make loans to foreign Governments and their citizens with which to settle their trade balances with us. This proposal was in a measure met by Sections 9 and 10 of the Victory Liberty Loan Act of March 3, 1919, providing for the amendment of the War Finance Corporation Act in the following respects. The Corporation was authorized, "in order to promote commerce with foreign nations," to make advances, to an aggregate amount of $1,000,000,000, to persons, firms, etc., in the United States engaged in exporting therefrom domestic products to foreign countries, when such persons, firms, etc., were unable to obtain money through ordinary banking channels on reasonable terms for financing their operations; or to banks and trust companies which might, after the passage of this Act, make advances to persons to enable them to carry on their exporting business. These advances were to run for not to exceed five years. The advances to individuals, firms, etc., it was provided, should only be for the purpose of assisting in the exportation of domestic products; should not exceed the contract prices of the goods including insurance and carrying charges payable in the United States; and should bear interest at not less than one per centum per annum in excess of the discount rate for 90-day commercial paper prevailing at the time the advances were made at the Federal Reserve Bank of the district in which the borrower was located. The advances to banks should not exceed the amount of the balances remaining unpaid of the advances made by them to their customers for financing their export operations. These advances might be made until one year after the termination of the war. They were to be made upon the promissory notes of the borrowers guaranteed by such securities as the Corporation deemed necessary. Finally, the date on which the Corporation should begin the liquidation of its affairs was postponed from six months to one year after the ending of the war. In considering the work of the War Finance Corporation as an agency for granting financial aid to undertakings engaged in war work or work contributory thereto, account should be taken of the fact that the Government had in the Revolving Fund of the Railroad Administration and in the War Credits Board of the War Department, organizations performing substantially the same function in their respective fields. An account of the first of these two organizations will be given in our account of the Railroad Administration. The second Board was created by the Secretary of War for the administration of the provisions of the Urgent Deficiencies Act of October 6, 1917, which provided that the Secretary of War, as well as the Secretary of the Navy, should have authority during "the period of the present emergency" to make advances from appropriations to contractors for supplies in an amount not to exceed 30 per cent. of the contract price of such supplies, such advances to be made subject to such conditions as he saw fit for the protection of the Government. That this authority might be properly exercised the Secretary of War created a body known as the War Credits Board to pass upon all applications from contractors for advances to them. Melville W. Thompson, a financial accountant and lawyer of New York, then a lieutenant-colonel in the Signal Corps, was made President of the Board. In a published announcement regarding its work the Board stated that it did not seek in any way to act as a bank. It deemed that it should not come to the relief of contractors until they had exhausted their resources at the banks. It found, however, that there were many cases in which its assistance was urgently required and of the utmost value. Its authorization of advances thus ran into hundreds of millions of dollars. Undoubtedly very large sums were also advanced in this way by the Navy Department. THE MOBILIZATION OF INDUSTRY Analysis of the problem - The two elements of marshalling industrial resources and establishing arbitrary control - Industrial inventories of the Naval Consulting Board and the War Department Organization of the Council of National Defense Munitions Standards Board - General Munitions BoardThe War Industries Board-Its duties, powers, and defects - Reconstitution of the Board as an independent administrative agencyIts powers and functions Organization of procurement through the Clearance Committee, the Requirements Division, and the commodity sections - Organization and unification of individual industries on a national basis through the Chamber of Commerce of the United States Conversion of industrial resources to war purposes through the Resources and Conversion Section and the Facilities Division Determination of priorities in raw materials, transportation, and finished products through the Priorities Division-Promotion of commercial economies through the Conservation Division - Price fixing through the Price Fixing Committee Purchasing for the Allies through the Allied Purchasing Commission- Demobilization of the War Industries Board - Continuance of certain functions by other agencies - Industrial Coöperation Service - Industrial Board of the Department of Commerce - Its abortive effort to stabilize prices of basic materials. - It has been pointed out that a prime characteristic of the late war was the necessity for the marshalling of practically the entire industrial resources of the Nation for its prosecution. Such a mobilization of industry required the doing of the following things: (1) the securing of as complete information as possible regarding the industrial requirements of the Government for war purposes and the essential needs of the general public; (2) the securing of data showing the extent to which existing resources and facilities were adequate to meet these essential needs of the Government and the public; (3) the taking of steps to secure an enlargement of these resources and facilities where they were found to be inadequate (a) by creating new sources of supplies or new establishments to manufacture the goods required, or (b) by converting existing establishments from the manufacture of articles not urgently needed to those the need of which was imperative; (4) the stoppage or curtailment of industrial operations not necessary for the prosecution of the war or the satisfaction of the essential needs of the public, in order that capital, plant, materials, and labor might thereby be released for essential work; (5) the determination of the use to which such resources and facilities as were available should be put to the end that they should be availed of in the way most urgently needed; and (6) the fixing of the price and other purchase conditions under which these resources should be secured. These last two requirements introduced the factors of priority and price fixing which have been such characteristic features of the whole problem of meeting the industrial situation arising out of the war. Ordinarily the purchasing operations of both the public and the Government are carried on in what is known as a competitive market- that is, one in which the supplies actually or potentially available equal or exceed the demand. Under these conditions all persons and all services of the Government not only may secure the supplies required by them, but may secure them at reasonable prices as fixed by competitive conditions. Under the condition of acute shortage in respect to many essential commodities that obtained upon our entrance into the war, procurement operations had to be carried on in a non-competitive market, one in which there was not a sufficiency to meet the demands of all, and in which |