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be always consistent. But the spirit of liberty has always been with us both—more honoured in theory perhaps in Republican France, and in practice in monarchical Englandbut inevitably presenting itself to both nations as the authentic mainspring of their political and social activities.

To-day, when French and English soldiers fight side by side in the mightiest struggle for liberty that the world has ever seen, it has perhaps not been inopportune to recall, briefly and inadequately as we have been able to do it, an important stage in the formation of that fund of sentiment which is common to both nations. It would be idle as well as hopelessly pedantic to attempt to estimate the precise indebtedness of one nation to the other. French was the lingua franca of the Europe of the eighteenth century, and of that century Voltaire was the prophet. Without the aid of that illustrious and indefatigable colporteur English ideas would hardly have reached, would certainly not have conquered, in so short a time the European mind. The alliance of France with England, initiated after the close of the Middle Ages and their tiresome dynastic disputes by the most farsighted of British sovereigns to which we drew our readers'attention in the opening pages of this essay, was purely political and military in scope. It reflected no common ideal of life, no common principle of growth. Yet, purely the work of statesmen as it was, it saved the principle of small nationalities and broke the power of Spain. Since those faroff days Frenchmen and Englishmen have come to know each other, and are fighting with conscious agreement of purpose on those battlefields of Flanders on which the blood of their forbears has so often mingled. The spirit which the French Encyclopædists and the great Englishmen of the eighteenth century fought so successfully in the battles of the mind, the spirit of intolerance, injustice and cruelty, of the lust of power, of the contempt of the rights of the human soul, has returned and challenges in every sphere those victories that were so perseveringly and gradually won, it seemed for ever. And indeed they have been won for ever. It is to prove this to the world definitely, finally, that England and her Allies are fighting their common foe.



CINCE the war began the country has passed through w various economic phases, each of which while it lasted seemed to be extremely serious. At the outbreak of war there was for a brief period a dislocation of employment, and the Press and the Government shared the idea that there was grave danger of general unemployment and poverty. Funds were hastily raised to provide relief, and the local authorities were urged by the Government to take steps to grapple with the problem. Within twelve months an entirely new problem had revealed itself. The demand for labour had outstripped the supply; the wage-earning classes were enjoying a condition of unprecedented prosperity, and their increased consumption was adding very seriously to the difficulty of financing our imports from abroad, and to the difficulty of financing the war. The most urgent problem in the autumn and winter of 1915 was how to diminish consumption. Thrift lectures were organised all over the country; taxation was somewhat increased ; and steps were taken to check the import of certain classes of goods. How serious the matter seemed at the end of 1915 can be gathered from the manifesto drawn up by the principal bankers of Great Britain. It is worth while to quote a few passages from this important document, which was published in the newspapers of December 23rd, 1915 :

At this time of great national danger it is imperative that every citizen should realise the vastness of the work which Great Britain has to perform, and should so act that the full strength of the nation may be put forth. ...

'The task of finding the greater part of the immense sums needed by the Allies is the special duty of the British people, for they in particular possess the necessary financial resources. ...

No one can realise the vastness of the task before the nation without becoming keenly conscious that it demands the strenuous co-operation of every man and woman, youth and maiden in the country; that the nation's energies must be completely concencrated upon the production of really essential things; and that the production of all non-essentials must be wholly stopped. Moreover, not only must the nation avoid the consumption of all nonessentials, but must even restrict the consumption of essentials to the limits of efficiency.'

The whole of the above argument is as true as when it was written more than a year ago; but during the past three months the newspaper press and the House of Commons have been mainly discussing, not the need for economy in consumption, but the duty of the Government to provide cheap food for the nation. The importance of the food problem can hardly be exaggerated ; but there is at least a danger that the new ministry may be harried by a popular outcry into taking measures which will intensify the trouble and may even provoke grave national disaster. It is significant that Mr. Walter Runciman, one of the most level-headed members of the late Cabinet, found himself compelled by political pressure to adopt measures which were in direct conflict with the sound economic principles which he had previously laid down. He unfortunately reversed the order of action which, apparently, must be followed by any man called upon to serve an impatient democracy. In a country governed by platform orators and halfpenny newspapers a minister is in a stronger position for doing what he knows to be right if he first lays himself out to win the applause of the people by saying what he knows to be wrong. Populus vult decipi—but let it be deceived for its own good.

The food problem is likely to be with us for many months to come-unless, perchance, the much more serious food problem in Germany should compel an early peace. Except on that hypothesis there is no reason to expect that staple foods will become cheaper: they may become very much dearer. It is therefore worth while to consider what are the main principles involved in a problem which has suddenly been presented to a people long accustomed to low prices for all the staple articles of consumption

The idea that the high prices of food-stuffs are due to the malevolent machinations of persons called profiteers need not be seriously discussed. This silly platform cry has just one element of truth behind it: that every person who earns a living by dealing in food-stuffs naturally tries to secure as wide a margin as possible between the price at which he buys and the price at which he sells. This is as true of the coster who sells vegetables from a barrow as it is of the Chicago speculator who deals in wheat by the shipload. The coster's percentage of profit is, as it happens, necessarily larger than that of the Chicago wheat-king. If the coster is to earn enough to live upon he must make fifty or a hundred per cent. profit on the barrow-load of stuff he pushes through the streets; the man whose daily dealings run into thousands of pounds sterling can do very well for himself if his average profit is even as low as one per cent. But neither of these profiteers can do just what he likes. If the coster holds out for higher prices than his public is willing to pay he will be left with his stock on his hands; exactly the same danger threatens the Chicago wheat-dealer. In the coster's case the stock perishes and the earnings of a whole week may disappear. The wheat that the Chicago dealer tries to hold up will not perish ; but while he is holding it he is losing interest every day on his capital, and he is risking the chance of a fall in prices that may leave him a bankrupt. For these reasons the coster and the wheat-king both tend to take a moderate profit as soon as they see it.

Similar considerations affect all the other persons in the long chain between the farmer who grows the food and the housekeeper who buys it. No one in that chain can-except for a very brief period—by his own action force an arbitrary rise in the price of a staple commodity. It has to be remembered that every man in the chain between producer and consumer is quite as much interested in buying cheap as in selling dear. When the external forces are in favour of cheapness each person in the chain uses his power to squeeze the person from whom he buys, and in turn is squeezed by the person to whom he sells. On the other hand, when the external forces make for dearness, the direction of the squeezing is reversed.

What, then, are the forces which finally determine the tendency of prices ? They are the primary facts of supply and demand. If the world enjoys a bountiful harvest at a time when there is no special growth in the general scale of consumption the farmer will be squeezed by the dealer to whom he sells, and so right on through the chain till the housewife is reached. She will obtain her loaf or her flour at a low priceperhaps even below the cost of production—through the action of those very profiteers whom socialist orators love to abuse. If, on the other hand, there should be a partial failure of the world's harvests at a time when the general scale of consumption has been enormously enhanced, then the farmer will stand out for the maximum price he can squeeze from the local dealer, and he in turn will squeeze the dealer next beyond him. Each person in the chain will seek his profit by selling dear rather than by buying cheap, and the consumer at the end of the chain will have to pay the price piled up against him.

The distribution of the increased price among the various persons in the chain will depend upon their relative skill in the art of bargaining and upon external factors, such as the difficulties of transport. But this distribution is a matter of indifference to the ultimate purchaser. There is no reason to believe that he would obtain his food cheaper if one or other of the persons in the chain voluntarily accepted a lower rate of profit. The benefit of that act of forbearance would only accrue to somebody else in the chain. Or, conceivably, it might accrue to some person who, tempted by the offer of goods below the market price, stepped in to buy up all he could, to sell again at a profit. There is, in fact, no way of escaping from the eternal law that when a commodity is scarce and the demand for it active the price will rise.

It does not follow that all measures to prevent a rise in the price of food-stuffs are to be condemned. What does follow is that those measures must be so framed that they will harmonise with the essential conditions of the law of supply and demand. An engineer who attempted to design á bridge in defiance of the law of gravity would be laughed at by the whole world ; but a politician who pretends that he can design a scheme for lowering food prices in defiance of the law of supply and demand is applauded by the House of Commons and by three quarters of the nation.

The two factors which are now forcing up food prices are, first, a reduction in the world's supply of food in consequence of the diversion of millions of food-producers to the work of war, and secondly an increase in the world's demand for food because many men, who as civilians could only afford to eat sparingly, are, as soldiers, able to eat heartily; while in addition in Great Britain, at any rate—the majority of the civilian population is also eating more. Either of these factors would alone have caused a rise in food prices ; added together they inevitably produce a great rise. If, then, we wish to secure a reduction of food prices we must approach the problem through these two factors. We must try to increase the supply of food-stuffs ; we must try to diminish the present rate of consumption. Very tardily the Government of this country has begun to consider the first point; its dealings with the second have been ludicrous. The late Government made frantic appeals

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