flail INTERACTION OF WAR AND COMMERCE. N OW that the first
anxiety created by the out- burst of war has happily subsided, and the great bulk of the population has regained its normal level- headedness, it is well to look round the whole field of operations and note the effects of war upon commerce. To begin with, the particular effect most dreaded at first— namely, the rise in the price of food—has not been realized to any appreciable extent. The only article that has risen much is sugar, and for this there is a very definite cause. The larger part of the sugar consumed in the United Kingdom comes from the Continent of Europe. The general public is still under the delusion that it is possible to distinguish between beet and cane sugar, but when sugar is properly refined even an expert finds a difficulty in distinguishing cane from beet, and the average house- holder is quite unable to do so. Among the countries -which supply England with beet sugar, the most important are Germany and Austria. In the year 1913, out of a total importation of sugar, refined and unrefined, into the United Kingdom amounting in value to £23,000,000, no less than £15,000,000 worth came from Germany and Austria. That source of supply is now cut off. In addition, there is certain to be some interruption in the supply of beet sugar from France and Russia and Holland, all of which countries send us smaller but appreciable quantities. The idea that we can make good this loss from our own sugar- growing possessions can be disposed of in a moment. In 1913 the total value of sugar imported from all British possessions was £930,000, or almost exactly four per cent. of our total consumption. It is obvious, also, that there is no means of suddenly increasing this supply. Therefore we must expect sugar to be dear as a necessary consequence of the war, and the only moral to be drawn from the fact is that, as far as possible, we must try to economize our consumption of sugar. The rise in the price of sugar, however, in itself produces unexpected results. For example, English fruit-growers are already beginning to complain that, though they have a magnificent supply of fruit ready for the market, the demand is extremely slack, largely because the housewife is afraid to buy fruit because of the dearness of the sugar with which it has to be cooked. As regards otligy foodstuffs, there seems to be no reason for any kind of &farm. Both wheat and meat have certainly risen in price, but the rise is nothing in comparison with the rise in the price of sugar.
Nor is such a rise as has already occurred altogether regrettable. The people who clamoured so loudly a week ago against the danger of panic prices forgot that a rise in prices is the very best way of attracting an increased supply. If it were possible for the Government to keep down prices by administrative action, the inevitable effect would be that holders of supplies of food, whether here or in foreign countries, would keep their supplies in reserve waiting for a rise in price later on ; whereas, if prices are allowed to take their natural course at the beginning, holders of food all over the world will do their utmost to pour fresh supplies into the United Kingdom. As a matter of fact, so far as can be made out, the Board of Trade in drawing up its list of wholesale prices has been guided by market considerations rather than by political ones, so that the interference from this point of view has not yet been of any serious consequence. Indeed, it appears that the Board of Trade, in its legitimate anxiety not to interfere with the free operation of the law of supply and demand, has put its maximum prices above rather than below the figures which the trade would have naturally fixed, with the result that shopkeepers have probably in many cases put prices at a higher level than they would. have done if the Board of Trade had not inter- fered at all. Politicians never seem able to realize the elementary truth that, whenever a, Government fixes a, maximum price, that price tends to become the minimum ; just as when it attempts to fix a minimum wage that wage tends to become the maximum.
Turning from the question of food to the question of commerce generally, the important 'fact to note is that Great Britain has already in effect secured the mastery of the seas, with `the "sista that the interruption to her com- merce has now almost ceased, while German ships are practically driven from the seas. It is, indeed, an extra- ordinary ordinary fact that within a few days of the outbreak of war the whole of the English Channel and a great part of the North Sea should be free to English commerce, so that the Port of London can carry on its business practically without interruption, and that even more northerly ports such as Hull and Newcastle are able to do a considerable trade. As for the West Coast, there is no interruption at all except for the fear of German cruisers lying off the coast of the United States. Their presence, it may be added, is quite as much an interruption to American as to British trade, and the cotton-growers of the Southern States are said to be anxiously await- ing a British naval victory so as to give security for the movement of American cotton to British and French ports. For this tremendous commercial victory gained at the very outset of the war there is one cause, and one alone "—the supremacy of our Navy. It is to be hoped that those politicians and writers who for many years past have been denouncing our naval expenditure as a wicked extrava- gance will now have the honesty, like Mr. Massingham, to recognize their folly and the courage publicly to apologize for it.
As a consequence of our silent victory at sea, Germany loses practically the whole of her oversee commerce. Some of this will certainly pass to Great Britain, and not only will our shipowners be benefited, but our manu- facturers will probably gain many orders in neutral markets previously supplied by Germany. The Americans, it will be noted, are also counting on a possible profit that they may derive from the war, and doubtless some of the trade lost to Germany will be won by the United States.
It must not be imagined, however, that the whole of our commerce can continue as before. Just as we have lost the supply of sugar from Germany and Austria, so have we lost the outlet for our manufactured goods in those countries. We have also lost a considerable market for goods among our own allies, because the cost of war deprives them of the means of buying as freely from us as before. On this account certain British industries are bound to suffer from the war. These industries, and others as well, must further suffer because of the shifting of the home demand. A very large portion of the energies of the country has suddenly been diverted into the making of war and the manufacturing of warlike material, and as a result industries engaged in supplying countless luxuries and comforts are feeling the pinch of hard times. The urgent question which arises is how far this inevitable unemployment is counterbalanced by increased employment in other directions. In certain directions it is obvious that there is at the present moment a tremendous demand for labour. The new army that Lord Kitchener is creating is not yet full, although recruits are coming in at the rate of six thousand a day. There is a big demand for many classes of mechanics to supply war material. Black- smiths, carpenters, drillers, dynamo attendants, electricians and engineers, and so on, are urgently required. In this direction the great fear is not that there will be any lack of employment, but that the number of men available will not equal the demand. A similar lack of labour is being experienced in many agricultural districts owing to the withdrawal of men for the Army, and grave difficulties are being anticipated in getting in the harvest. There is also a still unsatisfied demand for doctors and nurses, for, though the Army seems to be well supplied, the hospitals are losing a considerable percentage of their qualified staff. Taking employment as a whole, the best gauge we can obtain is from the reports of the Labour Exchanges, for they deal with all classes of labour, and up to tile present they are not reporting any increase in the amount of unemployment in the country. It must, of course, be recognized that though the sum total of employment in the country may be maintained at its previous figure, and possibly even increased- owing to the temporary stimulus that war gives to human activities, there must be a great amount of suffering due to the diversion of employment. Some classes of workpeople can doubtless shift easily from one employment to another. An engineer engaged ist making typewriters can, for example, find work in Woolwich Arsenal. But many classes of labour cannot so adapt themselves, and: in these classes there must be great suffering. The practical conclusion for the private individual, therefore, is that, though he is certainly justified in cutting down his luxurious expenditure, and, indeed, is under a patriotic obligation to do so, he ought to utilize the money thus saved in doing all that he can to assist those who 'are suffering from the war.
The broad general fact is that in time of war the whole nation has to concentrate its strength, as far as it possibly can, on those forms of activity which conduce to a speed, triumph over the enemy.
Previous page
