people as they did in May, 1917, to the point where the necessary saving in consumption would be secured through the medium of excessively high prices.

(3) An appeal for voluntary conservation and restriction of consumption by those elements in the community which could best afford to forego the use of wheat bread. (4) Commandeering of the necessary supplies by government action.

the

The first two methods were equally impossible first because of the extraordinary complexity and expensiveness of the task, in a country as large as the United States, and because of its repugnance to American methods, and the second for reasons which have just been indicated. At the outset the Food Administration announced its confidence in the efficacy of self-imposed restrictions on consumption by individual action, and for the first few months it relied almost wholly upon voluntary conservation to effect the necessary saving in food consumption. A widespread propaganda was instituted for the conservation of wheat, meat, fats, and sugar, and the billboards were mobilized in the campaign against waste and extravagance. The results, so far as wheat and flour were concerned, were upon the whole, disappointing. In justice it should be said that there was a very considerable saving of wheat flour by many persons in the community, a saving which represented conscientious and idealistic service. This appears to have been more than offset, however, by increased consumption on the part of certain sections in the community which were enjoying unwonted prosperity, growing out of the flush of war activity and high wages. Wheat flour was, thanks to the stabilized price, the cheapest food on the market, and there seems to have been a large increase in its use by people who, perhaps, had never had adequate nourishment before.

1 See page 5, supra.

To expect conservation in these conditions was like trying to lift oneself by one's bootstrap. Towards midwinter it became apparent that the unprecedented rate of milling activity in the flour industry was not enough to enable us to fulfill our self-imposed obligation to our European allies. It was seemingly impossible to fill up the gaps in our own commercial stocks; demand continued unabated. One underlying reason was that there was a considerable amount of hoarding of flour by consumers who had laid in stocks during the preceding spring and summer and who still continued to buy all they could get.

The export situation became very serious; winter weather of unprecedented severity and duration, coupled with railroad and steamship congestion, and breakdown in the coal supply, had by January led to a serious falling behind in our rate of flour shipments abroad. In these circumstances some decisive action was imperative. It came early in the new year, shortly after Lord Rhondda's appeal to America to send more wheat to meet Europe's needs. On January 10, 1918, President Wilson issued a proclamation appealing to all loyal citizens to make fresh sacrifices for the Allied cause by reducing still further their consumption of essential foodstuffs vitally needed for shipment abroad. This appeal was backed up by wheat conservation rules issued through the Milling Division of the Food Administration, January 15th, and effective February 15th, which required the purchase of "substitutes " (corn meal, barley flour, rye flour, oatmeal) in a one to one ratio with wheat flour by all buyers at retail and the admixture by bakers of wheat flour substitutes at the ratio of one pound in four with wheat flour in making white bread. Only with the application of the “substitute rules did the conservation program of the Food Administration become really effective. The total food

consumption of wheat flour in the United States during the eight months from July 1, 1917, to February 28, 1918, was considerably in excess of the corresponding figures for any year except 1915-16, and well over the average for the three " pre-war years 1914-15 to 1916-17.1 Net exports for the same eight months had fallen far behind the figures for any year since 1911-12.2 In these conditions some decisive action to enforce conservation and stimulate exports had become imperative. This was supplied in part by the "substitute " requirements, which resulted in a great diminution of flour purchases, and in part by the requisition of a considerable part of the output of all the larger mills by the Food Administration. The proportion taken was at first (January to April) 30 per cent; later (May to June) it was increased to 45 per cent. This action, together with increased wheat imports, permitted a speeding up of exports of flour; until by the end of the crop year (June 30, 1918) 22,000,000 barrels of flour and 34,000,000 bushels of wheat had been shipped abroad. The net export movement for the twelve months was equivalent to a total of 132,000,000 bushels of wheat, from a crop which had promised to be scarcely adequate for domestic consumption.

A curious accompaniment of the intensified conservation movement of the spring months of 1918 was the voluntary relinquishment of stocks of hoarded flour by individual consumers, bakers, grocers, in response to appeals by the Food Administration. No estimate can be hazarded as to the amount of these holdings which were thus brought out; in the aggregate it appears to have been considerable. Their surrender was a testi

1 Estimates of U. S. Food Administration, Statistical Division, Information Service' Bulletin No. 1045.

Ibid. Net exports of wheat and flour from July, 1917, to February, 1918, were equivalent to 60,548,504 bushels; the average for the five years 1912-13 to 1916-17 (same months) was over 148,000,000 bushels.

monial both to the complexity of the task which the Food Administration had shouldered and to popular confidence in the degree of success with which it has been performed.

XXIV

3. The problem of equitable distribution of wheat to the flour mills by the Grain Corporation in 1917-18, was primarily a commercial problem and one of peculiar difficulty. Not only was there a short crop, but the existing supplies were so faultily located with respect to some of the large milling centers as to necessitate a considerable shifting of grain from one section to another as well as the importation of wheat from outside sources far in excess of anything known in previous years. The Grain Corporation, administered as a public agency by men who had been conspicuously successful in private life as practical grain men, established an enviable record for the uniform sagacity and fairness with which it handled the large problems of allocating the existing stocks of wheat in such a way as to fulfill our obligations to our allies and at the same time to prevent local flour famines in the United States. The achievement speaks for itself; no one went hungery in this country, and through the combined self-denial of millions of individuals here our engagements were made good to our allies in arms. This accomplishment was a splendid achievement of democracy at its best; the fact that many able men, inspired by Herbert Hoover's example, divorced themselves from their private interests and at great personal sacrifice devoted themselves to public work, rendered gratuitously, is indicative of a fine spirit which augurs well for American idealism.

WASHINGTON, D. C.

WILFRED ELDRED.

THE PRICE-FIXING OF COPPER

SUMMARY

Fixing price to consumer of a commodity necessary for war, 72. — Necessitates regulation of distribution, 73. — Copper industry unique, 76. — A unified industry, 77. — Demand for American copper decreased at beginning of the war, later expanded, 79. Copper became prac

tically a "cornered" metal, 87.-Coöperative Committee on Copper appointed, 89. —Necessity for price-fixing becomes apparent, 92. — Sources of supply, 99.- Risks encountered in expanding production, 100. Increasing cost due to war conditions, 103.

GOVERNMENT price-fixing in this country has been a widely established practice in connection with our public service companies where the state grant of a franchise creates a legal or virtual monopoly, and also a duty to assure for its citizens uniformity of rates and protection against extortion. In recent years the exercise of these rights was taken over in part by the federal government, under its constitutional power to control commerce, and Congress gave to the Interstate Commerce Commission power to adjust and establish transportation rates. With the advent of war, however, the federal government was under the necessity of creating new machinery to marshall the nation's resources. The enormous powers given for this end have since the declaration of war become almost unlimited, and authority has been delegated to many persons in the name of the President. How far-reaching the industrial consequences of this control are, may be suggested by the fact that during the past eighteen months of war, prices as fixed cover the whole field of metals, chemicals, lumber, and other building materials, cotton and woolen textiles, wool, hides, and leather.