at present represents only a small percentage of the potential development. While in certain specific instances, as, for example, in the use of motor omnibuses in London and in Paris, the change to motor traction is practically complete, the revolution in respect of the haulage of goods is only in its initial stages. At this juncture, every vehicle which goes out to some fresh point overseas represents a nucleus around which trade is likely to accrue, first, to its manufacturers and next to its country of origin, if the service given by it is satisfactory. Enormous importance attaches to getting the first grip of these new markets, insignificant at the moment but capable of immense development. If British manufacturers are-as they unfortunately must be temporarily prevented from supplying the demands of foreign and colonial agents and purchasers, the consequences must be far-reaching, especially if competitors are able to utilise this opportunity of establishing themselves firmly. Even in the British Isles themselves, there is a strong likelihood at the moment of British manufacturers losing a material amount of goodwill. A trader building up a large fleet of motor vans prefers to limit himself to one make, if that make proves satisfactory. If at this juncture he is obliged to place his order for foreign vehicles, it is more than likely that, unless these prove total failures, all his subsequent orders will go in the same direction. It must be remembered, too, that at the outbreak of war, the Government requisitioned many thousands of cars built by British makers of high repute. The manufacturers in question have been unable to replace the vehicles thus commandeered; and traders, under the necessity of continuing the work of their delivery departments, have taken their orders elsewhere.

These facts serve to show that the profits accruing from the Government contracts, even if substantial in the first instance, must not necessarily be viewed with jealousy by those who do not participate in them. These profits represent payment not merely for the vehicles themselves, but for an enormous quantity of valuable goodwill built up during years of steady work. remains to be seen how much of this goodwill is recoverable in face of adverse conditions. As already stated, in many quarters manufacturers will have not only to

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make a fresh start, but to counteract influences that have superseded their own.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

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

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

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

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

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

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

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military expenditure of the French Government. the same time the Minister said that the total estimated expenditure for the first fourteen months of the war, that is to say up to Sept. 30, 1915, amounted to 960,000,000Z. Under normal conditions the expenditure of the French Government runs at the rate of about 170,000,000l. per annum; so that it may be said that the first fourteen months of war will cost the French Government 762,000,000l., or at the rate of 653,000,000l. per annum. Should the war be prolonged it would appear probable that the rate of expenditure will increase beyond this level. The military outlay for the first five months was at the rate of 34,000,000l. per month, for the succeeding six months at the rate of 44,000,000l. per month; and it is estimated that for the three months ending Sept. 30 it will average 52,000,000l. per month. The operations in the Dardanelles account for a large proportion of this increase. The expenditure on allowances to the families of mobilised men, on the support of refugees and on the repatriation of those who have been expelled from the army zone is continually increasing. During the last five months of 1914 the sum paid to dependents of mobilised men averaged 2,720,000l. a month. In the first half of 1915 it reached 5,080,000l. a month, and for the following three months it is estimated at 6,160,0007. monthly. The total expenditure on allowances to dependents of mobilised men for the first fourteen months of the war was put by M. Ribot at 62,500,000l. The estimated expenditure on the support of refugees and repatriated persons for the same period was put at 7,380,0007.

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