Long before the entry of the United States into the war it was recognized that the struggle for the control of raw materials was fully as important a factor in the great conflict as the struggle of the armies themselves, and that the food supply exercised a greater effect on the morale of a nation than its casualties on the battle-field. Other factors which, it was realized, had to be taken into consideration in estimating the fighting ability and staying powers of a nation were labor conditions, finance, shipping and ship-building, all of which bear an intimate relation to the production of munitions and essential supplies. There existed government agencies, such as the Department of Commerce and Labor and the Department of Agriculture, as well as many others born of the emergency, that were organized for the purpose of collecting data on all these subjects, but the results of their activities were not readily available for the purpose of the General Staff. As a consequence the need arose for a section of the Military Intelligence Division to gather, collate, and co-ordinate such economic information, and, in particular, to interpret it from the military standpoint. The Economic Subsection of the Positive Branch was created, therefore, to supply this need. The chief, and indeed the most important, function of the subsection was the compilation and the constant revision—based on the latest and most accurate data obtainable—of the economic portion of the _Current Estimate of the Strategic Situation_. Dealing as it did with vital economic conditions in all the countries of the world; it enabled the high command of the A. E. F. and the other organizations, both military and civil, to whom it was distributed, to keep in constant and intimate touch with the economic situation throughout the world. This work constituted, in fact, an up-to-the-minute encyclopedia of the most vital economic factors as they related to the strategic situation. The I. W. W. troubles in the spruce forests of the Northwest, the spread of boll-weevil in the cotton-growing districts of the South and of hoof-and-mouth disease on the Texas cattle-ranges, riots in Korea, revolutions in Russia, the assassination of a dictator in a Central American republic, a shortage of the Brazilian coffee crop, a change of government in Chile, a textile strike in Lowell, Mass., the price of bread in Bavaria, the increased use of paper clothing and leather substitutes in Prussia, the speech of a Socialist deputy in Paris, all were carefully weighed and given due consideration, the conclusions thus arrived at, when condensed and put into graphic form, enabling the military chiefs in Washington to gauge with amazing accuracy the economic conditions throughout the world and to forecast the effect which they might be expected to have on the fighting armies.