The great volume of Canadian recent aggre gate trade was due chiefly to three factors, in addition to the central one already indicated. The first and most obvious is the great increase in prices, the usual accompaniment of war con ditions. Second is the fact that the munition and other industries connected with the war have required the import of large quantities of machinery, raw materials and partly manufac tured goods, which enter into the production of the finished articles as finally exported. The other factor is the greatly increased im port, during the past two years, of articles of use and luxury for home consumption, due to the exceptional prosperity and spending power of that large section of the community which has benefited financially by the operations of the war.
This factor is a rather interesting and important one, not by any means confined to Canada; but, in conjunction with the other forces, accounting for a very ele ment in the general increase in prices and the higher cost of living generally. As has been already pointed out, the first effect of the war was to aggravate the depression which the recent reaction from exceptional prosperity had produced, but the double demand for men, on the one hand to enlist for military service and on the other to furnish the supplies and services incidental to their participation in the war, led, before many months, to the absorption of all the efficient man-power of the country. The demand, however, being far from satisfied, not only did wages rise in all activities directly or indirectly connected with the war, but, to an increasing degree, other elements in the popu lation, such as women and youths of both sexes, and elderly persons, found employment at hitherto unknown rates of remuneration. Thus, not only was the family income increased through its head, but often doubled and even trebled through the remunerative employment of several of its other members. Further, while over 400,000 men were taken overseas for mili tary service, their families or those dependent on them were provided for by separation allow ances, assig.ned pay and special contributions from the Patriotic Fund, while many of their relatives and dependents were among those who received extra employment, and, as was just and proper, in proportion to their qualifications, were given the preference in such employment. It goes without saying that those who were for tunate enough to control or have investments in munition industries, or other enterprises favorably affected by the war, receive as a rule profits and incomes much beyond what were customary, even in the days of expansion before the war. Some of these capitalists and merchants, it is true, have had to contribute various percentages of their gains through the war profits and income taxes, but the very volume of the taxes is an index of the excep tional revenue remaining with those who pay them.
It cannot be forgotten, however, that one considerable element in the community suffers more or less heavily from the war without any appreciable redress. This is made up of those living on fixed incomes or annuities, and cer tain professional or other salaries, which, for various reasons, have not been increased; also those furnishing services, or conducting various lines of business which have not been benefited by the war, but perhaps the reverse. Such per sons, according to their previous social status, must meet the steady increase in the cost of liv ing, and the many other calls upon their means without any offset. Their only resource is to
continually curtail, as best they can, their former standard of living while the majority of their neighbors are at the worst holding their own, but in most cases enlarging their expend.' hire.
With the government and its colossal expend iture, on the one hand, and hundreds of thou sands of war-prosperous citizens on the other, competing for the products of agriculture and industry, it is inevitable that prices must soar, the volume of money and bank returns expand, and imports for domestic consumption increase not merely in value but also in quantity. Pre suming that people indulge in luxuries only after the necessaries of life are secured in suf ficient measure, and that even in the necessaries they may pass from lower to higher grades of quality, the Canadian trade returns for the past two years indicate that not only does the pros perous element in the country completely offset those who are forced to curtail their former scale of living, but rolls up a large balance on the other side. It is true that only certain im ports can be cited in proof of this situation, inasmuch as, in many lines, the quantity and value taken for domestic consumption cannot be separated from the quantity and value taken for manufacturing purposes, or for reshipment to the troops overseas. Thus, only for the past two years have passenger automobiles been separated, in the trade returns, from all forms of automobiles and motor trucks; hence only for that time can one safely determine to ivhat extent the increased import represents com mercial or war needs as distinguished from per sonal use and enjoyment. So in the tobacco imports, it is impossible to accurately distin guish between the increased consumption in the country by a considerably diminished male population and the amount which is sent over seas to solders at the front. We must also recognize that much of what goes to the soldiers at the front is not sent directly from Canada, but furnished from Britain and France or pur chased at the canteens, from funds contributed for that purpose. In the case of many other articles, however, whether of ordinary supply or of pure luxury, what the trade returns show, alike in actual volume of goods and in the money values of these, is that the actual as well as the relative purchasing power of the people has very greatly increased during the war. A few typical articles may be mentioned, the increased import of which will serve to indi cate this interesting economic effect of the war. Boots and shoes, gloves, hats, various fancy articles, furs, glass ware, phonographs, piano parts and musical instruments generally, cheap pictures, precious stones, carpets, shirts, stock ings, especially silk stockings, underwear, cot tons, lace, embroidery, knitted goods, silks of all kinds for personal wear, tweeds, passenger automobiles, etc. The last is a typical case. Leaving values out of account we find that for the eight months ending November 1915, the total number of automobiles, including freight and passenger automobiles and motor was 4,887. For the next two years, taking the same eight month periods, the numbers of pas senger automobiles alone were for 1916, 8,491, and for 1917, 12,156.