The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1916-05-03
~ J. LAURENCE LAoHLlN
(Hesd of the Department OF Political
Econony In the uwiversity of
Chle09O.b

on The Duration OF tho European
Having In the first paper OF this
series made a survey of the basis OF
economic exhaustion, IL Is now pos
sible TO study the staying power OF
country like Germany, more or
OF countries like Great Britain and
France, with ports open TO their
own shipping or that OF other ma.
lions.
Money and forms of credit serve
In the exchange OF goods; they do
not. however. increase the quantity
Of goods. which feed meh and sup
port industry. Fundamentally. In a
case like that OF Germany. the mat.
ter OF supreme moment IL her ca.
supply both the civil and military
population. Money and methods OF
finance are. AZ distinct from actual
goods. mere bookkeeping.
The situation in Germany-and
Austria-Hungary- be illustrated
by the accompanying diagram. The
total output arising from its capital.
labor. and resources furnishes the
products Y aud Y for the total con
sumption OF Germany's civil and
military population OF about $1,000
600. In times. of peace a part OF
these products are exported. and by
foreign trade the square at the up
per left hand corner Is added TO the
total sum OF products. II this nor
nal situation be contracted with the
changes produced by the dislocation
Of industry due to the present war,
We shall be able 10 see at once how
the war is eating out the yitals OF
possible industry and staying power.
The Changes Made by War
The obvious change appears in the
disproportionate increase in the
quantity OF products now produced
for war purposes. Y. as contrasted
with y. Perhaps the total output at
the start may have been as large as
before, except that foreign trade
and shipping were soon wiped out.
Soon. however. large part of the
labor force was Withdrawn from in
dustry and sent into the field. so
that the total output. X plus y. was
reduced AT least 80 per cent. II not
more-wi,h the possible exception
OF foodstuffs. The imperative need
OF a large Y must inevitably reduce
X. the possible consumption OF the
60.000,o00 civilians. In Germany
alone nearly 100000 men (and in
Austria Hungary 5.000.00O must
have been put into the field. thus
taking away very large percentage
OF the labor force.
Moreover. in the year to Aug /,
1915. the losses In men 10 Germany
were estimated at 100000 tand
about the same to Austria Hungary i.
permanent subtraction from the
labor factor in production. To the
present time. the additional German
losses must have been at least 600.
600 more In the actions since Aug
ust. 1915. in France, Poland. Galicia
and Serbia On the othed hand. IL
must be stated that million or
more OF prisoners captured from the
enemy could have been used as an
offset TO laborers withdrawn from In.
dustry. In addition. as shown pre-.
viously. the factor OF objective cap.
itsl goods has been enormously re-
duced. with little opportunity for re-
placement. As regards materials
TO be used In products for both y
and Y there must have been great
reduction. Hence all the three fac.
tors Of production In Germany must
have been very largely crippled,
consequently the total Y plus Y OF
products was also diminished; and
yet II has been necessary TO in
crease Y AZ the expense OF Y.
Conditions In Britain and France
Applying the same method 10
Great Britain and France. We find
marked difference due TO the fact
that their ports are open to foreign
trade. British and French capital
has been destroyed "a well as that OF
Germany; hut. by drawing on other
countries and by forms Of credit. the
actual destruction OF objective CAPT
tai goods has been and can be. re-.
placed as long as the allies have
credit and purchasing power In neu-
trail countries like the United states.
Dr. Great Britain some 100000 men
were withdrawn from Industry;
while the losses in men TO August.
1915, we're about 100000; now, about
$4,000. In France the Withdrawals
Of men To the front amounted 10
about 100000 and the losses In
men have been estimated at 1.40O,
900 To- August. 1915. BY this tim
there must be 100000 more.
As regards materials for industry
or for making OF munitions there Is
no scarcity because OF open ports.
Thus Great Britain and France can
maintain their products for civilian
and military and naval needs to any
amount, limited only by some scar
city Of labor: but any such limita-
ton OF production can be filed up
by importation. With them. then.
u remains entirely a question OF
credit and buying power.
go fur tho anaIvsis haa haan III.