system does not fit all of his needs. Other business men have ready access to suitable savings banks, commercial banks, investment banks, trust companies and the powerful Federal Reserve system. Yet that system did not prevent inflation nor collapse of prices, which left the farmer's prices behind on the inflation and hit them hardest on the collapse.

His representatives were able to force Congress to help him at the collapse by renewing the War Finance Corporation and legalizing his credit coöperatives. The Federal Farm Loan banks helped somewhat with loans at less than current market rates of interest. He is learning a lesson. He feels the need of cheap credit to keep prices from falling and he sees that Congress has been able to give it.

Yet it is evident, from the undercurrent of approval of Ford's and Edison's plans, that he and others are not quite clear as to the relation between low rates of interest or bank discount, and an inflation of prices. The after-war inflation by the Federal Reserve Board, occasioned by keeping down the rate of rediscount and issuing Federal Reserve notes, was something unprecedented in the history of after-war finance. No agency so powerful over rates of interest and discount and volume of money has existed since the time of the Civil War. In the year 1868, without any previous campaign on the subject, Congress, under the influence of farmers, small business men and laborers, suddenly ordered the retirement of the greenbacks to be stopped. Another inflation followed and ended in the collapse of 1873. One can see today, among the farmers, a similar undercurrent, not stated in platforms. The War Finance Corporation is to lapse shortly, by virtue of the limit set by the act of Congress. The time is here for thorough consideration of the farmer's credit needs. It cannot be expected that he will let the Federal Reserve System go untouched. The system saved us from a panic but did not save us from a war inflation and a post-war inflation. It would seem that the credit needs of the farmers might be met without repeating the greenback inflation and collapse. A programme of stabilizing the general level of prices somewhere near the war level-the standard adopted in the "five-year look before and after" at which some corporations have been re-capitalized

instead of a programme of getting back to the before-war level of prices, would meet the farmer part way. Any renewed insistence on a policy of contraction would widen the breach.

Yet there is one situation even more difficult. The great outlet for farmers' products has hitherto been the European markets. The collapse of Europe's purchasing power, at the same time with the collapse of American prices in general, injured farmers more than it injured manufacturers. And no stabilization of prices, nor inflation, nor cheap credit, can correct this relatively greater loss of markets. Credit depends on expected prices, and an inflation or stabilization of prices must always leave manufacturers' prices ahead of farmers' prices, until either the European markets are restored or American manufactures increase or farm output decreases, sufficient to offset the loss of European markets. This means, unless Europe is rehabilitated, a prolonged depression of agriculture compared with manufactures, accompanied by a shift of bankrupt farmers to other industries until a new balance is created between American industries and agriculture independent of foreign markets.

Yet farmers adhere to the traditional American policy of refusing to take part in European affairs, and, at the same time, they insist on the payment of the war debts by bankrupt Europe. Since these debts can be paid only by imports of manufactured and other products, which would reduce by so much the sale of competing American products, the farmers and manufacturers, by high tariffs, prohibit the Europeans from paying their debts. The farmers are in the position of a merchant who finds his prosperous customers suddenly changed into beggars in front of his store, but refuses to let a bankruptcy court write off their debts and let them start over again, and refuses to let them sell what they might produce and so become prosperous again.

There is nothing revolutionary or even radical in the situation. It is rather the extreme conservatism of democracy and its political leaders, and a natural reaction after-war psychology. It prevents America from joining with Europe in a world stabilization of credit, currency and prices which must precede the rehabilitation of Europe and the restoration of markets.

JOHN R. COMMONS.

WHAT THE ENGLISH LABOR PARTY

WANTS

BY J. ELLIS BARKER

THE English Labor Party is an exceedingly important factor in English affairs. Four million people voted for it at the last general election, and it is represented in the House of Commons by nearly 150 members. It is the second strongest party in the House, and its leaders are prepared to form an alternative Government. Apparently labor may govern England at an early date. What, then, is its character, and what are its aims?

The British labor movement is not easily understandable, because it is very complex. It comprises men of all shades of opinion, from Conservatives and reactionaries to Communists and revolutionaries. These inharmonious elements strive for mastery. Their struggles take place below the surface. The party tries to adapt itself to the policy of that section which dominates it at the time. Hence it changes chameleon-like its colors in accordance with its moods and surroundings.

If we wish to understand the English labor movement we must bear in mind that history and tradition have shaped its character, that British and foreign influences have molded its policy and views. The British trade unions may be traced back to the Middle Ages. They are the direct successors of the old guilds, which aimed at improving the conditions of the workers by strictly laying down methods of production and of sale, by limiting production and the number of apprentices, by artificially keeping prices high, etc. The British trade unions continued this policy. They were secret societies, like their predecessors. They supported their members when ill or out of work, and enabled them to offer a united front against the employers.

Modern Socialism arose on the Continent. The early Socialists were middle class men who aimed at political revolution. They were driven from the Continent by the reactionary Gov

ernments of the time, and many of them found a refuge in England. In the opinion of Karl Marx and of his disciples England, which at that time was industrially most highly developed, offered the most favorable conditions for a social revolution. The foreign fugitives threw themselves into the fray and preached revolution with the greatest zest. However, they discovered that their general appeals failed to move the stolid people, and it occurred to them that the powerful trade unions might be converted into most valuable instruments of revolutionary propaganda. With this aim in view they insinuated themselves into the ultra-conservative trade unions, which were devoted exclusively to benevolent and industrial aims. By trickery and violence they obtained control over the executive committees, and converted the unions into political organizations which aimed at the overthrow of the existing order. The Labor Party shows the duality of the movement. It consists of the trade unions, some of which are frankly revolutionary in character while others are liberal and conservative, and of a number of Socialist societies and organizations. The two branches of the Labor Party have grown in the following most remarkable manner:

It will be noticed that between 1902 and 1914 the membership of the Labor Party grew by about 90 per cent., but it almost trebled between 1914 and 1920. It will also be noticed that the trade unions provide the overwhelming majority of its members. In 1920 they furnished a little more than 99 per cent. of the members, and the avowed Socialists a little less than one per cent. However, the Socialist tail wags the Labor dog. The small but powerful Socialist societies, which are dominated not by working men but by middle class intellectuals, such as Sidney Webb, George Bernard Shaw, H. G. Wells, and others, dominate in turn the great Labor Party. Incidentally it should be mentioned that there are in Great Britain about 8,000,000 trade

unionists. In many of the most important industries all the workers are trade unionists. The extraordinary growth of trade unionism during the last decade was due to Government action. Desirous of obtaining the votes of the organized workers, British politicians placed the trade unions above the law. So-called peaceful picketing has been made legal. The funds of the unions have been made inviolable. The Trade Disputes Act reads:

An action against a trade union, whether of workmen or masters, or against any members or officials thereof on behalf of themselves and all other members of the trade union in respect of any tortious act alleged to have been committed by, or on behalf of, the trade union, shall not be entertained by any court.

The trade unions are empowered to collect political subscriptions, which are lumped together with the non-political dues. The financial position of these organizations, which formerly insured their members against unemployment, illness, death, etc., was greatly eased by Government insurance, whereby the principal functions of the trade unions were transferred to the State. Thus the trade unions were made political fighting organizations pure and simple, and were given and simple, and were given a privileged position above the law. Naturally the leaders of the movement made the best use of the powers which had been rashly thrust into their hands. They forced all the workers in various industries to join the unions. They introduced the most rigorous discipline among their members, and they endeavored to carry out the Class War in accordance with the views of the Socialists.

British labor is frequently described in England as a giant with feet of clay. It is certainly a giant which can easily be managed by an enterprising pigmy. Individually the British working-man is rather conservative than liberal. He is not fond of innovation in politics or in industry. However, organized labor has always been amenable to the direction of a few advocates of violence, who have succeeded in obtaining control of the movement by fraud or by force. Hence the British Labor Party has readily become a champion of the most un-British policies imported from abroad, from Marxian Socialism to French Syndicalism and Communism, and to Russian Bolshevism.

The British Labor Party pursues at the same time industrial