one assumed before war began that Germany would have a large number of armed cruisers scattered over the seas, and that, before these could be hunted, they would destroy an appreciable percentage of British ships. The Germans, it turned out, were not so well prepared with their cruisers as had been expected. But the fear of them alone was enough to force insurance to an impossible figure, so a state insurance office was started in London, and the state announced that it was prepared to insure 80 per cent of the risks on ships and to insure cargoes at moderate fixed rates.
The result of this state guarantee, and of the protection afforded to shipping by the fleet, was soon made manifest. A number of merchant vessels were taken over by the govern-ment for transport work. The others were insufficient for the work awaiting them. The great German mercantile fleets had been driven from the seas by the British navy. France had no ships to spare. Japan, with her growing shipping, gained enormously. But the main benefit fell to the British shipowners. There came the greatest boom shipping had ever known. Rates doubled, trebled, and quadrupled in a very short time. Old ships almost derelict, which a few week's before had been unsaleable, now fetched more than they had cost when new. Shipowners who had struggled along with small fleets of tramp boats now found that every boat left to them by the government was a little gold mine. Sailors and officers demanded much higher wages, and got them. This represented a very small share of the gains. Many men made fortunes from their ships in the early months of the war.
The steadily growing activities of the state revealed themselves in another direction. Immediately war became probable, a number of people began hastily to buy large supplies of food stuffs. In some cases they laid in fantastic quantities of preserved foods, more than they would consume in a year in the normal course of things. Some shopkeepers tried to meet this rush by refusing to supply anyone except their regular customers, only selling them their usual quantities. Others, including some great wholesale houses, quickly raised prices. This rise fell most heavily on small and struggling retailers in poor districts, who could not afford to keep large stocks. As a result they had to increase prices for their customers, and the poorer classes were made to pay. The Cabinet formed a committee on food supplies,