make a fresh start, but to counteract influences that have superseded their own. They will have to fight for their old markets and for a share of new ones in circumstances that are bound to tell heavily against them. The necessity for maintaining a substantial output in the interests of the Government involves the purchase of stores of raw material a long time in advance and at much inflated prices. On the other hand, the Government contracts can be terminated at extremely short notice. There is, then, a strong probability that a large number of British manufacturers, including the bulk of the most prominent firms, will find themselves compelled to utilise materials in stock by continuing for some time to concentrate on the manufacture of vehicles of the very limited number of types that chance to be suitable for military work. The costs of manufacture will be great in view of the cost of the raw materials. Sales, on the other hand, will have to be effected in competition with a large number of other British manufacturers, all overloaded with vehicles of similar carrying capacity, and all equally anxious to reach that stage at which it will be possible to return to normal conditions of production.

Here, then, we have two effects; one, the flooding of the market with vehicles of certain specified types, which means a very small profit-if there is any profit at all— as a result of their sale; the other, an inability to supply the public demand for vehicles of other types, and a consequent continuance of a condition under which British trade loses ground every day. It is reasonable to anticipate that the whole difficulty will be still further increased by the presence upon the market of thousands of second-hand lorries and cars which, if the War Office and Admiralty adhere to customary methods, will presumably be sold by auction. Some of these vehicles will doubtless be obtainable at a wonderfully low price, so that purchasers will be strongly induced not to deal direct with manufacturers at a time when the latter are urgently in need of their custom. Others of these second-hand cars, when they go into commercial service, will show the results of rough handling, and will very unjustly earn for their makers an unenviable reputation. It is quite conceivable that, so far as this prospective

flood of second-hand vehicles is concerned, steps could be taken which would protect manufacturers from overwhelming competition, and would also safeguard the reputation of the British industry. It is also within the bounds of possibility that the terms of contract might be so modified as to relieve manufacturers to some extent from the onus of continuing to manufacture and sell a type of vehicle which is likely to be a drug on the market. These measures and others which might be devised to save a young and promising industry from the grave consequences of its active participation in the war, are matters for the consideration of those Depart ments of the Government that are charged with the duty of watching the interests of British trade. Whether it is possible, with its existing machinery, for the Board of Trade so far to make its influence felt upon the Departments directly concerned with the conduct of the war as to make these latter realise the necessity for incurring heavy expenditure which appears to be avoidable, is a question, the answer to which is hardly likely to be wholly satisfactory. It is conceivable that the establishment of the new Ministry of Munitions may form the basis of some link between interests which, viewed individually, are of a conflicting character. When the great problems before this new Department have been successfully solved, and its work gradually becomes lighter, it is possible that its energies might be diverted for a season, before it ceases to exist altogether, towards the work of securing that those industries which it has organised for warfare shall finally be set free to pursue the arts of peace under conditions which give them at the least a reasonable prospect of success.

HORACE WYATT.

Art. 12.-THE ECONOMIC POSITION OF THE ALLIED POWERS.

As the great war of attrition progresses, it becomes more and more evident that an unparalleled strain will be imposed upon the financial resources of each belligerent, and that economic exhaustion will exercise an important if not a decisive influence in bringing it to a conclusion. It is, therefore, a matter of profound importance to arrive at a clear understanding of the economic position and resources of the Allies.

The Allied Powers differ widely from each other in respect of economic conditions. The British Empire is the richest confederation in the world; and, of all the belligerents, its wealth and national income have been least affected by the war. France is very wealthy, but the mobilisation of practically all her male workers between the ages of 19 and 50 and the occupation by the German army of some of her most important manufacturing departments have for the time being rendered the financing of her external war expenditure a matter of considerable difficulty. Russia is potentially one of the richest Empires in the world, but, owing to the suspension of her foreign trade by the closing of her ports in the Baltic and the Black Sea, the process of converting her great natural resources into a liquid form has been rendered extremely difficult.

It was inevitable that the shock of war should fall upon France with the utmost violence both in a military and an economic sense. Some of the richest portions of her territory were almost immediately ravaged, and the flower of her manhood was rapidly mobilised. The French Official Review of the War stated that there were 2,500,000 men at the front at the beginning of March last and that at the same time there were 1,250,000 men in the depôts and in reserve. The cost of maintaining these men appears to be averaging now about 88. per man per day. On June 3 the French Minister of Finance, M. Ribot, laid before Parliament estimates for the public expenditure during the three months July, August and September, 1915, amounting in all to 237,600,000l., say at the rate of 79,200,000l. per month. This, of course, includes the civil as well as the Vol. 224.-No. 444.

military expenditure of the French Government. At the same time the Minister said that the total estimated expenditure for the first fourteen months of the war, that is to say up to Sept. 30, 1915, amounted to 960,000,000l. Under normal conditions the expenditure of the French Government runs at the rate of about 170,000,000l. per annum; so that it may be said that the first fourteen months of war will cost the French Government 762,000,000l., or at the rate of 653,000,000l. per annum. Should the war be prolonged it would appear probable that the rate of expenditure will increase beyond this level. The military outlay for the first five months was at the rate of 34,000,000l. per month, for the succeeding six months at the rate of 44,000,000l. per month; and it is estimated that for the three months ending Sept. 30 it will average 52,000,000l. per month. The operations in the Dardanelles account for a large proportion of this increase. The expenditure on allowances to the families of mobilised men, on the support of refugees and on the repatriation of those who have been expelled from the army zone is continually increasing. During the last five months of 1914 the sum paid to dependents of mobilised men averaged 2,720,000l. a month. In the first half of 1915 it reached 5,080,000l. a month, and for the following three months it is estimated at 6,160,000%. monthly. The total expenditure on allowances to dependents of mobilised men for the first fourteen months of the war was put by M. Ribot at 62,500,000l. The estimated expenditure on the support of refugees and repatriated persons for the same period was put at 7,380,000l.

Before the outbreak of war the public debt of France amounted to 1,071,848,000l., or 271. per head of the population; and her public revenue for 1911 was 195,267,000l., or 4l. 18s. 7d. per head, of which 37. 8s. 7d. per head was derived from taxation. The public debt of France before the war was larger than that of any other Power; and her revenue from taxation was nearly as great per head as that of the United Kingdom. France is one of the wealthiest countries in the world. Her national wealth has been estimated by M. Edmund Théry at 11,675,000,000l., and her national income at 1,460,000,000l. The gold reserve of the Bank of France is larger than that of any other European power with

the exception of Russia; and on the eve of war the Bank held 165,854,000l. in gold against notes in circulation to the value of 267,327,000l. On June 10, 1915, the gold reserve was 156,785,000l., and the note circulation 480,629,1907. The increase of the note circulations appears to be due to the fact that a large proportion of the war expenditure has been provided by advances by the Bank.

From Aug. 1 to Dec. 31, 1914, the war expenditure was provided, as to 77,600,000l., by the proceeds of the 3 per cent. Loan and the issue of National Defence Bonds; and 157,000,000l. was obtained from the Bank of France and the Bank of Algeria. That is to say, about one-third of the war funds were obtained from the French public and two-thirds from the Banks, while 20,000,000l. Treasury Bonds were issued in London. From January to May 15 this year, Treasury Bonds and the 3 per cent. Loan brought in 194,240,000l.; and the Bank advances only totalled 64,000,000l. Thus in the second period the French people subscribed nearly four-fifths of the outlay and the Banks little more than one-fifth. These figures show not only the growing confidence of the French people but the improvement which has taken place in their general economic position.

The national savings are ample to meet the further calls which will be made upon the French people for internal expenditure upon the war, but the financing of war material and foodstuffs purchased abroad is a matter of some difficulty. The capital value of the foreign investments of France may be estimated at 1,600,000,000l. ; and, under normal conditions, her income from this source should amount to about 80,000,000l. per annum. Unfortunately, a very large proportion of this total has been invested in Russia; and, until the commerce of that country has been released by the opening of the Dardanelles, France cannot derive full benefit from her Russian investments. France has also invested large sums in Turkey and the Balkan States, which are unrealisable for the time being. In these circumstances it is natural that she should look to Great Britain to help her to meet her temporary financial difficulties. Purchases abroad have to be paid for; exports have declined; import duties have to a large extent been cancelled. A recent estimate puts the probable amount