we shall pay the price for neglecting our merchant marine.

Still another menace to our trade lies in preferential alliances between Mother Countries and their colonies, which is part of the projected programme. Our next-door neighbour, Canada, has just given an illuminating instance of what may be in store for us. A Co-operative Export Association has been formed in the Dominion to get business throughout the British Empire and the other allied nations. In the circular announcing its organisation it declares that "the products of Canada will be preferred against the products of her great neutral competitor, the United States, who has stayed outside of the war and has borne no sacrifice of life and money made by the allied countries."

Return to the economic pact again and you find that it continues to bristle with dangerous possibilities for us. You will recall that one of the clauses forbids the resumption of a favoured-nation arrangement with enemy countries for a period "to be fixed by mutual agreement." This may be for an indefinite time.

Now the danger here lies in the European interpretation of the favoured-nation idea. To quote an authority: "Most of these countries have treaties under which each must grant most-favoured-nation treatment to the other; and this means that a reduction in duties granted to one country is automatically extended to all other countries with whom such treaties exist. The result is that the lowest rate in any treaty becomes, with exception, the rate extended to all countries."

We have the favoured-nation relation with many European countries, and herein lies the possible danger: The war automatically annulled all treaties between belligerents. When the day of treaty making comes again shall we suffer for the sins of friend and foe in the rearrangement of international trade and lose some precious commercial privileges? It is worth thinking about.

II—England Awake

Meantime, regardless of how the economic pact works out, England's policy is "Deeds, not Words," as she prepares for the time when normal life and business succeed the strain and frenzy of fighting days.

No man can range up and down the British Isles to-day without catching the thrill of a galvanic awakening, or feeling an imperial heartbeat that proclaims a people roused and alive to what the future holds and means. The kingdom is a mighty crucible out of which will emerge a new England determined to come back to her old industrial authority. It is with England that our commerce must reckon; it is English competition that will grapple with Yankee enterprise wherever the trade winds blow.

There are many reasons why. "For England," as one man has put it, "victory must mean prosperity. However triumphant she may be in arms, her future lies in a preeminence in world industries. Through it she will rise as an empire or sink to a second-rate nation."

In the second place, as all hope of indemnity fades, England realises that she will not only have to pay all her own bills but likewise some of the bills of her allies. Already her millions have been poured into the allied defence; many more must follow.

Hence, the relentless energy of her throbbing mills; the searching appraisal of her resources; the marshalling of all her genius of trade conquest. Dominating all this is the kindling idea of a self-contained empire, linked with the slogan: "Home Patronage of Home Product." The war found her unprepared to fight; she is determined that peace shall see her fit for economic battle.

This is what she is doing and every act has a meaning all its own for us. Take Industry: Forty-eight hundred government-controlled factories, working day and night, are sending out a ceaseless flood of war supplies. The old bars of restricted output are down; the old sex discrimination has faded away. Women are doing men's work, getting men's pay, making themselves useful and necessary cogs in the productive machine. They will neither quit nor lose their cunning when peace comes.

I have watched the inspiring spectacle of some of these factories, have walked through their forest of American-made automatics, heard the hum of American tools as they pounded and drilled and ground the instruments of death. What does it signify? This: that quantity output of shot and shell for war means quantity output of motors and many other products for peace. You may say that quantity output is a matter of temperament and that the British nature cannot be adapted to it; but speeded-up munitions making has proved the contrary. The British workman has learned to his profit that it pays to step lively. High war wages have accustomed him to luxuries he never enjoyed before, and he will not give them up. Unrestricted output has come to stay.

Five years ago the efficiency expert was regarded in England as an intruder and a quack; to use a stop watch on production was high crime and treason. To-day there are thousands of students of business science and factory management. In the spinning district girls in clogs sit alongside their foremen listening to lectures on how to save time and energy in work. Scores of old establishments are being reborn productively. There is the case of a famous chocolate works that before the war rebuffed an instructor in factory reorganisation. Last year it saw the light, hired an American expert, and to-day the output has been increased by twenty-five per cent.

The infant industries, growing out of the needs of war and the desire of self-sufficiency, are resting on the foundations of the new creed. "Speed up!" is the industrial cry, and with it goes a whole new scheme of national industrial education. The British youth will be taught a trade almost with his A-B-C's.

Formerly in England the standardisation of plan and product was almost unknown. For example, no matter how closely ships resembled each other in tonnage, structure or design, a separate drawing was made for each. Now on the Clyde the same specifications serve for twenty vessels. England has gone into the wholesale production; and what is true of ships in the stress of hungry war demand will be true of scores of articles for trade afterward. The old rule-of-thumb traditions that hampered expansion have gone into the discard, along with voluntary military service and the fetish of free trade.

Typical of the new methods is the standardisation of exports, which have increased steadily during the past year. In a room of the Building of the Board of Trade, down in Whitehall, and where the whole trade strategy of the war is worked out, I saw a significant diagram, streaked with purple and red lines, which shows the way it is done. The purple indicated the rosters of the great industries; the red, the number of men recruited from them for military service. No matter how the battle lines yearn for men, the workers in the factories that send goods across the sea are kept at their task. This diagram is the barometer. For exports keep up the rate of exchange and husband gold.

England is creating a whole new line of industrial defence. The manufacture of dyestuffs will illustrate: This process, which originated in England, was permitted to pass to the Germans, who practically got a world monopoly in it. Now England is determined that this and similar dependence must cease.

For dyemaking she has established a systematic co-operation among state, education and trade. In the University of Leeds a department in colour chemistry and dyeing has been established,