The month of October saw a further recovery and a more normal state of affairs. The percentage of unemployment in insured trades continued to decline;[1] but whilst the number of men on the Labour Exchange registers fell (from 28,664 on October 2 to 24,690 on October 30), the number of women registered remained almost stationary. At the end of three months from the beginning of the war the condition of men's employment was about normal; but women were suffering from excessive unemployment, whilst short time was still common in many industries in which women are largely employed.
[Footnote 1: The percentages are as follows: Oct. 2, 5.11; Oct. 9, 4.80;
Oct. 16, 4.46; Oct. 23, 4.29; Oct. 30, 4.16.]
The large volume of unemployment, which it had been anticipated would accompany a great war, was avoided, partly because of prompt State action in maintaining the fabric of commerce and finance, and therefore the supply of raw materials, and partly because of the large demand for commodities for the Army and Navy—a war demand vastly in excess of that in any previous war. In other words, State intervention and the Navy have placed Great Britain in a much superior economic position to that of her adversaries.
3. Trade Unions, Co-operative Societies and Distress.—Before the outbreak of the war there were signs that the wave of industrial activity which reached a high point in 1913 was receding, and that unemployment was beginning to increase; but the trade unions did not anticipate that the ordinary ebb and flow of trade was to be disturbed by a great war. Within a very short time after the declaration of war, the trade unions experienced a heavy drain on their funds in respect of unemployment benefit. It is, of course, obvious that the accumulated funds of trade unions were never intended as a subsidy to the community during a time of war, which is what, in point of fact, they became. It is true that the unions made efforts to conserve their resources in various ways, not least by advising their younger members without dependants to join the army; it is true also that most of them profited under Section 106 of the National Insurance Act by the State refund of one-sixth of their payments to their unemployed members; but these measures—and others—were inadequate to maintain the unions in a sound financial condition, and many unions trembled on the verge of bankruptcy.[1] Such a condition of affairs was viewed with apprehension not only by the trade union movement, but by the State, with the result that at the beginning of October the Government subsidy of one-sixth was under certain conditions increased.[2] But even with this assistance, many unions will undoubtedly experience considerable difficulty in avoiding financial disaster. Speaking generally, the trade union movement as a whole will emerge from the war in straitened circumstances. Some unions may have collapsed, and amongst others the movement in favour of amalgamation may have received an impetus owing to financial embarrassments.
[Footnote 1: Speaking generally, it cannot be said that the trade unions faced the crisis with either wisdom or courage. Their attitude, on the whole, was one of utter bewilderment. The lack of the power of adaptability to new circumstances, together with the fact that sufficient pressure was not brought to bear upon the Government in the first weeks of the war, accounts for the unfortunate position in which the trade unions found themselves.]
[Footnote 2: The scheme applies only to unions suffering from abnormal unemployment. There are also conditions that they "should not pay unemployment benefit above a maximum rate of 17s. per week, including any sum paid by way of State unemployment benefit," and that they "should agree while in receipt of the emergency grant to impose levies over and above the ordinary contributions upon those members who remain fully employed." The amount of the emergency grant in addition to the refund of one-sixth already payable will be either one-third or one-sixth of the expenditure on out-of-work pay, depending on the amount of the trade union levy. Under special conditions the grant is to be retrospective. It is, therefore, possible for trade unions to be subsidised so far as unemployment benefit is concerned, to the extent of one-half their payments. But this scheme does nothing to assist trade unions (of which there are many) which get no unemployment benefit.]
The decrease in earnings accompanying short time, and their total stoppage in the case of unemployment, mean amongst the workers a restriction of purchasing power. The shrinkage in the total wages bill, especially in Lancashire, must lead to a diminution in the income of small traders and the co-operative societies. Where trade is very bad the societies will be severely hit; smaller purchases will mean smaller profits, which, where there is no large reserve to fall back upon, will in turn mean the declaration of a smaller dividend. The "divi" received by the workers will be less, and the purchases which the thrifty housewife of the north usually makes with it in the way of clothing and replacement of household articles will be less also; where the "divi" has been left in the society, it will in a large number of cases be used to supplement the scanty wages earned on short time, or to provide the necessaries of life where the breadwinner is altogether unemployed. In places where times become very bad, the co-operative societies during the war, and for some time after, will suffer because of the conversion of the cash orders which ordinarily go to the "co-op" into credit orders at the shop round the corner. On the whole, however, the co-operative societies will probably come better out of the war than many classes of small shop-keepers. The small tailors, drapers, earthenware dealers, etc., and others who sell all but indispensable commodities, will see a shrinkage in their sales, especially if prices rise. The co-operative societies will also lose in this respect, but they will lose less on the whole, owing to the fact that a good deal of their capital is used in the sale of food-stuffs, the consumption of which will be restricted last. But admitting this, they cannot expect to escape unscathed, and the blow they suffer will be felt on other sides of their activity, such as their educational work, the income for which usually fluctuates with the prosperity of the societies.
The diminution of the purchasing power of the working people because of the restriction of the national wages bill, however, may be minimised by common action. The National Relief Fund and the Women's Employment Fund are intended really for this purpose. The establishment of women's training workshops and of maintenance grants on condition of attendance at schools and classes are steps in the same direction. The Government has increased the disgracefully low payments made to dependants of soldiers on active service, and its scale of pensions for widows of soldiers and sailors and for those totally or partially disabled in the performance of military or naval duties. Arrangements have been made for the payment of allowances of half wages up to a maximum of £1 a week to dependants of sailors employed on insured British merchant ships captured or detained by the enemy. More important from the point of view of industry as a whole are the steps which have been taken to minimise the effects of a diminution in the volume of employment by the development of new openings. The Government through the Board of Trade took the lead in the attempt to secure a share of the trade hitherto done by Germany and Austria. Special efforts were made to develop the manufacture of toys, and other industrial experiments were begun by the Central Committee on Women's Employment. The Government appointed a Chemical Products Supply Committee with a view to stimulating the production of dyes and drugs at home. These proposals are in the main an attempt to divert the trade of foreign countries, especially Germany, into British channels. The second line of action is fuller provision of home needs which cannot be satisfied by foreign producers, but are essentially domestic. Such needs are housing, public parks, roads, etc. Between August 4 and September 21, 1914, the Local Government Board received over 600 applications from local authorities for powers to borrow money amounting in all to over £2,500,000. About a fifth of this amount it was intended to expend on housing. During this period the Board sanctioned loans amounting in the aggregate to more than £3,500,000, as compared with rather under £2,000,000 in the same period in 1913. The Road Board arranged to put in hand the construction of certain new highways arranged for before the beginning of the war. In addition, in the first seven weeks of the war, the Board arranged to make grants amounting to about £450,000 in aid of new road construction and road improvements in many different parts of the country, which will involve a total expenditure of about a million sterling. The Development Commission began to consider schemes for the construction of light railways, for the improvement of the navigation of rivers, etc., in order that work of this kind should be ready to be put into operation when the necessity arose. The Board of Agriculture has urged that where practicable the acreage under wheat should be increased. This suggestion is, of course, valuable, but will not greatly affect the industrial situation. Even if the schemes sanctioned by the Local Government Board and those adopted by the Road Board were put into operation immediately, which is almost impossible, they would not make a very appreciable difference to the total wages bill of the country. But perhaps it is thought by the Government that the state of employment is not sufficiently grave to warrant a greater expenditure at the present time. In spite of the insistence on forestalling destitution, there is still among local authorities much confusion of charity and relief work with anticipation of future needs calling for employment through the ordinary channels of trade. On the whole the Government has not met the domestic problems of the war with the unanimity and boldness which has characterised its actions in the actual prosecution of the war and in dealing with the financial crisis.
4. The New Spirit.—The broader social effects which showed themselves in the early days of the war are illustrated by the remarkable growth of State Socialism. The nation became a community, united in a single purpose; breaches which many imagined to be permanent, cleavages which were thought to be fundamental, no longer existed. None was for a party; all were for the State. The three political parties formed a Parliamentary Recruiting Committee, and altogether impossible teams of people appeared on public platforms with a common aim; Mr. Ben Tillett, in words that might have fallen from the lips of a Tory ex-Cabinet minister, declared that "every resource at our command must be utilised for the purpose of preserving our country and nation"; the anti-militarist trade union movement earnestly appealed to those of its members who were ex-non-commissioned officers to re-enlist; the Queen and Miss Mary MacArthur were members of the same committee. This unanimity, which has pushed into the background for the present causes of difference, has led the vast majority of people to submit cheerfully to the will of the State. The unity of to-day must necessarily make its influence felt even when the reason of its existence has passed away. In the meantime it is assisting in the growth of a new spirit which the war itself has fostered. The social outlook of the people and their attitude towards the larger problems of life is changing, and patriotism has taken a deeper meaning.
So far we have devoted our attention to some of the immediate effects of the war. But on the return of peace there will be new influences at work, the immediate and ultimate effects of which will powerfully affect the course of future development. The European War will mark an era in international politics. It may also stand as a landmark in the history of the social and economic life of Western Europe. It is not unlikely that in this respect it will surpass in its importance all the wars of the past. The reasons are to be found in the magnitude and costliness of the war, the highly developed character and the inter-relatedness of foreign commerce, the possibility of new industrial forces coming into play, and the influence of the war on the political and social ideas of the European peoples. It may be that in this country the war will let loose economic forces destined to modify industrial organisation very profoundly; and that social forces, especially on the Continent, will be liberated to work towards fuller political freedom. These things lie in the veiled future, and prophecy is dangerous. We may, however, turn to consider some of the probable effects the war will leave behind it.