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    "source_title": "Encyclopaedia Britannica (1926)",
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    "title": "GOVERNMENT",
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    "verified_text": "short as it is, the period since toro has been momentous in the development of government. the period divides itself into three parts: the years before the war, 1910-4, the years of war 1914-8, and the years of recon- struction after the war. but in the history of government the years 1914-8 stand out in large letters. war, and especially modern war, sees the state writ large. yet, divided as it thus is, the period 1910-26 should be seen also as a whole. for the ideas of state organisation and control which were put into practice in 1914-8 were forming in the preceding years of peace. the steady growth in the functions of the state, especially in the seven years before 1914, made easicr the task of the mobil- isation and control of national resources in time of war. so again after the war, while the years of reconstruction saw a reaction against control, yet the range and the boldness of state action in war, and the magnitude and complexity of the problems of resettlement, left both the theory and the practice of the state more advanced than in the pre-war years. despite therefore, the exceptional conditions of the years of war, the period presents a unity in its development greater than at first sight appears. as events recede and the period can be seen from a greater distance this will become more evident. the gencral idea of the state-—in judging the position of the theory and practice of government at any period of time it is useful to ask three questions: (1) what changes have there been in the general idea of the state? (2) what developments stand out in the forms of government? (3) what is most noteworthy as regards the scope and functions of the state? ‘the most fundamental question 1s, what change is there in the general idea of the state? three things in this period deserve special emphasis. first, the remarkable growth in the sphere of govern- ment. the period might be called that of the changing state, with a great and on the whole steady increase in the functions of government. the movement of state and community control, which had been gaining momentum for over a generation, ex- tends in a wide variety of directions. the movement is universal, inasmuch as it shows itself in varying forms and degrees in all countries with a developed system of self-government, and with a highly organised economic life. second, there is the growth in the moral idea of the state. right not might is the valid basis of the state, but the significance 247 of this wins recognition slowly. yet this period will be seen to mark a great advance in this respect. the state exists to make life good. the idea of social justice reveals itself more fully both in the relations of the individual to the state and in the relations of states one to the other. the challenge to the crude theory of the state as might is made in deed as well asin word. there is a new emphasis on the truths that there can only be one morality for the individual and the state, and that, as the state exists to secure justice, its acts, as much as those of the individual, must conform to common moral principles. the third aspect is the new emphasis on the value of the individuality or personalitv of the individual and of the group. the end of the state is the individual. the doctrine of sover- eignty becomes less formal and dogmatic. the idea of the community transcends that of the state. for the community embraces the great family of groups and associations which the state must recognise as also sharing with it in the expression of man’s social and political nature. i, forms of government there have been in the period very important developments in the structure of government, international, national and municipal. but of these by far the most memorable has been the great international constitution embcdied in the covenant of nations 1919. the establishment of the assembly and of the council of the league, with their regular meetings and with their important array of permanent and special committees, the organisation of the secretariat of the league, the establishment of the international labour bureau under the treaty of versailles, and the creation of the permanent court of international justice, (g.v.) are achievements of the highest significance in the history of government. the years 1899-1910, opening with the first hague convention, had seen a great advance in interna- tional arbitration and methods of peaceful co-operation; the crucial year ror4 had seen the ratification of the first of the treaties between the united states of america and other countries to submit all questions under dispute to a tribunal of investiga- tion before recourse to war; but it is above all to the years 1919 and after that one must look for the foundations of the interna- tional polity. second, this period has been marked by the importance and variety of developments in government within the british ikm- pire—in itself a league of nations, whose constitutional experi- ence has had a peculiar value for the great world league. the union of south africa in 1910, expressed in a constitution dis- tinctive in type from that of the other great federations within the british empire; in the government of india act of 19109, embodying a bold experiment in diarchy; the constitution of the irish free state, under the government of ireland act 1922, with the status of a dominion; and the establishment of the parliament and government of northern ireland, under the government of ireland act 1920, the first example of legislation and evolution within the united kingdom, are events of, great constitutional interest. meanwhile important developments have taken place affect- ing the general system of relations within the empire. the im- perial conference of 1911—the organisation and work of the committee of imperial defence, the development of the imperial war cabinet in 1917~8,and the conscious advance towards fuller equality of status with the mother country on the part of the dominions—esnpecially the world recognition of the dominions and of india as member states in the league of nations, and the efforts made by post-war conferences to provide more effective methods of imperial consultation and co-operation—mark the period as one of the highest importance in the constitutional history of the british empire. third, this period will be notable for the advance throughout the world in the adoption of representative forms of government and in the progress of democratic ideas and institutions. the political constitutional changes since 1910 in china, including the establishment of a republican form of government, are the most striking indication of the changing east. however supcr- 248 ficial and subject to reaction many of these changes may be, they are evidences of the will to learn from the political experience of the west, and, with eastern participation in international insti- tutions of government, are part of the great movement which is bringing the world closer together. in europe itself the world war brought many changes in government, and the new constitutions in germany, the baltic states, poland, czechoslovakia and yugoslavia mark the ad- vance throughout europe of common representative forms of government. in most cases these new constitutions show an acceptance of the cabinet idea of responsible government, but methods of direct popular judgment through the referendum and the initiative have also a wide place in modern european constitutions. notable also is the widespread adoption, in new and old constitutions, of proportional representation. it remains to be seen how far the organisation of government on these lines is going to provide a sufficiently strong and stable executive, and how far experience may lead those nations which have adopted the system of parliamentary government to study and follow more closely the british model, which has secured a greater measure of stability and of clearness of responsibility than has resulted from other types of parliamentary government. trend towards a working harmony.—in this connection also it may be noted that the trend of opinion, based on expe- rience during the period, has been in favour of the system which secures close harmony between the legislature and the executive. in states where the established system was based on a more marked acceptance of the division of powers, and where, as in sweden, the constitution presented a “ dualistic character,” development has been steadily towards greater harmony between the parts of government, giving thereby a more unitary char- acter 1o the constitution. even in the united states of america, the great example of the separation of powers, there has been an increasing recognition of the value of closer relations between the parts of government, and the working system of the consti- tution seems to be moving towards the realisation of this object. in this connection one of the most notable developments has been the adoption of a budgetary system by the federal govt. in 1921, as well as by individual states of the union. in general it may be said that the increasing body of comparative evidence on the practical efficiency of different methods of legislative and administrative organisation is bringing about a closer approxi- mation of the different forms of government one to another, and a clearer understanding of the qualities and defects of each type. while this has been happening in the progress of a represen- tative government, it is also important to recognise that in this same period there has been a great increase in the critical atti- tude of mind in almost all advanced countries towards the work- ing of representative institutions. discontent with parliamen- tary and congressional institutions has been vocal, and the reac- tion has expressed itself in various ways. in russia, with the revolution of 1917 a new system of government, based on coun- cils of soldiers, workers and peasants, has been developed. the challenge of this type to the established representative system of parliamentary government has not so far succeeded in the states of central and eastern europe which have given them- selves new constitutions since 1918. on the other hand, espe- cially in the southern european states, the reaction against the weakness and corruption of government has led to the estab- lishment of a scries of dictatorships which, even when they main- tained the form of parliamentary government have denied it the substance of power. these reactions from representative government are significant. war increases the strength of the exccutive, and the experience of the first years of peace empha- sised the need of authority and leadership. but, apart from this, there has been a growing recognition that, even in normal times, good government in democratic states requires clearness of responsibility and the power to act, and that in many cases representative institutions, parliamentary and congressional, have dissipated power and obscured responsibility. functional representation—in another direction, closely related to the foregoing, the period has also shown interesting government developments in the growth of ideas and of institutional forms expressing what is called functional representation. the school of thought which has given prominence to these ideas has in its more extreme expression challenged the authority of a parlia- mentary system based on regional representation, and has sought to replace this by methods which would directly reflect the opinions of the various economic and social groups within the community. the vogue of this school of thought has been due, not simply to dissatisfaction with the working of the existing forms of representative government, but also to a sense of the importance of securing the expert knowledge of the group mind and of giving to the groups the largest measure of self-govern- ment and control in the development of their functions. in practice, the great increase in the organisation, not only of industrial and economic but of social and cultural groups within the body politic, extending often beyond national boundaries, has influenced the institutions of government, local, national and international. nowhere is this more clearly seen than in the formation of representative councils or committees, usually consultative, but in some cases invested with considerable statu- tory authority, which have been associated with the public departments of administration in great britain. in germany the place given in the new constitution to the economic council of the empire is an expression of the same tendency. this does not, however, involve the overthrow of the well-established forms of representative government. gradually the adjustment of the new to the old order is taking place, and the theory of representative government is thereby enriched and strengthened. for there is no alternative to representative government if democracy is to survive in the modern world. such at least seems to be the trend of progress through the changing complex of political, social and economic conditions. it is worthy of note also that in this political evolution there is going on a process both of centralisation and decentralisation. in all federal states there has been during this period a marked growth in the power of the central government, while in states with a more unitary type of constitution, like great britain and france, methods of devolution and of regional reconstruction have been making headway. but in both types, centralisation and decentralisation are actively proceeding, a consequence of the growth in the functions of the state and of clearer differenti- ation of the powers which should belong respectively to local, national and international authority. nor should the increased attention in this period to local gov- ernment, urban and rural, be overlooked. nowhere have devel- opments in this ficld been more significant than in the united states. ‘the great amount of experiment in that country in the forms of municipal government indicates a more active period of interest in local affairs, while the progress of the municipal home rule movement is a further expression of the democratic idea that government must be decentralised, and that the sense of local responsibility has to be safeguarded in the great modern nation state. thus this period has brought forth important developments in international, federal, national and local gov- ernment. it will stand out also as one in which the nations have been coming nearer to one another in constitutional thought and in forms of government. il. functions of the. state the years 1910-25 have seen a great extension in the functions of the state. in the last quarter of the roth and to an increasing degree in the first decade of the zoth century the state has been abandoning the policy of laissez faire, and building up a con- structive plan of community action, aiming at better social and economic standards of life. in education, in public health, in provision for housing, in factory and workshop standards, in the regulation of industrial disputes, in the development of municipal services, the new idea of the functions of the state was being progressively revealed. the years 1906-10 opened up rich fields of state activity; and 1910-4 saw further important developments, which, however, were checked by the outbreak of hostilities. gracle—grain elevator extension of state actitttyv—in great britain the establish- ment of the development commission and of the road board marked a new constructive policy of state aid. thus, the re- sources placed at the disposal of the devclopment commission enabled a comprehensive scheme of agricultural research to be undertaken, while later the establishment under the privy coun- cil of the committee for scientific and industrial research, and of the medical research committee were further recognition of the great and growing function of the state in this sphere. the road board was also the forerunner of developments of state policy in co-ordinating and controlling transport, culminating in later years in the establishment of a ministry of transport. so again the pre-war years saw the establishment of national health in- surance and the first steps in the development of unemployment insurance under the national insurance act of tort. the outbreak of war led to a great extension of state functions. voluntary methods gradually gave place to state control. the regulation of man power, the control of imports and exports, the nationalisation of the supplies of munitions, the regulation of agricultural production, the rationing of food supplics and of raw materials for industrial requirements—these and other meas- ures of state action demonstrated the power of state organisation in time of war. peace brought with it a reaction. nevertheless, after the war there remained a wider idea of community right and obligation. the gravity of the problem of unemployment led to measures of relief by central and local authorities of a character and amount hitherto unknown. ‘the state has also been called upon to exercise extended functions in relation to the national resources of coal, power and transport; while the devel- opment of a much more comprehensive policy for the assistance of agriculture and forestry and the establishment of the food council are indications of the steady growth in state function. voluntury effort—but side by side with the growth of gov- ernmental power is the increase in voluntary economic and social organisation, and in the association of voluntary with statutory bodies in the work of government. there is great significance for the future in this renascence of voluntaryism. it marks a new stage in the development of government, in which not simply do the people by their vetes choose their rulers, but in which to an increasing extent they are associated with the administration of government in its many branches. the state is becoming more flexible. the organisation of the community is proceeding, not simply by bureaucratic efficiency, but by the democratic method of making the people experience to an increasing extent, through voluntary organisations, the part which they alone can fill in the work of government. wer —shipping leq. | = -—2500 bushel garner. ss — transfer 8 me se pur spor scale te car.|— — cireuler storage bin. deapacity 47000 bushels. th ae ee <a belr. working house, ar ae belt, « storage bin. capacity 14.000 bushels. storage. 249 just as the theory of /atssez faire had to yield to changing con- ditions, so the theory of a socialistic state, meaning thereby state ownership, state operation and state control, is giving place, at least in the anglo-saxon countries, to a conception of community life, in which there is not only room for individual and voluntary organised effort, but in which it is seen that the increase of state action to be really effective and desirable has to be accompanied by a growth in the more flexible forms of association which come under the category of voluntary and self-help movements. it may well be that, as the anglo-saxon race has contributed beyond any other people to the development of representative institu- tions of central and local government, so the political genius of the race may reveal the part which voluntary associations have to play in the development of democracy and in the meaning of community life. in all these respects the period 1910-25 1s signifi- cant in the history of government. (sce soclal service. ) bibliograpiiy.—the main sources of evidence for the study of modern governments are to be found in the official records of parlia- mentary proceccdings in the several countrics and in the reports of the administration departments and of special commissions on commit- tees of inquiry. for the text of the constitutions w. f. dodd, modern constitutions (1909) and p. dareste, les constitutions modernes (1910) are the most convenient collections while the most useful source for the post-war constitutions is the jahrbuch des offentlichen rechts (tubingen). as regards general studies of modern government, viscount bryce, afodern democracies (921); a, ismein, flemenis de droit constitutionnel a ncais et coniparee (1921) and g. jellinek, ad/gemeine staatslehre (1922) are of standard value. a wide range of studies of government in war time has been issued by the carnegie endowment for international peace. a useful series of studies in governmental organisation is published by the institute for government research (washington, d.c.). cw. g.s. a.) grace, william gilbert (1848-10915), english cricketer (see 12.308), died at eltham, kent, oct. 23 rors. his elder brother, epwarp mitts grace (1841-1911), died at thornbury, glos., may 28 rgr1. see f. s.a. cooper, i’. g. grace, cricketer (1916), lord hawke and others, the afemorial biography of dr. w. g. grace (1919). graf, arturo (1848-1913), italian poet and critic (see 12.315), died at turin may 29 1913. pocsie, a collection of his best poems, appeared in 1915. sce sartori treves, arturo graf, romanzicre e pocta (1904). grain elevator.—the term elevator has been univer- sally adopted on the north american continent to describe a granary consisting of deep bins or silos, the grain being elevated to the top of these bins for the purpose of filling them. it is also commencing to be generally used by such other countries as have adopted this method of grain storage. the grain elevator is the natural outcome of the bulk- handling marine roiee lofrerle 8] mm | « | eed 7 a ae 5 ee meet gon menused. 9 =a gee ——e ae tl \\ upper gerner. ee cr ee ee o> \" ly batins scale. \\ lower gerner. = ~<- merine leg. maa hoe i | ev 4 | marine tower « : ‘3 ey fic. 1.—canadian pacific railway elevator, at port mcnicoll, ontario, transferring grain from a lake vessel to railway cars. its storage capacity 1s 4,000,000 bushels. 250 system as distinguished from the bagging system, and it is this that makes it possible for a port, equipped with up-to-date ele- vators and grain galleries, to receive and ship out such vast quan- tities of grain as are handled at canadian and united states ports, of which montreal holds the premier position with an export record of over 4,000,000 tons per annum. previous to the introduction of the bulk-handling system, grain was, and still is, in many countries, handled in bags. to attempt to handle a large grain crop in bags is about as economical as supplying city water in buckets instead of water mains. grain is a semi-fluid material, and the bulk-handling system uses this fact. distribution of elevators —a\\though canada and the united states are still the only countries in which grain is handled en- tirely in bulk through elevators, there has been a noticeable movement toward this method in several other countries and already there are examples of up-to-date elevators in europe, australia and the argentine. russia has a few dotted over her vast grain territory, and south africa has also made a commence- ment. the complete bulk-handling plan adopted by the new south wales govt. with its chain of elevators from the grain growing districts to the ports and a 5,500,000 bushel terminal elevator at sydney, is the most complete example of a bulk- handling system of elevators outside north america, the entire system having been constructed under the supervision of the metcalf co. of montreal. the two elevators at manchester and also that at dock one, buenos aires, are examples of this type by the same company. capacity.—the storage capacity of the elevators of the united states is approximately 1,000,000,000 bu.; that of canada 250,- 000,000 bu. and the portion of the australian system already completed 20,000,000 bu., whilst the entire up-to-date elevator storage of the remainder of the world probably does not exceed 5% of the totals of those countries. coustruction—until about the end of the roth century, eleva- tor bins were almost universally constructed of wood, but about that time a demand for a fireproof form of construction began to be felt, owing to the heavy losses by fire and, to some extent, to the increasing price of timber. steel plate and also tile bins com- menced to take the place of those of wood, but this era did not last owing to the introduction of reinforced concrete, which has become practically universal for this class of building. use of concrete—since the adoption of concrete as a material of construction, the size of elevator bins has been considerably in- creased. circular bins of over 30 ft. in diameter are quite com- mon, and the depth has been increased to as much as 110 feet. the square form of bin, which was almost essential in wood con- struction, has been largely superseded by circular concrete bins. another marked advance since 1910 is the general adoption of individual motor drives to all units of machinery, such as belts and lofter legs, and the substitution of silent chain or double- helical gears as a means of power transmission in place of the rope drives formerly used. car dumpers.—one of the most drastic changes in american elevators for many years has been in the method of unloading grain from railroad cars. until quite recently this was done by means of power shovels. the inner grain door of the car was removed by means of a crowbar and frequently destroyed in the process. two large scoops or shovels were then carried to the ends of the car by hand and automatically drawn back by ropes operated by drums on the line shaft. this method, although still in general usc, entails considerably more man power and more time than is at all in accordance with modern ideas on grain handling. the mechanical car dumper, which automatically opens the grain door without damaging it and dumps all the grain out through the doorway of the car without any manual labour, is being rapidly adopted in the newest types of elevators. the operation of the metcalf car dumper ts as follows: the car to be unloaded is hauled on to a platform about 58 ft. long, over rails which are in line and continuous with the track rails at either end of this platform. the car, having been run on to this platform, is automatically clamped in position. the plat- form, with the car, is then raised ro {t. by means of wire cables, grain production and trade and simultaneously tilted sideways through an angle of 14° and the grain door rammed in. the platform with the car upon it is then tipped endways, first in one direction and then in the other, until all the grain has run out into a pit with a hoppered bottom below rail level. the grain is drawn off from this pit on to a belt conveyor, is conveyed to an elevator leg, carried up to scales above bins, weighed and distributed in the usual manner. one of these car dumpers is capable of unloading seven 2,000- bu. cars per hour, and as there are batteries of four dumpers at the harbour commissioners of montreal elevator no. 3, the baltimore and ohio railroad company’s elevator at baltimore and the santa fe railroad company’s elevator at kansas city, each of these plants has an unloading capacity of 28 tons per minute. (cis) grain production and trade (sce 12.322).—according to the official statistics furnished to the international institute of agriculture, the production of cereals in those countries for which figures are available during the period was as follows:— world production of principal cereals (russia and china excluded) afillions of cit. average | average 1909-13 | 1919-23 | 192374 | 1924-5 | 1925-6 wheat 1,590 1,621 1,836 1,627 1,753 rye . 503 410 447 357 491 barley 486 415 487 a42 520 oats . 980 948 1,062 1,019 1,094 maize 1,705 1,713 1,804 1,527 1,759 ‘etal, . | 5,264 5,107 5,636 4.972 5,617 1300 200 i100 1000 700 fore ‘ sh aa or ay eg 8s sity: ~, a i id . we “ sat ae en an ee sou, + - millions of quintals 300 seanes cobafobneya- hmo klee ~ meera nieces oe oee onin ans arias sassy ; ee tap na ty tee ate ss : : panes soy oa; aes bata nm es beet waa rae. nas kota ee’ . 3 \" a pad oa ae ‘r be ee a hae 0 oo ay. ay. ay. av. av ay. av. ay, ay. av. 190943 1921-24 1909-13 1921-24 1909-19 192:-24 §=—1909-1b—“n9zi-24 1909-13 2-23 period ey united states [| russia (ussr) ff british india canada ftaly germany fs france poland bb turkey ([] united kingdom austrolia spain jopan argentina (i braztl others fic. 1.—diagram showing the average annual world production of wheat, rye, barley and oats, for the period ig09-13 to 1921-4, and of maize for 1909-13 to ig21-3. the production in the principal producing countries for which figures are available is indicated. “others” includes the production in egypt, ihlungary, mexico, rumania, yugoslavia and the other minor producing countries, and an estimate of production in those countries for which no figures are available. the diagram is based on figures given in the international yearbook of agricultural statistics for 1924-5. grain production and trade these statistics do not include the crops of russia or china, but they give an approximate indication of the yields in the rest of the world. apart from those two countries, the world’s pro- duction of these five cereals taken together on the average of the five years after the armistice was nearly up to the pre-war average. in 1923-4 the world had an exceptionally good crop of cercals, 7°% above the pre-war average, but in the following year 1924-5 the yield was poor, being 6° below the pre-war average. in 1925-6 the harvests were exceptionally good, 13°, better than in 1924-5, practically equal to the good yield of two years before, and 7°% above the pre-war average. according to official statistics furnished for soviet russia, its average yicld of these five cereals for the five years before the world war was 1,247, 000,000 cwt., in 1924 it was only 767,000,000 cwt., and in 1925-6 increased to 1,069,000,c00 hundredweight. this last estimate was perhaps too sanguine, as the russian harvests suffered from bad weather; but it may be said that for the world as a whole, including russia, the yield of these five cereals in 1925 was much better than it was in 1924, and somewhat higher than the pre- war average. these five grains form a large proportion of the food of the inhabitants of the temperate regions, but perhaps nearly as much grain in the form of rice and millet is consumed by the inhabi- tants of the tropical and sub-tropical countries. the world’s yield of rough rice (excluding china) in 1924 was 1,613,000,000 cwt., as compared with 1,413,000,000 cwt., the pre-war average, and if statistics for china were available it would appear that in the world as a whole the weight of rough rice produced 1s greater than that of wheat. of that quantity 132,000,000 cwt. was exported, as compared with the wheat export of 430,000,000 hundredweight. i. the wheat yield yield —the yield of wheat in those areas for which compar- able statistics are available was approximately as follows:— yield of wheat in millions of quarters of 4so 18, average|average 1909-13) 1919-23 1923-4 | 1924-5 | 1925-6 area europe (excluding russia) : : north america . asia africa . argentina australia total (excluding russia) soviet russia total (including russia) these figures do not include china and a number of unimpor- tant countries, and it may be roughly estimated that on the pre- war average the whole world produced about 490,000,000 quar- ters. the statistics for soviet russia are not very trustworthy, but, if they be included, the totals indicate that, for the world as a whole, the wheat harvest of 1925-6 is considerably above the pre-war average. for the countries other than china and sovict russia, it appears that on the average of the five years after the war the yield of wheat was about equal to the pre-war average. on the average of the threc years 1922-3 to 1924-5 their yield was 405,700,000 qr.—that is, 9% above the pre-war average. if a comparison be made between the average pre-war yield and the average yield of 1922-3 to 1924-5, it appears that the average yield of europe (excluding russia) has decreased from 168 to 1§2 million qr., and there is a very large but indeter- minate decrease in the yield of soviet russia. the average yields of asia and africa were much the same as before; but there was an increase in canada from 25 to 48 million qr., in the united states from 86 to 097 million, in argentina from 18 to 27 million, and in australia from 11 to 16 million. these increases more than made up for the decrease in the average 251 yield of europe and soviet russia. the average yield of wheat in the whole world may be therefore roughly reckoned at about soo million qr., of which about so million qr. are grown in the southern hemisphere and reaped in dec. and jan., while the remaining 450 million qr. are grown in the northern hemisphere and reaped at various times between march and october. import and export-—as the production and consumption of wheat are much more important in the northern than in the southern ilemisphere, it is convenient to adopt for the world’s cereal year the 12 months ending with july, just before the prin- cipal new harvests are reaped north of the equator. for cereal years so calculated the following statistics give approximately the net imports and the net exports of different areas, hour being reckoned as wheat at the rate of three of flour equal to four of wheat. ‘et imports of wheat in millions of quarters ) = oma on be) | ap | sp | area es) es] ss [1922-3/1923-4/1924-5 on oa o nn i i > <a << <q [mporting countries of europe . . : 69 69 70 70 80 non-european countries : 13 7 12 17 20 i total imports 82 69 81 87 | 100 93 british isles. . | 27-0 3° 25°6 | 27-0 | 29-0 | 28-3 france 5:5 | 10-1 7:2 5:7 6:5 3:9 | italy 66 | 9: 11-7 | 14-4 8-8 | 11-2 belgium 6-1 4°5 5:0 5-0 5-0 holland 2-8 24 2-9 3:3 3:3 germany 8-5 6-8 4°7 3°7 9:9 czechoslovakia a 1-8 1:2 2:5 26 greece 0-9 i-4 2:0 2°3 2°7 egypt i-o io 0-9 1-0 1:2 japan 0-5 2-0 1-7 3:5 1-5 the figures for the war years are necessarily incomplete for some countries. net exports of wheat in millions of quarters -t oo 3) i oy afj)ec!| ae area 3 2 | 3 a! so 1922-3/1923-4]1924-5 ea: > oo <— <_ < russia. . | 2055 —3:0 2:9 |—2-0 danubian countries | 13-2 i°5 3:0 3:2 canada ; 11-8 | 19-7 | 18-4 6-4 | 43-1 | 23°9 united states . 13-4. | 27*5.| 31°3. | 20°5. | 13-7 | 28-9 argentina 10°3).| 1129. | 16+7 7-4 | 21°5 | 15:3 australia 6g. | gig | t2ae50| -g°1 | 105 | 1553 india 6-2 seat nal 3:6 2°5 af total all exporting countries (includ- ing others not mentioned above) apart from the years of war, the demand for wheat from abroad of all the importing countries of the world was, on the average of the three years after the war, much the same as it was on the pre-war average, but on the average for the three cereal years completed in 1925 it increased from the pre-war 82 to 93, having risen to 100 in 1923-4, when wheat was cheap owing to the exceptionally good harvests of that year, and fallen again to 93 in 1924-5, when the price of wheat had risen owing to compar- atively poor harvests. the demand of the british is., which import about 30° of the whole world's surplus for export, remained remarkably steady, notwithstanding great fluctuations in price, and averaged 28,000,000 qr. for 1922-5, 7.¢., from aug. 1 1922 to july 31 1925, as compared with the pre-war average of 27,000,000 quarters. belgiumand holland taken together imported an average of 8,200,000 qr. as compared with their pre-war average of 8,900,000 quarters. ‘the demand of france, italy and germany, which produce a large proportion of the wheat they require for their consumption, varies considerably. on the average of the years 1922-3 to 1924-5 france’s import was 5,400,000 252 qr. compared with the pre-war 5,500,000, but it rose to 6,500,000 in 1923-4, when prices were low, and fell to 3,900,000 in 1924-5, when prices were high. italy’s import averaged 11,500,000 qr., against the pre-war average of 6,600,000 for a smaller population, but it was considerably higher in 1922-3 and 1ig24-5, when italy had poor harvests, than in 1923-4, when she had a very good harvest. ger- many's average import was 6,100,000 as compared with the pre-war average of 8,500,000 qr. for a larger population; and it was only 3,700,000 in 1923-4, when her own harvest was fairly good but her currency was disorganised, and rose to 9,900,000 in 1924-5, when her harvest suffered greatly from wet weather, and her exchange was on a better footing. greece, with her increased population, has raised her average import from 900,000 to 2,300,000 quarters. egypt's average is much the same as pre-war. japan has raised her average from 500,000 to 2,200,000 qr., but this includes the exception- al import of 3,500,000 qr. in 1923-4, due chictly to the effects of the great earthquake. the many importing countries outside europe, for which detailed statistics are not available, including china, brazil and other tropical and sub-tropical areas, have apparently imported on the average of 1922-3 to 1924-5 about 20,000,000 qr. against the pre-war average of 13 million. they are even more ready than the european countries to increase their consumption of wheat when it is cheap and to lessen it when it is dear, and they imported much more wheat in the cheap year for wheat 1923-4, when rice was comparatively scarce and dear, than in the year before or the year after, when wheat was dearer and rice cheaper. as regards the exporting countries, the most remarkahle feature was the clisappearance of russia as an exporter. before the war the russian empire on the average produced 102,000,000 qr. of wheat, more than one-fifth of the world’s total yield, and exported annually 20,500,000 qr., one-fourth of the world’s exports, on the average of the three years after the war, she imported 3,000,000 ar., largely as famine relief, and during the three years 1922-3 to 1924-5 she imported nearly as much as she exported. in the year 1925 she had a much better harvest. the danubian countries also, rumania, bulgaria, yugoslavia and hungary, which before the war had an average export of 13,200,000 qr., on the average of those three years exported only 2,400,000, their average yield having fallen off from 39,200,000 to 30,000,000 qr., no doubt owing largely to the impover- ishment caused by the war and to the partition among the peasants of the larye estates, which formerly furnished a great part of the exports. india had before the war an average yield of 43,800,000 gr., and an average export of 6,200,000 quarters. during the five war years her average yield was 44,000,000 and she exported an average of 3,700,000 quarters. the three years 1919-21 included two poor harvests—the average yield was only 37,800,000 qr., and there was practically no net export; but the three years 1922-4 were years of good harvests, with an average yield of 45,600,000 and an average export of 3,600,000 quarters. this makes the average con- sumption of these three years about 42,000,000, against an average pre-war consumption of about 38,000,000 quarters. apparently india utilised her increase of prosperity to increase her consumption of wheat, more especially as during part of that period wheat was unusually cheap and rice unusually scarce and dear. while europe and asia thus failed to maintain their former supply of surplus wheat, the deficit was more than made up by north america, argentina and australia, although their exports varied greatly from year to year. during the five war years canada increased her average export from 11,800,c00 to 19,- 00,000 qr., the united states from 13,400,000 to 27,500,000 qr. and argentina from 10,300,000 to 11,900,000 quarters. aus- tralia’s average export remained about 6,600,000 qr., the diffi- culty of transport over such a great distance in time of war having made it impossible to export the whole of her surplus. on the average of the three years 1919-20 to 1921-2 canada exported 18,400,000, the united states 31,300,000, argentina 18,700,000, australia 12,500,000 qr.; and on the average of the three cereal years 1922-3 to 1924-5 their exports were, canada 34,500,000, the united states 21,000,000, argentina 18,100,000 and australia 10,600,000 quarters. thus on the average of these three years the requirements of all the importing countries of the world, amounting to 93,000,coo qr., were supplicd approximately in the following proportions: canada 37° 5, united states 23%, argentina 19%, australia 11°%, india 5°, other countries 5°. consumption.—if it be assumed that the consumption of a country during a cereal year is represented by its yield plus or minus the quantity imported or exported, the following statistics grain production and trade give a rough idea of the consumption of certain countries for which comparable statistics are available:— consuntption of wheat in millions of quarters avera gelavera oc country 1909-14! i9t4-9 british isles france . italy germany canada u.s.a. argentina australia india is) or 00un gy go +e an pon o ont he wy oo = mt go +h gs www ana dh mm otn nw stoo tr nc fe. ues during the world war the importing countries of europe had great difficulty in obtaining the wheat they required from abroad, and took special measures to reduce the consumption of wheat; and as a result of these measures, and of the great rise that took place in the price of wheat, several of those countries consider- ably reduced their average consumption. for the british is. the pre-war average of 34,400,000 fell to an average during the war of 32,700,000 quarters. on the average of 1923~5 it rose to 35,- 600,000 gr., while the population increased from 45,200,000 1n iqil to 47,400,000 in 1921. during the war the french con- sumption was reduced from the pre-war average of 45,100,000 to 36,800,000 quarters. for 1922-3 to 1924-5 it only aver- aed 38,700,000 qr., although the population g(ncluding alsace- lorraine) was practically the same in 1922 as it had been in tott. on the other hand, the people of italy found it difficult to keep down their consumption of wheat, and during the war the average annual consumption increased from 29,500,000 to 30,200,000 quarters. for 1922-3 to 1924-5 it averaged 34,700,000 qr., the population having increased from 34,700,000 in 1911 to 39,700,000 in 1923. the consumption of wheat per head in germany is much less than it was before the war, as, according to the statistics, the average consumption of 1922-3 to 1924-5 for a smaller population was only 17,200,000 qr. as compared with the pre-war average of 27,500,000 quarters. canada and the united states, with an increased population, consumed cor- respondingly increased quantities. australia during the war was unable to export the whole of her wheat surplus, and much of it was wasted or was still in the country at the end of the war. her average consumption for 1922~3 to 1924-5 was 6,300,000 qr. as compared with 4,700,000 qr. before the war, owing chieily to increase of population. india also had difficulty in exporting her wheat surplus during the war, and her consumption there- fore increased, for 1922-3 to 1924-5 it averaged about 42,000,- ooo as compared with the pre-war average of 38,000,000 qr.; although the increase of population between rg11 and 1921 was only from 315,000,000 to 319,000,000. tue question of price the price of wheat varies greatly according to its variety, clean- liness, purity, uniformity, strength and condition. it also varies, often very rapidly, with reported changes in the world’s weather and expected changes in the relation between the world’s supply and the world’s demand. the cost of ocean freights is another factor in the calculation. the pre-war average freights on wheat imported into the united kingdom were approximately per qr. of 480 lb.: from new york 2s., from buenos aires 3s. 6d., from iarachi 4s. and from australia 7s. the pre-war average prices of wheat, in importing countries, after deducting import duties, were approximately, per quarter of 480 ib.: britain, home-grown 32s., imported 35s.; france 32s.; italy 33s.; germany 32s.; and austria 37s.; and in export- ing countrics—russia 33s.; united states (chicago) 30s.; canada (winnipeg) 30s.; india (xarachi) 31s.; argentina (buenos aires) 31s. and australia (melbourne) 31s. owing to the cheapness of ocean freights there was no great difference in the average prices in importing and in exporting countries; and hardly anywhere in the world, except in places far from the sea, or in countries where there was a high import duty, was the pre-war average price of wheat below 30s. or above 35s. a quarter. during the war, owing to the destruction or immobilisation of many ships, to urgent military requirements and to the increase of risks, there was a great rise in ocean freights, and after a time the british govt. took control of the whole merchant shipping of the grain production and trade empire and of the arrangements for the import of wheat, not only into britain, but into the allied countrics also. at the date of the armistice freight rates being paid for wheat per qr. to the united kingdom were—from new york 50s., from buenos aires 48s. and from waradchi 53s. after the armistice the control of shipping was maintained for a considerable time, but the rates of ocean freight fell very rapidly, and by dec. 1920 (when the movements of shipping were practically freed from control) the rates were approximately — from new york 8s., from buenos aires 8s. 7d., from karachi gs. 1d. and from australia 22s. 6d. after that date there was a further great fallin these rates, and in nov. 1925 they were approximately— from new york 3s., from buenos aires 3s. 4d., from karachi 4s. 3d. and from australia 8s. 9/.—thut is to say, freight rates were not very much higher than before the war, and as prices were about 55“o higher than before the war this meant that shipowners in 1925 brought wheat to britain on payment of only about two-thirds of the pre-war value in commodities. this great fall in the commodity value of freight rates was no doubt mainly due to the fact that the world’s gross tonnage of seagoing stecl and iron steamers had in- creased since 1914 by 38%, while the quantity of merchandise requiring cargo space was less. in order to trace the course of the world’s price of wheat during the period 1913-25, it will be sufficient to quote the prices of wheat about the middle of nov. (when it is usually possible to frame an approximate estimate of the yield of the harvests in the northern hemisphere and of their probable yield in the southern hemisphere) for chicago and winnipeg as representing the exporting countrics, and for london or liverpool as representing the importing countries, to which may be added the average price obtained about that date by farmers in england and wales for home-grown wheat, according to the corn trade returns. price of wheat about nov. 715 london or liverpool no. i manitoba, shillings per 480 ib, england and wales ilome-grown shillings per winnipeg no, i manitoba, cents per chicago cents per 60 lb. during the war the price of wheat rose rapidly both in exporting and in importing countries. after the armistice, the price of wheat continued to rise for a time, and in july 1920 wheat sold both in chicago and winnipeg at about 280 cents per bushe!l—meore than three times its pre-war price. soon after that date government con- trol began to be removed and freights and prices rapidly fell, and by nov. 1921 the price of wheat at chicago was only ii9 cents per bushel and at winnipeg r1i—that is, only about 35° above the pre-war average. in the following two years there was a further fall, and in nov. 1923 the prices quoted were at chicago 105 and at winnipeg 97—that is, less than 20°) above the pre-war price. similarly in the british is. the price of wheat rose until in nov. 1920 no. i manitoba wheat was being supplied by the govt. at 116s. per qr., and the british farmer was being paid about 90s. per qr. for home-grown wheat. these prices again were about three times the pre-war prices, but it must be remembered that they were reckoned in sterling, and that in that year the british paper pound was only worth about 75 % of the gold sovereign. after control was removed there was a very rapid fall in the price, and by nov. 1921 manitoba wheat was selling in liverpool at 50s. per qr. and british wheat was sold at 46s.—that is, about half the price obtained 12 months before. there was a further fall of price in the following two years, and in nov. 1923 northern manitoba wheat sold at 44s. and british wheat at 40s. per qr. or only about 30% above the pre-war price. these very low prices in 1923 were no doubt mainly due to the exceptionally good harvests of that year, both in europe and in the world as a whole, and to the impovcrishment of the importing countries of europe. the low price continued through the winter of 1923-4; but after may 1924 drought developed in south and southeastern europe, and canada and central and northern europe suffered a cold, wet summer, and it became evident that the harvest in the northern hemisphere as a whole would be a poor one. ‘the world price of wheat accordingly rose rapidly until at the end of feb. 1925 the price of no. 1 manitoba in liverpool was 76s. 6d.— 61% above its price 12 months before. it then came to be realised 253 that this price was higher than was justified by the prospects, and the price fell rapidly in march and april to about 60 shillings. in consequence of the good harvests of 1925 in the northern hemi- sphere it fell further to 55s. in the middle of nov. 1925, but then rose again owing to the disappointing harvests in the southern ifemisphere, and in jan. 1926 was about 62s.—almost double the pre-\\war price, while the british farmer was getting 53s. a qr. for his home-grown wheat—about 70% above the price of 1913. (j. w1.*) il. the grain markets great britain is the only country where the demand for im- ported wheat is constant and extensive. there are many others which import wheat from time to time, but merely by way of supplement to their home-grown food crops. these circum- stances have resulted in the establishment of the london grain tride in the commanding position of the chief market of the world, primarily for wheat business, but also for maize, oats and barley. it is not only for delivery in london itself that this trade is done. a very large portion is for other destinations, and car- goes for ultimate discharge in scotland, ireland or wales, at dutch, belgian or german ports, or even in the mediterranean, are bought and seld by london brokers, on the accustomed basis of london contracts. a considerable business in grain from overseas which does not enter london is registered daily in the grain trade journals, cargoes of wheat and maize forming the greater portion. the usages and terms of the london market are matters within the competence of the london corn trade assn., a corporate body including members of all grain trade firms of consequence, in great britain, on the continent of europe, and among ex- porters from north and south america, from india, australia and africa. brokers and traders in all the principal towns of britain, and millers with establishments in many parts of the world, find it advantageous to belong to the london corn trade association. most of those not strictly connected with london are also members of their own local associations, of which the liverpool corn trade assn. is the most important, and is fol- lowed by those of hull, bristol, leith, antwerp, hamburg, genoa, etc. the main object of these associations is the protec- tion of the common interests, by defining terms of contract, by providing for arbitration in cases of dispute, and by taking meas- ures to uphold the rights of traders against infringement. the predominance of north america among the grain markets of the world is an outstanding fact, and it is not too much to say that the wheat quotations of chicago and winnipeg are those most regarded as deciding the course of the world’s grain trade from day to day. in some seasons the chicago price is all-important, in others it shares supremacy with winnipeg. the qualities quoted are so well known that is is needful only to mention no. 2 winter or no. 1 manitoba in order to afford a definite basis of transactions. in this respect the business in north american grain is done on terms differing from those adopted by other exporting countrics. in the united states and in canada the system of government inspection of grain for settling grades is very efficient, and the certificate of the government inspector is accepted as final. by far the greater part of the grain business in the united states is in connection with produce intended for internal consumption or manufacture, and the terms agreeable to american buyers have therefore to be accepted by exporters from the united states. in canada the relative size of overseas trade is much greater, but the system of inspection and grading is even more precise than in the united states, and is accepted by exporters. in dealing with argentina, whence the tropical passage may cause the grain to deteriorate on the voyage, the contract basis throws this risk on the shoulders of the exporter in south america, and wheat is sold with a guarantee of natural weight to be veri- fied at discharge of the grain. wheat from australia is sold as fair average quality at time and place of shipment, and similar stipulations are made in the special contract form for indian wheat, with a guarantee in case of damage by weevil, or deteri- oration by the excessive mixture of barley or any other extra- neous matter. 254 by far the larger portion of the world’s wheat crops finds its way to the flour-mill, though some considerable quantity is used for cattle or poultry food. the miller, therefore, may be set down as the ultimate buyer of wheat. with the gradual con- solidation of mills under the management of a few leaders of the industry, each of these millers has become, individually or in his corporate capacity, a very important factor in the grain trade. he is, in most cases, the original buyer of grain for british ports, to be discharged direct from the ship into his warehouse communicating with the mill by grain elevators and conveyors. in the british grain trade of to-day there is very little scope for the merchant who formerly purchased a wheat cargo for appor- tionment in suitable quantities amongst millers. the miller does not manufacture flour entirely from one cargo, or even from one sort of wheat. in the ordinary way, when supplies from various exporting countries are plentiful, he will probably mix three or four different kinds, in carefully defined percentages, in order to provide the baker with just such flour as he has been accustomed to sell to the public. in most of the exporting countrics there are well-established firms who employ agents to buy from the farmers, and thus col- lect adequate quantities for loading their chartered ships. in countries such as canada and australia the farmers themselves have formed pools or syndicates, with managers who negotiate with exporters. in the united states, grain export business is so interdependent with future trading that it may be more con- veniently treated under that heading. with the exception of relatively small parcels of wheat, very little is sold on the corn exchanges after arrival. it has become the practice for millers to buy, even for their minor requirements, when the grain is still overseas or on passage. it is also customary for bakers to con- tract two or three montks ahead for flour to be delivered, and these contracts are sometimes made with canadian, australian and american millers. futures.—apart from direct sales of overseas wheat to millers, considerable business is done by traders who buy wheat for shipment and, either immediately or later, sell a stmilar quantity for delivery at a future period. this future delivery trading, known also as marche a terme or mercado & terminoa, originated in the united states and has been established at liverpool for nearly half a century. it was adopted at buenos aires in 1908 and is now carried on at winnipeg. there are future delivery exchanges, including grain contracts, at antwerp, paris, berlin, genoa, etc. at chicago and buenos aires futures trading is established for wheat, maize and oats; at winnipeg for wheat and oats; in all three and in liverpool wheat absorbs the chief attention. it may he considered as essential that, to avoid cornering, a future delivery exchange should have an ample available supply of such qualities of wheat as are in favour with millers; in other words, the exchange should be located on a main route of transit between the grower and the consumer. unless this condition is fulfilled the business organisation seldom succeeds. by means of one or other of these exchanges the farmer can, if he chooses to do so, sell his crop of wheat whenever the price suits him, months before it is ready for the reaper, and thus practically elim- inate any risk of falling prices. the muller who has purchased a cargo of wheat can sell an equal quantity in the form of contracts for future delivery. naturally, he will not find this course desirable unless there is an apparent profit between the price paid for his cargo and that obtainable for future delivery of wheat. he has also to buy wheat for his mill, and if he sells the contracts for future delivery his next enterprise is to sell the flour to be manufactured later, and as he achieves this to buy in his wheat contracts. hle thus makes four transactions in place of the simple purchase of wheat abroad and the sale of four at home. he has safeguarded himself against market losses, and is ready to continue his day-to-day disposal of the flour. it will be noted that in selling wheat for future delivery in a given market he has to rely upon others for fulfilment of these wheat con- tracts, for he docs not intend to deliver from his purchased cargo; hence it is clearly his aim to deal only on markets where there is a steady influx of wheat. ae this serics of transactions needs only to be multiplied indefinitely, and attributed to traders who are not millers, in order to form a basis of opinion on the grain futures markets. speculation of course exists, and may carry prices too high or too low. fluctuations in quotations for future delivery are often extreme and very rapid, for on receipt of some information affecting crops the first interpretation of its meaning is shown in the future delivery market. sharp fluctuations are not, however, always misfortunes. the purchaser of a wheat cargo who has duly sold futures against it may find that his contracts for sale can be repurchased at a discount of say 3%, and that he can resell his cargo at a discount of 2%. ile may probably do the grain production and trade business both ways and come out with a net profit of 1°64: he has sacrificed 2% on the original price of the cargo, but the sacrifice is more than compensated by the 3° gain on the future delivery side. future trading involves, in effect, a daily settlement by seller and buyer alike of difference in price arising from market fluctuations, and a payment by both parties at the time of making the contract of a cash margin according to the regulations which form part of the contract stipulations. in all four markets, chicago, winnipeg, buenos aires, liverpool, the grain trade clearing house attends to these matters, keeping a registry of the contracts entrusted to it by members of the association which carries out the future delivery business; non-members are not recognised by these associations as entitled to obtain this security of position. the penalty for non- payment of differences at the appointed time is the immediate sale or purchase, as the case may he, of all contracts standing in the name of the defaulting member in the clearing-house registry. these powers are entrusted by their own members to the liverpool corn trade assn. to the chicago board of trade, the winnipeg grain exchange and to the buenos aires afercado & termino de cereales, respectively. . at chicago, which is by far the greatest grain futures market, there has always been an avoidance of strictness in procedure as regards details, and a resulting immense business in contracts for future delivery. the trade is in contracts for future delivery, not in wheat for future delivery, and it is not surprising that this business in contracts should annually reach an aggregate far exceeding the us. yearly wheat crop. the tenderable descriptions of wheat com- prise many varieties; in practice, hard or red winter wheat is the effective basis. there are certain specified places where delivery may be made, and american farmers make great use of the chicago board of trade. at buenos aires the mercado 4 termino not only registers the contracts submitted to the clearing house, but in consideration of a small fee takes up the contracts with buyer and seller respectively, accepting the responsibility towards each party during the currency of the contract. it therefore devolves upon the mercado to call for suffcient margin, and to collect the day-to-day differences. nat- urally the mercado, in its own intcrests, keeps strict watch over the extent of trading done by its members, and the managers can call for increased margins if they are dissatisfied with the position created. the basis of the wheat contract is the typical wheat of the country in sound condition, with the proviso that the natural weight attains the requisite standard. delivery may be made at any rail- way station in the republic, with adjustments for transport expenses just as is customary in transactions for immediate delivery. in liverpool wheat may he delivered from any of the following descriptions: american winter or spring manitoba, argentine or australian, provided that the sample fulfils the requirements of grade. afaise.—the trade in maize is a very large one, though not equal to that in wheat; except in mediterranean and danubian lands all maize consumed in europe is imported, chiefly from argentine and south africa, although the enormous maize crop in the united states comprises three-fourths of the world’s yield of maize, very little of it is sent abroad; the united states are not usually sellers of maize on european markets, though it is generally possible to buy this grain from them for special requirements, by paying a moderate premium. the course of prices for maize is governed by quite differ- ent factors from those which affect the wheat market. the extent of consumption in some european countries varies greatly at different seasons of the year, for droughts may reduce the hay and fodder crops and throw the demand on maize, or a season favourable to field growth may curtail requirements seriously. the united states maize crop ts chiefly consumed locally, for hog or cattle feed- ing, and most of it is therefore never sold as maize on the open market. any examination of market conditions in the united states is therefore incomplete unless the meat and provision trades are also studied. of all the varieties of grain brought from overseas, maize requires the most care in selection for an ocean voyage. it contains a larger percentage of water than does wheat, and is also more likely to spoil by heating, if put on board soon after harvest or in the summer weather of six or eight months later. barley.—mlost of the oversea trade in barley is in the varicties suitable for malting or distilling; compared with wheat or maize the business is small, and in few hands. on the british markets, the supplies of home-grown barley and those of all kinds of foreign bar- ley are about equal in quantity, so that brewers and maltsters can select the desired quality from either source. the suitability of barley for malting is one of the technical studies of the grain trade, and a really accurate judgment on a particular sample is not an casy matter. california and canada are the main exporters of good malt- ing barley, but these crops are seldom equal in quality to that of england. russian and danubian barley are classed much lower down than canadian, but generally contain a valuable percentage of grains fit for malting, separable by machine. oats.—the british trade in oats is chiefly in home-grown grain; of the country’s ordinary requirements over 80°% is produced in the british is., and a very large proportion is used locally for dairy- ing or other cattle food, or horse provender. imported supplies are chiefly from north america. gramophones—great britain rye.—finally, rye enters little into trade in great britain. the great producing countries are russia, poland and germany, whence supplics are drawn for belgium and holland also. germany is sometimes a buyer and sometimes a seller, while russia, with an immense production, did not offer to sell for export in 1925, except during harvest time. except under the stimulus of high post-war prices the united states has not grown rye at all freely, and now exports but little. cj. fld) bislioograpiy.—(grain and the grain trade) american institute of agriculture: hf. b. price, privute exchange and state grain in- spection (1922); and market grades and classes of grain (1923); r. w. chapin, afiiing and manufacture of grain and grain producis (1923); j. p. haynes, transportation of grain (1923); j. h. mac- millan and b. l. hargis, financing the grain industry (1923); j. m. mehl, co-operative grain marketing (1923); i. savre, terminal markets and grain exchanges (1923); b. w. snow, ifow to interpret grain market reports and statistics (1923); w. j. spillman, picture of the grain industry (1923); j. uw. barnes, exporting grain and cereal products (1924); j. d. black, costs of marketing grain (1924); us. dept. of agriculture: e. g. boerner, handbook of official grain standards for wheat, shelled corn, oats and rye (1924); u.s. federal trade commission: report on methods and operations of grain exporters (1924); u.s. supt. of doc.: grain futures adminis- tration, trading in grain futures (1924); international institute of agriculture, f#fernational yearbooks of agricultural statistics, 1909 to 1921, and 1924 to 1925 (french and english) (rome, ig21 anc 1925); international (monthly) crop reports and agricultural statistics (1925); chicago board of ‘trade, annual report of trade and commerce, 1924 (winnipeg, 1924); afemoria det directorio det mercado & termino de buenos aires, ejerciciones de 1920 hasta 1925 (buenos aires, 1925); london corn trade association, boeks of contract forms (1924-5); liverpool corn trade association, annual reporis and clearing house regulations. gramophone: see phonograpii. grand rapids, mich., u.s.a. (see 12.350), had a population of 137,634 in 1920 of whom 28,355 were foreign-born, including the largest colony in the country from the netherlands (11,422). in 1925 the official estimate was 153,698. annexations of territory in 1915, 1924 and 1925 increased the area to 22 square miles. while the city kept its title as “ the furniture capital of america,’ the manufacture of aeroplanes and other essential products during the world war led to the permanent expansion and further diversification of industries. the commission-man- ager form of government was adopted in 1916. the aggregate value of manufactured products rose from $42,231,100 in 1909 to $109,135,000 in 1910, and, after a slight decrcase in 1921, to $130,277,997 in 1923. in 1925 a reconstruction of the city was under way in conformity with a comprehensive city plan, adopted in 1922. the public schools were in process of reor- ganisation and a ‘junior college had been added; there was a supervised playground within half a mile of every child’s home; the filtration plant, built in 1914, had been doubled in size; a sewage disposal plant was under construction; several fine hotels, hospitals and office buildings had been erected. grand rapids is second only to des moines in the proportion of homes owned (50:2% in 1920). it has a high proportion of children at school, a small amount of child labour, a low percentage of illiteracy, a low general death-rate and a low infant mortality. grant, duncan (1885- ), british painter, was born at rothiemurchus, inverness-shire, son of major bartle grant, and was educated at st. taul’s school, london. he early showed his remarkable decorative sense, working with roger fry at the omega workshops, london, and at the same time produced some highly individual painting. his early work in- cluded ‘ the lemon gatherers ” (1911), now in the tate gal- lery, and the “ seated woman ” (1912). modern french in- fluences, particularly those of cezanne, made themselves strongly felt in his design and brushwork, as may be seen in the “ tight- rope walker ” (1918), ‘‘ snow scene ” (1921), “ the hammock ” (1923) and many still-life pictures of this period. grant, who became a member of the london group, also carried out interest- ing domestic and scenic, decorations and designs for em- broideries. see duncan grant, .1 collection of plates, with in- troduction by roger fry (1923). granville-barker, harley granville (1877- ), british playwright, was born in london nov. 25 1877. at the age of 13 he was sent to the theatre royal, margate, then a combination of stock company, theatre and dramatic school. he 255 first appeared in london in the following year, at the comedy theatre, under charles hawtrey. his first play, written in 1893, was produced by amateurs. from 1895 onwards he acted in a variety of plays, in shakespeare with ben greet, and, with william poel, in richard it, and marlowe’s edward if. in 1899, his play the weather-hen (written in collaboration with herbert thomas) was produced in london. in rgoo he became interested in the newly formed state society, first as actor, then as producer, and his own play, zhe afarrytiug of aun lecte, was produced by the society in r90r. in 1903 he collaborated with william archer in the framing of .1 scheme and estimates for a national theatre. in 1904 he joined j. e. vedrenne in the management of the court theatre, london. there, during three years he produced, and at first acted in, a variety of plays by ibsen, bernard shaw, st. john hankin, john galsworthy, john masefield, maurice hewlett, gilbert murray (translations from euripides) and hisown he voysey inheritance (1905). in 1906 he published pruxei/a in collaboration with laurence housman. a later play, waste (1906), was banned by the censor, but was pri- vately performed by the stage society. the madras [louse (1909) was produced by the frohman repertory company at the duke of york’s theatre in 1910, and a revised version of it was revived in 1925. by 1910 he had given up acting, but until r914 produced plays in london, including two by shakespeare upon a platform stage with ‘ conventional ” decoration. after the war he main- tained no active connection with the theatre. he published various other works, including the exemplary theatre (1922), dramatic criticism, also translations of several forcign authors. he was public lecturer on the art of the theatre to the university of liverpool in 1921-2 and he delivered the british academy shakespeare lecture in 1925. graphs: see statistics and grapiis. gravitation: see astronomy. great britain.—the following article is a continuation of the one on the unitep kixncpom (sce 27.598). the change in title is rendered necessary by the altered political status of ireland. as the change took place during the period under review refer- ence must necessarily be made to irish affairs, but primarily the article is concerned with great britain only (i.e., england with wales and scotland), with the lesser islands belonging thereto. it deals with seven matters: ([.) constitution; (ii.) local gov- ernment; (il{.) defence; ([v.) finance and banking; (v.) pop- ulation; (vi.) industry and trade, including agriculture; (vii.) communications. (see also britisn expire; lncwisn history; ireland, northern; irish frip state; scotland; wales.) i. constitution the years 1910-25 were momentous in the history of the brit- ish constitution. they opened with an acute struggle between lords and commons which has left a permanent mark on the constitution, in the shape of the parliament act. four years later, with the outbreak of the world war, the country entered on a period of arrested development; a truce was called be- tween the two great political parties and a kind of constitutional moratorium declared in which the operation of the parliament act, alike in its application to the duration of parliament and 1o the machincry of legislation, was arrested; two statutes, the welsh church act and the government of ireland act, which had been forced through under its automatic action, were suspended. during the same critical period many rules of the constitu- tion—some statutory, others conventional— were also in abcy- ance; the re-election of ministers, on acceptance of an office of profit under the crown, was one; the cabinet system, in its nor- mal aspect, was another. a kind of super-cabinet, known as the war cabinet, came into existence, and with it another consti- tutional novelty, the “‘ cabinet secretariat ” as a haison between the government departments. the liberty of the subject, as the result of that /ex regia the defence of the realm act and its successors, coupled with a latitude of judicial interpretation which reached its high-water mark in rex v. halliday (ex parte zadig), underwent severe restrictions, and, for the period of the 256 war and some time beyond it, the country lived under a kind of statutory martial law as unprecedented in its history as the tremendous struggle which necessitated it. return to constitutional principles —with the end of the war and the return to normal conditions of existence, constitu- tional principles reasserted themselves. the courts of law, al- ways jealous of the liberty of the subject, administered severe and salutary checks to the encroachments of the executive, and a series of remarkable judicial decisions, most notably chester v. bateson ([1920] 1 k.b. 829) declared one “1).0.r.a.” regula- tion after another u/fra vires, while at the same time, in the great constitutional case of de kevser’s royal itotel v.the king ([1929] a.c. 08; [r9rg] 2 ch. 197), the courts asserted, if they did not actually extend, the right of the subject to sue the crown by petition for losses sustained as the result of the exercises of the prerogative in the matter of requisitions. the defence of the realm iegislation lapsed with the cfllux of time, though not the bureaucratic temper to which it ministered, and parliament, in endowing the executive with somewhat similar powers, in cases of “emergency,” under the emergency powers act 1920, was careful to impose the most stringent parliamentary checks upon their exercise. as the result of the de keyser case, the executive found itself threatened with thousands of claims for compensa- tion, and an indemnity act, imposing a time-limit upon such claims and establishing a special procedure for dealing with them, was placed on the statute book. the act had been most jealously scrutinised in its passage through the legislature, and it soon became apparent that parliament was as little inclined as the judiciary itself to tolerate a continuance of the usurpations of the executive, whose sole justification had been their tempo- rary character. with the fall,in oct. 1922, of mr. lloyd george’s coalition administration, the conventions of the constitution resumed their sway. ; staintory and other changes——it would, however, be a great mistake to regard post-war conditions as testifying to a mere reversion to type. great statutory changes of a permanent character took place, the most notable of which were the repre- sentation of the people act 1918, the parliamentary qualifica- tion of women act 1018, and the sex disqualification removal act of 1919, statutes which, among other things, effected a com- plete revolution in the civic position of women, removing, as they did, all disqualifications of sex for admission to the fran- chise, to a seat in the commons, to service on juries and all pub- lic functions. constitutional changes of equal magnitude were effected by the grant of self-government and dominion status to southern ireland, and by the establishment of representative legislatures and, in some measure, of self-government in india (see innis). equally important were the developments in the status of the overseas dominions (sce britisn empire; canada, etc.). many statutes of considerable constitutional importance, dealing with legal procedure and the administration of justice, were enacted during the years 1920-5, such as the administra- tion of justice acts 1920 and 1925, the judicature act 1925, the criminal justice act 1925; and for a long time two such funda- mental rights of the subject as procedure by indictment before a grand jury and trial by jury in civil actions at common law were seriously threatened as the result of innovations during the war, which, long after its termination, appeared likely to perpetuate themselves by statute. another act of considerable constitu- tional importance was the british nationality and status of aliens act 1918, which amended the british nationality and status of aliens act of 1914. ‘the period under review was also notable for the number of leading cases in constitutional law. moreover, the growing political consciousness of the working classes had, even before the war, been productive of new con- ditions, some permanent, others transient. one was the judicial decision known as the osborne case (osborne v. .lmalgamated society of railway servants [1909] a.c. 87), resulting in legisla- tion (the trade union act of 1913) for the protection of minori- ties against the political levy on members of trade unions; an- other, of which the issue has yet to be seen, was the claim to the active exercise of political power. the policy of direct action, great britain 1.¢., the exercise of political pressure upon the government of the day by resort to the weapon of a general strike, was the immediate cause of the action of parliament in conferring drastic powers on the executive, in case of emergency, to deal by procla- mation with any such threats to the normal economic life of the community. the govt. exercised this power effectively during the general strike of may 1926. the appearance of a minority government in 1923 raised'a constitutional question, long dormant, namely the right of a prime minister, even though in a minority in the house of com- mons, to ask and receive authority from the king to dissolve parliament. this was a question as to which there could be no real doubt in the minds of those acquainted with constitutional developments since 1858, but none the less it had been the sub- ject of much dispute when mr. ramsay macdonald accepted office in jan. 1924. his exercise of this prerogative of the crown in the following oct. may be said to have settled the question beyond further dispute. tur parliament act and other measures parliament —the enactment of the parliament act in rort, consequent upon the rejection of the finance bill by the house of lords in the preceding year, limited the authority of the house of lords. (see enciisu hisrory.) it was an emergency measure, designed to secure the immediate passage into law of a liberal govt’s. legislation. the preamble recognised this to the extent of admitting the necessity of further legislation “ to substitute for the elouse of lords as it at present exists a second chamber constituted on a popular instead of a hereditary basis.”’ the implied promise has never been redeemed and the problem still awaits solution, a solution that has become all the more imperative in view of the vast extension of the franchise effected by the act of 1918, the peculiar sensitiveness of post-war govern- ments to public opinion, and the appearance on the political scene of a new and powerful party whose avowed object is to revolutionise the economic basis of society by legislation. nor did the authors of the act foresee its constricting effect upon the legislative procedure of the house of commons itself. the con- fusion in which the government of the day found itself involved in its financial legislation during the session of 1914 was an in- direct consequence of the parliament act, for new questions as to the legitimacy of tacking non-financial provisions on to finance and revenue bills were raised. the discretion given to the speaker under the act, of deciding whether, in giving or withholding his certificate, a bill comes within the new statutory definition of a money bill, has invested his ancient office with a judicial authority the particular exercise of which no government can foresee. ‘that authority has hither- to been exercised with the complete independence characteristic of the speaker’s office, but the new powers conferred upon him, consliiuting as they do the sole constitutional safeguard against sudden and revolutionary legislation by a party temporarily in a majority in the house, may yet expose the office to political capture—to quote the expression of the trade union congress in oct... “rg24: the effects of the provisions of the parliament act confining the lords to a suspensory veto in ordinary, as distinct from financial, legislation have been iess apparent, as only two measures had, up to the end of 1925, been foreed through under their operation; but they have invested the process of tegislation in the commons with a new rigidity, owing to the necessity of any bill, which is to take ad- vantage of the automatic machinery of the parliament act, retain- ing the character of the same bill in cach successive session. an incidental result is the restriction of the right of private members to propose amendinents to a government bill, by way of suggestion, in its later and automatic stages. the constitutional crisis of 1910-1 was productive of another statute, equally novel but much fess revolutionary in its character— the provisional collection of taxes act. that crisis disclosed the fact, long known to constitutional! lawyers, that the budget resolu- tions under which duties are collected have no legal force, and, as the result of the case of bowles v. the bank of england ({1913] 1 ch. 57), it was found necessary to enact a statute giving, for the future, statutory effect, for a limited period of time, to ways and means resolutions varying or renewing taxation imposed during the pre- ceding financial year. great britain the procedure of the house of commons during the period under review has undergone little change and the prohlem of how to secure more effective control of the house over the estimates remains ecxact- ly where it was. it is essentially a problem of parliamentary time, which is limited, and the increasing devolution of the legislative func- tions of the whole house to standing committees has, with the in- creasing demand for legislation, not solved the question. a new departure was made in 1921 by the appointment of an estimates committee, but it is confined by its terms of reference to considcring what economies can be effected “ consistent with policy,” which in practice means that it had no power to deal with questions which ministers choose to regard as outside its jurisdiction. the mere fact that its reports are presented after supply is concluded has de- prived it of any effective voice in the control of expenditure. an interesting departure in the grant of legislative autonomy to the established church was eifected by the church of england assembly powers act of 1919. under the act powers of legislation are delegated to the newly constituted national assembly of the church, but subject always to the control of parliament to be exercised through an “ ecclesiastical committee ” consisting in equal numbers of members of both ilouses. upon the report of this com- mittee, measures submitted by the assembly shall, if approved by a resolution of both houses, be presented to his majesty for the royal assent in the same form as a bill. the co-ordinate authority assured to the house of lords by this act, and the legislative inde- pendence secured to members of both hlouscs, is a noteworthy departure, but the legislation contemplated does not, of course, partake of the character of a government bill. none the jess the act is a noteworthy experiment in devolution. the electorate.--the electoral changes effected by the repre- sentation of the people act were immense, far surpassing in magni- tude the three reform acts of the preceding century. not only did it enfranchise women and add no less than 13,000,000 electors to the register, but it also altered and simplified the law of registration, effected a redistribution of seats, abolished the property qualifica- tion and, much more questionably, removed the pauper disqualifica- tion. at the same time it reduced the qualifications for the exercise of a vote, in the case of men of 21 years of age, to the simple require- ment of six months residence, or, in the alternative, occupation of business premises, either or both of which might confer the right to vote, not more than two votes being so conferred. in the case of women the minimum age is 30, and the basis of qualification has to be sought in the local government franchise. innumerable other changes in the machinery of registration and election were effected by the act. taken in conjunction with the two acts previously mentioned its effect is, except in the matter of age, to assimilate the civic status of women entirely to that of men. a curious anomaly exists, however, in regard to the position of peeresses. the wife of a peer may be elected to the house of commons, but a peeress in her own right may neither be elected to the commons nor take her seat in the lords: this was the decision of the committee of privileges in viscountess rhondd:’s claim (1922). the cabinet and the ministry. —an important, if limited, change in the law governing the acceptance of office by ministers was effected by the election of ministers act 1919. temporary measures had been passed during the war relieving new ministers on appoint- ment from the necessity of seeking re-election; the act in question perpetuated this departure, to the extent of providing that no mem- ber on appointment should in future vacate his seat if his acceptance of office shoul:l take place within nine months after the issue of a proclamation summoning a new parliament. for such a measure there is much to be said, in that it dispenses with the necessity of a whole ministry, constituted on the resignation of its predecessor after a defeat at the polls, from being subjected to the hazards of a by-election. in 1926 the house of commons passed a measure designed to dispense altogether with the necessity of seeking re-clec- tion on the acceptance of office. some of the new ministries created during the war disappeared, but four became permanent—pensions, labour, transport and air, the last being responsible for the creation of a new sceretaryship of state. the number of secretaries of state was further raised to seven by the secretary for scotland being raised to that dignity. the status of the dominions overseas has been recognised by the creation of a secretaryship of state for the ljominions, but though legally distinct from the seerctaryship for the colonies it is united with it in the person of one and the same minister. the jocal government board was reorganised and renamed the ministry of health. with the establishment of the irish free state the [rish office was abolished and irish affairs were transferred to the colonia! office. the immediate result of the war appeared to be the exaltation of the position of the frime minister to a personal ascendancy incompatible with the principles of cabinet government. the insti- tution of the war cabinet, whereby a small inner council of minis- ters freed from all administrative duties decided all questions of policy—other ministers being summoned to these deliberations at the discretion of the prime minister communicating with them through his own secretariat—could only be justified in time of grave national peril. the result was to place in his hands an almost exclu- sive power of initiative in cabinet business, and to undermine the 257 time-honoured principle of the collective responsibility of ministers. the evil results of this system were manifest long after the war, with effects upon ministerial discipline which were forcibly illustrated by the circumstances attending mr. montagu’s resignation of the seals as secretary of state for india. the disappearance of the war cabinct, and of the coalition govt. of which it had been the offspring, marked a return to normal rocedure. in two respects, however, the ascendancy of the prime linister would appear to have become permanent: one is that the permanent under-secretary to the treasury has come to be regarded as the head of the whole civil service, and as an official through whom the prime minister may exercise a certain degree of author- ity over all departments otherwise than through the ministers in charge of the m—possibly an anomalous position; the other is the prec- edent created by mr. asquith when he obtained from the king before the dissolution of 1910 a contingent guarantee that if the government were successful at the polls such a number of peers would be created as the prime minister might think necessary -to secure the passage of the parliament bill into law. | in one important respect the precedents created by the war cabinet have left their mark on the constitution. the cabinet secretariat, although completely disestablished as an instrument in the hands of the prime minister, survives to the extent that minutes of cabinet proceedings are now kept by a permanent official, who is thus placed in a position of peculiar delicacy if not of peculiar authority. the tradition of ‘cabinet secrecy’ is to that extent changed. the departure has been much criticised by constitutional purists, but the exact position is obscure. the executive.—the outstanding constitutional problem is the continual encroachment of the executive either by using the pre- rogative or by the presumed exercise of statutory powers, upon the rights and liberties of the subject. the only safeguard against this tendency is the vigilance of parliament and the independence of the judiciary. ‘phe term of office of the labour govt. was marked by an attack by the prime minister upon the independence of the judiciary in the person of mr. justice mecardie, who in the case of o'dwyer v. nair (reported in the times, may 1-june 6 1924) had made certain observations on the attitude of the exccutive in the case of general dyer. for this mr. justice \\fccardie was severely criticised in the commions by mr. ramsay macdonald. on behalf of the judge it was urged that the subject-matter of the judge’s remarks was directly raised by the defendant in his plea of justi- fication, and was therefore such as the judge was bound, by the duties of his office, to deal with. the claim put forward by the prime minister to the immunity of the executive from judicial criticism was a far-reaching one. in the board of education v. rice (191) the court of appeal and the house of lords had reminded a department that ‘it is not an autocrat free to act as it pleases,” and had granted rules for the issue of writs of mandanzius and cerflorari to control its arbitrary disregard of the law in the exercise of the semi-judicial powers conferred upon it by the education act. in dyson v. the attorney-general ([1911¥} 1 k.b. 410, and [1912] 1 ch. 158), the court laid down for the first time that a subject threatened with penalties by the revenue author- ities, for non-compliance with interrogatories which were «al/tra vires, had the same right of access to the courts for a declaration of the law against the executive as if the defendant were a private person. these cases are only two out of many. the whole subject is both too large and too technical to be dealt with here, but reform is urgent in two directions: (1) in the assimilation of the rights of the subject to sue the crown to his rights against a private defendant, (2) in the restoration of both judicial and parliamentary control over the exercise of powers of ‘* subordinate legislation ” by govern- ment departments. in one respect there has been a notable reform— namcly, the acquisition of land (assessment of compensation) act of 1919. this statute provides that where, in the pursuance of any statutory power, land is acquired compulsorily by any govern- ment department or local authority, the right of the owner to the assessinent of compensation by an independent arbitrator, instead of an official valucr, is to be restored. the liberty of the subject—yor some months during the war the subject was deprived of his rights to trial by jury even in criminal cases, under the defence of the realm legislation, but the suspen- sion of this right was short-lived. in the case of the right to a jury in civil actions the situation was much more scrious. for seven years, from 1918 to 1925, this right was taken away, and it was the excep- tion, instead of, as hitherto, the rule, that a litigant in a common faw action should, on demand, have the right to have his case tried by jury. in the case of mord v. blurton (38 t.l.r. 801) this invaston of an ancient right of the subject was vigorously criticised by the court of appeal! itself, and the old rule was eventually restored by the administration of justice act of 1925. so too the ancicnt process of indictment by grand jury was abolished during the war, and for it was substituted, as the accusing authority, the attorney- general. after the war, however, it was restored. in the case of r. (ex parte o’ brien) v. secretary of state for [teme affairs ({1923| 2 k.b. 361; a.c. 603), the executive, acting under an order in council which purported to be made under defence of the realm legislation, reincarnated as late as 1923 in the form of regulations under the restoration of order in ireland act, had 258 arrested, with a view to summary deportation to ireland, an irishman resident in england; he applied for a writ of habeas corpus. the court of appeal, in an exhaustive survey of this ‘* subordinate legis- lation,”’ severely criticised the action of the executive, declared the legislation in question ultra vires and granted the rule for the issue of the writ. the judgment may be regarded as the classical authority on the scope of habeas corpus, and the house of lords, on appeal, upheld it, at the same time laying down the important principle that their appellate jurisdiction, while atways available against a refusal of the writ, does not extend to an appeal against the grant of it— in other words, the right of the subject to summary release, on the determination of an inferior court that he is illegally detained, is established. bibliography.—a. v. dicey, introduction to the study of the law of the constitution (8th ed., 1915); a. e. hogan, government of the united kingdom (1920); a. f. pollard, the frolution of parliament (1920); a. l. lowell, the government of england (new ed., 1920); c. f. g. masterman, jiow fugland ts governed (1921); j. a. r. marriott, english political institutions (3rd ed., 1925). (j. h. mo.) il. local government there have been no radical changes in the system of british local government since 1902, when the ad foc education authori- ties, the school boards, were abolished and their functions trans- ferred to the county and town councils. the hierarchy of local authorities stands in general as it was reorganised in the last two decades of the 19th century. in england and wales the chief administrative units are counties, county and non-county bor- oughs, urban and rural districts and parishes. the county of london has a unique subdivision into the city and the 28 metropolitan boroughs, and there are also in the me- tropolis and elsewhere a number of joint authorities for special purposes—asylum boards, hospital boards, water boards, burial boards, etc. scotland has counties, burghs—royal, parliamentary and police—and district committees of the counties in place of the english rural districts. it also has ad hoc education authori- ties and lunacy authorities (district boards of control). the scottish parish council is the poor law authority, corresponding to the board of guardians in england and wales. northern ire- land in the main follows the english system, while in the irish free state local government in 1926 was in the melting pot. the principal reforms of recent years in great britain fall under four heads:— 1. the old central authorities, the local government board and the scottish local government board, were abolished in 1919 and their functions transferred to new creations, the ministry of health (for england and wales) and the scottish board of health; 2. the local government electorate was enlarged by the repre- sentation of the people act 1918, which extended the vote to women and to certain classes of men hitherto disfranchised; 3. the rating and valuation act 1925 remodelled the machinery of assessment and rating, abolishing the parish overscers and putting their duties in the hands of the county borough and urban and rural district councils; 4. apart from these specific reforms there has been a gencral tendency to enlarge the powers of the local authorities, especially in the sphere of the social services. acts dealing with maternity and child welfare, tuberculosis, venereal diseases, mental deficiency, housing and town planning and education, have all added con- siderably to the work of the county and town and district councils. at the same time the big towns have grown still bigger, not only by increase of population, but often by extension of their area through the absorption of surrounding districts. all these developments have revealed grave defects and in- conveniences in the system, and have jed to a widespread demand for reform. the countics have struggled against the constant encroachments of the county boroughs. the county boroughs and the more important non-county boroughs and urban dis- tricts complain, and with reason, that while their functions have been increased they are still unduly controlled and thwarted by the central authority and parliament. and the absorption of surrounding districts by the big towns and the expansion of public needs have made it more and more difficult to administer effectively such services as transport, water supply, electricity, regional planning, police, etc. this problem is particularly acute in the metropolitan area, and in 1921 a royal commission, under the chairmanship of viscount ullswater, was appointed to in- quire into the local government of greater london. the major- substantial change. great britain ity of the commission, however, reported unfavourably to any they contented themselves with recom- mending :— (2) some redistribution of functions inside the administrative county; (b) a reduction in the number of the petty local authorities in the outer districts; (c) the creation of a statutory advisory committee to assist cen- tral departments in dealing with questions of transport, housing and town planning and main drainage; ae : (d) a scheme for further equalisation of rates within a 10-mile radius from charing cross. there were two minority reports. the first proposed that greater london should be made into a congeries of county bor- oughs with certain services reserved for administration by a cen- tralised authority. the second recommended a new authority, popularly elected, for the governance of the whole area. this body would be directly responsible for all the large central serv- ices, and would require to have carefully defined powers of co-ordination and supervision of the work of the minor local authorities within its area. in 1923 another royal commission was appointed, with the earl of onslow as chairman, to inquire in particular into the question of the creation and extension of county boroughs and generally into the constitution, areas, functions and mutual re- lations of all local authorities. it issued a first report in 1925, which proposed certain reforms in the machinery for creating or extending county boroughs. the most important of these were:— 1. all proposals for the constitution of county boroughs should be made by private bill instead of by provisional order. proposals for the extension of county boroughs should also be made by private bill, unless the county borough concerned prefers the provisional order procedure and no other local authority concerned objects. 2. the minimum population entitling a borough to apply for county borough status should be 75,000, instead of 50,000. this somewhat conservative report was generally regarded as a compromise, designed in the main to ease the friction between the counties and the towns. in 1926 the commission was pre- paring to deal with the second part of its reforms, which it was clear would be considerably affected by the proposed legislation for the break-up of the poor law. the main problems, therefore, remain unsolved. new wine is bursting old bottles, and no general agreement has been reached as to the kind of new bottle that is wanted. on two points, however, there is a growing consensus of opinion. a concession must be made to the demand of the great municipalities for de- centralisation—for jocal discretion, that is to say, to carry on their services or extend their enterprises, including “ municipal trading ’ schemes, with less interference from westminster and whitehall. this power they claim in the interest alike of eth- ciency, economy and democracy. on the other hand, there is urgent necd for a large measure of local centralisation, for the constitution of areas and authorities adequate to the performance of services which transcend existing boundaries. the attempt may be made to meet this need cither | (2) by special joint committees of neighbouring local authorities for various services such as transport, water supply, electricity and so on; or, better, (2) by a more drastic reorganisation which would sct up new authoritics—‘‘ super-local authorities,”’ so to speak—for these services, as well as for the general supervision of local govern- ment throughout their areas. this was what the second minority report of the ullswater commission recommended for london, and it is obviously cap- able of application in other parts of the country. it is in princi- ple the line of reform advocated by the “ regionalists.” region- alism implies a re-organisation in which the whole country would be divided into a number of regions or provinces, say seven or ten or a dozen. these provinces would be natural and not merely artificial units, since different parts of the kingdom have distinct ties of common interest, both economic and “ cultural ”’ (e.g., london and the home counties; east anglia; the west coun- try; “ lancastria ’). they would, it is claimed, be the most efficient possible units for administering the larger services; and on them would be devolved the bulk of the present central great britain authority’s powers in respect of the supervision of the work of the subordinate, but largely autonomous, local authorities within each region. bibliography.—j. j. clarke, the local government of the united kingdom (3rd ed., 1925): it also contains a full bibliography; c. m. lloyd, essays on the re-organisation of local government (1919); w. e. whyte, local government in scotland (1925); g. d. h. cole, the fuiure of local government (1921): contains a full discussion of regionalism; report of the reyal commission on london government (cmd. 1830, 1923); first report of the royal commission on local government (cmd. 2506, 1925). part i. of this report contains an admirable account of the constitution, functions and finance of the various local authoritics in england and wales. the afunicrpat year book of the united kingdom (annual) contains useful statistics and information about the local authorities in scotland and ireland, as well as in england and wales. for the history of local govern- ment, from 1689 to 1835, see the series of books by s. and b. webb: the parish and ihe county (1906); the manor and the borough (1908); the story of the king’s highway (1913); statutory authorities for special purposes (1922); and english prisons under local govern- ment (1922); also s. webb, grants in aid (1920). (c. m. l.) ill. defence in 1913 an important investigation was held by the committee of imperial defence into the principles which govern the defence ot great britain. for several centuries there had been two schools of thought. the one, supported by several eminent sol- diers, held that it was necessary to maintain a large army for defence against invasion. the other, supported by the majority of great seamen, held the view that it was essential to the eco- nomic life and prosperity of the population to maintain a navy of sufhcient strength to keep open their sea communications against any single foreign navy, or any anti-british combina- tions at sea; and that a fleet, strong enough to achieve that pur- pose, would also be in a position to secure the immunity of brit- ish territory from invasion by a foreign army. the invasion school met this plea with the argument that the british fleet might be “ enticed away ” from home waters and the opportu- nity then seized to pass a foreign army across the channel or the north sea; and, furthermore, that the larger the home defence army, the greater the force that must be employed by prospec- tively hostile foreign countries for effective invasion, and the easier the task of the navy, upon which “ freedom to manocu- vre’”’ would thus be conferred during the lengthy process of assembling the hostile invading army, and transporting it across the intervening sea. the question of invaston.—the invasion school was particu- larly active during the years immediately preceding the world war, partly in order to maintain the proposition that the recent- ly-established territorial force was required mainly for home defence, as the terms of enrolment of its members seemed to | indicate, and partly in order to support a widespread movement for the introduction of national service for a similar purpose. the controversy came to a head during the years 1913-4, when the committee of imperial defence devoted much time to an exhaustive inquiry into the question whether invasion by a german army, bearing in mind the size of the german mer- cantile marine, was a more feasible proposition than invasion by a french army, which had been ruled out of court some years before, after a similar investigation by the committee of imperial defence, mainly on the plea that french merchant shipping did not suffice for the purpose. the inquiry of 1913-4 resulted in the conclusion that invasion, defined as a military operation on a large scale intended to conquer the country, was not a danger against which it was necessary to make spccial provision under the then existing conditions of relative sea- power, but that the landing of military “ raiding forces ”’ upon british shores was a possible contingency, against which mili- tary forces must be provided. the situation was thus summed up by the late sir julian cor- bett in his official history of the war:— the truth is that, with rare and special exceptions, as when the enemy’s chief naval force was not based in the home area, our main or grand fleet always operated from its home station. its paramount duty was to secure the command of home waters for the safety of our coasts and trade .... for defence against invasion | 259 the system was obviously the only one possible; for control of trade it had been found efficacious, and never more so than proved to be the case in the war of i914. in order to draw up definite plans to meet the assumed danger from military raiding forces in time of war, the war office re- quired definite estimates of the strength of such forces which might succeed in slipping past the naval dispositions. as the strength of these forces must depend upon the number and size of the transporting vessels, this was clearly a question for the admiralty. the maximum strength agreed upon and accepted by the naval authorities was a military raiding force of 70,000 men, and sir julian corbett has told us that, in naval opinion, no such raid was likely to be attempted except across the north sea. in the actual event, the coasts of great britain were im- mune from military raiding forces in the world war, although on several occasions definite rumours of their probability caused the authorities to make dispositions for which considerable mili- tary forces were employed, at periods when there was an urgent need for their services beyond the seas. for instance, in march 1918, during the time of greatest anxiety for the safety of the british army on the western front, over 41,000 officers and nearly 130,000 other ranks of the army, classed as “ fit for gen- eral service in any theatre of war in all respects, both as regards training, physique and mental qualifications,’ were retained in the united kingdom, while the total strength of the home army, mostly of men in lower categories, reached a total of nearly 2,000,000. in that connection it is also necessary to bear in mind the need to maintain military forces in great britain in aid of the civil power, should such a demand arise. the attitude of the population of parts of ireland, which necessitated the presence in that country of british troops during and after the war provides an example. there was yet another demand for soldiers in the united kingdom, to guard, against “ evilly-disposed persons,”’ certain vulnerable points of which the loss or destruction would adverse- ly affect the navy, army or air forces. large numbers of men belonging to the combatant forces, most of them unfit for serv- ice abroad, were employed upon work of this nature, besides strong forces of police. personnel —it was also necessary to provide military person- nel, especially artillery and engineers, to man the defended ports and naval bases and anchorages, essential for the use of the navy, mercantile marine, and troop transports. the arrangement between the admiralty and war office was that the army should be responsible for the fixed defences, guns, forts, electric lights, and so forth and for defence of the land fronts, while the admir- alty provided floating booms as obstructions, and, at some places, submarine mines and the personnel connected therewith. the admiralty also made arrangements for an examination serv- ice, to visit and examine vessels before they were allowed to enter british harbours. a few places, including scapa flow in the orkneys and cromarty on the east coast of scotland, re- ceived special treatment, the admiralty providing marines to man the coast batteries and lights. another important task which fell upon naval personnel was mine sweeping, to keep free of enemy mines the channels leading to and from british ports and anchorages, and there was an additional and only partially foreseen demand for coast watching, in aid of the coastguard. this task was performed to a great extent by volunteer watchers, the boy scouts taking a very active part in the movement. coast defences.—in connection with the general question of fixed coast defences, it is important to realise their limitations. “ people often say,” wrote admiral mahan, “ that such and such an island or harbour will give control over such a body of water. it is an utter, deplorable and ruinous mistake.” the same author explains further that “ control of a maritime region is ensured primarily by a navy, and secondarily by positions, suitably spaced from one another, upon which, as bases, the navy rests, and from which it can exert its strength,” and that “ina naval war coast defence is the defensive factor, the navy the offensive. coast defence, when adequate, assures the naval commander-in-chief that his base of operations—the dockyards 260 and fuel-depets—is secure. it also relieves him and his govern- ment, by the protection of commercial centres, from the neces- sity of considering them and so leaves the offensive arm per- fectly free.”” on the whole it may be said that british defences adequately performed these functions in the world war, but it is necessary to take note of the point that they did not secure complete immunity for the coastal population; scarborough, hartlepool and other places suffered from bombardment by hostile war vessels. owing to popular demands, these bom- bardments affected both the movements and the distribution of the sea forces in home waters. attucks during the war—reviewing the situation, from the defence point of view, of the british isles in the world war, it is found that naval strength and dispositions secured the country from military invasion or raids, but that some places on the coast, which were considered to be immune under international agree- ments arrived at in conferences at the hague, were subjected to bombardment from the sea. the special provision referred to is to be found in article 25 of the 1907 hague conference, which forbi:ls the bombardment, ‘by any means whatsoever,” of undefended towns. air raids -——this is a new feature in warfare, which affects very seriously the defence of great britain. the situation was thus described in aug. 1914:— it seems safe to assume that the few hundred aircraft at present at the disposal of any military power would be unable to bring serious pressure to bear upon a hostile nation numbcring many millions, spread over wide areas. the mora! effect which would be produced by highly mobile aircraft dropping bombs first over one city, and a few minutes afterwards over another city a hundred miles away, would no doubt tend to produce local panics, but, given the right spirit, the material effect would not sulfice to produce concerted action amongst the population to force their government to stop the war. (sea, land, and air strategy, 1914.) this prediction was borne out in the years 1914-8, but consider- able damage was suffered in the united kingdom from air raids. these raids provide the only precedent, derived from actual experience, of the effect of air raids upon the civil population of great britain. putting aside the comparatively triling loss of naval and military personnel, 619 civilians were killed by acro- plane raids and 408 by air-ship raids, the numbers of injured being 1,650 and 1,236 respectively. of the total of 1,117 killed, 618 were women and children. of the 2,986 injured, 1,562 were women and children. there was no question of pressure being put upon the govern- ment for this reason to end the war without victory. the tend- ency was to stiffen the determination of the nation to endure all things rather than accept defeat. the deductions to be drawn from the statistics are (1) that airships, owing to their vulnera- bility, do not afford cause for anxiety, provided that the expcri- ence of the world war is studied and adequate defensive meas- ures are adopted; but (2) that the menace from acroplanes is more serious, though strictly limited in radius. whether this radius can be increased much beyond the estimate in 1924 of 200-300 m.' is a question for the future. the point has been ad- vanced that a reduction of bombing-load, and therefore an in- crease of fuel-radius, can be effected by substituting highter and more deadly chemicals and gases for heavy explosive bombs. the increase in range of artillery fire was yet another develop- ment which may affect the future defence of great britain, for certain ports on the east coast, and even inland towns, could now be subjected to bombardment from positions on land. comparison between pre-war and post-war condittons.—the situation in 1925, as compared with that in tg10, can thus be summarised. as long asa sufficiently strong navy is maintained, immunity from invading armies can be ensured in the future, as it has been in the past. the menace from the air would de- pend upon the country with which great britain might be en- gaged in hostilities, and would not be very serious except in a war against countries within the radius of action of bombing aeroplanes starting in large numbers from land aerodromes. long- 1 report of sub-committee of committee of imperial defence (cmd. 2029, 1g24). great britain range bombardments of certain places near the east coast could be eflected by heavy ordnance in similar localities. the navy, and the merchant shipping under its protection, would be open to air attack when carrying out their task of keeping up the trans- port over the high seas of essential goods to and from great britain; air forces, under naval control, would be essential to meet this menace. ‘the general effect of the air menace, as a factor in the problem of british defence, may be gathered from the attitude of successive british govts., which have found it necessary to adopt a ‘ one-power ” standard of strength in the air, to establish a separate air force controlled by an air ministry and to appoint an air officer as commander-in-chicf of the home air forces, a step which, in time of peace, has been considered to be against the best interests of the nation if applied to the military forces. irish free state—the grant of self-government to the irish free state has a considerable effect upon the defence of great britain. this quasi-political question cannot be dealt with exhaustively in an article devoted exclusively to defence. its main features are (1) the control by the free state govt. over its own forces; (2) the loss of a large number of recruits, of a wide area of recruitment for the british army, and of important training grounds; (3) the prospect for great britain in future emergencies of having a friendly population in southern ireland, in place of one bitterly hostile and requiring the presence of a strong british garrison; (4) the continued provision of a small nucleus of british troops in certain defended ports, and also the question of the ability, if not the eagerness, of the irish of the free state to deny their harbours to war vessels hostile to britain, and to provide an organisation for coast-watching to ascertain and report, as was done by british coastguards in 1914-8, the movements of such vessels within sight of the [rish coast. unless these services are adequately fulfilled, the establish- ] , ment of a free state in [reland would, in a grave emergency such as the world war, affect adversely the defence of great britain. concluston.—in conclusion, we have noted that the principal change between roro and 1925 in the defence of great britain has entailed the provision of a large localised air force, controlled by an air ministry and an air officer commanding-in-chief, in addition to the air forces needed to accompany british fleets and armies upon their world-wide mission, nevertheless, the burden of home defence may bear less heavily upon the british people than their responsibility for defending people of other rices and nationalities, spread over both hemispheres (see air torces; army; coast defence; navy; etc.). biinliography.—history of the great war, based on official documents. sir j. corbett, nevat operations, vol. \\.-yi. (1920, etc.): c. e. fayle, seaborne trade, vol. v.-jii. (1920-4); 4. hurd, the merchant navy, vol. u.—-eii. (1921, etc.); sir g. aston, sea, land, and air strategy (1914). (gi gea) iv. finance and banking the years immediately preceding 1914 were a period of rapidly growing expenditure, due (1) to the increase of the navy and (2) to social reforms. natronal expenditure i9i4-5 1go5\"9 (esti ma tee) debt army navy”. « . ; old age pensions insurance of working classes ; other expenditure {28,000,000 26,840,000 32,188,000 £23,500,000 28,885,000 51,550,000 12,710,000 i 9,312,000 65,264,000 $1,064,000 total £207,021,000 the growth of {15,800,000 in other expenditure was largely natural expansion, e.g., an increase of £8,000,000 in the post office. the increase in total expenditure (after allowing for the reduction of £4,500,000 in the debt charge) was £59,000,000, to which defence contributed £21,400,000 and social legislation £ 22,000,000, so great an increase in expenditure had naturally involved additional taxation. the extensive measures of new taxation imposed by mr. lloyd george’s budget of 1909 (which was re- jected by the house of lords and was only passed after a general great britain election) provided the greater part of what was required. the feature in that budget of greatest permanent importance was the institution of a supertax, that is to say an additional income tax on large incomes. incomes above £5,000 were taxed at 6d. in the pound on the excess over £3,000. at the same time the rate of income tax on unearned income was increased from 1s. to 1s. 2d. after the great effort of 1909 the natural expansion of revenue suthiced to cover expenditure till r914. in that year further taxa- tion became necessary, and the budget as finally adopted (before the war crisis) provided for an increase in estate duties, a rise in the income tax on unearned incomes from ts. 2d. to 1s. 3d. (the earned still remaining at od.), and an important extension of the supectax. supertax was applied to all incomes over £3,000, and was more elaborately graduated (the rate on the excess of an income over £8,000 was 1s. 4d. in the pound). the estimated yield for a full year was thereby raised from £3,300,000 to £7,770,000 (see income tax). the war period.—yrom the beginning of the war in aug. 1914 it became impossible to dissociate the budget position from the state of credit generally. in the first place, the govern- ment had to come to the assistance of the financial world and support credit through the initial crisis. secondly, expenditure on the war soon grew to such dimensions as to put an almost unbearable strain on the financial fabric of the country. the outbreak of the war threw first the stock exchanges and then the foreign bill markets of the world, but above all of lon- don, into utter disorder. the machinery of remittance to lon- don broke down almost completely and the london accepting houses found themselves faced with bankruptcy. the govern- ment was forced to step in and to proclaim a moratorium for debts, statutory power was taken for the treasury to issue legal tender currency notes for {1 and 1os. and the government guar- anteed advances by the bank of england to acceptors to pay off pre-moratorium bills (see stock exchange). war borroowing and inflation it wasin the midst of this state of confusion that the early stages of the war were financed. for the initial expenses, advances of £14,720,000 were obtained from the bank of i:ngland on “ ways and means” (i.e., under the powers annually conferred by the con- solidated fund act and appropriation act). the war was cost- ing about £1,000,000 a day. ‘there followed half-a-dozen issues of treasury bills of £15,000,000 at a time. in nov. 1914 addi- tional taxation was imposed and a loan of £350,000,c00 (32 yo at 95, redeemable 1925-8) was decided on. by that time serious unsoundness was already developing in the situation. the issue of £90,000,000 of treasury bills did not in itself overstrain the market. but the advances made by the bank of england for the pre-moratorium bills, with its advances to the government and large imports of gold, destroyed the bank’s power of controlling the money market. bank rate had been reduced to 5°¢ on the reopening of the banks on aug. 7, but in sept. it ceased to be effective and the market rate fell to 3%. in nov. it fell below 3. part of the 33°> loan was taken by the banks, and in any case the loan was not applied to strengthen the position of the bank of england. in feb. 1915 the market rate of cis- count fell below 2%. the private deposits at the bank of eng- land exceeded {£130,000,000. at last, in march 1915, severe measures were taken to coun- teract the growing inflation, which had already caused a consid- erable rise of prices. the ban!: of england came into the money market as a borrower at call on the same footing as the discount houses, and lent the proceeds to the government. the money was accumulated in balances, and public deposits at the bank rose from {27,000,000 at the end of feb. to £114,000,000 at the end of march and other deposits fell to {90,000,000. on april 13 a new departure was made, in that treasury bills in un- limited quantities were placed continuously on sale at fixed rates of interest to allcomers. but the rates were still low (217% for 3 months, 38% for 6 months, 33° for longer maturities). publie deposits rose to {130,000,000 and more. it was the treasury bill rate, and not bank rate, which regulated the money market. 261 by that time the cost of the war had risen to £3,000,000 a day and exceeded one-third of the national income (even if this be assumed to have risen in proportion to prices, which were 25% higher thanin 1913). this outlay (after deducting a modest con- tribution from the tax revenue) far exceeded the amount that the people could save. but inflation only made the situation worse. that the cost of the war was itself swollen by the high prices was the least part of the evil. easy credit makes trade profitable, because {t encourages buying and consumption. it directs sav- ings away from gilt-edged investments into trade. in 1915 con- ditions were extremely abnormal, but, for all that, this tendency was at work. lavish expenditure by the public on consumable goods was competing with the government, not only for the investment of the available savings, but for the employment of the available labour and productive power. inflation, once started, continued throughout the war and for some time after- wards and only spasmodic and half-hearted steps were taken to check it till 1920, when prices had risen to three times the pre- war level. | mr. mckenna, in june 1915, brought out the second war loan (42° at par, redeemable 1925-45). it was fer no specified total amount. the banks again undertook to subscribe for a very large amount, but the loan was planned much more for the ordinary in- vestor ancl fess for the money market than the 33 °o loan of novem- ber, it also remained open fonger, and there w = more propaganda. subscribers were given the right to conv ert their holdings into any future long-dated war loan. ‘holders of 32 per cents or of consols were allowed to convert these securities into the new loan if they subscribed in addition a certain amount of cash to it. the loan yielded £587,000,000 of cash, but £200,000,000 came from the banks, and the balance was but a modest contribution from genuine sav- ings towards the growing expense of the war. while the loan was still being subscribed, ominous signs of weakness began to appear. the rise of prices was resumed. the exchange on new york fell below $4.80 to the £1 sterling; at the end of aug. it dropped to $4.50. the government sought a remedy in the sale cf gold and securities in new york. gold received in 1914 and deposited at ottawa, gold displaced from circulation by currency notes, gold extracted from the precious reserves of france and russia, all were drawn upon. the total net imports of gold into the u.s. in 1915 were $420,000,000, of which two-thirds came in the second half of the year. the british govt. collected amcrican securities from british holders, and either sold them or pledged them in america. there was also direct borrowing in amcrica, starting with the anglo- french loan of oct. 1915 (s500,000,000, five-year 5 per cents at 98). by means of these resources it became possible to “ peg ”’ the exchange at 4-76$. that measure made inilation more ruinous to the country than before. inflation creates an excess of im- ports, which can be corrected, if the gold standard is abandoned, by an adverse movement in the exchanges. if the government prevents that adverse movement by undertaking to sell foreign currencies to all comers, the excess of imports continues, and the government has to pay for it. there were obstacles to imports in 1916 (especially lack of shipping), but the burden assumed by the government was still a formidable one. the british govt. also had to supply the necessary resources for pegging the french franc. what was needed above all was the cessation of inflationary finance. ‘the 43° war loan had been of some assistance. in aug. rors the lowest rate for treasury bills was fixed at 43%. in sept. new taxation was imposed calculated to yield over {100,000,000 in a complete year, and in may 1916 further increases brought the revenue for the year 1916-7 above {£500,- 907,000. but the cost of the war had risen to {4,500,000 a day and the rise of prices above the peace-time level exceeded 50%. in dec. 19t5 five-year 5° exchequer bonds were put continu- ously on sale from day to day, but yet in march 1916 the floating debt (treasury bills and ways and means advances) was almost £600,000,000. in july 1916 bank rate was raised to 6°, and the treasury bill rate to 54. the effect of bank rate on borrowing depends on the profits of trade; 6° is by normal standards a very high rate, 262 but in face of the profits promised by an orgy of inflation it counts as low. at any rate it was not high enough to have much effect in 1916. the sale of five-year exchequer bonds (raised to 6% in oct. 1916) continued till jan. 1917. mr. bonar law, who had become chanccllor of the exchequer in dec. 1916, then de- cided on a third world war loan. this took two forms: 5 per cents at 95 (redeemable 1929-47) and income-tax free 4 per cents at par (redeemable 1929-42). a “ de- preciation fund,’ equal to 1<°%, per month, was to be applied to buying up stock in the market whenever it was below the issue price. the amount asked for was unlimited, and the zeal of the pub- lic was stimulated by intensive propaganda. it was wisely decided to ask for no direct subscriptions from the banks. the cash raised was {816,000,000, and treasury bills subscribed amounted to £124,000,000. in addition holders of 43°. war loan and of the exchequer bonds since issued were entitled to convert into the new stock. the total amount created was £2,067,000,000 of 5 per cents and {52,000,000 of 4 per cents. even after this great effort the floating debt at the end of the financial year (march 31 1917) amounted to {£680,000,000. prices were almost double the peace-time level. growing difficulty was experienced in providing resources for the support of the american exchange. the vast quantities of gold sent to the united states (whose net imports of gold from jan. 1915 to march 1917 amounted to $1,192,000,000) not only paid for goods, but brought about a credit inflation and rise of prices there. indeed otherwise the discrepancy in value between the pound and the dollar would have been far too great for any pegging operation to be feasible. but the effect of the credit inflation in america was to make borrowing there more dillicult in face of the insistent demands of trade for all available supplics of capi- tal. it was found possible to raise loans of $250,000,000 in aug. 1916, $300,000,000 in oct. 1916 and $250,000,000 in jan. 1917, but the market was growing more and more reluctant. all such anxicties were dispelled by the entry of the united states into the war in april 1917. thenceforward the necessary resources both for supporting the exchange and for buying food and materials were advanced to the british and allied gov- ernments by the american govt. itself. the british govt. continued to provide funds to enable the allies to buy goods in england, but the amount lent was about equal to the amount borrowed from the american government. inflation in the united states was accclerated and the export of gold thence was prohibited. the price index rose from 162 in march 1917 (100 being the average of 1913) to 203 in nov. 1918. the english price index in nov. 1918 was 229. the cost of the war to the british exchequer had risen to £7,000,000 a day. bank rate had been reduced to 54% on jan. 18 and to 5% on april 5 1917. after the 5 °6 war loan, borrowing was effected through exchequer bonds, re-christened in sept. 1917 ‘ national war bonds.’ they were 5 per cents, but were repayable on maturity at a premium (2% on the 5-year bonds, 3° on the 7-year and 5°. on the 10-year), and were convertible at the holder’s option into 5°, war loan at 95 (1.e, a {100 bond would buy £105 §s. 3d. of war loan). there were also income-tax free 4 % 10-year bonds, repayable at par, and convertible into 4° war loan. national war bonds were continuously’ on offer till the armistice and thereafter till may 1919 (those issued after jan. 1919 having no conversion rights). much attention had been given to the attraction of savings from the working classes. special facilities were given for the purchase of the 44% war loan of 1915 in bonds of small denominations. in 1916 a special issue of war savings certificates was started. the subscriber paid 15s. 6d. for a certificate entitling him to £1 after five years, and he could obtain repayment at any time at the sacrifice of a part of the accumulated interest. the interest accumulating, ancl not payable periodically, was not liable to income tax, and to prevent too extensive an evasion of income tax by well-to-do holders, the amount of certificates which could be held by any one person was limited to £500. on march 3r 1919 the national debt amounted to £7,481,- 000,000, an increase of £6,775,000,000 since march 31 1914. the external debt was £1,365,000,000, or, if certain items which could be set off against debts due to the british govt. from canada, france, italy and russia be omitted, £1,179,000,000. the internal floating debt was £1,339,000,c00! including {£455,- 1 exclusive of treasury bills amounting to £73,000,000, included in external debt (see cd. 1648). great britain 000,000 of ways and means advances; the latter included sums lent by government departments (partly from the currency notes account, partly from trading accounts and many other sources). but a large part was money borrowed at call through the bank of england from the money market, extra interest being paid for foreign-owned balances. war taxation.—though there were heavy increases in indi- rect taxation, far the greater part of the war taxation was direct, as the following comparison shows:— tuxation in peace and war i9i4-5 source of revenue (peace 1918-9 estimate) £ millions f£ millions customs and excise . 75 +3 162-2 income tax 48-1 255°6 supertax . : : ; : 5:8 35:6 excess profits duty . : : : ss 285-0 other direct taxes . : ; ; 42-1 45°9 other revenue . . : 35°8 104°7 207°1 889-0 the rate of income tax had been raised to 2s. 6d. in 1915-6 and to 5s. in 1916-7. in 1918-9 the rate was raised to 6s.; the effect of this last increase was not fully seen till 1919-20, when the yield was £317,000,000. supertax rates had likewise been raised, and the high- est zones of income paid 4s. 6d. the biggest tax of all was the excess profits duty, which had been imposed by mr. mckenna in sept. 1915. this was a tax on the excess of the profits made by any firm or company in the year of assessment over the annual profits made before the war (computed in the case of a business established since the outbreak of war from its capital), administratively it was an off-shoot of the income tax, for the income tax assessments disclosed both the current profits of a business and its pre-war standard. the rate of tax was at first 5075, and was raised in 1g16 to 60°, and in 1917 to 80%. excess profits duty was a powerful corrective of inflation. it provided £645,000,000 revenue in the three years 1916-7 to 1918-9, and £540,000,000 more in the difficult years that followed. it diminished the evil tendency of inflation to accentuate the inequalities of wealth. by it the extravagant profits which made trading enterprises unduly attractive to capitalists, in com- petition with the needs of the government, were materially reduced. excess profits duty was never anything but a makeshift. it was full of anomalies and minor injustices. but these, in the emergency of the time, were as dust in the balance compared to its advantages. the indirect taxes imposed included import duties on motor-cars, clocks and watches, musical instruments and cinema films—officially known as the new import duties, but more commonly called the mckenna duties. they are noteworthy as being the first protective duties imposed since the days of the peclites.2. they were ostensibly intended to support the exchange and to economise tonnage. tue cost of the war an exact calculation of the cost of the war to great britain would be impossible, and what follows can be regarded as no more than an approximation. ‘the day after the declaration of war with germany the government obtained from parliament a vote of credit of £100,000,000, for “‘ expenses, beyond those provided for in the ordinary grants of parliament, arising out of the existence of a state of war.”’ certain services, such as naval and military operations, maintenance of trade, relief of distress, were specifically mentioned, but the total was not divided into subheads like an ordinary vote. till march 1919 the cost of the war was met from successive votes of credit. the total audited expenditure from votes of credit was £8,417,000,000. the table on the opposite page shows the principal details. civil departments drew on votes of credit for any expenditure in excess of their own votes, attributable to the war. some items so met (e.g., for cost of living bonus to civil servants) were not part of the cast of the war. but on the other hand the ordinary votes bore many war charges such as the civil pay of staff absent on militarv service, or the cost of administrative work arising out of the wat. the total includes £1,665,000,000 of loans to allies and dominions. these were an immediate burden when advanced, but the ultimate burden is only such part as is never repaid. the immediate bur- den was relieved by the advances received from the canadian and amcrican governments. 2 except the ephemera! corn duty of ig9o02. great britain vote cf credit expenditures (£ millions) 1914-5 | 1915-6 | 1916-7 | 1917-8 | 1918-9 navy air force :; os 2-5 37°9 munitions . -7 | 224-6 | 504-9] 641-0} 458-3 |1,829°5 railways and canals 6-8 5-9 16-9 26-4 49°6 {| 105-6 shipping ts oe 8-1} 110-9 | loo-4 | 219-4 food . : 9:7 73 2254 79°3 41-5 | 160:2 loans to al- lies and domns. . §1:8 | 316-0] 544°7 | 488-3 | 264-6 |1,665-4 exchange ac- count 53:1 3°7 56°8 pre-morato- rium bills se 30-6 - ds ‘ 30-6 war pensions “i 2-2 7:8 23°7 46-6 80-4 old age pen- sions : fo ts 1-5 5:2 6:0 12-7 other expen- | diture 4-0 11-6 59:1 | 101-4 87-0 | 263-1 ——— ec err | ef receipts 2°5 ny 336-7 |1,381-2 |1,952°7 |2,426-8 |2,298-3 |8,395-7 £ millions from the net total of 8,395 deduct: peace establishments of army and navy for four years say. o.* ok 500 war pensions paid during the war . 80 allowances to old age pensioners. ‘ 13 exchange account (working balance) 53 646 net cost rive in the years following the last vote of credit, there were large outlays and also large receipts due to the war, as shown in the following table (in £ millions) :-— war expenditures and receipts army . navy . : air force . middle east peace establishments munitions . ‘ , railway and canals shipping . ministry of foo ; loans to allies, etc. . training and rescttle- ment of ex-soldiers coal mines : other expenditure . = | cn ono ny bo gata total expenditure keceipts! ; 1 mainly sales of war stocks, ships, etc., but exclusive of repara- tions. * excess of receipts over expenditure. a further net sum of {22,250,000 was provided through the civil contingencies fund (advances, 1919-20, £64,500,000; re- payments 1919-20 to 1921-2 £42,250,000). the total net war expenditure is thus (in £ millions) :— total war expenditure british expenditure loans to allies, ete. 1,665 166 1,831 votes of credit . subsequent years 6,084 376 6,460 263 advances from allies were:— united states 865 canada: 34, -s- he ie 8 184 france, russia and italy (gold) 136 , 1,185 voluntary contributions from india and colonies (principal only) up co;to23) 5 gs te gee 90 1,275 this may be regarded as reducing the net “ immediate burden ” of advances to allics to £556,000,000. the burden of war pensions, actuarially capitalised at some date in the midst of the war, may be put at £1,000,000,000. finance after the war in 1919 the tremendous overstrain of the war period was still making itself felt in the direction of inflation. the most obvious symptoms of weakness were in the floating debt and the external debt (see above). the shortage of tax-revenue and gen- uine savings, as compared with the expenditure to be met, was made good partly by drawing on foreign resources, partly by bank credits. practically, with the cessation of advances from the american govt., foreign resources ceased to be available. bank credits meant the creation of the means of payment out of nothing—pure inilation. excessive government borrowing seemed so entirely adequate an explanation of the growing inflation that a more insidious cause was hardly taken into ac- count. bank rate had remained at 5°, but had not been made effective. the treasury bill rate, which governed the market, had been reduced since feb. 1918 to 34%. under war condi- tions the effect of cheap commercial borrowing in stimulating business was undoubtedly much diminished though not en- tirely avoided. with the return of peace its full effect would be felt. the committee on currency and foreign exchanges after the war, presided over by lord cunliffe, had presented a grave and author- itative report in aug. 1918. the report urged the cessation of gov- ernment borrowing, but also the use of a high bank rate to protect the gold reserves. the foundation of all their recommendations was that “under an effective gold standard all export demands for gold must be freely met.” ‘“‘ the conditions necessary to the mainte- nance of an effective gold standard in this country no longer exist, and it is imperative that they should be restored without delay.”’ unless the remedies approved by experience were applied, ‘ there will be very grave danger of a credit expansion in this country and a foreign drain of gold, which might jeopardise the convertibility of our note issue.’”?’ the committee condemned proposals for ‘a liberal supply of money at low rates,’’ based on a further growth of the note issue, because “in the result the gold standard will be threatened with destruction through the loss of all our gold.” in spite of these wise and emphatic recommendations, the gold standard was abandoned without an effort, as soon as the arrangement for supporting the new york exchange with american credits was brought to an end. a regulation under the defence of the realm act, replaced in 1920 by the gold and silver (export control) act, prohibited the export of gold (march ro19). the regime of cheap money continued. bur- dened with heavy war commitments the budget for 1919-20 brought the prospect of a heavy deficit. in june a new 4% loan was offered for subscription in two forms, the funding loan, at 80, redeemable 1960-90; and the victory bonds, at 85, re- payable by annual drawings at roo. during the war the issue of loans at a considerable discount had been avoided, the lowest price of issue being 95. this was a favour- able contrast to the policy during the napolconic wars, which swelled the nominal amount of the debt and diminished the effec- tiveness of the big conversion operations of the igth century. the funding loan represented a change in that respect. it secured the investor against the reduction of his interest after 1960 unless the market rate of interest had fallen by then below 4%. that is a very slight advantage to the investor, and any difference that it made in the price of the loan would not go far to compensate the gov- ernment for the loss of what might be a valuable option in the future. the twin loans yielded £475,000,000, but £92,000,000 had been subscribed by banks, so that the real contribution towards sound finance was only £383,000,000. moreover, the well estab- 204 lished but deceptive city tradition of fertilising a joan with cheap money had been followed. the sale of treasury bills had been absolutely suspended, and the government had bor- rowed at a low rate from the money market and so far as neces- sary from the bank of england. the inflationary tendency, already serious, was accentuated. the sale of treasury bills was resumed on july 14. in oct. came a change; the rate for three months bills was raised from 34°% to 4}°4—the first step towards a restriction of credit. in nov. the rate was raised to 54°4 and bank rate to 6%. in dec., pursuant to a recommendation of the cunliffe committee, a limit was im- posed upon the currency note issue. a treasury minute of dec. rs rorg (a purcly administrative instrument without statutory validity) prescribed that the fiduciary issue of currency notes (those uncovered by gold or bank of england notes) in any year should not exceed the maximum fiduciary issue recorded in the preceding year. the actual maximum recorded for 1919 was {£320,600,000, and accordingly this became the prescribed maximum for 1920. under this rule the limit can decrease but cannot increase. the limit for 1926 was £247,q00,000. inflation in great britain works through bank credits, but a limit on the supply of legal tender money, if really meant to be effective, was bound to react on the creation of credit. never- theless in the opening months of 1920 inflation continued un- abated. the price level (statist index, 1913 being too) rose from 217 in april 1919 to 313 in april 1920. the american exchange fell one-third below par. in april 1920 the sales of treasury bills at the fixed rate of 53°% fell off, ancl £55,000,000 had to be borrowed from the bank of england on ways and means. an abyss of inflation seemed to be opening. the treasury bill rate was thereupon put up to 6$%, and bank rate to 7% (april 15). the next week mr. austen chamberlain introduced the budget for 1920-1. inflation was swelling the revenue from the heavy taxes already in existence, but fresh taxation was nevertheless imposed. a tax revenue exceeding £1,000,000,000, in addition to enormous receipts from liquidation, was budgeted for, and the estimated surplus was £234,000,000. the severe regime of high discount rates and no government borrowing, recommended by the cunliffe committce, was being applied. but after a year of unconscionable inflation, a stronger dose was needed than they ever contemplated, and produced results which they never thought of. a year of 7% bank rate caused a tremendous collapse of prices, while the exchange was little im- proved (see currency), and the gold standard was not restored. the peril of inflation had vanished. it was excessive detla- tion that was now the trouble. but a contraction of credit, while it brings depression, bankruptcy and unemployment, neverthe- less, after the first passing phase of stringency, causes a rise in the prices of fixed-interest securities and favours funding opera- tions, just because it diminishes the profits of production and trade. when the budget for 1921-2 was introduced in april 1921, little progress had. been mace with the floating debt, which still amounted to £1,243,000,000. the foan issues of 1919, together with an issue of 53° exchequer bonds in feb. 1920, had been mostly used up in meeting a deficit of £326,000,000 for 1919-20 and a large amount of maturing bonds. the surplus of £230,000,000 for 1920-1 had been needed partly to pay off external debt (including $250,000,000 of the anglo-french loan of 1915 maturing in oct. 1920), and partly to pay off bonds. further heavy maturities were in prospect. by april 1922, £138,000,000 of exchequer bonds would have to be met, and between oct. 1922 and feb. 1924 the 5-year national war bonds, amounting to £574,000,000. certain securities also had the privilege of being used in payment of death duties and [excess profits duty. the total amount so used had been averaging {70,000,000 a year. the depreciation fund on the war loan of 1917 required over £30,000,000. all these obligations had to be met if the floating debt was to be prevented from increasing. in the budget statement in april 1921 was announced the issue of a new 33% conversion loan. it was to be a funded stock like consols, being redeemable only at the option of the government (after 1961), and not at any fixed due date. a sinking fund of 2% per annum on the amount outstanding was to be applied so long as the price was below 90. cash subscriptions were not asked for, the loan being destined only to be exchanged for the 5-year and 7-year national’ war bonds. at that time gilt-edged stocks had not re- covered far from the lowest levels of 1920. the 4° funding loan great britain which had fallen to 66 in dec. 1920, stood at 71. the 5% war loan had risen from 81} to 88. the national war bonds (carrying a premium on redemption) were slightly below par. from {160 to £163 of 34% conversion loan was offered to the holder of £100 of national war bonds. the stockholder was secured a return of about 52° on his money, and the interest could not be reduced be- fore 1961, and even then only if the government was able to borrow at less than 33%. by good fortune the loan was a failure. only £164,000,000 of national war bonds were converted, out of £630,000,000 to which the offer applied, but even so the increase in the nominal amount of the debt was about £100,000,000. a year later, still months before the earlicst maturities of national war bonds, the situation had been transformed by the trade depression. the 4° funding loan at 883, and the 5% war loan at 99 were well above their issue prices. the conver- sion loan, which had been offered in april rg21 on terms cor- responding to a price of 62, had risen to 773. treasury bonds to yield 53%, and then, as the market improved, 5°% had been sold to an amount exceeding £400,000,000. in 1922 a further batch of £70,500,000 of national war bonds were converted into 33% conversion loan on the basis of a price of about 75. when the bonds were above par it ceased to be profitable to use them in payment of duties. and now that the 5°, war loan was well above the issue price, the option attaching to national war bonds of converting into it at the issue price became profit- able, and in the three years 1922-5, £251,000,000 were so con- verted. no difficulty was found in raising the money to pay off {100,000,000 in cash in the same period, and in addition the floating debt was reduced from £1,243,000,000 in march 1921 to £742,000,000 in march 1925 (inclusive of £166,500,000 of advances from public departments). in april to21 the pre-war system of selling treasury bills by public tender was reverted to. the change was an important one, because it meant that in respect of the discount rate the treasury followed the market instead of leading it. so long as the treasury sold all the bills that the market would buy at a prescribed rate and no more, the bank of england was bound to lend to the treasury if the sales of the bills did not produce enough. a bank rate appreciably above the treasury bill rate could not be made effective. a bank rate below the treasury bill rate would be equally unworkable. in fact the treasury had usurped the place of the bank as regulator of credit. so long as bills are issued by tender in just sufficient amounts to meet the needs of the treasury, the bank of england can dis- charge its responsibilities undisturbed. in 1924 a new form of conversion loan was created, a 43% security redeemable in 1940-4, in order to make a beginning with the conversion of the great 5% war loan, the government has the option of repaying that loan at par at any date after 1929. the amount involved is enormous. conversions of national war bonds had raised the total in april 1924 to {£2,100,000,000, difficulty might be experienced, even in a favourable market, in dealing with so great a mass of stock, if notice were given in respect of the whole in or after 1929, and there may therefore be advantages in converting moderate portions at a time by offering suitable terms to the holders. ‘fhe amount converted into 44% was £148,000,000. american debt.—the net external debt had been reduced from {1,179,000,000 in march 1919 to {948,000,060 in march 1922, of which £856,000,000 represented the debt to the american govern- ment. but these figures exclude the interest on the american debt which the american government had spontaneously suspended in 1919 and which had been accumulating ever since. towards the end of 1922 it was decided to negotiate with the american govt. for the scttlement of the arrangements for paying off the debt. a sum of $100,000,000 was paid on account and in march 1923 an agreement was negotiated by mr, baldwin, the chancellor of the exchequer, who with mr. norman, governor of the bank of eng- land, visited the united states for the purpose.. the loan had been till then in the form of an obligation payable “ on demand \" and yielding interest at 5%. the agreement reduced the suspended interest to 41°, and fixed the future interest at 3% for 10 years and thereafter at 3}. the capital of the debt (including past interest) was rounded down by a small cash payment to $4,600,000,000, and was to be paid off by instalments in 62 years, starting at 4° ($23,000,000) and rising gradually so as to keep the annual obligation for interest and principal together approximately fixed at about $161,000,000 for 10 years and $184,000,000 therc- after. great britain has the option of paying the debt either in “u.s. gold coin of the present standard of weight and fineness \" or in gold bullion or in bonds of the u.s., and may postpone the great britain payment of half of any instalment of interest. there was in addition a debt of $61,000,000, being the balance of the advances of silver made for the benefit of india under the pittman act of 1918. this sum was paid off in 1923 in cash. (see debts, inter-allied,) sinking fund.—the sinking fund in operation at the begin- ning of the war (a fixed debt charge of £23,500,000 inclusive of interest) had become obsolete. surpluses of revenue over expenditure were legally applicable to the redemption of debt (the “‘ old sinking fund ”’), and under the finance act of 1920 a surplus could be so applied as it accrued, instead of being ac- cumulated in exchequer balances till the end of the year. the accumulation of a surplus of £200,000,000 like that of 1920-1 would have been an absurdity. the finance act of 1923 re- pealed the fixed debt charge arrangement, and established a new sinking fund. a sum of {40,000,000 was to be included in the expenditure of the year for the redemption of debt in 1923-4, £45,000,000 in 1924-5 and £50,000,c00 in 1925-6 and subse- quent years. with the fixed debt charge the saving of interest went to increase gradually the amount applicable to debt re- demption. under the sinking fund of 1923 it goes in diminution of expenditure, the sum applicable to debt redemption remain- ing at {£50,000,000. surpluses, however, remain, as before, applicable to debt redemption. realised surpluses have been as follows (in £ millions):— 1920-1 1921-2 230°6 45°7 repayments of principal of war advances to dominions and of relicf loans are paid to the national debt commissioners for debt redemption, without appearing in the exchequer account. 1922-3 1923-4 1924-5 ioi-5 48°3 3:6 post-war taxation.—the year 1919-20 was financially a war year, witha heavy deficit. the excess profits duty was reduced from 80 to 40°, but at the same time heavy additional duties were placed on beer and spirits, calculated to produce an additional revenue exceeding £50,000,000, in a full year. the budget of that year (alr. chamberlain’s) is noteworthy for the introduction of preferences in favour of products of the british empire. protective duties were not introduced for the purpose, but the preference was grafted on the revenue duties already in existence (sugar, tobacco, tea, etc.) the year 1920-1 saw the end of wardeficits. nevertheless big additions were made to taxation, further increases on beer and spirits, an in- creased super-tax, anew taxon the profits of limited companies, a rise in excess profits duty to go per cent. on the other hand an important simplification of the system of income tax abatements involved a loss of revenue in a full year of about £30,000,000 (at 6s. in the pound). this year saw tax revenue at its maximum, {1,031,700,000. the years 1921-2 to 1924-5 were years of steady remissions of taxation, excess profits duty was repealed (1921). corporation profits tax was first halved (1923), then repealed (1924). income tax was reduced from 6s. to 5s. (1922), to 4s. 6d. (1923) and to 4s. (1925). the duties on beer (1923), sugar (1924) and tea (1924) were reduced. the ' mclkenna ”’ duties were repealed by mr. snowden in 1924, but reimposed by mr. churchill in 1925. the safeguarding of industries act, 1925, imposed a number of protective duties. analysis cf expenditure (f millions) i | er a | ree ge pe | i i. ordinary debi eg” *-x 332 350 332 | 32 347 357 defence 160 160 155 120 113 11 \\war pensions 99 106 96 81 73 “ education . 4l 56 61 49 48 49 old age pen- sions . ‘ 19 25 26 22 23 25 health and labour min- istrics 19 28 38 31 32 other ; i2 157 196 | 135 148 ee i ee oo total ordi- nary. . 793 ii, excep- tional bread sub- sidy. , 50 40 war expend- iture ve 2! =! 60 a ef | 2605 expenditures ——these liberal reductions of taxation could not be effected without substantial economies in expendi- ture. in 1921 a committce with sir eric geddes as chairman made a searching investigation of the expenditure of public de- partments and recommended extensive savings. the foregoing table analyses public expenditure up to 1924-5 (appropriation accounts) and distinguishes ordinary from war expenditure. the diminution of £142,000,000 in ordinary expenditure in 1922~3 is not wholly due to economy. the exclusion of irish services relieved civil votes of about £20,000,000. the heavy fall of prices relieved expenditures not only directly, but also through the consequent reduction of the bonus dependent on cost-of-living, which is added to civil service salaries. the increase in ordinary expenditure in 1922-3 was due to the rise of £23,- 00,000 1n debt charges, consequent on the establishment of the new sinking fund and the beginning of the payment of the american debt. biblrography.—harvey fisk, english public finance (1920); a, w. kirkaldy and a. h. gibson, british finance during and after the war (1921); r. g. hawtrey, the exchequer and the control of ex- pendilture (1921); i], dalton, principles of public finance (1923); l. hilton young, the system of national finance, 2nd ed. (1924); j. w. hills, zhe ftuance of government (1925); f. w. hirst and f. be. alien, british war budgets, 1914-24 (1926). see also the annual fi- nance accounts and the parliamentary debates reported iy rags banking during the post-war period, and especially in the period 1918-20, the british banking system underwent a process of change which, although from the historical standpoint only a continuation of tendencies which had been in operation for many years, in fact altered the whole balance of power within the sphere of domestic banking, and altered considerably the rela- tions which used to obtain between the sphere of the domestic banks and those operating predominantly overseas. as a conse- quence there arose a series of problems which were still unsolved at the end of 1925. these were the adjustment of the internal economy of the banks to the new scale of business which they were undertaking; the relations of the banks with the central bank and the money market in the technical sense; and the rela- tions of the banks with their customers and to the national economic life as a whole. the amalgamation movement.—this consisted in the process of reducing the total number of independent banks. in contra- distinction to the developments in germany, the technical form assumed by the process of concentration was exceedingly simple. whereas in germany a whole series of intermediate forms ex- isted between complete fusion of banking establishments and completely independent institutions, such as the exchange of shares, pooling of resources, agreements not to invade terri- tory, interlocking directorates and stock-ownership without the extinction of the legal existence of the firm whose shares had been acquired, the founding of subsidiary enterprises by joint action, etc.; but in great britain, when two banks amalgamated, the separate legal and economic existence of the amalgamating establishments ceased. moreover, the field of operation of the british joint-stock banks was confined to england and wales: scottish and irish banking being conducted under different legal codes, it was thought impossible to amalgamate such institutions with english banks: and no attempt was made, except shortly before the war, to invade the sphere of the for- eign and colonial banks. it was only in 1905 that the first at- tempt was made by an english joint stock bank (the midland) to open a separate branch in the city of london for the conduct of foreign operations, an example which was very soon followed; whilst in 1911 the first overseas venture of an english joint- stock bank was made when lloyds bank acquired the business of armstrong and co. in paris. simple as the nature of the british amalgamation movement was, both as regards form and aim, it had sufficed to reduce very — materially, even in pre-war years, the total number of separate banks. by rgro the total number of separate joint-stock banks 266 in england and wales had been cut down to 45, the number having been 104 in 1890 and 77 in 1900. at the same date there were only nine private partnerships conducting a banking busi- ness—a sufficient proof of the extent to which the process of absorption by joint-stock banks had affected a transformation of banking conditions since joint-stock banking was first permitted under the act of 1826. these 45 banks possessed between them 5,102 branches, paid-up capitals and reserves of £81,000,000, deposits amounting to {721,000,000 and outstanding accept- ances to the amount of {£52,000,000. at the same date the deposits of the remaining. private bankers were only some £27,- 000,000. by 1914, the number of joint-stock banks had fallen to 38, their branches had risen to 5,869, their capitals and reserves stood at £82,000,000 and their deposits at £896,000,000, whilst the number of private banks had decreased to eight, and their deposits stood at £33,000,000. the leadership among eng- lish joint-stock banks at that date already belonged to the five banks which have since become known as the “ big five.” at the end of 1914, the deposits and numbers of offices of these banks stood as follows:— si i offices london, city and midland 125,700,000 ~—- 1,027 lioyds : ; : . ; 117,700,000 1,085 london county and westminster 101,000,000 363 national provincial : 74,900,000 447 barclays 167,400,000 606 behind these leading banks ranged four large banks with deposits of over £40,000,000 each, viz.: parrs, the union of london and smiths, the london joint stock, and the capital and counties, whilst five banks possessed deposits of between {20,000,000 and {£30,000,000. itome absorptions.—the history of the amalgamation movement after 1918 is but a description of how the leading five banks completely absorbed their powerful but somewhat smaller rivals, by a process of competition among themselves. the critical years were 1918 and 1919. in those two years, to mention only the more important events, the national provincial absorbed the union of london and smiths, the sheffeld banking co. and the bradford district bank: barclays (having absorbed the important united counties bank in 1916) took over the just amalgamated london, provincial and south western bank; the westminster absorbed parrs bank and the nottingham and nottinghamshire banking co.; lloyds bank took over the capital and counties and the west yorkshire bank; finally, the midland absorbed the london joint stock bank. in the same years the bank of liverpool amalgamated with martins bank, and absorbed the halifax commercial bank, the palatine bank and cocks, biddulph and co., thus forming a new and power- ful group, better able to stand centripetal pressure from the older and more powerful combinations. the competition to absorb did not relax in later years, and affected particularly the remaining private bankers. in 1920 the westminster took over beckett & co. of leeds; in 1923 cox and co., and h. s. king and co. were absorbed by lloyds, and holt and co. by glyn mills and co. in the following year the old firm of child and co. was acquired by glyns, and grindlay and co. by the national provincial, while the royal bank of scotland absorbed drummondand company. in thesame year also the national provincial absorbed the guernsey banking co. and the westminster took over the guernsey commercial banking co, affiliations and extensions oversea.—even more significantly, the amalgamation movement no longer confined itself to traditional forms and areas. during and after the war, the ‘‘ big five ”’ con- verted their undertakings from unified structures to banking groups with a main stem representing the amalgamations, with branches from the main stem in the shape of affiliated and subsidiary undertakings, and with undertakings owned in common. thus the midland affiliated the belfast banking co. in 1917, the clydesdale bank in 1920 and the north of scotland bank four years later: barclays control two affiliated institutions, the british linen bank (1919) and the union bank of manchester (1919), and possesses subsidiaries in the shape of barclays bank (overseas) ltd., barclays bank $.a.i. at rome, and barclays (dominion, colonial and over- seas) bank. barclays’ holding of shares in the colonial bank and the anglo-egyptian bank were turned over to the last named, formerly the colonial bank, with which the anglo-egyptian bank and the national bank of south africa are amalgamated. lloyds bank has a footing in india through the acquisition of cox and co, and h.s. king and co., is affiliated with the national bank of scot- . land and the bank of london and south america (an amalgamation of the london and river plate bank and the london and brazilian bank), is joint owner with the national provincial bank of lloyds and national provincial foreign bank ltd., and is a shareholder great britain (as are also the westminster, the national provincial and the pea bank of south africa) in the bank of british wrest rica. : the westminster bank has affiliated the ulster bank, is a share- holder in the royal bank of canada as well as in the british italian banking corporation (as are also its leading competitors, lloyds and the national provincial), and owns the westminster foreign bank ltd. the national provincial has affiliated coutts and co. (1920), is a shareholder in the p. and o. banking corporation, and is half owner of lloyds and national provincial foreign bank. thus with the exception of the midland bank, all the leading institutions are interested directly in overseas banks. the tendency to be in- terested in such concerns has affected even the smaller joint-stock banks: thus williams deacons bank and the union bank of scot- land are both shareholders in the british overseas bank, and a very large number of concerns other than those already mentioned are included among the shareholders of the british-italian banking corporation. effect of amalgamations.—so vast a development as this was well calculated to attract public attention and to cause alarm. but, in the main, public attention and criticism have been con- fined to the absorption and extinction of competing banks within the confines of the country and have concerned themselves little with the other features of the situation, which, as a matter of fact, represented a more significant breach with tradition. on march rr 1918, when the competitive amalgamation movement was at its height, the treasury appointed a committee on bank amalgamations to investigate the whole position. the committee reported on may 1 of the same year, but the evidence laid before it was not made public. the committee was clearly not very impressed by the argument that the growth in the scale of busi- ness undertakings justified the latest amalgamations, and was influenced by the view that when two banks of national scope join together, the effect is a net reduction of competition. it thought the tendency for amalgations to reduce the ratio of capital and reserves to deposits undesirable, and gave cautious assent to the view that circumstances might produce something approaching a money trust at a comparatively carly date. the committee therefore recommended legislation requiring that the prior approval of the government must be obtained before any amalgamations are announced or carried into effect, ‘ in- cluding under this term proposals for interlocking directorates, affiliations, and in fact, any arrangements which in effect would alter the status of a bank as regards its separate entity and control.” though no such legislation was carried, the prior con- sent of the treasury is obtained before amalgamations are car- ried into effect, and lloyds’ bank was refused permission to acquire the shares of the national bank of india in 1919. so far as the domestic situation is concerned, treasury control does not appear to have affected the course of events very much. the alarm which the movement has created is in the main due to the feeling that the absence of effective competition would mean less ample facilities and higher charges for the public, as well as greater rigidity in the business intercourse with banks. it is almost impossible to gauge how far the latter fear may have been subsequently justified: it is perhaps also significant of the greater power of the banks that they had not, by the end of 1925, raised the rate on time-deposits to the pre-war level of 14° below bank rate. what is undoubtedly true is that the amalga- mation movement has not in any way checked competition among the banks in the creation of new offices. these continue to increase in a ratio for which there would seem to be very little real justification. the amalgamations of 1918-9 were undoubtedly in part com- petitive: the leading banks absorbed others lest some competing bank should do so. the cost of acquisition was thus in some cases unnecessarily high, but the relative smallness of jiritish banking capitals—a disadvantage from other standpoints—prevented these high acquisition costs from being a very serious permanent burden. a more legitimate reason for expansion was undoubtedly the feeling that the end of the war would sce intensified competition between great britain and germany, for which strong and powerful banks were needed: but whilst this was hardly a justification for the internal absorptions (in view of the already large size of the then existing banks) it was a legitimate argument as regards overseas expansion, on the other hand, the later and lesser amalgamations which accompanied the trade depression of 1921 and subsequent years great britain were no doubt forced upon the absorbing banks by the position of the weaker banks, and by the fear that a general distrust of the banking system would arise if a series of failures were allowed to take placc. occurring at a time when all economic phenomena were affected and distorted by the war (in particular, in the case of banking figures, by inflation) it is impossible to say to what extent the actual 267 less than 10% for england and wales. the number of females to 1,000 males in england and wales, had, since the date of the first census in 1801, never been less than 1,036 (in 1821) and never, until 1921, been more than 1,068 (in 1901 and rgir). for the large excess of women in 1921 and for the unusually statistics of the “ bia five” joint stock bank 1914 | — 1920 capital and reserves 56-7 ioi-4 acceptances 3357 74-8 deposits . : 642-4 1,585:1 cash in hand and at bank 100-3 263-2 investments : : 97 °2 330-0 discounts, loans, advances and money at call . , ; 488-8 1,077'°9 cover for acceptances, premises, sun- dries, ‘ , f ; 46°5 90-2 total assets or liabilities ; 731°8 1,761°3 movements of deposits, loans, investments and advances would have been different, had amalgamations been less frequent. the most significant changes are the decline in deposits since the maximum of 1921 and the fall in investments accompanied by a rise in advances and discounts. this would indicate that the banks are responding to the needs of trade by reducing their holdings of fixed interest-bearing securities and of treasury bills. substantially the same results are revealed by taking the total banking figures of great britain, as under:— banking liabilities and assets liabilities in {, millions of 1922 1923 1924 capital and reserves 156-2 156-1 161-4 undivided profits 8-2 8-5 8+7 deposits ; 2,209-4 2,154°7 2,136°3 acceptances gig 115-6 142-4 notes, etc. . ; 33°83 31°5 31°8 total 2,499°5 2,469°4 2,480-°6 in £, millions of 1923 cash in hand, at bank, and at call and short notice investments : discountsandadvances premises and cover . total 487-6 542-9 1291-3 147°5 2,469°3 v. population the decennial census due in r921 was planned for april 24 of that year. owing to the coal dispute then in progress the enu- meration was postponed to june 19. the total population found at this latter date may be compared with that found in to1r as follows:— before 1921 the decennial increase per cent had never been table i. total population of great britain percent of population persons | population population since the pre- ceding census to 1,000 males crease no. of females date of census increase of decennial in- england and wales |1911|/36,070,492|m17,445,608 3,542,649 i 18,624,884 england and wales |1921|37,886,699|\\118,075,239|1,816,207 i 19,811,460 i9it| 4,760,904/m 2,308,839 i 2,452,065 scotland . {1921] 4,882,497|m 2,347,642 f 2,534,855 scotland . 288,801 121,593 a s at june 30 (at dec. 31) 1921 1922 1923 1924 192 1925 106-1 106-3 106-2 109-2 109°3 111-6 47° 45°5 64°5 73:0 79°8 97°2 1,620-1 1 ,600:2 i,504-2 1,518:7 1,509:0 1,522:1 253:6 242°5 230-0 246:2 252-4 258-1 303-2 377°0 324:8 319-0 264°7 259:2 1,147°5 1,064°3 1,031°4 1,037°9 1,075°8 1,090°4 693 68-2 88-7 97:8 105-2 123:2 1773-0 1.752:0 1,674:9 1,700°9 1,698-1 1,739°9 small increase per cent that occurred during that period, the war is in part responsible. the effect of the war can be more clearly seen when the crude birth rates and crude death rates since 1911 are considered. the crude rates are the numbers born and the numbers dying per 1,000 of the population during the year to which they refer. deaths due to the war occurring abroad are excluded. the effect of the war upon the death rate was to check the decline which had been in evidence previously. the influenza epidemic of 1918, which may be traced to the war, caused a high death rate that year. since the war the death rate has declined to alower figure than was ever shown before 1914. when the infant mortality rates for these years are considered (that is the number of children dying under one year of age per 1,000 born) it appears that the greatest improvement has been effected in the case of infants. the infant mortality rate, for instance, which in england and wales was 128 for the period 1go1-1910 and 100 for the period 1911-1920, declined to 83 in 1921, to 77 in 1922, and to 69 in 1923. the effect of the war upon the birth rate was to cause during the progress of hostilities a more rapid decline than had been in evidence before and to cause after the end of hostilities a sudden a higher figure in 1920, since when it has declined to a lower figure than was ever reached before. the decline in the crude birth rate which had been taking place for more than 50 years is mainly to be accounted for by decline in the number of children born to wives of reproductive age, but partly also by a change in the age distribution of the population. owing to this change in age distribution there is now a smaller percentage of wives of the most reproductive ages than formerly. these two facts may be illustrated as follows. in the period igti to 1915 there were 189-7 births per 1,000 wives aged 15 to 45; whereas there were in 1921, 176-5; in 1922, 161-6; and in 1923, 156-3. during the same period, however, of 100 wives table ii. birth rates and death rates: 1911-1924 birth rate per 1,000 of the population death rate per 1,000 of the population date england england and wales scotland and wales scotland ae ao 25°6 14-6 15-1 i912 23:9 25:9 13-3 15:3 roe 241 25°5 13:8 i5°5 1g14 23°8 26-1 14-0 13-5 i9i5 21-9 23:9 15-7 17-1 1916 20°9 22-8 14-4 14-3 1917 17:8 20:1 veg sie 1918 17°7 20:2 17-6 16:0 meant 18-5 2177. 13°7 15-4 1920 25°5 28-7 12 14-0 aoee oe. 25:2 12-1 13°6 cas 20°4 23°5 12-8 14°9 1923 19°7 228 11°6 12-9 1924 18-8 21°9 12°2 144 268 under 45 the proportion of wives under 35 has decreased, and this partly accounts for the decline in the number of children per wife. thus in rgor there were 593 wives under 35 years of age out of every 1,000 wives under 45; in roti, 559; and in 1921, 535. the changes in age distribution revealed by the census indi- cate that the proportion of young persons in the population is declining while that of old persons is increasing. there were, for example, out of every 10,000 of the population in england and wales, 2,094 persons uncer 10 vears of age in 1911 and 1,806 in 1921, whereas there were 297 persons of age and over in 1911 and 344 in 1921. the fact that the average of both sexes in scotland was 28-0 in 1911 and 29-6 in 1921 illustrates a similar change in that country. distribution in urban and rural areas.—the density, of the population in england and wales was 649 per sq. m. in 1921 and 164 per sq. m. in scotland. the population was distributed as between urban and rural areas in the following proportions: england and wales 79-3°% urban and 20-7%) rural in 1921, as compared with 78-1 % and 21-9% in 1911; scotland 77-3% urban and 22-7 “o rural great britain | table iii. industrial status of persons gainfully occupied, 192! 12 years of age and over england and wales scotland industrial status males females males females fimployers 563,203 73,708 88,745 9,445 employees 10,800,276 | 4,664,603 | 1,354,078 | 584,096 working on own account . 749,239 | 327,021 91,996 39,244 1,534,819 | 632,785 5,065,332 12,112,718 _ the population may next be classified according to the occupa- tions followed. the chief occupations in england and wales and in scotland respectively were as follows:— table iv. chief occupations by sex, 1921 england and wales in 1o2t as compared with 754% urban. ancdl!24°6%5 tiral ti tout. |) et when making comparisons between england and wales on the one hand and scotland on the other in this respect, it must be remem- bered that owing to differences in local government between the two areas the terms “ urban ” and “ rural” are used in somewhat different senses. two further points should be borne in mind when considering figures for urban and rural areas. these areas do not remain con- stant from census to census. arcas, formerly classed as rural, are from time to time added to the total urban area owing fo changes in the organisation of local government. the population classed as urban therefore occupies a somewhat larger area at each succeeding census, again the ahaa area includes many small towns and there- fore not all those classed with the urban population are living under strictly urban conditions. a better picture of the urbanisation of the country is provided by the fact that 33-8° of the population of england and wales were in 1921 living in towns of over 200,000 inhabitants each. the concentration of population in certain arcas may also be illustrated by the fact that out of the 53 counties in england and wales the 12 most populous counties contain 67-1 of the population while the 7 most populous of the 33 counties of scotland contain 71:9%> of the population. another method of illustrating the same point is to calculate the proportion which each county respectively contributed to every 100,000 of the population in 1921, it is then found that lancashire contributed 13,007, london 11,838, yorkshire 11,041, durham 3,905, essex 3,881, warwickshire 3,669, staffordshire 3,560, middle- sex 3,307 and glamorganshire 3,305. eight counties in england and wales show an actual decrease in total population between igii and 1921. they are cornwall, herefordshire, montgomeryshire, london, rutiandshire, westmoreland, cardiganshire and merion- ethshire. london as a whole, it may be noticed, has increased, the increase having taken place outside the county administrative area. in scotland 17 of the 33 counties show decreases within the same period. every county in england and wales shows an increase in total population between 1801 and 1921, but in scotland five counties, argyll, berwick, orkney, perth and sutherland, had in 1921 fewer inhabitants than in 1801. the most populous towns of england and wales in 1921 were as follows:— ; london (adminis- trative county) . 4,484,523 she fheld 480,639 birmingham 919,444 leeds 458,232 liverpool 802,940 bristol 376,975 manchester 730,307 west ham. 300,860 in scotland the most populous towns in 1921 were:— glasgow . ; : 1,034,174 edinburgh f . 420,264 dundee . : : : : : ; 168,315 aberdeen : \" ; ; 158,963 in england and wales there were 46, and in scotland four towns each with more than 100,000 inhabitants. distribution by occupation.—the first use which can be made of the information collected at the census regarding occupation is to classify the population according to industrial status. table iit. illustrates the result. the number of women recorded in table hi. as “ gainfully ’ occupied is relatively small because most women not “ gainfully\" occupied are married and household duties are not included in in the term ‘ gainful’ occupations. of the 10,542,599 women in england and wales for instance, in 1921 over i2 years of age, who were not “ gainfully ' occupied, 6,886,931 were married. total in total in occupations each occupations of each of males occupa- females occupa- tion tion metal working 1,540,235 | personal service 1,676,425 transport and com- textile workers 608 ,964 munication 420,593 | makers of textile agriculture 1,171,298 goods and dress 548,013 commerce and commerce and finance 496,056 finance 1,063,120 | clerks and mining and typists 429,695 quarrying . . | 1,061,749 | professional . 359,982 clerks and typists 568,034 scotland metal working 280,210 | personal service 168,149 agriculture 169,984 | textile workers 92,407 transport and commerce and communication 169,912 finance. 83,111 mining and makers of textile quarrying . 151,884 goods and cress 53,967 commerce and clerks and finance ; 116,460 typists 67,966 workers in wood professional . 44,970 and furniture 80,860 since a new classification by occupation was used in 1921, com- parisons with former censuses cannot easily be made. it should be remembered that this classification is by occupation and not by in- dustry. it might with care make possible a rough estimate of the numbers engaged in sedentary and non-sedentary occupation, in skilled and unskilled occupations and similar comparisons. it docs not show the numbers engaged in different industries. thus clerical workers are placed in a separate group. if all such workers are allo- cated to the industries with which they are usually associated, it is possible to classify the population by industry. this is done in the following table. table v. chief industries, 1921 scotland england and wales total in cach industry: both sexes total in each industry: both sexes industry industry commerce and nnanee manufacture of metals personal service agriculture mining and quarrying transport and communication manufacture of textiles public administra- tion and defence commerce and finance manufacture of metals personal service public administra- tion and defence mining and quarrying . transport and communication manufacture of textiles agriculture 289,369 368,610 199,648 183,086 1,335,879 179,952 155,564 15253,728 i 203,566 66 i5i,1 143,191 the precise scope of the industries included in the above table requires careful examination if the figures are to be properly appre- ciated. thus commerce and finance includes persons engaged in all great britain forms of wholesale and retail dealing, in auctioneering and valuing as well as in banking and insurance. shop assistants therefore form a large part of the total in this group. the manufacture of metals includes also the manufacture of machines, implements, conveyances, jewellery and watches. personal service includes not only domestic service but also service in lodging houses, hotels, clubs, laundries and restaurants. public administration and defence includes, in addition to the fighting services, those employed both by local and central government authorities. transport and communication includes those employed in connection with storage. the manufacture of textiles includes not only those engaged in the manufacture of cotton, wool and silk goods but also those engaged in the manufacture of various miscellaneous products such as lace, carpets, rope, asbestos, tents and tarpaulins, as well as those engaged in dycing, printing, bleaching and calendering. when the population is thus classified, it is seen that those en- gaged in certain industries are less in number than those engaged in the corresponding occupations. those engaged in the transport in- dustry, for example, are fewer in number than those engaged in the occupation of transport and this is so because some of those who follow transport as an occupation appear in the industry table as belonging to another industry. thus while a railway man would appear among those engaged in transport both as an industry and as an occupation, a carter employed by a mining company would be classed as following the occupation of transport but belonging to the industry of mining. those who follow the occupations of mining and agriculture comprise nearly all those who are engaged in the cor- responding industries, whereas those engaged in commerce and finance as an occupation only form about half of those engaged in the corre- sponding industry owing to the fact that numerous clerical workers who follow the clerical occupation belong to the industry of commerce and finance. four of the eight chief industries are not industries in the everyday meaning of the term, namely, commerce and finance, personal service, public administration and defence, and transport and communication. if they are omitted from considcration, the neues of the manufacture of metals takes the first place in great ritain. the low place of agriculture is noteworthy. it was once considered remarkable when those engaged in agriculture were fess numerous than those engaged in all other industries taken together. agricul- ture is now not even the most important industry from the point of view of numbers, having fallen to the fourth place in england and wales and to the second place in scotland. it is possible to classify industries broadly into those which are extractive, manufacturing, distributive and certain miscellaneous groups. if agriculture, mining and fishing are regarded as extractive and commerce and finance and transport and communication as distributive, then the following result is obtained. in england and wales of all those engaged in in- dustry, those engaged in manufacture comprise 43-6°, in distribu- tion 20-3%, in extraction 14:0°%, in personal service 11-8%, in public administration and defence 7-7%, in professions 2-9%, in sport and entertainment -7°%. in making this calculation the 162,767 persons engaged in the gas, water, electricity industrial group have been included among those engaged in manufacture. it should be noticed that about 60,000 of them are employed by local authorities and that a certain percentage of all those in this group should more properly be included among those who are engaged in the work of distribution. housing —for the purpose of the census a structurally separate dwelling is defined as any room or set of rooms having separate access to the street or staircase. thus a flat is such a dwelling. in counting the number of rooms, sculleries, bath rooms, shop or office rooms are excluded. the total number of dwellings was found to be 7,759,821, having a total number of 39,894,618 rooms. there were thus an average of 5-14 rooms per dwelling in england and wales, but as some dwellings were occupied by more than one family there were only on the average 4-55 rooms per family. as the average number in a family was 4-14 the average number of rooms per person was i-1. but these averages by themselves give little or no idea of the actual housing conditions of the population. thus there were no fewer than 3,480,273 private families with less than -5 rooms per person, while there were 17,429,709 persons belonging to families with less than one room per person. again 9-6°%> of the total private family population was living with more than two persons per room in england and wales. judged according to this standard the counties vary greatly. london has 16-1 % of the population living with more than two persons per room while cornwall has only 2-8. these figures, however, take no account of the size of the rooms. housing statistics tend to show a progressive improvement when the returns of one census are compared with those of preceding censuscs, though the figures for 1921 exhibit a check to the rate of improve- ment. the following figures for scotland show the number of occupied houses per 100 of the population: 1881, 19-8; i91i, 21-3; and 1921, 21:7. marital conditions. —of the male population in england and wales in 1921 §5°% was single, 41-4 °> married and 3-6°%> widowed. of the female population §3°5 was single, 38-3°% married and 8-2%%5 widowed. the large number of widows, 1,621,658, is noticeable, amounting to nearly three times the numbcr of widowers. there were at this date 8,464 men and 8,218 women divorced. 269 language.—the census returns show that the use of welsh and gaelic is declining. the proportion of persons three years of age and over in wales and monmouthshire speaking welsh only was 85 per 1,000 in 1911 and 63 per 1,000 in 1921, while in scotland the propor- tion of those speaking gaelic only was 4:56 in i911 and 3-47 in 1921. the proportion of those speaking both english and welsh and english and gaelic has also declined. bibsliography.—census reports of great britain for 1911 (issued 1911-7); and for 1921 (issued 1921-5); regisirar-general’s re- ports for england and wales (annual 1910-20); continued as the registrar-general’s statistical review (1920, etc.); annual report of the registrar-general for scotland (1910, etc.). england and wales: registrar-general, weekly returns of births and deaths; quarterly returns of marriages, births and deaths. scotland: weekly returns of births, marriages and deaths in sixteen towns of scotland; monthly returns of births, marriages and deaths in sixteen towns of scotland; quarterly returns of births, deaths and marriages of scotland. (a. m. c.-s.) vi. industry and trade the period of 1910-3 was one of steadily improving trade, but during the first seven months of 1914 there was a percepti- ble decline of prices and employment. the war period—the principal effects of the world war were the alteration of the normal directions of foreign trade, owing to the interruption of commerce between the belligerent nations and the influence of blockage policies on the commerce of neutral countries; the gradual assumption of control by the government over both production and distribution; the diver- sion of production and distribution; the diversion of produc- tion into new channels for the supply of war requirements and to make good the loss of imports due to the interruption of commerce; and great changes in labour conditions. government control—the progress of control by the govern- ment is thus described in the report of the war cabinet for the year 1917 (cmd. goo5, p. 130). | as the military struggle developed in scope and intensity, and the necessity of concentrating national efforts on the war became more pressing, section after section of industry was taken over, and wages, prices and profits, from raw material to finished product, were placed under government control. the process of extending state control, taking over more works and applying it to an always widen- ing range of products, continued unbroken right up to the end of 1916, whilst no exact demarcation line can be fixed, if a broad definition of the character of the movement to that period were attempted it would be that industries essential to war needs had been taken under government control whilst industries serving the civil population were still left in private hands. in the same way i917 may be described as the year in which state control was extended until it covered not only national activities directly affecting the military effort but every section of industry—production, transport and manufacture. towards the end of june 1917 the country was faced by a serious crisis in the cotton industry, owing to the difficulty of securing supplies of raw cotton. with the co-operation of the industry, a cotton control board was set up. the production of the cotton mills was cut down to 60%, extensions only being allowed on payment of levies, and the sum thus raised utilised for the benefit of the work-people in the less employed mills. the control board thus established contained representatives of the employers and the employed and also of the government. a board of control on somewhat similar lines was set up for the wool textile industry, to deal with the difficult problems which arose from the fact that, after government requirements had been met, rather less than 20% of the output of the trade was left for civil needs. according to the war cabinet report for 1918 (p. 210), there was no question raised in connection with the wool textile industries to the solution of which the board did not contribute a most valuable part. somewhat similar arrangements were made for the jute, flax and hemp industries. | one important effect of the government control and of the strain put upon various industries by war conditions was the attempt made to extend the standardisation of production even into the clothing industries. by the end of 1918 there had been put on the market {15,000,000 worth of standard suits, over 2,000,000 ib. weight of hosiery, 1,000,000 blankets and 8,000,000 pairs of standard boots. these schemes of standard- 270 isation did not long survive the end of the war, though they may have led in some degree to simplification and the reduction of patterns. of more lasting effect was the great alteration brought about in the productive capacity of various industries. the manufacture of explosives and propellants was chiefly carried out in special government factories, but shell cases, rifles, guns, trench weapons, aircraft, tanks, etc., could be produced in different classes of engineering works, and the great britain liberal than had been customary, was widely applied. the result was that during 1919 and 1920 there was a race between wages and prices. with regard to the employment of women, the following figures sufficiently illustrate the position:— average figures for men and women in industrial employment gnanufacturing) july 1918 july 1913 july 1924 engineering industry of the country was by degrees almost en- | |——-——--—--___- |---| ——_ _—_—_ tirely absorbed in this work, which led to a very considerable expansion of enginecring capacity. the same cause brought about a 50% expansion of capacity in the iron and steel in- dustry, and varying increases in many smaller industries. varlous new industries had to be created to supply essen- tial products which were formerly imported from sources ren- dered unavailable by the war. amongst these may be mentioned dyestuffs, a large range of fine chemicals, optical and scientific instruments and their components, and various special products such as magnetos. a special act (the dyestuffs [import reg- ulation] act 1920 [ro and 11 geo. v., ch. 77]). was passed in 1920 prohibiting the importation of dyestuffs except under licence, the idea being gradually to build up by these means british production of essential dyestuffs. in 1921, the safe- guarding of industries act (11 and 12 geo. v., ch. 47), sub- jected to an import duty of 333° a wide range of the other articles mentioned above. war conditions brought about:— (a) changes in wages, (b) new methods of negotiation and relations between employers and employed, (c) the introduction of new proc- esses and spread of repetition work, (d) improvement in the position of unskilled relatively to skilled labour, () an enormous increase in the industrial employment of women and (f) an increased interest in ie improvement of methods of production and the welfare of workers. prices and wages.—the complete control assumed over vari- ous industries fixed on the state the responsibility for the con- trol of wages. the cost of living rose steadily during the war (from too in july 1914 to 205 in july 1918), and as the demand for war material was practically unlimited the adoption of the cost of living as a standard in the fixation of wages was al- most inevitable. this principle was, however, not universally adopted, nor was there any generally accepted decision as to whether the increase should be a flat rate for all workers (on the ground that all need approximately the same minimum amount of food, clothing, etc.), or a rate proportional to earn- ings or varying inversely with earnings. the method generally adopted by the government in the controlled industries was, however, to give a flat rate war wage. this principle had the very important effect of introducing a change in the relation between skilled and unskilled labour, the position of the unskilled being very greatly improved. the following summary by professor bowley of the progress made from 1914-20 may here be quoted:— after a few months of unsettlement the demand for war materials and the withdrawal of men to the army resulted in very plentiful employment. the opportunity of increased family earnings at former rates of pay together with an active patriotic spirit prevented for some time demands for increased wages. as food became scarce and prices rose, however, earnings became insufficient in some cases to meet the reasonable needs of efficient subsistence, and bonuses and war wages were given, while the great demand for labour had its natural effect in raising rates of wages. so far as generalisation is possible, we may state that the growth of rates of wages gencrally lagged behind that of prices, but earnings, in those very numerous cases where piece rates or overtime gave facilities for additional work and pay, increased more rapidly than prices from the outbreak of the war to the armistice. in the early part of 1919 the war rates continued, though earnings probably tended to fall; and the working classes, fairly content with existing rates in view of the slight fall in prices, devoted their attention to reduction of hours, so that in fact the normal working week was generally reduced by some 10%, while the same money was received for the shorter week as formerly for the longer. when the rise of prices set in again there were continued further upward movements of wages, and at the same time several of the more powerful trade unions made definite efforts to secure a higher standard of living than before the war, while the principle of a minimum wage, intended to be sufficient to allow a livelihood more nlen women 5,058,000 2,970,600 6,301,000 2,178,600 6,016,900 1,987,990 the end of the year 1920 marked the peak of prices, and the slump of 1921 came upon a chaotic wage position. in some classes of work real wages were higher than pre-war, but in others they were lower. railway workers, coal-miners, dockers and others had definitely obtained improvements in their stand- ard of living. the effects of war tendencies continued in vary- ing degrees in different industries, sometimes without due consideration for what the commercial conditions enabled the industry to sustain. moreover, the operation of foreign compe- tilion upon certain industries created a great disparity between wages in these industrics and those in the non-competitive or sheltered industries (covering about one-half of the total per- sons employed), and itis the general view of industrialists that the high level of these latter wages added a very considerable burden of cost to the less fortunate industries and seriously hindered their revival. (see pricks; wages.) industrial relations —the experience of such bodies as the cotton and wool control boards, the spirit of comradeship en- gendered by the war, and the strengthening through war ex- perience of the nation’s realisation of the dangers of industrial strife, created a new attitude towards the relations between employers and employees. this found expression in individual works in the growth of works committees and other co-operative methods, and nationally in the establishment of the scheme for joint industrial councils, recommended by what is known as the whitley committee’s report. of these there were by the end of the year 1921 between 50 and 60 in operation, covering such important industries as wool and allied textile, heavy chemical, printing, pottery, flour milling and gas and electricity supply. the fact that the scheme was not adopted in coal-mining, cotton, engineering, railways, iron and steel, and certain other industries was largely due to the existence in those industries of well-tried conciliation schemes, which neither party desired to change. the intention of the scheme was that the councils should include in their scope not only conciliation but a wide range of subjects of general interest to the industry, such as technical education, etc. this intention has only been very par- tially carried out. another evidence of the new spirit was the foundation of such bodies as the national alliance of employers and employed (now called the national industrial alliance); the industrial welfare society; the institute of industrial psychology; the industrial fatigue research board, bodics which still survive to carry on the useful work indicated by their titles. (sce industrial relations.) scientific research.—the war strongly stimulated a most beneficial movement for scientific research. in 1917 [parlia- ment voted a sum of £1,000,000 to be administered by a special committee of the privy council in grants to trades willing to form research associations. in 1924, 23 industrial research associations were in actual operation, and the privy council com- mittee was able in its report for 1923-4 to record the opinion that the scheme promised to be a marked success. there has also been a substantial extension of research work by individual firms. (see industrial research.) trade organisation.—shortage of raw materials and other factors made it absolutely necessary for the government, when handling industrial questions, to be able to deal with trades as a whole. this led to the formation of voluntary representative associations in a considerable number of industries, while the increased realisation on the part of industrialists of the impor- tance of mutual consultation and co-operation for commercial great britain purposes led to the foundation in 1916 of the federation of british industries, a strictly non-political body dealing solely with commercial questions. the tendency towards amalgamation of individual firms was also much stimulated by war experience and by the recom- mendations of government committees, which brought home to industrial leaders the necessity of safeguarding supplies of raw material, enlarging the scale of production, etc. the ar- mament firms, faced with large extensions of plant, sought to facilitate the employment of these after the war by the acqui- sition of subsidiary businesses, capable of acting in the capac- ity of suppliers of matcrial or buyers of partly finished products. there were also considerable amalgamations in the iron and steel, clectrical enginecring, in cocoa, chocolate, biscuit and glass industries. the formation of a large combine in the jute trade in 1920 may also be mentioned, but there was not any very general enlargement of units in the textile industries. these various amalgamations have not all been equally successful. trade development.—owing to changes in values and methods of recording it is difficult to compare post-war trade with that of 1913. the following chart and tables show the course of trade of the united kingdom and in certain specified industries. fig- ures are for the whole of the british isles up to april 1 1923, and for great britain and northern ireland after that date. the imports exports 27% quantity index has been compiled to compare the post-war overseas trade with that for 1913. overseas trade of the united kingdom in value and volume, 1913, and 1919 to 1925 i. imrorts raw mate- rials and food, far hike manufac- drink and ae tured total year fobaceo unmanufac- articles tured mill. { index | mill. | index | mill.} index | mull. | index £ | of vol.} £ | of vol £ | of ‘vol; | -£ | of vol. i913 | 295 100 270 | 100 201 100 769 100 i9gig | 719 93-9 | 607 96-1 | 296 | . 63-2 | 1,626 88-4 1920 | 766 90:1 | 710 g1-8 | 453 81-8 | 1,932 88-4 1921 | 567 | 93:3 | 271 64:9 | 244 590 | 1,085] 74:3 1922 | 472 99:5 | 298 80-8 | 230 72-4 | 1,003 85-8 1923 | 509°); 114-0} 32s so*7 | 257 86-3 | 1,096] 93°3 1924 | 57! 125-4 | 400 go:5 | 300 98-0 | 1,277 | 104-0 1925 | 572 123-9 | 42 95'3 | 320 107-8 | 1,322 | 108-2 the slump of r92t-—it will be observed that in the year 1920, in almost every industry, the total value of exports had enor- mously increased, although the actual quantities exported were re-exports per cent above or below 19/3 25 1919 20 2 ¥ total all groups e food grouptm=—= manufactures groups=*=* raw materials group 1919 20 25 et 22 a r fic. 1.—graphs showing the trend of overseas trade (volume) of the united kingdom from 1919 to 1925. the volume in 1913 is taken as equal to 100, the volumes for the years 1919 to 1925 being shown as percentages above or below that of 1913. ° 272 great britain 2, domestic exports motorcars and chassis (values in millions of £) raw mate- mood aie niawatac: imports britist) exports ee and mainly pee total? chassis cars chassis year petey unmanufac- preis | aa = sas oe tured ete, it aes, ee i ate il ee ae, ne eh see mill. | index | mill.| index | mill.| index | mill. | index oe ne ee ae oe eee an fe ova ce end) = poet _f pers 1920 43.332 10°5 12,106 re s465 3:9 3,12. oe 1921 7,397 | 1-3 | 4,069] i-i 2721 273°) 404t|| 10 1922 | 14,315 | 2°5| 8517 | 1-5 | 1.934] 1:3 | 1,107 | 0-7 1923 | 17,199 | 2-9 | 12,62 17 a232\") 129], 22,022. 420 1924 | 14,717] 3-0| 12,459] 1-8 | 12,754 | 3-7 | 2,905 | 1-2 1925 | 34,722 | 6-3 | 15,617 | 2-2 |] 19,316 | 5:1 | 2,620 | 1-3 artificial suk (including yarn and manufactures thereof other than apparel) 3. re-exports ae a a ye fe fl raw mate- f rials and | \\fanufac- | oe d bees feta te total exports (in millions of £) vaag tobacco eee ae articles 2-6 l 3°5 tured | | less than in 1913 by varying degrees, and that this position was mill.| vol. {mill.| vol. | mill.| vol. | mill.| vol. suddenly changed in 1921, when the volume of exports fell to a index | f | index | £ | index | £ | index fraction of the volume in 1913, though the values continued to be substantially higher. thereafter quantitics gradually rose and values fell. the causes of the slump were described as follows ina report issued by the federation of british industrics in the year 19022:— although there was, for various reasons, considerable delay in the resumption of the normal flow of orders for manufactured goods after the war, and the intake by the countries normally buying large quantities of such goods was during 1919 and 1920 far below the normal, the demand was more than the capacity of the manufactur- exports of metals and metal products ing countries, hampered and reduced as it was by the effects of the te war, could supply. (in millions et £) at the end of 1918 a boom in manufactured goods was experienced (reproduced by the courtesy of the british engineers’ association) | in japan, which passed to the united states, and later in turn to great britain, to france and belgium and finally to germany. in . 1913 | 1920 | 1921 | 1922 | 1923 | 192. these circumstances, and with central [-urope very largely unable to ys | | import at all, great britain was in a relatively fortunate position for iron and steel and obtaining supplies of food and raw materials. in 1919 the necessary manufactures foreign credit was secured in the first few months by a continuance thereof: of borrowing, and subsequently to a large extent by the very high declared value . | 55-4 | 128-9 | 63:6 | 60-9 | 76-2 | 74°5 earnings of our shipping and the abnormal prices we were able to corrected value. | 55-4 | 40-3 | 22:2 38-4 | 49°7 | 47°9 secure for our coal exports. to the goods we were able to buy in this (on basis of i913 way have to be added the considerable imports on government ac- average values) count ordered during the war, but not shipped till after the armi- non-ferrous metals stice. in 1920 the demand for our manufactured goods was so intense, and manufactures that though the tonnage exported was small compared with 1913, thereof: the total value was very much larger, the average price being nearly declared value . | 12-0 | 25-8] 11-7 |] 11-5 | 14°5 | 15-6 four times the average pre-war price. corrected value. | 12:0 | i4°7 s-s./.t1e2.) 12:7 || “2-9 these developments were accentuated by the fact that many cutlery, hardware, countries had heavy accumulated stocks of raw materials which they implements and were unable to realise, as these accumulations were largely of mate- instruments: rials normally taken by the central empires and other countfies declared value 7-1 136] 9:0 g4 rie 8-5 which were still out of the market. unable to realise their products, corrected value 71 5:2 3°2 4°3 4-4 5°5 these countries in turn were unable to buy the manufactured goods electrical goods and they required, and the normal circle of commerce was interrupted. apparatus: the effect was immediately to prick the bubble of prices. purchasers declared value 5-4 11-6 | 13:0 ele to: | toi all over the world ceased to buy our goods, and, as prices fell, tended corrected value. 5°4 4:3] 4-4 2-9 ores 4°3 to defer purchasing altogether until they could see some sign that machinery: prices had touched bottom. on the one hand, therefore, manu- declared value 33-6 | 63-4) 74-6 | 51-5 | 44:5 | 44°7 facturers were left with high-priced goods for which the demand corrected value . | 33°6 | 23:3] 24:2 | 19:3 | 20-9 | 22°3 had suddenly ceased, while, on the other hand, there were heavy | li } accumulations of unsold agricultural products and raw materials ta the hands of potential buyers in distant parts of the world. this exports of coal and coke has had the result of checking production throughout the world both (quantities in millions of tons. valucs in millions of {) of agricultural products and manufactured goods. nese pee rt | 5 another factor which acted as a depressing influence imme- os eee ee ee “ diately the slump commenced (and had, indeed, prevented some industries from profiting by the boom) was the liquidation by eae bf eon) oe |e a ea 2 | 79°5 | 61-7 | 50-8 | | the government of the enormous stocks of war material held by coke on ; 72-1) 59's | | them at the conclusion of hostilities. the table on page 273 gives the production of various indus- trices, together with the trend of population in great britain o and the outward passenger movement for the periods 19rr to 1with minor items included. 1913 and 1919 to 1925. quantity. 3°: : : . 3: value . p * . * . a . . 6- , 2 great britain 273 statistics (production and population) for the united kingdom (1) (2) (3) | g | © |. © (7) (8) (9) (10) (11) ge mer- cotton | raw wool | cate imports of] ;-_,: ; cotton | © ousump- imports pig fron | stecl pro- ogee coal iron ore wheat re- pei ae oe year| spindles tion {in retained | production} duction tee raised | produced | tained for ee ce ae : es : | (000's thou- in the (in thou- | (in thou- raisin (in thou- | (in thou- | home con- ee ee ae ” emitted) sands of u.k. (in sands of | sands of ead tees sands of | sands of | sumption rb 7 “a (i 7 esa ne bales, 000’s| millions tons) tons) eae wi tons) tons) _|(in millions ritain (in | places out omitted) od.) and (in bi ews) millions) | of feurope ees : (number) of tons iqii] 54,522 34,240 529 9,526 6,461 1,804 2102 75,519 97°7 410: 272.996 1912] 55,317 3,734 517 8,751 | 6,796 1,739 260,416 13,790 108-9 ww 316.130 1913} 55,652 3,667 539 10,260 7,663 15932 297,43 15,997 105-4 4-3 329,073 i919} , it 7,398 7,804 1,620 229,037 | 12,240 71-4 40-7 ~ 7,903 1920] 58,692 3,074 672 8,034 9,067 2,056 229,295 12,678 109°3 42°5 154,174 1921 56,140 1,678 4.49 2,616 | 3,703 1,538 164,344 3.471 79°8 42:8 149,924 1922| 56,605 2.275 609 | 4,902 | 5,880 1,031 250,808 6,836 g6-2 az'1 i [9,162 1923| 56,583 1,919 361 7440 | 8,481 646 | 278,141 | 10,875 99:9 43-4 | 252,776 1924| 56,750 1,695 435 | 7,307 8,201 1,440 269,134 11,051 116-7 43:6 117,874 1925] 57,116 2,344 414 6,236 7,397 1,079 _|_ 246,671 di 96-4 ; (1) raw cotton spinning spindles based on the july issues of the international cotton federation statistics, not including doubling and waste spindles. (2) consumption of american cotton lint based on the international federation's spinners’ returns for years ending july 31. (3) total raw wool retained in the united kingdom compiled from the trade returns for the u.k. (4) and (5) production of pig iron and steel according to statistics compiled by the national federation of iron and steel manufacturers. (6) lloyd’s annual summary of shipbuilding. (7) production excluding ireland from 1922. prepared from the board of trade returns. (8) output according to the annual report of the secretary for mines. the u.k. trade returns. returns. the yarious industries coal.—the story of the coal industry was a particularly un- happy one. in 1914, 1,133,746 men were engaged in the coal mines of great britain, of whom 150,000 approximately joined up for war services. at the end of the war there were 1,008,567 and in 1924 1,230,248 men in the industry. immediately after the war huge demands for coal arose. during this time due attention could not be given to maintenance problems, and this, coupled with the return of the miners from the armies, created acute difficulties in organisation, leading to increased costs with reduced outputs. the market showed considerable inequalities, export prices being extremely high as against home prices. dur- ing 1920-1 exports steadily fell, but in 1922-3 there was a sudden and sustained improvement, due to the disturbance of conti- nental production through the occupation of the ruhr. as this factor gradually ceased to operate the depression set in again. in 1925 the government appointed a commission to inquire into and report upon the economic position of the industry. their report was published on march ro 1926 (see coal). iron and steel——the export figures increased very largely in 1922, the reason in this case also being the irench occupation of the ruhr. when this artificial stimulus was withdrawn the prospcrity of the industry immediately declined. this decline continued through 1924 until the last quarter of 1925. the fol- lowing statement by the national federation of iron and stcel manufacturers summarises the position at the commencement of the last quarter of 1925. blast furnaces in operation —there are in the united king- dom some 480 blast furnaces for the production of pig iron, which is the basic material for the manufacture of iron and steel. if the demand for pig iron required it, some 360 of these furnaces could be blowing at one time. in 1913 there was an average of 338 furnaces blowing throughout the year; the maximum number blowing at any one time since the war was 303 in sept. 1920. at the present time there are only 129 furnaces in blast, the number having steadily fallen since may 1923. pig iron.—the decrease in the number of furnaces in opera- tion is naturally reflected in the production of pig iron. pig iron reached its maximum production in the year 1913, when 10,260,300 tons were produced. in 1920 the output amounted to 8,034,700 tons, but in 1924 this had fallen to 7,307,300 tons or an average of 609,000 tons monthly, and this has still further fallen in the present year, so that the average monthly output for the first nine months amounted to only 529,400 tons, the output for sept. amounting to 448,700 tons. production excluding ireland from 1922. (10) estimated population compiled from the annua! reports of the registrar-general. (11) board of trade (9) total wheat retained for home consumption compiled from stecl —the output of steel ingots and castings in 1913 amounted to 7,664,000 tons, but owing to war needs the steel-making ca- pacity of the country was expanded by approximately 4,000,000 tons per annum, and the country has now the capacity to pro- duce at least 12,000,000 tons annually. in 1920 the output of steel ingots and castincs amounted to 9,067,300 tons. in 1924 the output had fallen to 8,201,100 tons, or an average of 683,400 tons monthly, and in the first nine months of 1925 the average was 609,400 tons. exports —the prosperity of the iron and steel industry de- pends very jarcely upon the extent of its export trade. in 1913 the total exports of iron and steel amounted to 4,969,200 tons; in 1924 exports were 3,853,100 tons, or an average of 321,100 tons a month, while the average in the first nine months of 1925 was no hi her than 300,0co tons a month. in sept. exports touched their lowest point for 1925 and amounted to 273,200 tons. imports —imports, on the other hand, have increased in spite of the fact that the increased capacity during the war was sufil- cient to make it unnecessary for any steel to be imported. im- ports of iron and steel in 1913 averaged 186,000 tons a month; in 1924 they had increased to 202,400 tons a month, and in the first nine months of 1925 amounted to 227,000 tons a month. the decline in this trade has been due to causes which have affected other industries, ¢.e., depreciated exchanges abroad, lower taxation, lower wages, longer hours in other countries and hi: h foreign tariffs, the difficulties of the steel trade being accen- {uated by the increase in productive capacity both here and abroad. | enginecring.—in regard to the engineering industry, the same causes were in operation. the year 1925, on the whole, saw an improvement. an unfavourable feature, however, was a rise in the average value of machinery imported in comparison with the average value of machinery exported, showing that the im- ported goods are of a more highly developed and costly character than those exported. the position of the electrical side of the industry was more satisfactory than that of the other branches, no doubt because of the great increase throughout the world in the consumption of power. shipbuilding —yvarticularly unfortunate was the experience of the shipbuilding industry. the productive capacity of the world has, since the slump of 1921, been greatly in excess of demand, due to the extension of plant throughout the world necessitated by the rapid wastage of tonnage during the war, and also to the continued depression of international trade which reduced the demand for freight. 274 great britain exports of cotton products (quantities in millions of ib. values in millions of £) 1913 1919 1920 1g21 1922 1923 1924 1925 yarn: | quantity. : 210-1 162-6 l47-4 145-9 202:0 145-0 163-1 189°5 value . , : 15-0 33-9 47-6 23°9 26°5 21-0, 27°8 30°5 piece goods: - quantity .. 6,580-0 (*) 4,435°4 2,902 °3 4,183°7 4,140-2 4,444°0 4,433°7 value . : : 97°8 od 315°7 s171 i42-4 138-3 153°4 150'5 inot available. exports of woollen and worsted products reproduced by the courtesy of the wool textile delegation, 1925 figures being added (quantities in millions of ib. values in millions of £) 1913 1919 1920 1921 1g22 1923 1924 1925 tops: quantity r : 43:6 14-9 23°8 34:7 41-6 33°9 f-2 32:0 value. .. 3-7 3:2 5-0 4-4 4-4 5:3 5 5-3 worsted yarns: a quantity . . 49°9 24-6 24-6 23°5 42-9 34°9 45-6 38-9 value... 5-0 10-6 11-5 5:2 7-6 6-2 g:i 7-9 woollen yarns: quantity 4:8 4:0 6-4 6-0 9:7 9-2 8-3 6-0 value. : 0-5 1-3 3:2 i- 2-3 1-9 i-9 1‘5 alpaca and mohair yarns: quantity e 17:2 i'5 4°3 4-1 6:8 9:6 8-4 8-o value 2:2 0-6 1-9 1-3 1-5 2°3 2-0 1-9 other yarns: quantity : : 85 2-0 3°3 7 2:8 2:8 3:6 4-6 value . 2 0-4 0-4 0-2 o-l 0:3 0-3 o-4 0-6 woollen tissues: 4 quantity : : 105°9 130'9 187-2 76-6 121-6 148-6 164°7 132°3 value”. : 14°5 60:4 75:2 24-6 251 28-3 30-1 26°3 worsted tissues: . quantity , : 62°5 23-2 77°3 40°8 62:3 9 56-8 47°3 value. ; ; 6:2 11-7 26-7 l322 11:8 ii-4 10:0 9:0 1 returns in sq. yd. from 1920 onwards, | exports of ieavy chemicals | (quantities in millions of cwt. values in millions of £) 1913 i919 1920 1921 1922 1923 1924 1925 cwt £ cwt £ cwt £ cwt £ cwt ai cwt £ ewt £ cwt £ sodium carbon- ate, including soda crystals, cle: 4 ; .| 39 o-7 4c 1-5 4°5 2:0 3:0 1-2 5:0 1-6 6-0 1:7 6:1 1:6 5:5 15 caustic soda .| 1:5 o-7 i-o 1-3 1-0 i-4 0-6 of 1-5 1-6 1-6 1-3 1-8 i-4 1-7 1-3 sulphate of soda | 1-3 o'r 0:5 0-7 2-0 1-2 o-4 o-4 i-4 ‘3 1-5 o-4 1-5 0-3 1-5 0:2 bleaching’ pow- der (chloride of lime) +. s4|. 1027 0:2 0-3 0:3 o-4 0-5 0:2 0-2 0-2 0-2 0-3 ov! 0-3 0:2 o-4 0-2 mull. mill. mill. mill. mull. mill. mill. mill. heavy coal gal. gal. gal. gal. gal. gal, gal. gal, tar oils . .| 368 | o6 | 13-7 | o-4 | 24:7 1-3 taeor |) oe? 25-6 | o-7 | 47°9 | 1:8 | 45:3 | 1-7 | 37°71 i-i exports of fertilisers (quantities in thousands of tons. values in millions of £) basic slag, super-phos- phates, guano, clc. ‘ ammonia sul- phate great britain cotton.—the position of the american section of the cotton trade was continually unsatisfactory. owing to short cotton crops the price of material was so high that the relatively poor markets, in which the great majority of sales are made, were unwilling to pay the prices which manufacturers were compelled to ask. here again the year 1925 gave promise of an improve- ment. in regard to the finer side of the trade, that using egyp- tian cotton, the raw material supply was more satisfactory, and trade was consequently better. moreover, this side of the in- dustry suffered less than the american section from the tendency of cotton-growing countries to install spinning machinery. finally, reference should be made to the policy of recapitalisation at higher values during the boom period, the subsequent effects of which seriously embarrassed a number of firms (see cotton). wool.—in regard to the woollen and worsted industry, there was very rapid recovery of trade in the second half of 1921, which continued, subject to a slight setback at the end of that year, through 1922 and 1923, the demand generally being for the finer class of goods at the expense of lower grade. during 1923 there was a further setback largely due to the disturbance in conti- nental trade through the ruhr occupation, which had so sub- stantially benefited the iron and steel and coal industries. during the first half of 1924 there was a gradual recovery, which, how- ever, affected the heavy more than the finer goods; but in the second half of that year the depression returned, and continued during the opening of the year 1925. in the latter part of 1925 there were signs of recovery. in this industry, as well as in cot- ton, there was a world shortage of material which maintained prices at a relatively high level, and was detrimental to consump- tion in the impoverished state of most markets. in neither wool nor cotton had the policy of central control, initiated during the war, maintained its power (see wool). chemicats.—the chemical industry includes heavy chemicals, dyestuffs and intermediates, fine chemicals and fertilisers. the ‘progress of the heavy chemical trades since the war was ex- tremely variable, as is shown by the export figures in the above tables. these have been chosen as samples, the great variety of products in the industry making any general statistical state- ment impossible. dyestuffs and intermediates —~at the outbreak of war less than 20% of the colours used here were actually made in great britain, the market being dominated by the german industry. the cessation of imports soon created a dye famine, and prices rose to unprecedented heights, to the great injury of the textile and other dye-using industries. by the end of the war, however, british makers were able to supply not only their own essential requirements, but also some of the needs of our allies. govern- ment assistance and finance were necessary to enable this result to be attained. in addition the government assisted the for- mation of a new company called the british dyestuffs corpora- tion, ltd., an amalgamation of various existing concerns, and itself invested a large sum in the corporation. in 1925 it was claimed that the british industry was meeting 80% olf the needs of british colour users, and that an average reduction of 50°, in prices had been effected since 1921. the working of this sys- tem of protection and partial government control had not, how- ever, been altogether happy, and during 1925 a reorganisation was carried through, the government giving up its shareholding in the corporation. fine chemicals —the following summary is taken from the volume chemicals by ashe and boorman (ernest benn, ltd. 1924) in the series, on the resources of the british empire:— prior to 1914 the fine chemical industry was practically a monop- oly of germany, although several british firms possessed an inter- national reputation for some of their products. the war cut off entirely our norma! supplies of all kinds of fine chemica!s, and beyond the stocks in the country we had no means of obtaining supplies of drugs such as aspirin; of anaesthetics such as novocaine; of remedies such as salvarsan; ef synthetic photographic chemicals which were vital to aerial photography and for x-ray work in the hospitals; of synthetic tannins required in the leather industry; of analytical reagents for chemical analysis in the great stecl works and in prac- tically every other industry; and of a varicty of other fine chemicals necessary for research work and in industry. fine chemical manu- 2795 facture was hurriedly undertaken in great britain, under most ad- verse conditions in respect of buildings, plant and processes, and very substantial progress was made. in a few months british salvarsan and salicylic acid were on the market; other drugs soon followed, and before hostilities ceased there was scarcely a synthetic drug of real importance that was not made in this country in sufficient quantitics, and in many cases with a margin for export. the same was true of the synthetic photographic chemicals, amidol, metol, paramidol and glycin, and at the present time british photographic chemicals are second to none in quality. of the synthetic perfumes and flavourings a certain number were made here before the war, but since the production has been largely developed. at the end of 1925 it was estimated that the british production was thrice as great and the volume of exports double what it had been before the war. fr fertilisers —the fertiliser industries, producing basic slag, sulphate of ammonia and superphosphate of lime suffered much from the agricultural depression, due to bad harvests throughout the world, and from the fact that many of the products are the by-products of other industries. before leaving the chemical industry mention must be made of the successful establishment since the war of a large scale plant for the fixation of nitrogen by synthetic process; this is a matter of great importance as great britain was previously entircly dependent on imports of nitrate of soda. motorcars—the progress of this industry is well illustrated by the tables given above. satisfactory features were the in- creased exports in 1923-4 and reduction of imports in 1924. it may be noted that a 333° 6 ad valorem duty on imported motor cars, componcnts and accessories was imposed in 1917, removed in july 1924 and reimposed in july ro25. artificial silk.—before the war artificial silk was not regarded as of sufficient importance to be allowed a special heading in official statistics. the figures given above show how prominent a place the trade held in great britain in 1925. it must be remembered that the figures represent values only, and that prices fell during the period 1921-5 (see artificial silk). sugar bect—the development of the sugar-beet industry in great britain is in too early a stage to make any statistical record possible. the government pledged itself to a generous scheme of subsidy, and the new industry started under favourable auspices. at the end of 1925 there were 10 factories actually in operation. brsliogcrarny.—w. t. layton, an introduction to the study of prices (1920); prof. a. l. bowley, prices and wages in the united kingdom, 191 4-20 (1921); a. w. ashe and boorman (h., g. trench), chemicals (1924); sec also reports of whitley committee (cd. 8606 of 1917 and cd. 9002 of 1918); reports of the war cabinet, 1917 and r91& (cd. 9005 of 1918 and cmd. 325 of 1919); board of trade report on women in industry (cmd. 135 of 1919); report of the committee of the privy council on scientific and industrial research (cmd. 1735 of 1922 and cind. 2223 of 1924); the trust movement in great britain, economist, dec. 22 (1923), jan. 5, 12, 26 and feb. 9 (1924); british industries (bulletin of the federation of british industries, 1924); board of trade returns; ilansard’s parliamentary debates; inter- natronal coiton federution statistics; ministry of labour gacsette; board of trade journal; committee of industry and trade, survey, of overseas afurkets (1925) and survey of industrial sata: ee vii. agriculture the period 1911-25 witnessed great changes in the cultivation of the soil, in the prices of agricultural produce, in the ownership of land, and still more in the relation of the state to the industry. indeed, the period witnessed the popular acceptation of the idea that agriculture stood on a different footing from other industries and as such demanded that the state should have a “ policy ”’ calculated in one way or another to encourage the full cultivation of the soil. refore the world war, government action was of a very jimited character. its most important function was the eradi- cation of contagious diseases of animals in continuation of the policy begun in the ’6os for the prevention of the spread of foot-and-mouth disease, cattle pleuro-pneumonia, swine fever and rabies. a beginning had, it is true, been made in promoting agricultural education and research, in the extension of small holdings, and in the improvement of light horse breeding, but generally in this period the policy of the government, apart 276 from the suppression of animal diseases, was one of non-inter- ference with the industry, combined with some tentative efforts towards education and the spread of information. the war period.—with the outbreak of war, agriculture assumed a new significance. it ceased, at least for the time being, to be an industry pursued, like other occupations, entirely for the benefit of those engaged in it. the production of food became a national question. for a time it seemed as though the increased prices would in themselves provide sufficient stimulus, and it was not immediately obvious in what direction the state could usefully intervene. gradually, both the food and labour supply became increasingly difficult, and in jan. 1917 the food produc- tion department was established under the board of agricul- ture with a view to more active steps being taken through county war agricultural committees and otherwise to stimulate the cultivation of the soil. the corn production act—in the following march the gov- ernment announced an entirely new policy, which was afterwards incorporated in the corn production act, 1917. this new policy was based on the view that in order to get farmers to plough up grass land and grow more cereals it was necessary to give them confidence in the future course of prices by providing a govern- ment guarantee that the prices of wheat and oats should not fill below a certain figure during the next few years. the act, as ultimately passed in aug. 1917, fixed the prices as follows:— for 1917, wheat 6os. and oats 38s. 6d. per imperial quarter; for 1918-9, 55s. and 32s.; and for 1920-1-2, 45s. and 24s. respec- tively. provision was made for the payment to the grower of the average difference between these prices and the average price ruling in the seven months following the harvest in each year. these guarantees, however, never became opcrative, as the actual price throughout the period was above the guaranteed price. apart from the guarantees, the act embodied another new and important departure in policy by providing for the establishment of an agricultural wages board, whose duty it was to fix minimum wages for workmen in agriculture and to see that not less than these wages were paid. this was combined with restrictions on the raising by land-owners of agricultural rents, and with power to enforce the proper cultivation of the land by farmers. thus the policy contained in this act was of a dual character: on the one hand it ensured to farmers for a period of six years certain minimum prices for their two principal cereal crops and protected them against any undue raising of rents; on the other hand it required them to pay adcquate mini- mum wages to their workers and to cultivate their land in accord- ance with the rules of good husbandry. as a policy of a less permanent character, very active steps were taken by the food production department (under lord lee) during 1917-9 in the direction of increasing the area under the plough and generally in promoting the output of food. the increase in the area of the corn and potato crops between 1916 and 1918 was over 1,500,000 acres in england and wales alone, while the total increase in the united kingdom was just on 3,000,000 acres. the selborne committee—in the meantime, the question of the policy to be adopted in regard to agriculture after the war had been considered by the agricultural policy sub-committce, of which lord selborne was chairman. the reference to this committee was “‘ to consider the methods of effecting an increase in the home-grown food supplies, having regard to the need of such increase in the interests of national security,”’ and their report was issued in july 1918. it contains a full exposition of the position of agriculture in this country and deals in detail with the various problems presented, the object being ‘‘ to for- mulate a scheme of agricultural policy which may be generally accepted by the nation and adhered to through a long course of years.”’ briefly, the committee took the view that the security and welfare of the state demanded that agricultural land should be made to yield its maximum production of foodstuffs, and that if this object was to be attained it was necessary to provide a basis of security and stability in the conditions under which agriculture is carried on. the method they recommended was great britain the permanent adoption of the principles underlying the corn production act, viz.: a minimum wage for the agricultural labourer, a guaranteed minimum price for wheat and oats for the farmer, and a control of cultivation sufficient to ensure to the state a permanent development of agriculture and the proper utilisation of the land. these principles were incorporated in the agriculture act which, after prolonged discussion, was passed on dec. 23 1920. the minimum prices guaranteed under this act were to be ascer- tained annually on the basis of the estimated cost of production in any year as compared with roro. within a few months of the passing of the act, however, it became apparent that a serious slump in agricultural prices was taking place and that the burden on the state involved in the guaranteed prices would be very large. this was combined with a general financial stringency which demanded a reduction in all government expenditure. a reversal of policy.—the result was that the main operative clauses of the agriculture act, 1920, were repealed by the corn production (repeal) act, 1921, and the whole policy of the the intervention of the state in agricultural wages, prices and in the control of cultivation was abandoned. some temporary compensation was given to farmers by the payment of a subsidy on wheat and oats grown in 1921, which amounted to the sum of £18,000,000, and the sum of £1,000,000 was added to the development fund, mainly for the purpose of promoting agri- cultural education and research. the agricultural wages board was abolished, and in its place conciliation committees represent- ing both employers and workers were established to fix wages by voluntary agreement. between 1921 and the end of 1925, a great deal of discussion » took place as to the adoption of some national policy in regard to agriculture, and a large number of proposals were put for- ward. a conference representative of the various interests was proposed with the object of arriving at some agreed method which would be acceptable to all parties and shades of political ‘opinion, but owing to preliminary differences this conference was never held. the council of agriculture, which is a statu- tory but unofficial body, proposed a scheme which, ‘among other matters, involved a subsidy amounting to some {5,000,000 or {6,000,000 for the encouragement of arable cultivation in eng- land and wales, but public opinion appeared generally to be opposed to subsidies of any kind. thus, at the end of 1925 there was no broad national policy recognised by the state in regard to agriculture of a character comparable with what was attempted by the corn production acts. on the other hand, between 1921 and 1925 a great many agricultural questions were dealt with separately, and very extensive action was taken by the state in the direction of fos- tering and promoting agriculture. very considerable sums are voted annually by parliament with this object, and the position may be summed up by saying that policy is in the direction of helping the farmer to help himself without the intervention of the government either in regard to prices or cultivation. agricultural wages.—in regard to agricultural wages, the state again intervened and by the agricultural wages regula- tion act, 1924, provided machinery whereby minimum wages for workers in agriculture must be fixed in england and wales. 1t was not thought necessary to include scotland in its provisions because scottish workers appeared able to arrive at satisfactory agreements with their employers without any assistance. the english act provides for wages to be fixed locally by 47 com- mittees covering the whole country, each committee being com- posed of an equal number of employers and workers (usually six to eight on each side), two impartial members appointed by the minister of agriculture and a chairman. in the event of failure to agree, an agricultural wages board similarly consti- tuted has power to act in default. apart from this action in regard to labour, the newer features of the agricultural policy are the action taken in regard to land settlement, education and research, and sugar beet, to which may be added the enquiries and investigations carried out in the first instance by the linlithgow committee and subsequently great britain by the ministry of agriculture in regard to the marketing of agricultural produce. combined with these developments is a continuance of the older policy in regard to the control of con- tagious animal diseases, more especially foot-and-mouth disease, which of late years has presented a more formidable problem than it did for a long period prior to the world war. land settlement, education and research.—a forward move- ment was begun after the armistice in the direction of settling ex-service men on the land, and under the land settiement (facilities) act the area of land in england and wales held by public authorities for letting as small holdings was more than doubled, viz.: from 201,000 ac. at the end of 1918 to 447,000 ac. at the end of 1924, while the number of occupiers increased from 13,874 to 30,177. as regards research and edu- cation enormous progress has been made, research institutes (connected in most cases with universities) being now provided for the study of all the scientific sides of agriculture, while in- struction of a practical character is undertaken under the direc- tion of the local authoritics in every county in the country. this work is maintained or aided by grants from the ministry of agriculture, the expenditure from parliamentary funds in england and wales alone in 1925-6 amounting approximatcly to £647,000. another direction in which parliament is providing larfe funds for the assistance of agriculture is by encouraging the establishment of the sugar beet industry by subsidising the manufacture of sugar from home-grown beet for a period of 10 years under the british sugar (subsidy) act, 1925. the acreage under this crop rose to 55,000 ac. in 1925, and it was expected that this figure would be doubled in 1926. considerable expendi- ture is also incurred in the direction of the improvement of live- stock. an attempt was made under the agricultural credits act, 1923, to establish a scheme of co-operative credit societics aided by loans from the state, but the number of socictics actually established is very small (see co-operation). the change in the attitude of parliament towards agriculture may to some extent be measured by the change in expenditure. thus in 1911-2, the total expenditure of the board of agricul- ture and fisheries was £251,000, of which possibly 10% repre- sented expenditure on fisheries. this covered england and wales and scotland. in 1925—6, the gross estimate for the ministry of agriculture (excluding expenditure on fisheries) was £3,277,000 for england and wales alone, while the estimate for the board of agriculture for scotland amounted to £452,000. the bulk of this expenditure took the form of grants for the purposes mentioned above and involved in most cases considerable addi- tional expenditure on the part of local authorities and others. a factor which has vitally affected both agriculture itself and the policy of the state has been the change in the price of agri- cultural produce since the war. during the war, prices naturally rose very considerably, and the rise continued till towards the end of 1920. in the middle of 1921 a severe and continuous slump set in, with the result that the prices of agricultural prod- uce generally, which were 202° above pre-war prices in sept. 1920, fell to 57°%> above in sept. 1922, and with some iluctua- tions remained more or less at this level for the next three years, the figure for nov. 1925 being 53%. the sudden fall in prices resulted in severe capital losses, and made agriculture, at any rate for a time, a very precarious undertaking (sce agriculture). in this connection, reference may also be made to another factor connected with the change in the value of money. the prevailing system of tenure in great britain is that of landlord and tenant, whereby the land and buildings are provided and maintained by the landlord at a rent which is generally admitted to give only a very small return by way of interest on the capital represented. the much higher rate of interest obtainable during the post-war period on first class securities led to extensive sales of estates, and is said to be resulting in a gradual change in the older system in the direction of a greater tendency towards occupying ownership. such statistics as are available suggest that the percentage of land occupied and farmed by the owner increased from about 15%) in 1920 to 25% in 1924. = = | changes in cultivation.—the changes in cultivation in great britain in the 14 years 1911 to 1925 reflect the policy of the period. up to 1916 there was little development; in 1917 the pressure for increased food production began to make itsclf felt and reached its maximum intensity in the following year. with the close of the war the impetus was lost, and the proportion of land under the plough gradually decreased and fell below the pre-war level. the following fizures, in thousands of acres, show the changes in great britain from igii to 1925:— acreage under crops and grass (100° omitted) total corn arable permanent pee crops land grass crops and grass | i9tl 7,041 14,648 17,447 32,095 iqu7 7,308 14,606 17,251 31,858 | 1918 8,974 15,852 15,896 31,749 | | 1925 6,321 13,912 16,549 30,461 | the decline in the total acreage under crops and grass is to some extent compensated by an increase in mountain and heath land and rough grazings not included under that heading. the area under wheat (included in the above table under corn crops) which was 1,906,000 in iqli, reached a maximum of 2,636,000 ac. in 1918, and declined to 1,547,000 ac. it 1925. in regard to live- stock, a very striking feature was the way in which on the whole the flocks and herds were maintained during the war, notwithstanding the shortage of feeding-stuffs. from 1y16 to 1920, however, there was a quite noticeable decline in the number of sheep, part of which has since been recovered. as compared with pre-war years cattle are somewhat more numerous, while the pig population, always a fluctuating factor, reached a maximum in 1924. as a broad indica- tion of the magnitude of the industry it may be mentioned that the total value of the “ output ” of agricultural land in great britain represented by the produce sold off farms fur consumption elsewhere was estimated in 1923 at £259,000,000. agricultural policy in 1926,--in feb. 1926 the government issued a considered stalement on agricultural policy, which declared that the government was not prepared to recommend subsidies for the increase of corn growing or arable cultivation and that it was defi- nitcly opposed tocompulsory control of cultivation. “ the right course in the best interests of the industry itself and of the nation as a whole is to proceed on the lines of education and encouragement rather than of coercion, to endeavour to create that confidence which is essential for progress, to stimulate the private enterprise of those engaged in the inclustry, and to assist them to organise themselves on an economic basis.’” it then went on to indicate the lines on which the government would proceed, such as the development of agricul- tural credit, small holdings, afforestation, land drainage, marketing of agricultural produce, housing in rural areas, protection against discase and the development of sugar beet cultivation. bibliography.—a griculiural policy sub-committee interim re- port, cd. 9079 (1917); report of the director general of food produc- tion (1917-8); agricultural sub-committee final report, cd. 8506 (1918); sir t. ii. middleton, food production tn war (oxford, 1923); land settlement in england and wales rorg to 1924 (1925); repori on the work of the intelligence dept. of the ministry of agriculture, 10902t-4 (1925); report of committee on stabilisation of agricultural prices (mintstry of agriculture economie series no. 2) (1925); ecanomic series of reporis issued by the ministry of agriculture 4925 and 1926); annual agricultural statistics of ministry of agriculiure, parts i., 1f., and i1i.; council of agriculture for england and wales, report on agricultural policy (stationery office); annual reports of the board of agriculture for scotland parl, papers; agricultural tribunal of investigation final report, cmd. 2145 (1924); govern- gent statement on agricultural policy, cmd. 2581 (1926). (ret. fp) viil. communications and transport at the outbreak of the war the government took complete control of the railways under an agreement whereby the com- panies were guaranteed their pre-war revenues. the fact that the war lasted for more than four years, and involved a far- reaching rearrangement and redistribution of the trade and traflic of the country, made the strict terms of the agreement practically inapplicable. a huge sum of money was required to put the companies back into their pre-war condition of repair and efficiency. rolling stock had been removed to other coun- tries, stations closed, permanent way and other plant allowed to fall into comparative disrepair, staff seriously depleted, and the arrangements for the routing of traflic widely altered. the | costs of operation had also risen enormously. 276 the ministry of transport—the government, foreseeing the difficulties which would arise if control were suddenly removed, passed in rg19 the ministry of transport act, which gave the minister powers to control the operation of all existing means of internal transport. one provision in the act has proved of permanent importance. this was section 21, which provided for the setting up of the rates advisory committee composed of five members: one person of legal experience (to be chairman), two representatives of trading and agricultural interests, one representative of transport interests, and one representative of labour. it was laid down that before directing any revision of charges, etc., the minister should consult this committee. the act was immediately followed by a reference from the minister to the committee to report upon an interim revision of railway rates for merchandise and mincrals. the committee reported in favour of a gencral increase varying according to class from 25 to 60%, with flat rate additions, and increased charges for collection and delivery. this was brought into operation on jan. 15 1920. on may 11 the minister announced his determination to undertake to complete revision of railway charges and invited the committee to report on the general prin- ciples which should govern the revision, including the classifi- cation of merchandise traflic. meanwhile he directed the increase of rates up to 100°% above pre-war as from sept. 1 1920. as a result of the committee’s general report, there was finally passed the railways act 1921, which had the effect of entirely reorganising the railway system of the country. the act’s most important provisions may be summarised as follows:— 1. the railways of great britain were amalgamated into four large groups, the southern, the great western, the london, midland and scottish and the london and north eastern. 2. anew tribunal called the “ railway rates tribunal ’’ was set up to which almost all the powers of the railway and canal coim- mission and many new powers were entrusted, its most important function being the settlement of the schedules and charges of the amalgamated companies. the tribunal consists of one person of legal experience, who is chairman, one person of railway experience and one of commercial experience, and is obviously the successor of the rates advisory committee. the first of these provisions was intended to facilitate working economics by climinating costly competition, and the second to provide a cheap and business-like tribunal for exercising the necessary control over the new system charges and wages.—the act laid down an entirely novel principle in regard to the basis of charge. section §8 provides that the charges be fixed on a basis estimated to yield an annual net revenue (‘‘ the standard revenue '’) equivalent to the aggregate net revenues in the year 1913 of the various companies absorbed by the amalgamated company together with allowances for interest on capital expended or raised since jan. 1 1913, or capital which had not at that date become fully remunerative. section §9 provides for periodical re- visions of the charges and also lays down that if on any such review the tribunal finds that the net revenue of the company is substan- tially in excess of the standard revenue, such excess shall be divided between the public and the railway companics, 80% being allocated to reduction of charges and 20‘ being retained by the company as profits. this increased standard (the old standard plus 20% of the excess) is then to become the standard revenue of the company. the tribunal was also given power to revise the classification of goods, and some control was vested in it of exceptional rates. there is no doubt that the framers of the bill intended, by extending the number of classes and instituting a strict revision of exceptional rates, to reduce the complexity of the rate books, which were said to in- clude more than 80,000,000 exceptional rates, many of them obsolete. the powers which the bill proposed to vest in the tribunal for this purpose were however strenuously opposed by both traders and rail- way companies, and, although the tribunal has increased the number of classes from 8 to 21, it is improbable that the new provisions will succeed in substantially reducing the number of effective excep- tional rates. in regard to wages and provisions of service, the act provides that all disputes in regard to these shall be referred to two bodies, the central wages board and the national wages board, the latter acting as a court of appeal from the former. both these bodies are in the nature of conciliation committees including repre- sentatives of the companies and their employees; the national wages board also includes representatives of railway users. between the passing of the act and the end of 1925, the railway rates tribunal was more or less continually involved in the carrying out of the reorganisation of the railway system entrusted to it by the act. the ascertainment of the standard revenue proved a very great britain great difficulty, and might indeed have proved impossible but for the formation of a committee known as the traders’ co-ordinating committee, representative of all trades substantially interested in railway traffic, and of such great organisations as the federation of british industries, the association of british chambers of commerce, etc. this committee has been legally represented before the tribunal and has been able to negotiate settlements with the railway com- panies. it appears likely that the almost insuperable difficulties in- volved in the application of the act will be surmounted in this way. reverting to the question of charges, these have been reduced by successive concessions in 1922 and 1923, till at the beginning of 1925 they were 50°, above pre-war, with certain flat rate additions, some of the heavy traffic standing at 40%. in july 1914 the rathway trades unions were preparing a claim for improvement of conditions and increase of wages, to be presented in nov. 1914, when an existing agreement was due to run out. on the outbreak of war it was agreed between the unions and the com- panies that the existing agreement should continue, but should be terminabie by six weeks’ notice on either side. the government dur- ing the war granted various increases of wages, and in nov. 1918 the unions gave notice to terminate the agreement. there followed a prolonged negotiation in which the unions, the companies and the government were all involved, and on sept. 26 1919 500,000 railway workcrs came out on strike. work and negotiations were resumed on oct. 5, and an agreement reached on march 20 1920. under this rates were divided into twoclasses, ““a’ rates and “ b”’ rates. the ‘** a” rates represented the pre-war rates plus certain flat rate addi- tions. these latter were to be subject to adjustment according to the cost of living. the ‘8b ” rates represented practically the pre-war wages plus 100%, and it was agreed that, whatever the change in the cost of living, wages should not fall below this level. in 1925 the railway unions put forward claims for a general increase of wages, and the companies counter-claimed for a general reduction, the national wages board rejected both claims, but provided that new entrants into the railway service should no longer be entitled to the benefit of the “a” rates. the board also stated that they did not regard the “ b” rates as an “ irreducible minimum.” the removal of control —the position of the companies after the removal of government control in 1921 was an unfavourable one. the economics promised through amalgamation were slow in materialising, and the trade depression resulted in a decline of traffic which was only temporarily alleviated by the great increase in the iron and steel and coal traflic caused by the french occupation of the ruhr. at the same time the rapid increase of road transport has diverted from the rail a considerable and increasing volume of the high grade traffics which were the most lucrative to the railways, whose position has been further com- plicated by the great increase in working costs. expenditure in 1924 exceeded that of 1913 by £96,000,000 or 117%, whereas to meet this additional burden receipts had only increased by £88,000,000 or 70°. coal was 142% higher than in 1911 and 89% over 1913; other materials were 67-9% and wages 153% above 1913. there was an increase in staff due to the operation of the eight hours’ day, the staff in the four amalgamated com- panies having increased by 76,000 or 13%. the companies’ financial position was, however, relieved by the fact that in 1922 the government, in order to clear up claims for compensation under the control scheme, handed over to them sums amounting in all to £62,000,c0o0o, making over £100,000,000 so distributed since the beginning of control. the companies were able in the years 1923 and 1924 to maintain their dividends by drawing money (over £5,000,000 in 1924-5) from their reserve funds, which had been enormously augmented by these grants. it should be mentioned that the companies hive made efforts to secure legislation enabling them to carry by road, but hitherto without success. meanwhile, they are no doubt endeavouring to effect economies in their operating expen- liture. electrification schemes are being put in hand, notably by the southern company. the l.&n.e.r. and the g.w.r. have taken steps to increase the size of the mineral trucks on their systems, the ideal apparently being a 20 ton standard; and passenger services are being co-ordinated, etc. attempts are also being made to obtain relief from the burden of local rates. canals.—during the war the government took over the great bulk of the canals, the object being to relieve the railways as far as possible of trathe which could equally well go by water. the arrange- ments for compensation were similar to those made with the railway companies. the great value of the canals during the war caused a revival of interest in their potentialities, especially as the railway system was very congested during the early post-war period. the great lakes and st. lawrence government instituted inquiries into the possibility of reviving the canals which had largely fallen into disuse prior to the war, but no government felt justified in undertaking the somewhat ambitious schemes of reorganisation which have been recommended at various times. local schemes, have, however, been under consideration in various districts, and with government and municipal assistance im- portant improvements are being made on the waterways between nottingham and the humber. it is possible that further devclop- ments may be undertaken, notably between birmingham and the mersey, and birmingham and the severn. roads.—the development of road transport during the first decade of the 20th century directed attention to the condition of the roads in the country, and as a result the development and road 1m- provement funds act was passed in 1909. under this act a road board was constituted with powers:— (2) to make advances to county councils and other highway au- thorities in respect of the construction of new roads or the improve- ment of existing roads; (b) to construct and maintain any new roads. the income of the road improvement fund was to be derived from motor spirit and carriage licence duties. during the world war the income was absorbed into the general revenue of the coun- try and road development was arrested. by an order in council dated sept. 22 1919 the powers and duties of the road board were transferred to the ministry of transport. in 1919-20 a special fund of {10,536,000 was sct aside for the road and bridge programme, and arterial road construction actively proceeded with, particularly in the london area. under the finance act i920 a new system of taxation, registration and licensing of mechanically propelled vehicles was introduced and came into force on jan. 11921. special schemes were put in hand for the relief of uncmployment, for which £4,000,000 was provided from the road fund in 1920-1. the income of the road fund in 1922-3, derived from motor spirit duties, car- riage licenses, exchequer grants and motor taxation, was £12,802,754: these receipts had increased in 1924-5 to £15,234,225. during the period 1919-25 artcrial roads were constructed in the london area, scotland, etc.: the total length of new construction was 169 miles, and 48 miles of existing roads were widened. on march 31 1925 the total commitments of the road fund amounted to £36,087,000, expenditure by local authoritics on the maintenance, improvement, etc., of roads increased from {18,903,840 in 1913-4 to £28,413,674 in 1919-20 and to {45,431,036 in 1921-2. ‘the great increase during the post-war period was due partly to the practical cessation of work during the war period and partly to local unemployment relief schemes. after 1921-2 expenditure by local authorities was con- siderably reduced. postal service.—telephone tariffs varied widely in different arcas in 1910, but by 1921 a system of uniform charges hal been instituted as far as possible. the national telephone company’s system was transferred to the post office on jan. 1 1912. the number of ex- changes increased from 1,566 in igo to 3,971 on dec. 31 1925, and the number of telephone stations from 619,399 in 1910 to 1,357,908 on dec. 31 1925. the acceptance of telegrams from subscribers by telephone, and delivery to them by the same means increased greatly between 1910 and 1925. rates for inland telegrams on sept. i 1920 were double those of igio. the following table shows the more important alterations in post~ age rates between 1910 and 1925:— changes in postal rates may 1922 june igke8 june initial letter rate (in- land and imperial) . initial letter rate (for- eign) . . . . . ad. gu. ad. 13d. gos (may 1923) wid. 2d. postcard rate (inland) 13d. initial printed paper rate... : : : gd. i. 7d. id. inland parcel rate (up to2lb.). a 4d. ; gd. 6d (may 1923) _ is. 3d. (may 1923) inland parcel rate (up to 11 lb.) . : ; is. 1s. 6d.| 1s. 6d. airy mails.—the post-war period was marked by the develop- ment of commercial aviation. the post office inaugurated air mail and parcel services between london and the continent. mails are accepted by the air mail for belgium, france, morocco, algeria, germany, denmark, norway, sweden, etc.; air services established in continental countries are used to supplement thts service. the total weight of letter mail despatched by air in 1925 was 15,520 pounds, the air parcel service carried during that year 50,000 ib. of parcel air mails to paris, holland and germany including the rhine army, wireless and cables.—wircless services considerably increasecl be- tween ig10 and 1926. a new wireless station was built at hillmor- ton, near rugby, and was opened for service from jan. 30 1926, 279 this station was able to send messages which could be picked up by ships at sea and by every cfficient receiving station in the world. in 1925 the british govt. owned and worked two cables between great britain and halifax, nova scotia. one, in german ownership before the war, is worked directly between london and tlalifax. the other, purchased from the direct united states co., and taken over by the }sritish post office in 1922, is worked from london to newfound- land and efalifax. the two cables are called the imperial cables. binliograapny.—reports of the railway and canal commission (annual); railways act 1921 (71 and 12 geo. v., ch. §5); reports of the proceedings of the road board (annual, igi1, etc.); report of the imperial wireless telegraphy commitiee t919-20 (cmd. 777 of 1920 and cmd. 2060 of 1924); report of the wireless telegraphy commiis- sion, 1922 (cmd. 1572 of 1922); report of the broadcasting committee, 1923 (cmd. 1951 of 1923 and cmd. 2599 of 1925). 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