saved. It is easy to understand this view. Our expenditures are now running at the rate of $2,000,000,000 monthly. If the war lasts until the end of 1919, we shall have to spend $50,000,000,000. To raise so great a sum all the energies of the American people will be needed.

CHAPTER XII

LABOR

BVIOUSLY we cannot keep our ships

afloat and our vast armies overseas unless the industries of the country are organized on a war basis and operated by an army of patriotic men. It is estimated that it requires all the labor of at least three men to keep one fighting man at the front. This figure is small. But accepting it, we see that to keep an army of 5,000,000 men fighting we must have 15,000,000 at home working solely for the soldiers. As a matter of fact, we are expending half of our national income on war work, and, therefore, half of our working energy. The problem of organizing the country's labor-power that it might be used to the best advantage becomes one of the most difficult of the intricate problems faced by the government.

Before we entered the war the urgent needs of the fighting nations brought them to our markets for food and materials of all kinds,

and the result of their competitive bidding for these things was a rapid rise in prices at home and a startling increase in the costs of living. Large profits were to be made in these foreign contracts and the manufacturers and producers began bidding against one another for labor, a process which resulted in greatly increased wage scales. Factories not engaged in highly profitable war work, and the farms, found great difficulty in securing workers, and to be able to pay the advanced rates had to increase the prices of their products. And so the withdrawal of millions of men and women from productive occupations in Europe brought to us a parallel rising of wages and prices. Some employers made great profits and there was a resulting spirit of unrest among employees, who felt that they were not getting their full share of the results of their labor. This feeling found expression in frequent strikes. Industries which had no share in these great profits felt this unrest severely. Of this situation the railroads afford the best example. In 1916 their employees demanded the establishment of an eight-hour day and time and a half

pay for overtime. To avoid a nation-wide strike, in September Congress passed the Adamson law, compelling the roads to make an eighthour day the standard of pay and to pay pro rata for overtime. This greatly increased their expenses although their earnings were at the time steadily declining. The government did grant them some relief by allowing an increase in freight rates. This dispute between the companies and their men threatened trouble enough for the country in times of peace. It continued up almost to the very moment of our entry into the war. Similar controversies were recurring from time to time in other industries.

The

When we entered the war we had to produce ships, munitions, and food in unprecedented quantities, and the continuation of controversies between employers and employees was a grave threat to the success of our fighting men. control of the large employers was a comparatively easy matter. The great majority of them placed their plants at the disposal of the government and entered into voluntary agreements as to the prices they should receive for

their products. Any profiteering was prevented by tax laws which took from them the largest part of their earnings above what they had made in normal times. The control of the great army of labor, organized and unorganized, a great deal of it floating, was another matter. But steps had to be taken to prevent, as far as possible, any halting in production.

When the war-cloud was hanging over us, after the break in diplomatic relations with Germany, the Advisory Commission of the Council of National Defense was formed, and Samuel Gompers, president of the American Federation of Labor, took a place upon it as labor's representative. On March 12 a meeting of the representatives of all the unions was held in Washington, and these leaders pledged their loyalty to the country in event of war and called on their fellow workers to follow their example. The day after war was declared Mr. Gompers pledged the support of the federation to the government, and the federation, in its annual convention on November 12, affirmed its belief in the war as essential to the defense of democracy. So the representatives of the