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ECONOMICS
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MATERIALS FOR THE STUDY
OF BUSINESS
SOME ASPECTS OF RECENT BRITISH
ECONOMICS
THE UNIVERSITY OF CHICAGO PRESS
CHICAGO, ILLINOIS
THE BAKER. & TAYLOR, COMPANY
NEW YORK
THE CAMBRIDGE UNIVERSITY PRESS
LONDON
THE MARUZEN-KABUSHIKI-RAISHA
Tokyo, OSAKA, Kyoto, FUKUOKA, SENDAI
THE MISSION BOOK COMPANY
SHANGHAI
SOME ASPECTS OF RECENT
BRITISH ECONOMICS
-- £,
* ~ a
JOHN A. HOBSON
LONDON, ENGLAND
D. H. MAC GREGOR
ALL SOULS COLLEGE, OXFORD, ENGLAND
REGINALD LENNARD
WADHAM COLLEGE, OXFORD, ENGLAND
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THE UNIVERSITY OF CHICAGO PRESS
CHICAGO, ILLINOIS

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COPYRIGHT Ig23 By
THE UNIVERSITY OF CHICAGO
All Rights Reserved
Published May 1923
Composed and Printed By
The University of Chicago Press
Chicago, Illinois, U.S.A.
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AUC 7 23
PREFACE
These chapters on “Recent British Economics” were printed
originally in the Journal of Political Economy. The Table of
Contents shows the part of the work for which the author is
responsible. The material is now presented in book form in
response to repeated requests for reprints of the various chapters.
vii
TABLE OF CONTENTS
CHAPTER
I.
II.
III.
IV.
PAGE
BRITAIN’s ECONOMIC OUTLOOK IN EUROPE—John A. Hobson . T
BRITISH ASPECTS OF UNEMPLOYMENT—D. H. Macgregor . . 29
ENGLISH AGRICULTURE DURING THE WAR–Reginald Lennard . 56
ENGLISH AGRICULTURE SINCE THE ARMISTICE—Reginald Lennard 84
CHAPTER I
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE.
I
In an attempt to present the salient features of the British
economic outlook, two preliminary notes of caution are required.
The first relates to all figures used either for measurement or
illustration, especially all monetary figures. Not only are many
of these figures liable to changes so rapid and considerable as to
be inapplicable by the time this article is published, but all
attempts to evaluate them in terms of some standard of IgE4
contain a considerable margin of error, chiefly due to alterations
in the quality or character of the goods or services submitted to
measure. For this reason I shall dispense as far as possible in
this general Survey with statistical tables, substituting the judg-
ments of economists and business men as on the whole less fallible.
The second caution relates to a distinction to be drawn between
the immediate economic outlook of this summer of IQ22 and the
more continuous Outlook of any country as affected by the Great
War and the Bad Peace.
The immediate situation is described as “bumping along the
bottom of a long and deep depression.” The cyclical depression,
the signs of which were already beginning to appear in 1914, was
postponed for nearly seven years by the war, only falling upon
us at the close of 1920. The rapid withdrawal of the inflated
expenditure of the government synchronized with the collapse
of the Far Eastern and American markets whose long-postponed
demand had maintained our economic prosperity for the two
years following the armistice and with the failure of financial and
industrial restoration in Europe—these were the visible causes
of the British depression which has continued from that time to
* Printed originally in the Journal of Political Economy for August, Ig22.
I
2 SOME ASPECTS OF RECENT BRITISH ECONOMICS
this. Of the twelve million work people insured under the
Unemployment Insurance Act 14.4 per cent were unemployed
at the end of last April and the Unemployment Exchanges
registered an amount of unemployment reaching the figure of
two millions, if semi-employment is taken into due account.
These figures have been maintained with little alteration during
the past twelve months and, taken in conjunction with other
evidence, attest the deepest prolonged depression which our
people have suffered within the period of reliable records.
When compared with the active production of the pre-war
era the output, as indicated by employment, must be down by
not less than 20 per cent, and probably, making a minimum
allowance for shortening of hours and admitted slackness, by at
least 25 per cent. This applies to all the fundamental and staple
industries, extractive and manufacturing, as well as to the com-
fort and luxury trades, while the ranks of the unemployed are
reinforced by large contingents from the distributive trades. It
may be safely estimated that fully a quarter of the producing
power of British capital and labor has been standing idle for
the past year. The bookkeeping side of this occurrence is, of
course, sensational enough. Wholesale prices had mounted
during the war and the opening years of peace to the pinnacle
of June, 1920, from which time a rapid and continuous drop has
taken place until in June, 1922, the figures stood at Only 64 per
cent above IQI4. The fall of retail prices which began six months
later has not yet overtaken the wholesale fall, partly owing to
the normal lag, partly owing to strong combination on the part of
distributors. With falling prices, aided by unemployment, has
come a large and continuous fall in wage rates. This process,
delayed in its beginning, is still proceeding and the Labour Gazette
for last June recorded a drop of nearly £2,400,ooo in the weekly
wage-bill of labor since the beginning of the year.
Accepting the Board of Trade index for working-class cost
of living, the real wages of skilled and unskilled labor have fallen
BRITAIN's ECONOMIC OUTLOOK IN EUROPE 3
in general a little below the pre-war standard. Regarded from
the standpoint of the employer and capitalist, the immediate
situation is far worse. For most manufacturers and merchants
the last year and a half has been a most disastrous period.
Heavy losses on the year’s trade, attributed primarily to rapid
shrinkage in the value of all stocks, and aggravated by high
wages, reduced hours, lowered productivity, and canceled orders,
have been the general rule. In Lancashire and Yorkshire textile
firms of the highest reputation have been reduced to temporary
insolvency, and only kept from public failure by arrangements
with the banks and other large creditors. The same is notori-
ously true of other great industries. In fact, the general preva-
lence of the disease has led to a suspension of the enforcement
of legal contracts by common consent for fear of the consequences
if important firms were allowed to collapse. The main concern
of most business men has been to “carry on.” The large war and
pre-war profits (not taken in taxation) have for the most part
evaporated, or at any rate are temporarily submerged. The
business world is waiting anxiously rather than confidently for
such early return to normality as the play of economic forces, On
the one hand, and the eccentricities of statesmen, on the other,
may permit.
That there has been so little of a panic feeling in spite of the
distressing circumstances is due in no small measure to the Con-
fidence and real strength of our banks and finance houses, which
even from the standpoint of earnings have not been great Suf-
ferers from the present strain. For in bad times finance has its
compensations. Each of the three big London discount houses,
we are informed, made larger profits in 1921 than in 1920, due
largely to a profitable dealing in short-dated government bonds
and treasury bills, and to an absence of depreciation in these and
other securities. Though all the leading banks (except the Lanca–
shire and Yorkshire) showed a lower profit for 1921 than for 1920,
the conservative habit of providing for all imaginable contin-
4 SOME ASPECTS OF RECENT BRITISH ECONOMICS
gencies enabled them to maintain the previous year’s distribution
of dividends by means of a reduced appropriation to reserves.
A conception of the general steadiness of our banking and
monetary situation during an exceedingly disturbed year is
perhaps best conveyed by the following table, with two notes
furnished by the financial editor of the Manchester Guardian.”
December 23,
Ig2O
December, 1921
Bank notes in circulation. . . . . . . . . . . . . . . . . . . . . .
Currency notes in circulation. . . . . . . . . . . . . . . . . . .
Total circulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deduct bank notes held against currency notes. . .
Net circulation
Gold in Bank of England. . . . . . . . . . . . . . . . . . . . . .
Gold in currency notes reserve. . . . . . . . . . . . . . . . . .
Total gold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage gold to notes. . . . . . . . . . . . . . . . . . . . . . .
Year’s decrease in note circulation. . . . . . . . . . . . . .
s s tº e º e º e º 'º e º ºs e e º is e s s is a e º e s e s tº * *
£134,582,ooo
368,23 I, Ooo
5oz,8I3,ooo
I9,450, ooo
483,363, ooo
I27,76O,OOO
28,500,ooo
I56,26o,ooo
32.3 per Cent
II per cent
£I26,671,000
324,429,000
45I, IOO,OOO
I9,450,000
431,656,ooo
I28,43 I,ooo
28,500,ooo
I56,93I,ooo
36.4 per cent
e & e º ſº tº º & © º ºs º º
Two points may be noted in connection with this table. In the first
place, the gold holding which in 1920 had been largely augmented by the
concentration of the reserves previously held by the joint-stock banks
received only an insignificant increase in 1921. Further, the contraction
in the currency notes circulation rendered the maximum fiduciary issue
provision quite ineffective. This for 1921 was fixed at £317,555,200,
which was the actual fiduciary circulation in 1920. This figure was never
approached, and in consequence no further transfer of Bank of England
notes to protect the currency notes issue was necessary, the total So held
remaining at £19,450,000 throughout the year.
Writing in the early summer of 1922, I find a spreading dis-
position to believe that the depression is drawing to a close.
Apart from the endeavor to induce a favorable psychological
atmosphere, there are certain evidences of a slight recovery in a
number of our staple trades. More orders are trickling in. The
textile, leather, chemical, and some branches of the metal trades
are less slack. Wages are everywhere falling, and with reduced
costs of production and some abatement of the burden of taxa-
* Manchester Guardian Commercial Supplement, January 26, 1922.
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 5
tion, a little spirit of adventure is coming back into business
circles. The soundest reason for anticipating some early
recovery is, however, the knowledge that the gluts of raw
material and manufactured goods which brought the depression
have by this time been nearly dissipated and no longer block the
avenues of production. Related to the fact that wholesale
prices seem to have touched bottom and that some rises are indi-
cated, this diagnosis of the situation is already beginning to
inspire hope and even to stimulate production.
But nobody with any understanding of the new economic
situation produced by the war can look forward to a revival of
British trade on pre-war lines. The new conditions which affect
our foreign trade, our finance, and our internal industrial rela-
tions, require careful consideration before we can form any
judgment upon Britain’s lasting recovery and progress. The
old economic determinism apparent in trade cycles is broken by
these new conditions. Let us glance first at our new position in
foreign trade.
Before the war our huge balance of visible imports over
exports was met by “invisible exports” in the shape of shipping,
banking, and financial services, and interest on foreign invest-
ments, amounting in all to between £300,000,ooo and £400,ooo,
ooo per annum. This included interest upon foreign investments
estimated to amount to some £4,000,ooo,000. We did not actu-
ally receive the whole of the interest on this sum, but left a
Substantial part of it to accumulate in re-investment, thus
increasing year by year the quantity of our annual claims upon
the wealth of the world, a contribution to the development of
backward countries in which our growing population, with in-
creasing dependence on foreign sources of supply had a literally
vital interest. For Britain produces within her own area a
constantly diminishing proportion of her necessary foods and
industrial raw materials. Before the war we were importing
more than three-quarters of our wheat supply, approximately
6 SOME ASPECTS OF RECENT BRITISH ECONOMICS
one-half of our aggregate cereal and meat Supply, without
reckoning those tropical and semi-tropical foods and materials
which furnish so large a part of the ordinary comforts and luxuries
of all classes. Our wheat production per head of our population
was far below that of any other European country. France grew
five times as much, Italy and Austria nearly three times as much,
even Germany (far less dependent upon wheat) 50 per cent more
per head. This dependence upon overseas supplies has been
increasing rapidly. Within the last three decades of the nine-
teenth century we nearly doubled our imports of wheat per head
and quadrupled Our imports of meat.
The trade statistics for 1913 showed three-fourths of our
imports consisting of foodstuffs and raw material. But of the
remaining quarter, officially classed as “wholly or mainly manu-
factured,” the greater part consisted of tools or other finished or
half-finished articles which entered as “costs” into some English
branch of industry or commerce. Now there is no ground for
believing that the post-war situation has lessened our depend-
ence upon foreign Countries for these necessaries of life and trade.
During the war some appreciable increase of our home agricul-
tural output was obtained by patriotic effort, public bounties,
and legislative coercion. But these emergency measures have
dropped and left us as dependent as before on overseas supplies.
More scientific agriculture and improved land tenure, with
brighter village life, may do something to stem the tide of growing
dependence, but cannot really cope with the enlarged material
needs of Our still growing population.
In point of fact the war has left us considerably more depend-
ent upon foreign trade. In using this term I do not distinguish
trade with our empire from that with other countries. For that
distinction has only a political and scarcely any economic signifi-
Cance. Apart from Some quite negligible tariff concessions, the
net effect of which is to interfere detrimentally with the most
advantageous flow of trade and therefore to increase our diffi-
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 7
culties, buying and selling within the cover of the British flag
carries the same economic implications as buying and selling out-
side that flag. Now the damaged financial position in which
Britain finds herself requires her to buy more and sell more
than before in foreign markets. A large proportion of the
“invisible exports” by which before the war we paid for our sur-
plus of visible imports has disappeared. It is probable that in a
normal year Considerably more than £200,000,ooo was due to us
as interest upon Our foreign investments, besides large payments
for freights and financial services. Though it is not possible to
Say exactly how much of our foreign holdings has been lost, it
Cannot, having regard to our public and external indebtedness
of Some £1,000,000,000 and the disposal of large portions of our
American and other Securities, be put at less than a sum of
between £1,500,000,000 and £2,000,000,ooo. The debts owed
to us by Our Allies which might about compensate this loss can-
not be regarded as real assets, at any rate so far as our present
Outlook is concerned, Whether we have lost anything in the
value of our shipping services, it is too early to determine,
though the temporary shrinkage of trade and of freights has
greatly reduced the present yield from this source. Some tem-
porary, and probably some permanent loss has been sustained by
London as the banking and financial center of the world’s
business by the fact that New York stands as the principal free
market in gold while the United States has to a considerable
extent displaced Britain as the world creditor.
The immediate bearing of these changes upon our commercial
situation may be summed up by saying that we are required to
find an increase of exported manufactures to the tune of over
£Ioo,000,000 a year, in order to pay for the imports we require.
There is, of course, a qualifying circumstance. Before the war
we invested abroad each year a sum varying from £IOO,OOO,Ooo
to £200,000,ooo. That may be said to have represented Our net
surplus as a nation from foreign trade. This investment was a
8 SOME ASPECTS OF RECENT BRITISH ECONOMICS
provision for our future, going to develop foreign countries for
the enlarged markets we should need. If we suspend, or reduce
to insignificant proportions, this provision, it is possible that we
can still just pay our way. But by doing this we remit the deter-
minant economic influence which as a nation we have hitherto
exerted upon the development of backward countries, including
those within our own empire. In bad times we shall be put to
straits to buy abroad our necessary foods and raw materials
without loosing further quantities of our reduced fund of foreign
securities.
These plain facts make it evident that, if Britain is to retain,
substantially unchanged, her pre-war commercial and investment
policy, she must increase to a considerable extent her exports.
For not only must she substitute visible for invisible exports to
the extent of £Ioo,ooo,000 a year, or more, but the production of
these increased exports will itself involve larger imports of raw
materials which, in their turn, must be paid for by exports.
Here appear two related problems upon the solution of which
the whole issue of our economic future seems to hinge, viz.,
productivity and foreign markets. As a nation we seem to
require to raise considerably the volume of our output of wealth,
and to find overseas markets for a large part of this increase.
The two problems manifestly interact. We cannot increase the
productivity of our industry unless we have reasonable security
of marketing the increased product, to a large extent abroad, at
profitable prices. On the other hand, this expansion of markets
is impracticable except on the assumption of greater productivity.
But this interdependence of supply and demand does not invali-
date the separate consideration of the two approaches.
In Britain at the present time preachers of productivity
abound. Unless production is raised to a higher level than the
pre-war level, it is impossible to see how our economic system is
to support the new demands of the factors of production and the
State. Now our present production, as we estimate, lies at
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 9
Something like 25 per cent below pre-war level. Even were
reviving trade to Suck up unemployment to the normal limit of
good trade, it is generally admitted that shorter hours and
slacker work would leave us with a lower than the pre-war output.
But the higher rate of interest for new capital involves, as time
goes on and brings a larger proportion of capital within this
claim, an increased payment of real income for the use of capital.
Labor, On the other hand, is generally unwilling to work unless
a larger share of the product is paid to it in wages. This is in a
large measure due to the higher standard of consumption to
which most classes of workers became habituated during the war.
This higher standard was not registered in higher real wage
rates, for money wages usually lagged considerably behind the
rise of retail prices. Labor statisticians, confining their attention
to the purchasing power of money wage rates, arrive at the
strange and false conclusion that “throughout the war practically
all workers suffered a decline in standard of living, even counting
the advances and bonuses secured.” Now, apart from certain
foods and other articles short in supply for all classes, and occa-
sionally unattainable, it is notorious that the general standard of
almost all workers was higher during the first three years of the
war than ever before. This was attested, positively by masses
of evidence relating to working-class expenditure, negatively by
the fall-off in poor-law and other eleemosynary aids, by reduced
child mortality, and other tests. In a word, wage rates were no
sufficient measure of standards of living in times when full
employment was available for women, children, and old persons,
and when earnings were supplemented largely by soldiers’ allow-
ances, billeting, and other supplementary sources. The better
feeding, clothing, and amusement fund furnished to most of the
civilian population under these conditions, lasted long enough
to produce a new standard of requirements. The psychology
of this situation, coupled with the nervous reaction from War
* Prices, Wages, and Profits, by the Labour Research Department, p. 39.
IO SOME ASPECTS OF RECENT BRITISH ECONOMICS
experience, is mainly responsible for the new unrest attending
the efforts of employers during the past year to effect reductions
both of money and of real wages. This is not the place to enter
On a discussion of the new labor problem thus presented. I men-
tion it only in its bearing on the problem of productivity, to
indicate that labor, like new capital, appears to ask for a larger
share out of a reduced product.
Finally, there comes the enlarged demand of the government
in the shape of taxation. The estimates presented for the fiscal
year beginning April 1, 1922, showed a reduction in expenditure,
as Compared with the previous year, of about £200,000,ooo,
obtained as the result of a clamorous demand for public economy.
They stood as follows:
ESTIMATES FOR 1922–23
Ordinary expenditure. £823,846, ooo Ordinary receipts. . . . . £820,775, Ooo
Special expenditure .. 61,223, ooo Special receipts. . . . . . Qo, OOO, OOO
Contingencies. . . . . . . 25, OOO, OOO
£91o, O69, Ooo £910,775, Ooo
Of the £910,000,ooo revenue, £181,000,ooo is described as non-
tax revenue, a half of which is the estimated yield from sale of
remaining war stores, three-fifths of the remainder being the
proceeds of the postal, telegraph, and telephone service, heavily
weighted with high charges which economically must rank as
taxes. The avowed tax revenue for the year is £729,000,ooo.
To test the pressure of taxation we may compare this with the
£160,000,ooo raised in 1913–14. Taking this pre-war revenue
at a premium of about 8o per cent (to meet the depreciation of
money today) we get a pre-war tax revenue of £290,000,000,
Comparable in terms of real wealth with the £729,000,ooo for
this year. A further comparison of items shows that the main
Stress at present falls upon the income tax, inclusive of Super-tax,
with customs and excise. The estimate of income tax for 1913
was £50,000,000 (£90,000,000 in present money values), that
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE II
for the current year is £329,000,ooo. Customs and excise for
1913 stood at £74,000,000 (£133,000,ooo, at present values),
compared with £273,000,000 for the current year.
In other words, while taxation in terms of real wealth taken
from taxpayers is about two and One-half times as great as in
1913, the estimated yield of income tax is three and one-half
times as great, the yield of customs and excise a little more than
twice. If we bear in mind that these increased amounts of
wealth are claimed for the state from an aggregate national
income reckoned as less by some 25 per cent than the 1913
income, we realize that incentives to industry and productivity
may be seriously disturbed. But in evaluating this disturbance
we must not exaggerate the evil by assuming that the whole of
this enlarged tax revenue is taken away from industrial uses, to
be consumed by governmental services. Out of the total revenue
of £911,000,ooo for this year, no less than £335,000,ooo is applied
to service of the national debt, the whole of this (with the excep-
tion of the £25,000,ooo for interest to America) going into the
pockets of British bondholders. In addition to this, the sum of
£90,000,ooo goes, as war pensions, back into the year’s income of
British citizens and taxpayers. The net real reduction of pri-
vate incomes thus imposed by this taxation is £511,000,ooo.
This consideration does not, of course, satisfy the taxpayer,
who is not consoled for having to pay a five shillings income tax
by the reflection that some two shillings come back to him, or
to Some fellow-citizen, in interest on war loan or as pension.
But when the tax burden is cited as Crippling trade and stopping
the recovery of industry, the fact that so large a sum is simply
transferred from the taxpayer to the bondholder and so far
involves no diminution of the amount available for saving or
spending, is highly relevant. But, when full allowance for this
large charge is made, it remains true that the state takes a
considerably greater share of the real income for its services than
was the case before the war. The Supply Services which then
I2 SOME ASPECTS OF RECENT BRITISH ECONOMICS
cost £158,000,oooo now cost £547,ooo,000, an enormous advance,
even if the former figure be raised 8o per cent for modern values,
and the £90,000,ooo of pensions, included in the £547,000,ooo, be
deducted. How far this higher expenditure on public education,
health, and other social services may be conducive now or
presently to increased economic productivity, it is not possible
to estimate, though this consideration should not be ignored.
This brief analysis of the new claims of Capital, Labor, and
the State, upon the product, is directed to enforce the growing
need of higher productivity, i.e., of a real income adequate to
meet these combined demands. Our present income, or even a
return to our pre-war income, is manifestly insufficient. The
failure to realize this fact, especially on the part of Labor, is a
leading factor in the impotent psychology of industrial unrest
from which the country is suffering. In order to meet the joint
demand of Capital, Labor, and the State, or otherwise to main-
tain our growing population in a state of civilized living and
contentment, our production must be largely increased. This
is not primarily a matter of access to larger natural resources,
or more labor power, or the discovery of new processes. It is a
matter of utilizing more adequately the technology and the
administrative knowledge already available. Even the hasty
improvisation of our war economy disclosed the enormous
amount of waste in the Ordinary Operation of our economic sys-
tem. In the application of the physical Sciences to industry, in
the psychology of business Organization, in the economics of
Standardization and of mass production, our business men have,
perhaps, more to learn than those of any other advanced indus-
trial nation. For our long lead in many branches of industry
and Commerce has kept us easy-going and unreceptive of new
knowledge. If all, or the bulk, of the firms engaged in any
industry could be brought up to something like the level of the
best-equipped and organized firm, our productivity would be
enormously enhanced. This is largely a question of access to
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE I3
information and of enterprise. Trade associations, chambers
of commerce, industrial Councils, trade boards, can all contribute
to this process of enlightenment.
The new recognition that more brains and energy are needed
in order to meet the requirements of the post-war situation is
gradually spreading among our business classes. The pre-war
boom and the period of war profiteering, in which big money
was made easily, exercised a demoralizing effect on large numbers
of business men. A more serious and a more “scientific”
interest in business is beginning to make way. As a part of this
reorientation of the business mind comes a new attitude toward
the claims of Labor. The first tendency of our business men
has been to blame the low productivity of industry upon the
slackness or “ca' canny” of the workers. This sentiment is
today more prevalent than ever among the majority of the
employing and professional classes and is sustained by a large
body of undeniable truth. The needed rise of productivity is
unattainable unless the mass of the organized workers will
recognize that it is to their interest to work better and harder.
We need not dispute, for it is impossible to decide, how far the
inefficiency or slackness of employers, how far of employees,
is responsible for the present low productivity. More and better-
directed energy is required from both.
But, whereas a growing number of employers recognize this
truth, it makes little way at present in labor circles. It is well
to understand why. There are two chief obstacles to its accept-
ance. The first is the common belief that there is plenty of
wealth produced to enable everybody to live comfortably, if it
were properly distributed, and that higher productivity of labor
would be absorbed in higher profits. The second is the fear that
working harder and producing more means fewer men employed
upon a job, or the completion of a contract earlier than would
otherwise happen, with the result of an ensuing period of unem-
ployment. The first consideration is really vital. For it signi-
I4 SOME ASPECTS OF RECENT BRITISH ECONOMICS
fies that better production is inseparable from better distribution
of wealth. A permanent incentive to keep down productivity
has been the suspicion of profiteering. That suspicion, like most,
feeds on secrecy and unreason. The Ordinary worker thinks he
is exploited by employers. He is not a socialist, a bolshevist, or
any sort of “ist,” but he is by nature a bit of a grumbler who
objects to giving more than he thinks he gets. He sees his
employer living in a large, expensive way, and hears of large-
sounding sums distributed as profits or dividends. He knows
there is a wealthy leisured class living in luxury “upon his labor.”
Labor leaders and socialist orators give a little shape and added
feeling to this normally vague discontent. It is not dispelled
by able and elaborate disquisitions by Professor Bowley or Sir
Josiah Stump, who prove quite convincingly that if every family
in England were put upon a rationed income of £250 a year, the
whole available surplus income from British industry, after this
were done, would not add more than some five shillings to the
weekly income of each family.
That this is the substantial truth there can be no doubt.
But the illusion of the amount of surplus wealth represented by
the showy extravagance of a wealthy class, forming perhaps 2
per cent of the nation, is not dispelled by reasonable statistical
analysis, which, were it read, would not convince, in the form in
which it is presented. If honest and intelligent labor leaders
would indorse and press home the issue of an insufficient product,
something substantial might be done to remove this obstacle to
higher productivity. But it would not suffice, unless accom-
panied by schemes of improved distribution. For, exaggerated
as the grievance is in its dimensions, it remains true that large
bodies of unearned wealth, unnecessary as incentives to effort,
and socially detrimental in their expenditure, are drawn by small
privileged classes. The economic system does not work with
convincing equity in the apportionment of the product, and this
inequity is a contributory cause of low productivity of labor.
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE I5
It is the recognition of this that gives point to the new
experiments which are on foot for reconciling Capital and Labor
in the several businesses and industries by Schemes of representa-
tive control and by policies of profit-sharing, bonuses, or co-
partnership. Only a minority of employers, however, as yet
recognize clearly that the age of autocratic government is passing
from industry as from politics, and that due representation of all
interests is taking its place. Works committees, trade boards,
conciliation boards, industrial councils, are experiments in this
direction, and a growing number of firms are willing to have
workmen on their directorates. The present difficulty, illus-
trated by recent troubles in the engineering trade, consists in
differentiating between the issues of control in which Labor has
a reasonable claim to a determinant voice, and those which,
like questions of finance and marketing, must rest with the
management. This difficulty can only be overcome by a policy
which identifies the lasting interests of the employees with those
of the employer, by a process of incorporating the former in
the business as definite participants in its success or failure.
Participation in profits, however, is one but not the only method
of such incorporation. There are many businesses whose me-
chanical or large-scale operation does not easily lend itself to
profit-sharing as an incentive. Organized workers often look by
preference to a policy of standard wages and hours, with Security
of tenure and provision for unemployment.
It is, I think, this last issue that is most important in relation
to our primary problem of productivity. Workers will not put
forth their best powers of work unless their continuous livelihood
is secured. Leakage between jobs and seasonal slackness are
notorious causes of slow work in the building and many other
trades. A trade depression, like the present, is a liberal educa-
tion in “ca’ canny,” for slackness of orders keeps before large
bodies of men the constant fear of dismissal when the present
job is ended. It is useless to argue that, in the long run, such
I6 SOME ASPECTS OF RECENT BRITISH ECONOMICS
slacking means less employment. The evil of the present system
is that most men cannot afford to take long views. It is for this
reason that schemes for throwing upon the Several industries
(together with some public contribution) the responsibility of
making adequate provisions both for short and long spells of
unemployment, are recognized as a first step toward higher
productivity.
II
But while increased national productivity is essential to our
maintenance and progress, another Condition equally essential
looms very large on Our horizon. It is the expansion of the
market. The theoretic contention that (apart from misapplica-
tion of productive power) there can be no such thing as overpro-
duction, cuts no ice either among business men or workers. For
experience teaches them that industrial machinery is always
tending to produce staple commodities at a faster rate than the
market will take them off. This normal tendency toward over-
production, attested by the cyclical depressions which are its
inevitable consequence, is the chronic Cause of slacking both on
the part of capital and of labor. For “regulation of output.”
for the maintenance of “reasonable prices,” which is the central
fact of the policy of trusts and combines, is in substance identical
with labor’s “ca' canny.” This normal trouble of a restricted
market has, of Course, an important bearing upon Britain’s
present economic outlook on the world. For the present depres-
sion shows this normal trouble aggravated by the financial and
commercial dislocation of the world-market, which has been the
aftermath of the Great War. Britain, as we see, is more vitally
concerned with Securing large, free, foreign markets than any
other country. Our interest in the peace, Safety, and economic
recovery of the world is unique. Had not our statesmen been to
so large an extent “economicilliterates,” they would have thrown
their whole weight into the reconstruction at the earliest possible
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE I7
minute of the broken industrial, commercial, and financial
machinery of Europe as Soon as the war was ended.
Economic statecraft would have avoided at least three fatal
blunders. The first is the economic-political dismemberment of
Austro-Hungary which left her a rotting carcass in the European
system. Second Comes the boycott of Russia, accompanied for
two years by a Squandering of vast sums of money and men by
the Western Powers in the work of further injuring the economic
resources of that ill-governed and impoverished country. Third
comes the fastening upon Germany of an immeasurable load of
reparations, instead of a fixed, practicable sum. There are, of
course, other troubles of a similar nature embodied in the Peace
Treaties and in the post-war policy, the larger bearing of which
upon our economic situation has gradually become evident.
Britain requires the peace and economic recovery of Europe
because only in this condition is it possible for her to obtain the
expansion of markets which renders her higher productivity
available. She must increase her foreign markets, and this
increase is impossible unless Europe obtains a higher and reliable
purchasing power.
This statement, as it stands, is liable to some misunderstand-
ing. It may seem to suggest that Britain must sell her increased
product exclusively, or mainly, in Europe. This, of course, is
by no means the case. A portion of the increased productivity of
which our industry is capable, should be met by the expansion of
our internal market. A higher standard of comfort for the mass
of our working population is, indeed, as we recognize, one condi-
tion for the achievement of higher productivity. A larger and
more regular consumption of staple commodities would be a
strong bulwark against trade depression in our standard Condi-
tions. But this is vitally associated with an enlargement of
external markets both for buying and for selling.
Here it may be well to put in evidence some statistics measur-
ing the importance of the slump of foreign trade in its bearing
I8 SOME ASPECTS OF RECENT BRITISH ECONOMICS
upon our economic situation. The best measure of the relative
importance of our export to our home trade is given in the
Census of Production (1907) where 37 per cent of the total indus-
trial product of this nation is assigned to export trade, 38 per cent
of the product of our mines and quarries, and 31 per cent of Our
“aggregate output.” Thus we see that virtually one-third of
the work done in this country on production of material wealth
has been for export trade. Now of our total export trade in 1913,
amounting in value to £525,000,ooo, no less than £205,000,ooo,
or two-fifths, was European. Germany was by far our largest
European customer, our largest foreign customer save India.
Her purchases in IQI3, if allowance be made for an unascertained
part of the trade ascribed to Holland and Belgium, must have
amounted to about one-quarter of our European market. If we
take into account the 1913 trade with Austro-Hungary, Turkey,
Bulgaria, and Russia, that group of countries accounts for
about one-third of our whole European trade. Now the failure
of the industrial recovery of Europe, especially of Russia, and
the artificially stimulated export trade of Germany have gravely
injured our export market. But though that injury proceeds
from European conditions, its area is by no means confined to
Europe. The indirect damage done to our export trade with
non-European countries, owing to the losses of European mar-
kets sustained by those countries, is at least as grave. The Col-
lapse of the demand for Asiatic, African, and other tropical and
Semi-tropical products on the part of European peoples has
brought a large shrinkage in their purchase of our manufactures.
Such are the familiar phenomena of roundabout trade, so signally
ignored by political peacemakers.
So much for the export side of our national accounts. But,
as we cannot sell abroad as much as we desire, we cannot afford
to buy abroad. And here, as we have seen, is the crux of Our
situation. We must buy abroad in order to exist, therefore we
must sell. No other great country feels the same pressure
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE I9
of necessity. How grave this pressure is appears from our
balance-sheet of last year, and our prospective balance-sheet for
this.
If our foreign trade for IQ21 is revalued on the basis of the
prices prevailing in 1913, the Comparison works out as follows:
VALUES ON BASIS OF 1913 PRICES
(ooo's omitted)

IQI3 Ig2I
Imports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £768,735 £570,912
Exports (British goods). . . . . . . . . . . . . . . . . . . . . . . . 525, 254 261,647
Exports (Foreign and Colonial). . . . . . . . . . . . . . . . . Ioo, 567 85, 612
The excess of imports over exports here disclosed is a new and
disconcerting feature in our economic outlook. For unless we
can substantially reduce that excess by expansion of our visible
and invisible exports, we are in a thoroughly unsound condition.
The visible balance was much worse for 1920 than for IQ21, but
it was redressed by the inflated shipping earnings of that year.
The following is an approximate trade balance for 1921 (given
in millions of pounds), in comparison with 1920 and 1913.

I92I I92O IQI3
Exports of merchandise. . . . . . . . . . . . . . . . . . . . . . . 8Io I, 557 635
Shipping earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7o 34O IOO
Finance and insurance earnings. . . . . . . . . . . . . . . . 3O 5O 3O
Income from investments. . . . . . . . . . . . . . . . . . . . . I2O I 2G) 2OO
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I, O3O 2, oë7 965
Deduct imports. . . . . . . . . . . . . . . . . . . . . . . . . . I, o&T I , 933 769
Final balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . —57 +-I34 +I96
Though the returns of recent months show some improvement,
the need of expanding foreign markets, and an accompanying
expansion of our shipping and financial profits, are of permanent
importance in their bearing on our policy of economic and financial
2O SOME ASPECTS OF RECENT BRITISH ECONOMICS
reconstruction. Economists, financiers, and enlightened business
men in Britain are virtually unanimous as to the essentials of that
policy, though there are differences upon methods of attainment.
We see Europe strangled in a coil of troubles, and hampering
world-recovery by its helplessness. Almost every nation suffers
from inflation, instability of exchanges, extravagance in arms and
doles, failure to balance budgets, crushing taxation, tariffs and
embargoes, public indebtedness, and reparations. These interact
So as to produce the appearance of a vicious circle, a conception
which is apt to exercise a paralyzing influence upon the will of
politicians. It seems politically impossible for a country in
the case of Austria or Poland to stop inflation. It seems idle to
Call on Germany, or even France, to balance her budget on the
existing basis of obligations. Reduction of armaments in so
dangerous a Europe seems impracticable to Continental powers.
Tariffs appear imperative in order to stop foreign goods from
low exchange countries from flooding the markets of high
exchange countries, and so the natural process of stabilizing
exchanges is made impossible.
This entanglement, however, is not an endless chain. There
is a quite definite point of entrance, a prime condition for the
Success of the general financial policy, adumbrated, first at Brus-
Sels two years ago, and lately at Genoa. We can only unravel
the coil by seizing firm hold of the reparation end.
The priority claim for the reparation settlement is not merely
One of political emergency, critical as that may be, but one of
economic rationale. Let the Allies once agree upon a drastic
reduction of the terms of the London ultimatum, accompanied
by a remission of British claims for pensions and allowances. Let
them recognize that at present Germany has not, and cannot
attain by any improvement of her taxing system or cancelment of
Subsidies, any considerable export surplus out of which to make
a large payment in gold marks. Let them realize that the pro-
vision of material for the repair of the devastated areas, with
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 2I
arrangements for Some ascending Scale of monetary payments to
begin as Soon as Germany attains a genuine trade surplus, is the
only method consistent with and contributory to the restoration
of Europe, and the recovery of the nations stricken with famine
or languishing in trade depression.
How will the healing influence of a sound settlement of
reparations work upon the other maladies P. It will operate in
some way as this. A total payment, reduced to something like
the Keynes figure, with a moratorium for the monetary portion,
would greatly facilitate the process of real restoration in the
devastated areas, because on those conditions it would be feasible
to float upon the money markets of the world those reparation
bonds handed by Germany to the Allied governments which in
present circumstances, can have no market value. The total
cancelment of the unpaid C. Bonds and the easing of the terms
for the payment of the A and B series are essential to enable
France to carry out speedily and advantageously the actual work
of repair. In other words, the real value and availability of a
greatly reduced sum for reparations would be far larger than
belong to figures known to be inflated and impossible. The
unreality of her present hopes, and of the false expectations built
On them, cannot be to the real advantage of France, while it visi-
bly aggravates the insecurity of the whole European situation.
The next beneficent reaction would be the slowing-down of
the artificially stimulated flow of German export goods into all
the markets where our goods would normally compete with theirs.
This, in itself, would do something for the recovery of our
export trade, especially when the stoppage of further German
inflation, with its accompanying reduction of real wages, is taken
into account. For so long as Germany is forced to find these
large sums in gold marks, she must go on meeting her internal
bills by an ever cheapening money, in order to drive down the
costs of labor to a point enabling her to undersell foreigners in
their own and neutral markets. Only by thus enabling Germany
22 SOME ASPECTS OF RECENT BRITISH ECONOMICS
to stop inflation can she be brought to balance her budget, con-
serve her sound foreign money for the supply of her own material
needs, and cease the costly policy of subsidies by which she has
broken the full shock of inflation upon the weaker classes of the
nation. The more pacific atmosphere produced by a reparation
settlement which won the reasonable acceptance of Germany
should immediately react in solid savings upon armaments, in
which France and her Continental satellites would be chief
beneficiaries. The withdrawal of forces from the occupied areas,
a corollary of this new policy, would leave a larger portion of the
payments made by Germany available for the real work of
restoration, and French statesmen might be enabled to meet
their internal obligations without undue recourse to borrowing.
The next reaction of the reparation settlement would be the
establishment of freer commerce. This would come through
the removal or reduction of the tariffs and export embargoes
which every state has thrown up to safeguard its industries
against the surging tide of uncontrolled trade. Just in propor-
tion as these barriers are thrown down and trade flows freely from
one country to another, can a parity of price levels be attained.
In no other way is that stabilization of the exchanges which we
need as the basis of confidence in business life attainable. Only
thus can we, or any other Country, hope to obtain any substantial
relaxation of the burdens of taxation. For only thus can the
burden be lightened at both ends by the sensible reduction of
expenditure on armaments. Trade once stimulated, rising
prices will be reflected in higher money incomes and an automatic
lightening of the great fixed charges for interest and pensions
which constitute so big a portion of our annual expenditure.
Cut down the indemnity, cancel inter-Allied indebtedness,
stop inflation, enable states to pay their way, secure stability of
external payments, reduce governmental waste, and ease taxa-
tion. By these means shall we secure a body of conditions
favorable to a revival of trade which shall suck up unemployment
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 23
in every country. Moreover, we enable peoples and their
governments to concert in common the further plans needed for
securing the peace and progress of a world taught at last, and by
terrible experience, to realize its unity. For only with the begin-
nings of economic safety and revival in Western Europe shall
we get the frame of mind and the external resources necessary to
evoke that larger policy of co-operative credit needed to meet
the case of stricken countries such as Austria and Russia, too
feeble to respond to the normal economic stimuli. Only by an
emergency policy of international credits, furnished on a larger
scale than hitherto contemplated, can these sick countries be
restored to the world which their sickness must otherwise con-
tinue to hamper and perplex.
This brings me to the dawning recognition of the necessity
of an international understanding and Co-Operation in Credits
and currency which is perhaps the most important outcome of .
post-war economic experience. Had it been politically practi-
cable at the Peace to endow a finance committee of a completed
League of Nations with the emergency power of rationing Some
international fund of credit (a continuation and expansion of
the allied system in the war) during a period of restoration, the
worst of our troubles might have been averted.
Slowly and piecemeal Europe has been struggling toward
the erection of some such system. In Britain the beginnings
came with our trade depression, taking shape chiefly in govern-
mental aids and guaranties for our export trade with Countries
whose purchasing power was feeble and unreliable. The Over-
seas Trade Acts of 1920 and 1921 empowered the Board of Trade
to make advances to British firms exporting goods to certain war-
stricken countries, and to guarantee a large share of any loss
incurred in such trade. Comparatively little trade was done
under the conditions of these Acts, and in 1921 a further amend-
ment of the policy was incorporated in the Trade Facilities Act,
the chief feature of which was “the granting of credits and the
24 SOME ASPECTS OF RECENT BRITISH ECONOMICS
giving of guaranties in respect of export transactions, other
than the sale of munitions of war, between the United Kingdom
and any other country whatsoever . . . . .” and extending the
time limit for such credits to 1927. The state was to guarantee
Ioo per cent of the invoiced value of exported goods where the
period of credits did not exceed twelve months, the state’s ulti-
mate liability remaining fixed, as in the earlier Acts, at 42% per
cent. A certain amount of trade has been done under these
Conditions, though Russia was formally excluded from the appli-
cation of the Act. The International Credits Organisation, set
up under the Ter Meulen scheme with the approval of the League
of Nations, for financing trade with impoverished nations, has so
far proved sterile, chiefly because it required from the govern-
ments of the borrowers guaranties which they could not give.
Another scheme outlined by Sir Edward Mountain (chairman of
a large insurance company) proposed a syndicate of banks and
insurance companies for the finance of export trade, with a
government guaranty against half the losses.
But none of these schemes have faced effectively the real
difficulty that “before the exchange risk can become an insurable
risk on Ordinary business lines, the distressed countries must cease
to be distressed,” nor is it clear that any of the barter schemes,
to which resort is sometimes possible, can go far to redeem the
situation. These small, fumbling experiments have made it
evident that a larger, bolder, and more fully international
remedy is needed, that Russia must be brought within its scope
as a chief subject of its operations, and that all the great powers
must participate in a task which is not merely one of restoration
but of development.
Moreover, the notion that any such work can be left entirely
to private enterprise is unthinkable. Though the active work of
financing such operations can best be undertaken by banking
and financial groups of the several nations in co-operation, that
Co-Operation must quite evidently extend to their governments
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 25
whose several and concerted action will be needed at the outset
to secure sufficient confidence in the individual traders who are
required to deliver goods for payment in terms of Some new sort
of paper. For though governments can hardly be expected to
add to their existing financial embarrassments any large financial
undertakings involving current public expenditure, their early
co-operation is urgently required in order to Secure the stabiliza-
tion of exchanges and of prices essential to Secure from bankers
and investors the loans needed to set the nations on their eco-
nomic feet.
A general consensus of economic opinion here supports the
resolutions of the Financial Commission of the Genoa Conference,
which are quite explicit upon the course it is desirable to take.
Stability of currency is the first requisite of economic reconstruc-
tion. That stability involves the adoption of a common stand-
ard of European currencies. The Only standard possible at
present for general adoption is gold. European governments
should formally accept that standard and without delay fix the
gold value of their several monetary units, according to their
several conditions, either adopting the old gold parity or a new
one approximating to the exchange value of the monetary unit
at the time of adoption. But the successful maintenance of such
a gold standard must turn upon effective international arrange-
ments in which the co-operation of governments and their central
banks is essential. For it will be necessary to “centralize and
co-ordinate the demand for gold, and so to avoid those wide
fluctuations in the purchasing power of gold which might other-
wise result from the simultaneous and competitive efforts of a
number of countries to secure metallic reserves. The Conven-
tion should embody some means of economizing the use of gold
by maintaining reserves in the form of foreign balances, such, for
example, as the gold exchange standard, or an international
clearing system.” With the restoration of a free market for
gold, and comparative stability of prices, productivity would
26 SOME ASPECTS OF RECENT BRITISH ECONOMICS
be restored and commerce would flow with its pre-war confi-
dence.
Suppose that the preliminary difficulties of getting the weak
exchange nations to agree to the immediate adjustment of their
damaged currency to a gold standard, and of getting all the
Strong nations (including the United States) to come into an
arrangement involving the establishment of an international
money policy with an internationalization of the final gold reserve,
Were possible, a certain considerable advance would have been
made toward financial and economic restoration. It should be
possible to get the economic advisers of the various governments
to recognize the urgent utility of such an international plan.
But it would be foolish for us to shirk the issue of American
co-operation. The Genoa Commission, indeed, expressly states
that “no scheme for stabilizing the purchasing power of the
monetary unit can be made effective without co-operation of
policy between Europe and the United States.” Now English
economists would, I think, admit that the immediate interests
of America are less urgently involved in this project than those of
this country or of other European countries. This admission,
of Course, applies to the whole European imbroglio, political as
Well as economic. But they would urge that, though America
is better able to stand out and has less immediately to gain by
coming in, the new economic position of America and in particu-
lar the growth of her foreign trade should furnish sufficient
grounds for participation. For a refusal to assist directly in
the financial recovery of Europe, and the hugging of an eco-
nomic isolation, must become more and more embarrassing as
time goes on. The direct financial stakes of America in Europe,
Considerable though they are, are small as compared with those
which under the normal play of business motives would be profit-
ably established during the years to come. While, therefore,
the inducements to America to come into an international cor-
poration are less potent than in our own case, they should be
BRITAIN’S ECONOMIC OUTLOOK IN EUROPE 27
adequate for Americans who take a long view of their economic
destiny.
There is one other important matter touched upon by the
Genoa Commission deserving of attention. If “undue fluctua-
tions in the purchasing power of gold” are to be prevented, i.e.,
if stability of price level be desirable, there must be some agreed
policy of regulating credit. Here, of course, we touch the most
sensitive organ of finance. If finance were a rigid mechanism
with a quantity of gold as the general governor of action, the
matter might be simply solved by some agreement on a propor-
tion between gold and credit, operated automatically by discount
rates. But though this appears to be the accepted doctrine of
conservative bankers and economists, it cannot seriously be
regarded as workable. Could, or would, any two central banks
agree on the desirable proportion of credit to gold in their re-
spective countries, when established banking policies differ so
materially P Or, taking an even broader point, can it seriously
be maintained that the same proportion of credit to gold should
be maintained on the up-grade as on the down-grade of a cyclical
fluctuation of trade P Granting that a more carefully concerted
credit policy could cut out the peak of a cyclical fluctuation by
stopping rises of prices before they reached the high level which
unrestricted credit renders possible, and could, by easier money,
do something for depressed trade, could such a policy be operated
successfully without assigning large discretion to some representa-
tive Committee empowered to take into consideration the special
circumstances of world-trade at the time when action is required P
A purely mechanical apparatus for correlating credit with
gold and Securing Co-operation by the separate action of national
banks hardly seems effective. A closer international govern-
ment of finance would seem necessary, in order to reconcile
wholesome elasticity with reasonable control. Toward Such an
international organ no doubt the world is moving. But its
present adoption would seem to presuppose a fuller apprehension
28 SOME ASPECTS OF RECENT BRITISH ECONOMICS
of the economic unity of the world, and of the consequent inter-
penetration of national economic interests, than yet obtains in
any large section of the business classes of any nation. Some
measure of agreed co-operation, however, should be feasible,
and the proposed association of central banks upon the one hand,
and the International Corporation for emergency credits on the
other, rank as serious experiments toward such co-operation.
CHAPTER II
BRITISH ASPECTS OF UNEMPLOYMENTI
I
The purpose of this paper is to show some aspects of the
problem of unemployment in the light of British experience.
This country has proceeded to a considerable degree of organiza-
tion as regards insurance and the labor-exchange system; in these
respects it goes farther than any other nation, and its results are
therefore of special interest. As regards attempts to regularize
work, there is not such clear evidence of results; but our posi-
tion may with advantage be reviewed. These are the main lines
of remedy. In respect of prevention, gradual work has been and
is being done from many points of attack. The health of the
industrial system as a whole is here involved, depending on such
influences as education, industrial peace, and Such amendments
of the industrial system itself as make for good relationships.
One general line of division is clear; prevention will be developed
slowly, but distress cannot wait; we must underpin with remedial
measures that are properly adequate and, taking these as a posi-
tion to stand on, inquire how much better we can do. The cost
of adequate remedies will itself compel us to look beyond remedies;
not the financial cost only, but the cost in terms of waste of work
and skill. -
Insurance is the largest aspect of remedy. We must start
by making it good and then seeing how far we can devise means
to lessen the liability. For a time at least it will be the chief
stand-by. We look to a time when labor will be, on the strength
either of the nation’s resources as a whole, or on that of par-
ticular industries, the strength implying the utmost economy
with which our resources can be organized; meanwhile it must
* Printed originally in the Journal of Political Economy for December, 1922.
29
3O SOME ASPECTS OF RECENT BRITISH ECONOMICS
be carried even on weakness, and too much reliance on insurance
has itself elements of further weakness.
II
Insurance is based on the fact of fluctuation. This is a differ-
ent fact from irregularity of employment. There would be
irregularity if the employment chart took a dip, then returned
for a time to average, then dipped again, then averaged, then
rose, averaged, rose again, dipped, and SO on in any order and
degree. It is because, On the Contrary, there is fluctuation that
unemployment is insurable. The average is a “good” average,
and there is oscillation about it. The fact of fluctuation, good
and bad times alternating, indicates that they arise out of each
other; otherwise there would merely be irregularity. That is
important also from the point of view of prevention, but vital
to insurance.
The average of unemployment in this country, reckoned over
the sixty years before the war, was slightly over 4 per cent. This
was based on certain trade-union returns, as to which there was
admittedly some doubt whether they were an adequate measure
of the whole field. The Act of IQ20 was actuarially based on
them in a “corrected” form, and the working of that act gives
some indication of their former accuracy, since direct comparison
is now possible between the trade union and the public figures.
It now appears that, as a general average, the trade-union figure
was not far wrong; for IQ20 the monthly average of the trade-
union figures is I5.3 and of the public figures I4; but the latter
are given as an underestimate through administrative causes
during two of the months. If Our average can be taken as about
4 per cent, this means that, Out of twelve million insured persons,
slightly under half a million will be normally unemployed. Our
average is not comparable with that of other countries, which
define the fact of unemployment differently.
Four per cent might be regarded as an insurable quantity,
without too heavy a burden on industry. But it does not repre-
BRITISH ASPECTS OF UNEMPLOYMENT 3I
sent the whole burden, since short time has to be included; this
averaged 5 per cent of persons in 1921, under the public scheme,
an addition of one-third. For various reasons the proper addi-
tion to unemployment can hardly be calculated, and it is best to
leave the figures as they are. It is dangerous also to use words
which imply that the burden, if insurable in amount, does not
represent a grave position; the safest word is that it is manageable.
The British Act of 1920 is the most thorough scheme in the
world of insurance against unemployment, although it has come
under criticism in several ways. The Poor Law Report of 1909
is the beginning of the modern treatment and study of the
question. That report was on the whole favorable to the method
of public subsidy to trade-union funds; general and compulsory
insurance did not at the time seem practicable. It is, however,
on the latter lines that the government has proceeded, so that
the British method is very distinct from the continental. The
idea in 1909 was that a “sentiment of solidarity” was a necessary
condition of contributory insurance, and that the system could
not be wider than the sentiment; hence the trade-union subsidy
idea. But working-class solidarity has developed very rapidly
before and since the war; and the sharing of the burden by a
flat rate on all workmen has not itself been a cause of strain,
though the liability to unemployment has a variation between
I and Io per cent as between different industries. In any case,
the field had to be covered; subventions to trade unions would
not have covered it; something as comprehensive as the health-
insurance plan was aimed at in these days of Mr. Lloyd George's
social policy. It could not all be done at once; there had first
to be labor exchanges, and that system had to reach a point of
development such that public insurance would be safe against
abuse. The Exchanges Act was passed in 1909, and insurance
began for some industries in 1911. It became general in IQ20,
the act being very eclectic both in what it embodied and in
what, as the result of the working of the earlier acts, it omitted.
32 SOME ASPECTS OF RECENT BRITISH ECONOMICS
Unemployment insurance is totally different from health
insurance in its analysis and working. But, of course, there
is not the same difference between a mere public liability for
sickness or unemployment. It has been suggested that insur-
ance might have been made “free,” after the plan of education,
the ground of this suggestion being economy and simplicity of
working, since the present system of stamps and cards and
twelve million separate accounts is certainly complicated.
“Free” insurance would simply be a charge on taxation,
national and local, according to the needs of the year. It is
not really insurance at all. The final incidence of its cost might
not be very different from that of general insurance. It would
give the state a very real interest in keeping industrial peace,
to protect the taxpayer against the resulting unemployment
charges. But it is felt that preventive work on unemployment
will be more successful if it is more devolved on industries; the
government is not near enough for all the details. And the
mere public maintenance, subject of course to the labor-exchange
test, of the unemployed does least to create a feeling of industrial
responsibility for the evil. In the absence of actuarial insurance,
too, the public liability would be greatest and the taxation
heaviest just at the times when the national income was suffer-
ing most through trade depression.
“Free insurance” is based on simplicity of working, but
another form of proposal has come from those who favor the
application to unemployment of the “industrial principle.”
This is much more than the subsidy of Trade-union funds. The
industry is to be the unit, with all its grades and varieties of
labor included; a vertical slice is to be cut from top to bottom,
and that will lie across any trade-union lines of organization.
The industrial idea has become very prominent in England since
the war; there is a distinct movement, for example, toward the
guild idea for labor, toward amalgamation of unions, and toward
councils of industries, under the Whitley scheme. Unemploy-
BRITISH ASPECTS OF UNEMPLOYMENT 33
ment insurance is now one of the most commonly discussed
phases of the “industrial idea.” The development has been in
some ways a curious One. It has been made a criticism of the
present act by leading employers that industries are far more
capable than the state of administering insurance, and that they
would prefer not to be interfered with. There is an obvious
reply from history. There has been nothing to prevent any
industry, during the last fifty years, from making proper arrange-
ments to insure or maintain its own unemployed; industrial
leaders have had a free field if they liked. But the fact is that
they did not do it. It was left to the trade unions to do what
they could. The state has, in the 1920 act, proceeded in default
of the industries themselves; and it is now too late to turn on
the government and ask, “Why were we not left alone P” They
were left alone long enough, and nothing was done. A late
repentance is better than none, and insurance by industries is
being made a rival scheme to the Act, which of course was made
bankrupt by the post-war depression, and has had to be sub-
sidized. But the act was necessary in 1920, and the rival
proposal will need considerable thinking out.
New machinery has certainly been devised whereby the
administration of insurance, industry by industry, would be
facilitated. For unorganized industries, the second Trade
Boards Act of 1918 established boards whose function is not
defined solely by reference to wage rates; they are intended also
to be welfare bodies in a wide sense, and any matter concerning
the industry can be referred to them. There are now sixty-three
of these boards, and considerable grouping of those in allied trades
is likely, in view of the recent Report of the Cave Committee. For
organized industries, the Joint Industrial (or “Whitley”) Coun-
cils have an equally wide reference, On a voluntary, instead of a
statutory, basis; of these there are about sixty, the Cotton
industry being the most notable exception. There has been a
tendency to confine the work of these bodies to wage negotiations,
34. SOME ASPECTS OF RECENT BRITISH ECONOMICS
and if they could take up insurance they would have a function
which would make for common instead of divided interests.
The report of a committee of the Council of the Building Industry
has become well known (the Foster report) for its bold scheme
of organization of employment. But this is exceptional. Trade
boards and industrial Councils are mainly wage committees, but
exist as possible machinery for the application of the “industrial
idea.'” to insurance against unemployment, as well as to preven-
tive organization. Different industries might go on different
lines, and improved schemes might develop by rivalry.
The problem of insurance on the basis of each industry for
itself is in the first place one of definition. How is member-
ship, e.g., of the cotton industry, to be defined for insurance
purposes? Is a Cotton Operative One who does something or one
who makes something? In the former case the definition is
based on the machinery and processes; in the latter on the
material which enters into the product. In either case there
are most serious difficulties, even apart from questions of move-
ment between industries, and transfer values. Definition by
process will certainly break down; what, for example, of the
engineers in the various industries? Definition by product can
be illustrated by reference to the wool-textile industry, since it
overlaps Cotton, silk, Carpets, hosiery, bleaching and dyeing,
blankets, and waste. Insurance schemes cannot develop faster
than the organization of industry itself allows. Of course, it
may seem absurd to be defeated by definitions, but it is not
really the definitions, it is the facts behind them. In the last
resort there might simply be registration of firms, so as to
bring the doubtful cases under one industry or another as regards
final product. Then what of mobility ? A mobile worker might
by forced definitions be defined as to his industry while he is
employed; to which industry is he to be allotted when unem-
ployed? The industrial organism does not allow of compart-
mental treatment; the Overlap, both vertical and horizontal,
BRITISH ASPECTS OF UNEMPLOYMENT 35
between industries is very great. Of course, there is the fact
that somehow this matter of definition has already been got over;
witness the Whitley Councils and trade boards for industries.
But anyone who sits On a trade board knows the amount of time
that has to be given to questions of “scope” or demarcation;
and a large part of the “industry” in the wide sense does not
come under the board. That is, the group of persons who are
subject to the same risks of employment is divided between a
number of boards. Distribution and clerical work have to be
taken separately; the auxiliary labor, like the firemen and
engineers, is in another picture altogether.
There are, in fact, three factors to take account of, in consider-
ing insurance on the industrial basis—wage rates, unemployment
rates, and degree of organization. These fall together very
differently. In engineering, the first and the last are favorable,
the second is unfavorable; in cotton, all are favorable—yet it
is the most marked absentee from the list of Whitley councils.
In wool, the second is favorable, the others are becoming less
unfavorable. But the degree of organization which is sufficient
to define a Whitley council is not sufficient to define the scope
of an insurance scheme. -
The second problem would be the variation of the unemploy–
ment rate, which is from I to Io per cent. While there is such
a variation the more fortunate industries will of course prefer
to have schemes of their own, and the less fortunate will prefer
public schemes. In other words, what is called “carrying the
burden of your own unemployed” may only mean evading a
due share of the national burden.
The various aspects of this question were discussed by the
Labour Exchanges Committee of 1920, which had before it a
proposal gradually to give up exchanges and put insurance On
the industries.* All the witnesses—official, ex-official and
unofficial—with only one exception, thought that the future of
* The Geddes Economy Committee has raised the question anew.
36 SOME ASPECTS OF RECENT BRITISH ECONOMICS
insurance was on the industrial plan; but it was a future too
distant to influence policy at present.
It must be clear that in any case the state cannot escape an
ſultimate liability, whatever be the immediate plan of insurance.
The scheme of a particular industry may break down, or there
may be gaps to fill in between schemes. Something on a public
basis must then be in the background. All this seems to show
that the plans of separate industries can best be instituted on the
basis of a general plan; of which they are modifications in special
cases; the general plan standing ready to reinsure the schemes
which lapse and to insure Some general handling of the problem.
We must remember, too, that the rates of unemployment for
separate industries are known Only in a very provisional way as
yet; a great correction had to be made on the rates estimated
in the 1911 act, as the result of experience of its operation. By
the time we are ready with confident knowledge, derived from
the working of the general Act of IQ20, the industries may be
ready with organization that will be adequate in strength and
definiteness to special schemes for themselves.
The Act of 1920 might be read as being based on some such
idea. It is, as has been said, eclectic; it allows some scope for
a number of ideas, within the Scope of a general plan. It insures
the worker as such, without reference to his industry, at a flat
rate of contribution (different of course for women and juve-
niles), contributed mainly by the worker and the employer.
The state gives a direct subsidy and also bears the cost of the
labor exchanges and the system of appeals. No doubt flat
rates tend to keep the contribution, and therefore the benefit,
down to what the weaker industries can bear; and the benefit,
never more than a pound a week for men, is held by labor to be
quite inadequate at the post-war level of prices. It has been
proposed, on high authority, that a percentage on the wage
bill would give elasticity and enable an adequate family benefit
to be paid; in this way also periods of boom would make a better
BRITISH ASPECTS OF UNEMPLOYMENT 37
contribution to periods of depression. But the problem of
adequate benefit is bound up with that of labor-exchange policy.
Large benefit is safe only if the exchanges can be sure that there
is no malingering; and that means that they must be notified
of all vacancies. It is not worth malingering for Small benefits.
Employers would have to submit to compulsory notification;
this can be no hardship, as compared with their own plan of
insurance by industries, in the administration of which they would
themselves insist on complete notification. The exchange which
cannot offer a job must pay benefit; therein lies the problem
of adequate benefit. “-----...-----
The act makes allowances for three variations from the public
scheme: In the first place, trade unions may themselves admin-
ſister the scheme, in conjunction with their own benefits, and
reclaim, the amount of the public benefit. This does not dispense
with the use of public exchanges, where unemployment books
must be lodged, and where “vacant books” may be, and to a
great extent are, kept for signature. Considerable use has been
made of this scheme, but the depression is tending to bring the
payment back to the public scheme, to save costs of administra-
tion. Secondly, it is permissible for an industry to contract out
of the general scheme, provided it pays a higher rate of benefit
on a scheme of its own, and receives a smaller Subsidy per
insured person from the state. The act was actuarially based on
the assumption that about one-third of insured persons would be
So contracted out, in industries with low rates of unemployment,
adequate wages, and adequate organization. As this assumption
has been made, the general scheme would not be weakened if
they acted on it; if they do not act on it, the general scheme
is so much the stronger. Very little use was made of this pro-
vision; only one special scheme, to my knowledge, was approved.
Problems of definition and of organization were the most serious
obstacles. The idea of special schemes was that scope would
be given for the reduction of unemployment by preventive
38 SOME ASPECTS OF RECENT BRITISH ECONOMICS
measures, such as decasualization and reduction of labor turn-
over, by an administration that would be close to the conditions
of each industry. But so far as this consideration goes, the
industries which need it most are rather those with high than
those with low unemployment rates; and of course these will
not contract out unless they receive a higher subsidy, instead of
a lower one, from public funds. The whole of this section of
the act is now in suspense, until we are clear of the deficits
created by the present abnormal conditions. But thirdly,
there is another provision which has been somewhat over-
looked in discussions of the act—that for supplementary
schemes. An industry can remain on the general Scheme up to
the amount of the standard contribution and benefit, while
combining this with a further scheme entirely financed by itself;
the point of this section being that, if the minister approves
such a supplementary scheme, it becomes binding on the whole
industry. It will be seen, therefore, that those who care for
the principle of “each industry looking after its own unemploy-
ment” have plenty of room for their activities and can develop
their own systems with the state supporting them up to a certain
point. The act can answer most of its critics on main issues.
IBut the controversy between the public and the industrial
idea of insurance can be followed to a further result, which bears
on the use to be made of the funds accumulated. Public benefit
is paid on an absolute condition of unemployment, and of course
that is wasteful, if there is any way of using such funds to keep
industry going. It was proposed long ago that, in times of
depression, the state should subsidize wages, so as to enable
employers to cost on a lower basis and follow the market. It is
doubtful if under public supervision this could be done; the
danger of abuse would be too great. A firm can do this by
accumulating a fund to draw on in bad times; an industry
might do it, converting unemployment funds into wage equaliza-
tion funds, the wage rates being plastic and the balance drawn
BRITISH ASPECTS OF UNEMPLOYMENT 39
from this reserve. Of course, this would apply to new contracts
only (not to running contracts), or to the making of stock, up
to So many hours a week. If we can thus get something back
for the expenditure of the funds the next boom will rise less
rapidly. We now have idle men receiving grants, whose work
might help to prevent the next rush of overtime and high values.
Industries working out their own plans might be able, through
their own close and expert Supervision, to turn unemployment
pay into Something better. At the time of writing, just 50 cents
a week is being paid in contributions for each employed man,
to give a benefit of $3.50 for himself, $1.25 for his wife, and
25 cents for each child.
III
The second aspect of British experience relates to the working
of labor exchanges. The chief source of information is the Report
of the Committee of 1920, of which I was a member. The British
system, established in 1909 through the work of Sir W. Beve-
ridge, became the most complete in the world. Every town of
any size has its exchange, with branch offices in the villages.
Mobility of labor was the great idea of that time, based largely,
perhaps too largely, on a study of conditions at the docks. Men
can move from One dock to another without changing their
homes; On a national scale the problem is not so simple. Of
Course, the exchanges were only part of a larger plan, but they
were the pivotal idea; a good deal of the subsequent criticism
and unpopularity of the exchanges was the result of failure to
Carry Out other parts of the plan, especially that part which was
to deal with the surplus which the working of exchanges would
reveal. While “maintenance and training” of that surplus is
undeveloped, it remains on the books of the exchanges, and in
many ways this impedes their function. The exchanges will
have to bear the burden of this unpopularity till they can refer
a man who has been long unemployed to some means of better-
4O SOME ASPECTS OF RECENT BRITISH ECONOMICS
ing his industrial skill and status. This is the function of the
proposed Unemployment Committees of Local Authorities, of
which more later.
The mobility theory needs no restatement, but it is a wider
idea than place mobility. Unemployment is due to misfits, as
regards places, times, or occupations; not enough work in this
place, or time, or occupation, and more than enough in that
place, or time, or occupation. Mobility is a general remedy,
whether it is the labor or the work that is moved to secure a
better fit. The British government, it was stated at the Wash-
ington Conference, arranges some of its contracts so as to place
them where there is most need for employment; here the work
is moved to the workers. The arrangement, to be discussed
later, for putting public work in hand at the times when trade is
slack is simply the time mobility of work; it can be carried out
only So far as contracts are not bound to a certain time, that is,
are not urgent. Occupational mobility is, for some kinds of
labor, the most difficult problem of all. Apart from good mobil-
ity, surpluses collect at places, times, or in occupations; there is
a general unity in the theory. But many employers who believe
in the time mobility of contracts, especially public ones, have
not been very willing to assist the place mobility of labor by
Supporting the exchanges. The insurance act has made the
use of exchanges compulsory on workmen if they wish to draw
benefit, but not on employers, even for casual engagements.
Before the Act of 1920 the exchanges were estimated to receive
annually about three million registrations by workpeople and
about 1% million notifications of vacancies by employers; and
they filled about one million jobs per annum. A quarter of the
total placings were women for domestic service. No statistical
details existed for measuring the proportion of all placings which
took place through exchanges, but it was estimated that in
insured trades it might be a third. These figures may seem to
be far below the expectations on which exchanges were started;
BRITISH ASPECTS OF UNEMPLOYMENT 4 I
but of course it was always intended to work exchanges in con-
junction with insurance, and it is only now that the exchanges
can fulfil their entire function. The theory of the exchange,
however, is not becoming simply that of an insurance office;
it remains essential, even for insurance, that employers should
notify their vacancies; but also on the original idea of work-
finding, when insurance runs at only fifteen shillings a week.
A sense of responsibility by employers is the great thing to obtain,
and it cannot be said that this has been generally obtained; it
was pointed out by Lord Askwith in evidence that the existence
of exchanges (and presumably now of general insurance) might
lessen the sense of responsibility on the assumption that there
was national provision.
There are some special points in the exchanges system to
which attention may be drawn, in the light of our evidence.
First, the important question of their function during trade
disputes. The rule has been that an exchange must inform an
applicant of a vacancy, even if there is a dispute; but it is also
to inform him of the existence of the dispute. This operation
has of course been carefully watched by labor interests, which
would prefer the stronger policy of refusing to notify vacancies
in places where there is a dispute. The 1920 Committee recom-
mended that during a dispute the use of exchanges be barred to
both sides. This recommendation, from which I dissented,
seems liable to prejudice the position of exchange officials, since
some disputes are partial or unauthorized, and they cannot be
expected to take the responsibility of deciding whether a par-
ticular dispute is to be regarded as official. Secondly, there is
a question of wage rates. At present our exchanges are bound
to enforce all legal rates, such as those fixed by trade boards;
and they are supposed to be informed of standard rates in their
own district and elsewhere. Should standard rates be enforced P
That is, should the exchanges system refuse to notify a vacancy
to an applicant if the wages offered are below standard P. It was
42 SOME ASPECTS OF RECENT BRITISH ECONOMICS
agreed by the Committee that they should do so but only on
the authority of the minister of labor, if he is advised that the
rates were agreed to by bodies properly representative of organ-
ized labor and capital. This would practically put in force the
suggestion of the Committee of I912 of the first Industrial
Council, that properly representative wage agreements should
be made legally binding on the entire industry. These two
proposals were to meet some labor claims; it is not yet certain
that they will be adopted.
From the side of employers it was held that the exchanges did
not send good workmen, and, in general, that they were not
efficient. All systems of labor exchanges, the use of which is
not compulsory on employers, will have to face this objection
for an obvious reason. If employers, by such other methods as
advertisement, application to trade-union offices, or direct
engagement, first exhaust the market of its best men, they can-
not thereafter get anything more than the second best, to
whatever agency they apply. And as many of them (or their
foremen) go to the exchange in the last resort, of course the
exchanges cannot often then do much for them. Many
employers have no idea how their labor is engaged; they appear
quite indifferent, and the exchanges have to work against that.
Many of them are critical, but uninformed.
Dut Some further organization of Exchange work is necessary,
especially with a view to specialization. This is one of the main
results of our experience. It will be remembered that the
Report of 1909 on the Poor Laws and Relief of Distress kept its
severest criticism for the system of the “general mixed work-
house,” and that specialized treatment of poverty was a main
idea of its proposals. But the labor exchange, which it regarded
as fundamental, turned out to be a “general mixed Labor
Exchange,” which on this ground was unpopular with higher
grades of labor and also suffered in efficiency. The craft spirit
of the skilled men did not like exchanges where general laborers
BRITISH ASPECTS OF UNEMPLOYMENT 43
hung round in working clothes; they wanted privacy, specialized
Sections or counters, or even Special exchanges. These objec-
tions were forcible, and will probably be removed in reorganiza-
tion. It may be a good thing, in certain areas where there are a
number of exchanges, to specialize one of them to the needs of
a predominant industry; this was done in London with marked
success for the building trade, which became a model of effi-
ciency, because employers and employed regarded it as their
own affair, and Co-operated to make it a success. Where
exchanges cannot be specialized, departments or counters may
be. This would be after the plan of Berlin, but we should need
a good many of them in the industrial north of England. The
other aspect of specialization is with reference to the staff. Our
experience shows that the placing of men in vacancies is not
clerks’ work but requires higher faculties; it is proposed to create
a class of registrars to mark the importance of their work. These
officials should be able to receive promotion without movement
from the district with whose industries and conditions they have
become familiar; it was a great defect that, as soon as an official
became skilful, he was apt to go to a new district by promotion,
all his previous knowledge of certain industries going for little
or nothing in his new location. Again officials should be given
Constant opportunity of visiting local works; they must see the
kinds of work done in each great firm, and know the right kind
of fitter to send if A. B. rings up for a fitter.
Another aspect of a good system of exchanges is their rela-
tion to local interests, especially to the municipalities. The
British system is a national one, while many foreign systems
are only municipal. But the exchanges are not in the position
of, for example, post-offices; they require the active interest and
support of local opinion. Perhaps they would obtain this more
fully if they were municipal; but we have definitely gone on
the national plan. Our exchanges are supervised by joint local
employment Committees composed equally of representatives of
44 SOME ASPECTS OF RECENT BRITISH ECONOMICS
employers and workers, which rendered great service during the
war; but, with the return to ordinary conditions, these com-
mittees have not enough to do, since they cannot appoint or
discipline the staff. They can be consulted as regards policy,
but there is little that they can do, so their interest declines.
But a proper handling of unemployment depends on local inter-
est and responsibility. An unemployment committee of the
municipal Council would create a new interest; this is now indi-
Cated as the future line of advance. The local status of the
exchanges needs to be improved by more direct association with
local administration.
I do not think the recent agitations to get rid of the exchanges
in the interests of national economy will succeed. That part
of the argument concerning unemployment which led to their
establishment is still very imperfectly understood. It is not
exchanges which have failed; the failure is to devise the further
steps for dealing with the unemployed whom exchanges cannot
place. The worst cases run out of insurance benefits, and then
there is only the hated Poor Law. The provision of work or
of training is the next question.
IV
There is a much repeated proposal that public authorities
should so average their work as to speed it up in times of depres–
sion and go more slowly in good times. The Washington
Conference re-emphasized this proposal, which has been indorsed
by a succession of commissions and Committees since 1909. The
Development Act of IQIo, Section 18, contains an explicit recom-
Imendation to this effect. This section applies specially to such
schemes as afforestation, reclamation and drainage of land, con-
struction and improvement of harbors, and of inland navigation,
development of roads, and “any other purposes calculated to
promote the economic development of the United Kingdom.”
This is a national application of a proposal which has usually
BRITISH ASPECTS OF UNEMPLOYMENT 45
been stressed in its local applications. It is the dominant pro-
posal for prevention of unemployment as set forth, for example,
in the Prevention of Unemployment Bill brought in by the
Labor Party in February, IQ21. It is based, as explained above,
on the time mobility of at least some part of public work. There
is friction here, as in the case of place mobility of work or labor;
the question is to what degree contracts are movable in time,
and whether the part of public work which is thus mobile is
sufficient in amount to be a makeweight for the conditions of
private industry. “Sufficiency” is here not an easy thing to
measure; provision of work is cumulative, acting through the
purchasing power of those employed, and so bringing others into
employment. It must be sufficient to start or keep the engine
running.
As the reports to the Washington Conference show, very
little has been done to carry out this plan; yet it keeps being
repeated. If it is administratively unpractical, the sooner we
know this the better. There is lack of evidence on the subject
from the public authorities themselves. A Treasury Committee
was appointed in 1914 to consider it, but was dissolved by the
war. The officials of a great municipality, whom I consulted
with regard to it, were plainly skeptical. The fact that so.
little has been done in this way all this time does not show that,
for example under the push of a labor government, much may
not be done in future. But there are strong labor interests
already in many municipalities, yet the scheme hangs fire.
Inaction may imply administrative difficulties, and Some of
these are obvious.
Of course, what is in view is not only the putting in hand of
work when unemployment has become great; useful as that is,
the larger idea is the deliberate reservation of work, until such
time as unemployment becomes great. It is a refusal to employ
at one time in order to employ at another time. That is what
Creates the administrative problem.
46 SOME ASPECTS OF RECENT BRITISH ECONOMICS
It is clear that effect will not be given to such a policy, so
far as local authorities are concerned, unless there is Some body
with a more permanent commission than the Distress com-
mittees. Hence the committee appointed in 1918 to consider
the future application of the remedies proposed in 1909 recom-
mends that a “Prevention of Unemployment and Training Com-
mittee” should be appointed by county and county borough
councils, one of whose functions should be to procure “So far as
practicable, and subject to service requirements and due econ-
omy, such a rearrangement of the Council’s works and services
as to regularise the local demand for labour.” On the same
lines, the Committee of the Industrial Conference of 1919 sug-
gested that “much more effective action could be taken if all
orders for particular classes of commodities were dealt with by
one government department. It would further be an advantage
that all Government contracting should be supervised by one
authority.”
It is not proposed that public and especially local authorities
should gather round them a body of employees who would be
busy when the general labor market was dull and would stand
off, or look for other work, when the general market was brisk.
That would create an economic friction which might increase
unemployment; it is the chief objection to purely distress
measures that they create a fringe of underemployment which
waits for municipal jobs in this way. Public contracts for cloth-
ing, printing, stationery, constructional materials, etc., would
be given to private industry, which would thereby be supported
in dull periods; and it follows that the effect of the policy would
be felt, not only by unskilled labor, but by labor in general.
It must also be remembered that the statistician’s attitude
to this question is different from the administrator’s. It may
be possible to show, looking back on recent fluctuations, that if
So much work had been postponed at One time and put in hand
at another time, the fluctuation would have been less. But the
BRITISH ASPECTS OF UNEMPLOYMENT 47
administrator who has contracts to get done does not know when
the next depression will be; he knows that his contracts are
always getting more urgent. For example, the Corporation of
Manchester is the largest employer in the north of England;
22,000 workpeople are engaged on its Services. This regular
work is not capable of variation inversely as the market for
private industry; on the contrary, it partakes itself of the sea-
sonal fluctuations which affect private employment. Its
“irregular” work, to use the term of the Poor Law Commis-
sioners, consists of such things as extensions of plant, repairs,
building of schools, making of roads. But these have a relation
to the growth of the city and of private industry. The holding
back of a new gas plant in a great city may increase unemploy-
ment, if industry cannot get proper gas facilities; the building
of such a plant takes time and has to be planned to be ready by
a certain time. The administrator, with hundreds of Com-
plaints a day of insufficient pressure, is not very well able to
delay completion by deliberate postponement to a period of
unemployment whose exact arrival is uncertain. It is open to
question whether the best way to regularize industry is to inter-
rupt deliberately the supply of those public services which are
most essential to development and therefore to the general level
of employment. Just because this is the sphere of demand which
can be controlled, it does not follow that it is the sphere which
it is most expedient to control. These objections do not apply
in the same way to the allocation of contracts for supplies for
the regular services of an authority.
To take an example. Suppose that a new harbor is required.
If its construction is held back until there is serious unemploy-
ment, then a demand is created at that time for constructional
labor. If it had been put in hand at once, then when the same
depression arrived there would have been a greater demand for
the operating labor of dockers, stevedores, and so on; even, that
* As shown in the evidence for the Manchester (General Powers) Bill of 1921.
48 SOME ASPECTS OF RECENT BRITISH ECONOMICS
is to say, when the fact of depression is allowed for. Its delay
might be a cause of hastening the depression, if trade went
elsewhere. It is no use intensifying a depression and then
filling it in. The question is one of the urgency of the contract
in relation to the future of employment as a whole.
A kind of compromise is now frequent between mere relief
works and the policy of definite reservation of contracts. Public
authorities, when a depression has arrived, set themselves to
anticipate their needs in the way of construction, and to put in
hand certain works in advance.” It may be safe enough to get
some things done sooner than necessary, though they will carry
loan charges longer and may stand idle for Some time when
carried out, as is the case with some roads which have thus been
anticipated. But if nothing has been reserved, there may be
nothing suitable to do; if there is anything in regularization, a
scratch policy like this is a second-best, which may become
dangerously similar to relief works.
Some further points may be considered as regards the policy
as a whole. It has been objected that, when public authorities
borrow in order to carry out schemes of work, they merely take
capital which private industry might have taken, and do not
really increase employment. It is obvious that this objection
could be urged against any borrower of capital, since he prevents
Someone else from borrowing the capital and employing the
labor which he borrows or employs. Or it might be urged that
the variation of the rate of interest would itself be an automatic
balancing force, since it falls lower as trade is worse; but while
private industry has to recover from its losses, so that the adjust-
ment is slow, public authorities have not the same losses to cover
and can enter the market at any time when capital is cheap or
cheapening. The whole point is prevention, not merely remedy.
But how is there a net increase in employment? The public
authority takes away some employment when trade is good and
* The Trade Facilities Act of 1921 gives a government guaranty for the payment
of the principal or interest of loans contracted for such purposes, for a limited period.
BRITISH ASPECTS OF UNEMPLOYMENT 49
creates some when trade is worse; but an unemployed man is
an unemployed man, whether he is only One of a thousand or
one of ten. There is, however, the chance that unemployment
will be better distributed; overtime will be lessened in the good
period, and in the worse period the chance is increased of short
time as against dismissal. Further, every diminution of the dif-
ference in employment between good and bad times increases the
possibility of organizing the labor market; since even if it
increases the fringe of chronic unemployment, as well as the
amount of permanent employment, it clarifies and defines the
size of the problem which is to be dealt with by other means.
Instead of so many “ins and outs,” where half-employment on
low wages is their curse, it defines so many “outs,” for whom
the remedy is either (a) maintenance while they are trained to
a skill which will induce industry to make them regular “ins”
or give them a greater wage reserve in unemployment, or (b)
emigration.
There may indeed be some reaction on the sense of responsi-
bility among private employers, if this remedy is thought to be
capable of more than is the fact. Private industry ought not
to be induced to think that in the boom it can work all the Over-
time it likes, make all the money it can, and discard on to public
authorities the effects of this in the bad times which follow. A
strong sense of responsibility among employers generally is the
most desirable thing to create; and advocacy of public Schemes
should be qualified by the caution that, both as regards amount
and as regards the feasibility of delay in allocating Contracts,
we do not know how far they will carry us.
V
We come now to the last aspect of the treatment which must
be applied if the disease of unemployment is to be continuously
dealt with. If industry is made more regular in time, the
chance of employment is permanently increased for Some workers
5O SOME ASPECTS OF RECENT BRITISH ECONOMICS
but permanently lowered for others; and this effect is enhanced
if industry is also equalized as between one place and another.
It is believed to be better that industry should by these means
sweat off its useless tissue. But something must be done for
those whose chances are lessened, perhaps almost to nothing;
otherwise it may be open to doubt if regularization does more
good than harm. What is done for them should be done on
behalf of industry itself, so that the surplus of labor as it exists
under irregular conditions may be returnable to industry as a
means of its regular expansion. This is the most difficult part
of the treatment of unemployment, and the most vaguely out-
lined at present. Decasualization by itself intensifies the
distress of some workpeople, if nothing more is done. It is not
a solution to throw some persons almost out of industry on to
pure maintenance. There is no percentage of the people, short
of Ioo, which is the limit that industry can keep On its pay-roll;
but it requires the different grades of labor in the right propor-
tions, and its expansion in terms of employment may be limited
by an excess of one grade." There is no excess of the world’s
supply of labor; invention is always finding new commodities
and new industries; the aim is to find an organization of labor
which will bring every person’s demand for goods up to the value
of his supply of goods, and to equate these values at the highest
level possible. The whole treatment of unemployment is sub-
ject to this aim; it must correct faults whose result is to lower
both supply and demand power. The tendency of regularization
is to ascertain the extent of the fault, to define the (at present)
unusable surplus; but how is it to be made usable P
The Washington Conference does not deal with this problem.
A good deal of light is thrown on it by the history of the study
of poverty, which has several times been brought right up
against it.
* There is, in fact, no demand for “labor”; there are many demands for many
Specific kinds of labor.
BRITISH ASPECTS OF UNEMPLOYMENT 5I
Mill says practically nothing about unemployment. He
thought that good and bad trade would result simply in an
increase or decrease of general wage rates. His “remedies for
low wages” therefore represent what now, under the régime of
standard rates, are remedies for unemployment. He proposed
two things: first, poverty must by a drastic step be extinguished
for a whole generation; second, educational measures must pre-
vent its recurrence. He was obsessed by a special idea of what
education should teach the working classes, namely a limitation
of their numbers; but his argument is in form the beginning of
the study of the surplus. He proposed to clear off the surplus
by Colonization, placing them. On the land at home or abroad, at
adequate wages. The standard of living being thus raised for
everyone, education was to maintain it. His plan was not
thought out, but the idea that surplus labor was to be “colonized”
persisted for a long time.
In his great work on poverty Mr. Charles Booth showed up
what came later to be called the “stagnant pools” of surplus
labor. He found that, in London, there was about 8 per cent
of the people whose labor, under existing organization, was
worse than useless. If it were entirely swept out of existence
there would be a net gain to the state. This was the always
underemployed casual labor of no trade, which stood round the
fringe of industry, whose presence prevented the proper organ-
ization of other grades, since it mixed itself up with the general
labor which is necessary for all trades, dipped into their work
for a few days a week, hung round relief funds, and did not desire
regular employment even if offered. This is the “competition
of the very poor” to which he ascribed a great deal of the “pov-
erty of the poor.” His remedy also was a form of colonization
at home, where this class would support themselves under State
regulation, thereby making employment more regular for general
* Principles, Book II, chap. xiii.
52 SOME ASPECTS OF RECENT BRITISH ECONOMICS
labor, and better paid for all labor. He agreed with Mill that
the scheme must be thorough and considerable."
The analysis of Beveridge and the Reports of the Poor Law
Commissioners carried the argument farther by showing, as
already explained, that imperfect regularization of work tended
to create such surpluses in all industries; obvious in the case
of dock labor, since all the unemployed congregated in One
place, but less obvious in other industries where the unemployed
stayed at home. Skilled men are insurable; but the less skilled
part of the surplus will suffer long periods of unemployment, and
for them especially the Poor Law Commissioners recommended
establishments for training and maintenance, with a view to re-
entry into industry on a higher qualification.
The Committee of 1918 carried this a step farther. A number
of objections may be offered to the segregation of the surplus in
institutions. If these institutions were themselves industrial,
as on Mr. Booth’s plan, it was objected that they would only
compete by their products with the general market, and create
Some more unemployment; which might happen if their Com-
petition were concentrated on some single product. The more
serious objection is unwillingness to enter a public institution,
where they would be segregated as the unemployed. To over-
come this it is now proposed simply that training should be
available for persons shown at the exchanges to be at any time
surplus, and that this training should be given in institutions
“open to, and in fact used by, other classes of the community.”
That is to say, they would be dealt with by the method of tech-
nical instruction. Those who refuse to accept these opportunities
would be sent to detention colonies. The administration of the
training would be in the hands of the proposed “Prevention of
Unemployment and Training Committee” of the local authority.
The local employment committee of the exchanges would pre-
Sumably refer to this committee persons who had been On the
* “Poverty Series,” Vol. I, chap. vi; cf. his evidence in Cd. 365.
BRITISH ASPECTS OF UNEMPLOYMENT 53
register for some duration of time, or who had exhausted insur-
ance benefit. The Insurance Act of IQ20 can in fact make accept-
ance of some training a condition of benefit.
The Committee emphasizes the point that such training
should be free from any element of deterrence. Neither, how-
ever, should it act the other way, by giving a positive advantage
to the unemployed, namely the training for a better job, whereby
they might re-enter industry on better terms than some of those
who had not been thrown out of low-skilled work. A man
might be willing to give up his job in order to train for a better
one, but he would not then rank as unemployed. This consider-
ation would have to be allowed for. The administrative side
of the problem as it affects institutions for training has presum-
ably been foreseen, as the report is signed by educational repre-
sentatives. The whole amount of unemployment to be dealt
with in this way is, of course, only part of what the index at any
time covers. A minimum of 2 per cent has been more than once
estimated officially to cover those who at any moment are chan-
ging their jobs; it is the surplus over these short-term cases that
has to be dealt with. Either they have run out of benefit or,
being still entitled to the benefit, exchange it for the condition
of maintenance under training. The personnel would be under
constant change, according to the demand for men from the
exchanges. Older men or failures in training will have a better
chance of unskilled work if other and younger men are trained
into skilled workers.
Some conclusion of this kind is in fact forced. Simple relief,
or Poor Law maintenance, is not a solution, because industry
is not limited in its use for labor, if it is available in the proper
forms. Neither, it is agreed, do relief works solve anything;
on the contrary, they tend to make the casual life more tolerable,
by a crude form of dovetailing public work in bad times. There
remains emigration, in regard to which any such heroic scheme
as Mill's could not be considered; it would be the last bank-
54 SOME ASPECTS OF RECENT BRITISH ECONOMICS
ruptcy of our social organization if we had simply to deport our
unemployed. There is a normal movement of emigrants, but
distress is not its only cause, and it affects employment like any
other form of mobility; but the present rates and problem of
unemployment coexist with it. Subsidized emigration, even if
other countries would accept our unskilled (their conditions are
always becoming more strict),” might only increase our immi-
grants in times of good trade. There remains some form of
land settlement at home, either for the complete removal of
Some labor from city congestion by permanent settlement, or,
as in Belgium, as a reserve occupation for city workers. The
planning of city growth might allow for this; but it is not an
unskilled occupation, and it would come within the scope of a
Scheme of maintenance and training to fit the men of the proper
temperament for re-entry into industry by this door. In general,
it is a large query whether England is now a country suited for
“home colonization”; we have not the spaces of America, or
the diversity of products.
This part of the whole scheme bears an obvious relation to
the proper regulation of the entrance of juveniles into industry.
It is easier for a skilled worker to keep a job or to be trained for
another job. The raising of the school-leaving age and the
development of continued education are the preventive aspects
of what for adults is the problem of restoration to industry.
In their case the technical school is taking the place of apprentice-
ship; but the full enforcement of the new Education Act is
urgent, if a large amount of preventable unemployment is to be
prevented. It is more urgent as a matter of mere economy, if
the state intends in future to accept the recommendation of
maintenance of adults under training. The addition of non-
Vocational education for juveniles up to a later age tends to Open
to their aspiration and competition other than the manual grades
of industry. But faith in this entire idea is a most difficult
* See Washington Conference, Report, II, 66–77.
BRITISH ASPECTS OF UNEMPLOYMENT 55
thing to create. It requires that industry will itself march with
educational preparation by the extension of Opportunity to share
in the government of industry. This reacts on the belief in
education, and education will in turn react upon it. The study
of unemployment will in the end overlap that of the system of
employment. But this is too large an issue to develop here.
REFERENCES
Ministry of Reconstruction, Report of Local Government Committee, Igr8
(Cd. 8917); Industrial and Social Conditions in Relation to Adult Educa-
tion, 1918 (Cd 91o'7).
Report of Provisional Joint Committee, Industrial Conference, Igrg (Cmd.
I39).
Ministry of Labour. Report of Committee of Enquiry on the Work of the
Employment Exchanges, 1920 (Cmd. IoS4).
Prevention of Unemployment Bill. (Bill 25 of 1921.)
Unemployment Insurance Acts, IQ20, 1921, 1922.
CHAPTER III
ENGLISH AGRICULTURE DURING THE WAR’
At the outbreak of the war English agriculture was in a fairly
prosperous condition. The great depression, which for more than
thirty years had made farming little better than a wild attempt
to fly from disaster, was succeeded by an unmistakable recovery
in the first decade of the new century. At enormous cost to
landlords and farmers the industry had adjusted itself to the
Condition of the world’s market. By 1910 the arable area in
England and Wales, which in the period 1871–75 averaged more
than 14% million acres, had been reduced to less than 11%
million acres; and the census of 1911 as compared with that of
I87I shows a decline of over 200,ooo in the number of persons
who were returned as engaged in agriculture.” In the meantime
rents had been reduced; and technique had improved, more
especially in those branches of agriculture which seemed least
endangered by foreign competition—that is to say, stock breeding
and dairying. These adjustments help to explain the recovery
which took place when prices began to move upward under the
influence of increased gold production. With the industry
adapted to a régime of low prices it was not necessary that
prices should reach anything approaching their old level to give
farmers substantial encouragement; and in fact, though the
rise in the prices of agricultural products was in most cases some-
What below the rise of prices in general as shown by Sauerbeck’s
index numbers, the prospects of farming became on the whole
fairly good. The outlook as revealed in Sir Daniel Hall’s Pil-
grimage of British Farming, which was the result of tours under-
* Printed originally in the Journal of Political Economy for October, 1922.
* The census of Igor gives the minimum. Between Igor and 1911 there was an
Increase of over 18,000 in the number of persons returned.
56
ENGLISH AGRICULTURE DURING THE WAR 57
taken by the author (then Mr. A. D. Hall) in 1910, 1911, and
1912, affords a striking contrast to the gloomy picture of the con-
dition of affairs only ten years before painted by Sir H. Rider
Haggard in his Rural England." There was a marked decline in
the number of farming bankruptcies, the annual average number
being 453 from 1892 to 1898, 315 from 1899 to 1905, and 299 from
1906 to 1912.” In 1912, Mr. Edward Strutt—a very great
authority on the subject—considered it “probable that a large
proportion of the second-class grasslands of the South and east
of England, and perhaps some of the east Midlands, could be
reconverted into arable with considerable profit to those engaged
in their cultivation.”3
But though the outlook for English agriculture in 1914 was
favorable, it cannot be said that the opportunities which were
opening out were fully used. The landlords, impoverished by
the depression and still bound by family traditions to maintain
their estates intact even when burdened under family settlements
with the payment of large sums to collateral relations, lacked the
capital requisite for the proper development of their land. They
also lacked the knowledge which had enabled their grandfathers
to be the pioneers of agricultural improvement. And they were
still imbued with a spirit of feudal paternalism, which made them
too lenient to inefficient tenants, so that the years of depression
had done less to bring about a “survival of the fittest” among
tenant-farmers than might have been expected.* The farmers,
* See, for example, Hall, Pilgrimage of British Farming, pp. 431, 437–38.
* See R. Lennard, Economic Notes on English Agricultural Wages (1914), p. 52.
3 See E. G. Strutt, Presidential Address to the Surveyors’ Institution (November
II, 1912), p. 6. On the general question see the Interim Report of the Royal Com-
mission on Agriculture of 1919, Cmd. 473 (“Majority Report,” $5; “Minority
Report,” $ 3); also R. E. Prothero (Lord Ernle), English Farming Past and Present
(1912), p. 382.
4 See Strutt, op. cit., p. 30. As regards the dearth of agricultural knowledge
among modern landlords a shrewd observer once suggested to me that the develop-
ment of athletics in the public schools was a contributing factor: games attracted
58 SOME ASPECTS OF RECENT BRITISH ECONOMICS
again, though their position and prospects were markedly im-
proved, in many cases failed to take advantage of the times.
Many were still burdened with debts incurred during the depres-
sion. A period of hardship had impaired the spirit of enterprise
and induced a spirit of timidity. As a class they suffered from
defective education. Though the best English farming was as
good as any in the world and English pedigree stock was almost
unrivaled, the average of English farming fell short of the stand-
ard which might not unreasonably have been expected and was
to a marked degree inferior to that which obtained in Scotland."
It is significant that the contraction of the arable area continued
after the period of recovery began. In 190o there were 12,217,-
208 acres of arable in England and Wales: in 1905 the figure
had sunk to II,656,oj9, in 191o to II,320,444, and in 1914 to
Io,998,254. Between 1900 and IQI4 the year 1912 was the only
one which witnessed any movement in the contrary direction.
Along with the factors mentioned above as inimical to the
full realization of the improved opportunities, something must
also be allowed for the alarm occasioned by the radical program
of Mr. Lloyd George in the years immediately preceding the war.
As the landowners were terrified by the budget of 1909, so the
farmers were terrified by the proposed minimum wage for farm
laborers which was the most important element in the land pro-
gram of IQ13.” It is difficult of course to gauge the influence
exercised by such fears, because they were fostered and paraded
for political purposes. But they deserve mention; and the Sub-
ject of the minimum wage brings one naturally to the considera-
the squire's sons, so that they took less part in the sports of country life. On the
failings and difficulties of landlords see Prothero, op. cit., pp. 400-401; Hall, op. cit.,
p. 437; J. Orr, Agriculture in Oxfordshire (1916), pp. II.5, II8-19; Report of the
Agricultural Policy Sub-Committee of the Reconstruction Committee (Lord Selborne's
Committee), Cd. 9079 (1918), Part I, § 18.
* See Hall, op. cit., pp. 150–53, 440–42; cf. Christopher Turnor, The Land
and Its Problems (1921), pp. 51, 54–56.
* See Prothero, op. cit., chap. xix, passim; J. A. R. Marriott, The English
Land System (1914), p. 133.
ENGLISH AGRICULTURE DURING THE WAR 59
tion of another feature of English rural economy on the eve of
the war—the condition of the agricultural laborer.
The class which forms the great bulk of the agricultural com-
munity had suffered rather than gained by the recent rise in
prices, for wages had not been advanced in proportion to the
increase in the cost of living." The advisability of minimum-
wage regulation was being discussed as early as the summer of
1912; and though political animosities and the traditional con-
servatism of the landowners somewhat clouded the issue, there
was a growing feeling that the poverty of the laborers was a
national disgrace, and that minimum-wage regulation was the
inevitable remedy.” A report of the Board of Trade, issued in
1910, showed that the total earnings of all classes of farm laborers
in England Only average 18/4 a week in 1907; that for ordinary
laborers alone the corresponding figures was 17/6; and that for
Oxfordshire, the county of lowest wages, the total average earn-
ings of the ordinary laborer were I4/II.3 The Land Enquiry
Committee estimated that between 1907 and IQI2 the cash wages
of ordinary farm laborers only increased as from Io2 to IO4.9.4
* The report of Mr. Lloyd George’s Land Enquiry Committee, which was pub-
lished in 1913, stated that “the real earnings of nearly 60 per cent of the ordinary
agricultural laborers have actually decreased since 1907”; see The Land, I
(Rural), 12.
* A Unionist Minimum Wage Bill for farm laborers was introduced in the
House of Commons in May, 1913; a Labor Party Bill was introduced a few weeks
later. Though most of the opponents of the minimum wage were to be found in
the ranks of the unionists, and its most ardent advocates were either liberals or
members of the labor party, the work done by the small group of progressive
unionists deserves recognition. Among them Sir Leslie Scott, the present Solicitor
General, was prominent. Mr. Turnor (op. cit., p. 24), speaking of agricultural
wages, says: “Several years before the war this low rate of pay had begun to
weigh upon the national conscience, and many farmers themselves realized that
wages should be higher; there was a general consensus of opinion that 20/- a
week in cash should be the minimum wage.” See also Hall, op. cit., pp. I53, 443.
3 See Cd. 5460, pp. xvi, xvii.
4 See op. cit., p. II. Judging by my own observations, I should say that in
North Oxfordshire any advance in wages in that period was very unusual. About
1912–13 the ordinary laborer’s weekly cash wage in that district was still 12/-;
and I4/6 would be a generous estimate of the weekly average value of earnings of
6o SOME ASPECTS OF RECENT BRITISH ECONOMICS
In 1913 the condition of the class was illumined by the publica-
tion of a volume called How the Laborer Lives by Mr. B. Seebohm
Rowntree and Miss May Kendall. This book contained detailed
studies of the weekly budgets of forty-two laboring families,
mainly in Yorkshire, Essex, and Oxfordshire, and reached the
conclusion that “on the average the forty-two families investigated
are receiving not much more than three-fourths of the nourish-
ment necessary for the maintenance of physical health.” Nor
was an insufficient income the only trouble of the laborer. The
shortage of cottages was acute, and many Cottages were unsanitary
and deficient in bedroom accommodation.” Moreover, the farm
hand had little prospect of advancement, except by emigration
or by deserting agriculture for some other occupation. Farms
as a rule were not large enough to allow of the creation of hier-
archy of bailiffs and foremen and of an organized system of pro-
motion. Small holdings, the creation of which had been encour-
aged by the Act of 1908, could do but little to improve matters,
for, though the prospects of a small holding had been made Some-
what better by the fall of cereal prices since 1870 (because cheap
bread means an improved market for small holders’ produce—
fruit, vegetables, poultry, eggs, etc.), the opportunities before
every description throughout the year—that was in fact the figure at which the
total average weekly income was commonly assessed by farmers when insuring
themselves against their liability under the Workmen’s Compensation Acts. It
must be remembered (I) that the man whose cash wages were lowest usually got
least also in the way of extra earnings, and (2) that these “ordinary laborers” were
a majority of the total number, at least in the low-wage counties. None the less
I am inclined to think that the lot of the laborer improved during the period under
discusssion, probably through a diminution in drinking and in the size of families.
* See B. S. Rowntree and M. Kendall, How the Laborer Lives, p. 304. Of the
forty-two households nineteen were in counties of Super-average wages, and
abnormally large families were not chosen. Similar results were reached in Igo3
by Mr. H. H. Mann and in 1905–6 by Miss M. F. Davies, see Sociological Papers,
I, I6I-93, and M. F. Davies, Life in an English Village (1909).
* See Report of Land Enquiry Committee, I, 83–Io'7.
ENGLISH AGRICULTURE DURING THE WAR 6I
the small holder were, save in exceptional districts and in the
case of exceptional men, strictly limited."
It seemed, too, unlikely that the laborers’ lot would be appre-
ciably improved by self-help in the way of trade unionism. The
geographical dispersion of the industry, the low wages, the
tendency of young men to leave agriculture for other callings,
and the discouraging memory of failure in the past were all factors
which hampered the growth of trade-unionist organization.
Old-fashioned prejudices which regarded a trade union as a hor-
rible and revolutionary thing still lingered among employers and
landlords, and wild acts of hostility were still possible. In
February, 1914, some farmers in Essex decided to dismiss and
evict their men unless these ceased to be members of the union
which they had recently joined. In Northamptonshire similar
action was taken a little later by Lord Lilford and the tenant
farmers on his estate, and it was reported in the Times on April
20 that “of the 7o laborers employed by Lord Lilford only half
a dozen have thrown in their lot with the union in preference to
retaining their positions.” It is true that both in Essex and in
Northamptonshire the settlement which was reached in the course
of the summer was on the whole a victory for the men. It is also
true that this early Victorian policy was vigorously condemned
by the Mark Lane Express, which is the organ of the National
Farmers’ Union, as well as by the Times. The Times described
Lord Lilford’s position as “an antiquated attitude wholly Out of
touch with the current of thought and feeling to-day” and
* The small holder in England usually needs subsidiary employment, e.g., in
the way of hauling; but there is only a certain amount of such employment to be
had, so that small holders cannot be very numerous in an ordinary village. For
the small-holding movement see Hermann Levy, Large and Small Holdings (1911);
A. W. Ashby, Allotments and Small Holdings in Oxfordshire (1917); W. H. R.
Curtler, The Enclosure and Redistribution of Our Land (1920). For a weighty
criticism see C. S. Orwin, “The Small Holdings Craze,” Edinburgh Review, April,
1916. In addition to other factors, one must remember that the poverty of the
farm laborer made it impossible, in most cases, for him to save enough capital to
start a small holding with any prospect of success.
62 SOME ASPECTS OF RECENT BRITISH ECONOMICS
remarked that “the men have just as much right to belong to the
Union if they choose as he has to belong to the Carlton Club.”
None the less the fact that laborers who joined a trade union were
still liable to be treated in this fashion undoubtedly acted as a
deterrent. Agricultural trade unionism was certainly making
Some progress in the period 1912–14. In 1912 the union which
had been founded six years before in the Eastern Counties, and
had been hard hit by an unsuccessful strike in 1910, was reorgan-
ized as the National Agricultural Laborers’ and Rural Workers’
Union. At the end of 1913 it counted nearly 12,000 members,
and in June, 1914, the total membership was some 15,000, dis-
tributed in twenty-six counties of England and Wales. Mean-
while, in 1910, the Workers’ Union renewed its previously unsuc-
cessful activities in rural districts and made considerable progress.
Between December, IQI2, and March, 1914, this union increased
its membership by nearly 90,000; but probably only a small frac-
tion of these were farm laborers. Two factors were at this time
Contributing to bring about a general growth of trade unionism
in England. . In the first place, as Mr. and Mrs. Webb have
pointed out, the National Insurance Act of 1911, “which prac-
tically compelled every wage-earner to join an ‘approved society’
of some kind, led to a dramatic expansion of Trade Union mem-
bership.” Secondly the great miners’ strike of 1912 meant that
all over England non-unionists who were thrown out of work by
lack of coal witnessed the spectacle of their fellows who were in a
union drawing out-of-work benefit which they did not receive.”
Among the agricultural laborers the revival of trade unionism
helped to bring about a small but helpful increase of wages in
some districts. In Lancashire an overtime rate was introduced,
after a strike, in 1913. In Northamptonshire wages were raised
I/– a week; sixpence an hour overtime was granted for men earn-
* See S. and B. Webb, History of Trade Unionism (1920), p. 498.
* This situation was noticeable among railway workers, who form a connecting
link between the rural districts and urban trade unionism.
ENGLISH AGRICULTURE DURING THE WAR 63
ing over I6/– a week; and it was arranged that work should cease
On Saturdays at 4: oo P.M. This was in the Summer of IQI4. In
Essex the dispute ended on the very eve of the war, the wage being
fixed at 15/– a week, which was I/– less than the men had de-
manded." But these developments are not sufficient to disturb
the general conclusion that trade unionism could not adequately
ameliorate the laborers’ lot. The history of agricultural trade
unionism in England is a lamentable story of temporary revivals
followed by rapid decline, and though the change of conditions
during the war has given better ground for hope as regards the
future, it would be unwarrantable to regard the movement of
the years 1912–14 as the initiation of a new era. In 1874 the
National Agricultural Laborers’ Union, of which Joseph Arch
was the leader, had 86,ooo odd members, but the next year saw its
membership reduced to less than 59,000, and by 1894 it had only
I, IOO members. At their strongest moments the rural laborers’
unions before the war contained only a small fraction of the total
number of agricultural wage-earners, and the Times was quite
justified in describing the agricultural laborers, as it did on March
6, 1914, as “an unorganized body.” In 1912, Mr. George
Edwards, then general secretary of the Agricultural Laborers’
and Rural Workers’ Union, said: “Forty years’ experience has
convinced me that the laborers cannot get a living wage by Trade
Union effort alone. The difficulties of organization are so great
that we cannot get an organization strong enough to enforce it.”
The outbreak of war in 1914 had an immediate effect upon
the agricultural situation in England, but at first the effect was
Only slight, and the changes which took place in the first two years
of the war period seem insignificant in comparison with those
* See the Manchester Guardian, August 5, 1914. There was also a rise of I/–
a week in some parts of Norfolk, but this seems to have been due less to trade-
unionist activity than to the example set by His Majesty the King at Sandringham.
* See, for the whole question of agricultural trade unionism, E. Selley, Village
Trade Unions in Two Centuries (1919); cf. R. Lennard, op. cit., pp. I4–18.
64 SOME ASPECTS OF RECENT BRITISH ECONOMICS
which occurred later. The price of wheat, which had averaged
34/– a quarter at the end of July, rose to 40/3 in the week ending
August 15, and there was a Corresponding advance in the prices of
barley and Oats. But this did not herald a continuing upward
movement, and it was not until after the middle of November,
1914, that the weekly average price of wheat reached 41/–. From
that time onward until the early part of the summer of 1915 the
advance of prices was more marked, and in the week ending June 5
the prices of wheat, barley, and oats respectively averaged 61/9,
35/4, and 32/5 as compared with 34/-, 25/II, and 19/4 in the cor-
responding week of IQI4. In the case of wheat and oats, however,
these prices were not maintained. Wheat was selling at 43/– in
the middle of September: oats averaged 26/I in the week ending
September 25. Barley, on the other hand, appreciated consider-
ably; but though wheat and oat prices moved upward during the
winter of IQI5–I6 and the weekly average for wheat was never
less than 50/- between the end of October and the middle of June,
wheat came down to 46/3 at the beginning of July, and after
June 12, 1915, the weekly average price of wheat never reached
6o/– until October 21, 1916. At the time of autumn sowing in
that year, there was little to indicate to the farmer that he was
on the eve of a long period of very high prices.
Table I shows the chief changes in cropping which took place
in this first period of the war in England and Wales. The figures
TABLE I
Grain Crops
Year Arable #. Wheat Barley Oats Potatoes
Peas
I913 . . . . . II, OS8 5, 7I9 I, 702 I, 559 I , 975 442
I9I4. . . . . . Io, 998 5, 759 I,8o'7 I, 505 I , 93C) 462
I9I5 . . . . . Io, 966 5,934 2, I'7O I, 232 2, o88 463
1916. . . . . II, O5I 5, 731 I, QI2 I , 332 2, o&5 428

represent thousands of acres. The poor results attained by the
end of 1916 were Seriously disquieting. The arable area was
ENGLISH AGRICULTURE DURING THE WAR 65
actually less than it had been in 1913, and though the wheat area
was more extensive than in the days before the war, the figure for
I916 shows a decline of more than a quarter of a million acres
from the total of 1915, and in spite of the need for bread corn,
farmers were devoting increasing attention to the production of
barley. The acreage under potatoes was in 1916 considerably
less than before the war." Moreover the harvest of 1916 was
poor.” At the end of the year it was estimated that the amount
of winter wheat sown was 15 per cent less than in the preceding
year.” On the very eve of the change of government, Mr. Acland
(then Parliamentary Secretary to the Board of Agriculture), in
answer to a question in the House of Commons, referred to the
fact that “short harvests abroad, the development of submarine
activity, and the bad weather of the last two months” had “made
it clear that a very special effort must be made to maintain home
food production,” and on December 20 the new President of the
Board, Mr. Prothero (now Lord Ernle), spoke of the country as
being in the position of a “beleaguered city.” These statements
are all the more significant because they were made before the
declaration of unrestricted submarine warfare by Germany. It
was on January 31, 1917, that the German government informed
the American ambassador in Berlin of its intention “to abandon
the limitations which it had hitherto imposed upon itself in the
employment of its fighting weapons at sea.” During the month
of February some 500,000 tons of British merchant shipping
were sunk.
* This does not, of course, include potatoes grown in gardens and allotments.
* The yield of wheat was 28.60 bushels per acre, the average of the ten years
I907-I6 being 31.4o bushels. The yield of potatoes was 5.85 tons per acre, as
compared with a ten years’ average of 6.16 tons.
3 See Report of the War Cabinet for 1917 (Cd. 9oo5), p. 156. It must be
remembered that in England spring-sown wheat is always a small crop; even in
I918 it only amounted to 263,000 acres, and in IQ21 had fallen to 65,000 acres.
4 See Hansard’s Parliamentary Debates: House of Commons,Vol.88, Col. 614-615
(Dec. 4, 1916) and col. I534.
66 SOME ASPECTS OF RECENT BRITISH ECONOMICS
It is difficult to acquit English farmers of the charge of a
certain amount of supineness during 1916. It must, however, be
remembered that the course of cereal prices had not hitherto
pointed to a long continuance of conditions which would make a
large extension of the arable area profitable. Secondly, the Sup-
ply of agricultural labor had been greatly diminished by enlist-
ments. By the beginning of 1917 some 250,000 agricultural
laborers had joined the army, and a very large number had been
attracted away from farm work by the higher wages which were
to be obtained in munition factories, in the building of camps
and aerodromes, and in other occupations Connected with the war."
It is small wonder that the year 1917 saw state control Sub-
stituted for the system of laissez faire in the sphere of British
agriculture. The Food Production Department of the Board of
Agriculture was set up on January I, and this department was
reorganized and the scope of its activities greatly enlarged in the
following month.” Secondly, on January Io, a regulation was
issued under the Defence of the Realm Act (Regulation 2 M.)
* See Report of the Director-General of Food Production (1918), p. 4. Those
who knew the conditions of agricultural employment had long foreseen the danger
of undue depletion of the ranks of farm labor by enlistment. The unit of produc-
tion being Small, the farmer has not so loud a voice wherewith to attract the
attention of the government as, for example, a colliery or a railway company. And
a shortage of bread is only felt when it is too late to repair it. If coal runs short,
soldier miners can speedily be marched back to the mines; but no man can march
back from harvest to seedtime. Some blame, however, attaches to English farmers
for their slowness in raising wages sufficiently to diminish the attraction of other
employments. In January, 1917, the average wage of ordinary farm laborers in
England was 22/9; in Berkshire the winter rate in 1917 was from 15/- to 16/-;
and, on April 24 in the same year, Mr. Prothero said in the House of Commons:
“I know a certain farmer in a certain district who is paying his men I4/– a week
and not a penny more.” See Report on Wages and Conditions of Employment in
Agriculture, I (Cmd. 24), IoS-6; Hansard, op. cit., House of Commons, Vol. 92,
col. 2258; cf. E. Selley, op. cit., p. 144. In general, farm laborers' wages at the
beginning of 1917 were only some 50 per cent higher than in 1907, while the
combined price of wheat, barley, and oats was in the last week of 1916 greater by
139 per cent than it had been on the eve of the war.
* See Report of the Director-General of Food Production (1918), pp. II-12.
ENGLISH AGRICULTURE DURING THE WAR 67
which gave the Board of Agriculture power “to enter on and take
possession of any land which in their opinion is not being so
cultivated as to increase, as far as practicable, the food supply of
the country, and after entry thereon, do all things necessary or
desirable for the cultivation of the land or for adapting it to cul-
tivation”; and also laid it down that the Board might “by
notice served on the occupier of any land require him to cultivate
the land in accordance with such requirements as the Board may
think necessary or desirable for maintaining the food supply of the
country and may prescribe in the notice.” Finally the govern-
ment introduced the Corn Production Bill, and this was read for
the second time on April 25 and received the royal assent on
August 21.
Besides giving the Board of Agriculture powers to direct
farmers in the cultivation of their land—a provision which proved
to have little importance because orders to plow up grass, and
other directions, could be given and were given under Regulation
2 M. of the Defence of the Realm Act—the Corn Production Act
did two important things, both of which seemed called for by the
special circumstances of the time, but both of which had also
been advocated as desirable features of a permanent agricultural
policy. The establishment of a legal minimum wage for farm
laborers had been the foundation of the Land Campaign of IQI3,
and in 1917 the need of attracting fresh labor to the land, and
the impossibility and injustice of giving lower wages to experi-
enced agricultural workers than to unskilled townsmen who were
physically unfit for military service, made it essential that farmers
should be compelled to raise wages. Guaranteed minimum
prices for cereals harmonized well with the long-cherished desire
of the opponents of free trade to give an artificial stimulus to
arable farming, and they had been advocated, as a war measure,
in the Interim Report of Lord Milners’ committee (July, 1915)*
* See Cd. 8048, p. 4. In their final report, dated October 15, 1915, the Milner
Committee stated that they had only been unanimous in suggesting a guaranty
68 SOME ASPECTS OF RECENT BRITISH ECONOMICS
and, as part of a post-war policy of national Security, by the
Agricultural Policy Sub-Committee which had been appointed
by Mr. Asquith with Lord Selborne as its chairman and presented
the first part of its report at the end of January, IQI 7.* Even
for the immediate purpose of stimulating corn production during
the war it was felt that the guaranty must be for several years:
if farmers were to be encouraged to plow up grassland, a sudden
fall of prices on the conclusion of hostilities was the thing which
they would especially desire to be insured against.
It is unnecessary to recount the provisions of the Corn Produc-
tion Act in detail. As regards wages, the chief points to be
noticed are: (1) that minimum-wage rates were to be fixed by a
central Agricultural Wages Board consisting of representatives of
employers and of workmen in equal numbers, and certain mem-
bers appointed by the Board of Agriculture; (2) that district
committees were established to make recommendations to the
Wages Board; (3) that the minimum wage was in no case to be
less than 25/– a week for an able-bodied man; (4) that the mini-
mum-wage rates might be fixed “so as to apply universally to
workmen employed in agriculture, or to any special class of
workmen in agriculture, or to any special area, or to any special
class in a special area, subject in each case to any exceptions
which may be made by the Agricultural Wages Board for employ-
ment of any special character, and so as to vary according as the
for wheat “on the hypothesis that there was urgent danger to our impôrted
food supplies owing to the activity of hostile submarines” and noted that the
government had decided that this danger was not sufficiently great to justify the
establishment of a guaranty. See Cd. 8095, pp. 3, II.
* See Cd. 9079 (1918). The Selborne committee also recommended the
establishment of a minimum wage.
* The appointed members were not to exceed one-quarter in number of the
whole Board: actually the Board consisted of thirty-nine members, of whom Seven
were appointed. Because of the defective organization of both farmers and
laborers, however, only half the representative members were actually elected
by the organizations and half were selected by the Board.
ENGLISH AGRICULTURE DURING THE WAR 69
employment is for a day, week, month, or other period, or accord-
ing to the number of working hours or the conditions of the
employment, or so as to provide for a differential rate in the case
of overtime”; and (5) that an employer who failed to pay the
minimum rate was liable to a substantial fine in addition to the
repayment of arrears." The act also authorized arrangements
for the payment of rates less than the minimum to persons
affected by mental or physical infirmity and for the valuation of
allowances in kind. Guaranteed minimum prices were estab-
lished for wheat and oats. For the crop of 1917 these prices were
60/- per quarter of 480 lb. in the case of wheat and 38/6 per
quarter of 312 lb. for oats. The system was to continue until
1922; but the minimum prices were to fall in 1918 and 1919 to
55/- for wheat and 32/- for oats, and in the years 1920, 1921, and
I922 to 45/- for wheat and 24/– for oats. If the average price of
a quarter of wheat or oats for seven months from the beginning
of September in any year was less than the guaranteed mini-
mum price for that year, the farmer was entitled to be paid four
times the amount of the difference for every acre planted with
wheat and five times the difference in the case of oats for every
acre planted with that grain. The payments to the farmer might,
however, be reduced or withheld altogether if the land had been
negligently cultivated.”
It is interesting to compare the system and scale of guaranteed
prices established by the Corn Production Act with the proposals
of the Milner and Selborne committees. The former committee
had recommended a guaranty for wheat only, had suggested that
45/- a quarter should be guaranteed for four years, and had urged
that “if, in the opinion of the Government, it is necessary that
the promise of a guaranteed minimum should be accompanied by
a maximum, the latter should, in our opinion, in no case be fixed
* The maximum fine was £20 for each offense plus £1 a day for the con-
tinuance of the offense after conviction.
* Rents were not to be raised above the figure which might have been obtained
if the guaranties had not been established.
7o SOME ASPECTS OF RECENT BRITISH ECONOMICS
at less than 55/- per quarter.” The Selborne committee went
farther. It advocated that oats should be included in the scheme,
that for the first two years after the conclusion of peace the
guaranties should be “at least comparable to the prices ruling
during the war itself,” and that a permanent guaranty should
be given of 42/– a quarter for wheat and 23/– for oats. Moreover
the committee urged that these prices “certainly would not afford
a justification for any attempt in times of peace to fix maximum
prices for wheat or oats nor for requisitions of corn grown in the
|United Kingdom at less than the market price.” Both com-
mittees considered that the payments should only be made in
respect of corn actually harvested.”
The Corn Production Act not only put the guaranteed prices
higher than those recommended by the committees, but required
that they should be paid on an acreage basis, the crop being
assumed to be four quarters an acre in the case of wheat and five
quarters in the case of oats.4 The inclusion of oats, of course,
made it difficult to pay for the actual crop, because oats are
largely consumed on the farm. The acreage basis too had the
advantage of putting a premium upon the extension of the area
under the two crops: the farmer who felt doubtful about the
yield which would be obtained from grassland newly converted
* See Cd. 8048, pp. 4-5. * See Cd. 9o'79, pp. 18–19.
3 See Cd. 8048, p. 4; Cd. 9ozo, p. 19. -
4 The gradual expansion of the policy seems to illustrate the contention of
free traders that protectionists, whether they advocate tariffs, bounties, or guaran-
teed prices, are always, like Oliver Twist, asking for more. In the Majority Report
of the Royal Commission of 1919 the inclusion of barley was recommended, the
basic prices for the wheat and oat guaranties were considerably higher than those
established for 1917 by the Corn Production Act, and the payment of these guaran-
ties on an acreage basis was advocated as part of a permanent peace-time policy.
One witness who gave evidence before the Commission urged that guaranteed
prices should be established, not only for cereals, but for all agricultural products
except milk; another championed a guaranty for milk; a third one for potatoes;
two others, one for meat. See Cmd. 473, p. 8; Cmd. 365, qu. 5468; Cmd. 345,
qu. 2358; Cmd. 391, qu. Ioz Ig; Crmd. 445, qu. I5570; Cmd. 665, qu. I74oz.
ENGLISH AGRICULTURE DURING THE WAR 7I
to arable would be encouraged by knowing that a poor crop would
not diminish the sum payable under the guaranties. On the
other hand the system might make farmers careless about yield
and neglectful of rotations, and might Conceivably incline them
to plow up their worst land instead of land more suitable for
cereals. It must, however, be remembered that the operation of
ordinary economic motives was to some extent maintained by
the fact that the crops the farmer grew remained his own to dis-
pose of in the Ordinary way, though it is also true that these
motives were impeded by a system of maximum prices.
The establishment of maximum prices was connected with
the upward sweep of prices which began toward the end of 1916;
and in studying the history of English agriculture after the passing
of the Corn Production Act it is essential to remember that, like
the Corn Laws at certain periods of the Napoleonic Wars, its
provisions in regard to guaranteed prices were Swamped by the
change in price levels. The guaranties never became operative.
At the beginning of July, IQI6, English wheat was selling at
46/3—a lower figure than any which appears in the weekly aver-
ages since the third week in October, 1915, and one which was not
greatly in excess of the average prices of the end of IQI4. By
the middle of November the price was over 70/– –a level not
previously reached during the war. Moreover it continued to
rise, and in the week ending April 14, 1917, averaged 85/2, having
remained above 75/- ever since the end of December. On
April 16 an order was issued fixing maximum prices for grain of
the 1916 harvest—the prices being 78/– per 480 lb. for wheat,
65/- per 400 lb. for barley, and 55/- per 312 lb. for oats. The
advance in wheat prices had been accompanied by a similar ad-
vance in the prices of the other cereals: in the week ending
April 14, Oats had averaged 57/2 and barley 7I/Io.
Henceforth maximum prices governed the markets, and their
history has been summarized in the Majority Report of the Royal
Commission of 1919. “The maximum prices for the 1917 crops,”
72 SOME ASPECTS OF RECENT BRITISH ECONOMICS
say the Commissioners, “were fixed in August, 1917, in the case
of wheat, rye and oats, by a scale based on date of delivery
ranging from 73/6 to 77/9 per quarter of 504 lb. for wheat and
rye, and 44/3 to 48/6 per quarter of 336 lb. for oats; and in the
case of barley at a flat rate of 62/9 per quarter of 448 lb. For
the 1918 crop, the corresponding prices were: for wheat and rye,
75/6 to 76/6; for oats, 47/6 to 52/-; and for barley, 67/– per
quarter.” The report adds that “the actual prices received by
farmers for their crops approximated to these maximum prices.”
It is time now to return to the statistics of agricultural pro-
duction. Table TT shows the chief changes in cropping which
TABLE II
Grain Crops
Year Arable #. Wheat Barley Oats Potatoes
Peas
I916. . . . . II, OSI 5, 73 I I, QI 2 I , 332 2, o&5 428
I9I 7 . . . . . II, 246 6, o&5 I, 918 I,46o 2, 259 5o8
I918. . . . . I2; 399 7,481 2, 557 I, 5OI 2,78o 634

took place in England and Wales in 1917 and 1918. The figures
represent thousands of acres. These figures indicate a notable
achievement. In two years the arable area was increased by
I,348,000 acres. That the wheat acreage increased so little
between 1916 and 1917 is not surprising, for in England wheat is
almost entirely autumn Sown and the autumn Seedtime was past
before the factors making for increased production became opera-
tive. No doubt mistakes were sometimes, perhaps frequently,
* See Cmd. 473, § 15, p. 5. For certain agricultural products other than
cereals maximum prices had been fixed somewhat earlier, e.g., hay and straw
(June, 1916), milk (November, 1916), seed potatoes (January, 1917), ware potatoes,
(February, 1917). See Report of the Committee appointed by the Agricultural
Wages Board to inquire into the Financial Results of the Occupation of Agricultural
Land and the Cost of Living of Rural Workers, Cmd. 76 (1919), pp.4-8; cf. Benjamin
H. Hibbard, Effects of the Great War upon Agriculture in the United States and
Great Britain (1919), pp. 204-19.
ENGLISH AGRICULTURE DURING THE WAR 73
made in the process of breaking up pasture, and Some land was
plowed which it would have been better to retain as grass. But
estimates made in regard to a Sample of about 78,000 acres dis-
tributed among more than 600 parishes suggest that on the whole
the results justified the conversion. Table III, taken from the
TABLE III
g g Average Yield
Estimated Yield on i.e., | Average of the Ten
New Arable, Igr8 Englandº Wales, Years Igog–18
Bushels Bushels Bushels
Wheat. . . . . . . . . . . . . . . . . . . 3 I. 3 32.9 3I. I
Oats. . . . . . . . . . . . . . . . . . . . . . 4.O. 7 4 I. 3 39 - 4
Barley. . . . . . . . . . . . . . . . . . . . 28.8 32.4 3.T. 9
Beans. . . . . . . . . . . . . . . . . . . . 27.5 29.4 27.6
Peas. . . . . . . . . . . . . . . . . . . . . 26.9 27.5 24.8
Tons Tons Tons
Potatoes. . . . . . . . . . . . . . . . . . 7. I 6.6 6.3

Agricultural Statistics of the Ministry of Agriculture for the year
I919, sets forth the evidence of this sample, which, it is stated,
included “cases of total or partial failure” and was based on
“estimates made by qualified persons.”
Of the newly plowed land, probably about 70 per cent was
Sown with oats and 15 per cent with wheat.”
There is, however, another side to the picture—the statistics
of live stock. The most important figures are given in Table IV
TABLE IV
Year Cows in Milk Total Cattle Sheep Pigs
1913 . . . . . . . . . . . . . . . . . I, 707 5, 7 I 7 I7, I3O 2, IO2
1914. . . . . . . . . . . . . . . . . . I, 908 5,878 I7, 26o 2,481
1915 . . . . . . . . . . . . . . . . . . 1,882 6, O64 I 7, 523 2, 42O
1916. . . . . . . . . . . . . . . . . . I,856 6, 216 I 7, 95T 2, 168
1917 . . . . . . . . . . . . . . . . . . I, 83 I 6, 227 I7, I 70 I , 919
1918. . . . . . . . . . . . . . . . . . I,858 6, 200 I6,475 I, 697

(thousands omitted). It will be noticed that, with the exception
of Cows in milk, the totals of all these classes of stock were
* See Cmd. 680, p. 4. *Ibid., p. 5.
74 SOME ASPECTS OF RECENT BRITISH ECONOMICS
lower in 1918 than in 1916, and that the cows in milk were fewer
than they had been in 1914. Moreover the amount of food for
live stock which was produced in 1918 is estimated to have been
less than that produced in 1916 by more than two million tons.”
Part of this last decline was, however, due to the accidents of the
seasons, for the hay Crop of IQI6 was unusually good, while that
in 1918 was deficient. And Lord Ernle has calculated that if
these losses in fodder are converted into their equivalent in meat
and are set against the gains in other directions, a comparison of
the two years leaves us with a net gain of 3,294,000 tons of human
food.”
There is, however, a sense in which the food-production cam-
paign may be said to have disappointed its promoters. The
original scheme which was submitted to the Cabinet in April,
1917, was for an addition of three million acres to the arable area
of 1916, before the harvest of 1918. But the Cabinet did not
consider the scheme until late in June. As Lord Ernle Says,
“precious months were lost,” and partly because of this, partly
because an increase of production was expected in Ireland and
Scotland, the program was modified.* The revised program
“provided for an increase in the tillage area of England and Wales
of 2,600,ooo acres, as compared with IQI6, and it was estimated
that 2,050,000 acres of permanent grass would have to be ploughed
in order to obtain this result.”4 Even this modified scheme was
not carried out. The total increase in the arable area was, as
we have seen, less than 1,400,000 acres, and the total increase in
the area under crops other than grass is put by Lord Ernle at
* See Lord Ernle’s article, “The Food Campaign of 1916–18,” Journal of the
Royal Agricultural Society of England, LXXXII (1921), 35.
* See ibid., pp. 36–37.
3 See ibid., p. 29.
4 See Report of the Director-General of Food Production (1918), p. 6. The
Report of the War Cabinet for 1917, however, describes the 1918 program as provid-
ing for “an increase in the arable area over 1916 of 2,700,000 acres in England
and Wales.” See Cd. 9oo5, pp. I58–59.
ENGLISH AGRICULTURE DURING THE WAR 75
“upwards of 1,950,000 acres.” Lord Ernle describes the chief
factors which hampered progress in the following passage:
One obstacle to the progress of the campaign was the difficulty of con-
vincing farmers of the reality of the danger. Each delay, disappointment,
failure, or modification of plans, however inevitable it might be, each acre
of land appropriated for aerodromes, was used as a proof that the position
was safe. It not only encouraged farmers to hang back, but chilled the
enthusiasm of the Executive Committees. From this point of view, the
withdrawal of the 18,000 skilled ploughmen on May Io, IQI 7, the loss of the
summer months, the delay in the sanction of the programme were serious
and widespread in their combined effects. Still more paralysing was the
comparative failure to supply the promised soldier labour. . . . . Almost
equally great was the disappointment over the supply of tractors.”
In the Spring of 1918 a new program was prepared for the
forthcoming season. A million more acres of grass were to be
plowed up. But this scheme was never submitted to the Cabinet.
The German offensive, leading to further military demands upon
the man power of the country and the withdrawal of large num-
bers of agricultural workers for military service, combined with
other reasons to convince the Board of Agriculture that the pro-
posed increase of tillage could not be carried out. In July, IQI8,
the program was abandoned, and Lord Lee, the Director of Food
Production, resigned. Lord Ernle remarks that “two circum-
stances, the first of which was accidental—the foul weather of
September and October, and the signature of the Armistice in
November—subsequently justified the Board’s decision.” But
he adds that “there were obvious risks in the abandonment of the
programme as well as in its prosecution.”
It is Scarcely possible to describe in a few words the main
effects of all these agricultural changes upon the various classes
of the rural population. There can be no doubt that the land-
Owners suffered loss. A strong Committee which was appointed
by the Agricultural Wages Board in March, 1918, to inquire into
* See Lord Ernle, Food Campaign of 1916–1918, p. 32.
* See ibid., pp. 29–30. * See ibid., pp. 43-47.
76 SOME ASPECTS OF RECENT BRITISH ECONOMICS
the financial results of the occupation of agricultural land and
the cost of living of rural workers, reported a year later that so
far as evidence was available it tended to show: (1) that in the
majority of cases changes of rental had only taken place on a
change of tenancy; (2) that something like 25 per cent might be
taken as the proportion of land subjected to rent adjustment since
Lady Day, 1914; and (3) that in many cases, even where the
rents had been raised, they had not reached the full competitive
value of the land. Meanwhile, the upward rush of prices had
enormously increased the cost of repairs, and though the full
influence of this factor was not felt until after the conclusion of
hostilities because shortage of labor and materials compelled the
postponement of repairs which would normally have been under-
taken, note was already taken in the above-mentioned report of
the large quantity of land which was being sold.”
If landowners suffered, farmers undoubtedly prospered during
the war. They had many difficulties to contend with, but their
incomes increased. Though the régime of maximum prices, at
least in the case of cereals and milk, prevented them from taking
full advantage of the war-time market in the later stages of the
Struggle, and though the costs of production rose, prices were on
the whole very remunerative. The fixed prices did not always
operate to reduce profits. For example, the Secretary of the
Ministry of Food (Sir William Beveridge) told the Royal Com-
mission on Agriculture in 1919 that, in the case of potatoes, the
farmer, at least in the year I.917, had “got money from the State
* See Cmd. 76, pp. 9-II. The diminishing proportion of the net returns
received by the landlord of a farm in one of the Eastern Counties is shown by a
graph in an article on “Farming Equipment and Finance” by C. S. Orwin and
S. J. Upfold which is published in the Journal of the Royal Agricultural Society
of England, LXXXII, I55.
* See Crmd. 76, p. II. The accumulation of arrears of repairs was particularly
disastrous for the landowners because building costs advanced rapidly after the
armistice. .
ENGLISH AGRICULTURE DURING THE WAR 77
which unquestionably he would not have got in the open mar-
ket.” It must be remembered, too, that the farmer was exempt
from the excess-profits duty. The fact that few English farmers
keep adequate accounts and the spirit of Secretiveness which is
not uncommon among them makes it impossible to obtain com-
prehensive statistical evidence as to the degree to which their
profits increased. But such facts as are available point to a very
substantial improvement. The National Farmers’ Union of
England submitted to the Royal Commission some figures relat-
ing to a group of 78 farms with a total area of 33,531 acres.”
The farms were divided into six classes according to size, and in
the four classes which in 1913–14 showed an excess of receipts
per acre over payments per acre, the balance per acre in the
period 1917–19 showed an increase of 277 per cent, 229 per cent,
673 per cent, and 39 per cent respectively. In the two classes
of farms which had adverse balances in 1913–14 deficits of 8/3
and 4/5 an acre were in 1917–19 converted into credit balances
of 34/– and I2/–. Further light on the question is supplied
by the Report of the Committee of the Agricultural Wages Board
which has previously been quoted. The Committee remark that
the material for a comparison between the pre-war position of
farmers and their position during the war is scanty, but Say “it
all tends to the same conclusion, viz., that farming has been sub-
stantially more remunerative during the war than in the period
immediately preceding it,” while “it would appear that the year
I916–1917—i.e., the twelve months ending Lady Day, IQI 7—was
that in which profits were largest.” The Committee came to the
conclusion that “the farmers’ average pre-war net returns from
farming were in the region of 9/– to Io/– per acre, and that in
1918 these had risen to about 34/– per acre,” but they observed
that the position had subsequently been changed “by the Opera-
* See Minutes of Evidence, I (Cmd. 345), p. 103, question 2517.
* See ibid., V (Cmd. 665), Appendices, p. 3.
78 SOME ASPECTS OF RECENT BRITISH ECONOMICS
tion of the Agricultural Wages Board’s awards, the full effect of
which was not felt in the year 1917–1918.” *
To the agricultural laborer the war brought an increase in
Wages and a reduction of hours, but it is arguable that an agricul-
tural minimum wage might have been established if there had
been no war, and that, though circumstances connected with the
War emergency ultimately led to its establishment in 1917, the
Outbreak of hostilities actually postponed legislation. In the
first years of the war wages rose sporadically and slowly; but a
minimum wage of 25/– a week was made obligatory from the date
On which the Corn Production Act came into force (August 21,
I917), and the Agricultural Wages Board set up by that act had
power to fix rates higher than the statutory minimum and was
Charged with the duty of fixing such minimum rates as would
“secure for able-bodied men wages which, in the opinion of the
Board, are adequate to promote efficiency and to enable a man
in an ordinary case to maintain himself and his family in accord-
ance with such standard of comfort as may be reasonable in
relation to the nature of his occupation.” The first award made
by the Wages Board—one for the county of Norfolk—came into
Operation on May 20, 1918. By the end of the year no English
Or Welsh county had a minimum rate of less than 30/- for an
able-bodied male over twenty-one years of age, while in Cheshire,
Durham, and Northumberland the minimum rate was 36/-, and,
in Glamorganshire and Monmouthshire, 36/6. It was not,
however, the high-wage counties which received the largest
increases; and the committee appointed by the Wages Board
* See Crmd. 76, pp. 38, 40. For other evidence see the Minority Interim Report
of the Royal Commission on Agriculture (Cmd. 473), p. 9, § 4, and the sections of
the Minutes of Evidence there referred to. The contrast between the war period
and the years immediately preceding the war shows itself in the statistics of farming
bankruptcies. The total numbers of farming failures under the Bankruptcy and
Deeds of Arrangement Acts were 245 in 1910, 305 in 1911, 336 in 1912, 326 in 1913,
I89 in IoI4, 132 in Ior 5, 78 in 1916, 65 in 1917, 30 in 1918.
* See 7 and 8 Geo. 5, chap. 46, § 5 (6).
ENGLISH AGRICULTURE DURING THE WAR 79
reported in March, 1919, that a general result of the minimum
wage had been “substantially to narrow the gap between the
highest and lowest paid Counties.” Including the value of
allowances this committee estimated the average minimum rates
of 1918 as 31/5 for Ordinary laborers, and 38/I for stockmen, or
33/– for all classes. These figures, as Compared with the wages
of 1914, were reckoned to represent a rise of 83 per cent for ordi-
nary laborers, Io.3 per cent for stockmen, and 88 per cent for all
classes. In the same period the expenditure of a farm worker’s
family on food, rent, fuel and light, clothes, insurances, and
cleaning materials taken together was estimated to have in-
creased 85 per cent.” “As a general statement,” the committee
observes, “it would be true to say that the minimum rates in 1918
represent fewer hours of work than the wages quoted for 1914.”
No doubt the establishment of overtime rates tended to lessen
the amount of overtime that was worked by making it costly to
the employer. The establishment of extra rates for overtime
also provided an instrument which at the end of the war was used
as a means of securing a weekly half-holdiay (apart from Sunday)
for the agricultural worker.3 But the effects of the minimum
* See Crmd. 76, p. 21. The desirability of such a leveling up of agricultural
wages in the counties of low wages was urged by the present writer in 1914. See
R. Lennard, op. cit., p. 94.
* See Cnd. 76, pp. 24, 37. As regards the distribution of the net returns of
farming, the article of C. S. Orwin and S. J. Upfold already cited contains the
following statement with regard to the farm the accounts of which were analyzed:
“The landlord’s share declined steadily throughout the period, no increase in
rent having occurred, and speaking broadly it may be stated that the farmer
took his original share plus that which would have gone to the landlord on the
previous basis of distribution, whilst labor continued to take the same proportionate
amount as at the outset.”—C. S. Orwin and S. J. Upfold, op. cit., p. 154.
3 I venture to quote some arguments in favor of this from the Minority Report
which I addressed to the Minister of Reconstruction in November, Igr8, as a
member of the committee appointed by him to consider the employment of returned
sailors and soldiers on the land. I had previously approached several members of
the Wages Board in much the same sense: “A rigid law that there shall be a
Saturday half-holiday is unthinkable in agriculture. Cows must be milked,
8o SOME ASPECTS OF RECENT BRITISH ECONOMICS
wage extended beyond these more or less direct results of its
enactment. Agricultural trade unionism was stimulated. As
Mr. George Dallas, of the Workers’ Union, said: “The need for
representation on the bodies for fixing wages made organization
essential.” The insufficiency of the figure actually named in the
Corn Production Act to serve as an adequate minimum rate when
the cost of living continued to rise increased this stimulus, for, as
Mr. E. Selley says, “there is no doubt that the insertion in the
Act of a paltry 25/- minimum drove thousands into Unions who
might not have joined had a really adequate minimum been pro-
vided.” In July, 1919, Mr. Selley estimated that nearly 250,000
farm workers were subscribing to One or other of the Several unions
for which they are eligible.” Probably the minimum wage and
other influences springing from the arrangements and legislation
of the war period were the chief causes of the growth of organiza-
horses must be fed, and in hay time and harvest a fine afternoon cannot be missed.
A rule that some day in the week must be allotted each laborer for a half-holiday,
while less objectionable from the farmer’s point of view, would not meet the needs
of the laborers. Either the men would keep holiday each on a different day, so
that they could not combine for games, or there would be a tendency for the farmer
to give all his men holiday on a day which was too wet for outdoor recreation.
For cricket and football to prosper it is obviously necessary that the same day
should be chosen for holiday making throughout the village, and in all the villages
of the neighborhood, and that it should be known some time beforehand what that
day will be. Only so can inter-village matches be arranged. Now all this can
be obtained without undue disturbance of farming operations by a simple wage
regulation. If the Wages Board requires overtime rates—say, time and a half
rates—to be paid for all work done in excess of five hours on Saturday or on some
other stated day of the week, the result will be that only really urgent work will be
done on the afternoon of that day, and the men who can be spared will be spared,
while at the same time the law will have all the elasticity which agriculture requires
because of its dependence on wind and weather.”—Report of the Committee of
Section IV of the Advisory Council (1919), p. 39.
* See E. Selley, op. cit., p. 161. Mr. Selley also quotes the opinion of Mr. R. B.
Walker, the general secretary of the National Agricultural Laborers, and Rural
Workers’ Union, to the effect that the Corn Production Act had “undoubtedly pro-
vided an incentive to the laborer to organize.”
See E. Selley, op. cit., pp. 163–64.
ENGLISH AGRICULTURE DURING THE WAR 8I
tion which showed itself among the farmers at this time. The
agricultural employers as well as their employees extended their
organization." And the Wages Board brought the representatives
of both sides together, with a notable effect in increased mutual
knowledge and respect. This wholesome development was as-
sisted in no small degree by the formation in March, 1918, of
the Agricultural Club, under the genial presidency of Sir Henry
Rew. The object of the club was “the discussion of subjects
relating to agricultural and rural development.” Members of
the Wages Board and officers of the Board’s staff, and subsequently
members of the various District Wages committees, were eligible
for membership of the club without election, and in addition
other persons might be elected by ballot, though the total number
of persons so elected was not to exceed twenty. The club usually
met on the evenings before the meetings of the Wages Board, and
its distinctive characteristic, as Sir Henry Rew remarks, “was
that farmers and agricultural laborers were placed on an absolute
equality.” The happy results have been described by Lord
Bledisloe. He writes:
On many a chilly winter’s evening, illuminated and warmed by two
great fire-places and the often unvarnished rhetoric and scathing sallies of
bucolic orators of very varying political views and social experience, the
owner of many broad acres, the tenant farmer of wide agricultural experience
and renown, and the industrious and independent farm worker, living in
and loving (as only an English agricultural worker can) his humble, creeper-
clad Cottage home, could have been seen filling their pipes from the same
tobacco-pouch and enjoying each other's company in an unaffectedly con-
genial atmosphere.8
It would be fitting to conclude a sketch of English agricultural
history during the war with a general judgment upon the system
of state Control which was set up under the pressure of war-time
* The declared membership of the National Farmers’ Union increased from
22,674 in 1916 to 27,ool in 1917, 51,368 in IQI8 and 72,036 in 1919.
* See R. Henry Rew, The Story of the Agricultural Club, 1918–1921 (1922), p. 4.
3 See ibid., Foreword by Lord Bledisloe, p. xiii.
82 SOME ASPECTS OF RECENT BRITISH ECONOMICS
necessities. One would like to estimate its efficiency for the
immediate purposes of war and discover any lessons of permanent
value which the experience of the period might suggest. But the
history is baffling to a degree. In the whirlwind of violent and
conflicting forces, with naval, military, political, and financial
factors all changing from day to day and each influencing the
agricultural situation, it is difficult to trace even the more impor-
tant causes of the most striking changes. What shall we say was
the real cause of the great extension of the arable area which took
place in 1917 and 1918? Given the system of maximum prices
and the insistent demand of the War Office for men, there can be
little doubt that vigorous action on the part of the state was neces-
sary for the development of food production. The Board of Agri-
culture and the Food Production Department had to protect agri-
culture against other departments of state. But if it had been
politically possible or socially desirable to leave the farmer to get
the best price he could, and if a sufficient supply of labor had been
left on the land, would the ordinary economic motives have
induced an extension of Corn-growing similar to that which was
actually brought about by state interference P May we conclude
that the history of 1915 and 1916 reveals so much inertia in the
farming community that nothing short of state Control could be
expected to produce the necessary activity ? Is this conclusion
seriously shaken by the fact that the rise in cereal prices did not
become revolutionary in character until the autumn of 1916 P
Even more hesitating must be our answer to questions regarding
the relative importance and efficiency of the various instruments
employed by the state in the food-production campaign. Did
the guaranteed prices of the Corn Production Act affect the course
of events to an appreciable extent P The guaranties never became
operative; but it might be argued that they gave the farmer Some
security against the possibility of a sudden fall in prices." Was
1 When Sir Daniel Hale of the Board of Agriculture was giving evidence
before the Royal Commission of IQI9 he was asked, “Do you think that the
guaranteed prices as a policy have really stimulated corn production in this
ENGLISH AGRICULTURE I) URING THE WAR 83
the really effective force the power to issue plowing orders which
was derived from the Defence of the Realm Act P. How much
would have been accomplished if the action of the state had been
limited to negotiation with the War Office for the supply of soldier
labor and of the labor of prisoners, and to measures for the pro-
vision of tractors and fertilizers P Finally, what must we say of
the general lessons to be derived from the history of the war in
regard to the desirability of state interference with the conduct of
the agricultural industry P. On the one hand, it must be remem-
bered that during the war everything had to be done in a hurry,
and that newly enrolled officials had to undertake work which
was almost entirely strange to them and in regard to which little
experience was available. A permanent peace-time policy would
be enforced by trained officials, and its administration would
grow richer in experience from year to year. On the other hand,
it is equally true that patriotism and a spirit of willing helpfulness
pervaded all classes in the period of national emergency: in such
a time of crisis people were willing to put up with restraints and
inconveniences which normally they would not endure for a
moment. When the country is no longer “a beleaguered city,”
the average Englishman begins once more to think that his home
is his castle. On one minor point, perhaps, a definite Conclusion
may be reached. Maximum prices which are lower than market
prices must tend to impair the quality of agricultural products.
The farmer will be able to obtain the maximum price for goods
of inferior quality, and he can get no more in any case. He will
therefore become indifferent to quality.
country?” He replied: “Certainly not. I should say not, because they have
never been in operation. You see the actual prices that have prevailed since the
Corn Production Act was passed have been a long way above the guarantees of
the Corn Production Act, and a long way below the world’s market prices. The
world prices, for instance, in 1918 for wheat would be over Ioo/– instead of the
75/– that we have been tied to.” See Crmd. 345, p. II, qu. 220.
CHAPTER IV
ENGLISH AGRICULTURE SINCE THE ARMISTICE"
A survey of English agriculture made soon after the Armistice
would have revealed a condition of affairs in many ways very
different from that which obtained on the eve of the war. In
I918 the arable area in England alone was greater by Some
I, Io2,000 acres than it had been in 1913—an increase of more than
Io; per cent. In England and Wales together the increase
amounted to about 1,340,000 acres, and in 1918 the area under
wheat was greater by 51 per cent, and that under oats greater
by 32% per cent, than the average of the ten years 1904–13.
The total head of cattle was greater than before the war, but
the numbers of sheep and pigs had declined. As regards the
position of the various classes of the agricultural community
mathematical indices of change are naturally hard to Come by,
but a general impression may perhaps be trusted to reveal the
more important facts. The landlords at the time of the Armistice
were already suffering from the failure of rents to advance in
proportion to the general change in price levels, and Sales of
agricultural land were increasing. The Report of a committee
appointed by the Agricultural Wages Board, which is dated
March 5, 1919, speaks of “the large quantity of land which is
Coming into the market owing to the break up of estates” and
mentions the fact that “occupiers have in many cases purchased
their farms.” A reflection of this process may no doubt be
Seen in the increased acreage of land returned as occupied by
owners. The official tables, which are concerned only with
land under crops and grass and exclude mountain and heath
land, show that, whereas in 1913 the total area occupied by
* Printed originally in the Journal of Political Economy for December, 1922,
and February, 1923.
* See Cmd. 76, p. II.
84
ENGLISH AGRICULTURE SINCE THE ARMISTICE 85
owners in England and Wales was 2,890,559 acres, on June 4,
1919, it amounted to 3,296,452 acres—an increase of 14 per cent."
To describe the position of the farmers is a less simple task.
They had made money during the war, and those who were
previously encumbered by debt were enabled to pay off their
overdrafts and probably had capital to spare. The National
Farmers’ Union was rapidly increasing its membership and the
farmers’ leaders were taking an increasing interest in broad ques-
tions of agricultural policy. The fact that many farmers were
buying their farms “at prices at which the interest on capital
represents a higher rent than that which they were previously
paying” seemed to indicate confidence in the future prosperity
of the industry. On the other hand, land sales made the posi-
tion of the tenant farmer insecure; and it might be argued that
it was insecurity of tenure which harassed tenants into buying
their farms rather than that they were encouraged by confidence
in the future. Again, though prices remained remunerative, the
System of maximum prices prevented the full advantage of the
world’s cereal markets from being obtained, and doubt was felt
as to the continuance of high prices, especially as the falling
Scale of guaranteed prices under the Corn Production Act tended
to create an impression that expert opinion anticipated a slump.”
* See Cd. 7325, p. 99; Cmd. 680, p. 41. * See Cmd. 76, p. II.
3 Lord Ernle says: “The price paid for wheat to home-producers was some-
times less by two-fifths than that paid for foreign bread-stuffs. Every quarter
grown at home reduced the expenditure abroad, and the burden of the taxpayer
was relieved, at the expense of the British farmer, by a sum which in the years
I917–20 exceeded £30,000,ooo.” See Journal of the Royal Agricultural Society of
England, LXXXII (1921), 13–14. Lord Ernle speaks of the burden of the tax-
payer, not of the consumer, because the price of bread was kept artificially low by
a subsidy. As regards the psychological effect of the falling scale of guaranties
the Majority Report of the Royal Commission on Agriculture—a report which is
dated December Io, 1919—says: “The existing feeling of uncertainty as to the
Cause of future prices of cereals seems also to some extent to have been fostered by
the reduction in the prices guaranteed in Part I of the Corn Production Act from
60/- per imperial quarter for wheat in 1917 to 45/– in 1922, which appears to have
given rise in some quarters to the supposition that official opinion was opposed to
the view that prices of cereals would continue to range high for a considerable
period.” See Cmd. 473, p. 6, § 17. The guaranty for wheat, which had been
55/- in 1918 and 1919, was to fall to 45/- for the years 1920, 1921, and 1922.
86 SOME ASPECTS OF RECENT BRITISH ECONOMICS
The difficulty of obtaining labor during the latter months of the
war, the vexatious intricacy of governmental regulations, the
fact that rules and requirements necessarily varied almost from
day to day, the upward movement of the minimum wage rates
and the movement for shorter hours of work were all factors
which disquieted the farming community. At the same time
one of the most obvious features of the agricultural situation
after the Armistice was the need for considerable expenditure
upon the land to make good the neglect of hedging and ditching
and of general maintenance operations, which the desperate
shortage of labor had made inevitable, as well as to clean land,
which, largely for the same reason, had got into a very filthy
condition. It would be very hard of course to strike a balance
between the solid gains which the farmer had made and the
difficulties which he experienced, or again between the hopes and
uncertainties which he felt as regards the future; but it may
perhaps be taken as a sign of Caution that in the autumn of 1918
the area planted with wheat in England and Wales was less by
218,813 acres than that similarly treated in the autumn of IgE 7.
- For the laborers the future seemed full of hope. In the
Agricultural Wages Board they had obtained a powerful instru-
ment for the amelioration of their lot, and already wages were
higher and hours of work reduced. The actual advance in wage
rates throughout the country had hardly as yet done more than
keep pace with the increase in the cost of living; but the improve-
ment had been greater than the average in the districts of espe-
cially low wages, and though part of the obvious increase in
prosperity was probably due to the income derived by many
laboring families from non-agricultural sources, such as military
separation allowances or the employment of Some members of
the family in connection with aerodromes or munition works, the
existence of the Wages Board was a safeguard for the future."
* It was estimated that in the winter of 1918–19 agricultural wage rates were
on an average 90 per cent higher than in 1914–89 per cent in the case of ordinary
laborers and Ioo per cent for stockmen—while the laborers’ expenses were higher
by 93 per cent than in 1914. See Cmd. 76, pp. 24, 37.
ENGLISH AGRICULTURE SINCE THE ARMISTICE 87
The weekly half-holiday soon became an accomplished fact and
this was an inestimable boon—especially to the younger men,
whose numbers increased with the rapid progress of demobiliza-
tion. Moreover, the development of agricultural trade unionism
gave the laborers a new sense of strength and inspired them with
hope and confidence. Hope was in the air, born of a natural
reaction when the cessation of hostilities removed the pressure
of constant anxiety, and fostered by the exuberant oratory of
the Prime Minister at the time of the General Election. England
was to become “a land fit for heroes to live in.”
For SOme time past, among those who concerned themselves
with the larger questions of agricultural policy, there had been
a feeling that the war-time development of tillage heralded a new
day for English agriculture. Visions of a self-sufficient England,
independent of foreign supplies of cereals, and of the English
Countryside repeopled and prosperous, floated before the imagina-
tion of not a few. These visions had little basis in the hard
facts of the economic situation; but the opinions to which they
gave rise were contagious. Even the experts had been rather
rash in their statements. Opinion had been a great deal influ-
enced by Mr. T. H. Middleton’s (now Sir Thomas Middleton's)
pamphlet on The Recent Development of German Agriculture
which was published in 1916 as a parliamentary paper; and
Sir Daniel Hall, also in 1916, had written hopefully about the
possibility of increasing the arable area by six million or even by
ten million acres as a permanent policy." Early in 1917 the hopes
of a vast and permanent development of arable farming were
given detailed and authoritative expression in the first part
of the Selborne Committee's Report, and a year later the same
Committee in the second part of their Report reasserted their
belief that it was desirable that the country “should become self-
Supporting in the matter of foodstuffs in the event of any future
emergency.” Several factors combined to produce an atmos-
* See Cd. 8305; also A. D. Hall, Agriculture after the War (1916).
* See Cd. 8506 and Cd. 9079.
88 SOME ASPECTS OF RECENT BRITISH ECONOMICS
phere favorable to schemes for the expansion of English agri-
Culture. The cruder fallacies of protectionism naturally throve
at a time when war-weariness promoted looseness of thought,
and the movement of the rate of exchange with America after
the Armistice seemed to the ignorant to be an additional argu-
ment in their favor. Again ignorance of agricultural facts on
the part of urban idealists is always liable to make agrarian policy
a Cherished field for the exercise of philanthropic imagination
and there was a tendency to mistake the cessation of hostilities
for the commencement of the millennium. Moreover, the Ger-
man Submarine campaign had provided a vivid lesson as to the
precariousness of overseas supplies." It was felt too that, after
years of campaigning, many thousands of soldiers would find
an Open-air life on the land more congenial than urban employ-
ment. In regard to this last consideration it should be noted
that in March, 1918, the Minister of Reconstruction had
appointed a committee “to consider the steps and conditions,
apart from the provision of Farm and Small Holding Colonies,
necessary to attract to employment on the land all returning
Sailors and soldiers who may wish to take up country life, and
particularly to induce them to do so in sufficient numbers to
Secure the maximum output from the land.” This committee,
in their Report which is dated December 20, 1918, recommended
that in the case of untrained ex-service men the state should
for a limited period contribute toward “the difference between
the untrained man’s economic value on the farm and the full
local rate of wages,” and, while urging that the state is “morally
bound to consider the future security of an industry to which
returning sailors and soldiers are invited to devote their lives,”
*In view of the anxiety which was felt this may seem an understatement.
But, as a matter of fact, while 12,652,000 tons of grain and grain products were
imported into the United Kingdom by the Royal Commission on Wheat Supplies
during the whole submarine campaign (from November, 1916, to October, 1918),
only 4 per cent of the possible arrivals were lost through enemy action. See First
Report of the Royal Commission on Wheat Supplies, 1921 (Cmd. 1544), pp. 37–38.
ENGLISH AGRICULTURE SINCE THE ARMISTICE 89
expressed the opinion “that the necessity of intensive production
in the United Kingdom will increase and not diminish as years
go by; and further that the demand for the additional labor
required by such cultivation will continue to rise to an extent
equal to any reduction due to labor-saving machinery.” Apart
from the more far-reaching hopes of agricultural development
account must also be taken of the fact that the awakening of
public interest in agriculture seemed at least to justify a belief
that in the future farming ought not to be, and would not be,
suffered to fall short of such opportunities as the world’s markets
might provide. Slackness of the kind which was only too com-
mon before the war would surely be intolerable in a nation which
was devoted to the reconstruction of its economic prosperity.
And experience gained in the war had shown how great was the
need for improvement. In giving evidence before the Royal
Commission of 1919, Sir Thomas Middleton said: “A great deal
of the farming is of a very high order in this country. Before
the war one was under the comfortable illusion that a very large
proportion of it was of a high order; but I think that the experi-
ence one has had in the Food Production Department, and the
experience of the Agricultural Committees throughout England
and Wales, has pointed to the fact that after all there are more
bad farmers than we supposed.”
* See Report of the Committee of Section iv. of the Advisory Council (1919),
especially $$ 66 and 69. The present writer, who was a member of this committee,
submitted a Minority Report, stating his inability to believe “that the number of
agricultural laborers required to secure the maximum output which could profitably
be obtained from the land of this country will exceed the number employed in
agriculture before the War to the great extent that is presupposed by the recom-
mendations of the foregoing Report,” and expressing doubt “whether the tax-
payer will be willing, for more than a few years, to provide a stimulus sufficiently
strong to make any very great difference to the number of men for whom employ-
ment on the land will be available.” See ibid., p. 36. -
* See Cmd. 345, question 3064. Mr. Floud (now Sir Francis Floud), in his
evidence, said: “I think it has been a revelation to the Board and to members of
executive committees to find how much second-rate farming there is in the Country,
and that an enormous increase in the production could be brought about if we
90 SOME ASPECTS OF RECENT BRITISH ECONOMICS
Throughout the first seven months of 1919 the prices obtain-
able by the British farmer for his cereals remained practically
steady in the neighborhood of the controlled maximum figures,
and only in June was the monthly index number of the prices of
agricultural produce lower than the annual index number for
1918." There were however considerable changes in Cropping—
the decline in the area under grain crops in England and Wales
being not far short of half-a-million acres, while the potato acre-
age was reduced by 25 per cent. The number of cows and heifers
in milk increased, but there was a slight decline in the total head
of Cattle and an increase of Too,000 pigs was no appreciable
offset to the reduction of the sheep population by more than
I,3oo,ooo. How far these changes were due to difficulties Con-
nected with the shortage of labor or to the fact that much of the
land needed a rest from corn-growing,” and how far they were
could raise the level of farming generally in a district to that of the best farmer in
that district.” He also said: “I think it is true that landowners and their agents
have not been sufficiently severe on bad tenants.” See Crmd. 665, questions I6458,
I6481. It may be pointed out in connection with the prevalent low standard of
farming that the large schemes of development sketched in 1916 by Mr. A. D. Hall
(now Sir Daniel Hall) in his book on Agriculture after the War can only fairly be
judged in the light of the author’s opinions as to the extensive improvements which
were economically possible even before the outbreak of war. Sir Daniel considered
that in the years before the war, with the price of wheat at about 35/– a quarter,
arable farming “might with profit have been extended over at least as much land
as had been under the plow in 1872,” and said “if we further take into account the
possibilities of diminishing costs by the greater use of machinery and improved
organization, as on the suggested large scale farms, we might expect that the land
could pay wages at rates comparable to those received by laborers in other industries,
and yet provide a reasonable return for capital and management.” See Agriculture
after the War, p. IoA.
* These index numbers are based on the prices of the principal articles sold
off the farm weighted according to their relative importance. See Agricultural
Statistics, LVI (1921), Part III, 88–89.
* Lord Ernle says: “Much of the tillage land of 1918 had grown corn crops
for two or more years in succession without adequate labor to keep it clean or
sufficient fertilizers to restore its fertility. It needed rest.” See op. cit., p. 43.
ENGLISH AGRICULTURE SINCE THE ARMISTICE QI
induced by fears for the future of prices or by the rising cost of
labor it would be hard to say. In January, 1919, the workers’
representatives on the Agricultural Wages Board proposed a
Substantial increase in the minimum wage rate and eventually in
May various somewhat complicated changes were made of which
the most important were (1) a reduction of the hours for which the
minimum weekly wage was payable to 54 in Summer and 48 in
winter or to 52 hours throughout the year and (2) an increase of 6/6
a week in the minimum wage payable to male workers of twenty-
one years and over. In the meantime—on March 3—the “Half-
Holiday Order” came into operation." It must be remembered
too that the first half of 1919 saw a considerable fall in the cost of
living, though after June retail prices moved upward again.
How far the cost of labor changed with the rise of wages and the
reduction of hours cannot be determined. On the one hand
demobilization was increasing the proportion of laborers who
were physically fit and in the prime of life. On the other hand
the passing away of the war strain produced a psychological
reaction and many of the returned soldiers found it difficult to
* For all these changes see A. W. Ashby, “The Work of the Agricultural
Wages Board in 1919, '' Journal of the Royal Agricultural Society of England,
LXXX (1919), 164–20I. The terms of the Half-Holiday Order were as follows:
“(1) For the purpose of the application of all differential rates for overtime fixed
by any Order of the said Board, and notwithstanding any reference in any such
Order to the hours of employment customary in any area in the case of any special
class of workman, the definition of employment which is to be treated as overtime
employment is hereby extended so as to include the following employment, that
is to Say: All employment in excess of 6% hours on a Saturday or on such other
day (not being Sunday) in every week as may be agreed between the employer and
the worker. (2) Provided that any time spent by Horsemen, Cowmen, Shepherds,
Teammen, and other classes of Stockmen in connection with the feeding and
cleaning of stock shall be excluded from the foregoing extension of the definition
of overtime employment.” The principle of this Order had been approved by the
Wages Board some time before the Armistice and on September 3, 1918, notice
was given of the Board’s intention to propose a change of this nature “three months
after the general cessation of hostilities, or on the withdrawal by the Food Con-
troller of all restrictions upon food consumption (whichever event shall first occur).”
See Wages Board Gazette, I, No. 3, 36, also No. 8, 93.
92 SOME ASPECTS OF RECENT BRITISH ECONOMICS
settle down to assiduous work. Farmers commonly complained
of slackness among their employees and asserted that they were
required to pay higher wages for a poorer quality of work; but
in judging the validity of this complaint some allowance must be
made for the natural tendency of an employer who is forced to
pay increased wages to scrutinize the quality of his labor force
more closely than was previously his custom."
In July, IQI9, the question of the future agricultural policy
Of the country was brought to the fore by the appointment of a
Royal Commission “to inquire into the economic prospects of
the agricultural industry in Great Britain, with special reference
to the adjustment of a balance between the prices of agricultural
Commodities, the costs of production, the remuneration of labor,
and hours of employment.” On August 5, the day on which the
Commission began to hear evidence, “a letter from the Parlia-
mentary Secretary to the Board of Agriculture and Fisheries was
read, intimating the desire of the Government that an Interim
Report should be presented by the end of September in order
that farmers might be informed of the conditions under which
they could cultivate their land in the coming year”; but such
haste proved incompatible with a thorough examination of the
problem, especially as farm accounts for the cereal year 1918–19
would not be available until after Michaelmas and the harvest
Season made it impossible either for the farmer members of the
Commission to spare more than two days a week for the hearing
of evidence or for farmers generally to give much time to the
In regard to this question of the efficiency of agricultural labor several wit-
nesses before the Royal Commission of 1919 gave their impressions. See Cmd.
345, questions 1392–94, 1573–75, 1667–68, 1689–91, 1695–97 (evidence of the
Hon. E. G. Strutt.); questions 1889–1906, 2014–32, 2070–71 (evidence of Dr. E. J.
Russell); questions 3039–41 (evidence of Sir Thomas Middleton); also questions
3869–76, 4473, 4492-4502, 4742–58, 4830–38; also Cmd. 365, questions 5375-76,
5988–89, 6041–45, 61.53–61, 6369–71, 6545–77, 6555–56, etc. The difficulty of
making an exact comparison between work done before the war and work done
during the war was well brought out in Mr. Ashby's searching cross-examination
of Dr. Russell.
ENGLISH AGRICULTURE SINCE THE ARMISTICE 93
preparation of estimates and accounts." Before the Interim
Report was presented (on December Io), the Commission had
examined a large mass of material and this had been elucidated
by a viva voce examination of witnesses extending to over
I7,000 questions. It is hardly necessary to add that such bulky
evidence cannot be summarized satisfactorily. In regard to the
burning question of guaranteed prices, however, three points may
be noticed.
The representatives of the Board of Agriculture, in giving evi-
dence before the Commission, advocated a system of guaranteed
prices for cereals and for cereals only, because cereal production
was the branch of farming in which the pressure of foreign com-
petition was most severe.” On the other hand, the Secretary
of the Ministry of Food (Sir William Beveridge) told the Com-
mission that “it was the policy of the Ministry of Food to main-
tain the milk supply by guaranteed prices, which of Course
involves control, even if other articles were not controlled,” and
pointed out that “milk is an essential which can only be produced
at home, and therefore it is more important to keep up the Out-
put of milk than of other agricultural produce.” Thirdly, while
individual farmers definitely advocated the continuance of
guaranteed prices, the case presented by the National Farmers’
Union of England was that the question whether arable cultiva-
* See Cmd. 473, Majority Report, § 2; Minority Report, § 2. In the evidence-
in-chief submitted on behalf of the National Farmers’ Union by Mr. James Donald-
son on September 23 it is stated that “to meet the pressing request from the
Commission to submit the Union’s evidence upon the costs of production at the
earliest possible date, it has been physically impossible to submit all the data upon
this question that the Union would have wished,” and that after another month
or six weeks “the Union would have been in a position to have submitted probably
twice the number of statements that are contained in Mr. Wyllie's evidence.”
See Cmd. 391, II 289.
* See Cmd. 345, question II6 (evidence of Sir Daniel Hall, then Permanent
Secretary of the Board of Agriculture); also Cmd. 665, questions 16255-57 (evidence
of Mr. F. L. C. Floud—now Sir Francis Floud—then Assistant Secretary of the
Board of Agriculture).
* See ibid., questions 2385, 2422.
94 SOME ASPECTS OF RECENT BRITISH ECONOMICS
tion was to be maintained or extended was one of national policy
for the government to decide, but that as business men farmers
could adapt themselves to a régime of low prices and would
face the abolition of all controls and guarantees with perfect
equanimity. This is brought out by the replies given by Mr.
Donaldson, on behalf of the Union, to questions asked by Mr. R. R.
Robbins, one of the commissioners who subsequently became
president of the Union. Mr. Robbins said: “And the purport of
this document (i.e., the evidence-in-chief) on the one hand is to
show that farmers, if the Government say they are to do so and So,
are perfectly willing to conduct their businesses according to their
own ideas as to what is best—without Government guarantees or
interference P” Mr. Donaldson assented; and Mr. Robbins pro-
ceeded: “But on the other hand, the purport of it is that if the
Government ask them to do something which they consider eco-
nomically unsound from the farmers’ point of view, as distinct
from the general point of view, the farmers are entitled to some
guarantee which shall indemnify them against serious loss; and
when the time arrives they are quite willing to say what in their
opinion the guarantee should be P” Mr. Donaldson again replied
“yes.”
In the event, the Royal Commission found itself divided into
two almost exactly equal bodies on the question whether the
* See Cnd. 391, questions II.773–74. In the evidence-in-chief it was main-
tained that a return to the unrestricted play of the law of supply and demand
“would not, taking the long view, do injury to the farmer nor to the workers as
individuals,” that high wages might be paid, but that employment would be
reduced and “the nation would lose heavily in output” (ibid., question II.296).
It was not however laid down as a certainty that guaranteed prices were necessary
to maintain production, for the next paragraph contains the sentence: “It may be
that by some drastic reforms in our agricultural system, such as by a great extension
of the practice of Co-operation amongst farmers, or by the development, on a large
scale, of what is sometimes called ‘factory farming,” or, at the other extreme, by
a wide increase in the number of small holdings, or by each and all of these methods,
agriculture can face the possibility of a decline in prices without the necessity for
a reduction of output.” The verdict of the Union on this point was “We do not
know” (ibid., question II 297).
ENGLISH AGRICULTURE SINCE THE ARMISTICE 95
system of guaranteed prices should be continued. The Majority
Report was signed by the chairman and eleven other commis-
sioners, of whom one agreed only on the main question of principle
and expressed dissent as regards all the detailed recommenda-
tions. The Minority Report was signed by eleven commissioners
without qualification. The majority included, besides the
chairman (Sir William Peat), all the farmer representatives save
one, one of the labor representatives, and half the “independ-
ent” members. The minority included all the labor repre-
sentatives save one, one farmer and half the “independents.”
The Majority Report, after rehearsing the salient facts of
recent agricultural history and the uncertainty, inimical to
arable farming, which farmers had felt since the Armistice in
regard to the future, recalled the fact that “the passing of the
Corn Production Act by Parliament, and subsequent public
pronouncements by the Prime Minister, indicate that the Govern-
ment have definitely adopted the policy of increasing the acreage
of land under tillage in this country.” The Report further stated
that “a considerable body of evidence given by farmers went to
show that in the opinion of many of them no measure for assist-
ing the farming industry by means of guaranteed prices of
cereals is necessary solely in the interests of farmers themselves,”
and that in the opinion of these farmers “it is for Parliament to
decide whether the national requirements necessitate increased
Corn production and consequently restriction on their freedom
of action as regards their systems of cultivation.” The Conclu-
sion of the Majority was that “if Parliament so decides, and
farmers are required to undertake the greater risks and responsi–
bilities arising from increased corn production, we think that a
Corresponding obligation rests upon the State to preserve them
from the possibility of loss due to a substantial fall in Cereal
prices.” In detail the Majority recommended:
* In order that my readers may be warned against any unconscious bias on my
part, it is perhaps desirable to state here that I was myself one of the commissioners
who signed the Minority Report.
96 SOME ASPECTS OF RECENT BRITISH ECONOMICS
I. That subject to the Conditions set out in the following paragraphs,
minimum prices for wheat, barley and oats grown in Great Britain be
guaranteed by the State, on the same principle and conditions as are laid
down in Part I of the Corn Production Act, 1917, the producer being allowed
an unrestricted market for his produce, but the State retaining the right
to control prices in case of national emergency.
2. That barley should be dealt with in the same manner as wheat
under Section I of the Corn Production Act, payment of four times the
difference between the average price as defined in the Act and the guaran-
teed minimum price per quarter being made in respect of that cereal.
3. That for the grain Crops of IQ20 and subsequent years the guarantees
be calculated from year to year on a sliding scale based on the average bare
costs of cereal production of the preceding year, rent being disregarded for
this purpose; and that the datum line to which increases or decreases in
the average costs of the IQ20 grain Crops above or below those of 1919
should be applied, shall be 68/-per quarter of 504 lbs. of wheat, 59/-per
quarter of 448 lbs. of barley, and 46/—per quarter of 336 lbs. of oats.
4. That the guarantees be continued until Parliament otherwise decides,
subject to not less than four years’ notice of withdrawal being given.
5. That, if found necessary, the powers under Part IV of the corn
Production Act be extended so as to enable the Boards of Agriculture or
the County Committees to take effective action against any landowner or
farmer who impedes or neglects to carry out the Orders issued by them for
the better cultivation of the holding.
6. That any payment in respect of the guaranteed prices be dependent
upon the production of a certificate from the Department concerned to the
effect: (a) that the holding in respect of which payment under the guarantees
is claimed has been well cultivated and an adequate amount of labour
employed upon it or that such labour was not available; and (b) that either
one-eighth part of the holding or one-fourth part of the arable land (which-
ever be the greater) is under cereal crop, or that so much less of the holding
is under cereal crop as appears to be desirable in the public interest.
The Minority, in their Report, stated that “nothing in the
conditions under which the industry was carried on before the
War, or in the prospects now before it, would justify usin recom-
mending the continuance of the policy of guaranteed prices for
cereals.” In regard to the common argument that the artificial
stimulation of cereal production was necessary as an insurance
ENGLISH AGRICULTURE SINCE THE ARMISTICE 97
against war risks, they pointed out that it would “require much
more evidence on this point than has been brought to our notice
to convince us that it is really necessary that the agricultural
industry of Great Britain should in times of peace be maintained
upon a war footing,” and that “we were not asked to lay down
a war-policy for the industry.” In regard to the argument that
increased tillage was desirable as a means of rehabilitating
the foreign exchanges, they urged that “exchange can be
improved, with greater benefit to all concerned, by increasing
exports rather than by decreasing imports.” They further
argued (I) that the basic figures recommended by the Majority,
while on a higher scale than that suggested by “two such Com-
petent advocates of the policy of guaranteed prices as Sir Thomas
Middleton and the Hon. E. G. Strutt,” were much too low to
insure the maintenance or extension of the cereal area by volum-
tary action; (2) that a system of government control of farming
such as would be necessary to make the policy effective would
be contrary to the best interest of the industry; (3) that guaran-
ties sufficient to make farming remunerative “under the present
conditions of tenure and with the present methods of cultivation”
on the great mass of land which produces only 3% quarters an
acre would probably “impose a heavy burden on the Treasury at
a time when the need for national economy is paramount” and
that, if effective, the policy would “prevent the application of
genuine remedies by stereotyping the existing conditions and
methods.” In the opinion of the Minority, the recommendations
of the Majority were likely to be unfair to the producer of meat
and to the large number of small farmers who do not derive their
income largely from cereal production. It would be “detri-
mental to the best interests of agriculture were it to be obliged
to conduct its operations on the uncertain basis provided by
guaranteed prices.” Guaranties could only be given by Parlia-
ment “and no Parliament can bind its successors.” Moreover,
the Minority emphasized their opinion that a policy of guaranties
98 SOME ASPECTS OF RECENT BRITISH ECONOMICS
would inevitably lead to a demand for the continuance of maxi-
mum prices.” Action designed “to increase the farmer’s sense
of Security in his holding, as desired by the witnesses speaking on
behalf of the National Farmers’ Union and the National Farmers’
Union of Scotland, would do much more to give the farmers confi-
dence, and thereby increase production, than any other measure.”
The Minority expressed their hope of being able to deal with
this problem of security of tenure and other matters important
for the development of agriculture in a final report. For the
present they recommended:
I. That farmers be informed that they shall be left free to cultivate
their land in such manner as they deem best, in accordance with the rules
of good husbandry.
2. That the Boards of Agriculture organize an efficient system of dis-
tribution of all available information relating to the progress and prospects
of agriculture, with special reference to the course of world prices.
3. That, so long as prices of cereals are controlled by the Government
the farmers be paid at prices not less than those at which the commodities
controlled can be imported."
Such in outline was the division of opinion. But the Govern-
ment had not waited for the advice of the Commission. Lord
Ernle, who was president of the Board of Agriculture when the
Commission was appointed, resigned; and on August 15 his
place was taken by Lord Lee, the former Director of Food Produc-
tion, whose adherence to the policy of the plow had been shown
in the previous year by his resignation on the abandonment of
the tillage program for 1918–19.” At a meeting held at Caxton
Hall, with Lord Lee in the chair, the Prime Minister pledged
the Government to the system of guaranteed prices. This was
on October 21, 1919—seven weeks before the Interim Report
* For all this see the Interim Report, Cmd. 473.
* See Lord Lee’s letter in the Times of July 23, 1918, and his speech in the
House of Lords on July 24. In a letter to the chairman of the Agricultural Wages
Board dated September 23, 1919, Lord Lee said: “I have come to the Board of
Agriculture with the sole object of promoting production by every means in my
power.” See Wages Board Gazette, I, No. 28, 379.
ENGLISH AGRICULTURE SINCE THE ARMISTICE 99
was issued, but hardly early enough to influence the autumn
sowings." It was primarily to this speech by Mr. Lloyd George
that the Majority of the Royal Commission referred in their
Interim Report when they said that “the passing of the Corn
Production Act by Parliament, and subsequent public pro-
nouncements by the Prime Minister, indicate that the Govern-
ment have definitely adopted the policy of increasing the acre-
age of land under tillage in this country.” It was in view of
this speech too that the Minority in their Report ventured to
say that “if the decision as to what is the best policy for agri-
culture had been left to the unfettered judgment of the Com-
mission, we feel sure that several of our colleagues, who deemed
themselves bound by certain declarations of Government policy,
would have voted with us in opposition to the policy of enforced
cultivation of cereals with the consequent guarantee of prices.”
Soon after the issue of the Interim Report, the chairman and
six other commissioners, all of whom had signed the Majority
Report, resigned, and the Commission was informed that the
Government had adopted the unusual course of advising the
* Mr. Lloyd George stated at the meeting that it had been arranged for an
earlier date but was postponed on account of the railway strike. In his speech he
said: “I think it is essential that the guaranty should be given.” He added that
“the amount and the length of time are the subject of examination by a Com-
mission,” but that the guaranty to be given “must have reference to the increased
Cost of production,” and “must cover a sufficient period of years to make the
farmer feel that it is worth his while to cultivate the land.” “It is not,” he said,
“for me to indicate the period, because I should be usurping the functions of the
Royal Commission”; but he went on to say: “It is not a matter of looking forward
to next year or the second year.” See the report of the meeting in the Times of
October 22, 1919. The Railway Strike had lasted from September 26 to October 6.
Lord Lee, speaking at Gloucester on November Io, said “that the Government
policy is fixed, and that failing a report from the Commission on this point—I do
not think we have any reason to anticipate anything of the kind—the Government
must and will act on its own responsibility.” See Journal of the Ministry of Agri-
culture, XXVI, 794.
* See Cmd. 473, p. 6, § 18.
3 See ibid., p. I2, § 19.
:
IOO SOME ASPECTS OF RECENT BRITISH ECONOMICS
Crown to bring its proceedings to a close.” The Commission
therefore never presented a Final Report, but the sixteen remain-
ing commissioners, who included all the representatives of labor, a
majority of the farmers’ representatives and (apart from the chair-
man) half the “independents,” unanimously resolved to put on
record their view that “all the subjects which had been proposed
by their Evidence Sub-Committee for investigation and accepted
by them, were well within the terms of reference” and to express
the opinion “that many of the remaining subjects now excluded
are of more enduring importance to the future of agriculture than
the policy of guarantees, as to which they had not been agreed.”
It was added that “with regard to these matters they had reason
to hope that they might find a large measure of agreement,”
and the Commission “reorded their regret that much valuable
evidence already taken together with other evidence prepared
at their request by various bodies, could not now have any
influence on the questions which they were justified in believing
were submitted to them.”
The subsequent history of the Government’s agricultural
policy can best be considered after something has been said of
the actual progress of agricultural affairs during the period
covered by the sessions of the Royal Commission. Three
matters deserve special notice—prices, wages, and the sale of
land. For the 1919 harvest the Government had guaranteed
minimum prices—75/6 per 504 lbs. for wheat, 68/Iož per 448
lbs. for barley, and 47/6 per 336 lbs. for oats. For imperial
* Lord Lee’s letter announcing this decision is dated February 24, 1920. In
it he contends that the subjects the Commission proposed to examine were “not
included in the terms of Reference.”
* A full report of the meeting of the Commission at which these resolutions
were passed was published at the time in the Daily Telegraph. The sixteen Com-
missioners who agreed to these resolutions included all the representatives of
Scottish and Welsh agriculture and the two English farmers who afterward held
office as president of the National Farmers’ Union in 1920 and 1921, respectively.
See Wages Board Gazette, II, I34–37.
ENGLISH AGRICULTURE SINCE THE ARMISTICE IOI
quarters the approximate equivalents of these prices are 71/II
for wheat, 61/1 for barley, and 44/1 for oats. The system of
maximum prices nominally came to an end; but in the case of
wheat the Government used its control of the mills to insure that
for wheat of ordinary quality no more than the guaranteed mini-
mum price should be paid, so that in effect the minimum price
became the maximum." The natural tendency of cereal prices
at this period must therefore be sought in the course of prices
paid for barley and Oats, and in both cases there was a notable
advance after the middle of the summer. The weekly average
price of oats per imperial quarter, which had only once touched
50/-before August (in the week ending January 18) and had
been under 49/– in 19 out of the 30 weeks preceding August,
was 50/3 in the week ending August 2 and 62/4 in the week
ending September 13. From August 9 to the end of the year it
was never less than 55/3. The advance in barley prices was still
greater. From January to August the weekly average price
per imperial quarter had ranged between 61/10 and 63/4, but
it jumped to 73/8 in the week ending August 9 and continued to
rise week by week until September 27 when it reached 95/2.
Between that date and November 8 it varied from 93/10 to 97/Io
and on November 15 was Ioo/7. Between November 22 and
the end of the year it was never lower than Iog/6 and on De-
cember 6 touched its maximum for the year at IoS/II. Nor
was this tremendous advance in cereal prices very short-lived.
For oats the monthly average ranged from 55/7 to 64/8 in the
first eight months of 1920: the corresponding range for barely
was from 81/6 (August, 1920) to IoS/5 (January, 1920). It is
clear, too, that if the farmer had had a free market for his wheat
* The exact position was that “there was no maximum price for wheat harvested
in 1919, but millers were informed by the Food Controller that the prices to be
paid by them should not exceed an average of 76/6 per quarter of 504 lbs. (72/Io
per 480 lbs.) for wheat purchased on rail at producer’s station, or 77/- per quarter
of 504 lbs. (73/4 per 480 lbs.) for wheat delivered into mill.” See Journal of the
Ministry of Agriculture, XXVII, 395.
IO2 SOME ASPECTS OF RECENT BRITISH ECONOMICS
the removal of control would have been followed in the case of
that Cereal also by a very great increase in price.* And the rise
was not confined to cereals. The index numbers of the prices
of agricultural produce sold off the farm were above the average
of the year 1918 in every month from July, 1919, to April, 1921.
Table I shows the annual index numbers, and Table II shows
those for the individual months.”
TABLE I
I9II-I3 . . . . . . IOO I916. . . . . . I6o I9I9 . . . . . . 258
1914. . . . . . . . . IOI I9I 7 . . . . . . 2OI I92O . . . . . . 292
T915 . . . . . . . . I27 I918. . . . . . 232 I92I . . . . . . 22 I
TABLE II
Month IQIQ IQ2O I92I I922*
January. . . . . . . . . 248 3I3 286 I77
February. . . . . . . . 25O 3O5 272 I83
March. . . . . . . . . . . 25O 299 258 I82
April. . . . . . . . . . . . 253 299 24. I I68
May. . . . . . . . . . . . 232 269 2 I 2 I7o
June. . . . . . . . . . . . 228 264 2O2 | . . . . . . . . .
July. . . . . . . . . . . . . 24.2 274. 2OO . . . . . . . . . .
August. . . . . . . . . . 238 277 216 . . . . . . . . .
September. . . . . . . 248 282 2OO . . . . . . . . . .
October. . . . . . . . . . 266 29I I9C | . . . . . . . . .
November. . . . . . . 282 297 I84 |. . . . . . . . .
December. . . . . . . . 3O7 294 I82 . . . . . . . . .
* Since May, 1922, the index numbers published in the Journal of the
Ministry of Agriculture have been based, not on the average prices of the
years Igir—I3, but on the average prices of the same months of the years
Igri-I3 taken as Too. On this basis the monthly figures for Ig22 are:
January, I 75; February, I'79; March, I 77; April, I70; May, I'7I; June, I68;
July, I'72; August, I 67. w
* The average (c.i.f.) price of imported wheat per 480 lbs. was 91/6 in 1917,
Too/Io in 1918, 92/1 in 1919, and 95/– for the period January–May, 1920. See
ibid., p. 395.
* See Agricultural Statistics, LVI (1921), Part III, 88–89, also the Year Book of
the Wational Farmers’ Union for 1922, pp. 304-5. The weights used in calculating
these index numbers are stated to be as follows: Cattle 25, milk 21, sheep 13,
pigs I3, hay II, wheat 8, barley 6, potatoes 6, poultry and eggs 4, fruit 4, wool 3,
butter 3, oats 2, cheese I, beans and peas I, vegetables I. Care should be taken
to distinguish these index numbers from the earlier ones issued by the Board of
Agriculture which had the average of the years 1906–8 as their base, while these
are based on the average of the years 1911–13.
ENGLISH AGRICULTURE SINCE THE ARMISTICE IO3
As regards the renumeration of agricultural labor, the main
point to be noticed is that an Order of the Wages Board reduced
the hours in excess of which Overtime rates had to be paid to
fifty hours a week in October, 1919, and forty-eight for the winter
months. From the beginning of March fifty hours were again
to be worked for the minimum wage. This change was equiva-
lent to a rise in wages: it meant that the minimum rate per hour
was increased. There was come controversy over the change,
which ill-informed persons misinterpreted as involving a limita-
tion of hours; and even the new president of the Board of Agri-
culture urged the Wages Board to reconsider its decision on the
ground that a reduction in the hours of work would be inimical to
production. In reply to Lord Lee’s letter the chairman of the
Agricultural Wages Board pointed out that the new Order was
the result of an agreement between the respresentatives of the
employers and the representatives of the laborers and “that
both employers and workers hold the view that the question is
really one of wages and not of hours, as there is nothing in the
Orders of the Board to prevent any farmer from agreeing with
his men to work regularly from fifty to fifty-four or any number
of hours per week, provided the wages paid are not less than the
minimum rates fixed.” The effect of the new Order was simply
to require overtime rates to be paid when work was done in excess
of fifty hours in Summer or forty-eight in winter.” Apart from
minor changes affecting particular districts or special classes of
* See Lord Lee’s letter and the reply of Sir Ailwyn Fellowes (now Lord Ailwyn)
in the Wages Board Gazette, I, No. 28, 379–80. Mr. R. R. Robbins, the vice-
chairman of the employers’ section of the Wages Board, in a letter to the Times
dated October Io, said: “I desire to emphasize the point that payment at a higher
rate for hours worked in excess of a given number, be it 50 or 54, involves no statu-
tory limitation of the hours of working in the industry such as labor is seeking to
impose by amendment to the Hours of Employment Bill, No. 2.” See Wages
Board Gazette, I, No. 29, 413. At this time and for some months to come the
agricultural community was much agitated over the question of the exclusion of
agriculture from the Bill referred to by Mr. Robbins—the so-called “Forty-Eight
Hours Bill.”
IO4 SOME ASPECTS OF RECENT BRITISH ECONOMICS
work people, no further alteration in the minimum wage took
place until April, 1920, when the general minimum for adult
males was raised to 42/-, with a minimum increase of 4/-. This
advance “was made in opposition to the workers, who demanded
50/-, the employers eventually agreeing with the appointed
members to fix 42/-.” The cost of living, it should be remem-
bered, had been gradually rising since the early part of the Sum-
mer of 1919 (when the official index number showed an excess of
IoS per cent over July, 1914) and at the beginning of May, 1920,
was reckoned to be 141 per cent higher than before the war.”
Meanwhile, the sale of agricultural estates had been proceed-
ing apace. It was constantly referred to in the evidence taken
by the Royal Commission as being on a revolutionary Scale and
it was the fact that tenant farmers were so often faced with the
alternative of buying or quitting their farms which at this time
gave so much urgency to their demand for Security of tenure.
The number of holdings returned as owned or mainly owned by
the occupier in England and Wales increased from 48,665 in IQI9
to 57,234 in 1920, while the area owned by Occupiers increased
from 3,296,452 acres to 4,102,556 acres—an increase of more than
24 per cent in twelve months. The causes of this movement are
not hard to discover. Agricultural land had long been under-
rented and by a curious tradition among English agricultural
landlords it was regarded as rather ungentlemanly to raise the
rent on a sitting tenant. Because of the general rise of prices,
the increased profitableness of farming, and the favorable oppor-
tunities for the investment of capital presented as a Consequence
* See Sir Henry Rew’s article on “The Wages Problem in Agriculture,” Quarterly
Review (January, 1921), p. 186.
* See the Labor Gazette of the Ministry of Labor, XXVIII (January, 1920), 5,
and XXIX (January, 1921), 6. The items on which these figures are based are,
for the purposes of the calculation, “combined in accordance with their relative
importance in pre-war working class family expenditure,” but it should be noticed
that they make no allowance for changes in the objects of such expenditure during
the war nor for the special conditions of rural districts.
ENGLISH AGRICULTURE SINCE THE ARMISTICE IOS
of the rise in the rate of interest, landlords could greatly increase
their incomes by selling their estates and investing the proceeds.
And many of them were driven to do this by the pressure of
war taxation and by the great increase in the cost of repairs,
which was all the more serious because, Owing to shortage of
labor and materials during the war, several years’ arrears of
repairs were waiting to be carried out. But the purchase of
farms by the tenants was, for the time being at any rate, a bad
thing for farming, and the uncertainty attaching to the future
of agricultural prices made it a dangerous expedient for the
farmers. It meant that the farmer's capital, which should have
been employed in clearing land after war conditions had caused
it to get foul, and in working off arrears of hedging and draining,
was often used for the purchase of the farm. And since
land fetched very high prices, it meant that, instead of
paying an augmented rent from year to year as the profits of
farming allowed, the farmer did what was equivalent to promis-
ing an increased rent for the rest of time—either in interest on
borrowed capital or in foregoing the income which he might
have obtained from an alternative investment. Some measure
of protection was however afforded to tenant-farmers at the land-
* The student of English agrarian history will notice that the history of the
Tudor period provides a curious parallel. When the influx of American silver,
following the debasement of the coinage, raised prices, landlords found that the
fixed rents of the copyholders prevented them to a great extent from using the
most obvious method of increasing their nominal incomes to meet the change in
prices. But in many cases the fines payable on the passing of a copyhold to a new
tenant were arbitrary in amount. The lord could not increase the annual rent:
he could, and did, demand a greatly increased capital sum at the change of tenancy.
The system of fixed rents, like the tradition against raising rents on a sitting tenant
at the present time, impelled landlords to more radical changes than would other-
wise have been necessary. I do not suggest that this explains all the inclosures and
evictions even of the latter part of the sixteenth century: but it was undoubtedly
one factor in the movement. See R. Lennard, “Custom and Change in Sixteenth-
Century England,” English Historical Review, XXVIII (October, 1913), 745–58.
In considering the difficulties of English landlords since 1914 it must not be forgotten
that some were able to sell timber at war prices.
Ioč SOME ASPECTS OF RECENT BRITISH ECONOMICS
lord’s expense by the passing, in 1919, of the Agricultural Land
Sales (Restriction of Notices to Quit) Act. This enacted that
“in the making after the passing of the Act of any contract for
Sale of a holding or part of a holding any then current and unex-
pired notice to determine the tenancy of the holding . . . . shall
be null and void, unless the tenant after the passing of the Act
and prior to the contract of sale agrees in writing that the notice
shall be valid.” In other words, the tenant would have a longer
period of grace: the new landlord, if he wished to occupy the
land himself or for other reasons to get rid of the sitting tenant,
Would have to give him a fresh notice of the length required by
his agreement. . -
In the agricultural history of the year 1920 the most absorb-
ing topics are naturally the Government’s control of wheat
prices and the passing of the Agriculture Act. But the general
Changes indicated by the Agricultural Statistics and the further
alteration of the minimum wage must first be noted. The
figures for 1920, compared with those of the preceding year, show
a decline of 289,000 acres in the arable area, and of 544,000 acres
in the area under grain crops, wheat being 'diminished by 346,ooo
acres and oats by 292,000 acres, while barley increased by I27,ooo
aCres. There was an increase of 70,000 acres in the area under
potatoes. As regards stock, cows and heifers in milk were fewer
by II6,Ooo and the total number of cattle declined by 648,000.
Sheep declined by 1,441,000 and pigs increased by 196,ooo.”
Except for the increase of potatoes and the decrease in the num-
ber of cows and heifers in milk, these changes are strikingly
similar to those which took place between 1918 and 1919, but
they were on the whole of larger dimensions.
* See 9 and Io Geo. V, c. 63.
* See Aubrey J. Spencer, “Contemporary Agricultural Law,” Journal of the
Royal Agricultural Society of England, LXXX, I54.
3 These figures are for England and Wales as are all the figures in this article
except when the contrary is stated.
ENGLISH AGRICULTURE SINCE THE ARMISTICE Io'7
In August, 1920, the general minimum wage for adult male
laborers in agriculture was raised from 42/– to 46/-. The repre-
sentatives of the laborers had proposed an advance to 50/- and
the employers, having proposed a reduction to 40/-, refused to
agree to any advance on 42/-. In the issue, 46/– was proposed
by the appointed members and this was carried, the workers’
and employers’ representatives both abstaining from voting."
The arguments used by the laborers’ representatives in favor of
a 50/- minimum were:
I. That the previous increase was inadequate.
2. That even if it were then adequate the subsequent increase in the
cost of living makes it now insufficient.
3. That the statutory duty of the Wages Board is, by the terms of
Section 5 (6) of the Corn Production Act, to fix such minimum rates of wages
“as will enable a worker to maintain himself and his family in accordance
with such standard of comfort as may be reasonable in relation to the
nature of his occupation” and that the Board have no right to consider
any consequences which may fall on the agricultural industry by the adop-
tion of this principle.”
* With the exception of one laborer’s representative who voted against the
proposal. See Wages Board Gazette, III, 262.
* This point of course involves a fundamental question of principle which
necessarily arises in all minimum wage regulation. The laborers’ position may be
compared with that of the Hon. Dr. Findlay, attorney-general for New Zealand,
who, speaking in the Legislative Council of New Zealand in July, 1907, said:
“What is the judge to take as a basis on which to fix the number of pounds or
shillings the worker has to get? For the life of me I cannot see any reasonable
basis except the one I understand the Hon. Mr. Barr suggested—that of seeing
that the worker shall have such a wage that he may live in decency and comfort,
notwithstanding what the earnings of the employer are. And if a trade cannot
be carried on so as to give the workers such a wage as to enable him to work at
that trade and enable those who are dependent on him to live in decency, we do
not want that trade, because there are in this country other trades still left in which
a competent man can be paid such wages as will keep him from degradation and
maintain him in that position in which we, as a civilized people, wish to see Our
workers as a whole.” See Ernest Aves, Report on Wages Boards, etc., Col. 4I67,
p. 216. In an industry subject, as agriculture is, to the law of diminishing returns,
the alternative principle, that the wage should be limited by what the industry
can bear, has no definite meaning unless it is qualified by some understanding as
to the intensity to which the industry shall be carried (i.e., the margin of cultiva-
tion).
Io8 SOME ASPECTS OF RECENT BRITISH ECONOMICS
4. That the rise in the wages of agricultural workers since 1914 has
not been in proportion to the rise in the cost of living, and that in any case
it is not sufficient merely to place the agricultural worker in the same unsatis-
factory economic position as in IQI4.
5. That there is evidence to show that farmers can afford to pay higher
wages than those now fixed.
6. That wages in other Occupations, especially those of railway men,
have risen much higher than those of agricultural workers, who are more
skilled and equally deserving.
It would take too long to examine these contentions in detail.
A few facts should, however, be noticed. The official index
number of the cost of living rose between the beginning of April
and the beginning of August by about 9 per cent and the advance
from 42/– to 46/– is an advance of about 9% per cent. But the
cost of living continued to rise and the average of the index
numbers for the six months August, IQ20–January, IQ21 is
greater by some I4 per cent than the figure for April. As regards
the contention that agricultural wages had not risen in proportion
to the cost of living the lack of information as to the amount of
overtime worked in 1920 and as to the extent to which minimum
rates were exceeded in certain districts makes it impossible to
set forth an exact comparison between the total earnings obtained
in 1920 and those obtained in 1914. If we follow Mr. Ashby in
taking 16/– as the average rate of cash wages of the ordinary
laborer in 1914 it is obvious that even the minimum rate of 42/–
exceeds this figure by more than the I55 per cent by which the
cost of living at the beginning of August, 1920, exceeded the cost
of living in July, 1914, and this excess would be increased if
hourly rates rather than weekly rates were taken as the basis of
comparison. On the other hand if we take the figure of 20/6
which Mr. Rowntree and Miss Kendall estimated to be the
minimum weekly income required in 1913 to keep a family of
five persons in a state of bare physical efficiency"—or if we take
* See B. Seebohm Rowntree and May Kendall, How the Laborer Lives (1913),
P. 3O.
ENGLISH AGRICULTURE SINCE THE ARMISTICE Io9
the 20/– which many considered should have been made the agri-
cultural minimum wage before the war"—an increase of 155 per
cent would bring us to a figure exceeding the 50/– demanded by
the laborers’ representatives.” In regard to the question whether
farmers could in the Summer of 1920 afford to pay higher wages,
the figures in Tables I and II shows that though the index number
of the price of agricultural produce was lower in August, IQ20,
than it had been in the first four months of the year, it was still
177 per cent higher than the average of the years 1911–13 and
that for the whole year 1920 it was 192 per cent higher than that
average. In connection with the comparison made between the
wages of agricultural laborers and railway workers, it may be
noted that at the end of 1919 a minimum wage of 51/– had been
established for all adult railway workers and that by midsummer
1920 these workers were receiving wages which exceeded the
pre-war average rates by 40/- and over.”
In reply to the arguments advanced by the workers’ repre-
sentatives, the representatives of the employers urged:
I. That the increased cost of living does not press so hardly upon
workers in agriculture as in other industries.
2. That the provisions of the Corn Production Act must be considered
as a whole, and that, in fixing minimum wages, the Wages Board must
* See Christopher Turnor, The Land and Its Problems (1921), p. 24.
* It must be remembered (as stated above p. 13, footnote 3) that the figures
which indicate the rise in the cost of living do not allow for changes in diet, etc.,
since 1914, nor for the special conditions of rural districts. A labor committee,
making a fresh investigation, criticized the Ministry of Labor’s index numbers
and put the increase in September, 1920, as 189 per cent over July, IQI4, as Com-
pared with the official figures of I61 per cent (September 1) and 164 per cent
(October I); but Professor Bowley has shown reason for thinking that the attack
on the official figure “breaks down entirely.” See Economic Journal (September,
1921), pp. 406-II.
3 See p. Io2.
4 See the Labor Gazette, XXVIII (1920), 290; XXIX (1921), 4. It is worth
noting that in West Lancashire a standard wage of 60/– had been agreed to by
the farmers in March, 1920, after a strike had been threatening. See F. E. Green,
History of the English Agricultural Laborer 1870–1920 (1920), p. 324.
IIo SOME ASPECTS OF RECENT BRITISH ECONOMICS
have regard to the effect which Such wages will have on the production of
food, and the employment of labor.
3. That the rates fixed by the Board are only minima which must be
paid to the least efficient workers, and that higher wages can be, and in
many cases are, paid to the more efficient.
4. That the weekly wages under the Board's Orders must be paid
whether the worker can be profitably employed or not; and that in this
respect agriculture differs essentially from other industries in which the
workers are continuously employed on productive work.
5. That there is evidence that the present rates of wages are causing
land to be laid down to grass and throwing many men out of employment.
6. That any further increase in wages must result in decreased produc-
tion and higher prices of food.
The appointed members, in commenting on the position, said
they viewed with concern the reduction in the arable area, but
could not admit that the underpayment of agricultural laborers
was a proper remedy. They advanced the somewhat startling
contention that “if the financial results of farming under the
present conditions are insufficient to allow of the payment of
adequate wages to the workers, it is the duty of the Government
to take such measures as may be necessary to establish the eco-
nomic position of the cultivators of the Soil on a sound basis.”
The appointed members further pointed out that “if, as has been
argued, the Board had to consider nothing in the Act but the
terms of Section 5 (6) it would follow that the Board has no
responsibility in respect of any workers, except those who are
married and have families” and expressed the opinion “that
the Board not only has responsibilities in respect of all workers
in Agriculture, male or female, married or single, but that they
must also have regard to the effect of their actions upon the
interests of the industry as a whole.”
* For some arguments against this principle see R. Lennard, “Agricultural
Development and National Welfare,” Nineteenth Century and After (January, 1919),
pp. 123–24. The appointed members may, however, have meant only to maintain
it, if the policy of the plow and guaranteed prices are taken for granted.
* All these extracts are from a statement issued by the appointed members
which is quoted by Sir Henry Rew, “The Wages Problem in Agriculture,” Quarterly
Review (January, 1921), pp. 187–88.
ENGLISH AGRICULTURE SINCE THE ARMISTICE III
It would be difficult to form a decided judgment upon the
merits of this dispute about the rate of wages. But enough has
been said to show that the data available were such that there
was plenty of room for honest differences of Opinion on the main
issue.
In the meantime there had been a great to-do over the price
of wheat. In January, IQ20, the Commission on Wheat Supplies
was paying 121/Io per 480 lbs. for imported wheat, while the
English farmer was still receiving less than 73/– for home-grown
wheat." Toward the end of February, Lord Lee issued a state-
ment saying that the following announcement had been approved
by the Cabinet:
It is hoped that before the Autumn of IQ21 the importation and control
of the price of wheat by the Government will have ceased, and that farmers
will secure the benefit of a free market at world’s prices. So long as wheat
is still controlled, and thereby deprived of a free market, the controlled
price of home-grown wheat of Sound milling quality, harvested in 1921,
will be the average (c.i.f.) price for the twelve months ending August 31,
1921, of imported wheat of similar or comparable quality, provided that the
price so paid to the home-grower shall not exceed Ioo/- per quarter of 504 lbs.”
This announcement raised a storm of indignation. It was
clear that the price of home-grown wheat was not to be increased
in 1920, and that if world-prices continued to exceed £5 a quarter
in 1921 the English farmer would be prevented from getting
more than that price for wheat of the 1921 harvest, but that if
prices collapsed he would have no security over and above the
promised guaranties which were to cover at most the bare cost
of production without allowing any profit.” Moreover, the state-
* See Hansard, Parliamentary Debates: House of Commons, 5th series, Vol. I25,
column 22I. The Report of the Wheat Commission states that “the depreciation
of our exchange was such that when the £ stood at $3.35 in New York during
February, 1920, the purchase of dollars to pay for our wheat connoted a money
loss to us of 35/- a quarter.” See Cmd. I544, p. 13.
* See Wages Board Gazette, II (March 1, 1920), II.4.
3 For the nature of the promised guaranties see Lord Lee’s speech of November
Io, 1919, in which he said: “We do not say that he should be guaranteed a profit”
but “that he should be guaranteed against disastrous losses for which he is in no
II 2 SOME ASPECTS OF RECENT BRITISH ECONOMICS
ment with which Lord Lee accompanied his announcement did
not tend to alleviate discontent, and indeed reads rather as a
criticism than as a defense of the Government’s policy. It men-
tioned the decline in wheat production in the United Kingdom,
and the fact that imported wheat was being bought at prices
“which now range up to 135/- and average over II.4/– a quarter.”
It stated that the maximum price of 76/– a quarter (i.e., of 504
lbs.), which was all that the home producer could get, had been
fixed in 1918, “when the costs of production, and notably wages,
were far lower than they are today,” that “the equivalent of
76/– in 1918 is not less than 95/– in 1920,” and that “the con-
trolled price has acted as a direct and effective deterrent to home
wheat production, and in this respect is operating to the detri-
ment of both the consumer and the taxpayer.” As regards the
I920 crop, the statement contained the following rather myste-
rious passage: “The wheat of the coming (1920) harvest is not
directly concerned in this announcement, but it is obvious that
its price will be indirectly and favourably affected. There will
be an increased inducement, therefore, to sow more wheat this
spring.” d
By this last remark Lord Lee struck a blow at the most sub-
stantial argument which could be urged in support of the Govern-
ment’s decision not to raise the price before 1921—the argument
that the wheat had already been sown and that since wheat is
almost entirely an autumn-Sown crop in Great Britain no sub-
stantial increase in the area under wheat would result from an
increase in price announced at the end of the winter.”
sense responsible” (Journal of the Ministry of Agriculture, XXVI, 793). Compare
the opinion of the Majority of the Royal Commission that “the principle of guar-
antees somewhat below the bare costs of production (i.e., not including interest
on capital or remuneration for the farmer himself) should be adopted. (See
Cmd. 473, p. 7.)
* See Wages Board Gazette, II (March 1, 1920), II4–15.
*In the event, the breadth of wheat sown in the spring of 1920 in England
and Wales was 81,737 acres, as compared with I46,568 acres in 1919—and this in
spite of the reversal of the government’s decision on March II.
ENGLISH AGRICULTURE SINCE THE ARMISTICE II.3
Whatever may be thought of Lord Lee’s statement, there can
be no doubt about the reality of the outburst which followed the
announcement of the Government’s decision. On March 2, the
Energency Committee of the Royal Agricultural Society passed
the following resolution: “That this committee has learnt with
astonishment of the decision of the Government purporting to
encourage the growing of wheat, and is convinced that a continu-
ance of present conditions will lead to a great diminution in the
food supply of the nation, and that nothing less than the increase
of price indicated in Lord Lee's recent statement to the Press for
the 1920 crop of wheat will arrest the decline in the cultivation
of that cereal.”
At a meeting of the Council of the society held on March 3,
Mr. Overman (one of the signatories of the Majority Report of
the Royal Commission and a very distinguished Norfolk agri-
culturist) said “he had never known the farmers of England so
angry as they were at the result of the Government’s announce-
ment as to the future prices of wheat” and that “it was quite
possible that there would be many acres of wheat crossed this
year with oats and barley, so as to turn the wheat into dredge
corn.” In the same week the Middlesex branch of the National
Farmers’ Union, the chairman of which at that time was Mr.
Robbins, the vice-president (afterward president) of the Union,
and like Mr. Overman one of the signatories of the Majority
Report of the Royal Commission, unanimously passed a resolu-
tion protesting against the Government’s proposals, and expres–
sing the opinion “that in the interests of the nation at large the
Cabinet should immediately reconsider its proposals with a view
either to the immediate decontrol of wheat or, alternatively, to
fixing for the 1920 harvest the prices proposed to be applied under
Continued control to the harvest of 1921, and that the price of
* See Journal of the Royal Agricultural Society, LXXXI, Appendix, p. xxii.
* See ibid., p. xxiii. Mixed corn could be used for feeding stock: this was
forbidden in the case of wheat.
II4 SOME ASPECTS OF RECENT BRITISH ECONOMICS
the 1921 harvest should be reconsidered at a later date.” On
March 9, the matter was discussed in the House of Commons.
In the course of the debate Lieutenant Colonel Guiness said:
“When the farmers sowed last year’s crop they thought that
76/– was going to be the minimum, and not the maximum.
That is the invariable opinion given. They may have been
wrong, but they only took the statements of Ministers at their
face value. They have been let down once, and they are very
Suspicious as to the Government getting into the habit of letting
them down year by year.”
The Government bowed to the storm. On March II, in
answer to a question in the House of Commons, the Prime
Minister said: “In order to remove the anxiety which has been
expressed by farmers with regard to the price of the 1920 wheat
crop the Government has decided that so long as wheat is still
controlled and thereby deprived of a free market, the controlled
price of home-grown wheat of sound milling quality harvested
in 1920 shall be the monthly average (c.i.f.) price of imported
wheat of similar or comparable quality, provided that the price
so paid to the home grower shall not exceed 95/- per quarter of
504 lbs.”
This statement seemed definite enough, but before the end
of the year farmers found that though the price of imported
wheat exceeded Io2/– per 480 lbs. they were unable to get the
maximum price for the home-grown variety. The official
“Agricultural Statistics” explains the situation thus. Millers
were overstocked with wheat and the fall in the price of wheat in
* See the Daily Telegraph, March 4, 1920. The resolution contained the follow-
ing paragraph: “That attention should be given to the recommendation in the
Minority Interim Report of the Royal Commission on Agriculture which was
signed by the representatives of Labor: That so long as prices of cereals are Con-
trolled by the Government, the farmers be paid at prices not less than those at
which the commodities controlled can be imported.”
* See Hansard, Parliamentary Debates: House of Commons, 5th series, Vol. I26,
column II 76.
3 See Hansard, ibid., columns 1524–25.
ENGLISH AGRICULTURE SINCE THE ARMISTICE II5
North America and the expectation of its continuance led bakers
to reduce their stocks of flour to a minimum. Farmers, how-
ever, continued to thresh and press their wheat on the market:
a further fall in price was feared and some farmers needed ready
money. A “not unimportant proportion” of the home-grown
wheat offered for sale at this time was damp or of poor quality.
Thus, though controlled millers were authorized to pay 95/–
per 504 lbs., “they either ceased to buy or found in practice they
could buy for less.” On the other hand, it was suspected by
agriculturists that the Wheat Commission, faced with a falling
market and the prospect of decontrol in the near future, was
unloading its stocks and that the saturation of the market was,
at least in part, due to this cause. On December 15, the Council
of the National Farmers’ Union protested to the Minister of
Agriculture and the Food Controller and made certain proposals
with a view to stimulating the demand of millers for home-grown
wheat. The reply of the Ministry of Agriculture (dated De-
cember 17) stated that the wishes of the Farmers’ Union were
being met in two respects—by a reduction of the rate of extrac-
tion from 75 per cent to 73% per cent, and to 72 per cent when
more than 15 per cent of British wheat was used, and by the
revocation of the Cereals (Restriction) Order which had pre-
vented the feeding of wheat or flour to stock. It also expressed
the hope that “at no very distant date” the Wheat Commission
might allow the export of wheat for seed “without any restric-
tion other than the issue of a license on the recommendation of
this Ministry.” On the other hand the letter set forth the
official view of the factors tending to depress the price of British
wheat and reminded the Farmers’ Union that “millers are under
* See Agricultural Statistics, 1920, Part III (Cmd. 1363), pp. 99–Ioo.
* As a matter of fact “the quantitative restriction on the export of home-
milled flour was removed on December 16, 1920, and on the same day permission
was granted for the export of flour both imported and home-milled, and also of
wheat, to any country with which trading was permitted.” See Report of the
Wheat Commission (Cmd. I544), p. 88.
II6 SOME ASPECTS OF RECENT BRITISH ECONOMICS
no obligation to purchase grain which is not required to meet
current needs.”
But the situation did not improve from the farmer's point
of view. The average price of British wheat which had been
above 90/- per 480 lbs. from August 21 to November 20, con-
tinued to fall and in the week ending February 5, 1921, was 84/2.”
The Report of the Council of the National Farmers’ Union which
was presented to the Annual General Meeting of the Union on
February 9 spoke of the “repudiation by the Government of
the Prime Minister’s pledge,” and a resolution was carried
expressing the “grave dissatisfaction” which the meeting felt at
“the failure of the Government to fulfil the Premier's pledge.”
It was further decided to send a telegram to the Prime Minister
asking him to receive a deputation that same week.”
The deputation was received on February 16. Mr. Lloyd
George stated that he stood by his pledge “in the letter and in
the spirit” and that where there was any doubt the farmer should
have the benefit of the doubt “because it is of paramount impor-
tance that there should be no feeling in any section of the com-
munity that the British Government has broken faith with
them.” Wheat had been decontrolled on January 25, but the
Government would not take advantage of that, for so long as
the existing relations between the millers and the Government
continued the farmers were entitled to say they were affected
by these conditions.
On the following day and on February 23 there were confer-
ences with the departments concerned and it was finally decided
that in respect of past purchases (defined as purchases between
November 8, 1920, and March 5, 1921) farmers or merchants
would be entitled to receive the difference between the price
* The letter of the Farmers’ Union and the reply of the Ministry are printed
in the Journal of the Ministry of Agriculture, XXVII (January, 1921), 895–98.
* By March 5 it had fallen to 72/5.
3 See Twelfth Annual Report of the National Farmers’ Union, pp. 23, 47, 48.
ENGLISH AGRICULTURE SINCE THE ARMISTICE II 7
paid by millers per 504 lbs. and 95/– free on rail or 96/–
delivered into the mill for wheat of Sound milling quality, cor-
responding prices to be paid for inferior wheat in proportion to
the degree of its inferiority. With regard to future purchases
millers would be instructed to pay these prices “so long as the
average (c.i.f.) cost of imported wheat remains above the par-
ity” of 95/- per 504 lbs. In the event of this average falling
below 95/– prices would be “revised by the Wheat Commission
in accordance with the cost of imported wheat and announced
monthly.” These arrangements were to hold good for the rest
of the Cereal year and August 13 was suggested and subse-
quently fixed upon as the date when they should terminate."
While the problem of immediate wheat prices was being
handled in the way that has been described, the permanent
policy of the Government was embodied in the Agriculture
Act. Though the Interim Report of the Royal Commission on
Agriculture was presented on December Io, 1919, the Govern-
ment’s Bill was not introduced into the House of Commons until
May 20, 1920. After “a somewhat agitated passage through
Parliament” it received the Royal Assent on December 23 and
Came into operation on January 1, 1921. It had undergone con-
siderable alteration in the House of Lords and the changes made
were not to the liking of the farming community.”
The Agriculture Act (Io and II Geo. V, c. 76) established
guaranteed minimum prices for wheat and oats on the system
and basis recommended by the Majority of the Royal Commission
On Agriculture." It did not, however, carry out the recommenda-
* See Journal of the Ministry of Agriculture, XXVII (March, 1921), Io91-98.
* See Wages Board Gazette, III (January 1, 1921), I.
3 See the address of Mr. E. W. Langford, president of the National Farmers’
Union, in the Twelfth Annual Report, pp. 60–61.
4 Sir Henry Rew, formerly assistant secretary to the Board of Agriculture, has
described the sliding scale method of these guaranties as one “which appeared
plausible on paper but in practice would probably have been extremely difficult to
apply satisfactorily.” See R. Henry Rew, The Story of the Agricultural Club (1922),
P. 94.
II.8 SOME ASPECTS OF RECENT BRITISH ECONOMICS
tion of the Commission that the price of barley should also be
guaranteed, nor did it embody their recommendation that pay-
ments in respect of guaranteed prices should be “dependent upon
the production of a certificate from the department concerned
to the effect—(a) that the holding in respect of which payment
under the guaranties is claimed has been well cultivated and an
adequate amount of labor employed upon it or that such labor
was not available; and (b) that either one-eighth part of the
holding or one-fourth part of the arable land (whichever be the
greater) is under cereal crop, or that so much less of the holding
is under cereal crop as appears to be desirable in the public
interest.” The Act further incorporated the provisions of the
Corn Production Act of 1917 in regard to agricultural wages,
but established a separate Wages Committee for Wales on the
lines of the Scottish system as set up in 1917. There were con-
siderable changes made in the provisions for enforcing proper
cultivation. Part II of the Act dealt with the relations of land-
lord and tenant, its most important provisions being (1) that a
tenant required to quit without any fault should receive Com-
pensation for disturbance equal to not less than one year’s or
more than two years’ rent, (2) that adjustments of rent should be
subjected to arbitration, (3) that a tenant should receive compen-
sation for improvements under certain conditions even if the land-
lord had not consented to their execution, and (4) that a farm
laborer living in a “farm-tied” cottage should, if evicted by his
employer otherwise than under special specified conditions, be
entitled to compensation for disturbance.
The year 1921, which opened with the inauguration of the
Agriculture Act, witnessed a further decline of 400,ooo acres odd
in the arable area, and of 285,ooo acres in the breadth of grain.
Cows and heifers in milk increased by 48,000 but the total head
of Cattle declined by 30,000. There was an increase of 449,000
sheep and of 511,000 pigs. Apart from wheat, the price of which
*See Cmd. 473, Majority Report, § 25 (b).
ENGLISH AGRICULTURE SINCE THE ARMISTICE II9
was affected by the agreement of February, the prices of cereals
fell in the first six months of the year, and in June barley was
selling for less than half the price it had fetched at the end of
November. The index number of the price of agricultural
produce in general which was 292 for the year 1920 and was
still 286 for the month of January, IQ21, fell to 202 for the month
of June. On June 4, 1921, the area owned by occupiers in Eng-
land and Wales amounted to 5,231,847 acres—an increase of
more than 27% per cent since June 4, 1920."
It has been argued that the sense of security given by the
passage of the Agriculture Bill through Parliament led to the
enlargement of the wheat area, and it is true that in 1921 the
area under wheat was greater by IOI,352 acres than it had been
in 1920. But this cannot be credited to the system of guaran-
teed prices which the Government was setting up. The Govern-
ment’s change of policy in regard to the price of the 1920 wheat
crop—the change announced by the Prime Minister on March
II, 1920–had been effective throughout the seed time. In
each week from the middle of August to November 20, the aver-
age price of wheat had been above 90/- per 480 lbs. It was only
after the end of November that the check came which led to
the controversy described above. Moreover, if it had been the
guaranties which caused the increase in the breadth of wheat,
this factor would also have affected the sowing of oats, if any-
thing to a greater degree. Oats are largely spring sown in Eng-
land, and by the spring the system of guaranties was not merely
in the process of being established—it was already the law of the
* The acreage owned by occupiers was in 1921 just 20 per cent of the total
acreage under crops and grass, as compared with Io.7 per cent in 1913. There
seems to be ground for thinking that sales of land were accelerated in 1920 (or
rents raised) in anticipation of the passing of the Agriculture Act: this makes the
delay in its introduction important. See Year Book of the National Farmers’
Union for 1921, p. 195. The figures do not of course show whether or not the chief
part of the increase in Occupying ownership between June 4, 1920, and June 4,
I921, took place before the end of 1920.
I2O SOME ASPECTS OF RECENT BRITISH ECONOMICS
land. And the scale of guaranties in the Agriculture Act was
considered to put a premium on oat production." Yet oats
declined more than wheat increased: there was a net decrease of
21,000 acres Odd in the breadth of the two guaranteed cereals.
But whatever may or may not have been the effect of the
Agriculture Act, its influence was of short duration. The first
clause of Part I of the Act, which was the part dealing with
guaranteed prices and minimum wage regulation and was tech-
nically an amendment of the Corn Production Act of 1917, ran
as follows: “Subject as hereinafter provided, the provisions of
the Act of IQI 7 shall continue in force until Parliament other-
wise determines: Provided that it shall be lawful for His Majesty,
on an address presented to him by both Houses of Parliament
praying that the Act of 1917 shall cease to be in force, by Order
in Council to declare that that Act shall cease to be in force on
the expiration of the fourth year subsequent to the year in which
the Order is made.” That the guaranties were to be subject to
a four years’ notice of withdrawal was of the essence of the
Government’s policy.
Yet on June 8, 1921, Sir Arthur Griffith-Boscawen who had
succeeded Lord Lee as Minister of Agriculture” made the follow-
ing announcement in the House of Commons:
The Government have been carefully considering for some time past
the operation of the Agriculture Act, and have come to the conclusion that
the financial liability on the State under Part I of the Agriculture Act is
* The Minister of Agriculture, speaking in the House of Commons on July 4,
1921, of the guaranteed prices of the Agriculture Act, said: “There can be no doubt
that the Royal Commission who fixed these guaranteed prices and whose figures
were accepted by the Government put the price of oats very high. It is entirely
out of the parity which has generally prevailed in the matter of wheat and oats.
Ordinarily the parity has been wheat Ioo/-, oats 55/-. As regards these guar-
anteed prices, the figures are wheat Ioo/-, oats 66/-. I feel no doubt in my own
mind that if the price of wheat be right the price for oats is too high.” See Hansard,
Parliamentary Debates, Vol. I44 (July 4, 1921), column 67.
* Lord Lee did not cease to be a member of the Government: he was appointed
First Lord of the Admiralty and still (September, 1922) holds office in that capacity.
ENGLISH AGRICULTURE SINCE THE ARMISTICE I2 I
more than the country can afford under present circumstances, and con-
sequently that there is no alternative but to terminate at the earliest possible
date the policy guaranteeing minimum prices for wheat and oats. This
decision involves also the repeal of the provisions relating to the minimum
wage for agricultural workers and to the control of cultivation by the State,
which are contained in Part I of the Agriculture Act and in the Corn Produc-
tion Act. I may add that payments will, of course, have to be made in
respect of the wheat and oats which will be harvested this year."
Because of this complete change of policy, the year 1921 will,
according to Sir Henry Rew, be most memorable in agricultural
history as “that in which agriculture endured the heaviest blow
ever dealt to it by a British Government.” He writes:
Never had the agricultural interest received such earnest assurances of
assistance, such emphatic protestations of sympathy. Pledges in the most
definite form were given by the Prime Minister and other members of the
Government, and embodied in an Act which was passed by large majorities.
An agricultural policy was thus framed and endorsed with every demonstra-
tion that it was regarded as of vital importance to the nation. The one
Supreme merit claimed for it, whatever defects in detail it might possess,
was that it was permanent; and Parliament was invited to insert a very
unusual, if not unprecedented, provision which so far as was consistent with
Constitutional practice, pledged it not to alter the Act without giving four
years’ notice. There were certain sceptical persons who were not impressed
by this imposing parade of resolution, and who warned farmers that in any
case no pledges, however solemn, could bind the next Government or the
next Parliament. But even the most cynical refrained from suggesting
their repudiation by the same Government and the same Parliament. The
policy and the pledges were, however, abandoned and repudiated within
six months—one of the most remarkable examples of tergiversation in
history. And perhaps even more remarkable still was the fact that the
Prime Minister and the late Minister for Agriculture, who had made them-
Selves prominently responsible for the policy, left the explanation of the
Government’s action to the present Minister of Agriculture, who had no
personal responsibility for the policy.”
* See Hansard, Parliamentary Debates, House of Commons, 5th series, Vol. 142,
column 1872.
* See Sir R. Henry Rew, “The Position and Prospects of Agriculture,” Quarterly
Review, CCXXXVII (April, 1922), 316–17.
I 2.2 SOME ASPECTS OF RECENT BRITISH ECONOMICS
The Corn Production Acts (Repeal) Bill received its “second
reading” on July 5, 1921, and came into force on October I.
By a bargain with the National Farmers’ Union, which could
do nothing but “attempt to salve as much as possible from the
wreckage,” the Government arranged to pay the farmers £3 in
respect of every acre under wheat and £4 in respect of every
acre under oats—the crop of course remaining the farmer’s to
sell at market prices. In addition fºr,000,ooo was allotted to
agricultural education and research. Part II of the Agriculture
Act—the part which dealt with tenants’ rights—was to remain
in force, save for a minor alteration in regard to the farm-tied
cottage and with the exception of the provisions as to improve-
ments executed without the landlords’ consent. As regards
control of cultivation the Minister of Agriculture only retained
powers to order the destruction of noxious weeds. The whole
fabric of minimum wage regulation was abolished: in its place
voluntary conciliation committees were to be set up, and if a
wage was agreed upon by one of these committees for its district
and was afterward confirmed by the Minister of Agriculture, it
was provided that a workman who had been paid less than the
agreed wage might sue his employer for the difference. It was
contended of course that the minimum wage and the guaranteed
prices were part and parcel of the same policy. But, apart from
the fact that the agricultural minimum wage had been advocated
by Mr. Lloyd George in his pre-war days without any suggestion
that it should be accompanied by guaranteed prices, the idea
that the two things were connected was expressly repudiated
by Lord Ernle, when, as Minister of Agriculture, he introduced
the original Corn Production act.* Experience had proved the
* See Year Book of the National Farmers’ Union for 1922, p. 186.
* See Hansard, Parliamentary Debates: House of Commons, Vol. 92 (April 24,
I917), columns 2351-52. The unreasonableness of making wage regulation
dependent upon guaranties for wheat and oats may perhaps be gauged from the
fact that in the official weighting of agricultural products for statistical purposes
the weight of wheat and oats together is only Io, that of other products II.2 or,
if hops and straw are included, II5. See Cmd. 345, Appendices, p. 4.
ENGLISH AGRICULTURE SINCE THE ARMISTICE I23
need of compulsory powers and penalties to insure the payment
of the minimum wage by the worst employers; but, on the other
hand, though the advances in rates made in 1920 had caused
considerable irritation, farmers in general were getting accus-
tomed to the determination of a minimum wage by law.” Some
mistakes were no doubt inevitable in the experimental period;
but on the whole the Wages Board had done its work well.
Lord Ernle, though he considers it was not an unqualified bles-
sing, being, in his view, “too rigid, too mechanical and inelastic”
and though he apparently thinks that the new system of concilia-
tion committees may prove more satisfactory, points out that
“agriculture in 1917–19 was hampered by no strikes” and “con-
tributed practically nothing to the record of Io'7,ooo,000 days
lost by industrial stoppages in 1920–July, IQ21.” He adds
that the Wages Board “tided the industry over difficult times,”
that it “prevented violence” and that “it maintained the
peace.”
Almost the last act of the Wages Board was to reduce the
general minimum wage for adult male laborers from 46/– to
42/-, a change which was carried “against the opposition of
the workers’ representatives, the employers’ representatives sup-
porting the motion of the appointed members under protest.”
The new rate came into force on September 6, 1921, but on Octo-
* Information as to prosecutions may be found in the Wages Board Gazette,
passim. See also F. E. Green, op. cit., pp. 31.7–20.
* On the whole I think there was less grumbling among farmers about the
minimum wage than there had been about the National Insurance Act when it
was first introduced: now that Act is accepted as a matter of course. Mr. Padwick
(then president of the National Farmers’ Union), in evidence submitted to the
Royal Commission in January, 1920, said: “The Union recognizes that in the
matter of wages a return of pre-war conditions is neither practicable nor desirable,
and accordingly they take the view that the Agricultural Wages Board machinery
should be continued, with such modifications as experience may have shown to
be desirable.” See Cmd. 665, Appendices, p. 17.
3 See Journal of the Royal Agricultural Society, LXXXII, 28–29.
4 See Wages Board Gazette, III (September 29, 1921), 263.
I24 SOME ASPECTS OF RECENT BRITISH ECONOMICS
ber I the Wages Board ceased to exist, and from that time on-
ward information as to rates of wages has been harder to obtain,
and it is Scarcely possible to form as yet a general opinion about
the working of the new system of conciliation committees. The
Country was speedily covered by Committees and by January,
I922, agreements had been reached by thirty-nine out of fifty-
seven committees. There was, however, little willingness to use
the machinery for getting these agreements confirmed and made
legally binding; there was a tendency to make agreements for
very short periods only; and in some districts the question of
hours was a cause of difficulty." Rates have been “very variable,
with a marked tendency downward,” and there has been “a
*istinct movement in the direction of longer hours.” It was
estimated that in December, 1921, the average was about 36/–
or 37/– but “by the end of January, 1922, this had fallen appreci-
ably and in a number of Counties farmers were only paying
30/- a week, though higher rates were still ruling in possibly
the majority of cases.” According to the official Agricultural
Statistics “it is probable that 32/– to 33/– represented the aver-
age cash wage in February–March, Ig22.” The same publica-
tion contains the following statement:
The average cash wages of ordinary workers in agriculture in England
and Wales in IgE4 was estimated at I6/9 per week, or, including allowances,
at 18/-per week. Compared with this latter figure, 32/6 per week shows
an increase of approximately 80 per cent. It must be borne in mind, how-
ever, that allowances are generally less today than before the war. If the
present estimated average rate of 32/6 be compared with the cash wage of
I6/9, the increase is about 94 per cent. These figures may in their turn be
compared with the increase in the price of agricultural produce in February–
March, 1922, of 82% per cent, and with the increase in the cost of living index
number of 86 per cent on March I.”
*See Journal of the Ministry of Agriculture, XXVIII (November, IQ21), 673–74;
(December, 1921), 836-89; (January, 1922), 865, 946–47; (March, 1922), IoëI-64.
* See Agricultural Statistics, LVI (1921), Part III, 92. The statement is dated
April 29, 1922.
ENGLISH AGRICULTURE SINCE THE ARMISTICE I25
The agreements in being on August 1, 1922, vary very widely.
For example the agreed wage in eastern Lancashire is 45/- per
week of the usual working hours: in Oxfordshire it is 30/- per
week of fifty hours. In several districts in the south of England
no agreement had been reached on August I: in some others—
also in the south—agreements had lapsed for several months with-
out any new agreement being reached. From Oxfordshire com-
plaints had been received to the effect that many employers were
not honoring the agreement. The question how far the relative
positions of high-wage and low-wage counties are different from
what they were, on the One hand, in 1914, and, on the other hand,
during the period of legal minimum wage regulation, would prob-
ably repay investigation. The subject is complicated by the diffi-
Culty of measuring extra earnings and allowances, by differences
in hours, and by lack of information about the payment, in some
areas, of wages higher than the minimum. It may be noticed,
however, that while the difference between wages in Lancashire
and wages in Oxfordshire appears to be greater than it was in
I907, the percentage by which rates in Durham exceed the
Oxfordshire rates is considerably less than the corresponding
percentage twenty-five years ago."
The slump was not confined to wages. On June 17, 1920,
Lord Lee, speaking as Minister of Agriculture to a gathering of
farmers at Rothamsted, gave a remarkable forecast of the posi-
tion of the English farmer at the time when the harvest of 1921
should come on the market. He would have, in respect of his
wheat, a guaranteed minimum price which at the level of costs
obtaining at the time he was speaking was estimated to be some-
thing “between 80/- and 85/–’’ and next year would “probably
be higher.” Moreover, he said, “at whatever price imported
wheat comes into this country the farmer will get the equivalent
of that price for his wheat harvested in 1921, instead of being
* For information respecting conditions in August, 1922, I am indebted to the
National Union of Agricultural Workers.
I26 SOME ASPECTS OF RECENT BRITISH ECONOMICS
tied down, as he has been recently, to a controlled maximum.”
What the world-price of the 1921 harvest would be, Lord Lee
said he could not foretell, but he told his audience that the Food
Controller had suggested it might “go as high as 140/–’’ and
added “it seems almost certain that the price will be well above
the average of Ioo/– at which it stands to-day.”
It was perhaps fortunate for the English farmers that in
spite of this rosy prospect they did not increase the area under
wheat by much more than Ioo,ooo acres. For when the grain
crops of 1921 came to be threshed, the Government (of which
Lord Lee remained a member) had abandoned the system of
guaranties; and by the first week in November the average
price of British wheat was 44/– per quarter of 480 lbs.” The
prices of other cereals also fell. Though barley recovered tem-
porarily after a severe slump in the late spring and early Summer,
the downward tendency was renewed in October; and oats
fell steadily in price for some time after harvest and averaged
less than 20/- per 312 lbs. in each week from the beginning of
October to the end of the year. For the seven months from
September 21, 1921, to March 31, 1922, the average prices were-
wheat: 49/– per 480 lbs.; barley: 48/1 per 4oo lbs.; oats:
28/4 per 312 lbs. The corresponding prices for the cereal year
September 1, 1920–August 31, 1921, had been 84/8, 62/4 and
41/9. Live stock shared in the fall. Sheep which in January,
1921, were selling at 203 per cent more than their pre-war price
were only 53 per cent above that price in December: for cattle
the corresponding figures were 179 and 63—for pigs 180 and 66.
The general position is shown by the index numbers in Table II.
In February and March, 1922, farmers were a little heartened
* See Journal of the Ministry of Agriculture, XXVII (July, 1920), 323. Lord
Lee apparently was speaking of the quarter of 504 lbs. 504 lbs. at Ioo/- is roughly
equivalent to 480 lbs. at 95/3.
* A few farmers who threshed exceptionally early were fortunate enough to
obtain about 70/– a quarter, but the price declined rapidly from week to week.
It must be remembered too that English wheat in 1921 was of unusually fine quality.
ENGLISH AGRICULTURE SINCE THE ARMISTICE I 27
by an improvement in the prices of wheat and live stock, but
thereafter milk prices declined, partly perhaps on account of a
shrinkage of demand due to urban unemployment. Meanwhile a
new trouble had appeared in January—an outbreak of foot-and-
mouth disease more widespread than any which had occurred in
Great Britain since 1884."
There can be no doubt that farmers had grave cause for
anxiety from the Summer of 1921 onward, for crops and stock
which had been produced when costs were high had to be sold
after the slump at unremunerative prices.” The situation was
especially trying for men who had only recently started farming, for
in their case all the equipment of their farms had been purchased
at war prices. But while it would be foolish to minimize the
seriousness of these facts, it would be absurd to consider them
without reference to the fall in the costs of production which
took place in the latter part of 1921. The decline in wages after
September 6 has already been described; but it is also important
to notice (1) that feeding stuffs which on an average had been
I73 per cent above pre-war prices in 1920 were only 58 per cent
up in December, 1921, (2) that the prices of fertilizers were in
December only 67 per cent above the pre-war average as com-
pared with 159 per cent in 1920, (3) that between 1920 and 1921
there was a fall of about 30 per cent in the price of the principal
kinds of seed, and (4) that the later months of 1921 witnessed a
decline in the cost of agricultural machinery.”
The influence of these compensating factors can perhaps be
traced in the statistics of cropping and stock in the present year.”
* See Journal of the Ministry of Agriculture, XXVIII (March, 1922), IoS7–6o.
* It must be remembered however that under the Corn Production Acts (Repeal)
Act farmers were paid £3 an acre or about 15/- a quarter for wheat and £4 an
acre or about 16/– a quarter for oats in addition to what they received for the sale
of their crops.
3 For all these price figures see Agricultural Statistics, LVI (1921), Part III,
passim.
4 The figures are taken from the Preliminary Statement issued by the Ministry
of Agriculture on August 5, 1922, and refer to June 3.
I28 SOME ASPECTS OF RECENT BRITISH ECONOMICS
There has been a further decline of 309,000 acres in the arable
area, which is now only 311,Ooo acres greater than in 1914; but
the reduction in the past year has been appreciably less than that
which took place between 1920 and IQ21, and the bare fallow
is less by Ioz, Ioo acres than it was a year ago. The breadth
under grain crops (including peas and beans) is almost exactly
what it was in 1921; and it is a Curious comment upon the
statesmanship of the Agriculture Act of 1920 that while the
acreage of the two guaranteed cereals (wheat and oats) declined
by 21,000 acres odd in the cereal year 1920–21, it actually
increased by 5,000 acres in the Cereal year IQ21–22. The largest
changes are in clover and rotation grasses, and in permanent
grass—the former having decreased by 247,000 acres and the
latter increased by 189,000 acres. As regards stock, cows and
heifers in milk increased by 57,500 and the total head of cattle
by 205,100—the totals in both cases being larger now than in
1913. Pigs also increased by 208,8oo; but the sheep population
is less by 394,800 than it was in 1921. This reduction in the
number of sheep is stated to be due to the shortage of keep in
the winter (after the draught of 1921) and to the “very high
prices which have ruled for fat sheep during past months.” It is
“confined to sheep other than ewes and lambs, the breeding
flock having been again increased.”
The canvass of contemporary history is always crowded and
the historian is bound to select those facts which seem to him
most important and to leave great masses of detail unnoticed.
But this is to some extent a necessity in all historical writing in
regard to modern periods; and the real trouble in a summary of
recent events is to apply an adequate standard of importance to
the work of selection. The perspective obtainable from a distant
viewpoint is lacking; and topics which have been matters of
controversy demand more attention than they deserve. To the
contemporary it is the work which has occasioned most difficulty,
not that which has been most successful, which seems the more
important. And in the foregoing account of English agriculture
ENGLISH AGRICULTURE SINCE THE ARMISTICE I29
since 1914 many things have gone unmentioned which perhaps
the future may show to have merited more prominence than, for
example, the history of arable farming discussed in the preced-
ing pages. It is not improbable too that in an account of British
grain production in the twentieth century written a generation
hence less will be said about the actions of the British Govern-
ment between 1917 and 1921 than about the quiet breeding of
improved wheats in the laboratory of Professor Biffen at
Cambridge.
But without making any guess as to their relative importance
in the eyes of those who will be better able than a contemporary
to form a balanced judgment, it may be well to supplement the
preceding narrative with a brief note—almost in the manner
of a catalogue—of some of the topics which have been, as it were,
crowded out.
Nothing has hitherto been said of the settlement of ex-service
men on the land. A scheme for training such men for agricul-
tural work was provided, but the demand for this training was
not large. As regards the provision of land it may be noticed
that when the list was closed on December 1, 1920, applications
had been received from 48,34o ex-service men and that in April,
I921, it was expected that about 30,000 of these applications
would stand, while over II,000 of them had been satisfied. But
in spite of these efforts the small-holding movement cannot be
said to have progressed since the outbreak of the war. The
number of holdings under 50 acres in extent was less in 1921
than in 1913 and the number above 50 acres but not exceeding
Ioo acres had only increased from 59,287 to 61,00I.
To discuss the much-criticized housing schemes of the Govern-
ment would require a special article. But there can be no doubt
of the fact that badly needed cottages have been built since the
conclusion of hostilities in a very large number of English villages.
Again, though the economy campaign, in its more short-
sighted manifestations, has destroyed many of the hopes which
were entertained in 1919, a great deal has been done, almost
I3o SOME ASPECTS OF RECENT BRITISH ECONOMICS
entirely by voluntary effort, to brighten the social life of the
English village. The women’s institutes, started in 1915 in
imitation of those in Canada and assisted by a grant from the
Development Commissioners, have done good work: they are
said to have made their presence felt in some 4,000 villages. The
work of the Village Clubs Association and the efforts made by the
Y.M.C.A. to provide entertainments and circulating libraries
also deserve mention. But much has been accomplished by
local effort and financial difficulties have in a curious way given
a stimulus. Rising costs meant that all existing village organ-
izations from churches to cricket clubs needed to raise additional
funds, and an obvious way of raising them has been to hold
whist drives, dances, and village fêtes.
The work of the Agricultural Organization Society and the
progress of agricultural Co-operation is another important topic
which cannot be discussed as it deserves. It may be noted how-
ever that between February, IQI9, and January, IQ20, the
membership of farmers’ co-operative societies increased by more
than 40 per cent and that their share capital was more than
doubled in the same period. The National Farmers’ Union has
also grown apace and in 1921 had five times as many members
as in 1913." Agricultural trade unionism has however under-
gone a marked decline since the days when it was stimulated by
the minimum wage.”
* See Table VII. The figures for 1922 are not yet available. The rate of
growth has diminished since 1918, the increase of membership being 97 per cent
in 1918, 42 per cent in 1919, 15 per cent in 1920, and 6 per cent in 1921. In 1921
about 44 per cent of the total acreage under crops and grass was held by members
of the union. I am indebted for this information to Mr. R. R. Robbins.
* The membership of the National Union of Agricultural Workers was estimated
in November, 1920, at close upon 200,ooo; in the summer of 1922 the membership
was about half that figure. The Workers’ Union had about 150,000 agricultural
members in 1920. The number is now (September, 1922) put at 90,000 as a
maximum. I am indebted for these figures to Mr. R. B. Walker, general secretary
of the National Union of Agricultural Workers, and to Mr. George Dallas, divisional
Organizer of the Workers’ Union for the home counties.
ENGLISH AGRICULTURE SINCE THE ARMISTICE I31
There are many more topics which would require discussion
in a really comprehensive account of English agriculture since
1914—such things as the experiments in Sugar-beet production,
the work of women on the land during the war, the control of
meat and milk, the history of wool prices, the use of the tractor,
the campaign for the destruction of rats, the measures taken for
the testing and improvement of Seed, and the campaign for the
improvement of grassland in which Professor Somerville has
taken a leading part. One of the most promising innovations of
the war period must be mentioned with regret, for the Agricultural
Costings Committee, which was set up in 1919 to assist and
stimulate the keeping of cost accounts and seemed likely to
become an efficient instrument for the elimination of inefficient
and uneconomic methods, has been abolished in the supposed
interests of economy. Milk recording has however made some
progress: the scheme was inaugurated in 1914 and the number
of cows recorded has increased from I2,950 in 1916–17 to over
85,000 in 1921. The development of agricultural education is
clearly a topic of great importance and significant progress has
been made in the last few years; but it must suffice to mention
the establishment of a degree course in agriculture in the Uni-
versity of Oxford, the reopening of the Agricultural College at
Cirencester (the oldest institution of the kind in England), and
the allocation, under the Corn Production Acts (Repeal) Act of
a capital sum of £850,000 for agricultural education and research
in England and Wales.
Two recent events must finally be mentioned—the decision
that farmers’ incomes will for income tax purposes be assumed
to equal the rent of their farms instead of double that rent as
in recent years, and the decision to allow the importation of
store cattle from Canada. The first decision has given Substan-
tial relief to agriculturists at a time of difficulty, but it is to
be feared that it has removed a stimulus to improvement in
the keeping of accounts. The latter is the issue of a prolonged
I32 SOME ASPECTS OF RECENT BRITISH ECONOMICS
controversy which was largely concerned with the interpretation
of a pledge given by Lord Ernle at the Imperial Conference in
1917. A royal commission, appointed in May, 1921, to inquire
into the results which would follow from the admission of live
stock from overseas otherwise than for the purpose of slaughter
at the ports, reported in September in a sense favorable to the
removal of the embargo. In spite of this the Government at
first announced that they did not purpose to alter the existing
law; but subsequently this policy was reversed and it has been
decided to admit Canadian stores in the future.


TABLE III
CHANGES IN CROPPING (ENGLAND AND WALEs)
Thousands of Acres
Grain Crops
Year Arable |Including Peas. Wheat Barley Oats Potatoes
and Beans
I9I3 . . . . . . . . . . II, OS8 5, 719 I, 702 I , 559 I, 975 442
I918. . . . . . . . . . I2,399 7,481 2,557 I, 5ol 2,78o 634
I9 IQ . . . . . . . . . . I2, 3O9 6,993 2, 22T I, 5 IO 2,564 4.75
I92O. . . . . . . . . . . I2, O2O 6,449 I,875 I, 637 2, 272 545
I92I . . . . . . . . . . II, 618 6, I64 I, 976 I,436 2; I49 558
I922*. . . . . . . . . II, 3O9 6, I62 I,969 I, 362 2, IóI 56I
TABLE TV
ToTALs of LIVE STOCK (ENGLAND AND WALEs)
Thousands Omitted
Year cowºśiers Total Cattle Sheep Pigs
I9I3 . . . . . . . . . . . . . . . . . . I, 707 5, 7I'7 I7, I.3O 2, IO2
I918. . . . . . . . . . . . . . . . . . I,858 6, 200 I6,475 I,697
I919 . . . . . . . . . . . . . . . . . . I, 944 6, IQ5 I5, I24. I,798
I92O. . . . . . . . . . . . . . . . . . I,828 5,547 I3,383 I,994
I921 . . . . . . . . . . . . . . . . . . I,876 5, 517 I3,832 2,505
1922*. . . . . . . . . . . . . . . . . I , 934 5, 722 I3,437 2, 297
* Preliminary returns.
ENGLISH AGRICULTURE SINCE THE ARMISTICE I33
TABLE V
OCCUPYING Own ERSHIP (ENGLAND AND WALEs)
Numb f º of
Acreage Owned Hoi}; º, O d à a. C €3. UIIl-
Year tº "ºº"gº,
by Owners
I913 . . . . . . . . . . . . . . . 2,890,559 48,760 Io. 7
I919 . . . . . . . . . . . . . . . 3,296,452 48,665 I2.3
I92O. . . . . . . . . . . . . . . 4, Io2,556 57, 234 I5.5
I921 . . . . . . . . . . . . . . . 5,231,847 7o,469 2O. O
TABLE VI
TOTALS OF FARMING FAILURES UNDER BANKRUPTCY AND DEEDS OF
ARRANGEMENT ACTS (ENGLAND AND WALEs)
T91O . . . . . . 245 I9I4. . . . . . I89 I918. . . . . . 3O
I9II . . . . . . 3O5 I915 . . . . . . I32 I9I9 . . . . . . 33
I9I2 . . . . . . 336 I916. . . . . . 78 I92O . . . . . . 44
I9I3 . . . . . . 326 I917 . . . . . . 65
TABLE VII
MEMBERS OF THE NATIONAL FARMERS’ UNION
I9Io. . . . Io,877 I9I4. . . . 21, 166 I918. . . . 53,288°
IQII . . . . I4. I'75 I915. . . . 21,84I I919. . . . 76, IoI
I912. . . . I 5,646 I916. . . . 22,674 I92O. . . .87, 7oo
I913. . . . IQ, 766 IQI 7 . . . . 27, OOI I92I . . . . 93; 4OO
Those in Table

* The figures for Igr8 and Igrg differ from those given in the preceding article.
VII above are corrected figures for which I am indebted to the kindness of Mr. R. R. Robbins, ex-
president of the National Farmers’ Union. Members who pay subscriptions late are not always
reported to headquarters; and there seems little doubt that the actual membership of the Union is
now Over Ioo,ooo.
TABLE VIII
ENFORCEMENT OF THE MINIMUM WAGE THROUGH THE WAGES BOARD
º, A. of º; #.
ageS eCOV- 2.IIIlS II). e- .:
Period ered through the Spect of Which Pºtion
Direct Action Complaints SČS
of the Board Were Received
In Pounds
October 28, 1918, to end of Ig 18. . . . . . 338 7I 7 | . . . . . . . . . . . .
* @ is - tº º is º - e º 'º e º s - © e º te e º c < * ~ * * * * * 9, IQ5 4,549 II6
• * g e a tº s is º ºs e e s e s tº a e º e a s e e s - e s e s e 2O, 393 3, 595 I58
sº º e º e s e º e s - tº e º so e o e s is e e s a e s a e º e e IO, 74I I, 665 72
Totals. . . . . . . . . . . . . . . . . . . . . . . . . 4o, 667 Io,526 346

I34. SOME ASPECTS OF RECENT BRITISH ECONOMICS
TABLE IX
AVERAGE YIELDS OF CROPS (ENGLAND AND WALEs) PER ACRE

Hav f Hay from
Year Barley Oats gº." Pºnt
Bushels Bushels Tons Cwt. Cwt.
Average 1903–12. . . . . . . 32.9 4o. 6 6. O 29. O 23 6
1913. . . . . . . . . . . . . . . . . 32.4 38. O 6.5 3I. 9 25. O
1918. . . . . . . . . . . . . . . . . 32.4 4.I.. 3 6.6 29. O 21.8
1919. . . . . . . . . . . . . . . . . . 29. O 35.6 5. 7 23.6 I6.4
1929. . . . . . . . . . . . . . . . . 3I. O 37. 9 5.8 3O. 9 25.6
1921 . . . . . . . . . . . . . . . . . 29.6 37.4 5.3 24.4 I5.8
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