But accepting these conditions as inevitable, it is still important to inquire whether improvements cannot be made in the existing machinery of government, both to make it more responsive to the will of the majority and to enable it to carry out its desired objects with less friction and duplication of effort. The experience of war-time administration in the United States has pointed the way to a number of readjustments which would give added efficiency to the government without loss of democratic control.

ECONOMIC ORGANIZATION FOR WAR

ERNEST L. BOGART

University of Illinois

As shown in the struggle recently ended, modern war means "a nation in arms." The old-time distinction between fighters and workers was almost obliterated, and there was an industrial army as well as an army in the field. The labors of the men and women behind the lines were essential to the effective operations of the men in arms. That this condition was recognized by the governments themselves is shown by the classifications of workers, according to which those whose special skill or ability was essential to the conduct of war industries were taken out or kept out of the army and retained in the factories, mines, workshops, and fields. In various ways the old lines between soldier and civilian, between war operations and the work of production, were broken down. The Germans made no distinction between war vessels and merchantmen. They deliberately destroyed coal mines and factories, growing crops and cattle; this was done with a military purpose, for the sake of lessening the military strength of the enemy. So, too, the former distinction between contraband and free goods was obliterated. Whole nations were in arms, and all their resources were mobilized to carry on the titanic struggle.

This world conflict has taught us that war is not waged altogether by armies in the field. It is a contest between the industrial organization and technique of the opposing nations. It is not carried on by money alone, but by the total resources, material and human, that can be concentrated in a combined, productive effort. The World War gave the first opportunity for a complete application of the modern factory system of production in warfare. Methods of production have been completely revolutionized since the Napoleonic wars, the last general

European struggle, and the smaller conflicts since that time have not involved the complete utilization of the industrial resources of the nations engaged. In the late war, however, the whole productive energies of the belligerent nations were thrown into the fight. The production of raw materials and food, the manufacture of munitions, ships, airplanes, automobiles, clothing, and a multitude of other things, was carried on by the most efficient machine processes and large-scale methods, while the transportation of men and supplies was effected with the utmost expedition.

War has meant, therefore, the industrial organization of the nation, and victory has been dependent not merely upon the number of men in the field and on the seas, nor upon the strategy of warfare, but to an even greater extent upon the effectiveness of the industrial organization behind the lines. This is well illustrated by the complete collapse of Russia, which was inevitable even before the revolution of 1917, and which was due in large measure to the unwise withdrawal of large numbers of men from basic Russian industries, so that with enormous armies in the field it became impossible to furnish them adequately with munitions and other supplies. On the other hand, Germany's industrial reorganization was hastened by the fact that the cutting off of foreign supplies by the British blockade compelled an immediate shift from peace to war production on the part of many factories if they were to survive at all.

During the two and a half years prior to the entrance of the United States into the war, the industries of this country had been gradually organized upon lines of war production for the European belligerents. Certain of the industries that produced those commodities which were in greatest demand had reached a high point of efficiency, but it was on the whole a scrambling, competitive market in which the Entente Allies bought their supplies. There was as yet no coördination of effort, no coöperation or unity of purpose. This was true of production; the Allies early learned through costly experience the necessity of arranging a common purchasing agency.

The government was as ill-prepared and as unfitted as was private industry to assume the task laid upon it by the entrance of this country into the war. In our federal system of government, control of industry has remained for the most part with the states; at only a few points did the national government touch business and trade and exercise control over them, though the tendency in recent years had been in the direction of greater regulation. Beginning with the establishment of the interstate commerce commission in 1887, whose jurisdiction had been gradually extended so as to include telephone and telegraph, express companies, pipe lines, and other common carriers, as well as railroads, the authority of the national government had been steadily widened until it covered the inspection of food, the control of combinations, and currency and finance, and to a lesser extent was able to control competitive enterprise in other directions.

With the entry of the United States into the World War it became necessary to reorganize the industries of the country from a peace to a war basis. At once difficulties unsuspected and at times seemingly almost insuperable presented themselves. The obstacles to be overcome were enormous. The size of the country, the sectional and regional distribution of the industries, and the uncoördinated character of the transportation systems, presented serious physical difficulties. Almost greater were the difficulties of securing unity of sentiment and purpose in the polyglot nation. Public opinion had to be organized, as well as production. The political traditions of liberty and the economic habits of individualism threatened to prevent the coöperation that was necessary for the successful prosecution of the war. The economic virtues of peace were not suited to an effective war-time organization, and many people doubted whether a democracy could successfully cope with a military despotism. The outcome has shown, however, that although its movements may be slow, a democracy once moved to action carries with it an imponderable weight of spiritual power which more than offsets the discipline and obedience of a people trained under militarism.

It took England more than a year to learn that the necessary man power could not be secured for the army by voluntary enlistment, and that the necessary production of war materials could not be left to the voluntary and uncoördinated efforts of industry. Unfortunately, the lesson of England had not been thoroughly taken to heart by the people of the United States. It was necessary for war industry to be stimulated and expanded and for business in general to be readjusted to war requirements. To effect this reorganization the government relied at first upon the ordinary economic incentive of high prices. By affording an opportunity for large profits to the producers of war materials, it hoped to divert a sufficient number of establishments and labor into war production to yield the necessary supplies. In fact the program of the administration, which planned the spending of nineteen billion dollars in the first year, surpassed the productive capacity of the plants that could be diverted to these purposes.

In time, no doubt, such a policy would secure the necessary readjustment of business to war requirements. Capital and labor would be withdrawn from the production of nonessentials and these by reason of their scarcity would rise in price. At the same time the absorption of the surplus income of the people in taxes and subscriptions to bonds would leave them less to spend for such purposes. Such a shift of production is, however, slow at best, and it was opposed in this country, as in England, by the slogan of "business as usual" and by the expenditure on the part of wage earners of their unprecedentedly high wages for luxuries. It was evident that the volunteer system, whether for the raising of an army or for the mobilization of labor and capital in war production, was inadequate. During the first few months much was done; production was stimulated, and the foundations were laid for future work on a large scale. But there was great confusion, conflict of counsel, and little real guidance.

It was clear that coördination of effort was needed, and that this could be had only through the extension of government control. Unfortunately, however, no centralized administration