WAR, INDUSTRY, AND FINANCE.*
PROBLEMS of unusual interest were discussed at last year's meeting of the British Association, and, for obvious reasons, its proceedings took up less space than usual in the newspapers ; so that there is every reason to welcome the publication in book form of reports and papers presented to it on some of the most important subjects dealt with. Among these, industry and finance may well claim a leading place. No other departments of modern life have been more drastically revolution- ized by the war, and no others are more important to its conduct, and to the problems that will face us when it is over. The state of things studied by the experts who have contributed to the book was necessarily in a condition of rapid change, and in most cases they have only been able to arrive at tentative conclusions in interim reports. It was also inevitable that the book should be rather a disjointed whole, but there is plenty of good matter in it, and those who like variety of diet will find their appetite stimulated by its succession of dishes.
In the opening address delivered by the President of the section, Professor Scott, there is a very interesting sketch of the attitude of economists to war. It need hardly be said that they have, as such regarded it as a barbarous interruption to the arts of production, and that "the encouragement of the best possible relations with other coun- tries has always been a prominent feature of their teaching." Never- theless Professor Scott is justified in contending that the spontaneous and free development, which we owe so largely to the teaching of our economists, has produced a power of initiative in our people which augurs better for victory than the mechanical rigidity of German organi- sation. He is perhaps a little pessimistic in his view that "after the war Europe will experience very considerable straits for many years to come" owing to "the evil legacy in inflated funded and floating debts," which will lessen, "by reason of increased taxation, the normal margin for new savings." This will certainly be true, to the extent that the European belligerents borrow abroad; but unless the war lasts much longer than seems likely, they will not be able to do this to a very serious extent. In so far as they borrow at home, increased taxation for the purpose of interest payment and loan redemption will all be paid to the holders of the debt, and so one man's margin for saving will be lessened but another's will be increased. High taxation for these purposes is likely to tend to political friction and social unrest, especially if it is not wisely apportioned, but it will not diminish the net margin for saving. As for the difficulty with which capital will be obtainable, that will depend on the pace at which we produce and the rate at which we save. If, as we believe, the war will teach us to produce fast and save a large proportion of what we earn, then capital will be plentiful. And Professor Scott himself shows that in many respects the war may have beneficial results even from the purely economic point of view. Witness this excellent passage :—
" The waging of a just war results in a quickening of the national spirit. It forces a nation out of the easy and well-worn paths of routine and convention. Thus out of all the suffering and all the loss, some good will come. The large proportion of our young manhood which has gone to serve the country on the seas or in the field, and which returns having looked death m the face without being afraid, will not take up life where it was left. The noble qualities that have been evoked by the stress of battle will remain and will influence civil life during the next generation. The outlook will be broader and also more simple. Methods of social legislation and administration will become more direct and less timorous. The men who have dared greatly and who have endured will chafe against the rules that have been formed during easier times. . . . It has fallen to us to live in an heroio age ; and, if we remain true to ourselves and to our high destiny, we shall have the strength and the fixity of purpose to achieve greatly in peace as well as in war."
Among the purely industrial problems investigated by these inquirers, the most novel and important was the question of the introduction of female labour. Their report arrives at the somewhat paradoxical conclusion that it is not the fact, save in special cases and to a limited extent, that women have replaced men in the sense that they are now
• Credit, Industry, and the War : being Reports and other Matter Presented to the &dims of Economical Science and Statistics of the British Association for the Advance-
' meat of Science, Manchester, 1915. Edited by Adam W. Kirkaldyi M.A. With a
Preface by William E. Scott, M.A. London : Sir Isaac Pitman and Sons. [25. Gd. net,
doing work which before the war was being done by men. Industry to-day is to a great extent monopolized by our Government and those' of the Allies, and their demands are for goods to be used in war. At first sight one would expect that war goods would be goods turned out by men, or goods that had been turned out by men before the war. Not so, says the report. "A largo part of the Government demand for goods is in those branches of trade in which a larger proportion of women is employed." For instance, the tailoring trade normally employs some hundred and thirty thousand women regularly, with a fluctuating number that come in in times of seasonal pressure. The "retail bespoke" branch, in which high-class tailoring is done, employs men almost exclusively. This branch is very much depressed owing to, the war, because we have no time to be fashionable, or to order new clothes carefully cut to measure. Army clothing is good but not high-class, and it is this branch that is busy. In it female labour normally pre- dominates, and so the large number of women that have been pressed into its service are in a sense replacing men, since they are busy while the high-class tailors are idle, but they are not doing work that was normally done by men. In the boot and shoo branch there has actually been a replacement of women by men owing to the heavier nature of the work required in the military than in the civilian boot. It thus appears that what we may call the sex problem in industry is leas likely to be acute after the war than might be expected. If women are not really replacing men, but doing a large amount of extra women's work, which will decline when peace comes, the process of going back to the old peace basis will be less complicated than it might have been. The actual replacement of men by women seems to have taken place chiefly in non-industrial processes, such as clerical work, ticket-collecting, tram and 'bus conducting, and various forms of retail distributive work. Even in these branches, it appears that the work done by women is seldom exactly similar to that previously done by men :—
" In the case of ticket-collecting, in which at first sight men's and women's employment appears equal, it is found on inquiry that the women work shorter hours, requiring three shifts to do what men do in two, and their shifts are arranged when traffic is less heavy, thus leaving the more arduous work to the men. In many of the large stores three women are required to do the work formerly done by two men."
When we come to the financial side of the war problems, the views expressed at the British Association of last autumn suffer from being too recent and too ancient. They are too recent to give a final judgment on the events that they judged so soon after their happening, and they are too ancient to be in touch with the wider problems that have arisen since then. Whether it was the banks or the public that hoarded gold on the first outbreak of war is a question which is not, at the moment, a matter of great importance, nor are the views expressed about it very convincing. Mr. A. H. Gibson is quoted as saying that "there was no run on the Joint Stock Banks or on the Savings Banks, and what degree of hoarding of gold took place at the commencement of the crisis was probably due to the lead given by some of the Joint Stock Banks paying out Bank of England notes instead of gold." Perhaps this authority is a little too positive in saying that there was no run on the banks. Some bankers admit that the withdrawals by their customers in the week before the war were on an abnormal scale, though one may, of course, argue about the point at which abnormal withdrawals become a run. With regard to the Savings Banks, we have official figures to show that during the eight weeks ended on September 5th, 1914, nearly five and a half millions were withdrawn from the Post Office and Trustee Savings Banks.
But there is much interesting discussion of the exciting events of that breathless period in finance which heralded and followed the out- break of war. On the whole, the conclusion arrived at agrees with the view current in well-informed City circles, that the measures taken to meet the opening crisis were unnecessarily drastic. It is easy to see this after the event, but we must remember that it was the duty of those in charge of the matter to err, if at all, on the aide of making sure, because any error in the other direction would have spelt disaster. It is rather curious to find, however, how little the Association seems to have grasped the real financial necessity that has been so long neglected—namely, the need for drastic economy in public and private spending and a reduction of consumption by the indiiiduaL There are references to this necessity, but the subject is nowhere handled separately as the most important thing to be done in the interest of our financial staying-power ; and yet long before the Association met this need had been put before the nation by the Prime Minister in a speech at the Guildhall. At present we are wasting our financial strength by an orgy of public and private extravagance, and deluding ourselves with hoary old fallacies about helping trade by circulating money, and so forth. The British Association might have given us much dry light on this point, but seems to have missed its chance.
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