The Appropriation Act for 1914 au- were secured by making purchases thorized a naval transport to cost abroad. The establishment of an $1,850,000 and to carry 2,000 men, armor factory by the Government is and a supply ship, to cost $1,425,000; recommended as a means of preventthese vessels are now under construc-ing manufacturers from demanding tion. extortionate prices for armor plates. Guns and Armor.-The main bat-It is also proposed by Secretary tery of the latest American battleship Daniels to have several navy yards is composed of ten or twelve 14-in. equipped for the construction of menguns, mounted in the Pennsylvania of-war. and No. 39 in four three-gun turrets. The service test of these novel weapons and mounts is waited with some anxiety, but it appears that experiments on shore and in foreign battleships justify these innovations. Krupp guns of 14-in. calibre are 55 ft. long and weigh 62 tons. With a shell weighing 1,365 lb., they are said to have a muzzle energy of 73,722 ft.tons and to be capable of penetrating 43 in. of steel armor. The American guns are to be only 45 calibres long, but they may be expected to penetrate the heaviest armor at battle ranges. Austrian and Italian battleships are said to find no difficulty in operating three-gun turrets at sea.

Improved torpedoes having a range of three miles before losing a speed of 30 knots have become a factor in engagements at modern ranges. Torpedoes of this type are manufactured at Newport, but orders have to be placed abroad to keep up supplies; 375 of the 21-in. type were ordered in England in 1913.

THE FLEET

of this fleet of 25 battleships. Captain W. S. Sims commands the Atlantic Torpedo Flotilla, which includes 26 destroyers, 10 submarines, and two tenders. Numerous fleet auxiliaries are attached to the battleship squadrons.

Commands Afloat.-The Atlantic Fleet remained under the command of Rear-Admiral C. J. Badger throughout the year, and his successor has not been designated. Several changes have taken place among the four rearThe new battleships of the Ameri-admirals who command the divisions can Navy will use the heaviest armor plates available for their protection; and the diminution in the number of turrets, from six in the Arkansas to four in the Pennsylvania, and of funnels, from two to one, will favor the concentration of armor at vital points. In neither type are the 21 or 22 five-in. anti-torpedo guns protected by armor. The necessity of any armor involves increased tonnage, and improved processes of hardening steel are eagerly studied by constructors. It is claimed abroad that the plates hardened by the Schaumann process are decidedly superior to the Krupp armor in general use.

Bids for supplying armor for the Pennsylvania have attracted public attention. The Secretary of the Navy rejected the first bids submitted as not really competitive and called for a second set. Of these the Midvale Steel Company's offer of Class A armor at $440 a ton and turret armor at $504 a ton was accepted, with a saving of $111,874 as compared with the original tender. Similar results were obtained in purchasing steel for battleship No. 39. For projectiles and large steel castings reduced prices

The Atlantic Reserve Fleet, which includes most of the battleships of the second line as well as the monitors and cruisers of various types, remains under the command of Rear-Admiral W. B. Caperton. The Pacific Reserve Fleet is commanded by Rear-Admiral R. M. Doyle.

The Pacific Fleet, with Rear-Admiral W. C. Cowles in command, includes four armored cruisers, five destroyers, and four submarines. The Asiatic Fleet, still under the command of Rear-Admiral R. F. Nicholson, is made up of cruisers and gunboats of various types more or less fitted for the service in the Philippines and Chinese waters, and a small flotilla of destroyers and submarines is attached.

Operations. The landing of seamen and marines for service in foreign countries has not been required in 1913, but vessels have been detailed to

ports of the Gulf of Mexico and the | COMPARISON WITH FOREIGN Pacific to protect American interests NAVIES during the civil war in Mexico. The Estimates and Programmes. The length of their stay has been the sub-naval competition between Great Britject of diplomatic discussion, on the ain and Germany is continued. The ground that a fixed period for the latter country has a continued prostay of foreign cruisers is named in gramme for the increase of the fleet, the Mexican constitution. Command- but it is charged that the completion ing officers have not been warned to of German ships is accelerated and leave the ports, however, nor have the number of those in full commisthey received instructions from Wash- sion is increased. This record has led ington to heed any such warning. (See to an increase in the British naval also III, International Relations.) estimates, and new ships have been No naval review was held by the laid down on this account. The President in 1913, but the Secretary amended German plans will provide of the Navy and a delegation from 41 battleships, 20 large cruisers, and Congress cruised in the ships of the 40 small cruisers by 1920, with large Atlantic Fleet in order to witness flotillas of destroyers and submarines. battle practice at sea. On Oct. 25 For the British Navy a superiority of nine battleships and five auxiliaries 60 per cent. over the German tonnage sailed from Hampton Roads for a six is now officially accepted as the standweeks' cruise in the Mediterranean, ard, the proposal to build two ships expecting to return to home ports on for every one laid down by Germany being regarded as extravagant. First Lord of the Admiralty offered in 1913 to fix a "naval holiday" by agreement with Germany, the completion of ships being retarded to maintain the present relative force; but the proposal is not likely to have any practical effect. (See also IV, Great Britain.) France proposes to have 13 battleships by 1920, and Japan is building a fleet fit to meet a hostile force of 21 battleships. All programmes for construction are, however, liable to change, generally in the direction of an increased force.

Dec. 15.

Battle Efficiency. The combined figures of target and engineering practice give the relative standing of vessels after certain prescribed exercises have been carried out. Target practice includes the use of the whole armament, and engineering competitions take count of economy as well as speed steaming trials. For 1913 the pennant in the battleship class was awarded to the Idaho, Capt. W. L. Howard, 20 ships having competed. Of the 27 destroyers tested, the Whipple, Lieut. M. K. Metcalf, receives the highest mark. Only three submarines were able to conduct all forms of target practice and make all engineering runs, though 16 were given partial trials. Of these the pennant winner was the A-2, Ensign R. Bradford. The older battleships made a creditable showing in these competitions, and the results indicated a notable improvement over those of previous years.

The

Expenditures.-Unless the "naval holiday" proposed in England or some other arrangement for the reduction of armaments is generally adopted, a steady gain in expenditures may be expected. The United States, as shown in the following table, still stands between Germany and Great Britain in the schedule of naval expenditures, but spends less for new construction than either power:

Strength of the Principal Navies.-, regarded with favor in the British All tables making comparison of service. The ships of the 1912 pronaval strength must be used with gramme are to have eight 15-in. guns caution, but the accompanying statistics, compiled by the Office of Naval Intelligence at Washington, furnish useful data.

BIBLIOGRAPHY

XIII. ECONOMIC CONDITIONS AND THE CONDUCT OF

BUSINESS

S. S. HUEBNER

BUSINESS CONDITIONS IN 1913

A Year of Declining Business.— and uncertainty, occasioned largely by From the standpoint of general busi- numerous Federal and state investiness conditions the year 1912, as de- gations and the uncertain results of scribed in the 1912 issue of the YEAR the new tariff law and other legislaBOOK (p. 311), "was one of normal tion. business with a tendency toward improvement and with business men optimistic as regards the future." The reverse only can be claimed for the year 1913, practically all the leading barometers of trade indicating a marked decline instead of the very noticeable improvement of 1912, and the general tone of the financial and trade journals being distinctly pessimistic in character. Much of the improvement in business during 1912 was traceable to the splendid agricultural crop of that year, which established records in nearly all the important cereals and which furnished a great stimulus, not only to the transportation interests of the nation, but also to the many industries which are directly or indirectly dependent for the volume of their business upon the bounty of the soil. In 1913, however, the yield of the five leading cereals showed a decline of 19 per cent. as compared with 1912. Similarly, the indicated yield of most other agricultural products was comparatively small, the potato crop showing a decline of 25 per cent. as compared with 1912, the hay crop a decline of 14 per cent., and the indicated condition of tobacco standing at only 61, as compared with a tenyear average of 83. These facts are briefly enumerated to show that the condition of the principal mainstay of the nation's business enterprises, the crops, was such as naturally to exert a retarding influence on business in general. In addition to this factor, however, 1913 was also a year of doubt

The year represented a selling movement in which investors and speculators liquidated heavily. During the entire year business men marked time while awaiting developments and showed a disinclination to take the initiative in making purchases for the future or otherwise extending their business operations. The security market gave an exhibition of almost unprecedented dullness throughout the year. Sales of shares on the nation's leading exchange, the New York Stock Exchange, during the first nine months of the year showed a decline of nearly 30 per cent. as compared with the corresponding period of 1912, itself a comparatively dull year in this respect; while during the same period standard dividend-paying shares showed a decline on the average of 20 points. Bond sales on the New York Stock Exchange, comparing the first nine months of 1913 with those of 1912, likewise declined 30 per cent., and amounted to less than 60 per cent. of the sales in 1911, and only slightly over 37 per cent. of the sales in 1909. Meanwhile, during the first nine months of the year, the average price of representative bonds declined almost five per cent., or the equivalent of a whole year's interest return. New listings of securities on the New York Exchange also declined over 56 per cent. during the first nine months of the year as compared with 1912, and the showing is still worse if a comparison is made with the corresponding