Knowledge that Transforms

From the viewpoint of political economy the present European war has produced numerous interesting and important developments. Theories which in the past had gained quite universal acceptance have during the past year been put to an acid test. A restandardization and readaptation have become necessary with respect to various conceptions in the realm of economy, which have hitherto been quite firmly rooted in the minds of the public, as well as of scholars. Of the economic organizations throughout the world, perhaps none have during the past twelve months undergone a more crucial test than those of Germany, the marvelous strength and efficiency of which today challenge the admiration of even those who in the past have observed them more or less closely. The gigantic operations of Germany's army, railroads, and banks constitute truly brilliant achievements of governmental economic efficiency. In the field of private (individual) economy, German commerce and industry are producing results equally amazing. The factor which here has proved to be the backbone of Germany's industrial life is the German cartels, those unique, co-operative organizations which, in times of peace, overcame that bellum omnium contra omnes so baneful to commercial activity and development, and in its stead succeeded in weaving together an economic organism, the solidarity of which not only placed Germany in the front ranks among the leading commercial countries, but also has proved itself a tower of strength during the present war. The German cartels are co-operative combines of independent enterprises in allied industries for the purpose of regulating demand and supply and centralizing the business management in the mutual interest. With respect to their outer organization, as well as from a legal point of view, German cartels differ essentially from our so-called trusts in that they lack the permanent and organic amalgamation of the latter, and, unlike our trusts, are not capitalistic organizations, but essentially economic, co-operative enterprises. It can be readily seen that the cartels, numbering about six hundred, afford the government a most handy and welcome means for controlling

Mediaeval ordinances prohibited speculative transactions and were particularly severe against resale without displacement of the goods. It was supposed that gains made by conveying goods from one place to another were legitimate and that gains entirely attributable to changes in value were not. The function of the middleman was supposed to consist entirely in the movement of commodities from one place to another. According to the letter of the law, speculation was illegal, but the prohibitions could not be enforced and the arbitrage transactions between different places were not free from speculation as was supposed. Under the prevailing conditions of trade, changes in value in a period of time could not be separated from the differences in value in different markets. The purchase and sale in the distant markets were not simultaneous. Purchase in the low markets of a producing region preceded by a considerable period the eventual sale in the consuming center. The interval of time that must needs elapse introduced a definitely speculative element into a transaction that was officially tolerated because it was supposed to be free from the taint of speculative gain. There were some communities where life was so distinctly self-centered that trade with distant markets was relatively unimportant, but such extreme localism was not characteristic of the late mediaeval period. For the most part, trading relations were elaborately developed. The changes in the technique of market organization in the eighteenth and nineteenth centuries have made it possible to distinguish sharply between the truly speculative time transactions and the essentially non-speculative transactions between different places. The accomplishment of this result turns upon the full recognition of the essential interdependence of the markets that constitute a market system, and upon the development of contracts

During the I9I5 session of the Illinois legislature, an effort was made to amend the so-called " ten-hour " law which, enacted in i909 and amended in 9 i , limits to ten hours a day the work of women employed in "any mechanical or mercantile establishment, or factory, or laundry, hotel or restaurant, or telegraph or telephone establishment or office thereof, or in any place of amusement, or by any express or transportation or public utility business, or by any common carrier or in any public institution, incorporated or unincorporated, in this state." By the proposed change the working day would have been limited to nine hours, and the working week to fifty hours, with specific exception permitting a fifty-fourhour week in mercantile establishments. Such a shortening of working hours would have been quite in conformity with the recent legislative policy of other states and with the practice of a considerable proportion of employers in the state of Illinois. Under the existing Illinois law, while the working day is limited to ten hours, there is no restriction of the number of hours per week, and women may, therefore, if the employers demand it, legally work seventy hours a week. In view of generally accepted standards for women's employment such a possibility is of course an anachronism, especially unsatisfactory in Illinois, which ranks as the third manufacturing state in the Union. Thirty-two states and the District of Columbia now limit the working week to sixty hours or less; two have a sixty-three-hour week; four are in the same class with Illinois; and only nine have failed to enact legislation on the subject. Moreover, the ten-hour day is rapidly being reduced. An eight-hour day has been established in five states, Arizona, California, Colorado, Washington, and Wyoming, and in the District of Columbia. Six others, Oregon, Minnesota, Missouri, Nebraska, New York, and Utah, have established nine-hour schedules. Idaho and Montana also have a nine-hour day, without further restriction of the number of hours per week. It is true that in few states are the limitations at present so general in scope as in Illinois;