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commodations, and the high cost of building materials, explain to some extent the failure of rents to decline. The explanation for the continued high cost of fuel is not so easy, but it was due among other factors to increased cost of labor and transportation and the continued high profits taken by capital. According to the United States Department of Labor the average index number of wholesale prices of typical commodities, using the figure for 1913 as 100, was 272 in May, 1920; 148 in June, 1921; 148 in May, 1922; 150 in June, 1922; 156 in December, 1922, and January, 1923; 153 in June, 1923; 151 in December, 1923.

By the end of 1922 deflation had run its course and industry. was to a considerable extent adjusted to a peace basis. Increased industry on the part of labor and caution on the part of capital had placed the economic life on a sounder basis and increased the demand for all kinds of commodities. Most of the principal industries were again working at close to capacity, the railroads reported record business, and unemployment had virtually disappeared. Agriculture alone failed to respond to the renewed prosperity and the agricultural unrest continued an uncertain political and economic factor. That and the continued unsettled conditions abroad remained in 1923 as the chief adverse factors in what appeared to be the opening of a period of prosperity and normal conditions.

Results of the War-Problems of Reconstruction.-Although we are still too close to the great catastrophe of the World War to gauge with any degree of accuracy its effect upon the economic life of America, nevertheless it is quite evident that our social and economic problems have been enlarged and complicated rather than lessened by the conflict. In the first place, our international position economically, and consequently politically, was considerably altered. From a debtor nation struggling to keep out of world entanglements and but recently embarked on the road to financial imperialism, the United States emerged from the war the great creditor nation of the world, holding the whip hand financially and apparently determined irrevocably to a career of economic imperialism. The United States, whether it will or no, cannot avoid playing a leading rôle in solving the

problems of the economic rehabilitation of the world. Not alone did the war force the nation to assume a larger internationa position with greater responsibilities, but it has introduced new problems at home and accentuated the old ones. The war left the usual legacy of debt, which still amounted in 1923 to almost $23,000,000,000, a stupendous amount even for a wealthy nation, and one which will necessitate increased taxation for years to come. Expenses of the federal government are now (1924) five times the pre-war figure, a situation brought about to no small extent by the increased appropriations for military purposes It was hoped by many that the recent conflict was a "war to end war," and the renewed wave of militarism which has followed the conflict is depressing not only to humanitarians, but to the taxpayers of many impoverished nations. While the universa! demand is for a reduction of taxation, the need of revenue continues with little abatement.

The inflation and business boom of the war period, as we have seen, was followed by deflation and depression, but industry as a whole has recovered, notwithstanding many adverse factors. The same has not been true with large agricultural groups. and the handling of the agricultural situation in all its ramifica tions of production, financing, and distribution is a problem, old. to be sure, in American history, but accentuated by the war, and is pressing insistently for solution. Closely connected with agriculture is the problem of transportation, complicated by the war and by new methods of motive power, as well as by an infinite number of old and new questions which must be solved to the satisfaction of capital, labor, and the public. The expenditure and waste of the war have made imperative a more courageous handling of the matter of the conservation of natural resources and the general integration of the resources of production and distribution.

Of all the domestic problems which the war has left for the future to solve, none is more important than that involving the relations between capital, labor, and the consumer as regards the distribution of the wealth produced. Both capital and organized labor were strengthened by the war, whereas the position of the consumer was weakened. The increased cost of living has

I pressed hard upon the last-named group and at the same time sharpened the demands of organized labor for a greater share in the created wealth. Since the war there have been strikes in many of the basic industries and in many public utilities. An obviously chaotic condition exists. While capital and labor (so called) fight bitterly over the profits of some particular industry, those not connected directly are usually forced to stand by, helpless to protect themselves. This incongruous situation must be remedied, but bettering the position of the public in the warfare between capital and labor is but a beginning of the solution. There yet remains the warfare itself. If the interests of labor and capital are the same, then some means must be discovered to reconcile the two groups. If their interests are fundamentally opposed, the warfare will go on until one or the other is the victor. The whole future of our economic, social, and political life depends chiefly upon the solution of this fundamental problem.

Conclusion. For three centuries the drama of American history has been unfolding for us. We have seen the precarious settlements of the Atlantic Coast grow into a mighty and wealthy nation. We have seen one generation of frontiersmen after another push their way farther and farther west until they had conquered a continent and left for their children a heritage unsurpassed. We have seen a primitive agricultural people broaden their interests under the stimulus of limitless raw materials into a nation whose economic life has widened into almost every activity. And we have seen an economically dependent people achieve first political, then economic independence, until finally they have assumed a strong economic and political rôle and have become a nation which proved the decisive factor in the greatest of all wars. It has been the history of the opening and exploitation of a region enormously rich in raw materials and overflowing with possibilities. Our people have met the task with confidence, buoyancy, and optimism. A continent has been conquered, but the methods have been crude and wasteful. Much of value has been needlessly squandered and lost forever. Irreparable inroads have been made in our most valuable raw materials. As we have grown rapidly and almost chaotically into a mighty manu

facturing nation, population has grown and concentrated in cities, economic groups have become more differentiated, and class feeling stronger. We are now experiencing the problems of the older industrial nations of Europe. Although there is room here for a much greater population and there is infinite wealth still waiting the hand of man, the time has long since arrived for a taking of stock and for a scientific and determined effort to solve the many economic problems pressing upon us.

NOTES FOR FURTHER REFERENCE

Short running accounts of the United States in the World War, with special reference to economics, are F. L. Paxson, Recent American History (1921), and I. Lippincott, Economic Development of the United States (1921). More detailed studies are to be found in the series, "Problems of War and Reconstruction," edited by F. G. Wickwire and including G. O. Smith, The Strategy of Minerals (1919); W. F. Willoughby, Government Organization in War Time and After (1919), and E. L. Bogart, War Costs and Their Financing (1921). See also G. B. Clarkson, Industrial America in the World War (1923), and George Creel, How We Advertised America (1920).

On the cost of the war, in addition to the work of Bogart cited above, see J. H. Hollander, War Borrowing (1919); E. L. Bogart, Direct and Indirect Cost of the Great World War (1919); E. R. A. Seligman, The Cost of the War and How It Was Met, Vol. IX, American Economic Review, December, 1919, and especially E. B. Rosa, Expenditures and Revenues of the Federal Government, in the Annals of the American Academy of Political and Social Science, Vol. XCV, No. 184, May, 1921.

On labor during the war read Mary Beard, A Short History of the American Labor Movement (1920), and Selig Perlman, A History of Trade Unionism in the United States (1922), Chaps. 10-15.

Post-war conditions in various phases are further treated in I. Lippincott, Problems of Reconstruction (1919); W. J. Cunningham, American Railroads: Government Control and Reconstruction Problems (1922); F. H. Dixon, Railroads and Government: Their Relations in the United States, 1910-1921 (1922); Inflation and High Prices in Proceedings of the Academy of Political Science, Vol. IX, No. 1 (1920), and The Money Problem, ibid., Vol. X, No. 2.

A valuable source book is that of J. M. Clark, W. H. Hamilton, and H. G Moulton, Readings in the Economics of War (1918).

SELECTED READINGS

LIPPINCOTT, ISAAC, Economic Development of the United States, Chap. XXVII LIPPINCOTT, ISAAC, Problems of Reconstruction, Chaps. I-VII.

BOGART, E. L., War Costs and Their Financing, Chaps. III-V, VII, IX, XIV. CUNNINGHAM, W. J., American Railroads: Government Control and Reconstruction, Chaps. I-XII.

WILLOUGHBY, W. F., Government Organization of War Time and After, Chap XVI.