One unfortunate, though inevitable, effect of the Munitions of War Act, and the regulation of labour by the Ministry of Munitions, was the extent to which employers ceased to manage the labour in their own works. Though profits were limited, work was plentiful, and prices ample; they were assured of business without much effort on their part. In addition, many employers resented, and probably not unnaturally, the intervention of the Ministry of Munitions in labour disputes, and when disputes did arise, instead of endeavouring to settle them with the men, contented themselves with reporting them to the Ministry. On the other hand, Trade Unions found it an easier matter to report disputes to, and discuss them with, the Ministry rather than go to the trouble, as before the war, of discussing them with each individual firm. Whatever may have been the real cause, the effect undoubtedly was that the passing of the Munitions Act in 1915, inevitable as it was, has contributed materially to the aloofness which now exists between employers and their workers. It was not in the normal administration of labour by the Ministry of Munitions that harm occurred—it was when, for political considerations, particular action was forced upon the Ministry by politicians, that real detriment was inflicted upon industry. An example of that is the famous 12½ per cent. bonus. It is well-known that the Ministry and the Admiralty were strongly opposed to that fatal action, but it was thought expedient for Government to try and placate Labour not merely in reference to then existing difficulties, but with a view to possible political developments, and so the bonus was given. As Director of Shipyard Labour of the Admiralty, with over a million men who would be affected by the decision, I strongly protested against it. My protest was registered on the War Cabinet minutes; I stated it would subject the country to an extra annual wages bill of 95 million sterling; I was wrong to the extent of 7 millions, it proved in the end to be 102 millions. Increases of Wages and Prices One important question is the position in which the war left the workmen so far as standard of living is concerned; that involves some consideration of wages and prices. It is unnecessary for me to discuss that at length; Professor Bowley in _Prices and Wages in the United Kingdom, 1914-1920_, Oxford University Press, has now most ably dealt with the matter, and reference should certainly be made to that book on this crucial question. In his speech on January 29, 1920, at the Annual Meeting of the London Joint City and Midland Bank, Ltd., the Right Hon. R. McKenna succinctly described how prices rose: