A serious weakness of the United Kingdom's position with respect to minerals is the lack of domestic mineral-oil production or adequate production within the Empire. Domestic production (from the reduction of shale) meets but about 15 per cent of the pre-war requirements. The British are making a determined effort to remedy this situation (1) through exploitation and development work in the United Kingdom; (2) through development of production in India and elsewhere within the Empire; (3) by the purchase and development of oil lands in Mexico and other American countries. With respect to slate, sandstone, salt, limestone, clay, chalk, gypsum, and other baser materials the domestic resources of the United Kingdom are fairly adequate.

The United Kingdom, particularly England, is well provided with railway facilities. The mileage of steam roads in 1915 was 23,709. There are in addition about 3,000 miles of electric roads. During the war the railways have been controlled by the Government, and it is still an open question as to just how far this control will be perpetuated after the war. The total length of navigable canals in the United Kingdom is between 5,000 and 6,000 miles.

The British merchant marine is the great transportation agency of the United Kingdom. Nearly half of the world's seagoing merchant fleet is of British registry. About a third of the British shipping as it stood before the war has been lost, and new construction and other acquisitions have been entirely inadequate to make good the losses suffered. Indeed, construction during the first three years of the war averaged less than 50 per cent of the pre-war level of output. American shipyards are at present outbuilding the British yards.

The effect of the war upon British trade and production has been tremendous, but hardly revolutionary. Before the war the United Kingdom was the greatest importer of foodstuffs and industrial raw materials in the world. This situation has persisted during the war. Imports have greatly increased in value; many commodities have been received in increased quantities (fuel oil, motor spirit, rice, raw hides, wheat flour, bacon and hams, cheese, milk, cocoa, oil nuts, raw copper, arms and ammunition, certain chemicals, bristles, etc.); receipts of other articles have fallen off in volume (sugar, beef, wheat, butter, fruit, cotton seed, flax, cotton, steel, lead, fertilizers, leather, etc.). In general, net imports have been fairly well maintained. In the case of some foodstuffs the rate of consumption seems to have been maintained at or above the pre-war level. Net imports of meats as a class and of cereal products have been increased. Consumption of sugars, fruits, eggs, etc., has been reduced. In general, the rations of the civilian population have been cut down, but not as severely as in other European countries. Net imports of important commodities, such as raw wool, have been increased.

To a very considerable extent the industrial equipment of the United Kingdom has been converted to the production of war materials. This has not meant any revolutionary change with respect to the character of the output of fundamental materials, such as pig iron and steel. In fact, the steel industry has experienced a great expansion during the war, the current output being about 50 per cent above the pre-war level. The output of the normal lines of more highly specialized products, however, such as machinery, vehicles,

textile fabrics, etc., has been sharply curtailed, almost without exception. The equipment involved has been to a considerable degree devoted to making arms, ammunition, tanks, aeroplanes, etc., and in some cases, where such conversion was virtually impossible, the equipment has been standing idle or running only part time. This last has been due both to raw-material shortage and arbitrary Gov

ernment restrictions.

Summing up the trade tendencies and conditions during the war, it may be noted that (1) imports of raw materials and foodstuffs have been well maintained; (2) imports of manufactures, aside from chemicals, arms and ammunition, and a few other items, have been sharply curtailed; (3) exports of domestic textiles have been fairly well maintained; (4) exports of the output of the British engineering trades have been reduced more severely than textile exports, although in many cases not as sharply as the imports of corresponding commodities; (5) the British reexport trade in colonial and other materials has largely disappeared; (6) the trade in miscellaneous manufactures (see Appendix D) has held up well, in many cases showing increases; (7) exports to France of a long list of commodities have increased tremendously; (8) the wide distribution of British exports has in general been maintained; (9) imports of commodities formerly obtained from Germany have, in many cases, not been replaced by goods from other sources; (10) imports from the United States have increased all along the line.

Certain of these conditions deserve emphasis and brief explanation. As stated above, the import trade in the case of many manufactures has suffered more severely than the export trade in British products of similar type. This is true of all textiles (except silks), earthenware and glass, paper, apparel, and rubber manufactures. Such a situation indicates that these industries were relatively well maintained during the war. In the case of the glass industry, for example, there has been a considerable expansion. Before the war the United Kingdom was largely dependent upon Belgium and Germany for supplies of glass. Cut off from these supplies the domestic industry has flourished, particularly in certain branches. On the other hand, imports of manufactures more intimately connected with the carrying on of war have been increased or have at least not fallen off as sharply as exports of similar classes of products of British manufacture. This is true of iron and steel and nonferrous metal manufactures, electrical apparatus, machinery, vehicles, leather and leather manufactures, wood products, cutlery, implements, and chemicals. When it is noted that, after textiles, iron and steel manufactures, and machinery are the most important groups of exports of British manufacture, the disturbance to British trade caused by the sharp decline in the exports of these products is emphasized. In 1912 the exports of British iron and steel manufactures totaled 3,566,000 tons. In 1918 this trade amounted to the relatively small figure of 1,057,000 tons. Exports of British machinery in 1912 amounted to 703,612 tons, and in 1918 to only 183,027 tons.

The effect upon the commercial interests of the great shrinkage in the formerly large and profitable reexport trade of the United Kingdom has, of course, been serious. Almost without exception reexports have fallen off, in many cases almost disappearing. Since it was this branch of British commerce which was least essential to the

economic life of the nation during the war, this development is not surprising. The scarcity of shipping was perhaps the most important factor conditioning the volume of the reexport traffic. Exceptions to the general decline in this commerce are drugs, tanning materials, and certain chemicals.

The development of the export trade to France has been very striking, and is unquestionably due purely to war conditions. In 1913 the merchandise trade balance was slightly against the United Kingdom, shipments from France to the United Kingdom exceeding shipments in the opposite direction by about £6,000,000. In 1917 the balance against France was £105,000,000. British exports to France of cottons, woolens, rubber, munitions, iron and steel materials, chemicals, linens, etc., have increased tremendously. In 1912, for example, France took but 2 per cent (4,893,900 pounds) of British cotton yarns; in 1918 the corresponding figures were 65 per cent and 66,516,100 pounds. In 1912 only 58,777 tons of British iron and steel manufactures were exported to France. In 1916 France received 1,115,939 tons, and the figure for 1917 was only a little less than a million tons, about 65 per cent of the total exports of this class to all

countries.

The expansion of the trade with France under the unusual conditions prevailing a development which it can hardly be expected will be maintained-has been naturally accompanied by reductions in exports to other countries. This means that old markets must be recovered or new markets developed, if the volume of British export commerce is to be maintained when unusual shipments to France have ceased.

J In 1913 Germany was second only to the United States with respect to exports to the United Kingdom, and in the case of imports from the United Kingdom, Germany led the United States by a narrow margin. The severance of trade relations between Germany and Great Britain at the outbreak of the war, accordingly, gave a very serious jolt to British industry and commerce. Germany furnished the United Kingdom with a long list of dyes, chemicals, electrical apparatus, and other "key" commodities. In general, as was noted above, the imports of commodities formerly received from Germany (and the same might be said of imports from Belgium) have not been fully replaced during the war. To a considerable extent, however, British manufacturers have developed and increased the output of these essentials and have made good the deficiencies caused by the loss of German goods.

In analyzing British trade statistics for the war period one can not fail to be impressed by the extent of the United Kingdom's increasing dependence upon the United States for foodstuffs and industrial raw materials. In the last two years the United States has furnished from 50 to 95 per cent of the United Kingdom's total imports of wheat, wheat flour, corn, oats, barley, bacon, hams, glucose, kerosene, motor spirits, lubricating oil, fuel oil, pig iron and crude steel, raw copper, spelter, raw cotton, tobacco, etc. From 10 to 30 per cent of many other materials imported, such as lead, for example, have been furnished by the United States during the war. development has been due in a considerable degree to the scarcity of tonnage, and probably will not persist for long, although it may be expected that the United States will continue to be the most impor

This

tant source of such materials. Before the war Argentina, British India, Russia, Roumania, and other countries led the United States with respect to the volume of exports to the United Kingdom of certain of the materials and foodstuffs mentioned above.

Increased imports of many lines of American manufactures during the war should be noted. In 1913, 3,411 tons of machine tools of American make were received; in 1917 imports of these goods from the United States totaled 15,645 tons, with a value of £2,616,286. Imports of American dye extracts, other chemicals, and motor vehicles have been increased, and, of course, the shipments of arms and ammunition have been very large. The future of American manufactures in British markets is uncertain and depends to a great extent upon British governmental policy.

The numerous committees and subcommittees organized under the Ministry of Reconstruction have presented reports advocating protection for British manufacturers after the war. This movement is due particularly to the feeling that British industrial welfare must not again be allowed to become dependent upon the outside for important key commodities, such as dyestuffs, potassium compounds, other chemicals, machine tools, scientific instruments, electrical supplies such as magnetos, hosiery needles, etc. Before the war the United Kingdom was largely dependent upon Germany, and to a less extent upon the United States, for almost its entire supply of these and other essential materials and manufactures. Along with this, however, goes the clamor of every British manufacturer who has had his business fostered somewhat by the protection from foreign competition given under war conditions. How far this movement will be carried into effect as governmental policy is difficult to guess. The war has, however, introduced a new feeling with respect to trade policies into the British commercial public. The United Kingdom will doubtless remain a great market for American foodstuffs and certain raw materials; but tariff walls against American and other manufactures may be expected.

An analysis of the British financial situation shows the United Kingdom to be in a strong position despite the strain of a great war. With respect to her international position Great Britain appears to be in approximately the same situation as before the war, and is still the great creditor nation of the world. Although holdings of American and other securities in private hands have been considerably reduced, the excess of loans extended during the war by the British Government to its associates and other countries over all foreign borrowings in the same period approximately balances this reduction in private holdings. This assumes, of course, that the loans and credits granted by Great Britain to Russia, Serbia, Roumania, and others are worth their face, an assumption perhaps somewhat questionable, as pointed out in Chapter VIII.

Appendix E shows certain data with respect to price advances in the United Kingdom during the war. In spite of these advances, however, and in spite of the hardships introduced by rationing and other governmental regulations and restrictions, the standard of living of the mass of the British people has not been reduced-at least in essentials during the war. Unemployment has been virtually nonexistent; and the important private and governmental relief associations of all kinds find fewer people on their rolls than before the war.

II. FOODSTUFFS.

INTRODUCTION AND SUMMARY.

The United Kingdom is the world's largest importer of foodstuffs. Of the three main groups of imports listed in the British official trade statistics the division "food, drink, and tobacco" is the most important (in value). In 1912, for example, the value of the total imports of food and drink (tobacco excluded) was £274,228,716, or nearly 37 per cent of the total value of all importations. Of this trade the three leading items are wheat, corn, and sugar. Other cereals, meats, dairy products, fruits and vegetables are also imported in large quantities. Exports of foodstuffs are small relative to total imports, amounting in 1912, for example, to but £44,943,440. The total trade in foodstuffs for the years 1912-1918 is shown in the following table:

IMPORTS AND EXPORTS OF FOOD AND DRINK.1

1 Annual (and Monthly) Statements of Trade of the United Kingdom.

According to the above data, both gross and net imports of foodstuffs have been increased very sharply during the war period. The net importation figure for 1917, for example (which is 40 per cent of the total of all imports for the year), is about 190 per cent of the corresponding figure for 1913. This showing, however, is more than accounted for by the rise in prices. The average price of all foodstuffs in 1917 has been estimated to be about 218 per cent of the 1913 price level. There has then been some decline in the net importations as far as quantities are concerned. Further, it is probable that the consumption of foodstuffs by the British armies has been somewhat greater than the amount which would normally be required by the same individuals in civil life, and that the making of adequate provision for the victualing of the troops has accentuated the shortage in the supplies available for the civilian population. Still further, labor troubles and the derangement of the distributive system brought about by war conditions have caused both local and general disturbances in the food situation. On the other hand might be

This estimate is based on Sauerbeck's index numbers as published in the Statist.

2 There is room for a difference of opinion on this point. Some would not agree that the British soldiers have been better fed in the army then the same men would have been fed in their own homes in peace times. Further, it would seem reasonable to expect that some economies would be realized in handling and preparing foods on the large scale that must be adopted in provisioning a modern army. Another consideration involved is the extent to which the United Kingdom has supplied the large contingents of men furnished by Canada, India, and other British possessions, and no specific information on this question seems to be available. At any rate, it is clear that the precautions which the British Government felt obliged to take to insure adequate supplies for its military forces (such as rationing, price fixing, and arbitrary control of stocks) did actually add to the general scarcity.