1JN J3K11A1IN

a competitive price, and it was precisely in these semi-finished
products that the British steel makers were out-competed by the*
mass production works established abroad. The patchwork develop-
ment of British works indicated a lack of appreciation of the funda-
mental effect on unit direct costs derived from large-scale lay-out,
even if this involved a new start. The industry would not accept
the dictum that economic by-gones are by-gones, yet it \\as no
use trying to carry over small industrial units into the mass pro-
duction machine. British costs of production were influenced by the
past history of the industry and there was much less readiness
compared, for example, with the U.S.A., to take up new methods
and processes, or to plan for future demand.
With the rapidly increasing trend in steel consumption in the
early part of the period, the planning and equipment of economically
situated mass production works should have been carried out
between 1880 and 1900 at the latest. It was not only too late in
the profitless twenties—it was already too late in 1912, when the
War was seen to be inevitable.
Whilst the lag in horizontal and vertical integration in this
country must be chiefly attributed to the open market, which put
prices under the control of foreign exporters, individualism and the
momentum of laisser-faire in Britain militated against a planned
organization of the industry, and the measure of success attained at
the beginning of the period rather cloaked its necessity. One or
two trades, such as the rail-makers, overcame the difficulties of
horizontal organization and remained permanently affiliated to
international cartels. The inability of the industry to organize itself
even regionally, until the last decade under review, proved a
particular handicap to the development of sales and marketing.
Organization, for example, would have put the trades into a stronger
position to obtain the requisite financial backing to give long-term
credits, such as were enjoyed by the foreign industries.
Vertical integration, when it occurred, was, unfortunately, based
on accidental connections and not on technical suitability or
economic locality.
Stress has been laid above on the relative lag in planning moderni-
zation and productive efficiency, as it is considered far more im-
portant than the frequently alleged handicap of high British wages.
Higher wages were paid in this country than on the Continent over
the whole of the period under review- In the early part of the
period the higher money wages were offset by the greater skill.