should be utilized. Most immediately effective, perhaps, 
 of all the Committee's recommendations was its proposing 
 the appointment of local War Agricultural Committees.'^ 
 Such bodies w^ere soon instituted to urge upon the far- 
 mer the adoption of the improvements in question, and 
 a year later Mr. Prothero complimented them on their 
 admirable work. 
 
 A year later, as it happened, the agricultural situation 
 had become much more serious than it was when Lord 
 Milner's Committee made its second report. In May, 
 1 9 16, Mr. Prothero declared in the Commons that the 
 production of food in the country was likely to fall off 
 by 15 per cent, or 25 per cent. " I should be very glad," 
 he added, " if the Government would grasp this situation 
 firmly and put us upon rations. I believe that sooner or 
 later that will have to be done." One cause of the im- 
 paired prospect was the bad weather of the spring of 
 
 7 Cd. 8095. 
 
 \ 
 
254 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 191 6, which long made labour on the land impossible.^ 
 By autumn further causes were apparent and were dis- 
 closed in the debate of October 17. The area under 
 wheat was 260,000 acres smaller than in 19 15 and the 
 wheat crop stood at only 88>^ per cent, of the average 
 crop of the last ten years. In part this was due to a 
 diminished yield per acre, since the land of England and 
 Wales was tending to become increasingly foul. In the 
 autumn of 1916, 112,000 acres, which a year before had 
 been under farm crops, were lying fallow. It was pre- 
 dicted, too, that in 19 17 500,000 more acres would cease 
 to be under wheat. Should this happen, the loss for the 
 two years would be some two million quarters, an 
 amount which 100 ships of 5000 tons would require four 
 and one-half months to fetch from Australia. And be- 
 hind all this was the fact that 30 per cent, of the perma- 
 nent agricultural labour had left the land.® By way of 
 contrast the Marquis of Lincolnshire pointed out in the 
 Lords that, with worse land and worse weather, the 
 German farmer was able to produce 50 per cent, more 
 meat and corn per acre than the British farmer.^^ 
 
 The seriousness of the situation impelled the Govern- 
 ment to action and from November, 191 6, various meas- 
 ures, for the most part recommended by Lord Milner's 
 Committee, were put into effect. Behind them was the 
 vigorous hand of Mr. Prothero, the new Minister of Agri- 
 
 8 p. D. C, 1916, LXXXII, 1895. 
 Mbid., LXXXVI, 451,454, 458. 
 10 L. T., Aug. 7, 1917, p. 8. 
 
 AGRICULTURE 
 
 255 
 
 culture, a former member of the Committee, and the 
 author of a history of British farming. The Govern- 
 ment's first act was to order an agricultural census of 
 Great Britain. Crops, live stock, the residents on the 
 farm, casual labourers, male employes who had joined the 
 army, all were to be reported. ^^ Next an ideal was pro- 
 posed. If in 1872 England and Wales had tilled some 
 4,000,000 acres more of arable than at present, why 
 should they not so till some of them again? Plans look- 
 ing toward such an achievement were formulated. Cer- 
 tain measures could be taken before spring to induce the 
 farmer to plough liberally in 19 17 and during the year 
 other measures to foster still more ploughing during 
 19 1 8. In the main, four lines of action were proposed. 
 Waste lands might be brought under tillage, fertilizers 
 and improved agricultural machinery might be made 
 available for the farmer, the number of farm labourers 
 might be increased and paid a suitable wage, and a mini- 
 mum price for \/heat over a period of years might be 
 guaranteed. 
 
 To the first of these measures the Government was 
 urged by the War Emergency Workers' National Com- 
 mittee. In November, 19 16, the Committee proposed 
 that the Government take into its own hands 400,000 
 acres now fallow or in grass and provide for the tillage 
 of them. Capital, it added, should be advanced to local 
 authorities and to co-operative societies to induce them 
 
 " D. R. M., 3rd ed., p. 357. 
 
256 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 AGRICULTURE 
 
 257 
 
 to bring land under cultivation.^^ j^ ^^^ ^pj^.^^ ^^ ^^j^ 
 appeal the Government responded on December 5 by 
 a new regulation under the Defence of the Realm Act. 
 This provided that the Board of Agriculture and Fish- 
 eries might enter upon land without any one's consent if 
 the land was for the time unoccupied or was common 
 land; and that in other cases it might so enter with the 
 consent of the occupier and the person receiving the rent. 
 Land thus taken over might be cultivated either by a 
 contract of tenancy or in some other manner and the 
 Board might authorize any local authority to act for it. 
 This meant, of course, that local authorities might ac- 
 quire uncultivated land and let it out in small allotments 
 and market gardens. If a farmer should prove recalci- 
 trant about the cultivation of his land, the Agricultural 
 War Committees might enter upon it and take possession. 
 The regulation was an endeavour to stimulate produc- 
 tion through small holdings. ^^ 
 
 In taking the next step, the provision of fertilizers, the 
 Board of Agriculture did what Lord Milner's committee 
 had recommended : it checked the exportation of sulphate 
 of ammonia. Inasmuch as the supply of feeding stuffs 
 like oil-cake was bound to be reduced, farmyard manure 
 would lose half of its ammonia. In 1918 there ought, 
 therefore, to be sold five times as much sulphate of am- 
 monia as was used in 19 16 and of this the Board had 
 hope. Supplies of lime also were increased and a native 
 
 12 M. G.. Dec. 2, 1916, p. 8. 
 
 13 B. T. J., Dec. 14, 1916, p. 795. 
 
 i 
 
 form of phosphate which might replace the German 
 product was introduced to the market.^* 
 
 With even more comprehensive plans the Board of 
 Agriculture turned to the provision of improved agricul- 
 tural machinery. To co-operate with it and with the 
 Food Controller, the Ministry of Munitions in January 
 set up an Agricultural Machinery Branch. Agricultural 
 machinery and implements were henceforth to be classed 
 as munitions work and, in order to control the character 
 of those manufactured, no one might henceforth make 
 them except under permit.^^ For the same reason the 
 importation of them without licence was prohibited, the 
 Government wishing to ensure that the machinery be of 
 the right type and be distributed over the country where 
 most needed. ^^ By February, thirty-two motor tractors 
 had been acquired by the Board of Agriculture and 230 
 more had been ordered.^^ Mr. Lloyd George, speaking 
 in May, warned workmen that disaster might be brought 
 upon the country by any refusal on their part to use these 
 labour-saving machines. ^^ At the same time the Board 
 of Agriculture requested the Ministry of Munitions to 
 supply it with 6000 tractors. A type was selected and 
 engineering firms were asked to tender bids for the mak- 
 ing of the whole or of parts. So great were the de- 
 mands upon the Ministry of Munitions for war material, 
 
 1* L. T., Oct. 6, 1917, p. 8. 
 
 16 D. R. M., 3rd ed., p. 179; L. T., Jan. 10, 1917, P- 5- 
 
 16 B. T. J., Mar. i, 1917, p. 606. 
 
 17 L. T., Feb. 9, 1917. 
 
 18 M. G., May 28, 1917, p. 6. 
 
ii^-M. i■s^^'^^ ^^ i^nwV'S^'? 
 
 258 WAR TIME CONTROL OF INDUSTRY 
 
 however, that the undertaking had to be adandoned. A 
 considerable number of American tractors of approved 
 type were purchased instead, and the entire output of 
 British-built tractors was absorbed. ^^ 
 
 If 2,000,000 acres were to be added in 191 8 to the ex- 
 isting arable it was estimated that at least 5000 tractors 
 would be needed. In August, 191 7, as many as 9000 
 had been ordered and 1000 of them had been received 
 from the manufacturers. It was hoped that by October 
 2500 would be on hand, by the end of December 4500, 
 and by the end of March the entire 9000. Of the num- 
 ber, 6000 had been ordered from the Ford Company, 
 2000 from other American firms, and 1000 from British 
 manufacturers. The Royal Agricultural Society had 
 recommended the Ford after a trial by five judges. It 
 was light for its power, hence was light on the land, was 
 easily handled, and was able to turn in a small circle. 
 Since the Fords could not be made in England as had been 
 at first planned, the parts were to be made in the United 
 States and assembled after being sent over.^^ In its 
 furnishing of tractors the Government did not intend to 
 relieve farmers of ploughing and of other work which 
 they could do themselves. Farmers who could were 
 urged to buy tractors; but to those who could not, the 
 War Agricultural Committees, would, as far as possible, 
 furnish assistance.^^ The loan of expensive agricultural 
 machinery w^as thus a new burden assumed by the state. 
 
 i»B. T. J., Je. I, T917, P- 203; L. T., Jy. 25, 1917, p. 8. 
 
 20 L. T., Aug. 24, 1917, p. 3. 
 
 21 Ibid., Aug. 2, p. 3. 
 
 AGRICULTURE 
 
 259 
 
 The extended use of agricultural machinery was ex- 
 pected to repair in part the 30 per cent, depletion of agri- 
 cultural labour. Efforts were also made to retain such 
 labourers as remained and to increase the number of 
 hands from other sources. Among possible sources of 
 supply were German prisoners. In November, 19 16, 
 Parliament was informed that a scheme was in prepara- 
 tion whereby small parties of prisoners would be turned 
 over to farmers, who in turn would be responsible for 
 their custody, housing, and feeding. At the beginning 
 of the new year Mr. Prothero announced that 10,000 
 prisoners skilled in agricultural labour would be available 
 and would be employed under the supervision of the 
 county War Agricultural Committees.^^ Owing to the 
 attitude of the prisoners themselves, however, not very 
 much came of the project. 
 
 Women were another resource. In June, 191 7, the 
 President of the Board of Agriculture issued an appeal 
 to farmers to employ them more extensively on the land. 
 They were to be looked upon not as substitutes for men 
 already employed but as additional workers, and no 
 farmer would risk the loss of his male labour if he 
 utilized their services. They were willing and able to 
 work ; and they had already shown themselves useful in 
 the care of stock, in milking, in the management of 
 horses, in all odd jobs about the farm and in such ordi- 
 nary field work as weeding and hoeing. Early in the 
 year Mr. Prothero had expressed himself as hopeful of 
 
 22 A. R., 1916, p. 189; L. T., Jan. 2, 1917- 
 
26o 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 securing the services of 50,000 or 60,000 women, the 
 equivalent of 35,000 men.^^ In June Lord Milner 
 told the Lords that 120,000 women were working 
 on farms and that some 20,000 more might soon do 
 
 so. 
 
 24 
 
 More difficult was the retention of male labour on the 
 farm. Better wages could be had elsewhere, and the 
 War Office was only too ready to enlist agricultural la- 
 bourers. How unwise were some of the dispositions of 
 this body is illustrated by an instance described in Parlia- 
 ment. A noble peer explained that his second gardener, 
 a man not unskilled in agriculture, had been enlisted and 
 that the man's wife and eight children had become re- 
 cipients of an allowance amounting to 35 s. weekly. 
 Meanwhile the gardener had for two years been em- 
 ployed, not at the front, but as an officer's groom some- 
 where in Essex.^^ Further evidence of lack of co-ordi- 
 nation between the departments of War and Agriculture 
 was abundant. When the latter told farmers to pool 
 their labour, the former asked, '' How can this man be 
 indispensable to Farmer A when he has been lent to 
 Farmer B ? " On the other hand, the County Councils, 
 those large landlords of small holdings, were not able 
 to co-ordinate labour. If 100 acres in small holdings 
 were cultivated by ten men, each could say to the War 
 Office that he was indispensable to the cultivation of 
 
 23 M. G., Je. 1917, p. 4; L. T., Feb. 9. 
 
 2*L. T., Je. 28, 1917, p. 10. 
 
 25 P. D. C, 1916, LXXXVI, 460. 
 
 AGRICULTURE 
 
 261 
 
 his holding, yet the County Council could till the 100 
 acres with three men and release seven.^^ 
 
 In 19 1 7 some approach was made to better co-ordina- 
 tion. An agreement was reached between the two de- 
 partments whereby the new army order should withdraw 
 not more than 30,000 men from the land. In May, to be 
 sure, there was complaint that the War Office was not 
 keeping its agreement,^^ but in the same month it did at 
 least assist agriculture in another way. Soldiers not in 
 Class A were given furloughs to assist in sheep-shearing. 
 Elsewhere training schools were set up to teach soldiers 
 the management of horses and the technique of plough- 
 ing.28 In June Lord Milner stated that from one source 
 or another the Government had secured some 70,000 men 
 for farm work.^^ In July it was announced that the 
 County Agricultural Executive Committees would be 
 given some influence in retaining men on the land. If 
 any Committee should issue a voucher that a man was 
 employed full time in farm work and was so engaged on 
 June I, 19 1 7, and further that the work was of national 
 importance, the man would not be called up for the army. 
 The Committees were to see to it, moreover, that agri- 
 cultural labour was put to the best use and that any sur- 
 plus on a farm would be moved to some other place where 
 it was urgently required.^^ Such measures tended to 
 
 2« P. D. C, 1916, LXXXVII, 878. 
 
 27 M. G., May 30, Je. 7, I9i7- 
 
 28 L. T., Oct. 6, 1917, p. 8. 
 
 29 Ibid., Je. 28, p. 10. 
 
 30 Ibid., Jy. 25, p. 3. 
 
262 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 allay the farmer's distrust of the War Office and to re- 
 lieve somewhat his anxiety regarding labour. 
 
 The policy of largest scope, however, looking toward 
 the encouragement of agriculture, was the guaranteeing 
 to the farmer of minimum prices for grain and to the 
 agricultural labourer of a minimum wage. Minimum 
 prices for grain had, it will be remembered, been recom- 
 mended by Lord Milner's Commitee, and the decision of 
 the Government at length to adopt this recommendation 
 was announced by Mr. Lloyd George in the Commons on 
 February 23, 1917. A schedule of prices for six years 
 was presented, a proviso being added that the matter was 
 open to reconsideration after four years. As compared 
 with the pre-war price of wheat, which was 34 s. 11 d. the 
 quarter, and the prices of 191 5 and 19 16, which were 
 respectively 52 s. 10 d. and 58 s. 5 d., the new minimum 
 prices for wheat, it was proposed, should be 60 s. in 19 17, 
 55 s. in 1918 and 1919, 45 s. in 1920, 1921, and 1922. 
 The corresponding prices for oats during the six years 
 were to be 38^^ s., 2i^ s. and 24 s. For potatoes in 19 17, 
 £6 a ton should be guaranteed. After explaining that 
 some four million acres had been converted from arable 
 to grass since the sixties, the Premier stated that the 
 farmer was hesitant, not so much through lack of labour, 
 as through timidity. Twice since the process of conver- 
 sion began he had been caught badly with too much 
 arable — in 1880 and in 1890. That a fear of the re- 
 currence of such disaster might not affect him now, the 
 Government was drafting a bill along the lines indicated. 
 
 AGRICULTURE 
 
 263 
 
 Provision for a minimum wage of 25 s. a week for agri- 
 cultural labourers would be included.^^ It was hoped 
 that as a result some three million more acres might be 
 brought under cereals and potatoes.^^ 
 
 On April 1 1 the new measure, known as the Com Pro- 
 duction Bill, was introduced.33 At once the question 
 which had confronted Lord Milner's Committee again 
 arose. Should the guarantee extend to all grain raised, 
 or merely to the added product? If to the former, the 
 Government might find itself bound to make consider- 
 able payments, although output might thereby be little in- 
 creased. If to the latter, the farmer might not main- 
 tain existing production. Mr. Prothero declared that the 
 second risk was more serious and that the Government 
 was not willing to confine the bonus merely to excess pro- 
 duction. Another question which came up for discussion 
 was whether the output in quarters or the acreage under 
 cereals should be made the basis of the guaranteed pay- 
 ments. To give the measure a wider and more demo- 
 cratic appeal the acreage basis was adopted. As 
 amended, the bill provides that payments, whenever 
 called for, will be based upon every acre cultivated and 
 producing a crop of wheat or of oats.^^ 
 
 Most hotly debated of the provisions of the bill was 
 that relative to the minimum wage for agricultural la- 
 bourers — an inducement to keep them on the land and 
 
 31 Ibid., Feb. 24, p. 9. 
 
 32 M. G., Je. 7, 1917. 
 
 33 L. T., Apr. 12, 1917, p. 3. 
 8* Ibid., Jy. II, p. 10; Jy. 12. 
 
264 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 a means of enabling them to meet the increased cost of 
 Hving. The Premier in February had promised 25 s. a 
 week. Before the war he had started a campaign to 
 secure 20 s., the average pre-war wage being 17 s. 10 d. 
 RecalHng the latter facts and pointing out that the figures 
 of the Board of Trade showed an advance of 75 per cent, 
 in the cost of living, the Labour members demanded that 
 the minimum be fixed at 30 s. The Government, how- 
 ever, stood firm. It maintained that the 25 s. minimum 
 would mean in many districts an acceptable advance over 
 prevailing rates, that this sum could be increased where 
 desirable by Wages Boards for which the bill provided, 
 that the 25 s. would continue after the war and was in- 
 dependent of a fall of prices, and that, should a fall to 
 pre-war levels take place in the price of wheat during 
 five years, the farmer would get from the state only £68 
 millions but would have to pay in wages £59 millions 
 above pre-war wages. Should the minimum wage be 
 fixed at 30 s. the latter payment would be increased to 
 £100 millions. Such a provision would take from the 
 bill its effective force as a stimulus to production and 
 upon the Premier's February promise the Government 
 would stand or fall. It would gladly fix no minimum 
 whatever, as in the case of the miners, but agricultural 
 labour was unorganized and helpless.^^ 
 
 Thus defended, the Bill was passed on August 21 and 
 five weeks later an Agricultural Wages Board was set 
 up. Upon it sat sixteen representatives of employers 
 
 »5 Ibid., Jy. 24, p. 10. 
 
 AGRICULTURE 
 
 265 
 
 and sixteen representatives of workmen, together with 
 seven impartial appointees of the Board of Agriculture. 
 Similarly constituted local wages committees might be 
 established by the Central Board, their chief duty being 
 to recommend wages applicable in their districts.^^ In 
 determining minimum wages the Board was instructed 
 by the President of the Board of Agriculture to have in 
 mind an amount which would enable a man to keep him- 
 self efficient and maintain his family *' in accordance 
 with such standard of comfort as may be reasonable in 
 relation to the nature of his occupation." ^'^ It was a 
 statement that would many times have to be interpreted. 
 While the Government was carrying out its policy of 
 encouraging agriculture by guaranteeing minimum wages 
 for an indefinite time and minimum prices of grain for a 
 period of years, it displeased the farmer by its action in a 
 closely related matter. In August, 19 17, the scale of 
 maximum prices for grain, set up in the spring to pro- 
 tect the consumer, was revised. So far as wheat was 
 concerned, the new scale would no longer affect the con- 
 sumer. Since bread was henceforth to be supplied at 
 the uniform price of 9 d. the quartern loaf, a price cor- 
 responding with one of 60 s. the quarter for wheat, the 
 maximum price to be set for wheat reflected only what 
 the Government would in the future have to pay as its 
 subsidy for bread so far as this was made from home- 
 grown wheat.^^ To the farmer the new scale seemed 
 
 36 Ibid., Sept. 29, p. 7; Sept. IS, p. 3- 
 
 37 Ibid., Aug. 7, p. 8. 
 88 Cf . above. 
 
266 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 illiberal. Not only were the spring maximum prices re- 
 duced, but the weight of the quarter was increased. In- 
 stead of the spring maximum of 78 s. a quarter for 
 wheat, the nominal maximum until December i now be- 
 came ']'}) s- 6d. and the real maximum (allowing for the 
 increased size of the quarter) 72 s. The maximum for 
 oats was correspondingly reduced from 55 s. nominally 
 to 44 s. 3d., actually to 43 s., the maximum for barley 
 from 65 s. nominally to (^2 s. 9 d., actually to 56 s. 
 
 Provision was made, to be sure, for a progressive in- 
 crease in prices during the next six months, except in the 
 case of barley. On and after June i wheat would at 
 length command yj s. 9 d. and oats 48 s. The price of 
 wheat in the summer of 19 18, therefore, was to be prac- 
 tically what it had been in the summer of 191 7. But 
 farmers grumbled about the reduction during the later 
 months of 1917 and the earlier months of 1918. When 
 the crops of 191 7 were sown, they said, no intimation had 
 been given that market prices would not prevail ; there 
 was being transferred to the consumer most of the ad- 
 vantages arising from their redoubled efforts ; the success 
 of the Corn Production Bill was being compromised by 
 a loss of confidence in the Government.^^ More astute 
 observers saw in the new prices an endeavour to make 
 them reflect the seasonal abundance of autumn and winter 
 compared with the scantier supplies of spring and early 
 summer. Looked at impartially, they were high in com- 
 parison with pre-war prices and even in comparison with 
 
 3»L. T., Aug. 16, 1917, p. 3; Aug. 20, p. 3. 
 
 AGRICULTURE 267 
 
 the minimum prices of the Corn Production Bill. Com- 
 plaint, however, was not likely to be long continued nor 
 was the success of the new measure likely to be seri- 
 ously imperilled. 
 
 By the autumn of 1917 the Government could review 
 the agricultural achievements of the year and state ac- 
 curately its program for 1918. Whereas at the end of 
 1916 the arable under cultivation in England and Wales 
 was 260,000 acres less than in 191 5, the spring sowing 
 of 1917 had restored the situation and had improved it 
 by the addition of 380,000 acres. To these 640,000 acres 
 should be added a considerable acreage in Scotland and 
 700,000 acres in Ireland.^^ In view of the unexpected 
 increase in Ireland, the Government could afford to re- 
 duce its program for England and Wales. The 3,000,- 
 000 acres at first asked for in 19 18 were changed to 
 2,600,000, of which some 380,000 had already been 
 ploughed.^ ^ Not all of the remaining amount need be 
 got, Mr. Prothero pointed out, by ploughing up pastures. 
 A part could come from bare fallow, of which there was 
 still 350,000 acres, a part from the 2,500,000 acres under 
 clover and rotation grasses, a part by taking two crops 
 in succession, if the land could be kept clean. Not more 
 than 2,000,000 acres of grass land would have to be 
 ploughed. To effect the ploughing of this amount fa- 
 cilities in the shape of tractors had been provided or 
 would be ; government credit for the purchase of seeds, 
 
 <o Ibid., Oct. 12, p. 4. 
 
 -»! Ibid., Aug. 6, p. 3 ; Aug. 24, p. 3. 
 
268 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 fertilizers, implements, and horses would be extended; 
 horses and ploughmen would be lent to farmers on rea- 
 sonable terms, the services of women and soldiers would 
 be made available.^^ Behind these immediate methods of 
 assistance were the guarantees of the Corn Production 
 Bill. The outcome would for the rest depend upon the 
 patriotism and skill of the British farmer. 
 
 *2 Ibid., Oct. 6, p. 8. 
 
 CONCLUSIONS AND COMPARISONS 
 
 Broadly speaking the state may be said to exert influ- 
 ence upon production, distribution, and consumption in 
 three ways. It may persuade the producer, distributor, 
 or consumer to enter voluntarily upon some course of 
 action contributory to the public advantage. So per- 
 suaded the producer may put his product on the market 
 at a price which will yield him only a moderate return. 
 The consumer, whether the state itself or the public, will 
 have the benefit of the renunciation of profits which con- 
 ditions of scarcity might put within reach. The dis- 
 tributor in the same way may be induced to renounce the 
 excess charges which conditions of transportation and 
 distribution might warrant his asking. The consumer, 
 again, may be urged to economize in the use of such neces- 
 sities as coal and food. Any nation which in time of war 
 or in time of peace can bring itself to a state of efficiency 
 by measures like these may boast of a population ani- 
 mated by a high degree of public spirit. So far as such 
 methods are efficacious they are obviously wisest and are 
 most creditable to the Government and people concerned. 
 Wherever possible, they should have first trial. 
 
 The state, however, failing in its appeal to voluntary ef- 
 fort, may find it necessary to resort to sterner measures 
 
 269 
 
,!,-ifes„J "U— 
 
 270 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 CONCLUSIONS AND COMPARISONS 
 
 271 
 
 than persuasion. It may have to impose regulations upon 
 the processes of production, distribution, and consump- 
 tion. Inasmuch as such restraints are sometimes neces- 
 sary in time of peace, their imposition in time of war 
 would not be unexpected or unwarranted. They tend 
 usually to assume the form of making obligatory such 
 action as would preferably be induced by persuasion. The 
 producer is required to put his product on the market at 
 a fixed maximum price, regardless of his concurrence; 
 the distributor is restricted in what he may charge for 
 his services; the consumer, although not rationed, finds 
 that food is procurable only in certain quantities depend- 
 ant upon the quota allowed to his district or firm. Regu- 
 lations like these indicate that the state cannot rely upon 
 voluntary renunciation but hopes that, by the least pos- 
 sible interference on its part, satisfactory conditions may 
 be made to prevail. 
 
 In certain cases the state may find that even such meas- 
 ures are inadequate. At this juncture it steps in and as- 
 sumes entire control. While the immediate administra- 
 tion of the industry in question may be left with the own- 
 ers, the Government henceforth determines all larger is- 
 sues. It fixes the wages to be paid the workers, it ar- 
 rives at a cost price by an investigation of the costs of the 
 successive stages of production, it adds to this the profit 
 which is deemed just for the producer, and it specifies 
 how the commodity in question may be put upon the mar- 
 ket. Wholesalers' and retailers' transactions are super- 
 vised and their charges closely restricted. In this way 
 
 the commodity is procurable by the consumer at what he 
 may properly consider the cost price. The consumer, 
 although the ultimate beneficiary of a system like this, 
 does not escape its compelling power. Economy of con- 
 sumption may be enjoined upon him and a system of ra- 
 tioning, more or less elaborate, may be imposed. Such 
 imposition occurs only when the supply of a commodity 
 is considerably below the normal demand. Then it is 
 that the state interposes to see that equal sacrifices are ex- 
 acted from all its citizens. 
 
 Naturally a country is likely to experience transitions 
 from one of these stages of state interference to another 
 as the conditions of war grow more exacting. The tran- 
 sitions, too, are more rapid in the case of certain indus- 
 tries than in the case of others. In general a Govern- 
 ment, plunged into war, at once assumes control of what- 
 ever industries it feels essential to the prosecution of the 
 war or the maintenance of its civil population in war 
 time. Other industries it leaves free, relying if need be 
 upon persuasion and exhortation. Only when induce- 
 ments of this kind are disregarded does it resort to regu- 
 lation and ultimately to control. A comparison of Eng- 
 lish and American experience in these matters is not un- 
 instructive. 
 
 Striking differences in the situation in which each 
 nation finds itself at the end of 19 17 at once appear. 
 One country has been at war for more than three years, 
 the other for less than three-fourths of a year. In the 
 one case a vast expenditure of resources, a large part of 
 
(■*!;"j,„*«ri«', .^'."mi^ifn^''^ 
 
 '1 
 
 2^2 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 CONCLUSIONS AND COMPARISONS 
 
 273 
 
 the population under arms, heavy casualties, and the long 
 strain of steady application demanded of the labouring 
 classes have created a temper very different from that 
 prevailing in a country which until recently has profited 
 from the war and has as yet felt scarcely any of the sac- 
 rifices which it entails. In the second place, geograph- 
 ical conditions and the resulting industrial specialization 
 have placed the two countries in a different attitude to- 
 ward certain of the necessaries of life. Great Britain 
 depends upon foreign countries for a large part of her 
 foodstuffs and for such commodities as wool and hides. 
 The United States is an exporter of food-stuffs and pro- 
 duces most other commodities in considerable measure. 
 Whenever, as has happened during the war, shipping 
 facilities are restricted, Great Britain is much more sensi- 
 tive to the danger of diminished imports than is the 
 United States. Hence a different attitude of the state to- 
 ward the food supply. Where in one case there is se- 
 curity against anything worse than shortage, in the other 
 there is always the possibility of famine conditions. In 
 the matter of food, as of ships, England can afford to run 
 no risks, and in the case of certain other imported com- 
 modities it is not at all to her advantage to do so. 
 
 Great Britain's long experience of war and her peculiar 
 geographical situation thus conduce to impel her farther 
 in the direction of state control over industry than the 
 United States has thus far gone. It might be pertinent at 
 this point to inquire which nation had the greater pre- 
 dilection for such control. The answer cannot be far to 
 
 I 
 
 seek. England since the eighteenth century has become 
 the classic land of laisses faire. Until recently her later- 
 day statesmen have done little to fetter the free play of 
 competition in industry and commerce, except where com- 
 petition has been clearly detrimental to the welfare of her 
 people. Most unreservedly committed to the doctrine is 
 the Liberal party, in whose hands lay the conduct of the 
 war for more than two years. So late as October, 19 16, 
 Mr. Barnes could charge this party in the House with 
 secret loyalty to its long-professed principles. " I cannot 
 help thinking," said he, " that the Government have had 
 at the back of their minds a mournful, lingering feeling 
 of regret for the demise of an antiquated system or prin- 
 ciple, which, as soon as the war began, was promptly 
 thrown overboard as useless and dangerous for the pur- 
 pose of fighting the war. It has, however, been allowed 
 to do its worst in regard to the civil population. The 
 policy of laissez faire is no more good in regard to social 
 economics than it is in regard to fighting the war. I sub- 
 mit to the President of the Board of Trade that it is as 
 dead as Queen Anne." ^ Whatever be the truth in this 
 charge — and Mr. Runciman freely professed his reluct- 
 ance to exert control until it was necessary — the Govern- 
 ment can scarcely be accused of precipitate action. Only 
 in respect to the railways and the sugar supply was the 
 state put in immediate charge. Energetic measures in 
 other directions date largely from the end of 191 6. 
 
 If it be true that the Liberal Government abandoned 
 
 1 P. D. C, 1916, Ixxxvi, 436. 
 
274 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 its laissez faire principles only reluctantly, what may be 
 said about the attitude of the United States toward the 
 same doctrine? Governmental tradition here was some- 
 what different. Whereas throughout the second half of 
 the nineteenth century England was a free trade country, 
 during the same period industry in the United States was 
 fostered by high protective tariffs. To Americans who 
 had pointed out that capital was largely benefited thereby, 
 it was answered that only thus could the wages of the 
 industrial labourer be maintained at a level which raised 
 him above his European fellow. Thus there was built 
 up the tradition that state interference to prevent the 
 unfettered course of trade was legitimate when it con- 
 duced to the advantage of certain classes in the com- 
 munity. To be sure the political party in power when the 
 United States entered the war had not subscribed to this 
 doctrine; but just before 1917 it had twice given its sanc- 
 tion to state interference in the free play of industrial 
 forces. By the Child Labour Act, the Democratic party 
 assumed for the central Government authority hitherto 
 exercised by the several states, the power, namely, of in- 
 suring to young persons in factories humane conditions of 
 employment; and by the Adamson Act it guaranteed to 
 certain classes of railway employes an eight hour day. 
 Thus tradition and sentiment favourable to governmental 
 regulation of industry, after being fostered by the Re- 
 publican party during its long tenure of office, had been 
 reinforced by the action of the Democratic party on the 
 eve of the country's entry into the war. 
 
 CONCLUSIONS AND COMPARISONS 
 
 275 
 
 If, then, at the end of 1917 any one were to give an a 
 priori answer to the question whether Great Britain or 
 the United States was likely to have gone farther in the 
 direction of state control over industry, the reply could 
 scarcely be an unqualified statement. Predilection and 
 tradition, it would be answered, might incline the United 
 States more than Great Britain toward regulation or con- 
 trol; on the other hand, Great Britain's peculiar geo- 
 graphical and industrial position and her reaction toward 
 the vicissitudes of a long war would probably have per- 
 suaded her to adopt the more energetic measures. In 
 temperament Great Britain would be the more hesitant, 
 yet circumstances would have conspired to induce her to 
 more radical action. 
 
 If now the respective attitudes of the two governments 
 toward industry at the end of 1917 be considered, it will 
 appear that this diagnosis is correct. The United States 
 was still to a considerable extent reliant upon the volun- 
 tary co-operation of its citizens. A certain number of 
 official regulations had been imposed, two industries had 
 been taken over, and a third was likely to be. Great 
 Britain, on the other hand, was waiting to find whether 
 her last appeal to voluntary effort would meet with a satis- 
 factory response; if it should not, regulation or complete 
 control would henceforth prevail wherever the industry 
 was one of war-time importance or where the food sup- 
 ply of the population was in question. 
 
 In the United States the appeal for voluntary co-opera- 
 tion from business men, workers, and the public elicited 
 
2y6 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 for the most part a hearty response. Most publicity was 
 given, perhaps, to the campaign for economy in the con- 
 sumption of food. The avoidance of waste, the use of 
 substitutes for scarce and exportable foods like sugar, 
 meat, butter, and wheaten flour, the preference for whole- 
 wheat bread or corn bread over white bread, all these 
 economics were urged upon consumers. They were 
 enforced by lectures and demonstrations until people who 
 had never heard of calories began to draw up their menus 
 in terms of that abstruse unit. Housewives were asked 
 to pledge themselves to adopt all recommendations made 
 by the Food Administrator. Various flours were com- 
 pounded by mixing inferior grains with wheat and their 
 general use was recommended. Relative to the consump- 
 tion of only one food did the Government at first 
 make any approach toward compulsion. It authorized 
 retailers to require, if they so desired, the purchase of 
 two pounds of corn meal along with every pound of sugar. 
 Apart from this the consumer was not, in 19 17, ham- 
 pered, save by the force of public opinion, in procuring 
 what foods he liked and in using them as he liked. In 
 Great Britain, on the other hand, the waste of food had 
 become a criminal offence, the use of a war-bread made 
 from whole-wheat flour mixed with inferior flours was 
 obligatory, sugar had long been rationed, and other food- 
 stuffs were henceforth to be, if the second energetic cam- 
 paign for voluntary rationing should prove ineffective. 
 In the use of food, compulsion had become the rule while 
 
 «^(^,-%W'*)W^fe'«W!SA%M*''«l^ S«S«('m(S«iiflt&SiKmS«l»*'3«lf ^^^ 
 
 CONCLUSIONS AND COMPARISONS 
 
 2yy 
 
 co-operation still remained the privilege of American con- 
 sumers. 
 
 Voluntary co-operation also proved feasible between 
 the United States Government and its industrial leaders 
 in respect to the acquisition of certain important commo- 
 dities. In the summer of 191 7 contracts had to be placed 
 for enormous quantities of steel and copper for munitions 
 and ships, and these metals were commanding very high 
 prices in a war market. The Government, accordingly, 
 approached the producers to see whether an arrangement 
 could be made advantageous to itself and to the Allied 
 powers, henceforth its fellow-purchasers. Behind the in- 
 vitation lay, of course, the intimation that concessions 
 would be necessary. Conscription of factories as well 
 as conscription of men was always possible. No threats, 
 however, were needed, and the producers of steel and cop- 
 per readily accepted the prices which the Government, act- 
 ing on the advice of the Federal Trade Commission, of- 
 fered. This achievement in voluntary co-operation left 
 a large sphere of essential war industry free from gov- 
 ernmental control. Here again English experience has 
 differed and has carried His Majesty's Government much 
 farther. Anxious to increase the output of munitions at 
 the beginning of the war, the Ministry, by the Defence of 
 the Realm Act, assumed power to turn into munitions- 
 making establishments all plants suitable therefor. To 
 still the complaint of labour about proprietors' profits, the 
 Munitions of War Act next imposed a limit, restricting 
 
278 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 CONCLUSIONS AND COMPARISONS 
 
 279 
 
 profits to the average return of the two years before the 
 war. The situation thus created differs somewhat from 
 that prevaihng in America. Profits allowed to muni- 
 tions-makers in Great Britain are less than those accruing 
 to the steel and copper producers in the United States; 
 for pre-war profits were smaller than are those of 1917 
 even though the latter have been reduced by rising costs. 
 The American Government, however, reasoned that a 
 considerable part of the profits still accruing to producers 
 would be swallowed up by the excess profits tax and felt 
 further that essential industries should not be left with- 
 out stimulus. English establishments, again, found 
 themselves "controlled" in other respects. Not only 
 were they required to submit to the Ministry of Munitions 
 all their rules affecting employes but they likewise were 
 subjected to elaborate priority regulations. Priority, of 
 course, is to be given in the United States to Government 
 needs ; but the procuring of a permit or the showing of a 
 contract for warwork is not yet a pre-requisite for the 
 getting of any steel or copper by a private buyer, as it is 
 in Great Britain. 
 
 Closely associated with the British control of muni- 
 tions plants is the control over labour. Both were es- 
 tablished by the Munitions of War Act, 1915. In the 
 United States labour is still free. Certain unions about 
 to strike have, indeed, been asked by President Wilson to 
 submit their request for wages to arbitration and in the 
 case of other labour demands there undoubtedly will be 
 urged similar resort to an arbitration tribunal. America, 
 
 however, has not yet enacted a law providing for com- 
 pulsory arbitration. The assent of many of the unions 
 affected would first have to be got as it was in England, 
 nor is it certain that such assent could be secured. Yet, 
 if continual readjustments accompanied by threats of 
 strike are to be avoided, either such a law or the unswerv- 
 ing co-operation of the unions with the Government seems 
 essential. The problem is undoubtedly the most difficult 
 of all those created by the war. The United States has 
 as yet scarcely faced it. Great Britain in the Munitions 
 of War Act and in the measures by which it has been 
 amended may have found as satisfactory a solution as is 
 possible. Arbitration has with her become to a con- 
 siderable degree compulsory and where it was not ac- 
 cepted, as it was not by the miners, state control eventually 
 became necessary. The policy of fettering labour by the 
 requirement of leaving certificates \\n\\ scarcely recom- 
 mend itself to American legislators, the more in that it 
 has proved a failure in England. The dilution of la- 
 bour, on the other hand, by the employment of unskilled 
 men and women is likely to become necessary in the 
 United States, as it has become in England. Unless in 
 their attitude toward war-work the trade unions remain 
 heartily co-operative, it is not improbable that meas- 
 ures resembling the Munitions of War Act may have 
 to be resorted to in America. In its attitude toward la- 
 bour as in that toward the producers of steel and copper 
 the United States government is still relying upon volun- 
 tary co-operation. Great Britain found such reliance in- 
 
28o 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 adequate, and for two and one-half years has resorted, 
 not, to be sure, to complete control, but to very stringent 
 regulation. 
 
 Extensively as the United States has trusted to the vol- 
 untary co-operation of its citizens in the fields of produc- 
 tion and consumption, it has in certain instances resorted 
 to governmental regulation. Most noteworthy is the de- 
 termination of the selling price of wheat, the regulation 
 of the distribution and sale of other important food- 
 stuffs, and the supervision of the apportionment of im- 
 ported wool and hides. 
 
 On August 30 the United States Government an- 
 nounced what it thought should be the maximum price 
 for the wheat crop of 1917. In the Food Control Act, 
 which had become law on August 10, the farmer was 
 guaranteed a minimum price of $2.00 a bushel for the 
 wheat harvest of 1918. The Act contained no provision 
 for either a maximum or a minimum price for the 1917 
 crop. The Government was, however, empowered to 
 purchase wheat for itself and the Allies, and at once ap- 
 pointed a committee, representative of all interests and 
 sections, to determine a fair price. The price reported 
 and adopted was $2.20 per bushel at Chicago for the basic 
 grade. The Government intimated that it would not be 
 content with limited purchases but was prepared to buy 
 the entire crop of the country if such action should be 
 necessary to stabilize prices. The Food Administrator 
 had already announced that all elevators and all large 
 mills would be brought under a licencing system. 
 
 CONCLUSIONS AND COMPARISONS 
 
 281 
 
 Hoarding and speculation would thereby be eliminated. 
 By this device the price of wheat, although not tech- 
 nically fixed for the community at large, was practically 
 determined. When the Government, through a newly 
 established Grain Corporation, began to buy wheat as it 
 came in at the elevators, there was no friction. The far- 
 mer was, of course, under no compulsion to sell his grain 
 at the Government's price and many producers did hold 
 back their stores. So far, however, as the transactions of 
 middlemen were concerned profiteering was eliminated. 
 
 The action of England relative to the wheat supply was 
 at first more hesitant, but in the end somewhat more com- 
 prehensive. At intervals from the beginning of the war 
 His Majesty's Government purchased large stores of im- 
 ported wheat, anxious to maintain a food reserve for the 
 nation. The sale of these stores at opportune times 
 served to quiet an excited and rising market. Apart 
 from making purchases and sales, the Government after 
 1915 tried to modify the price of imported wheat by ex- 
 erting control over ocean tonnage. It was not, however, 
 until the spring of 19 17 that maximum prices for domestic 
 wheat, oats, and barley were established. In the sum- 
 mer the policy was continued by the announcement of 
 maximum prices for the cereal harvest of 19 18. Mean- 
 while the Government was planning to fix a selling price 
 for bread, lower than one warranted by its own maximum 
 prices for wheat and flour. The loss incurred would, it 
 was stated, be met by the Exchequer. In this way Eng- 
 lish regulations have shown themselves even more favour- 
 
282 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 able to the consumer than have those of the United States. 
 To the producer, also, greater guarantees have been of- 
 fered. Whereas the United States in the Food Act as- 
 sures the farmer a minimum price for his wheat in 191 8, 
 Great Britain guarantees liberal prices over a period of 
 six years. Owing to the submarine menace it was neces- 
 sary for her to stimulate the domestic production of ce- 
 reals. Even a minimum wage for agricultural labourers 
 has become statutory, in the hope that adequate labour will 
 be available on the farms. Geographical isolation and 
 laggard agricultural wages have thus prompted the pro- 
 visions of the Corn Production Bill, circumstances neither 
 of which are characteristic of the United States. On the 
 other hand, so far as both countries have felt the need of 
 regulations favourable to the consumer and to the pro- 
 ducer of cereals, but restrictive toward the middleman, 
 they have acted similarly. One has been more prompt, 
 the other more thorough-going. 
 
 The form of regulation adopted in the United States 
 to control the price of wheat readily lent itself to ex- 
 tension. Since no power had been conferred upon the 
 Executive to fix prices for foodstuffs, all that could be 
 done was to check profiteering on the part of middlemen. 
 To this end the system of licencing was admirably 
 adapted. At the end of 19 17 it had been applied not only 
 to the sale of wheat, but to the distribution of many other 
 
 foodstuffs. 
 
 First to claim attention after wheat was sugar. The 
 world shortage in this commodity made itself acutely felt 
 
 CONCLUSIONS AND COMPARISONS 
 
 283 
 
 in the United States late in the summer of 191 7. Hold- 
 ers of the remainder of the Cuban crop were asking ex- 
 orbitant sums for their sugar and retail prices in August 
 rapidly advanced 2 or 23^ cents a pound. The new 
 Cuban crop would not be available until the end of the 
 year. After September, however, the 800,000 tons which 
 constitute the beet sugar crop of the United States, would 
 come upon the market. Mr. Hoover, accordingly, ap- 
 proaching the beet sugar producers, asked for their co- 
 operation. This was readily granted and it was agreed 
 that their product should be sold at a price which would 
 reduce the prevailing market price by i^ cents a pound 
 and save the public some $30,000,000 before the end of 
 the year. 
 
 The Food Administrator next turned to the distribu- 
 tors. In view of the terms conceded by the beet sugar 
 growers, refined sugar, it was computed, ought to sell for 
 $8.35 a hundred weight and for less toward the end of 
 the year. The wholesaler should be entitled to add a 
 charge of 25 cents a hundred w^eight and upon this basis 
 it was found that sugar could be sold to the consumer at 
 9J^ cents in the South and in the Atlantic seaboard states, 
 and for somewhat less north of the Ohio and west of the 
 Mississippi. To insure that wholesalers and retail- 
 ers should keep very nearly within these limits the Gov- 
 ernment introduced its licencing scheme. All dealers 
 were required to secure a federal licence in order to carry 
 on business, and the Government was prepared to with- 
 hold licences and supplies from any firms w^hich might 
 
284 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 attempt to realize undue profits. Refiners and whole- 
 salers were instructed not to supply retailers who 
 charged exorbitant prices, and Federal Food Administra- 
 tors were detailed to different districts both to inform the 
 public of proper prices and to report delinquencies on the 
 part of dealers. To conserve the supply, confectioners 
 were put on rations, and to increase it a $13,000,000 pur- 
 chase was made in Louisiana. Stores acquired by the 
 British Government were released for the American mar- 
 ket. Although instances of excessive charges and of 
 the hoarding of sugar were for a time reported, the adapt- 
 ation of the sugar trade to the new regulations was rea- 
 sonably prompt and a stability of prices like that at- 
 tained in the wheat trade soon resulted. 
 
 Before the end of the year further steps were taken 
 looking toward the future. On investigation by the Food 
 Administration it was found that the cost of refining cane 
 sugar was $1.30 a hundred weight. After prolonged 
 negotiations the refiners were persuaded to reduce their 
 charges from about $1.84 to this amount and it was es- 
 timated that the saving to American consumers in 1918 
 would be $25,000,000. To apportion all imported sugar 
 fairly among American refiners, a committee representa- 
 tive of cane sugar refiners was appointed; and to arrange 
 for the transportation of foreign sugar and its distribu- 
 tion among the Allies, representatives of the English, 
 French, Italian, and American Governments were to meet. 
 The Cuban crop was bought by the Allied Governments 
 at about $4.60 a hundred weight (or $6.00 delivered in 
 
 CONCLUSIONS AND COMPARISONS 
 
 285 
 
 New York), a price which should put sugar into the hands 
 of the American consumer in 1918 at from 83^ to 9 cents 
 a pound. Mr. Hoover declared that speculation in sugar 
 and the taking of excessive profits had been eliminated.^ 
 
 At the same time that licencing was applied to the 
 sugar trade, it was extended to many other foodstuffs. 
 Ill the middle of October it was announced that on and 
 after November i licences would be required for dealing 
 in all foods which form '* the prime basis of life." Eggs, 
 poultry, milk, meat, vegetables, sugar, flour, bread, wheat 
 and other cereals, fish, and canned goods were designated. 
 All persons engaged in the import, manufacture, storage, 
 and distribution of such foodstuffs were required to se- 
 cure a licence from the Food Administrator and among 
 the middlemen in question were specified meat packers, 
 cold storage warehousemen, millers, canners, grain deal- 
 ers, wholesale distributors, and retailers doing a business 
 of more than $100,000 a year. Since small grocers 
 would scarcely be able to charge more than the large re- 
 tailers, it was expected that the system would tend to 
 stablize the entire retail market. So flexible and adapt- 
 able was the licencing system proving that the ends at- 
 tainable by it were practically the ends aimed at by a sys- 
 tem of direct price fixing. 
 
 The United States, therefore, within eight months 
 after its entrance into the war had taken action to restrain 
 a rise in the price of essential foodstuffs such as England 
 had in general resorted to only in the third year of the 
 
 2N. Y. Times, Dec. 26, 1917. 
 
286 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 CONCLUSIONS AND COMPARISONS 
 
 287 
 
 conflict. Mr. Hoover put the issue clearly before a war 
 convention of business men held at Atlantic City on Sep- 
 tember 19. "If we are to have ascending prices we must 
 have ascending wages. But as the wage level rises with 
 inequality it . . . [leads] to strikes, disorder, riots, and 
 defeat of national efficiency. The verdict of the world's 
 experience is in favour of price control as the lesser 
 evil." This was the conclusion to which England had 
 been forced at the beginning of 1917. Once convinced, 
 she adopted out-and-out methods of price fixing. Prices 
 were based upon the formula which alone has stood the 
 test of experience. At every stage in its manufacture 
 the price of a commodity should represent the cost of its 
 production increased by a reasonable profit for the 
 producer. When the United States' scheme of licencing 
 dealers in foodstuffs went into effect, England had al- 
 ready fixed maximum prices for most articles of food. 
 The control was more direct, since violation of a price 
 order became a criminal offence, punishable in the courts. 
 In America the indirect control, which would take from 
 a dealer his licence or in the case of a small retailer sub- 
 ject him to the competition of large concerns, is less pre- 
 cise but will probably prove no less efficacious. Both 
 schemes are alike in principle, aiming to protect the con- 
 sumer against undue profit-taking on the part of all 
 dealers in foodstuffs. 
 
 In two respects England has gone farther in an en- 
 deavour to protect the consumer. Sugar is not merely 
 sold at a price fixed by the Government — a regulation 
 
 which dates from the beginning of the war — but it has 
 also since the autumn of 19 17 been impartially distributed 
 in limited amounts to consumers. This action followed 
 upon long-continued complaints about unfair distribution 
 both to communities and to individuals. The American 
 scheme scarcely provides against such contingencies but 
 the degree of scarcity which makes them possible may 
 not come to prevail in the United States. The other 
 regulation relative to foodstuffs in which Great Britain 
 has been more radical than America is the selling of 
 bread at a price lower than the market — even a con- 
 trolled market — w^arrants. This subsidizing of bread 
 is an expedient to which a Government has recourse only 
 as a last resort. It is not impossible that, had the British 
 Cabinet striven from the beginnig of the w^ar to eliminate 
 middlemen's profits in foodstuffs, it would have avoided 
 the growth of popular distrust and criticism which made 
 the step necessary. Even the poor do not rebel against 
 hardships which they feel are created by the circum- 
 stances of the war and which are shared by all classes 
 alike. Nothing, on the other hand, makes the worker 
 angrier than to see the well-to-do profiting by the nation's 
 disaster and profiting in part at his expense. Great 
 Britain is paying the penalty for allowing this temper to 
 devlop by being obliged to subsidize bread. It will be the 
 triumph of American regulation if charges like those 
 which have been made in England since the early months 
 of the war can be avoided. English experience relative 
 to essential foodstuffs seems to be that state control of 
 
288 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 prices is necessary, if the great mass of consumers are 
 not to be antagonized, and that the sooner such control is 
 assumed the wiser and more economical it is for the Gov- 
 ernment concerned. 
 
 Government regulation in the United States has taken 
 the form not only of fixing prices for wheat and of super- 
 vising the sale of important foodstuffs, but at the end of 
 1 91 7 it was invoked relative to imports of wool, leather, 
 rubber, and a few other commodities. In an official an- 
 nouncement of December 14, the War Trade Board ex- 
 plains why in the case of wool the step became necessary.^ 
 Although at the time the price of this commodity in Eng- 
 land was only 55 per cent, in excess of its pre-war price, 
 the advance in the United States had been 200 per cent. 
 Nor was the rise in any considerable degree due to the 
 new military demands. The supply of wool in the coun- 
 try was ample for the needs of the present and the imme- 
 diate future. Inasmuch as the clip in most wool-produc- 
 ing countries had increased and might reasonably be ex- 
 pected not to decrease, there was no prospective shortage 
 in the world's supply. Consumption in the United States 
 during 1918 would be little if at all greater than in 1917. 
 Through the influence of the Commercial Economy 
 Board, substitutes, too, were being introduced and wool 
 itself was being diverted from less essential to more 
 essential products. The excessive advance in price was 
 in reality due to speculation and to hoarding. Importers 
 had speculated in an hysterical market; cloth manufac- 
 
 »Ibid., Dec. 15, 1917, p. 2. 
 
 CONCLUSIONS AND COMPARISONS 
 
 289 
 
 turers in distrust were carrying abnormal stocks of wool 
 and were contracting with importers for unusual quan- 
 tities for far forward delivery; manufacturers of cloth- 
 ing were purchasing cloth in excess of their reasonable 
 needs. 
 
 Deprecating such action, the War Trade Board at- 
 tempted to check it by two regulations. Applicants for 
 import licences were henceforth required to agree not to 
 sell to any person other than a manufacturer without the 
 consent of the Board, and the United States Government 
 reserved to itself the right to purchase within ten days 
 after Custom House entry any imported wool at a price 
 5 per cent, less than the basis price of similar wool in the 
 Boston market on July 30, 19 17. The first regulation 
 was designed to prevent speculation, the second to check 
 the rise of prices by setting a Government valuation. 
 That the Board might be assisted in carrying out these 
 measures and in procuring an equitable distribution of 
 wool to the most essential industries, committees from 
 the wool trade and the other trades concerned were ap- 
 pointed. It became the. duty of these committees to 
 gather for the Government information in the various 
 trades, to act as consignees of imported wool and other 
 commodities, keeping record of the extent of the imports 
 and releasing them to importers under the required guar- 
 antee, and, finally, to observe the disposition of the im- 
 ports and the observance by the importers of their 
 pledges. 
 
 In the case of wool this scheme of regulation stands 
 
290 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 in contrast with the more complete control developed in 
 England during the course of the war. In the United 
 States the home clip is still unaffected ; foreign wool may 
 still be bought by private importers subject to the Govern- 
 ment's right of pre-emption and the Government's licence 
 for resale. If importers refrain from speculation they 
 may still sell much of their wool to manufacturers at 
 a favourable price. How far the Government's option 
 may be exercised to keep prices below the level of July 30, 
 19 1 7, will probably depend upon circumstances. Wool 
 will certainly be diverted to essential industries; but if 
 the supply continues liberal, as is hoped, and if substitutes 
 are developed, there is no reason why less essential in- 
 dustries need suffer. In England, on the other hand, the 
 home clip has twice been commandeered by the Govern- 
 ment, the Australasian clip twice bought, and the distribu- 
 tion of all has been strictly controlled. Indeed, the 
 method of control, especially the rationing which became 
 necessary in the summer of 19 17, brought sharp criticism 
 from the trade. Only by the establishment of a Board 
 representative of the trade and by the resumption of 
 somewhat more liberal apportionments was the dissatis- 
 faction at all allayed. The motives which induced the 
 English and American Governments to assume control 
 over wool differed somewhat and in this lay the reason 
 for different procedure. England was concerned about 
 both the supply and the rise in price; the United States 
 professes assurance regarding supplies, but great concern 
 about high prices. Since English complaints arose from 
 
 CONCLUSIONS AND COMPARISONS 
 
 291 
 
 rationing rather than from the closing of a free mar- 
 ket, American manufacturers need not expect from the 
 new regulations hardships like those experienced in Eng- 
 land, but pronounced benefits instead. The American 
 scheme is a simple one to check rising prices. Unless 
 the supply of wool diminishes or unless hoarding and 
 speculation continue, there would seem to be no reason 
 why the United States Government should purchase 
 either the home or a foreign wool clip. The same rea- 
 soning applies to hides and leather, commodities which 
 the English Government itself does not control to the 
 extent that it controls wool. What England has demon- 
 strated in the case of wool is that government action can 
 keep prices within bounds, and this for America has be- 
 come a matter of some concern. 
 
 In only two fields of industry had the United States 
 Government by the close of 19 17 assumed complete con- 
 trol, although in a third it seemed about to do so. The 
 two were shipping and railway transportation, the third 
 was the working of the coal mines. In the case of ship- 
 ping, the action had been most prompt. On October 15, 
 191 7, all merchant ships above 2500 tons gross were re- 
 cpiisitioned, practically blue-book rates were fixed, and 
 the movement of the vessels in question was henceforth 
 at the Government's will. Such decisive action on the 
 part of the state is in marked contrast with British policy, 
 although the latter is at length in accord. 
 
 Nothing probably provoked more bitter charges of 
 profiteering in England and caused more popular discon- 
 
292 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 tent than did the liberty long granted to a part of the 
 British mercantile marine to charge high freights. The 
 annual reports of steamship companies confirmed the sus- 
 picion harboured by the indignant British consumer. 
 The legislation demanded relative to the cost of food wa^ 
 closely connected with the cry that the Government 
 should control shipping rates. Slowly the Government 
 yielded. At first it acted to secure the army's supply of 
 meat from the Argentine at reasonable prices; next it 
 deflected tonnage to the North Atlantic to insure the grain 
 supply; lastly, it substituted for the agreement by which 
 these grain boats were bringing their cargoes its own 
 blue-book rates. Public opinion was slowly won over 
 and by the autumn of 1917 the subsidized loaf at length 
 convinced it that the Government preferred to pay for 
 bread rather than attempt further to reduce shipping 
 rates. The United States was not of course in a position 
 to suffer in the same way as England from high oceanic 
 freights, nor was its mercantile marine comparable in 
 size with that of Great Britain. Although, therefore, the 
 problem in America was a simpler one, the promptitude 
 with which it was handled, embodies, whether con- 
 sciously or not, the wisdom got by Great Britain through 
 bitter experience. 
 
 In another respect the United States took more de- 
 cisive action than did Great Britain in the matter of mer- 
 chant shipping. By appropriation of Congress in 19 17 
 and 1918 neariy $2,000,000,000 will be devoted to the 
 building of a large merchant marine to supplement the 
 
 CONCLUSIONS AND COMPARISONS 
 
 293 
 
 small one already existing. The need for ships to carry 
 troops and supplies to Europe, is, of course, imperative. 
 Since private firms, even if subsidized, could not be 
 trusted to build the requisite tonnage, the Government was 
 forced to become the builder and owner of a mercantile 
 fleet. Great Britain had different and more encourag- 
 ing traditions. Annually her shipbuilders had turned out 
 some 2,000,000 tons of merchant shipping, the Govern- 
 ment at most advancing a subsidy to steamship lines which 
 carried mails or would put their ships at the Government's 
 disposal in time of war. When the submarine ravages 
 of 19 1 7 made necessary the increased building of mer- 
 chant ships, the old methods could be relied upon. Only 
 labour and skill had to be put at the disposal of the ship- 
 building firms. The Government thus avoided the direct 
 responsibility thrust upon the United States, that of be- 
 coming a merchant shipper on its own account. The 
 administrator of an enormous amount of requisitioned 
 tonnage Great Britain has temporarily become; but she 
 has at least escaped this last venture in industrial initi- 
 ative. The United States, in general more reliant upon 
 the voluntary action of its citizens, has in this matter 
 been obliged to take the more radical step. 
 
 The second great industry of which the United States 
 has taken complete control is railway transportation. 
 For a time after the outbreak of the war it seemed as if 
 reliance upon the voluntary action of railway men might 
 prove efficacious. The fifty leading railway presidents 
 of the country declared themselves ready to eliminate 
 
294 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 competition and to co-operate in problems of transporta- 
 tion. Independent companies resigned for the time 
 their freedom of action, and entrusted to a commission 
 of five experienced men chosen by the President of the 
 United States the determination of important policies. 
 This Railroads' War Board at once devoted itself to 
 co-ordinating the railway resources of the country. 
 Through its efforts needless passenger trains were taken 
 off, freight congestion was often averted by the skilful 
 handling of empty cars, large quantities of supplies and 
 many thousands of men were expeditiously transported 
 for military purposes. '' It was thought to be in the 
 spirit of American institutions," said President Wilson 
 in December, ''to attempt to do everything that was 
 necessary through private management, and if zeal and 
 ability and patriotic motive could have accomplished the 
 necessary unification of administration, it would cer- 
 tainly have been accomplished ; but no zeal or ability could 
 overcome insuperable obstacles. . . ." ^ 
 
 The obstacles in question had become only too appar- 
 ent at the time when he spoke. Increasing costs of 
 operation, due largely to advancing wages and the high 
 price of commodities, diminished the net returns of nearly 
 all roads, and demands for still higher wages were in the 
 air. Although the appeal of the Eastern roads to the 
 Interstate Commerce Commission for an increase in 
 freight rates seemed assured of a cordial reception, it 
 quickly became apparent that this remedy would not meet 
 
 * Ibid., Dec. 27, 1917, P- 2. 
 
 CONCLUSIONS AND COMPARISONS 
 
 295 
 
 all difficulties. Greater sums of money than higher 
 freights would promptly yield were essential and could 
 be obtained in the market only at ruinous rates of interest. 
 Several roads which with public spirit had responded to 
 the desires of the Railroads' War Board had, owing to 
 circumstances, suffered peculiarly from so doing. At the 
 same time transportation demands became so great that 
 congestion of traffic ensued. The issue of priority or- 
 ders — orders which were sometimes in conflict — only 
 increased the confusion and delay. At this point the 
 Interstate Commerce Commission recommended one of 
 two remedies. Either the Government should take over 
 the administration of the railways during the war, ren- 
 dering therefor suitable compensation and providing ade- 
 quate maintenance, or, if the roads were left in the hands 
 of the companies, there should be granted an increase in 
 freights and a loan from the Government, while legisla- 
 tive hindrances to combination should be suspended. 
 
 Of the alternatives the Government chose the first. 
 " It has become unmistakably plain," declared President 
 Wilson, *' that only under Government administration 
 can the entire equipment of the several systems of trans- 
 portation be fully and unreservedly thrown into a com- 
 mon service without injurious discrimination against par- 
 ticular properties. Only under Government administra- 
 tion can an absolutely unrestricted and unembarrassed 
 common use be made of all tracks, terminals, terminal 
 facilities, and equipment of every kind. Only under that 
 authority can new terminals be constructed and developed 
 
296 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 without regard to the requirements or limitations of par- 
 ticular roads." ^ 
 
 By proclamation of December 26, 1917, the President, 
 therefore, announced that on December 2S he would take 
 possession of all railway systems in the United States. 
 Appointing the Secretary of the Treasury, Mr. W. G. 
 McAdoo, Director General of Railroads, he recom- 
 mended to Congress provisions for the maintenance of 
 the equipment of the roads during the period of Federal 
 control and for the payment of net operating income 
 equal in each case to the average net income of the three 
 years preceding June 30, 1917. Mr. McAdoo's first in- 
 structions to railway presidents directed them to continue 
 the operation of their roads and to use every effort to 
 increase efficiency, particularly in moving traffic by the 
 most convenient and expeditious routes. The existing 
 Railroads' War Board was continued, as well as the 
 various co-operating committees that it had formed.^ 
 
 The measure which came before Congress embodied the 
 President's recommendations as to maintenance of the 
 roads and remuneration of the companies. It added pro- 
 visions for the creation of a " revolving fund " of $500,- 
 000,000 to meet the expenses of Federal control, for the 
 issue with the President's sanction of new securities by 
 the roads, for the optional purchase of such securities by 
 the Government, and for the continuance of control " dur- 
 ing the period of the war and until Congress shall there- 
 
 5 Ibid., Jan. 5, 1918. 
 *Ibid., Dec. 27, 29, 1917. 
 
 CONCLUSIONS AND COMPARISONS 
 
 297 
 
 after order otherwise." At the same time Mr. McAdoo 
 came to an understanding with the heads of the four 
 important railway brotherhoods. A committee of four 
 representative men, he announced, would be appointed to 
 investigate the relation of employes to the railways dur- 
 ing the period of Governmental control and to inquire 
 into the demands recently presented to the companies. 
 The findings of the committee as to wages would be 
 operative from January i, 1918.'^ This fair and even 
 generous attitude of the Government toward the com- 
 panies and toward their employes called forth many ex- 
 pressions of approval and assurances of co-operation. 
 
 The assumption of Federal control over railways in 
 the United States was not uninfluenced by English prec- 
 edent. The prompt action of England in taking similar 
 steps at the outbreak of the war and the satisfactory 
 working of government control there were often referred 
 to in America. The motive in both countries was the 
 same, the imperative war-time need of an efficient trans- 
 portation system, unhampered by the rivalries or restric- 
 tions that might arise under a system of competing roads. 
 The measures adopted were not dissimilar. In England 
 the immediate management of the roads is left with the 
 heads of the various systems sitting as a Board, but the 
 final decision of important policies resides with the Presi- 
 dent of the Board of Trade. In America the presidents 
 of the roads continue their individual administration, sub- 
 ject to the direction of a central Board of selected railway 
 
 7 Ibid., Jan. 5, 1918. 
 
298 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 executives, already experienced, and to the final ruling 
 of a Director who is already Secretary of the Treasury. 
 Financially, too, England and America have acted on the 
 same principle. Both Governments guarantee to the 
 roads maintenance of equipment and remuneration of 
 stockholders. In England the remuneration is the net 
 profit during the year preceding the war, in America the 
 average net profit during the first three years of the war. 
 In England, however, the Government makes no pay- 
 ments for services rendered to itself, such being looked 
 upon as a return for profits guaranteed. In America, 
 book-keeping is likely to be continued in the usual manner, 
 the expenditures of the Government and the services ren- 
 dered it being accurately recorded. In America, as in 
 England, provision is made for the investigation of de- 
 mands for higher wages, and the former Government 
 stands ready, as the latter has for three years stood ready, 
 to meet the reasonable requests of employes. In all es- 
 sentials the English scheme has been adopted, and this 
 step of the United States Government is perhaps more 
 closely imitative of England than any other which has 
 thus far been taken. 
 
 At the end of 1917, however, there was considerable 
 likelihood that English experience with the coal mines 
 might become a precedent and that the mines of the 
 United States might soon pass more completely under 
 government control. As in the case of the railways, the 
 mines of the latter country were at first left under private 
 operation. Soon, nevertheless, a measure of control was 
 
 CONCLUSIONS AND COMPARISONS 
 
 299 
 
 introduced and took the form of price-fixing. Acting 
 under the Food Control Law, which conferred upon 
 the Executive power to control the fuel supply of 
 the country. President Wilson in August issued price 
 schedules applicable to the sale of bituminous and anthra- 
 cite coal at the mines. The prices were the outcome of 
 investigations carried on by the Federal Trade Commis- 
 sion. They purported to be based upon the actual cost 
 of production and were deemed to be, the President re- 
 marked, " not only fair and just but liberal as well." 
 Concurrently with their publication a Fuel Administrator 
 was appointed. Not merely was he to enforce the price 
 schedules but he was to supervise the distribution of coal 
 and the operations of middlemen and retailers. Very 
 soon there was enough to occupy his attention. Pro- 
 ducers complained that the price of bituminous coal had 
 been fixed too low and would compel the closing of the 
 smaller mines. Consumers complained that they were 
 being charged by the retailers more than the pit-head 
 prices would warrant. Retailers complained that sup- 
 plies from the mines were not forthcoming. The 
 miners, finally, complained that their wages were in- 
 adequate and demanded higher ones, threatening a strike. 
 How the price for bituminous coal was advanced, how 
 retailers were restrained, how supplies were hurried for- 
 ward to various consuming centres, and how the miners 
 w^ere given higher wages constitutes a tale of considerable 
 length. Its instructiveness lies in the demonstration that 
 an attempt to regulate an industry at one point is likely 
 
I 
 
 300 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 to involve the regulation of every part of it. Pit-head 
 prices involve the cost of the miner's labour, and when 
 this has to be advanced under threat of a strike, pit-head 
 prices must be revised. On the other hand, a close watch 
 has to be kept upon the middleman and the retailer to see 
 that no profiteering creeps in between the pit-head and 
 the consumer's furnace. 
 
 At the end of the year the Fuel Administrator, Mr. 
 Garfield, told a Senate Committee that more extended 
 control of the coal mines would be inevitable if the war 
 continued, and that he himself would have put into effect 
 such control as soon as he took office, had there not been 
 danger that the sudden change would defeat the end at 
 which he aimed, the supplying of coal to those who needed 
 it most.^ Lack of transportation facilities increasingly 
 complicated the situation. It was responsible for a 
 shortage in available coal of 20,166,442 tons between 
 August 28 and November 24. Some immediate relief 
 was got through priority orders, although in some in- 
 stances conflicting priority orders seem to have aggravated 
 the difficulties. In December a coal famine prevailed in 
 many regions and the first task taken in hand by the new 
 Director of Railroads was the hurrying of coal to critical 
 points. That such a situation might not again arise, Mr. 
 Garfield formulated a plan closely modelled upon the 
 English one of September, 1917. The United States he 
 proposed to divide into twenty districts, each containing 
 a coal producing area and each presided over by an agent 
 
 • Ibid., Dec. 27, 191 7, p. i. 
 
 CONCLUSIONS AND COMPARISONS 
 
 301 
 
 of the Fuel Administration. Between districts no 
 " cross-hauling " should be allowed and each agent should 
 see to it that coal for his district came from the mines 
 situated therein. Long hauls, it was hoped, would thus 
 no more tie up cars, and the reduced freights would lessen 
 prices for consumers. Only a few months before, the 
 Controller of Coal Mines in England had, in order to 
 forestall similar difficulties of transportation, mapped out 
 that country into producing and distributing areas. That 
 such a plan might be introduced into the United States 
 it was necessary that contracts involving transportation 
 of coal between points in different districts be no longer 
 drawn. On December 2y, accordingly, the Fuel Admin- 
 istrator issued an order which prohibited contracts that 
 might involve " cross hauling," and in addition provided 
 that no contract should be for a longer period than one 
 year, that the prices stipulated should not exceed prices 
 fixed by the Government, and that, at the request of the 
 Fuel Administrator, the contract itself should be forth- 
 with cancelled. Investigation had shown that prac- 
 tically all existing contracts would expire by April i, 
 1918. As a result, the new ruling would by that date 
 bring the distribution of coal pretty completely under 
 the Fuel Administration. The running of the mines, to 
 be sure, would still be left with the owners ; but on this 
 point Mr. Garfield told the Senate Committee that the 
 big coal operators had assured him of their readiness to 
 deliver their properties the moment the Government asked 
 for them. At the end of the year, therefore, govern- 
 
302 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 ment control of the coal mines had already passed beyond 
 the stage of price fixing to that of control over distribu- 
 tion, with a prospect that complete Federal administra- 
 tion was not far in the future. 
 
 England's experience with coal mines and miners has 
 been more grievous than that of the United States, has 
 been distributed over a longer period of time, and has 
 at length reached its logical conclusion. Complaints 
 from consumers about the high prices of coal led, in the 
 summer of 191 5, to the introduction of the Price of Coal 
 (Limitation) Bill. Before it could be passed the miners 
 of South Wales, demanding a new and liberal wage- 
 schedule, precipitated the most disastrous strike of the 
 war, and after the passage of the bill difficulties did not 
 cease. The maximum prices established had to be in- 
 creased, retailers had to be controlled, and miners had to 
 be further propitiated. At length the miners' demands 
 rendered the situation intolerable and early in 19 17 
 the state assumed control of all mines. It would prob- 
 ably have been better had this step been taken long before 
 it was. Once in control, the Government proceeded to 
 regulate the distribution of coal with a view to the relief 
 of the transportation system, and this measure was fol- 
 lowed by a virtual rationing of the metropolitan area. 
 
 In the United States a readiness has been shown to 
 profit by English experience in fixing maximum prices for 
 coal and in establishing production and consumption areas. 
 Without doubt the American Government will not allow 
 a disturbing labour situation to arise. Wages in certain 
 
 CONCLUSIONS AND COMPARISONS 
 
 303 
 
 mines have already been once advanced under Govern- 
 ment persuasion and with Government assistance. The 
 complete control of the mines which England has found 
 essential would forestall any difficulty of the kind and 
 such control is probably foreshadowed. Whereas the 
 prompt action of England relative to the railways has 
 been a happy precedent for the United States, her tardy 
 action and resultant misfortunes relative to shipping and 
 the coal mines may well serve as warnings. In the case 
 of shipping the warning has not been without effect, in 
 the case of the mines it is not likely to be. 
 
 At this point the comparison between the war-time ex- 
 perience of the two countries relative to the control of 
 industry may be concluded. Despite the somewhat dif- 
 ferent circumstances under which Great Britain has often 
 been forced to act, the United States may in a general 
 way learn much from her. The control of many food- 
 stuffs, of wool, and of hides has in England been pre- 
 cipitated by dependence upon foreign sources of supply. 
 America seldom has to face this difficulty in an acute 
 form. If, however, for various reasons a shortage in the 
 supply of foodstuffs, wool, or hides should arise, the 
 experiment of stringent governmental control has been 
 made and the workings of it are observable. Of more 
 immediate value, perhaps, is English experience in the 
 management of railways, coal mines, munitions works, 
 and organized labour. By the prompt taking over of her 
 railways, the tardy taking over of her mines, the efficient 
 control over her munition shops, and the statutory co- 
 
304 
 
 WAR TIME CONTROL OF INDUSTRY 
 
 Operation of labour, England has brought great essential 
 industries to a stage of efficiency which America may well 
 be proud to attain. It was at first hoped that voluntary 
 co-operation in the United States might achieve what in 
 England has required state control. This hope is no 
 longer entertained in regard to merchant shipping or the 
 railways. It is fading in the case of the coal mines. Its 
 brightness has been dimmed by the introduction of 
 various restrictions upon trading in foodstuffs and in 
 wool. It persists still relative only to the production of 
 munitions, the conciliation of labour, and the consump- 
 tion of food. Always, however, as the hope wanes, the 
 experiences recorded in the preceding chapters are turned 
 to, and the wisdom taught by them is carefully pondered. 
 
 INDEX 
 
 Absenteeism at coal mines, 63. 
 Agriculture, xiii, 249-268. 
 Agricultural Committees, War, 
 
 253, 256. 
 Agricultural machinery, 257-258. 
 Agricultural Wages Board, 264- 
 
 265. 
 
 Arable, conversion to, 249-250, 
 
 254-255, 267. 
 Arbitration, compulsory, 31, 52, 
 
 54. 
 Argentina, 105, 132-133, i47, 184- 
 
 185, 205. 
 Armament firms, 15. 
 Australia, 106, iio-iii, 147, 153, 
 
 184, 205, 207, 254. 
 
 Bacon, 195-197. 
 
 Beef, prime, 191, cf. meat. 
 
 Beer, 217-219. 
 
 Blue-book rates, xv, 141, 152, 157, 
 
 206. 
 Board of Trade, i, 5-^, yy, 210. 
 Bonus, war, ix, 3-8, 70. 
 Boots, 129 ff.; standard, 138. 
 Bread, 198 ff. 
 
 Coal, exportation of, 64, 79-81; 
 for London, 12, 65-68, 78-79' 
 96-100; prices of, 66-69, 77-85, 
 90; transportation of, 12, 67, 
 8I4, 300. 
 
 Coal and Coke Committees, Dis- 
 trict, 13, 80, 92. 
 
 Coal mines, 61 ff. ; Controller of, 
 12, ^z, 98-100; output of, 62- 
 63, 93-95; owners of, 68-69, 
 
 305 
 
 71-72, 86-S8, 94; in the United 
 States, 298-301. 
 
 Commission of Inquiry into In- 
 dustrial Unrest, 52-59. 
 
 Consumption, economy in, xiii, 
 
 64, 95-96, 173-177, 188, 211-232, 
 276. 
 
 Controlled establishments, 30. 
 Copper, prices of, 39-41, 277-27^. 
 Corn Production Bill, 263-265. 
 Costs, conversion, 36, 108, 114, 
 244. 
 
 Cotton, importation of, 160-162; 
 operatives, 29, 31. 
 
 Defence of the Realm Act, x, 
 16, 82, 210. 
 
 Dilution of labour, 29, 50-52, 56. 
 
 Docks, congestion at, 9. 
 
 Engineers, Amalgamated Society 
 of, 49-51, 56. 
 
 Engineers and Firemen, Asso- 
 ciated Society of Locomotive 
 2, 6^. 
 
 Exportation, of coal, 64; of 
 wool, 104-107; of steel, 42. 
 
 Fertilizers, 252, 256. 
 
 Food, xii, 167-248; waste of, 
 
 231-232; cf. prices. 
 Food Control Committees, 179- 
 
 180, 247. 
 Food Controller, 209-211, 179, 
 
 221, 227, 242. 
 
 George, Lloyd, as Chancellor of 
 the Exchequer, 15, 16, 20, 22 \ 
 
3o6 
 
 INDEX 
 
 as Minister of Munitions, 23- 
 34, 91 ; as Prime Minister, 45, 
 76-77, 83. 
 
 Hides and leather, xi, 129-139. 
 
 Importation, of meat, 183-187; 
 of sugar, 170; of wheat, 198- 
 207; restriction of, 150-151, 
 159-162. 
 
 India, 134-135, 200, 202. 
 
 Insurance for shipping, 143. 
 
 Labour, ix, 2 ff., 17 ff., 31, 45, 48- 
 
 60, 187, 260-261, 278-279. 
 Laissez-faire, Doctrine of, 273- 
 
 275- 
 Leaving Certificates, x, 31, 53, 
 
 56. 
 Liquor, 22, 55, 217-219. 
 
 Machine tools, 15. 
 
 Meals Orders, Public, 219-221, 
 230. 
 
 Meat, xi, 147, 153, 181-197 ; sup- 
 ply for the army, 183-184. 
 
 Military Service Act (1916), 50, 
 
 55. 
 Milk, 237-240. 
 
 Milling Orders, 211-213, 216. 
 Milner's Committee, Lord, 249- 
 
 254- 
 Miners, xi, 29, 31, 69-77, 88-90, 
 
 94- 
 
 Munitions, x, 14 ff., 25 ff., 35 ff. ; 
 Ministry of, 23 ff., 43-47 ; Vol- 
 unteers, 32. 
 
 Munitions of War Act (1915), 
 X, 30 ff., Z7y 53, 72,-7(>- 
 
 Paper, 150, 159. 
 Passenger traffic, 9-10. 
 Periods of the war, vii. 
 Potatoes, 233-236. 
 
 Prices, of coal, 66-69; of food, 
 168; of hides and leather, 130- 
 136; of iron and steel, 39; of 
 meat, 184-193; of sugar, 171- 
 174, 283-285; of wheat, 199- 
 205, 241, 246, 265-266, 280; of 
 wool, 107-111, 114-115, 288- 
 289; maximum, xii, 39-41, 168, 
 172-173, 189-193, 232-246, 265- 
 266, 280, 286-287; minimum, 
 250-251, 262, 280. 
 
 Price of Coal (Limitation) Act, 
 77-79, 84, 90. 
 
 Priority regulations, 43-46, 92, 
 I 18-124. 
 
 Production, Committee on, 17, 
 19, 21, 54. 
 
 Profiteering, ix, 152, 154, 200-201. 
 
 Prothero, R. E., 190-192, 195, 254. 
 
 Railways, congestion on, 9, 295 ; 
 
 fares on, 10; state control of, 
 
 I ff., 293-298. 
 Railwaymen, National Union of, 
 
 Rationing, of coal, 97-99; of cot- 
 ton, 160-162; of sugar, 179- 
 181; of wool, 1 18-124; volun- 
 tary, 221-230. 
 
 Runciman, W., 72, 7S, 210, 232. 
 
 Shipping, xi, 140 ff. ; construction 
 of new, 164-165; freight rates 
 for, 67, 80, 143-148, 153, 158, 
 184-185; losses in tonnage, 
 163 ; requisitioning of, 147- 
 149, 152-153, 157, 204, 291; 
 profiteering in, 151-152, 154, 
 157. 
 
 Shoddy, use of, 116. 
 
 Speculation, in coal, 66 ; in hides, 
 132, 134-135 ; in steel and cop- 
 per, 41 ; in wool, 288. 
 
 Stanley, Sir Albert, 6-8. 
 
 INDEX 
 
 307 
 
 Steel, exportation of, 42; prices 
 of, 39 ff., 277-278. 
 
 Strikes, 5, 7, 18 ff., 48-51, 68-77. 
 
 Subsidized bread, 245, 287. 
 
 Sugar, ix, 169-181 ; Commission, 
 Royal, 170, 173, 178; consump- 
 tion of, 173-177; prices of, 
 1 71-174, 283-285. 
 
 Syndicalists, 75. 
 
 Tobacco, 159. 
 
 Tonnage, mercantile, 141, 163. 
 
 Tractors, 257-258. 
 
 Trade unions, x, 2 ff., 18 ff., 125 ; 
 
 Advisory Committee, 56-58; 
 
 regulations, 29-33. 
 Transportation, economies in, 9- 
 
 13 ; of coal, 12, 67. 
 
 Treasury Conference, 20, 33. 
 
 Wages, 3-«, 53, 55, 57, 70-76, 8&- 
 
 90; agricultural, 251, 263-264. 
 War-bread, 211-217. 
 War Savings Committee, 223. 
 Wheat, ix; Commission, Royal, 
 
 205-208; prices of, 199-205; 
 
 supply of, 199-206, 209, 227; 
 
 stimulus to production of, 
 
 250 ff. 
 Whitley Report, 54, 58. 
 Wool, xi, loi ff. ; prices of, 107- 
 
 III, 114-115; state purchase of, 
 
 108-112, 125; supply of, 102- 
 
 106 ; in the United States, 288- 
 
 291. 
 Women, in agriculture, 259; in 
 
 industry, 29, 34, 53, 55. 
 
 Printed in the United States of America. 
 

 T 
 
 HE following pages contain advertisements of a 
 few of the Macmiilan books on kindred subjects. 
 
Cooperation : The Hope of the Consumer 
 
 By EMERSON P. HARRIS 
 
 President of the Montclair Cooperative Society. 
 With an Introduction by JOHN GRAHAM BROOKS 
 
 Cloth, i2mo 
 
 The Failure of Our Middlemanism, Reasons and the 
 Remedy, Practical Cooperation, Background and Out- 
 look, are the titles of the four parts into which this work 
 is divided. The author's purpose has been to discuss 
 cooperative purchasing, to show why it is desirable, to 
 indicate the evils which it reforms, to present the opera- 
 tion of a cooperative store and to consider the difficul- 
 ties which must be overcome. '' Mr. Harris could have 
 chosen no happier moment for his message than the 
 present," says John Graham Brooks, in his Foreword. 
 "The consumer has been the 'forgotten man.' From 
 big business down to obscure quackeries he has been 
 fleeced almost without protest. Into this conspiracy of 
 ignorance, wastefulness and sharp practices the shock 
 of war has come. The awakening is rude but the con- 
 sumer has got the stage. Already millions of us are 
 looking back wondering at the slavish acquiescence with 
 which we took our punishment. We are most amazed, 
 perhaps, that we should have submitted to methods of 
 secrecy which have been as mischievous in business as 
 in diplomacy." 
 
 THE MACMILLAN COMPANY 
 
 Publishers 64-66 Fifth Avenue New York 
 
The Foundations of National Prosperity 
 
 By RICHARD T. ELY, RALPH H. HESS, CHARLES 
 K. LEITH, AND THOMAS NIXON CARVER 
 
 Cloth, 8vo, $2.00 
 
 "A most useful assembling of closely related problems and the facts 
 about them — highly stimulating to constructive thought on some of the 
 most vital issues of to-day and to-morrow." — Duluth Herald. 
 
 His book emphasizes the thought that conservation is to be regarded as 
 a treatment of the foundation of national prosperity. It deals with the 
 permanent causes of the wealth of nations. The titanic war struggle in 
 which we are now involved makes it important to emphasize the fact that 
 in conservation we have to do with national preparedness both for war and 
 peace. There is danger that in our various measures we may direct our 
 attention too exclusively to the needs of to-day and to-morrow, whereas 
 nothing is more evident than that this preparedness must be a lasting all- 
 around condition. While this volume treats primarily of prosperity and 
 preparedness from the standpoint of permanency, it also has lessons for 
 the immediate moment. 
 
 Part I deals with the more general aspects of the subject, bringing it 
 particularly into relation to economic theory. Conservation policies are 
 considered and the fact that these are chiefly land policies is brought out. 
 
 Part II discusses the relation of conservation to economic evolution, 
 showing that each stage in economic evolution must have its own conser- 
 vation policies. 
 
 Part III gives an authoritative presentation of the minerals which play 
 a peculiar part in conservation. 
 
 And part IV deals with the human resources for which the natural re- 
 sources exist. This section is critical and leads to a very careful examina- 
 tion of remedies for social evils, because it looks below the phenomena of 
 the day to the permanent effects of our methods in deaUng with human 
 beings. 
 
 THE MACMILLAN COMPANY 
 
 Publishers 64-66 Fifth Avenue Hew Tork 
 
 The Food Problem 
 
 By VERNON KELLOGG and ALONZO E. TAYLOR 
 
 %I.2S 
 
 " Food is always more or less of a problem in every phase of its production, 
 handling, and consumption. It is a problem with every farmer, every trans- 
 porter and seller, every householder. It is a problem with every town, state, 
 and nation. And now very conspicuously, it is a problem with three great 
 groups ; namely, the Allies, the Central Empires and the Neutrals ; in a word, 
 it is a great international problem." 
 
 These sentences from the introduction indicate the scope of *' The Food 
 Problem " by Veinon Kellogg and Alonzo E. Taylor. 
 
 Both authors are members of the United States Food Administration. Dr. 
 Kellogg is also connected with the Commission for relief in Belgium and pro- 
 fessor in Stanford University. Mr. Taylor is a member of the Exports Admin- 
 istrative Board and professor in the University of Pennsylvania. The preface 
 is by Herbert Hoover, United States Food Administrator and Chairman for the 
 Commission of Relief in Belgium. 
 
 The food problem of to-day of our nation, therefore, has as its most con- 
 spicuous phase an international character. Some of the questions which the 
 book considers are : 
 
 What is the problem in detail ? 
 
 What are the general conditions of its solution ? 
 
 What are the immediate and particulars which concern us, and are within 
 our power to affect ? 
 
 And finally, what are we actually doing to meet our problem ? 
 
 TABLE OF CONTENTS 
 
 Introduction: The International Problem. 
 
 Part I. The Problem and the Solution. 
 
 Chapter I. The Food Situation of the Western Allies and the United States. 
 
 II. Food Administration. 
 
 in. How England, France, and Italy Are Controlling and Saving Food. 
 
 IV. Food Control in Germany and Its Lessons. 
 
 Part II. The Technology of Food Use. 
 
 V. The Physiology of Nutrition. 
 VI. The Sociology of Nutrition. 
 VII. The Sociology of Nutrition {Continued), 
 VIII. Grain and Alcohol. 
 Conclusion : Patriotism and Food. 
 
 THE MACMILLAN COMPANY 
 
 Publishers 64-66 Fifth Ayenue Hew York 
 
The Soul of Democracy 
 
 By EDWARD HOWARD GRIGGS 
 
 Cloth, i2mo, $1.25 
 
 What at bottom does the war mean? Why has 
 it been our war from the beginning? What will 
 be the effect of the war upon our social philoso- 
 phy and upon the future of democracy? These 
 are the questions which this volume undertakes 
 to answer. The respective values of democracy 
 and paternalism for efficiency, endurance, and 
 finally for the welfare and progress of humanity 
 are studied in a series of vital chapters culminat- 
 ing in an analysis of the effect of the war upon 
 socialism, feminism, religion, education, and litera- 
 ture. Those who have heard the author's public 
 addresses will readily realize the significance of a 
 volume embodying his whole philosophy of the 
 world's struggle with its effect upon the future. 
 
 THE MACMILLAN COMPANY 
 
 Publishers 64-66 Fifth Avenue New York 
 
COLUMBIA UNIVERSITY LIBRARIES 
 
 This book is due on the date indicated below, or at the 
 expiraUotn of a definite period after the date of borrowing, as 
 provided by the library rules or by special arrangement with 
 the Librarian in charge. 
 
 DATE BORROWtO 
 
 DATE DUE 
 
 DATE BORROWED 
 
 DATE DUE 
 
 C28 (358) lUOM 
 
 D203 
 
 G794 
 
 COLUMBIA UNIVERSITY 
 
 003204865 
 
 G794 
 
 Grav 
 
 try 
 
 War time control nr inriin- 
 
 V-ii 
 
 N 
 
 NEH 
 
 FEB 1 1 T9W 
 
'pwmi^^M 
 
 r 
 t 
 
 t 
 } 
 
 t^xt 
 
 m 
 
END OF 
 TITLE