The transportation problem early became acute. Railways in continental Europe were al ready controlled by the state. In England such control was assumed within two months of the outbreak of hostilities, and the United States government took similar action American railways in December 1917, eight months after its own entry into the war. in both the United States and England this public control was based on a system of compensation whereby earnings of the railways during the three-year period preceding the war were anteed by the government. The British govern ment did not explicitly commit itself to the re turn of railways to their owners after the war. The Railway Control bill passed in the United States Congress provided for such return months after the proclamation of peace.
As for ocean transportation, it became neces sary, particularly during the later years of the war, for belligerent governments with access to the sea to apply restrictions on essential and non-essential export and import of freight This necessity arose not only because of the extensive use of existing shipping facilities for transportation of government material, but more especially because of the actual shortage of such facilities, after the wholesale destruc tion of Allied merchant vessels by German sub marines had begun.
Regulation of exports to neutral countries from England began early in the war, being then based on the program for blockading Germany, and having as its immediate purpose the preventing of reshipment, through the neutral countries into Germany, of supplies ac quired from England. After its own entry into the war the United States pursued a similar policy, which by that time had the further justification of the shortage both of supplies an4 of ship room. In the meantime, both Eng land and the United States devoted themselves to construction of new merchant ships on a scale never witnessed in the history of the shipping industry.
The problem of food proved to be one of the most difficult of all. It became acute in 1917 and the early part of 1918; its less aggra vated form in the earlier years of war being due to special reasons. In the two years men tioned, not only had wheat harvests of the largest producing countries turned out deficient, but shortage of ships had made it impracticable to transport wheat from distant producers like Australia to the European market. In some countries, Germany in particular, actual ration ing of the supply of flour and bread was adopted by the government. In all belligerent countries the situation was met by the required use of substitutes for wheat, and by compul sory observance of certain days on which wheat should not be sold or eaten. Similar restric tions were subsequently applied to consumption of meat, sugar and other foodstuffs. In both England and the United States, and by all other producing belligerents, distribution of foodstuffs from producer to market was placed in the hands of a government commission.
These expedients, especially the reduction in consumption through the restrictive regula tions, served to meet the emergency. In 1914 and 1915 the United States had raised grain harvests far beyond any precedent in its his tory; it was this which postponed until later in the war any actual 'good crisis* of the Entente Allies. But the American wheat harvests of 1916 and 1917 were not only 30 to 40 per cent below the yield of the two previous years, but were actually below the average of recent years preceding them; and it was not until the raising of another American wheat crop in 1918, sec ond in magnitude only to that of 1915, that the strain relaxed. Meantime, however, and
despite the maximum price fixed for wheat, most urgent efforts were made to stimulate the planting of new wheat acreage by farmers in every wheat producing country. The result of this propaganda was seen in the autumn of 1918, when England's acreage under grain, and its average yield of crops, were the largest in 40 years, and when the results in Continental countries, except in the actual area of warfare, were better than in any preceding season since the first year of the war.
The economic and financial problems which will arise on conclusion of the war, and as a result of the war, belong in a class apart. To attempt to foreshadow in advance their nature and the probable solution of them would be as futile as the predictions regarding war-time problems, made before 1914 have already turned out to be. It is probable, indeed, that some problems will arise which could not have been foreseen at all beforehand. Experi ence of the war itself has, however, converged interest and discussion on the following definite problems as certain to arise in that period: (1) Management of the enormous war debts of the belligerent governments — a question which involves the possibility of repudiation in some countries; in others the possibility of a •levy on private capital') heavy enough to pay off all or a good part of the principal of the debt. Interest on the war debt in one or two belligerent countries already equals the entire public revenue of such countries in the year before the war.
(2) Reduction of the paper currency where excessive inflation has prevailed, and resump tion of gold payments; reforms which have al ways been slow and difficult of achievement in the past.
(3) Readjustment of prices, in cases where such prices have been raised to abnormal heights through the war demands of govern ment on products of a given industry or (as in grain) through the cutting-off of previous large sources of supply by the war itself.
(4) Readjustment of the wages of labor, where those wages have been abnormally ad vanced through demand for workers in new war industries or through curtailment of the labor supply by army conscription. If wages are not adjusted, then the problem of industry's adjustment to such a scale of wages under peace-time conditions will remain. This whole question will naturally be affected by the re sumption or prohibition of emigration from one country to another, and by the extent to which the industrial employment of women in war time, to replace men, turns out to have been temporary or permanent.
(5) Problems peculiar to international trade, when some of the largest exporting states of the period before the war have been partly or entirely cut off from their previous export market, and when neutral states, or partial belligerents like Japan, have largely assumed the task of supplying the important countries. The question of after-war competition between different exporting markets, which will itself have to do with the question of labor and wages in the different countries, is connected with this.
(6) The largest problem of all; the extent to which, in control of railways, telegraphs and other enterprises in regulation of prices, pro duction, distribution and consumption, and in actual ownership of facilities, governments will retain after the war the immensely increased powers necessarily granted to them during the period of war.