PROBATION

probation, as a system of re- lease from court without commitment to prison or reformatory, originated in massachusetts, u.s.a. in 1878, and has been ex- tended by law to every state of the united states and to the territory of hawaii. ‘twelve states limit probation to juveniles under 16 or 21 years of age; several others use it only for first offenders or for special classes of cases. massachusetts has pro- bation officers in every court in the state. many states have them only in the larger cities. probation work is supervised by a state probation commission in massachusetts and new york state and by a state probation dept. in indiana. a 1925 directory of probation officers includes names and addresses of 3,028 probation officers in the united states and 107 in canada. the national probation assn. (370 seventh avenue, new york city) stimulates the development of probation and holds annual conferences. application of the probation system has not kept pace with the law. an investigation showed that children’s courts em- powered to use probation, and disposing of 175,000 cases a year, had probation officers in only one-half of the courts. during 1923 there were 29,763 placed on probation by all courts in massachusetts and 24,633 in new york state. approximately 400,000 were on probation during the year in the whole united states. studies of results of probation show that from 44% to 75% are genuinely improved. law of 1925.—the most significant advance in the probation system in the united states was the passage of the first federal probation law, may 1925. this authorises district courts, after convicting for any offences except those punishable by death or life imprisonment, to suspend sentence and release on probation for a maximum period of five years. federal judges may appoint probation officers to investigate cases referred by court and to aid in bringing about improvement in conduct and condition of probationers. after governmental appropriations are made, salaries may be fixed by judges subject to approval of the attorney general. appointments of salaried oflicers are by 224 competitive civil service examination. in some districts, county and city probation officers have volunteered to serve as fed- eral probation officers. the probation system has extended rapidly to ail parts of the world and is being applied increasingly in children’s courts. of 14 european countries where inquiry was made in 1925, 12 had probation laws; in 11, probation officers were paid by state or municipality; 1,380 salaried probation officers were reported. among the countries which have adopted a probation system are england and a number of british colonies, austria, belgium, denmark, greece, holland, norway, poland, spain and sweden. the juvenile court in paris employs a salaried probation officer. england has a national association of probation officers. (sce borstal system.) (ai. m. h.) process: scc photo-engraving. production, census of.—the census of population, regu- larly repeated in most civilised countries, furnishes an indication of the numbers of workers at the ages most important for pro- ductive effort. when associated with a record of the occupa- tions of the working population, an index to the distribution of the productive energies of the community in various directions is furnished. the grouping of the population by the industries in which they are engaged furnishes further valuable material for a general survey of resources. this grouping, undertaken in this country at the population censuses of 1911 and 1921, js in some cases, as in germany, made the object of an independent inquiry, the numbers of establishments and of the persons em- ployed by them being ascertained for each industry. inquiries of the character referred to above furnish no information regard- ing the amount and character of the products of the various industrics. agricullure—in many, indeed in most, countrics no general survey of the products resulting from the labours of the inhabi- tants is carried out. in countries mainly devoted to agricultural industry, the ascertainment of the distribution of the cultivated area among its principal uses, and of the quantities of the leading crops and the numbers of livestock maintained, give information of the greatest importance relating to the country’s production. ‘where the extraction of minerals is important, the quantities of such mincrals produced are a necessary element in the survey of the country’s industrial resources. in various countries in which manufacture has reached a considerable degrce of tmpor- tance, periodic returns of the output of various leading products of the manufacturing industries are added to the records of agricultural and mineral products obtained. these surveys are, however, not merely incomplete in the degree in which they do not cover the productive activities of the country, but fail to furnish a satis(actory measure of the results of that activity. for that purpose a census not of products but of production is needed. for the extractive industries the record of products serves to measure production reasonably well, since the value of the products of other industries used up m the processes essen- tial to the extraction of new products is, in general, compara- tively small in relation to the value of the new products secured. even in the case of field crops, however, the secd required is often an important fraction of the crop secured, and a record of the quantities harvested does not furnish figures of the amounts that are available for consumption in or for sale beyond the limits of the country. under consideration. a sound estimate of the “ production ” of agriculture would need, indeed, a deduc- tion from the gross total of crops harvested not only of the seed which has been required to produce those crops, but also of the equivalent of manures used and of the requirements for the replacement of tools and equipment so as to maintain the stock of such tools, etc., undiminished. in dealing with animal prod- ucts, allowances must, in like manner, be made for food con- sumed in the maintenance of the animals and for other supplies used up in the business of stock rearing, so far as these goods are obtained from sources beyond the limits of the agricultural industries under survey. indusiry.—the principles illustrated in these references to the distinction between a census of products and a census of process—production, census of production have especial importance in reference to many manu- facturing industries. while the progress of a given industry may be reilected in the quantities of certain products charac- teristi¢ of that industry, so long as the structure of the industry remains without changes affecting the relative importance of these products in the industry as a whole, the comparison of different industries, and of different divisions of the same in- dustry, cannot be made on the basis of the aggregate value of the products of the industries compared. there are two impor- tant reasons for this. on the one hand, if industries were other- wise similar in character, but made use of different materials, they would yield aggregates of products, the value of which would be higher or lower according to the values of these ditfer- ent materials. materials costing £50,000 might be worked up into products worth £100,000, and precisely similar operations on materials costing £75,000 might yield products worth {125,000. measured by the value of products, the second industry appears to havea yield 25°64 greater than the first, while the actual incre- ments in value of materials used were the same in both cases. on the other hand, the same materials may be advanced from stage to stage in manufacture in different establishments, and the products of the series of establishments will show values gradually increasing, the material of each being the product of the preceding. it would not be a sound conclusion from such a record that the productive importance of the successive estab- lishments was in the order of the processes, and that the increas- ing values of the goods from stage to stage reflected the impor- tance of the productive services of the series of establishments. in comparing establishments making use of different materials and conducting processes of manufacture dissimilar in char- acter, as in the two types of cases dealt with above, no true com- parison of the value of the productive contribution of each can be expected to result from a single comparison of the value of their products. a census of production must, accordingly, be something more than an enumeration of the products of the various establish- ments and industries surveyed and a record of their values. the products of other establishments or industries which have been used up in the productive processes surveyed must be ascer- tained if a true: measure of the production carried on is to be secured. in strictness the effects of wear and tear, so far as not made good by the staff maintained within the establishment for that purpose, and also the effects of obsolescence on the plant and buildings, should be evaluated and included in the deduc- tion, from the value of the gross output, needed to arrive at the value of the contribution made to production. in_ practice detailed allowances for depreciation cannot be estimated with a precision approximating to that attainable with reference to cost of materials, and adjustments in respect of the consequent overestimate of the production have to be made by some means other than the simple aggregation of the depreciation sufiered by each establishment. the result of deducting the value of miterials used from the value of the products resulting from work on them is designated “‘ net output ” in the reports on the census of production in the united kingdom and is dealt with under the title “ value added in manufacture ” in the reports 1 the census of manufactures in the united states. in addition to an enumeration of the kinds and values of goods produced, there is needed, for a proper understanding of the significance of these data resulting from a census, a record of the numbers of persons employed in the production of those goods and of the mechanical aids to production at their disposal. information as to the distribution of the value of the recorded production between wages, returns to capital, taxation, prolits. etc., will also have much importance, in view of the reaction of distribution on productive efficiency; but inquiries regarding the distributive allocation of the values produced do not appear to be an essential part of the census of production itself. information on these matters, like information regarding the quantities and values of imports and exports of the various classes of goods with which the census is concerned, is of very great. importance in the application of the results secured by profitteering means of the census. the comparison of the imports and exports of any class of products with the amounts and values of similar products made within any country affords information of funda- mental importance. for the aggregate of ail industries it fur- nishes measures of the dependence of the material welfare of the country on its foreign trade. further, since the material income of a country consists in the goods produced and in those which are obtained from abroad in exchange, a census of production furnishes a basis for measuring the amount of, and the changes in, the total income of the community. in so far, too, as capital goods and consumption goods are capable of distinction, the total of products applied to capital purposes, replacement and increase together, can be ascertained. the formation of a rea- sonable estimate of what is required for maintenance of the exist- ing stock of capital enables an estimate lo be made, of a corre- sponding degree of reliability, of the increase of capital. thus results of uncertain estimates formed on other principles can be submitted to useful tests. censuses in different countries—the united states has the longest record of periodic censuses of production, covering agri- cullure, mining and manufacture. the decennial. census of population in that country was accompanied by inquiries into production from 1850 onwards. aiter 1900 these inquiries were _~made quinquennial and, since the close of the world war, have been biennial. in canada, since confederation, a similar series of production returns has been secured, and these have become annual since 1917. australia, new zealand and the south afri- can union have also annual returns of production in manufac- turing as well as jn extractive industry. in europe similar in- quiries have been irregular and relatively rare. the united kingdom took its first census of production for the year 1907; the second, relating to 1912, was not completed owing to the war; and the third, relating to 1924, is in progress. no decision has been announced as to the resumption of the quinquennial series arranged to follow the first census or its replacement by a series at other predetermined intervals. in the netherlands, war necessities led to the initiation of inquiries into production, and occasional inquiries have taken place in sweden (1914-7), norway (ig09 and 1916), france (1800-12, 1845, 1861-5), bel- gium (1880), rumania (1901-2), bulgaria (1922), ilungary (<899-1900) and russia (tg00 and 1908). a new census of indus- try in russia was announced in 1926, various countries have undertaken, annually or at longer intervals, a census of indus- trial establishments of a more or less complete census of products. particulars of the latest of the inquiries in the several countries mentioned above may be found in the bibliography below. biblicgraphy.— united states, brennial census of manufac- tures (1914); united kingdom, report on the first census of produc- tion, 1907 preliminary tables cd. 4986 (1909); cd. 5005 (1gi0); cd. 5162 (1910); cd. §254 (1910); cd. 5397 (1910); cd. 5463 (1910); final report, cd. 6320 (1912); canada, census of industry 1917, 14 parts (1919); australia, sammary of australian production statistics, commonwealth bureau of census and statistics (1gii); new zealand, statisitcul reports on industrial manufacture, census office (1924); union of south africa, statistics of factories and productive industries (excluding mining and quarrying) tn the union (1924); netherlands, e. w. van dain van [issclt, ‘ the census of industrial production in the netherlands’’ jour. of royal statistical society (may 1924}; sweden, textil och beklad- nadsindustrien specialundersekningen av konimers kollegiun (1914); ldder, har-och gummivaruindustricn (1915); bergshantering (1gi4- 7); norway: industristatistikh, norges offistelle statistikh 1916-7 (1919). france: enquete d’industric, 1861-5, statistique generale de la france. see also a. w. flux, the census of production, jour. roy. statistical soc. (may 1924). (a. w. f.) profiteering.—this word came into colloquial use early in the world war, and, having been included in the title of an act of parliament in 1919, may be considered to have received official recognition as part of the english language. it signifies the making of an unreasonably large profit on the sale of goods or services, particularly those in common use. i. general in normal times before the war, opportunities for making unreasonably large profits were to a great extent restricted by 225 the play of competition, and in fact competitive prices were widely regarded as being prima facie reasonable. no doubt an exceptional demand or an unexpected shortage of supply might lead to a sharp rise of prices and swell profits sometimes to an unreasonable extent. but for the most part movements were gradual; changes in prices and profits also served a social purpose in bringing about adjustments in supply and demand. when competition was excluded, the possibility of unreasonably large profits being made was obviously increased, and there was a widespread tendency on this ground to regard monopolies with suspicion. some industries which could not ordinarily be run on competitive lines, or which tended to become monopolies, were consequently carried on as public undertakings, or were controlled by public authority as regards rates and conditions of trading. this applied generally to railways and public utility services, such, for instance, as gas and water undertakings. for many years before the war there had also been a tendency for compctition to be excluded to a greater or less extent in an increasing num- ber of industries through the formation of trusts or combines. though the selling prices fixed by such organisations were not in all cases higher than those which would have prevailed under competitive conditions, they were certainly higher in many cases; while even when they were not, a feeling was apt to arise where large profits were being made that the trust or combine in question was taking for itself an unduly large share in the economies effected by the elimination of the wastes of competi- tion. ‘the belicf that unreasonably large profits were being made was undoubtedly the most powerful motive in the cam- paign for the control of trusts and combines in various countries. wer conditions —war conditions tended very greatly to in- crease the opportunities for profitecring. on the one hand insis- tent and insatiable demands arose for munitions and other sup- plics required in connection with the war; and, on the other hand, the available supplies of many articles were reduced below the normal. the circumstances of the time frequently made it impossible to effect as speedy an increase of production in response to the call of demand as would have been the case in peace time. another factor which tended to swell prices and profits was monetary inflation. ‘this meant a continuous in- crease of purchasing power and growth of demand without a corresponding increase in supply. manufacturers and traders consequently found that they were nearly always able to sell their goods at rather higher prices than would have been required to recompense them for the cost and to yield a normal profit. it was not perhaps adequately recognised that in many cases some toss on capital account was being incurred at the same time, owing to the fact that when stocks had to be replaced or plant renewed the nominal capital ordinarily required for the purpose was no longer sufficient. in many trades, however, there can be little doubt that after full allowance was made for this, profits (whether reckoned in absolute amount or as a per- centage on turnover) were much above the normal. various measures were taken during the war to restrict prof- iteering, especially in belligerent countries. these included the fixing of maximum prices, and in some cases of profit margins at cach stage of production and distribution. rationing of primal necessaries served to distribute supplics evenly and to prevent them from being sold to the highest bidder. the weapon of taxation was also employed in the form of highly graduated income taxes, excess profits taxes, etc., to secure for the public revenue a substantial part of the high war-time profits made by private interests. period of post-war readjustiment.—after the war, the uni- versal hope was to get back to “ normal ” conditions, whatever these might be, as speedily as possible. events, however, were to show that in many countries, especially european countries, the way to peace and prosperity was long and rough. as the result of a widespread continuance of inflation, profiteering was in some cases more rife after the war than during its continu- ance. under conditions of extreme inflation, such as occurred in germany in 1923, profiteering became widespread. the rise of 226 prices was so rapid that profits of hundreds or thousands per cent could be made by holding goods even for a few days. that, however, was a profit in paper marks, and it was obvious that paper marks, while circulating as currency, were entirely un- trustworthy as a standard of value. the true position did not become clear until after a stable currency hac been reintroduced. lt was then seen that while a comparatively small number of persons had made and retained fortunes, a vast mass of people had been reduced to penury. il. profiteering in great britain brtiish govt. afeasures—in great britain, inilation reached comparatively small dimensions. following the armistice, the general level of prices was for a time downwards, and during this period many war-time controls were withdrawn. subsequently, prices began to rise and continued to advance until the spring of 1920, when a rapid fall began. public apprehension led in the summer of 1919 to the passing of an act to check profiteering, commonly cited as the profiteering act rorg. this act conferred upon the board of trade powers (a) to investigate prices, costs and profits at all stages; (b) to receive and investigate complaints regarding the making of excessive profits on the sale of any article to which the act was applied by the board of trade, and after giving the parties an opportunity of being heard either to discuss the complaint or to declare the reasonable price for such articles, and to order the seller to refund to the buyer any amount paid in excess of such reasonable price, the board also having power, where it appeared to them that the circumstances so required, to take proceedings against the seller in a court of summary jurisdiction; and (c) to obtain from all sources infor- mation as to the nature, extent and development of trusts and similar combinations. the act was to remain in force for six months only, but it was subsequently continued for a further three months, and later, by an amending act, for six months more until may 19 1921. to deal with retail trade, local committees, numbering in all over 1,800, were set up, and: the board of trade delegated to them the bulk of their powers under the act relating to retail sale. there were also 108 appeal tribunals to which the seller had the right of appeal against the decision of a local committee. the task of dealing with larger transactions of wholesalers or manufacturers affecting whole trades or industries was entrusted by the board of trade to a central committee, which worked through three standing committees: the investigation of prices committee, the complaints committee and the standing com- mittee on trusts. these standing committees in turn appointed sub-committees as required to deal with particular questions. the investigation of prices committee made investigations into the cost of production of various articles in all stages of their manufacture. reports were published as parliamentary papers on agricultural implements and machinery, aspirin, biscuits, boot and shoe repairs, brushes and brooms, clogs, costings in government departments, furniture, gas apparatus, matches, metal bedsteads, motor fuel, pottery, standard boot and shoe schemes, tweed cloth, worsted yarns, wool and the wool top- making trade. the complaints committee undertook the inves- ‘tigation of specific complaints and also investigated specific transactions brought to their notice, even when there was no formal complaint. | the committce on trusts was responsible for obtaining infor- mation as to the nature, extent and development of trusts and combines. numerous investigations were made and parliamen- tary papers dealing with the following subjects were published: dyes and dyestuffs, dyeing, finishing, bleaching and printing, electric cables, electric lamps, explosives, farriery, fish, fixed retail prices, fruit, glassware, iron and steel products, laundry prices, meat, milk, oils and fats, pipes and castings, road trans- port rates, salt, sewing cotton, soap, tobacco, uniform clothing, vinegar and yeast. mention may be made further of a provision contained in the profiteering (amendment) act, 1920, which authorised the board of trade to approve suitable schemes sub- mitted by persons representing a substantial proportion of those proftpeering engaged in the production or distribution of goods to which the original act was applied limiting the profit to be allowed on such manufacture or distribution. any profit which did not exceed the amount fixed was then not to be regarded as unreasonable under the act. only two such schemes (relating to men’s ready- made and made-to-measure clothing and to the retail sale of coal in the london area) were actually approved by the board of trade. since the lapsing of the profiteering act in 1921, there has been no special legislation in great britain against profiteering except for the continuance of restrictions on the rent which may be charged for certain classes of houses. public feeling, however, continued to be very susceptible on the question, especially when a rise of prices occurred. various public inquiries have been conducted into costs of production and distribution of food- stuffs and other articles of common consumption, the most important of these being (a) the inquiry of a committee ap- pointed in 1922 under the chairmanship of lord linlithgow to enquire into methods and costs of selling and distributing agri- cultural, horticultural and dairy produce in great britain and the diminytion of the disparity between the price received by the producer and that paid by the consumer; (0) the inquiry of the royal commission on food prices appointed in 1925 and (c) the proceedings of the food council appointed in 1925 following the report of the royal commission on food prices to watch over food prices and supplies. in european countries—in the countries of continental europe public interest in prices and profits has been fully as great as in great britain. periods of inflation in different coun- tries were marked by a varicty of measures designed to check speculation and prevent further rises of price. as countries got back on to a stable currency basis, or began to deflate their currency, the problem changed into one of ensuring that the benefit of stable or falling costs was reflected in quotations, and that the inevitably large profits of the inflationary period were not perpetuated. it was felt that the force of competition had been impaired, and that special action was necessary with regard to combines. legislation motived largely by the desire to miti- gate profiteering by combines was consequently passed in several countries, including notably germany, czechoslovakia and norway. the german experiment, represented by the “ decree against the abuse of economic power,”’ which came into force in nov. 1923, is of particular interest. the decree provided amongst other things that the german minister of economic affairs may, when he considers a cartel agreement or the method of putting it into operation detrimental to the public interest, apply to the cartel court set up in accordance with the decree to have the agreement declared void or the particular method of carrying it out forbidden. the public interest or the common good is to be considered as detrimentally affected, particularly when supply or demand are restricted in a manner not economically justi- fiable; when prices are raised or kept high; or when, in the event of prices being quoted in a stable currency, extras for risks are included; or when economic freedom is unreasonably restricted by boycott in buying or selling or by the fixing of discriminating prices or conditions. until the summer of 192s, action by the government was confined to unofficial intervention, and it was claimed that this was successful in bringing about a large number of price reductions and in preventing price increases. it was decided, however, to make a more rigorous use of the powers under the decree and suits were brought in the cartel court charging a number of cartels with jeopardising the economic life of the country by the maintenance of excessive prices. should existing powers prove inadequate, the german govt. has an- nounced its intention of amending the decree. (c2 ki) iii. profiteering in the united states united states-— profitecring,” as the term has been used in the united states, may be roughly defined as consciously taking and retaining profits considerably in excess of the return neces- sary to equilibrate demand and supply, especially when such profitieering profits are the result of prices enhanced by the activity or policy of the recipient. its meaning has therefore a direct relation to the current conception of a legitimate business “ profit ’—a point on which public opinion during the world war became peculiarly sensitive. probably, conscious direct control of in«dus- trial processes never reached such development in the united states as during the world war. prices were fixed and both supply and demand controlled. an unusual mass of information concerning cost, production, consumption and stocks was ob- tained. the chief sources of information are the cost reports of the federal trade commission and data compiled from the income-tax returns. according to income-tax returns from some 7,co0 corporations their net earnings of the pre-war years 1911-3 average: 11% on invested capital. unfortunately, returns are not available in published material for these same corporations in 1917, but for 1918—a year of lower profils—they averaged 15%. the year 1917 was the time of maximum profits. these income-tax returns are not conclusive. they do indi- cate, however, that average profits increased considerably be- tween the pre-war period and 1918. more accurate and illu- minating figures concerning particular industries were obtained by the federal trade commission. a study of the costs of 37 wheat-flour companics showed that the average earned on in- vestment was 126%, in the fiscal year 1913-4, 17% in 1914-5, 38-4% in 1916-7 and 34% in 1917-8. that this increase in profits was not due solely to increase in business is evident from the fact that the percentage earned on sales also increased, the rate being 3:4% in 1913-4 and 6-5% in 1916-7. in ror7 there was apparently no limit to the price purchasers were willing to pay, the condition being one of panic. in the next year profits were somewhat abated by government regulation. twenty-two manufacturers of farm implements made at this time about 85% of the product in the united states. their profits increased from about 9° on investment in the years just prior to the war to 16-6% in 1917 and 19°9% in 1918; and the rate of profit on sales increased several fold. there was no general shortage of farm implements and no unusual demand, for exports were cut off. irom senate document no. 248 (65 cong. 2nd session) further evidence of profiteering may be gained. it appears that oil companies circulated reports that the supply of gasolene was dangerously short, for the purpose of maintaining prices of that commodity while making ‘‘ enormous ”’ profits on fuel oil. con- cerns bottling or canning vegetables, which had made future contracts, sometimes withheld portions of their output from delivery on such contracts and sold in the higher ‘‘ spot ” mar- kets. in frequent cases licences were revoked by the food ad- ministration. the practice of such concerns in maintaining re-sale prices for jobbers contributed toward maintaining the general high level of prices and increased profits in some in- stances. according to the same document the steel companies in 1917, prior to government price-fixing, made abnormal profits, and a number continued to make unusually heavy profits thereafter. the united states steel corp., which made 5% before the war, reccived 25° on investment in 1917; and ro smaller concerns made from 30% to 319% on their invest- ments. certain sulphur companies took advantage of the war demand for sulphur to raise their prices to such an extent as to reap net profits of approximately $15 a ton, which meant over 200% on investment in one case. the profits of tanners increased from two to five times, as they took advantage of the enormous demand for leather and exacted very high prices. the price of hides was rapidly advanced, notwithstanding that at the same time “ great supplies were withheld from the public.’? upon learning of approaching price control, one of the large packers took steps “ quictly and promptly ” to increase the appraised value of his tanneries. e without further evidence it may be concluded that profits in many industries increased in the earlier part of the war more than 100% above the pre-war level, and that this increase was in not a few cases due in part to profiteering as above defined. 207 high prices do net necessarily indicate excessive profits, but there is reason to believe that profiteering was common in ce- ment, petroleum, lumber (notably ship timber), wocl, clothing, sulphur, naval stores, rice, sugar, sand and gravel, raisins and other products, in addition to those already mentioned. in most of these cases the government reduced prices and profits through some form of control. the u.s. govt. attempted to deal with profiteering in three ways: (1) taxation; (2) price-fixing; (3) direct action under the food control act. the first and the last methods proved largely ineffective. by special taxes levied on profits, many thought that the spoils of the protiteers could be regained by the public. in 1016 a tax of 123% was levied on the profits of munitions manufac- turers; and a general ‘‘ war profits tax ”’ and an “ excess profits tax ’’ were imposed in 1917. in 1918 these taxes were combined. but, unfortunately, it proved so easy for most corporations to increase their investment accounts, and to pad their expenses, that the worst profiteers often showed small excess profits. moreover, a considerable part of ithe tax was shifted to con- sumers in the shape of higher prices, as was possible during the inflation period. government price-fixing, while it did not prevent profiteering, did moderate the evil, notably through such substantial reduc- tions as were made in the prices of wool, coal, sugar, flour and sulphuric acid. unfortunately, this means was not used as vigorously and thoroughly as it would have been had there not been an ill-founded reliance upon profits taxes. on aug. 10 1917 the food control act became jaw. section 4 of this act made it unlawful for any person to hoard or to make any unjust or unreasonable charge in transactions relating to “necessaries ” (foods, feeds, fuel, fertilizers, farm implements and machinery), but imposed no penalty. sections 6 and 7, however, provided for penalties and seizure, in case of hoarding. section 5 authorised the licensing of dealers in necessaries and the fixing of fair storage charges, commissions, profits or prac- tices. the fixing of prices for coal and coke was authorised in section 25. it was under this act that the food administration operated, and, as already indicated, its control over prices was partly effective. on june 30 1919, however, the activities of the food administration were suspended; and as the agitation concerning the “‘ high cost of living ” grew in volume, the de- partment of justice assumed the task of enforcing the law, which remained in force while a state of war was only technically in existence. but the attorney-general found his efforts limited by the absence of a penalty clause in section 4 and the restricted definition of “ necessaries,” and, at the president’s request, congress re-enacted the law in oct. 1919, with amendments to cover these defects. according to the annual report of the attorney-general for 1920, since oct. 1919 sentences had been imposed on 49 sugar dealers and 20 clothing dealers. in addi- tion, six sugar dealers and one flour dealer had been convicted of hoarding, and two coal dealers had been sentenced under the provision as to fixing reasonable prices. in all there had been over 2,000 indiciments, arrests and sentences, involving chiefly the commodities just mentioned, together with meats, potatoes and meals at restaurants. the great majority could not be sustained under the law. meanwhile, a growing hostility to the act was apparent. the upshot of the matter was a decision of the u.s. supreme court in feb. 1921, which declared the act unconstitutional. the reasoning of the court was that congress alone had power to define crimes against the united states; and, therefore, because the act was vague and indefinite, and fixed no precise standard of guilt, and because it did not inform the defendant of the nature and cause of the accusation against him, it was uncon- stitutional. thus ended the anti-profiteering crusade of the attorney-general. meanwhile, from april 1920 prices began to decline, and with that decline came a loss of interest in the sub- ject of profiteering. {in a sense the u.s. govt. was to blame for much w ar-time proliteering. in the first place it was lax in letting contracts 228 and making purchases, either directly, or indirectly, by placing authority in the hands of interested persons. the “ cost-plus system ”’ invited profiteering as well as inefficiency. in the second place its combination of excess profits taxes and price regulation was unfortunate. at the same time that it fixed prices on a cost basis it spread the idea that it made little differ- ence if excess profits were earned, as such profits would be reached by taxation. taxation, however, proved at best to be ai inadequate means of reaching profits, and early laxity in defining cost and investment made this means nugatory.