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From the South-African War down to 1907 wholesale prices showed comparatively trifling changes, and they fluctuated between 69 in 1903 and 80 in 1907, falling again in 1908 to 73. But in 1909 an upward movement began, which continued almost without interruption until 1913, when the average was 85. For the first half of 1914 there was a slight check in this advance, and at the end of June 1914 the average was 81.2. Immediately after the outbreak of war there was a considerable rise in the price of foodstuffs; but for the first five months the movement in raw materials was mainly downwards, owing to the dislocation of trade. In 1915, however, practically every article advanced to a marked degree, especially in the later months of that year, when the abnormal freight situation was the dominant factor. The 'Statist' index number for forty-five articles was 108 for 1915, as compared with 85 in 1913. The advance continued throughout 1916, and was more pronounced than in the preceding twelve months, the index number for the year being 136. The upward movement continued at an accelerated rate in 1917, the index number for that year being 175. A further advance was recorded in 1918, when the high average of 193 was reached, an advance of 127 per cent. on the figures for 1913. The highest point of the year, 197-8, was reached in October 1918. After that date prices fell slightly until April 1919, when the average was 184-6, but an upward movement then began which carried the average up to 206.4 in July. Minerals were responsible for the bulk of this rise.

It will be observed that, while during the Revolutionary and Napoleonic Wars prices advanced from 85 to 157, or 84.7 per cent. in, say, twenty years, in the war which has just concluded prices advanced from 85 to 193, or 127 per cent., in four and a half years. And, as in the case of the Franco-German War, the rise continued after the fighting ceased. The fluctuations in prices in the wars which occurred between 1854 and 1905 were trivial in comparison with this vast movement; and it is obvious that these conflicts afford insufficient data when we attempt to measure the economic consequences of the World War of 1914-8.

The loss of life and the expenditure of money have

been on a colossal scale. The total casualties of the Allies may be estimated at about 16,600,000, and the total deaths at about 5,250,000. The missing and permamently disabled will have amounted to not less than 80 per cent. of the killed, so that Germany and her Allies caused the death or disablement of about 9,000,000 men of the Allied nationalities. The total casualties of the Central Powers were about 12,000,000 men, and the deaths and disablements about 6,600,000. Including both the Allies and the Central Powers the casualties exceed 28,600,000, and the deaths and disablements exceed 15,500,000.

The total expenditure of the Allied Governments, including indirect losses in some cases, exceeds 29,000,000,000l. The war expenditure of the Central Powers, apart from the cost of reparation, exceeds 13,600,000,000l.; and the aggregate cost to the Allies and Central Powers is well over 42,000,000,000l., irrespective of (1) shipping losses, (2) claims for pensions, and (3) damage to property, plant, etc., and replacement of raw materials. Including these items, the total gross cost of the war may be put at about 52,000,000,000l.

There has been nothing approaching this destruction of life and wealth in the history of the world (although I do not accept the general view that the gross cost of the war represents in every case the actual destruction of wealth); and it is my belief that this stupendous conflict has produced the greatest economic revolution of which we have any record. The immediate manifestation of this revolution is to be found in the rise in the cost of living and the universal increase of wages.

Cost of Living.-An extremely valuable report (mentioned at the head of this article) on the increase in the cost of living in Great Britain was issued in November 1918. The items of expenditure which the Committee took into account were food, rent, clothing, fuel, insurance, household sundries and fares. The con

clusions of the Committee were mainly based upon the household budgets (over 1900 in number) which it collected. In reducing to averages results obtained from families composed of persons of both sexes and of vary. ing ages, it is necessary to reduce persons of all kinds to a uniform standard unit. This is done by expressing the consumption of women and children in terms of that of

men according to one of the scales worked up by specialists in dietary. The Committee employed the scale used by the Inter-Allied Scientific Food Commission. On this basis their 'standard family' of the employed-athome class is found to consist of 4.57 equivalent 'men or 'unfits' including 12 supplementary earners. The general conclusion of the Committee is embodied in the following approximate estimate of the average weekly expenditure of a 'standard' urban working-class family in July 1914 and June 1918:

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The Committee estimated the general average rise in expenditure at 74 per cent., from July 1914 to July 1918; they further estimated that by September 1918 the increase was 80 per cent. The Committee found, on the evidence of the budgets of working-class expenditure, that in June 1918 the working classes, as a whole, were in a position to purchase food of substantially the same nutritive value as in June 1914. Indeed, their figures indicate that the families of unskilled workmen were slightly better fed at the later date, in spite of the rise in the cost of food. This conclusion is more than confirmed by the reports the Committee obtained from the Medical Officers to the Education Authorities in the great cities.

As the advance in commodity prices has been worldwide, though of course by no means equal, it has been reflected by a universal increase in the cost of living. A comparison of the index numbers of the retail prices of food in various countries which appeared in the second number of the Monthly Bulletin of Statistics, prepared

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by the Supreme Economic Council, showed the following increases since July 1914 :

Country.

United Kingdom
France (Paris)

99

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Italy

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It will be observed that on the whole the United Kingdom compares favourably with other European countries in the matter of the increase of retail food prices.

Wages. On the outbreak of war, employment became very active; and before the end of 1914 a good deal of overtime was being worked, while in several trades complaint was made of a shortage of labour. This was especially the case in engineering, shipbuilding, woollen and leather and kindred trades. Concurrently, the prices of food and other necessaries rose. Owing to these circumstances, a movement to raise wages began in 1915. From March 1915 onwards it spread to nearly all the principal industries; and its effects have been far greater than those of any other upward movement in wages previously recorded. No complete account can be given of all the changes in rates of wages which have been made since the beginning of the war, since among the unorganised workers many changes escape attention; but it appears that before the end of 1916 nearly 6,000,000 workpeople had received some advance. The average weekly increase was about 6s. per head. In 1917 a further great increase of wages took place; and 5,000,000 workpeople received advances of wages amounting in the aggregate to 2,300,000l. per week (Labour Gazette,' January 1918).

The Labour Gazette' for January 1919 stated that the changes in the rates of wages during 1918 which were brought to the notice of the Labour Department resulted in an aggregate increase of nearly 2,800,000l. in the weekly wages of over 5,650,000 workpeople. Taking the whole of the employed people of the United Kingdom, I estimate that the wages bill for 1918 was about 900,000,000l. more than in 1913. (In 1903 it was estimated that the total wages bill of the United Kingdom was about 750,000,0007.) Of course real wages have not increased to anything approaching that figure. But the rise in wages has been a world movement, and it reflects the universal advance in the cost of living. The average weekly wage per capita in New York State in June 1918 was $20.44, as against $12.85 in June 1915.'

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Through all the economic records of the past it is possible to trace an advance (notwithstanding set-backs in certain periods) in the wages of labour, concurrently with an increase in the amount of money in circulation and a decline in the purchasing power of money. Prof. Thorold Rogers, in his 'History of Agriculture and Prices in England' (Vol. 1), devotes a chapter to the question of the purchasing power of money in the Middle Ages, which, according to him, was about twelve times as great as it was at the time when he was writing (1866). He estimates the money value of the wages of regular farm servants at different epochs as follows:

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It will therefore be seen that between 1348 and 1866 the labourer's wages had risen, from the point of view of purchasing power, only about 10 per cent. Prof. Rogers points out the remarkable economic effects of the Great Plague, in which, according to some authorities, from one-third to one-half of the population fell victims to the disease. The immediate effect of this catastrophe was to double the wages of labour; and they ultimately settled down at an advance of about 50 per cent.

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