Manchester, Liverpool, South Wales, and other industrial centres in the early part of June and delivered a series of stirring speeches to the local engineers and manufacturers, with the purpose of promoting the mobilization of the resources of each district. At Manchester he declared that we were the worst organized nation in the world for the war when it broke out, and that we had not so far concentrated half of our industrial strength on the problem of carrying through the conflict. The war, he impressed on his hearers over and over again, was a war of munitions, and for success all our available resources in men and machinery must be employed for turning out ammuni

tion and equipment. A few days later, at Cardiff, he sketched the various methods of local organization that might be adopted. One was to set up one, two, or three national factories in the area to do nothing but turn out shot and shell. For this purpose either existing works might be utilized or unoccupied factories taken over. The latter alternative involved the installation of new

machinery, and therefore presented the difficulty that, as the makers of machine tools were so busy that they could not give delivery for weeks or months, the factories had to be equipped by requisitioning plant from other works. This plan was, however, followed in

Leeds and other centres in Yorkshire. In Lancashire another method, similar to that which France had adopted with success, was preferred the utilization of such factories and tools as were in existence, perhaps supplementing the equipment with some new machines but certainly with the indispensable gauges. A third plan, which combined the other two, was to select a few existing works and convert them into a kind of national arsenal with the aid of machinery obtained from other works, either voluntarily or under the Defence of the Realm Act, at the same time using other shops for parts of the work for which they were adapted. Whether or not the former works were able to carry out the manufacture of shells from the beginning, they would be designed to finish work sent them from the other factories, the equipment of which permitted only some of the necessary operations to be performed.

In the course of these speeches Mr. George laid stress on several other interesting and important matters. One was that there must be equality of sacrifice and contribution, so that one firm by concentrating its energies on its ordinary work might not be able to take advantage of another engaged in making shells and get the latter's custom and trade. Another was that the pilfering of men by one manufacturer from another must be stopped. The need for the trade unions to relax their regulations and to permit women and unskilled men to fill positions previously reserved to skilled men was, on the understanding that the safeguards established by trade union action before the war would be restored to their former position after the war so far as the Government was concerned, also insisted on, and the reservation was made with equal emphasis that the State control of labour must be for the benefit of the State and not for increasing the profits of any private organization.

These principles were embodied in the Munitions of War Act, the introduction of which was the first business of the Minister of Munitions after the scope of his office had been defined by an Order in Council published on June 18. In asking leave on June 23 to bring in the Bill he stated the problem as being to equal, and surpass, the tremendous production of 250,000 shells a day, which he was informed on good authority was being achieved by the Central Powers, and he enunciated the principles followed in organizing the new Munitions

Department. The first was that, the help of some of the best business brains in the country must be called in to cope with the difficulties of establishing in a few weeks an organization which ordinarily would take years to build up. The second was that the different functions of the expert and the organizer must be recognized, the business of the latter being to make the best use of the brains of the former. Thirdly, the first-class business men having been secured, full scope must be given for their energies and they must be trusted. The services of the business men were to be utilized in

three ways to organize the Central Office, to organize the resources of manufacturing areas locally, and on a Central Advisory Committee to secure dealing on right lines with the business community. Each man was allotted his own sphere one to look after metals, another explosives, another machinery, another local organization, and so on.

Mr. George went on to explain the system of decentralization, which he had adopted because there was no time to organize a central depart. ment sufficiently strong and well-equipped to make the most of the resources of each district. His plan was to divide the country into munitions areas, each placed under a committee of management of local business men with local knowledge, and to establish in them offices attached to the headquarters of the

Ministry, where manufacturers could inspect specifications and samples. They were further helped by an expert engineer in each of the centres, with which also were associated representatives of the Admiralty and War Office.

The early operations of the Ministry of Munitions revealed a variety of difficulties. As regards materials, it was found that although some of them were abundant enough, others had to be husbanded carefully, while in the case of others, again, considerable expenditure was required in order to develop the supply at a later stage. It was necessary for the Ministry to be informed regularly and accurately of the stocks of raw and semi-manufactured metal in the country, and to that end monthly returns were required from all those concerned. Indications were noticed of supplies being held up in certain quarters, some contractors showing a tendency to delay the delivery of old and running contracts, apparently with the object of obtaining better prices at a later date. The adequate supply of high explosives involved the establishment of new factories, and as the raw material from which they are made is obtained from the distillation of coal, the supreme importance was recognized not merely of maintaining but of considerably increasing the output of the particular variety of coal required.

In regard to machinery, information had to be obtained regarding the amount and character of the plant in the country, so that it might be classified according to the kind of work for which it was suited. The Home Office at an earlier date had secured returns from most of the engineering firms showing what plant they had in their workshops and yards, but valuable as these were they did not give all the information needed, since they had not been compiled with a view to shell-making. More details were therefore asked for and were given with surprising celerity; indeed Mr. Lloyd George said he had never seen returns crowd in in such a way before.

The third, and perhaps the most serious, group of difficulties related to men. In the first place there was the old trouble of a shortage of skilled men, which was still accounting for many delays in delivery. It operated in two ways partly by preventing existing machinery from being worked to its full capacity, and partly by delaying the erection of new machinery which was lying ready to be put

together The second trouble, according to Mr. Lloyd George, was slacking and irregularity, which, although confined to a small minority of the men, often dislocated the work of a whole shop; its seriousness was abundantly demonstrated in a White Paper which was issued at the beginning of May. Thirdly, there was the existence of trade union rules and regulations which hampered the employment of women and the substitution, possible in many cases, of unskilled or partially trained men for skilled men, and which, in other ways, restricted the possible output, sometimes even to the extent of halving it. Some of these rules are written, but the "most devastating," to use Mr. George's phrase, were those which are unwritten and which limit the production by making it impossible for a man to put forth the whole of his strength without incurring the displeasure of his fellows.

Mr. Lloyd George recognized that it was vain to attempt to suspend these unwritten rules and practices by Act of Parliament, and that in regard to them the nation must rely upon the honour of the workmen; but provisions for removing or palliating others of his difficulties were inserted in the Munitions Act, which became law at the beginning of July. The first part was concerned with the settlement of labour disputes. Both strikes and lock-outs were declared to be offences punishable under the Act unless the difference over which they arose had been submitted to arbitration. This provision applied only to munitions workers; after many con ferences Mr. Lloyd George had gained the assent of the engineers to it, but had not been able to persuade the miners to accept it. Power was, however, taken to extend it to any other work of any description by Royal Proclamation, if the existence or continuance of a difference was directly or indirectly prejudicial to the manufacture, transport, or supply of munitions of war.

The second part of the Act contained provisions designed to give the Government greater control, on the one hand, over the labour in establishments where munitions work was carried on, and, on the other hand, over the profits of their owners. Powers were given the Minister of Munitions to make an order declaring any munitions factory to be a "controlled establishment." In that case the owners had to pay over to the Exchequer