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. 

'-' .  t. 


47816 


ONTARIO 


INDUSTRIAL 
PEACE 


4  7  fi  1  K 
VOLUME    VII 


LONDON : 

THE  ST.  CATHERINE  PRESS. 
STAMFORD  STREET,  S.E.I 


ONTARIO 


: 


'  , 

.          " 


INDEX   TO   VOLUME   VII. 


Titles  of  Articles  printed  thus  :— FOOD  FOB   THOUGHT. 
All  papers,  pamphlets,  etc.,  thus : — The  Call. 


A. 


Aberconway,  Lord,  79 

Adamson,  William,  30,  31 

Adriatic,  46,  48 

Africa,  3,  24,  117 

Agricultural  Wages  Board,  30 

Aliens  Act  1920,  95 

Allessio,  Signer,  188 

All-ltussian  Central  Council  of  Trade  Unions,  31 

Amalgamated  Cotton  Mills  Trust,  141 

Amalgamated  Engineering  Union,  126,  157,  185 

Amalgamated  Textiles  Ltd.,  142 

America,  50,  145-147,  168,  170,  171 

American  Federation  of  Labour,  50-52,  126,  127 

American  Labour,  49-52 

Appleton,  W.  A.,  126,  156 

Argentina,  80,  120,  175 

Argentine  Navigation  Co.,  120 

Asquith,  H.  H.,  98 

Australia,  117 

Austria,  47,  53,  113,  178 


B. 


Bakar,  46 

Balfour,  A.  J.,  32,  101 

Hank  of  England,  71,  74,  135 

Barker,  J.  Ellis,  170,  171 

Bassett,  W.  R.,  146-148 

Belgian  Socialist  Party,  96 

Belgium,  96,  114,  124,  133,  143 

Benn,  Sir  John,  78 

BennBros.  Ltd.,  77 

Berkman.  50 

Berne,  124 

Bessborough,  Earl  of,  79,  80 

Bevin,  Ernest,  27,  59,  93,  131,  159,  188,  189 

Birmingham,  128 

Board  of  Education,  173 

Board  of  Trade,  61,  62 

Bolckow,  Vaughan  &  Co.,  78,  79,  119 

Bolshevism,  27,  31,  49.  57,  88,  89,  124,  154,  175, 

185 

Bosnia,  46-48 

Bowerman,  C.  W..  95,  132,  179 
Bowley.  Dr.  A.  L.,  74,  106,  108 
Brace,' William,  94,  125 
Bradford,  9 
Bridgeman,  125 

Britain,  3.  49,  70.  89,  119,  168,  170,  171 
British  Chamber  of  Commerce,  60 


British  Glass  Industries  Ltd.,  157 
British  Wool  Federation,  93 
Brownlie,  J.  T.,  126 

BRUSSELS   INTERNATIONAL   CONF.,   134 
Brussels,  134,  172,  175 
Building  Trades,  62,  125,  128,  150,  159 
Building  Trades  Operatives,  29,  125,  160 
Bukharin,  127 
Bureaucracy,  36,  40 

BUSINESS    MAN'S    VIEW,    THE,    77,    117, 
141,  179 


C. 


Cabinet,  26,  93,  95,  127 

Cachin,  31 

Calico  Printers'  Association,  143 

Cammell  Laird,  31 

Canada,  175 

Capital,  36,  51.  74,  82,  146,  148,  182 

Capitalism,  20,  21,  24,  25,  49,  93,  127,  128,  133, 

146,  180 
Cavinthia,  48 
Carlisle,  89 
Carniola,  47 
Census  of  Production  1907,  106,  108,  138,  168, 

170, 171 

Central  Council  for  Economic  Information,  164 
Cheshire,  87,  159 
Chicago,  50,  52 
China,  152 
Choate,  Mr.,  162 
Christian  World,  The.  186 
Churchill,  Winston,  24 
Civil  Service,  128 
Class  War,  23,  24,  50,  51,  89,  91,  94,  127,  131, 

133 

Clay,  Henry,  123 
Clyde,  156 

Clynes,  J.  R.,  122,  126,  133.  163 
Coal  Crisis,  26,  59,  61-64,  92-96,  124,  125 
Coal  Mines  Department,  63 
Collective  Bonus,  98-100 
Coining  Revolution,  The,  153 
Committee  on  Trusts,  157 
Commons,  House  of,  95,  101,  110,  149,  186 
Communism,  28,  52,  53,  89,  94,  125,  128,  133, 

185 

Communist,  The,  56,  57 
Communist  Labour  Party,  189 
Communist  Party,  28,  56,  57.  62,  128,  159, 189 
COMPLEAT   CONCILIATOR,   THE,   109 


Confederation  Generate  du  Travail,  30-32,  92, 

186 
Cork.  95 

Cornwall,  3 

Cost  of  Living.  2,  2(5,  28,  32,  60,  61,  72,  89,  130, 

135,  156,  184,  187 
Cotton  Operatives  Association.  64 
Cotton  Reconstruction  Board,  185 
Council  of  Action.  29-32,  89.  132,  160 
Coventry  Soviet,  92 
Cratt  Unionism,  8,  126 
Crammond,  Edgar,  76,  138 
Cramp,  C.  T.,  88-90 
CHIME   OF   CAPITALISM,   THE,    17 
Croatia-  Slavonia,  46-48 
Ctmliffe,  Lord,  74 
Currency,  Committee  on,  74 
Currency  Expansion,  3,  4,  38,  61,  72,  76,  130, 

134  136,  151,  173,  175 


D. 


Daily  Herald,  22-25,  27,  31,  56,  57,  61-63,  92,  95, 
118;  125,  128,  133,  153,  154,  179 

Daily  Herald  Policy,  22-25 

Dalmatia,  48 

D'Annunzio,  47 

Danube  river,  46 

DAY  BY  DAY,  28,  60,  92,  124,  156.  184 

Dell,  Robert,  57 

Denmark,  53 

Derby,  Lord,  41 

Derbyshire,  87 

Diagrams,  11,  13,  43,  45,  73,  75,  85,  107,  139, 
169 

Dictatorship  of  Proletariat,  28,  32,  56 

Direct  Action,  102,  132,  155 

Division  of  the  Product  of  Industry,  74,  106 

Dockers'  Union,  131,  156 

Drave  river,  46 

Dublin,  125 

Durham,  87 


E. 


Economic  education,  121-123 

Economic  Scheme,  162-164 

Economic  Statesmanship,  170 

ECONOMY   AND   EDUCATION,  172 

Edinburgh,  31 

Emergency  Powers  Bill,  95,  96 

Engineering  Employers'  Federation,  32,  157 

England,  9.  10.  12,  40,  67,  113,  122 

E.T.U.  strike,  31,  32,  60,  61,  63,  157 

Europe.  50,  72,  89,  113,  114,  121,  130,  134,  137, 

146.  147.  150.  152,  160,  175,  178 
Excess  Profits  Duty,  4,  71,  172,  180,  181 
Exchequer.  21,  159,  174 
Ex-Service  men,  29.  61,  64,  94,  159 


F. 


FACTS  OF  THE  CASE  IN  DIAGRAM,  9,  41, 

72,  105,  138,  168 
Fnirfax,  Lord,  141,  143 

Federation  of  Printing  &  Kindred  Trades,  61 
FINANCING  OF  EXPORTS.  175 
Fiume,  46-48 
Foch,  24 
FOOD  FOR  THOUGHT,  26,  58,  88,  121,  153, 

182 

Fonvard,  57 
France,  3,  15,  24,  30-32,  53,  70,  113,  133.  143, 

152,  178,  186 
French  Labour,  30 
French  Socialist  Party,  30,  31,  184 
Friendly  Societies,  53,  157 
Furness,  Withy  &  Co.,  117 


G. 


General  Federation  of  Trade  Unions,  62,  156 

General  Staff  for  Labour,  62 

Geneva;  28, 175 

Genoa, 62 

George,  Lloyd,  29,  32,  62-64,  93,  94,  125,  126, 
149,  159,  160 

German  Independent  Socialist  Party,  64,  124 

Germany,  25.  37,  49,  50,  94,  113-115,  124,  133, 
143,  145,  151,  154,  1Z8 

Giolitti,  32,  63 

Glasgow,  28,  31 

Goldman,  Emma,  50 

Gompers,  Sam  50-52,  126 

Goschen,  172 

Gosling,  Harry,  30,  31 

Gould,  Gerald,  153,  155,  183 

Government,  2,  9,  24,  29-31,  37,  41,  53,  55,  59, 
60,  62-64  68,  70,  89,  93-96,  123-125,  127, 
130-132.  135,  136,  140,  145,  149,  151,  152, 
154.  158-160,  165,  178-180,  184-189. 

Great  Western  Railway,  strike,  28 

Greenwood,  A.,  179 

Grimsby,  189 

Guest,  Keen  &  Nettlefolds  Ltd.,  78,  79 

Guild  of  Insurance  Officials.  125,  126 

H. 

Haldane,  Lord,  182 

Hamburg,  47 

Hartshorn,  Vernon,  124 

Harvey,  R.  V.,  128 

Health,  Ministry  of,  173 

Hease,  H..  57 

Henderson.  A..  160,  179,  184 

Herzegovina,  46 

Higher  Production  Council,  98 

Hodges,  Frank,  27,  28,  61 

Holland,  124 

Home  Office,  123 

Hopkinson,  Austin,  182 

Home,  Sir  Robert,  60-64,  125,  184,  188 

Housing,  9,  10,  12,  62,  94 


Hull,  88 

Hulton  Press.  126 

Hungary,  46,  47 


I. 


IF  LABOUR  RULES,  101 

Ilford,  186,  187 

Imperialism,  19 

Income  Tax,  108 

Independent  Labour  Party,  32,  56,  124,  186 

India,  152 

Indianopolis,  51 

Industrial  Conference  (U.S.A.),  51 

Industrial  Councils,  8 

Industrial  Court,  27-29,  60,  62,  131,  185-187 

Industrial  Courts  Act  1919,  61,  64,  131 

Industrial  Unionism,  8 

Industrial  Welfare  Society,  123 

Industrial  Workers  of  the  World,  50,  52 

Infant  Mortality,  9,  10 

Ingram,  Beresford,  122 

Insurance  Strike,  125,  126 

International,  Second,  124 

International,  Third,  27,  28,  32,  56,  61,  62,  64, 

92,  96,  127,  128,  133,  184,  187.  189 
International  Federation  of  Trade  Unions,  128 
International  Labour  Office,  188 
International  Movement,  62,  185 
International  T.U.  Conference,  126-128 
International  Transport  Workers  Federation,  128 
Ireland,  24,  87,  132 
Islington,  184 
Italian  Socialist  Party,  92 
Italy,  53,  60-64,  93,  94,  128,  133,  158,  178,  188 


J. 


Japan,  69 

Jefferson,  Thos.,  15 

Jingoism,  26 

Johnson,  John,  50 

Johnson-Ferguson.  Sir  J.  E.,  79,  119 

Joiners'  Strike,  128,  156 

Joint  Industrial  Councils,  38,  61,  62,  94,   125, 

126,  131,  187 
Jouhaux,  31,  32 


K. 


Kameneff,  25.  62,  63 
Kidd,  James,  182,  183 
Run.  Bela,  127 


L. 


Labour,  2,  22,  31,  36,  49,  53,  56,  58,  59,  62,  74, 
81,  92,  93,  95,  102,  103,  119,  120.  126,  127, 
130,  131,  133,  140,  146,  148,  155,  156,  165. 
180,  182 


LABOUR  AND  BOLSHEVISM  IN  U.S.A.,  49 

Labour  Gazette,  28 

LABOUR  IN  1920,  130 

Labour  Leader,  The,  56 

Labour  leaders,  26,  102,  183 

Labour,  Ministry  of,  32,  53,  60,  92,  93,  124-126, 

131,  156,  157,  184,  186,  187 
Labour  Party,  2,  27,  29,  30,  53,  56,  57,  101,  103, 

126,  132,  133,  158,  160,  179,  184-186,  189 
LABOUR  RULES,  IF,  101 
Labriola,  60 
Lanarkshire  Miners,  31 
Lancashire,  87,  96,  142,  159 
Lansbury,  George,  16,  25,  27,  31,  63,  133,  153, 

154 

Law,  Bonar,  29 

League  of  Nations,  103,  126,  176 
Lee,  L.  B.,  143-145 
Leeds,  189 
Leicester,  87 
Lenin,  90,  95,  127,  133 
Lewis,  Sir  Frederick,  117,  120 
LIBERTY,  OF,  14 
Lincoln,  Abraham,  20 
Littlefield,  Henry,  158 
Litvinoff,  31,  57 
Liverpool,  61,  63,  142,  159 
London,  29,  31,  62,  95,  124,  156,  157,  185,  188 
Lords,  House  of,  41,  96 
Losovsky,  94,  127 
Lucerne,  32 


M. 


Mucassey,  Sir  L.,  182 

Macdonald,  J.  R..  124 

McLaine,  W.,  56 

Macmanus,  A.,  28.  57 

Macnamara,  Dr.,  157-160,  184,  187 

MacSwiney,  Alderman,  95 

Malone,  Colonel,  28,  125,  126 

MAN  AND  THE  MACHINE,  THE,  146 

Manchester,  15,  61,  63,  88,  126 

Manchester  Liners  Ltd.,  120 

Mann,  Tom,  183 

Mansbridge,  Albert,  122 

Marat,  15 

Marx,  Karl,  15 

Marxism,  20.  54,  122 

Master  Builders'  Federation,  29 

Master  Cotton  Spinners'  Federation,  64 

Maybury,  Sir  Henry,  93 

Medical  Association,  64 

Metal  Workers'  Union  (Italy),  60 

Meynell.  Francis,  61,  62 

Milan.  60 

Miners'  Federation,  8,  29,  59,  95,  124,  125,  131, 

159,  188 

Miners'  International  Federation,  28,  188    • 
Miners'  strike,  60,  64,  93-96.  102,  124-126,  132 
Mines  Department,  62,  125 
Minsk,  32 
Mirabeau,  15 


Money  and  Prices,  Labour  Report  on,  61,  81 

Monmouth,  87 

Monopolies.  7,  93,  104 

Montifiore,  Mrs.,  28 

Montreal,  52 

Morris.  T.  Henry,  142,  143 

Moscow,  25,  32.  64,  92.  127.  128.  133,  184,  185, 

187,  189 

Muelen  Scheme,  175,  177 
Munich,  48 


N. 


National  Alliance  of  Employers  and  Employed, 
157,  185,  189 

National  Debt,  140 

National  income,  74.  76,  105, 106,  108,  138,  140 

National  Labour  Party  (US. A.),  52 

National  Socialist  Party,  30  •*• 

National  telephone  service,  36 

National  Union  of  British  Fishermen,  189 

National  Union  of  Clerks,  158 
,  National  Union  of  Distributive  and  Allied  Wor- 
kers, 160 

National  Union  of  Ex-Service  Men,  31 

National  Union  of  Railwaymen,  88,  94,  95,  126, 
132, 187 

National  Union  of  Teachers,  164 

National  Unionist  Association,  42 

National  Wages  Board.  94-96,  131 

NATIONALISATION,  40 

Nationalisation,  36.  40,  52,  104,  123 

NEW  MAP  OF  EUROPE,  THE,  46 

New  York.  50.  51,  146 

New  York  Tribune.  49 

Newnes  (Geo.),  Ltd.,  77 

Newport,  126 

Nineteenth  Century,  The,  182 

"  No  Rent  "  strike  (Scotland),  31 

Northcliffe  Press,  22 

Northumberland,  87 

Norway,  128,  187 

Nottingham.  87 


O. 


OF  LIBERTY,  14 

Oldham.  64 

ON  COLLECTIVE  BONUS,  98 

Operative  Bricklayers'  Society,  158 

OUH  ECONOMIC  SCHEME,  190 

OUTPUT  AND  DISTRIBUTION  OF  COAL,  84 

Oxford.  122 

Oxford  Tracts  on  Economics,  190 


P. 

Palmers'  Shipbuilding  Co.,  118 
Pankhurst,  Sylvia,  57,  94-96 
Paris,  30-32,  188 
Parliament,  94,  125,  189 


Pensions  Committee,  30 

Phillips,  Sir  Owen,  120 

Pittsburg,  50 

Poland,  24,  25,  29,  30,  32,  53,  70,  132,  177,  178 

Ponsonby,  Arthur,  56 

Poor  Law,  104 

Portsmouth,  61 

Post  Office.  36 

PRICES,  THE  RISE  IN.  2 

Printers   Strike,  61,  63,  93,  124 

Printing  Trades  Federation,  127 

Profiteering,  38 

Profiteering  Act,  93,  159,  184 

PROFITS-MOTIVE  &  THE  PROFITS-TEST. 

THE,  34 
Purcell,  A.  A.,  28 


Quelch.  Tom,  127 


Q 


R. 


Radek,  127 

Representation  of  the  People  Act,  44,  102 

Richards,  T  F.,  158 

RISE  IN  PRICES,  THE,  2 

Ritchie,  Mure,  118 

Rubinstein,  H.,  57 

Rural  Councils,  55 

Ruskin  College,  122 

Russia,  23-25,  29-32.  49,  50,  62,  64,  70,71,88, 

90,  92-94,  121,  127,  128,  132,  153,  154,  ICO, 

185 


St.  Davids,  Lord,  188 

Save  river,  46 

Scotland.  10,  12,  87 

Seamen's  and  Firemen's  Union,  55 

Serbo-Croat-Slovene  State.  46,  47 

Shacketon,  Sir  David,  131,  187 

Shaw.  Lord,  131 

Sheepbridge  Coal  &  Iron  Co.,  78 

Shop  Assistants'  Union,  157 

Shropshire,  87 

Sicily,  93    . 

SLUMP  IN  TRADE,  THE,  68,  113.  149 

Smillie,  Robert,  26,  59,  (11-64,  92,  93 

Smith,  Sir  Allan,  160,  184 

Smith,  Herbert,,  125 

Snowden,  Philip,  56,  124 

Social  Democratic  Federation   30 

Socialisation,  128 

Socialism,  21,  24,  25,  53,  79,  126 

Socialist  State,  5 

Soviet  Government,  25,  30-32,  63,  93,  127,  128, 

132.  175 

Staffordshire,  87 
Stamp,  Sir  Josiah,  183 


State,  15,  18,  21,  51,  66,  67,  71,  116,  134,  135, 

165-167,  172,  173.  175 
STATE  AND  TOLERANCE,  THE,  66 
State-ownership,  2,  27 
State  Socialism,  52,  166 
Steel,  John,  128 
Steel,  Peach  &  Tozer  Ltd.,  92 
Stevenson,  W.  H.,  186 
Strakcr,  59      i 
Strikes  :— 

E.T.U..  31,  32,  60,  61,  63,  157 

G.W.R.,  28 

Insurance,  125,  126 

Italian,  94 

Joiners,  128,  156 

Miners,  60.  64,  93-96,  102,  124-126,  132 

"No  Rent,"  31 

Printers,  61,  63,  93,  124 
Styria,  48 
Sweden,  124 
Switzerland,  145 
Syndicalism,  63,  64,  123 

T. 

Tchitcherin,  31,  57 

Thomas.  J.  H.,  61,  88,  95,  102-104,  126,   128, 

132,  133,  187 
Times,  The.  94,  95 
Trade,  Board  of,  61,  62 
Trade  Boards,  6-8,  39 
Trade  Boards  Act,  39,  118 
TRADE  COMBINATIONS,  37 
T.U.C,.  Sept.  1920,  61,  62 
T.U.C.,  2,  8,  29,  92,  95,  131,  179,  185,  186,  189 
Trade  Unionism,  7,  22,  81,  126,  127,  183 
Trade  Unions,  27,  28,  30,  50,  53,  55,  57,  62,  81, 

124,  128,  183 
Trades  Councils,  30 

Tramway  Workers,  131,  157,  158,  186,  188,  189 
Transport  &  General  Workers'  Union,  156 
Transport,  Ministry  of,  93 
Transport  Workers  Federation,  93-95 
Trieste,  48 

Triple  Alliance,  32.  60,  62,  64,  156 
Trotsky,  50 
Turin,  60 

Two-Shift  system,  126 
Typographical  Association.  63,  124,  127 

U. 

UNEMPLOYMENT,  53 
Unemployment,  Report  on,  127 
UNEMPLOYMENT  INSURANCE,  165 


Unemployment  Insurance  Act,  28,  53,  64,  157, 

159,  184 

Unemployment  Act,  1920,  158,  165,  167 
United  Kingdom,  41,  74,  76,  105,  106,  125,  138, 

141,  168,  171 
United  States,  37,  49-52.  69,  70.  115.  117,  146, 

147,  168,  170.  171,  177 
Universities,  173,  174 
Ural  Trade  Unions,  127 


Y. 

Varley,  Miss  J.  A.,  126 

Veltheim,  Eriki,  124 

Vickers  Ltd.,  179-181 

Vienna,  48 

VIEWS  OF  THE  MINORITY  PRESS,  22,  56 

VITAL  INDUSTRY,  A,  162 


W. 

Wage  Census  1906,  106 

Wages  Act  1911.  64 

WAGES  PROBLEM,  THE,  5,  81 

Waldeck-Rousseau  Act,  186 

Wales,  9,  10,  12,  30,  79,  87,  95,  96,  159 

Warwickshire,  87 

Washington,  50 

Webb,  Sidney,  179 

Welfare  Work,  122.  123 

When  Labour  Rules,  102 

When  the  Workmen  help  you  manage,  146 

Whitley,  J.  H.,  109 

Whitley  Councils,  8.  109 

Williams,  Robert,  28,  30,  57,  94 

Wilson,  President,  51 

Woolwich,  187 

Worcester,  87 

Workers  Dreadnought,  57,  94,  96 

Workers'  Educational  Association,  122 

Workers'  International  Movement,  128 

Workers'  Union,  54 


Y. 

Yorkshire,  3,  87,  187 

Yorkshire  Miners'  Federation,  125 


Z. 


Zengg,  46 
Zinovieff,  94,  95,  127 


CORRIGENDA. 

Page  23,  line  38,  for  "  staternan  "  read  "  statesman." 
Page  61.  line  2,  for  "  1909  "  read  "  1919." 
Page  83,  line  1,  for  "  high  "  read  "  highly  " 


No.  XXXVII 

SEPTEMBER 


MCMXX 


'We  fear  no  change  of  social  or  economic 
form  provided  that  the  substance  of  freedom  be 
preserved." 


INDUSTRIAL 
PEACE 


CONTENTS 

The  Rise  in  Prices 

The  Wages  Problem,  II 

The  Facts  of  the  Case  in  Diagram,  V 

Of  Liberty 
The  Crime  of  Capitalism 

Views  of  the   Minority  Press :  "  The 
Daily  Herald  " 

Food  for  Thought 
Day  by  Day 


INDUSTRIAL     PEACE 


THE  RISE  IN  PRICES. 

A  FEW  months  ago  a.  committee  representative  of  the  Labour 
movement  was  appointed  to  investigate  the  causes  of  the  rise 
in  the  cost  of  living,  and  it  is  expected  that  at  least  an 
interim  report  will  be  submitted  to  the  Trade  Union  Congress, 
which  will  have  met  before  these  lines  appear  in  print. 
We  welcome  the  investigation  for  two  reasons.  In  the 
first  place  the  charge  is  frequently  made  against  the  Labour 
party  that  it  has  offered  no  practicable  alternative  to  the 
present  economic  policy  of  the  Government.  For  it  is  argued 
that  to  express  the  ultimate  intention  of  substituting  State 
ownership  for  private  competitive  enterprise  is  not  to  provide 
any  constructive  policy  for  immediate  application;  and  that 
if  the  Labour  party  achieved  a  majority  and  took  up  the  reins 
of  government  in  the  near  future,  it  would  be  forced,  by  the 
necessities  of  the  case,  to  continue  the  policy  pursued  by  the 
present  administration.  The  first  condition  of  successful 
constructive  effort  is  accurate  knowledge  of  the  present  situa- 
tion and  the  factors  responsible  for  its  creation.  In  the  second 
place  the  enquiry  provides  a  test  of  sincerity  and  capacity. 
An  ex  parte  statement,  based  upon  '  selected '  evidence,  or 
resulting  from  sheer  inability  to  interpret  evidence  honestly 
sought,  would  produce  more  harm  than  good  ;  but  a  document 
which  was  scientific  in  the  true  sense  of  the  term,  distin- 
guishing the  inevitable  from  the  avoidable,  would  enhance  the 
reputation  of  the  Labour  movement.  Nor  is  it  unlikely  that 
the  Committee  will  rise  to  the  level  of  its  opportunity  and 
responsibility.  It  is  fairly  strong,  and  includes  economists 
accustomed  to  gather  and  to  weigh  evidence. 

We  hope  that  in  its  report  the  Committee  will  first  of  all 
examine  the  existing  methods  of  measuring  changes  in  the 
level  of  prices.  A  considerable  section  of  industrial  workers — 
particularly  of  local  leaders — profoundly  mistrust  the  present 
official  index  number,  which  is  accepted  by  arbitration  tri- 
bunals and  Government  departments  in  dealing  with  applica- 
tions for  advances  in  wages.  There  should  be,  above  all 
things,  confidence  in  the  departmental  enquiries  upon  which  the 
results  are  based,  and  it  is  therefore  of  the  first  importance 
that  the  Committee  should  bring  these  enquiries  under  review 
and  either  criticise  or  approve  them. 


The  present  level  of  prices  is  the  resultant  of  all  the 
economic  forces  in  operation  at  the  present  time.  The  task 
of  the  Committee  is  thus  an  enquiry  into  the  economic  situa- 
tion as  a  whole.  The  rise  in  prices  is  not  confined  to  this 
country:  it  is  characteristic  of  all  countries.  It  would  there- 
fore appear  to  be  due  in  part,  at  any  rate,  to  the  operation  of 
world  forces.  Moreover,  historical  records  show  that  wars 
have  always  tended  to  raise  prices,  if  not  permanently,  at 
least  for  considerable  periods.  History  suggests  that  there  is 
an  inevitable  connection  between  the  two,  and  the  suggested 
inevitability  is  a  matter  for  the  serious  consideration  of  the 
Committee.  Again  there  is  a  considerable  difference  between 
the  extent  of  the  present  rise  in  different  countries,  and  we 
hope  the  Committee  will  observe  the  differences  and  endeavour 
to  ascertain  their  causes.  It  is  worth  knowing  why  the  rise 
in  prices  has  been  less  marked,  for  example,  in  South  Africa 
than  in  France.  We  suggest  that  to  restrict  the  investigation 
to  this  country  would  be  as  profound  an  error  as  to  restrict  it 
to  Cornwall  or  Yorkshire.  Great  Britain  is  not  an  economic 
entity,  but  an  integral  part  of  a  large  whole;  its  economic 
organisation  is  intimately  bound  up  with  the  organisation  of 
the  world  as  a  whole.  Nor  is  it  sufficient,  for  the  purpose  of 
an  investigation  which  is  intended  to  be  comprehensive  and 
to  carry  the  weight  of  authority,  merely  to  specify  the  world 
forces  in  operation  ;  it  is  necessary  to  estimate  their  line  of 
operation  and  the  degree  of  influence  they  exercise  upon  the 
general  result.  For  example,  it  is  highly  important  that  we 
should  know,  not  merely  that  the  cost  of  production  and  the 
price  of  coal  have  advanced,  but  also,  as  far  as  information 
can  be  obtained,  the  extent  to  which  the  cost  of  coal-getting 
has  risen  as  the  direct  result  of  the  reduction  of  hours  of  work, 
the  rise  in  wages,  and  the  change  in  the  guaranteed  daily 
wages  relatively  to  the  piece-work  earnings  of  miners.  Again, 
we  require  to  know  in  far  greater  detail  than  is  yet  known, 
the  extent  of  the  specific  and  unavoidable  advance  in  the  cost 
of  building  a  ship  or  locomotive. 

The  nature  of  the  forces  which  have  produced  a  rise  in 
general  prices  is  well-known,  and  a  report  which  contented 
itself  with  covering  the  same  ground  would  carry  little  weight. 
The  two  main  forces,  as  we  have  frequently  been  told,  are  a 
deficiency  in  supply  relatively  to  demand  and  an  expansion  of 
currency  and  credit.  There  is  much  leeway  to  be  made  up, 
not  only  in  this  country  but  also  in  others.  In  some  directions 
supply  has  again  overtaken  demand,  and  the  margins  between 
costs  and  prices  have  been  largely  reduced,  if  not  abolished. 


In  other  directions  supplies  have  practically  reached  the  pre- 
war level,  but  demand  has  increased  in  the  meantime,  so  that 
a  condition  of  shortage  remains  and  prices  still  leave  a  con- 
siderable margin  for  excess  profits.  The  increase  in  demand 
has  been  largely  due  to  the  extent  to  which  wealth  has  been 
re-distributed  during  the  war,  to  the  advantage  of  particular 
groups  of  manufacturers,  dealers  and  workpeople.  This  seems 
to  be  an  inevitable  result  of  currency  expansion.  We  need 
not  here  consider  why  it  should  be  so:  it  is  sufficient  to  note 
the  fact,  and  to  call  attention  to  the  connection  between  the 
extent  of  the  rise  in  general  prices  and  the  degree  of  currency 
expansion  in  each  country.  Further,  the  main,  though  not 
the  only,  avenue  along  which  the  new  currency  has  travelled, 
is  towards  advances  in  wages.  It  is  thus  one  of  the  most 
important  tasks  of  the  Committee  to  endeavour  to  establish 
the  true  connection  between  existing  wages  and  prices.  There 
appears  to  be  a  two-fold  connection  between  the  two.  Where 
supplies  are  short,  prices  are  fixed  by  the  competitive  power  of 
consumers,  which  is  in  turn  represented  by  the  amount  of 
currency  at  their  disposal.  The  further  connection  is  found 
where  supply  approximates  to  demand,  and  competition 
between  sellers  is  effective  Under  these  conditions  prices 
are  in  the  neighbourhood  of  costs.  But  costs  are  themselves 
mainly  determined  by  wages  rates,  which  are  to-day  far  in 
excess  of  pre-war  rates. 

The  above  statement  is  a  truism  ;  but  it  is  one  of  those 
truisms  which  are  consistently  ignored.  We  are  frequently 
told  that  wages  will  never  return  to  pre-war  rates — which  is 
probably  true ;  that  rates  may  rise,  if  they  have  not  already 
risen,  to  an  uneconomic  level ;  and  that  currency  and  credit 
must  be  deflated.  To  what  extent  is  it  true  to  say  that 
advances  in  wages  are  futile  ?  What  is  the  economic  level  of 
wages  at  the  present  time  ?  To  what  extent  can  prices  be 
reduced — or  their  upward  tendency  checked — without  any 
reduction  in  wages?  What  may  be  expected  from  increased 
production  in  this  industry  and  that?  To  what  extent  has 
industry  become  '  lopsided  '  in  development  ?  What  adjust- 
ments are  necessary  to  secure  a  true  equilibrium?  To  what 
extent  is  the  power  of  this  country  restricted  by  its  depend- 
ence on  other  countries?  What  influence  has  been  exercised 
by  price  associations  since  the  Armistice  ?  Is  the  Excess 
Profits  Duty  in  any  way  responsible  for  the  persistence  of 
high  prices  ?  Questions  such  as  these  call  for  careful  exami- 
nation, and  they  must  be  faced  by  the  Committee  if  its 
report  is  to  serve  any  real  constructive  purpose. 


THE  WAGES  PROBLEM  (II). 

MOST  of  us  think  we  are  grossly  underpaid  relatively  to  other 
people.  The  average  professor  believes  that  he  should  be 
remunerated  at  least  as  highly  as  the  chief  administrative 
officials  of  a  large  city.  School  teachers  have  fought  strenu- 
ously for  adequate  financial  recognition  of  their  profession. 
We  have  already  referred,  in  the  first  article,  to  the  efforts 
made  by  moulders  to  secure  a  higher  place  in  the  ranks  of 
skilled  workers.  Women  workers  strove  during  the  war  for 
the  recognition  of  the  principle  of  'equal  pay  for  equal  work.' 
During  the  same  period,  too,  people  employed  on  construc- 
tional work  in  the  building  trade,  pressed  their  claims  for  the 
preservation  of  the  custom  of  being  paid  for  such  work  three 
farthings  or  a  penny  per  hour  more  than  for  repair  work  in 
factories;  and  the  granting  of  a  bonus  of  12^  per  cent  to 
certain  skilled  engineers  and  moulders  was  the  signal  for  an 
application  for  a  similar  bonus  by  other  skilled  workers,  who, 
quite  naturally,  desired  to  preserve  the  same  relative  wages 
in  the  various  skilled  trades.  The  problem  of  adjusting  relative 
wages  is  one  of  the  most  difficult  in  modern  industry.  A 
desires  to  overtake  JB,  who,  while  welcoming  a  rise  to  the 
former,  endeavours  to  remain  as  far  in  advance  as  before. 
The  problem  of  adjustment  is  clearly  quite  distinct  from  the 
problem  of  raising  '  earned  '  incomes  as  a  whole  to  a  higher 
level,  at  the  expense  of  investment  incomes.  To  the  latter  we 
shall  return  in  a  future  article — for  the  present  we  ignore  it. 
The  former  would  exist  even  if  all  the  income  of  the  nation 
were  distributed  in  wages  and  salaries  in  return  for  personal 
effort.  It  would  also  appear  in  a  Socialist  State.  And  a 
solution  of  the  problem  which  was  satisfactory  one  day  would 
cease  to  satisfy  the  next.  For  industry  (and,  indeed,  most 
forms  of  economic  effort)  is  constantly  changing;  new 
occupations  are  created ;  the  demands  upon  workers  in 
existing  occupations  change  their  character  ;  machinery 
converts  skilled  labour  into  semi-skilled,  and  unskilled  into 
skilled. 

We  have  no  method  of  adapting  our  system  quickly  to  new 
requirements.  We  appear  to  be  in  a  transition  stage,  and 
likely  soon  to  witness  the  complete  abandonment  of  the  old 
method  of  regulating  wages.  Under  the  system  which  pre- 


vailed  for  the  greater  part  of  the  nineteenth  century,  wages 
were  said  to  be  regulated  by  competition.  An  employer  was 
said  to  be  compelled  to  offer  a  wage  sufficient  to  call  forth  an 
adequate  supply  of  labour  for  his  purpose.  He  competed  with 
rival  employers  in  the  same  industry  and  with  employers  in 
other  industries.  If  the  work  which  he  had  to  offer  was  of  a 
peculiar  character,  its  peculiarity  would  be  reflected  in  the 
wages  rate.  Thus  work  demanding  skill  and  training,  or 
work  which  was  exceptionally  unpleasant,  or  carried  with  it 
great  risk  of  periodic  unemployment,  would  necessarily  carry 
remuneration  at  a  higher  rate  than  unskilled,  pleasant  or 
regular  work.  But  this  theory  did  not  square  with  the  facts. 

Workers  were  generally  at  a  great  disadvantage.  They 
moved  slowly,  and  wh«n  ready  to  move  were  at  a  loss  as  to 
the  direction  they  should  take.  Custom  and  tradition 
hindered  the  process  of  adjustment.  In  some  industries  the 
workpeople — particularly  the  skilled  workers — banded  them- 
selves into  unions  which,  for  reasons  which  we  need  not  here 
discuss  (in  any  case  they  are  somewhat  obscure)  were  able  to 
secure  far  better  terms  for  their  members.  But  .the  position 
of  those  who  remained  in  isolation  was  rendered  worse  by  the 
action  of  the  organised  workers.  In  some  trades  the  conditions 
became  notorious,  and  the  workers  were  said  to  be  '  sweated  ' 
— which  in  essence  meant  that  their  wages  were  regarded  as 
unduly  low  relatively  to  the  wages  of  organised  workers. 
Unskilled  workers  employed  to  assist  skilled  and  organised 
workers  were  paid  rates  which  reflected  their  lack  of  organisa- 
tion. Roughly  speaking,  skilled  rates  were  about  fifty  per 
cent  above  unskilled  rates.  This  difference  became  traditional, 
and  the  tradition  may  prove  a  hindrance  to  progress  in  the 
future. 

Unskilled  workers  in  many  industries  were  organised  before 
the  outbreak  of  war,  but  the  rate  of  improvement  in  working 
conditions  might  have  been  accelerated.  There  remained, 
moreover,  large  groups  of  sweated  workers,  and  in  1909  an 
experimental  act  was  passed  for  the  establishment  by  Trades 
Boards  of  minimum  rates  in  selected  industries.  This  act 
represents  the  first  attempt  at  legal  regulation  of  wages  under 
modern  industrial  conditions.  Two  points  call  for  special 
comment,  in  that  they  raise  the  issue  for  the  twentieth 
century.  The  first  is  that  the  act  was  due  to  the  growth  of 
the  feeling  that  there  is  such  a  thing  as  economic  justice,  and 
that  every  worker  is  entitled  to  a  'fair*  wage.  The  second  is 

6 


that  collective  arrangements  were  substituted  for  individual 
bargaining,  and  a  combined  conciliation  and  arbitration 
arrangement  was  substituted  for  the  employment  of  economic 
power.  The  two  sides  represented  on  the  Boards  endeavoured 
to  arrive  at  an  agreement  regarding  what  constituted  a  '  fair  ' 
minimum  wage  in  the  particular  circumstances  of  the  case, 
and  in  the  event  of  failure  to  agree,  the  independent  members 
endorsed  the  view  of  one  side  or  the  other. 

During  the  war  the  trade  union  movement  made  great 
progress,  but  there  remain  a  number  of  industries  still 
imperfectly  organised.  During  the  last  few  months,  Trade 
Boards  have  been  set  up  in  several  of  these  industries,  and  are 
likely  to  be  set  up  in  many  more.  What  will  be  the  result  ? 
The  conditions  of  employment  of  practically  every  worker  in 
the  manufacturing,  distributive  and  other  industries  will  be 
determined  for  him  or  her  by  arrangements  made  between 
associations  of  employers  and  workers.  The  day  of  individual 
negotiation  is  practically  over.  The  competitive  force  (in  the 
sense  already  described)  if  it  ever  was  effective,  has  spent 
itself.  In  many  industries  the  workers  form  close  and  powerful 
monopolies.  What,  then,  is  to  be  the  regulative  factor  in 
wages?  For  many  years  to  come  we  shall  no  doubt  witness 
displays  of  force  by  monopolistic  combinations,  but  if  these 
are  sincere  in  their  professions  that  they  merely  aim  at 
'  economic  justice,'  and  if,  moreover,  we  can  devise  some 
machinery  for  interpreting  that  ideal  and  translating  it  into 
money  terms  in  given  circumstances,  we  may  witness  the 
abandonment  of  the  strike  weapon  as  a  method  of  securing 
advances  in  relative  wages. 

The  new  problem  is  similar,  in  its  essential  features,  to  the 
problem  of  determining  prices  under  monopoly  conditions. 
While  producers  worked  in  friendly,  or  unfriendly,  rivalry, 
prices  could  be  left  to  take  care  of  themselves.  If  we  .magine 
an  economic  society  in  which  all  goods  are  produced  by 
monopolistic  associations  the  problem  of  fixing  'fair'  prices 
naturally  assumes  the  first  importance.  Similarly  with  wages. 
Monopolistic  power  will  not  be  allowed  free  and  full  play. 
It  will  be  necessary  to  devise  some  machinery  for  adjusting 
claims  which  will  always  reflect  the  conflict  between  the 
part  and  the  whole.  Such  machinery  will  in  course  of  time  be 
evolved.  The  arbiters  must  clearly  possess  expert  knowledge 
of  the  work  for  which  the  rate  of  remuneration  has  to  be  fixed 
as  well  as  other  kinds  of  work  with  which  it  can  be  compared. 


From  this  point  of  view  the  industrial  union  represents  an 
advance  from  the  craft  organisation,  for  the  former  covers  .a 
variety  of  occupations,  and  must  therefore  adjust  the  relative 
claims  of  such  occupations  before  approaching  the  employers' 
association.  But  occupations  cut  across  industries,  so  that 
some  form  of  integration  of  industries  is  necessary.  This  is 
already  to  be  found  on  the  labour  side  in  the  Trade  Union 
Congress.  But  the  Congress  is  hardly  likely,  at  the  present 
moment,  to  undertake  the  responsibility  for  determining  the 
appropriate  relations  of  wages  rates.  If  it  were  ready  to  do 
this,  the  latest  claim  of  the  miners  might  be  submitted  to  it 
for  settlement.  But  for  the  present,  labour  leaders  are  too 
eager  to  preach  the  solidarity  of  labour  to  do  anything  which 
helps  to  reveal  the  many  cracks  in  the  wall. 

Industrial  Unions  are  bound  to  face  the  problem  in  so  far  as 
it  concerns  their  own  members — witness  the  'grades  move- 
ment '  among  railway  men,  and  the  efforts  of  the  Miners' 
Federation  to  adjust  the  relations  of  tonnage  and  time 
workers.  Trades  Boards  and  Whitley  Councils  are  similarly 
engaged  in  the  task  of  adjusting  relative  rates.  These  should 
be  supplemented  by  an  Industrial  Council  composed  of 
representatives  of  Trade  Union  Congress  and  associations  of 
employers,  and  of  independent  members  appointed  in  the  same 
way  as  are  independent  members  of  Trades  Boards.  The 
Industrial  Council  should  be  so  large  and  representative  that 
it  would  be  able  to  work  through  sub-committees  possessing 
adequate  knowledge  of  the  special  occupations  under  con- 
sideration and  those  with  which  they  would  normally  be 
compared.  With  such  machinery  it  should  be  possible — 
though  it  would  be  by  no  means  easy — to  place  each  occupa- 
tion in  the  general  grouping,  after  due  consideration  of  its 
peculiar  circumstances,  the  degree  of  skill,  the  risk  of 
unemployment  and  other  factors  which  attract  or  repel. 


THE  FACTS  OF  THE  CASE  IN  DIAGRAM  (V). 

IT  is  no  longer  necessary  to  emphasise  the  importance  of 
the  housing  of  the  people.  The  social  and  economic  aspects 
of  the  question  have  long  been  a  source  of  grave  anxiety  to 
those  who  understood  the  relation  of  housing  to  the  health 
and  wealth  of  the  nation.  Five  years  of  war  intensified  the 
evils  of  over-crowding,  and  the  political  factors  which,  during 
the  past  two  or  three  years,  have  accentuated  the  danger  of  a 
continuance  of  the  prevailing  shortage  of  houses,  leave  no 
excuse  for  ignorance  of  the  conditions,  and  no  room  for  apathy 
or  delay.  The  Government  is  striving  to  make  possible  the 
rapid  provision  of  new  houses,  and  builders  are  only  too 
anxious  to  set  to  work  when  given  proper  guarantees. 

But  among  the  people  generally  the  real  significance  of  the 
problem  is  still,  unfortunately,  ignored.  Unfortunately,  because 
it  will  only  be  properly  and  thoroughly  tackled  when  it  is 
wholly  understood.  There  are  those  whose  knowledge  is 
limited  to  the  fact  that  they  cannot  get  a  house  themselves. 
There  are  others  who  are  more  conscious  of  the  political 
question  than  of  the  social  and  economic  problem.  To  some 
of  these  the  shortage  is  a  menace  which  it  is  imperative  to 
remove  ;  to  others  a  weapon  which  it  may  be  more  expedient 
to  retain.  Of  the  real  importance  of  housing  as  a  factor  in 
the  maintenance  and  development  of  this  country  as  a  first- 
class  power,  little  or  nothing  is  realised. 

In  December,  1918,  we  called  attention  to  certain  facts 
relating  to  the  influence  of  housing  on  health.  We  stated  that 
in  1911  ten  per  cent,  of  the  population  of  England  and  Wales 
were  living  in  over-crowded  conditions  (i.e.,  more  than  two 
adults  or  four  children  per  room) ;  that  a  commission  of 
enquiry  into  the  things  most  damaging  to  health  and  life 
concluded  that  the  primary  factor  is  the  fresh  air  available ; 
that  two  of  the  greatest  drains  on  the  manhood  of  the  nation 
are  phthisis  and  tuberculous  diseases,  and  that  the  main  pre- 
disposing condition  to  these  diseases  is  overcrowding  in  towns 
and  houses,  insufficiency  of  light  and  air.  We  quoted  Infant 
Mortality  statistics  for  Bradford  for  1914  showing  a  mortality 
rate  of  62  per  thousand  in  the  three  best  wards  of  the  city,  as 
compared  with  a  rate  of  179  per  thousand  in  the  three  worst, 
where  overcrowding  and  slum  conditions  prevail.  Anaemia, 


rickets,  tuberculosis  and  a  lowered  power  of  resistance  gener- 
ally characterise  the  "  fittest  "  who  survive. 

The  influence  of  air  and  light  on  infant  life  are  not  disputed  : 
medical  science  recognises  them  as  factors  no  less  vital  in 
their  influence  on  health  than  parental  stock  and  food  itself. 
If  the  extent  to  which  the  nation  surfers  from  the  handicap  of 
bad  and  insufficient  housing  could  be  accurately  estimated  and 
brought  home  to  every  one  of  us,  the  active  sympathy  of  the 
whole  nation  must  be  roused  by  the  tale  of  needless  suffering. 
If  the  effect  of  an  ever-growing  proportion  of  mentally 
and  physically  undeveloped  men  and  women  in  permanently 
lowering  the  standard  output  per  head  in  the  country  were 
fully  grasped,  even  the  purely  self-interested  would  recognise 
the  economic  disadvantage  under  which  such  a  nation  must 
live,  and  find  the  means  to  rid  themselves  of  the  unnecessary 
burden.  The  evils  of  bad  housing  are  like  some  cancerous 
growth  that  undermines  the  very  strength  that  must  support 
it.  The  effects  are  cumulative :  those  who  bear  the  burden 
grow  weaker  as  its  weight  increases. 

The  diagrams  on  the  accompanying  pages  show  pictorially 
the  meagre  limitations  and  inadequate  nature  of  the  housing 
available  to  the  majority  in  1911.  Since  that  date  conditions 
have  considerably  worsened. 

In  diagram  No.  9  we  see  the  exact  distribution  of  the  popu- 
lation of  England,  Wales  and  Scotland  in  1911,  according  to 
the  number  of  people  living  in  one  room.  Of  the  total  popula- 
tion of  these  countries,  1,624,000  persons,  represented  by  65 
squares  in  the  diagram,  were  shown  by  the  census  to  be  living 
in  institutions,  on  barges,  or  as  homeless  vagrants.  Of  the 
remaining  1,568  squares,  751  denote  people  enjoying  the  possi- 
ble privacy  of  at  least  one  room  per  person,  and  817  squares — 
considerably  over  half  of  the  population  living  in  ordinary 
houses — represent  people  who  have  only  a  share  in  a  room. 
To  understand  the  influence  of  these  conditions  on  the  physical, 
mental  and  moral  development  of  the  men  and  women  who 
constitute  the  nation  it  is  necessary  to  bear  in  mind  the  follow- 
ing facts.  In  estimating  the  number  of  persons  per  room, 
every  room — kitchen  or  bedroom — is  taken  into  account. 
Two  persons  living  in  one  bedroom  and  one  kitchen  are  con- 
sidered as  having  one  room  each.  In  the  majority  of  cases  the 
rooms  are  small  and  ill-ventilated,  the  houses  are  herded 
densely  together  in  the  unhealthiest  districts  of  our  large 
cities,  airless,  sunless,  and  in  an  atmosphere  tainted  by  the 


10 


DIAGRAM  No.  9. 

(Note. — The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


88 


435 


228 


499 


109 


•BBBBft 


65      In  Institutions,  on    Barges,  etc. 


People  occupying  more  than  two 


rooms  each. 


People  occupying  more  than  one 


,  , 

but  not  more  than  two  rooms  each. 


People  occupying  one  room  each. 


People  living  more  than  one 
but  less  than  two  in  a  room. 


afiBBBBBB 

-   H^BSBBI 


People  living  two  in  a  room. 


• 
People  living  more  than  two  in  a  room. 


100 


People  !:ving  three  or  more  in  a  room. 


_J 


IRELAND 

and  the  Islands. 


HOUSING. 

Analysis  of  Population,  showing  number  of  persons  per  room. 


Scale — Each  Square  of  Colour  represents  25,000  persons. 


smoke  and  dust  of  forge  and  factory.  Sanitary  accommoda- 
tion in  the  smaller  houses  is  as  often  as  not  shared  between 
two  to  six  households  and  is  frequently  built  at  the  end  of  a 
whole  row  of  houses,  at  a  considerable  distance  from  some  of 
the  householders.  In  addition  to  the  effects  of  such  conditions 
on  the  physical  health  of  the  people  must  be  reckoned  the 
moral  and  mental  strain  imposed.  An  inspection  of  the 
housing  in  any  of  our  large  manufacturing  towns  leaves  the 
visitor  marvelling  that  so  many  men  and  women  successfully 
combat  the  dirt,  the  inconvenience  and  squalor  of  their 
cramped  surroundings,  and  contrive  for  themselves  clean, 
orderly  and  comparatively  dainty  homes. 

The  conditions  in  Scotland  are  very  much  worse  than  in 
England  and  Wales.  "In  the  former  country  45.1  per  cent, 
were,  in  1911,  living  in  over-crowded  conditions  (i.e.  more 
than  two  in  a  room).  The  corresponding  figure  for  England 
and  Wales  is  9.1  per  cent.  Of  the  100  squares  in  diagram 
No.  9  allotted  to  people  living  more  than  three  in  a  room, 
58.5  are  accounted  for  by  Scotland. 

Diagram  No.  10  shows  the  distribution  of  the  population 
according  to  the  size  of  the  house  they  live  in.  The  diagram 
does  not  tell  the  whole  story  because  in  the  1911  census  for 
England  and  Wales,  any  part  of  a  house  in  the  separate 
occupation  of  a  family  ranks  as  a  house.  Thus,  two  families 
living  separately  in  a  house  of  six  rooms  are  represented  in 
the  diagram  as  occupants  of  three-roomed  houses.  In  the 
Scottish  census  the  "tenement"  means  a  complete  house  or 
flat,  and  the  figures  are,  therefore,  more  truly  representative 
of  the  type  of  house  in  which  the  people  live.  In  Scotland 
53.2  per  cent,  of  the  houses  have  less  than  two  rooms.  It  may 
be  noted  that  people  represented  in  diagram  No.  9  as  having 
two,  three  or  four  rooms  to  themselves,  are  not  necessarily 
rich  people  living  in  large  houses.  A  big  proportion  of  these 
are  " families"  of  one  or  two  persons  living  alone  in  small 
houses.  For  instance,  423,183  single  people  occupy  as  many 
houses  containing  from  one  to  ten  rooms,  while  2,419,010, 
living  in  "families"  of  two,  occupy  1,209,505  houses  of  from 
two  to  ten  rooms. 


12 


DIAGRAM  No.  10. 


( Note.— The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


77 


187 


212 


320 


360 


218 


65       In  Institutions,   on    Barges,  etc. 


Houses  of  10  or  more  rooms. 


Houses  of  7,  8,  or  9  rooms. 


159 


35 

1-roomed  houses 


'    i    "•••    r   '•' 
j    i 

6-roomcd  houses. 

mmmmmmmmmmmmmmm\ 


5-roomed  houses. 


4j  t. 
•roomed  houses. 


3-roomed  houses. 


2-roomed  houses. 


IRELAND 

and  the  Islands. 


HOUSING. 

Distribution  of  Population  according  to  size  of  House. 

Scale — Each  Square  of  Colour  represents  25,000  persons. 


OF  LIBERTY. 

"  O  Liberty,  how  many  crimes  have  been  committed  in  thy  name  !  " 

How  many  crimes — and  how  many  blessed  acts — have  been  and 
are  yet  to  be  committed  in  the  name  of  Liberty  ?  Is  there, 
indeed,  a  single  movement,  not  wholly  personal,  but  had  its 
origin  in  some  conception  of  freedom  ?  Analyse  and  dissect 
every  aspect  of  human  life  as  you  will,  in  the  last  resort  the 
controlling  force  is  the  desire  for  what  some  race,  nation  or 
individual  has  conceived  as  freedom.  Psychologists  may  not 
include  this  universal  craving  for  liberty  of  thought  and  action 
in  any  classification  of  the  human  instincts,  but  it  is,  in  point 
of  fact,  to  the  sentiment  of  liberty  that  all  of  us,  consciously 
or  unconsciously  guide1  and  subject  the  instinctive  actions  that 
make  up  our  lives.  Periodically  the  unexpressed  desire  takes 
form  and  assumes  the  force  of  a  passion  far  exceeding  the 
instinctive  loves  and  hates  of  men,  a  passion  that  transcends 
all  personal  aims  ;  and  men  deliberately,  willingly,  eagerly, 
sacrifice  life  itself  in  the  effort  to  achieve  their  ideal  of  liberty 
for  future  generations.  History  is  little  but  a  r-ecord  of  the 
wreckings  and  achievements  of  this  all-embracing  passion — 
sublime  in  its  self-immolation,  awful  in  its  blind,  tempestuous 
force.  Patriotism  itself  is  nothing  more  nor  less  :  respect  and 
love  for  the  freedom  embodied  in  our  own  traditions. 

A  very  little  thought  convinces  us  of  the  strength  of  the 
desire  for  freedom  as  a  prime  motive  in  the  conduct  of  life. 
The  feeling,  weak  or  strong,  is  universal  in  man.  And  it 
follows  that  an  appeal  to  men's  love  of  liberty  constitutes  the 
easiest  access  to  the  control  of  the  policy  and  actions  of 
nations,  of  parties  or  of  factions.  Convince  a  man  that  your 
cause  is  the  cause  of  freedom  and  you  appeal  at  once  both  to 
his  highest  ideal  and  to  his  best  self-interest.  It  is  good  for 
the  future  of  mankind  that  it  should  be  so :  it  is  his  certain 
promise  of  a  progress  not  limited  to  material  things.  But 
because  modern  life  is  complex  beyond  the  understanding  of 
most,  if  not  all,  men ;  because  we  are  compelled  to  form  our 
judgments,  not  from  facts,  but  from  the  subjective  presentation 
of  facts  in  our  daily  papers  by  men  prejudiced  in  their  outlook, 
unconsciously  interpreting  facts  in  the  light  of  their  desires,  or 
deliberately  perverting  them  to  their  own  ends  ;  because  one 
man's  idea  of  liberty  may  mean  to  others  intolerable  constraint 
— because  of  all  these  things  it  is  of  the  utmost  importance 
that  men  and  women  should  be  armed  against  their  own 

M 


credulity  with  a  clear  understanding  of  what  constitutes  the 
highest,  fullest  liberty  that  men  can  hope  to  enjoy. 

"  All  men,"  wrote  Thomas  Jefferson,  "  have  a  natural  right 
to  life,  liberty  and  the  pursuit  of  happiness,"  and  even  as  he 
wrote,  misled  in  their  ignorance  by  the  wretched  self-interest 
or  the  blindness  of  their  leaders,  the  people  of  France  threw 
aside  their  "  natural  rights  "  and  in  the  name  of  "  Liberte, 
egalite,  fraternite,"  forsook  the  more  moderate  counsels  of 
less  interested  men,  and  welcomed  the  cruel  enslavement  of  a 
reign  of  terror  under  Mirabeau  and  Marat. 

Nearly  a  century  ago  the  Utilitarians  and  the  Manchester 
School  committed  this  country  to  a  socially  detrimental 
economic  policy  in  the  erroneous  belief  that  man  was  rational 
and  if  left  alone  would  do  what  was  best  for  himself  and  for 
others.  Experience  proved  that  economic  liberty,  in  a  social 
state,  did  not  consist  in  each  man  doing  as  he  thought  fit ; 
that  the  unrestricted  liberty  of  one  involved  the  enslavement 
of  another  ;  that  men's  conception  of  their  own  liberty  was 
limited  often  to  the  immediate  future,  and  took  no  count  of 
later  consequences.  The  horrors  of  the  early  factory  system 
brought  the  error  home,  and  reforms  quickly  followed.  The 
State  saw  that  if  all  were  to  enjoy  some  measure  of  liberty, 
men  must  be  guided  and  restrained  in  their  economic  relations, 
as  they  were  in  their  social  relations.  All  our  laws  are  an 
acknowledgement  of  the  fact  that  "  liberty  must  be  limited  to 
be  enjoyed,"  and  that  man's  conception  of  liberty  is  faulty, 
and  fails  to  take  proper  cognisance  of  social  claims  upon  the 
individual  living  in  a  society.  The  State  rightly  imposed 
restraints  which  in  their  effect  increased  the  real  liberty  of  the 
subject,  but  it  failed,  and  still  does  apparently  fail,  to  see  that 
while  much  good  of  a  negative  kind  may  be  accomplished  by 
legal  restrictions,  the  amplest  measure  of  liberty  that  can  be 
enjoyed  in  a  complex  social  order  will  only  be  attained  when 
the  people  themselves  strive  for  the  right  ideal.  Only  when 
children,  youths,  men  and  women,  are  educated  in  the  mean- 
ing of  the  term  can  they  effectually  be  free.  Liberty,  to  be 
enjoyed,  must  first  be  understood. 

"  Workers  of  the  world,  unite.  You  have  nothing  to  lose 
but  your  chains.  You  have  a  world  to  gain,"  cried  Karl 
Marx,  the  apostle  of  economic  liberty  in  the  ipth  century,  and 
the  men  of  the  2Oth  century,  deceived  by  the  mirage  of  liberty, 
and  fed  on  the  false  doctrines  of  Utopian  socialists,  jostle  each 
other  in  the  mad  struggle  to  relinquish  such  liberty  as  they 


now  enjoy,  in  favour  of  a  slavery  more  absolute  than  they 
have  ever  known. 

Wage  slaves,  George  Lansbury  reiterates  to  half  a  million 
workers  daily,  you  can  have  liberty  now  if  you  will  throw  off 
the  yoke  of  capitalist  domination.  Revolt  against  those  who 
have,  and  the  blessings  of  liberty  will  be  yours.  And  millions 
believe  because  they  feel  that  they  are  not  free,  and  no  one 
has  taught  them  why,  or  what  is  true  freedom. 

What  is  it?  In  the  abstract  it  is  a  negative  ideal.  It 
implies  the  absence  of  restraint  of  any  kind ;  the  absence  of 
all  obstacles  in  the  way  of  individual  development.  Such  an 
ideal  is  obviously  anarchical,  impossible  in  a  social  State, 
since  it  has  no  regard  to  the  social  welfare.  It  supposes  the 
right  to  take  whatever  seems  necessary  to  your,  or  my, 
happiness  or  progress,  even  though  it  be  the  property  or  the 
life  of  another. 

Freedom  in  this  sense  cannot  be  the  governing  principle  of 
any  community.  We  have  learned  from  experience  that 
greater  freedom  is  derived  from  co-operation  than  from  mere 
absence  of  restraint.  We  need  each  others'  help  :  alone,  we 
become  the  slaves  of  our  physical  needs.  But  to  achieve  some 
measure  of  freedom  by  co-operation  with  others,  we  must 
ourselves  submit  to  some  constraint.  Our  share,  for  instance, 
in  the  work  of  co-operation,  must  be  adapted  to  the  common 
need.  The  ideal  of  freedom  will  be  a  state  in  which  the 
citizens  enjoy  the  maximum  of  individuality  combined  with 
the  maximum  of  co-operation ;  where  the  united  effort  gives 
the  greatest  power  over  Nature,  but  leaves  to  the  individual 
the  greatest  measure  of  freedom  in  the  conduct  of  his  own 
life  :  freedom,  that  is,  to  choose  his  work  within  the  limits  of 
his  capacity  ;  to  choose  where  he  will  live ;  to  determine  the 
details  of  his  private  life  ;  to  utilise  his  leisure  in  such  socially 
harmless  pursuits  as  he  chooses. 

Freedom,  as  a  desirable  ideal,  is  much  more  than  absence  of 
restraint.  It  is  first  and  foremost  the  power  that  comes  from 
unity.  There  is  no  freedom  where  there  is  strife,  and  there  is 
no  freedom  where  there  is  absolute  poverty.  Those  who 
preach  that  freedom  can  ever  be  the  fruit  of  violence,  mislead 
their  followers.  Liberty  in  the  sense  defined,  will  come  when 
the  individuals  of  the  nation  learn  and  appreciate  its  true 
significance.  There  is  no  absolute  liberty,  and  the  maximum 
will  only  be  obtained  by  mutual  self-restraint.  The  instru- 
ment for  its  achievement  is  neither  law  nor  force,  but  the 
influence  of  education  in  citizenship,  which  shall  work  like  a 
leaven  until  it  has  permeated  the  whole. 

16 


THE  CRIME  OF  CAPITALISM. 

IN  a  small  English  hamlet,  where  the  only  industry  was 
market-gardening,  lived  John  Adamson,  a  man  of  the  people, 
poor,  uneducated  and  industrious.  If  he  held  any  advantage 
over  his  fellows,  it  was  that,  besides  working  harder  than 
most,  both  he  and  his  good  wife  were  also  more  frugal  than 
their  neighbours,  wasting  nothing  and  always  spending  a  little 
less  than  they  earned. 

In  his  early  days  John  had  been  a  farm  labourer,  but, 
inspired  by  the  modest  ambition  to  become  his  own  master, 
he  had  put  his  harvest  money  into  the  family  stocking,  and 
adding  to  his  store  little  by  little  as  the  years  went  on,  he 
was  at  length  able  to  rent  a  bit  of  ground  near  his  cottage 
and  to  start  market-gardening  on  his  own.  These  were 
anxious  days  for  John  and  his  wife  because,  besides  having  to 
buy  tools,  seeds  and  manure,  they  had  to  live  on  their  savings 
until  their  crops  were  ready  for  market. 

The  risk  was  great,  and  if  anything  had  gone  seriously 
wrong  they  might  have  lost  their  all  and  then  John  would 
have  had  to  become  a  farm  labourer  again,  with  the  added 
bitterness  of  feeling  that  the  fruits  of  his  self-denial  had  been 
thrown  away.  Fortunately  the  season  was  favourable,  and 
the  first  year's  working  showed  a  fair  profit  on  the  labour, 
thought  and  money  that  he  had  risked  in  the  adventure. 

As  he  gained  experience  in  his  new  business,  matters 
improved  very  considerably,  but  he  still  made  it  a  rule  to 
keep  his  expenditure  below  his  income  with  the  result  that,  in 
the  course  of  a  few  years,  he  was  able  to  buy  a  horse  and 
cart.  This  put  him  into  a  very  advantageous  position  as 
compared  with  his  neighbours,  because  he  was  no  longer 
dependent  on  the  local  merchant  who  used  to  buy  his  produce, 
but  could  take  his  fruit,  eggs  and  vegetables  to  the  market 
town  and  get  a  better  price. 

The  possession  of  the  horse  and  cart,  however,  complicated 
matters  somewhat.  There  was  the  cost  of  the  horse's  keep, 
the  risk  of  broken  knees,  and  the  extra  labour  of  feeding  and 
grooming,  besides  the  impossibility  of  being  in  two  places  at 
once,  for  he  couldn't  mind  his  garden  when  he  was  away 
marketing.  In  this  dilemma  he  bethought  himself  of  his 
nephew,  who  was  employed  looking  after  pit  ponies  in  a 


Welsh  coal  mine,  and  as  the  boy  was  willing,  terms  were  soon 
arranged  to  the  satisfaction  of  both  parties.  John  did  not 
offer  very  high  wages  to  begin  with  because  he  didn't  know 
just  how  things  would  pan  out,  or  whether  the  boy  would 
earn  his  keep.  As  a  matter  of  fact  the  experiment  was  not  a 
complete  success,  as  one  of  the  boy's  first  exploits  was  to  let 
the  horse  down  and  break  a  pair  of  shafts.  Other  mishaps 
followed,  and  John  began  to  regret  the  day  that  he  became 
an  employer.  As  time  went  on,  however,  these  early  troubles 
were  forgiven  and  forgotten,  the  nephew  grew  up,  received  a 
man's  wage,  and — what  is  more — earned  it. 

John's  success  at  market  became  the  talk  of  the  hamlet, 
and  others  thought  they  would  follow  his  example,  but  not 
having  saved  the  wherewithal  to  buy  horses  and  carts  for 
themselves,  they  offered  to  hire  John's  turn-out  once  or  twice 
a  week  so  that  they  might  enjoy  similar  advantages.  This 
suggestion  was  not  altogether  to  John's  liking,  for  two 
reasons :  firstly,  because  he  realised  that  the  competition  of 
his  neighbours  would  increase  the  supply  of  vegetables  in  the 
market  and  therefore  reduce  prices;  and  secondly,  because  he 
foresaw  that  before  long  someone  would  be  asking  to  hire  his 
horse  on  days  when  he  wanted  to  use  it  himself.  Still,  he 
was  not  the  sort  of  man  to  play  the  part  of  a  dog  in  the 
manger,  and  so  he  put  on  his  thinking-cap  and  worked  out  a 
plan  by  which  he  could  oblige  his  neighbours  without  injury 
to  his  own  prospects.  The  upshot  of  his  deliberations  was 
that  he  borrowed  some  money  from  a  bank  on  the  security  of 
his  stock  and  furniture,  bought  two  more  horses  and  carts, 
hired  a  couple  of  drivers,  and  started  in  regular  business  as  a 
carrier.  Some  thought  that  he  charged  too  much,  but  he  told 
the  critics  that  he  hadn't  taken  on  the  job  entirely  for  philan- 
thropic reasons,  that  his  horses  would  wear  out  and  have  to 
be  replaced,  and  that  if  he  had  all  the  bother  of  book-keeping 
and  the  risk  of  bad  debts,  he  meant  to  get  a  decent  return  for 
his  outlay.  He  added  that  if  anybody  was  dissatisfied  the 
remedy  was  in  his  own  hands,  that  nobody  was  obliged  to 
hire,  and  that  those  who  had  been  able  to  do  without  his 
services  in  the  past  could  carry  on  in  the  same  way  for  the 
future. 

It  was  something  of  a  shock  to  John  Adamson  when  he  had 
to  pay  income  tax  for  the  first  time.  He  felt  that  the  State 
had  done  little  enough  for  him  during  the  many  years  whilst 
he  was  struggling  to  make  both  ends  meet,  and  he  didn't  see 

18 


why  he  should  have  to  forfeit  a  large  slice  of  his  income  as 
soon  as  he  became  more  prosperous.  Any  resentment,  how- 
ever, that  he  harboured  on  this  score  was  of  short  duration 
He  came  to  realise  that  if  he  did  not  pay  income  tax  there 
was  no  logical  reason  why  anybody  else  should,  and  if  nobody 
contributed  towards  the  cost  of  administering  the  country,  the 
whole  fabric  of  society,  which  had  given  him  opportunity  to 
improve  his  position  and  security  to  keep  what  he  had  got, 
would  be  shattered.  After  arriving  at  this  conclusion  he  paid 
up  willingly  and,  as  becomes  a  good  citizen,  was  proud  to 
bear  his  part,  and  thus  to  relieve  those  less  fortunate  than 
himself  from  burdens  which  would  otherwise  add  to  their  cost 
of  living. 

When  John  Adamson  died  he  left  what  his  neighbours  called 
a  nice  little  fortune,  out  of  which,  after  succession  duty  had 
been  met  and  a  few  small  legacies  paid,  enough  was  left  to 
keep  his  widow  in  moderate  comfort  for  the  rest  of  her  days 
without  having  to  work  for  her  living.  Thereafter  in  statis- 
tical calculations  Mrs.  John  Adamson  figured  as  one  of  the 
"  idle  rich,"  and  years  afterwards  was  cited  as  an  example  of 
a  "  parasite  battening  on  the  life-blood  of  the  producing  class  " 
by  an  itinerant  orator  who  came  to  spend  a  week  in  the 
hamlet  as  the  representative  of  a  socialist  organisation  in 
London. 

As  a  rule  this  speaker  was  listened  to  with  attention, 
especially  when  he  confined  himself  to  vague  generalities  and 
talked  about  grasping  Imperialistic  governments,  downtrodden 
subject-races,  proletarian  wage-slaves,  and  such  like  matters 
which  the  village  people,  knowing  nothing  about,  thought 
rather  fine  and  original.  But  when  he  came  down  to  details, 
and  particularly  when  he  began  to  abuse  local  people,  he 
found  that  his  spell-binding  gadget  didn't  work,  for  the  simple 
reason  that  his  audience  knew  more  about  the  facts  of  the 
case  than  he  did,  and  someone  in  the  crowd  was  heard  to  say 
that  if  the  orator  had  worked  half  as  hard  or  half  as  long  as 
Mrs.  John  Adamson  had  done  he  would  have  no  need  to  take 
a  weekly  salary  as  a  cheap-jack  mischief-monger. 

This  bald,  unheroic  tale  of  John  Adamson  and  his  circle  is 
nothing  out  of  the  ordinary.  Similar  men  in  similar  circum- 
stances and  with  similar  histories  have  always  existed  by  the 
thousand  score  all  over  the  English-speaking  world.  What 
then  is  the  point  of  the  story,  and  why  should  such  common- 
places be  recounted  ?  Our  answer  is  that  all  the  essential 

19 


principles  of  the  social  system  which  goes  by  the  name  of 
capitalism  are  represented  in  this  simple  working  model  of  the 
everyday  life  of  typical  British  citizens.  The  tale  is  nothing 
but  an  illustrated  version  of  Abraham  Lincoln's  well-known 
panegyric  on  the  merits  of  private  enterprise,  in  which  he 
said — "  The  prudent,  penniless  beginner  in  the  world  labours 
for  wages  for  a  while,  saves  a  surplus  with  which  to  buy 
tools  or  land  for  himself,  then  labours  for  himself  for  another 
while,  and  at  length  hires  another  new  beginner  to  help  him. 
This  is  the  just  and  generous  and  prosperous  system,  which 
opens  the  way  to  all,  gives  hope  to  all,  and  consequent  energy 
and  progress  and  improvement  of  condition  to  all." 

With  these  words  we  might  bring  our  present  discourse  to  a 
fitting  end,  were  it  not  that  Capitalism  has  been  so  persistently 
misrepresented  in  the  past,  is  being  so  grossly  caricatured  in 
the  present,  that  one  is  tempted  to  try  to  dot  every  *  i '  and 
cross  every  *  t,'  in  the  hope  of  compelling  the  public  to  focus 
its  attention,  not  on  a  counterfeit  presentment  which  con- 
fuses the  issue  by  plastering  it  with  every  sort  of  mud  that 
spiteful  detractors  can  collect  or  invent,  but  on  a  dispassionate 
weighing  of  evidence — for  and  against — the  fundamental 
principles  and  the  necessary  consequences  of  the  system  itself. 

There  is  nothing  ambiguous  about  the  story  of  John  Adam- 
son,  and  its  value  consists  in  the  fact  that  no  healthy-minded 
Englishman  can  misunderstand  it.  He  was  a  capitalist  and 
an  employer.  He  took  advantage  of  the  capitalist  system  to 
improve  his  position  and  to  secure  his  own  future  and  that  of 
his  wife.  In  the  jargon  of  Marxian  economics,  "he  accumu- 
lated wealth  and  used  it  to  employ  the  labour  of  others."  He 
lived  on  profit  and,  paying  little  or  no  attention  to  the  theory 
of  the  "ethical  value  of  labour,"  he  paid  the  rate  of  wages 
current  in  his  district  and  went  through  life  without  any 
suspicion,  that,  in  the  opinion  of  a  German-born  savant,  he 
was  a  thief  who  robbed  poor  people  "  by  economic  force,"  that 
is  to  say,  by  taking  "  surplus  value  "  from  its  creator  and 
rightful  possessor.  John  Adamson  was  not  a  bad-tempered 
man,  but  if  the  boy  who  let  his  horse  down  and  broke  a  pair 
of  shafts  had  talked  to  him  like  that  he  would  very  likely  have 
got  a  black  eye  for  his  pains. 

John  Adamson  worked  hard  and  took  risks  because  he 
preferred  practice  to  theory  and  because  he  was  determined 
to  make  good.  His  objects  may  have  been  selfish,  but  their 
accomplishment,  far  from  impoverishing  others,  raised  the 

20 


total  wealth  of  the  small  community  in  which  he  lived  by 
increasing  production  without  raising  its  cost.  Nobody  was 
a  penny  the  worse  on  account  of  his  success  and  many 
profited  by  his  initiative  and  example.  On  the  positive  side 
he  helped  the  State  by  contributing  to  th«  Exchequer,  and  on 
the  negative  side  he  relieved  his  neighbours  of  a  contingent 
liability  to  support  himself  and  his  wife  in  their  old  age. 

"  Under  an  ideal  capitalistic  system  every  worker  would  be 
a  capitalist  and  every  capitalist  would  be  a  worker."  There 
is  nothing  in  the  English  law,  nothing  in  public  opinion,  to 
prevent  a  man  of  grit  from  following  in  John  Adamson's 
footsteps.  Some  will  have  better  luck  than  others,  for  that  is 
the  way  of  the  world  that  neither  Socialism  nor  Capitalism 
can  alter.  There  is  not  enough  wealth  in  the  country  for 
everybody  to  be  rich.  The  total  amount  of  wealth  will  be 
increased  if  people  work  harder — it  will  be  diminished  if  people 
work  less  hard,  and  the  position  of  the  individual  depends 
more  on  his  own  energies  than  on  the  defects  of  the  system. 
The  ladder  is  there  for  the  climbing,  and  it  is  better  to 
negotiate  one  rung  at  a  time  than  to  stand  in  a  crowd  at  the 
bottom  and  revile  the  few  at  the  top.  Capitalism,  as  prac- 
tised, is  admittedly  faulty,  but  its  shortcomings  are  caused 
mainly  by  the  inherent  faults  of  the  human  beings  who 
operate  it.  These  faults  would  still  be  there  whatever  the 
system  and,  as  evolution  is  the  one  certain  law  of  progress,  it 
is  a  fair  presumption  that  Capitalism  which  has  grown  up,  not 
on  a  theoretical  basis,  but  as  the  result  of  trial  and  error 
under  varying  conditions,  in  different  lands  and  through  long 
years  is  better  adapted  to  meet  the  requirements  of  average 
human  beings  than  some  other  system  which  has  still  to 
emerge  from  the  text-book  stage. 


21 


VIEWS  OF  THE  MINORITY  PRESS. 
"The  Daily   Herald." 

FOR  the  past  three  years  we  have  endeavoured  to  keep  our 
readers  in  touch  with  the  views  expressed  in  what  we  have 
termed  The  Minority  Press.  At  the  beginning  of  that  period 
this  section  of  the  Press  was  limited  to  weekly  and  monthly 
periodicals  enjoying  a  varying,  but  in  every  case  small  cir- 
culation, among  a  rather  exclusive  set  of  men  and  women 
who  favoured  this  or  that  organ  according  as  their  sympathies 
were  socialist,  anarchist  or  vaguely  "revolutionary."  None 
of  the  many  papers  referred  to  were  sufficiently  influential 
to  mould  the  beliefs,  ambitions  and  desires  of  the  working- 
class  of  this  country.  With  the  advent  of  the  Daily  Herald, 
however,  in  April,  1919,  the  Minority  Press  entered  on  an 
entirely  new  phase  in  its  existence.  Hitherto,  such  papers 
were  chiefly  important  because  they  showed  us  the  mentality 
and  the  aims  and  intentions  of  those  who  worked  among  the 
devotees  of  street  oratory.  We  knew  that,  generally  speaking, 
they  were  "strong  drink"  enjoyed  in  the  main  by  a  very 
small  minority  who,  having  drunk,  worked  off  the  effects  of 
their  intoxication  on  such  audiences  as  they  could  command. 
The  journals  then  were  the  food  of  the  teachers  and  students 
of  Labour  and  socialist  politics,  rather  than  the  man  in  the 
street. 

But  to-day  the  Daily  Herald,  with  a  circulation  of  between 
three  and  four  hundred  thousand  copies,  and  supported  finan- 
cially by  a  large  proportion  of  the  strongest  Trade  Union  and 
other  Labour  organisations,  speaks  directly  to  an  increasingly 
important  section  of  organised  Labour.  It  is  still  rightly 
classed  with  the  Minority  Press  because,  as  an  avowedly 
revolutionary  organ,  its  policy  is  that  of  a  small  minority; 
but  its  influence  is  no  longer  limited  to  a  minority.  On 
the  contrary,  despite  the  difference  in  actual  circulation, 
its  voice  not  improbably  penetrates  hardly  less  widely  and 
persuasively  than  that  of  the  Northcliffe  Press. 

To  some  it  may  seem  that,  if  a  paper  is  acceptable  to  so 
large  a  public, its  views  cannot  be  considered  to  represent  those 
of  the  minority.  But  so  long  as  a  paper  offers  sufficient  points 
of  interest  to  the  majority,  it  is  not  essential  to  its  sale  and 
circulation  that  its  ultimate  aim  should  be  that  of  its  readers. 
The  Daily  Herald  offers  all  the  ordinary  attractions  of  the 
popular  newspaper  :  sensational  headlines,  police  court  news, 
racing  tips,  boxing,  cricket  and  football  news,  theatrical 

22 


gossip,  reviews  of  current  literature,  and  columns  for  women 
and  children.  In  addition,  it  gives  a  provocative  and  one- 
sided account  of  nearly  every  strike  or  labour  trouble,  small 
or  great,  throughout  the  country.  The  whole  paper  is  written 
in  a  tone  calculated  to  appeal  to  the  prejudices  of  its  particular 
clientele,  the  language  is  strong,  the  sentiment  flamboyant, 
the  humour  broad,  and  the  key-note  of  the  whole  is  sensa- 
tionalism. The  worker's  vanity  is  flattered  :  an  heroic  motive 
is  ascribed  to  his  most  ordinary  actions,  while  the  lives  and 
deeds  of  the  so-called  governing  and  employing  classes  are 
held  up  to  his  ridicule  and  scorn.  The  spirit  of  compromise 
is  conspicuously  absent,  and  envy,  malice  and  all  uncharitable- 
ness  are  stimulated  deliberately. 

The  art  of  special  pleading  is  not  confined,  we  must  admit, 
to  journalists  who  are  out  for  revolution,  but  whereas  all  the 
other  newspapers  wage  Party  war,  so  to  speak,  within  the 
Constitution,  seeking  to  further  this  or  that  interest  as  they 
conceive  it,  but  leaving  the  fabric  of  the  Constitution  itself 
untouched,  the  Daily  Herald  seeks  to  divide  the  nation  into 
warring  factions  and  will  not  hold  its  mission  accomplished 
until  the  Class  it  favours  has  risen  up  and  utterly  destroyed 
the  Class  it  scorns.  Its  object  is  neither  reform  nor  progress, 
as  we  understand  it,  but  Revolution — annihilation  and  a  new 
beginning. 

But  to  those  who  care  most  for  the  welfare  of  the 
nation,  and  who  most  deeply  study  the  ways  and  means  to 
social  reform,  it  has  always  been,  and  stiU  is,  obvious  that 
revolution,  \vhether  anarchy  or  socialism  be  its  goal,  is 
emphatically  not  a  short  cut  to  better  things.  The  example 
of  Soviet  Russia  can  offer  little  hope  even  to  the  most  pre- 
judiced and  optimistic  revolutionist. 

From  the  Daily  Herald,  however,  these  things  are  apparently 
hidden.  Starting  out  with  the  conviction  that  revolution  is 
good  for  the  people,  this  paper  endeavours  by  all  the  usual 
artifices  of  the  less  sciupulous  propagandist  to  achieve  that 
end.  Thus  all  its  leaders  and  all  its  news  reports  are  made 
to  bear  witness,  not  to  the  weaknesses  or  the  vices  of  this  or 
that  stateman,  or  of  a  given  trade  or  individual  firm,  but  to 
the  supposed  rottenness  of  the  system  itself.  In  illustration 
of  the  subtly  suggestive  manner  in  which  this  class-war  pro- 
paganda is  carried  out  amongst  a  reading  public  who  would 
recoil  in  horror  if  they  understood  the  nature  of  the  poison 
they  are  gradually  absorbing,  we  quote  below  extracts  from 
a  few  of  the  articles  which  have  appeared  in  the  paper  during 


August.  Lack  of  space  compels  us  to  confine  ourselves 
to  the  Polish  question,  but  the  same  treatment  colours  every 
question  handled  in  the  paper.  Ireland,  the  miners,  taxation, 
railway  fares,  housing,  even  the  charabancs  :  every  trouble 
great  or  small  is  skilfully  welded  into  a  weapon  for  the  class 
war. 

"There  is  no  question  of  the  independence  of  Poland,"  we 
are  told  on  August  6th,  "  the  military  situation  is  quite  plainly 
that  Russia  dare  not  stop  fighting  until  it  has  a  solid  guarantee 
of  peace.  It  cannot  possibly  trust  our  Government  or  the 
French  or  the  Polish.  .  .  .  Russia  has  played  absolutely 
straight.  The  question  for  the  British  working-man  now  is 
whether  he  is  prepared  to  shed  his  blood  and  to  have  his 
sons  conscribed  and  butchered  so  that  a  set  of  tricksters  can 
secure  the  corn  and  oJ4  wells  of  the  Middle  East  for  capitalist 
exploitation  for  this  country  ;  so  that  the  natives  of  Africa 
may  be  deprived  of  their  own  land  and  made  to  labour  under 
the  lash  for  French  and  British  capitalists  :  so  that  the 
subject  races  and  the  subject  classes  of  the  world  may  remain 
in  subjection." 

On  August  9th  we  read :  "  Workers !  You  will  not  be 
deceived !  You  know  it  is  the  same  old  gang  at  the  same 
old  game :  seeking  to  shed  your  blood  in  capitalism's  filthy 
quarrels  :  lying,  intriguing,  ruining  the  world." 

In  "  The  Truth  about  Poland  "  (August  loth)  we 
are  asked  to  "consider  the  monstrous  pretence  that  these 
measures  (taken  by  the  Allies)  are  really  designed  to  save 
Poland.  Poland  does  not  want  to  be  saved  from  anybody  except 
the  Allies.  Poland  is  negotiating  an  armistice  and  the  pre- 
liminaries of  peace  with  Russia  tomorrow,  and  if  we  desired 
to  save  Poland  we  should  let  it  negotiate  and  leave  it  alone. 
There  is  no  chance  of  continued  war  except  such  as  is  desired 
by  Messrs.  Churchill,  Foch  and  Co.  ...  THEY  ARE 
PLANNING  WAR  AGAINST  SOCIALIST  RUSSIA  BE- 
CAUSE THEY  LIKE  WARS  AND  BECAUSE  RUSSIA 
IS  SOCIALIST.  .  .  .  The  game  of  the  Allies  is  to  prevent 
Poland  from  signing  peace,  to  force  it  to  go  on  with  the  war 
which  it  openly  desires  to  abandon,  and  instead  of  saving 
Poland  to  destroy  it." 

It  is  difficult  to  make  a  selection  from  the  welter  of  inimical 
leaders  which  appeared  in  this  paper  throughout  August  on 
the  subject  of  Poland.  Whether  or  no  the  Daily  Herald  is 
the  official  and  paid  organ  of  Soviet  Russia  in  this  country, 
there  can  be  no  doubt  that  in  actual  fact  the  paper  acted 

24 


solely  and  blindly  throughout  the  crisis  as  the  friend  of  Russia, 
and  the  enemy  of  this  country  and  the  Allies.  The  general 
tone  of  the  paper  betrays  perhaps  more  to  the  critical  reader 
than  can  be  conveyed  by  any  one  particular  passage,  but  given 
only  the  following  extracts  it  is  difficult  to  avoid  the  con- 
viction that  Mr.  Lansbury's  staff  were  at  least  kept  closely 
informed  of  Soviet  Russia's  ultimate  intentions  towards 
Poland.  It  is,  indeed,  not  easy  to  avoid  the  suspicion  that 
British  sympathisers  were  actually  in  counsel  with  the 
Moscow  government,  and  that,  if  anything,  the  crisis  was 
"engineered"  not  by  militarists  and  capitalists,  but  by 
revolutionists  for  revolutionary  ends. 

On  August  3rd  the  Daily  Herald  discusses  the  probable 
conditions  of  an  armistice  between  Poland  and  Russia.  Some 
armed  forces,  they  consider,  would  be  essential  in  Poland,  as 
they  were  in  Germany  where  the  Allies,  we  are  told,  solved 
the  problem  in  the  worst  possible  way. — "  Can  that  blunder 
be  averted  in  the  case  of  Poland  ?  We  believe  that  there  is  a 
way  .  .  .  and  that  the  instinct  of  the  Russian  workers  is 
likely  to  suggest  it  to  them  as  the  right  solution  of  the 
problem.  .  .  .  It  is  that  the  control  of  the  armed  forces 
should  be  taken  out  of  the  hands  of  the  class  that  has  proved 
itself  unfit  to  hold  such  power,  and  that  it  should  be  placed 
in  the  hands  of  the  organised  Polish  workers  themselves." 

On  August  I2th  the  "  official  text  "  of  the  Russian  Armis- 
tice terms  is  published,  and  prominence  is  given  in  the 
headlines  to  the  fact  that  "M.  Kameneff  makes  the  reser- 
vation that  these  terms  may  be  supplemented  by  details  of 
secondary  moment."  The  next  quotation  is  from  the  follow- 
ing day's  issue.  "  The  Soviet  Government  is  to  be  congrat- 
ulated upon  having,  by  its  generous  attitude  towards  Poland, 
posed  the  issue  thus  unmistakably.  It  has  removed  the  last 
vestige  of  excuse  from  the  aggressors.  It  shows  them 
attacking  Russia  for  one  purpose  and  one  alone — the  overthrow 
of  Socialism." 

On  August  i6th  the  Herald  declares  that  "  as  to  the  arming 
of  the  Polish  workers  .  .  .  there  is  nothing  new  about  it 
at  all,"  and  refers  to  the  article  of  August  3rd  in  which  they 
pointed  out  that  "  the  disarming  of  Poland  would  necessarily 
mean  the  placing  in  the  hands  of  Polish  workers  the  duty  and 
the  means  of  maintaining  internal  order."  On  another  page 
of  the  same  issue  we  read  :  "  That  there  will  be  a  Socialist 
revolution  in  Poland  as  the  result  of  the  mad  and  wicked  war 
into  which  the  working  class  have  been  plunged  by  their 
unscrupulous  rulers,  is  indeed,  very  possible.  That  will  not 
be  Russia's  fault.  .  .  ." 

35 


FOOD   FOR  THOUGHT. 

THE  doggerel  verse  which  first  gave  Jingoism  the  name  it 
bears,  prefaced  its  bellicose  absurdities  by  announcing  that 
"we  don't  want  to  fight,"  and  forthwith  proceeded  to  utter 
"  awful  threatenings  and  complaints  "  as  to  the  consequences 
that  would  ensue  unless  the  side  represented  by  the  author  got 
its  own  way.  Much  the  same  line  of  argument  is  being  too 
freely  used  in  the  present  coal-mining  controversy.  Practically 
every  Labour  leader  concerned  has  declared  that  he  does  not 
want  a  coal  strike,  the  mandate  did  not  come  from  the  rank 
and  file,  the  public  is  overwhelmingly  in  favour  of  a  settle- 
ment, and  the  Cabinet  is  anxious,  above  all  things,  to  avoid  a 
conflict  that  will  make  its  task  of  governing  the  country  more 
arduous,  and  more  fraught  with  peril,  than  ever  before.  If 
the  expressed  desire  for  the  maintenance  of  industrial  peace  is 
honest,  only  sheer  lunacy  can  forego  it,  and  the  group  which 
refuses  to  listen  to  reason  will  earn  the  condemnation  of  all 
fair-minded  people.  Assuming,  for  the  moment,  that  neither 
party  is  guilty  of  wilfully  misrepresenting  their  attitude,  we 
are  forced  to  the  conclusion  that  Mr.  Smillie  believes  that  he 
can  gain  his  point  through  the  agency  of  threats  —  for  it  is 
clear  that  if  the  projected  strike  actually  materialises,  the 
objects  for  which  it  is  ostensibly  instituted  cannot  possibly  be 
secured. 

•s    m    m 

Mr.  Smillie  advocates  a  reduction  in  the  price  of  household 
coal  on  the  grounds  that  the  cost  of  living  will  thereby  be 
brought  down  :  but  he  cannot  be  blind  to  the  fact  that  the 
strangulation  of  industry  occasioned  by  shortage  of  fuel  would 
force  up  the  price  of  all  commodities  to  an  unprecedented 
figure.  The  public  would  infinitely  prefer  to  buy  coal,  almost 
at  any  price,  than  have  to  do  without  it  altogether.  If  a 
reduction  in  the  cost  of  living  for  the  poor  is  Mr.  Smillie's 
true  objective,  let  him  show  his  good  faith  by  offering  to  with- 
draw his  demand  in  return  for  the  concession  that  the  cost  of 
bread  shall  be  artificially  reduced  to  the  very  poor  during  the 
coming  winter. 

Mr.  Smillie  claims  a  wage  increase  on  the  score  that  the 
standard  of  comfort  enjoyed  by  the  miners  ought  to  be 
improved,  but  he  knows  that  the  positive  privations  which  it 
is  in  his  power  to  inflict,  must  more  than  outweigh  the 

26 


problematical  benefits  that  he  hopes  to  obtain  for  his  con- 
stituents. He  declares  that  public  ownership  of  the  mines  is 
his  aim,  but  he  demolishes  the  whole  basis  of  nationalisation 
when  he  seeks  to  divert  money  which  is  now  earmarked  for 
the  reduction  of  the  national  debt,  and  proposes  to  devote  it 
to  increasing  the  wages  of  a  particular  section. 


The  threatened  lock-out  in  the  engineering  industry  is 
another  trouble  that  ought  to  be  composed  on  its  merits, 
without  a  declaration  of  war.  The  case  is  different,  because 
whilst  the  regulation  of  wages  is  a  fit  matter  for  submission 
to  an  Industrial  Court,  the  employers  cannot  go  to  arbitration 
on  the  question  of  their  right  to  appoint  their  own  foremen. 
The  essence  of  arbitration  is  the  willingness  of  both  parties  to 
abide  by  the  decision  of  the  Court,  and  when  that  condition  is 
necessarily  absent  the  avenue  is  closed.  At  the  same  time 
we  strongly  deprecate  the  policy  of  counter  attack,  and  are 
persuaded  that  the  lock-out,  being  a  survival  from  the  bad 
old  days,  is  intrinsically  detrimental  to  the  cause  of  industrial 
peace.  When  the  Employers  are  in  the  right  let  them  stand 
their  ground  (but  not  to  their  guns)  and  leave  the  odium  of 
attack  to  the  offending  party. 


We  have  neither  the  space  nor  the  inclination  to  enter  into 
a  discussion  of  the  sordid  details  of  the  self-exposure  of  the 
Daily  Herald  which  has  provided  us  with  a  nauseous  example 
of  hypocritical  casuistry,  unequalled,  we  suppose,  in  the 
annals  of  journalism.  One  aspect,  however,  calls  for  comment. 
The  Labour  Party  has  decided,  by  an  emphatic  majority  of 
votes,  to  have  no  truck  with  the  Third  International,  with  its 
declared  policy  of  the  deliberate  provocation  of  "heavy" 
civil  war  and  the  destruction  of  parliamentary  institutions. 
The  Daily  Herald  has  accepted  contributions  from  Trade 
Unions  on  the  implied  understanding  that  Mr.  Lansbury's 
paper  would  support  Trade  Union  policy,  but  the  Herald  could 
have  had  no  subsidy  from  the  Bolsheviks  without  promising 
its  adherence  to  the  Third  International.  Mr.  Ernest  Bevin 
and  Mr.  Frank  Hodges  are  directors  of  the  Daily  Herald  and 
also  prominent  Trade  Union  officials.  The  question  therefore 
arises — will  they  retain  both  offices  and,  if  so,  which  of  their 
mutually  antagonistic  paymasters  will  they  obey  ? 

27 


DAY    BY   DAY. 

(A  monthly  Record  of  the  principal  events,  at  home  and  abroad, 
•which  have  a  direct  bearing  upon  the  maintenance,  or  otherwise,  of 

peace  in  industry} . 
August 

1st.  The  Labour  Gazette  index  number  for  the  cost  of  living  at 

August  ist,  was  155,  indicating  a  rise  of  three  points  during 
the  month  of  July. 

Changes  effected  in  the  rates  of  labour  during  July  resulted 
in  a  total  money  increase  of  nearly  ^200,000  a  week  in  the 
wages  of  nearly  500,000  work-people.  Over  11,000  work- 
people received  an  average  reduction  of  nearly  two  and  a  half 
hours  in  their  working  time.  265  trade  disputes  involved 
90,000  workers  and  a  loss  of  908,000  working  days. 

Unemployment  in  industries  covered  by  the  Unemployment 
Insurance  Act  rose  from  2.62  to  2.73  per  cent,  and  the 
numbers  on  the  Live  Registers  of  the  Employment  Exchanges 
fell  from  287,003  to  271,504. 

A  special  trade-union  conference  in  Glasgow,  at  which 
450  Scottish  trade  unions  were  represented,  passed  a  resol- 
ution in  favour  of  a  twenty-four  hour  strike  on  Monday, 
August  23rd,  to  inaugurate  a  no-rent  campaign. 

The  Communists  in  England,  at  a  meeting  convened  for 
the  purpose,  formed  themselves  into  a  "  National  Communist 
Party."  The  delegates  represented  a  total  of  not  more  than 
five  to  six  thousand  rank  and  file.  Messrs.  Arthur  Macmanus, 
Robert  Williams,  A.  A.  Purcell,  Colonel  Malone  and  Mrs. 
Montefiore  were  the  most  prominent  socialists  present.  Mem- 
bership was  limited  to  bodies  advocating  the  dictatorship  of 
the  working  class,  the  Soviet  system,  and  the  Third  Inter- 
national. 

2nd.  Miners'  International  Conference  opened  at  Geneva.     Mr. 

Frank  Hodges  was  elected  Secretary. 

The  Industrial  Court  refused  to  support  the  claim  of  the 
railway-wagon  builders  and  repairers  for  an  advance  of  6d. 
an  hour  on  time  rates.  It  was  shown  that  wage  advances 
over  pre-war  rates  already  secured,  ranged  from  126  per  cent. 
for  smiths  to  199  per  cent  for  strikers. 

3rd.  The  Miners  in  Conference  at  Geneva  formed  a  unanimous 

resolution  that  all  miners  should  strive  for  the  nationalisation 
of  the  mines  in  every  country. 

5th.  Over  360  skilled  mechanics  on  the  G.W.  Railway  struck 

as  a  protest  against  the  decision  of  the  Industrial  Court  that 

the  demand  for  a  wage  of  ^6  a  week  was  not  justified.     The 

present  wages  average  ^£4  153. 

6th.  The  Industrial  Court  awarded  advances   of  6s.  and  73.  a 

28 


week  to  men  and  women  respectively,  in  the  employ  of 
Maconochie  Brothers,  and  fixed  minimum  time  and  piece- 
rates. 

The  Government,  in  conference  with  the  Master  Builders' 
Federation,  and  the  National  Federation  of  Building  Trade 
Operatives  propose  to  accelerate  building  by  taking  in  un- 
skilled and  partly  skilled  labour — particularly  ex-service  men 
and  adopting  payment  by  results.  In  return  for  these 
concessions  and  an  insurance  against  stoppage  of  labour, 
they  propose  a  guarantee  of  employment  for  five  years. 

At  a  national  conference  of  engineering  and  shipbuilding 
unions  in  London,  the  agreement  under  which  wages  in  the 
industry  have  been  regulated  since  February,  1917,  was 
abrogated,  "  in  view  of  the  unsatisfactory  use  made  by  the 
Industrial  Court  of  the  four-monthly  leaving  agreement." 
After  allowing  an  award  of  6s.  a  week  last  March,  the  Court 
rejected  a  claim  for  a  further  advance  last  month.  The  actual 
abrogation  of  the  agreement  (which  would  have  expired  in 
any  case  next  month),  leaves  employers  and  men  free  to 
negotiate  directly  without  compulsory  reference  to  the 
Industrial  Court. 

7th.  Delegations  of  ex-service  men's  organisations  representing 

a  total  membership  of  three  million  ex-officers  and  men, 
considered  a  proposal  for  amalgamation.  It  was  agreed  to 
draw  up  a  draft  constitution. 

9th.  A  special  emergency  meeting  of  the  Parliamentary  Com- 

mittee of  the  T.U.C.,  the  National  Executive  of  the  Labour 
Party,  and  the  Parliamentary  Labour  Party  was  held  to  discuss 
the  Polish-Russian  crisis.  The  resolution  passed  was  to  the 
effect  that  the  meeting  felt  certain  that  war  is  being  engineered 
between  the  Allied  Powers  and  Soviet  Russia,  and  that  the 
whole  industrial  power  of  the  organised  workers  will  be  used 
to  defeat  such  war.  A  national  conference  of  affiliated 
organisations  is  to  be  called,  and  is  advised  to  instruct 
members  throughout  the  country  to  '  down  tools  '  on  icceipt 
of  instructions  from  that  conference.  A  Council  of  Action 
was  appointed  to  watch  and  direct  immediate  developments. 

10th.          The  Labour  Council  of  Action  discussed  the  Polish  crisis 
with  the  Prime  Minister  and  Mr.  Bonar  Law. 

llth.  The  Bread  subsidy,  which  amounts  to  ^45,000,000  and 

is  equivalent  to  5d.  a  quartern  loaf,  is  to  be  abolished — 3d. 
will  be  taken  off  next  month,  and  the  balance  if  the  price  of 
corn  has  not  dropped,  will  come  off  next  March. 

12th.  The  delegate  meeting  of  the   Miners'  Federation  decided 

on  a  ballot,  to  be  taken  on  August  25th,  to  ascertain  whether 
members  are  prepared  to  strike  in  support  of  their  demands 

for  higher  wages  and  cheaper  coal. 

29 


The  Select  Committee  on  Pensions  suggests  the  formation 
of  a  representative  council  of  employers  and  trade  uniuns  to 
ensure  employment  for  all  disabled  men. 

Labour  Council  of  Action  agree  to  send  a  deputation  to 
Paris  and  invite  the  assistance  of  the  French  Labour  move- 
ment to  prevent  misunderstandings  between  the  workers  of 
this  country  and  France. 

13th.  The  Agricultural  Wages  Board  fixed  a  new  minimum  wage 

for  male  agricultural  workers,  to  come   into  force  on  August 
23rd.      The   increase  of   45.   a  week  will  give  a   minimum 
varying  from  463.  to  503.  6d.  according  to  district. 
14th.  A  special   Labour    Conference   was  held    to   receive   the 

reports  of  the  Council  of  Action.  There  were  present  1,044 
delegates  representing  Trade  Unions,  the  Labour  Party  and 
Trades'  Councils.  A  unanimous  resolution  was  passed 
approving  the  Soviet  Government's  declaration  in  favour  of 
Polish  independence,  and  instructing  the  Council  of  Action 
to  remain  in  being  until  complete  guarantees  have  been 
secured  that  this  country  shall  offer  no  direct  or  indirect 
military  or  naval  opposition  to  Russia  in  support  of  Poland, 
and  until  the  Russian  Soviet  Government  is  recognised  by 
this  Government,  and  unrestricted  trading  and  commercial 
relationships  established.  Further,  the  conference  authorises 
the  Council  of  Action  to  call  for  any  and  every  form  of 
withdrawal  of  Labour  which  circumstances  may  require  to 
give  effect  to  this  policy.  In  a  second  resolution  the  Council 
was  authorised  "  to  take  any  steps  that  may  be  necessary  to 
give  effect  to  the  decisions  of  the  Conference."  A  special 
levy  of  one  half-penny  per  member  of  all  affiliated  organisations 
will  provide  the  necessary  funds  for  action. 

The  Council  of  Action  (referred  to  by  Mr.  Robert  Williams 
as  the  Committee  of  National  Security)  calls  for  the  estab- 
lishment of  local  councils.  The  Chairman  (Mr.  Adamson) 
and  Mr.  H.  Gosling  were  instructed  to  proceed  to  Paris  to 
consult  with  the  C.G.T.  and  the  French  Socialist  Party. 

The  third  annual  Conference  of  the  National  Socialist  Party 
(henceforth  to  be  known  as  the  "  Social  Democratic  Feder- 
ation ")  declared  its  support  of  the  Labour  Council  of  Action 
in  all  its  endeavours  to  deal  with  the  Russian-Polish  crisis, 
but  refused  to  pledge  its  allegiance  to  a  body  empowered  to 
call  a  general  strike  to  compel  official  recognition  of  the 
Soviet  Government. 

In  the  South  Wales  coalfields  the  output  per  person 
employed  underground  has,  since  the  introduction  of  the 
Seven  Hours  Working  Day,  dropped  from  254  tons  to 
215  tons  per  year.  During  the  last  twelve  months  there 
has  been  a  loss  of  nearly  five  million  tons  output  from  these 
mines  due  to  avoidable  absenteeism. 
30 


16th.  The  All-Russian  Central  Council   of  Trade  Unions  sends 

"  heartfelt  thanks  "  to  the  Labour  Council  of  Action  for  "the 
practical  sympathy  shown  towards  Soviet  Russia "  by  those 
"  British  organisations  which  forced  the  hand  of  the  Govern- 
ment." 

The  Labour  Council  of  Action  recommends  that  August 
22nd  be  kept  as  a  "Peace  with  Russia  Sunday." 

17th.  The  Labour  Council  of  Action  delegates,  Messrs.  Gosling 

and  Adamson,  on  arriving  in  Paris,  were  informed  by  French 
police  authorities  that  they  must  leave  before  night.  The 
delegates  left  in  the  evening,  after  having  spent  most  of  the 
day  at  the  offices  of  the  C.G.T.  in  consultation  with  MM. 
Jouhaux  and  Cachin. 

The  Council  decides  that  there  shall  be  no  general  strike 
in  the  event  of  war  with  Russia.  Such  a  measure  would, 
they  believe,  defeat  its  own  ends  because  Labour  could  not 
hold  out  for  more  than  three  days.  Only  those  engaged  in 
services  necessary  to  such  a  course  will  be  called  on  to 
suspend  their  labour. 

18th.  Wireless  messages   intercepted   by  the  Government  show 

that  Lansbury  was  promised  financial  support  for  the  Daily 
Herald  by  the  Soviet  Government.  Litvinoff  advised 
Tchitcherin  that  in  Russian  matters  the  Daily  Herald  "acts 
as  if  it  were  our  organ,"  and  that  if  funds  were  not  forth- 
coming the  paper  would  have  to  turn  "right"  trade  unionism. 

19th.  The  National  Union  of  Ex-service  men  are  endeavouring 

to  organise  a  strike  to  take  the  form  of  a  refusal  to  pay  rent 
until  prices  are  down  four  shillings  in  the  pound.  The  strike 
will  not  be  called  until  the  committee  have  secured  at  least 
2,000,000  supporters. 

Mr.  Adamson  and  Mr.  Gosling  state  that  their  expulsion 
from  France  secured  immediate  unity  of  action  between  the 
French  Socialist  Party  and  C.G.T.,  these  parties  having  up  to 
that  moment  acted  independently. 

20th.  A  Council  of  Action  of  the  Greater  London  area  has  been 

formed. 

The  strike  of  the  E.T.U.  men  employed  by  Messrs.  Cammell 
Laird,  at  Penistone,  threatens  to  cause  a  national  stoppage  of 
the  engineering  industry.  The  dispute  originated  in  the 
Company's  refusal  to  dismiss  a  non-union  foreman.  Messrs. 
Cammell  Laird  announce  their  intention  of  locking  out  the 
E.T.U.  men  on  August  28th  if  the  strike  is  continued. 

23rd.  In  Glasgow  and  Edinburgh  practically  all  work   was  sus- 

pended  as  a   result  of  the  no-rent  demonstrations.     60,000 
Lanarkshire  Miners  ceased  work  for  the  day. 
As  a  result  of  the    attempt  of  the  Bolshevists  to  compel 


Poland  to  arm  200,000  Polish  peasants,  Mr.  Lloyd  George 
and  Signor  Giolitti  have  decided  neither  to  acknowledge  nor 
deal  with  the  Soviet  Government,  and  propose  joint  action 
with  France  to  secure  for  Poland  her  full  rights. 

24th.  The  National  Administrative  Council   of  the  I.L.P.  defin- 

itely dissociates  itself  from  the  Third  International  (Moscow) 
and  condemns,  among  other  things  in  the  Soviet  form  of 
government,  the  dictatorship  of  a  minority,  and  the  deliberate 
provocation  of  civil  war  for  the  overthrow  of  capitalism. 

25th.  The  Labour  Council  of  Action  interprets  the  Lucerne  note 

as  a  move  in  the  direction  of  war,  the  question  of  the  civic 
militia  being  used  as  a  "  pretext  of  the  flimsiest  character."  It 
calls  for  immediate  peace  negotiations  with  Russia,  and  the 
withdrawal  of  all  support  from  Poland. 

At  a  meeting  of  the  French  C.G.T.  a  majority  followed  the 
lead  of  M.  Jouhaux  definitely  repudiating  the  Third  Inter- 
national and  the  Bolshevist  idea  of  a  dictatorship  of  the 
proletariat.  It  was  confirmed  that  the  railway  strike  of  last 
May  was  the  work  of  one  union  only  and  forced  the  C.G.T. 
into  an  untenable  position.  The  statutes  of  the  C.G.T.  were 
accordingly  altered  to  prevent  the  recurrence  of  any  strike 
affecting  a  group  of  trade  unionists  unless  voted  by  the 
Governing  Committee. 

26th.  The  Soviet  Government,  in  a  note  to   Mr.  Balfour  states 

that  it  will  not  insist  upon  the  arming  in  Poland  of  a  workers' 
civic  militia.  The  British  Labour  Council  of  Action  wire  to 
Mr.  Lloyd  George  that  they,  having  urged  the  Russian 
Government  to  withdraw  the  clause  objected  to,  now  call  on 
both  Governments  to  publish  the  terms  on  which  they  will 
make  peace. 

28th.  The  Polish   delegates   at    Minsk   reject  the  Soviet   peace 

terms  as  inconsistent  with  Polish  sovereignity. 

The  Engineering  Employers'  Federation  issue  notices  for 
a  national  lock-out  of  E.T.U.  men  to  commence  on  Sept.  4th. 

30th.  The  Ministry  of  Labour  intervenes  in  an  attempt  to  prevent 

the  threatened  lock-out  in  the  engineering  trade. 

31st.  The    Miners'    ballot   result   shows   606,782    for  a  strike; 

238,865  against.  The  Triple  Alliance  considers  the  miners' 
claims  are  reasonable  and  just,  and  should  be  conceded 
forthwith. 

Error.  In  our  figures  on  the  rise  in  the  cost  of  living  we 
stated  last  month  that  the  index  number  for  Paris -was  269. 
This  figure  represents  the  rise  in  the  cost  of  food  only  and 
corresponds  not,  as  stated,  to  the  British  Index  number  152, 
but  to  the  number  162,  which  also  takes  account  only  of  food 
prices. 
32 


No.  XXXVIII 

OCTOBER 


MCMXX 


"  Full  of   misery  is  the  mind  anxious  about  the 

future." 

— Seneca. 


INDUSTRIAL 
PEACE 


CONTENTS 

The  Profits-Motive  and  the  Profits-Test 
Trade  Combinations,  II 

Nationalisation 
The  Facts  of  the  Case  in  Diagram,  VI 

The  New  Map  of  Europe,  VIII 

Labour  and  Bolshevism  in  the  U.S.A. 

Unemployment :   Towards  a  Solution 

Views  of  the  Minority  Press 

Food  for  Thought 

Day  by  Day 


INDU  STRI  AL     PEACE 


THE    PROFITS-MOTIVE    AND    THE 
PROFITS-TEST. 

THURE  is  scarcely  anything  in  life  that  is  quite  simple.  Much 
of  life's  tragedy,  and  much  of  its  comedy,  too,  comes  from  a 
mistaken  belief  in  the  simplicity  of  things.  Repulsion  and 
attraction  are  each  so  strong,  that  a  mixed  and  judicious 
attitude  is  hard  to  maintain.  It  is  always  easier  to  condemn 
or  praise  a  thing  than  to  understand  it  discriminatingly  in  its 
breadth  and  depth.  If  the  motive  of  an  act  is  obvious  and 
distinctive,  or  is  imagined  to  be  so,  many  men  pronounce  at 
once  and  emphatically  for  or  against  the  act,  and  pay  no 
further  attention  to  mental  complications  in  the  agent  or  to 
external  conditions  or  results. 

But  the  search  for  motive  is  a  misleading  short-cut.  It  is 
exceedingly  misleading  in  Economic  matters.  Thus  for  many 
people  "profits"  is  a  most  powerful  key-word.  They  see  in 
the  business  conduct  of  others  activity,  and  even  excitement, 
and  a  desire  to  make  money.  They  sum  it  up  in  one  word  : 
GREED.  Dwelling  on  this  sight  with  the  emotional  exaltation 
of  discoverers,  they  conclude,  in  a  twinkling,  that  the  greed 
must  be  unmitigated,  absolute,  triumphant.  Having  identified 
the  profits-motive  with  greed,  having  achieved  an  exposure, 
they  feel, — it  is  mostly  feeling  with  them  from  first  to  last, — 
that  profits  and  the  profits-motive  must  be  done  away  with. 

They  have  proved  too  much,  of  course, — if  they  can  be  said 
to  have  proved  anything  at  all.  If  the  profits-motive  is  so 
strong  and  so  general  among  men,  it  will  be  impossible  to 
extirpate  it.  This  deadly  Greed,  if  suppressed  here,  will 
assert  itself  there.  It  is  the  human  motives  that  shape  the 
system,  though  the  system,  when  established,  reacts  selectively 
upon  the  motives. 

Let  us  look  again  at  the  profits-motive,  which  some,  too 
hastily,  would  identify  with  animal  greed.  Let  us  see  whether, 
in  the  course  of  nature  and  of  business,  it  can  be  disciplined 
and  corrected.  There  are  two  questions  to  be  answered. 
"7s  there  anything  in  the  motives  and  feelings  of  tJie  individual 
to  restrain  his  Greed?"  and  "  Can  the  profits-motive  guarantee 
its  own  success  against  the  external  circumstances  and  forces  of 
the  business  world?  " 

In  answer  to  the  first  question  it  is  enough  to  suggest  that, 
in  business,  men  have  a  sense  of  what  is  fair  and  an  instinct  of 

34 


moderation.  There  is  a  constraining  public  opinion  in  business 
as  in  other  walks  of  life.  This  public  opinion  might  be 
stronger,  to  be  sure ;  but  to  deny  its  presence  and  to  prescribe 
the  measures  made  necessary  by  its  supposed  failure,  is  not 
the  way  to  make  it  stronger.  Its  strength  is  moral.  Greed 
cannot  be  abolished.  But  it  can  be  counteracted  by  other 
motives.  Intelligence  and  humanity  go  hand  in  hand  in  the 
life  of  man.  They  hold  the  cure  for  all  of  our  troubles  that 
are  curable.  Those  who  would  abolish  profits  and  ban  the 
profits-motive  imagine  themselves  to  be  living  in  some  moral 
emergency  that  justifies  despair  of  human  nature.  Their 
convictions  about  other  men's  motives  justify  them,  as  they 
think,  in  devising  drastic  remedies.  Headiness  blinds  a  man 
to  the  honesty  of  others  :  he  thinks  that  they  are  enslaved  to 
motives  of  which  he  would  be  ashamed  in  himself.  A  quicker 
sympathy,  a  more  cultivated  imagination,  would  dissolve 
away  the  misunderstanding  that  blinds  him. 

The  answer  to  the  second  question  is,  perhaps,  even  more 
important.  Greed  is  not  really  the  key  to  success  in  business. 
Any  inflation  of  feeling  or  desire,  any  sort  of  headiness,  may 
lead  not  to  profit-making  but  to  ruin.  The  desire  to  be  rich 
is  not  the  same  thing  as  knowing  how  to  become  rich.  The 
one  is  an  appetite,  and  most  men  have  it.  The  other  is  a 
technique.  It  needs  to  be  acquired.  It  cannot  be  acquired 
without  making  a  real  difference  in  the  man  who  acquires  it. 
On  the  one  side  he  has  to  practise  self-restraint,  and  on  the 
other  he  has  to  learn  method  and  pursue  efficiency.  His 
"greed"  cannot  succeedexcept  by  the  exercise  of  trained  powers 
which  are  not  the  same  thing  as  "greed."  Those  powers  of 
ordered  work  tend  to  qualify  and  even  to  supplant  "  greed  " 
as  a  motive.  A  standard  of  work  emerges.  A  man  may 
begin  by  thinking  only  of  money.  But  if  the  thinking  never 
gets  beyond  money  he  will  never  make  very  much.  The  range 
of  business  activities,  which  some  hasty  critics  dismiss  con- 
temptuously because  the  profits-motive  is  there,  ministers, 
in  reality,  much  more  to  ambition,  and  the  craving  for 
responsibility,  and  the  taste  for  organising,  and  the  love  of 
power,  than  to  greed. 

Anyone  can  long  for  wealth,  and  try  for  profits.  But  where 
a  hundred  try  how  many  succeed  ?  The  struggle  weeds  out 
the  competitors  pitilessly.  Some  are  efficient,  and  some  are 
not.  Some  can  take  the  measure  of  circumstances  and  of  men 
better  than  others.  Organisation  is  a  rare  gift.  Those  who 

35 


use  capital,  whether  their  own  or  borrowed,  in  business  with 
the  hope  of  making  profits  are  making  an  attempt  in  which 
failure  carries  a  severe  penalty.  They  have  set  out  to  enrich 
themselves  and  at  the  same  time  to  supply  the  public  with 
something.  The  test  of  efficiency  is  the  public  pleased  and  a 
profit  earned. 

The  test  of  public  satisfaction  is  not  always  easy  to  apply. 
The  public  clearly  must  be  given  the  sort  of  article  it  wants, 
and  at  the  price  it  is  prepared  to  pay.  It  pays  some  prices 
under  protest,  it  is  true,  and  uses  some  articles  on  sufferance, 
till  better  are  available.  But  on  the  whole  and  in  the  long 
run,  the  business  man  has  to  serve  the  public.  On  the  whole, 
too,  the  public  has  been  a  very  exacting  master.  The  con- 
sumer has  often  had  tKfe  upper  hand.  This  has  produced  in 
some  industries  a  morbid  tension,  since  the  product  has  had 
to  be  sold  at  a  price  which  could  not  remunerate  properly  all 
the  parties  in  the  industry.  In  the  domestic  difficulties  that 
then  ensued  sometimes  Labour  suffered  and  sometimes  Capital, 
but  just  as  often  both.  Thus  for  some  years  before  the  war 
there  was  not  a  living  for  either  party  in  brickmaldng. 

The  second  test  is  vital.  In  general  it  is  fair  to  say  that 
the  business  that  cannot  show  a  profit  ought  not  to  survive. 
This  test  includes  the  other,  for  unless  the  public  is  fairly  well 
served  and  pleased  there  will  be  no  profits. 

Those  who  inveigh  against  the  profits-motive  have  nothing 
to  offer  in  place  of  the  profits-test.  This  is  the  great  draw- 
back of  nationalisation.  For  nationalisation  means  bureau- 
cracy, and  bureaucracy  means  commercial  inefficiency.  No 
one  really  believes  that  the  Post  Office,  for  instance,  does  the 
work  of  sending  letters  and  telegrams  about  the  country  as 
well  or  as  cheaply  as  private  enterprise  would.  In  particular 
the  National  Telephone  Service  is  the  subject  of  continual 
criticisms  and  complaints  There  is  certainly  here  no  public 
pleased.  It  is  very  much  to  be  doubted  if  there  is  any  profit 
earned.  There  is  a  somewhat  cumbrous  system  manned,  and 
this  usually  means  overmanned,  by  officials,  certainly  inefficient 
and  certainly  expensive.  It  takes  more  than  it  gives. 

It  is  easy  to  indulge  in  rhetoric  against  the  profits  motive. 
But  a  system  from  which  that  motive  is  banished  must  still 
be  judged  by  the  results  of  its  working.  It  is  no  triumph  to 
"improve"  your  motives  and  destroy  your  efficiency.  There 
is  no  real  test  of  efficiency  but  the  profits-test.  That  test 
must  be  applied  strictly  to  all  methods  and  all  proposals  of 
nationalisation. 

36 


TRADE  COMBINATIONS   (II). 

THE  slump  with  which  most  trades  are  threatened,  and  which 
some  are  already  experiencing,  may  prove  to  be  serious.  If  so, 
the  industrial  combinations  which  have  been  formed  in  many 
industries  and  have  eliminated  competition  will  be  severely 
tested.  If  they  survive  the  test  they  will  need  to  be  accepted 
as  permanent  features  of  our  industrial  organisation.  Even  if 
they  do  not  survive  the  depression  they  may,  and  probably 
will,  be  re-formed  when  trade  revives.  Such  has  been  the 
history  of  the  past  two  decades  in  some  of  the  highly 
standardised  industries.  Co-operation  of  this  character  is  not 
only  to  be  expected;  rightly  directed  it  is  to  be  welcomed. 
It  represents  an  advance  in  commercial  organisation  and 
eliminates  many  of  the  wastes  of  competition.  Co-operative 
purchase  and  sale  leads  naturally  to  manufacturing  co- 
operation, facilitates  specialisation  and  standardisation,  and 
generally  economises  human  effort.  The  organisation  of  the 
supply  of  munitions  by  Government  Departments  during  the 
war,  was  but  an  extreme  example  of  the  co-operative  effort 
which  is  possible  within  narrower  —  but  still  wide  —  limits  of 
voluntary  effort  on  the  part  of  employers  in  the  same  industry. 
About  1916  a  number  of  machine-tool  makers  formed  an 
association  for  the  purpose  of  securing  manufacturing  co- 
operation, thus  preventing  unnecessary  duplication  of  effort. 
This  affords  a  simple  example  of  what  may  be  done  in  highly 
standardised  manufacturing  industry. 

Before  the  war  commercial  associations  of  employers  were 
regarded  as  a  menace  rather  than  a  consummation  to  be 
desired.  Nor  was  this  attitude  surprising.  The  then  existing 
organisations  were  formed  for  the  sole  purpose  of  regulating 
prices,  and,  it  was  held,  exploiting  the  market.  The  power 
of  price  associations  was  severely  curtailed  by  free  trade, 
which  encouraged  competition  from  abroad  when  the  price  of 
the  home  product  was  raised  to  a  highly  profitable  level,  so 
that  we  escaped  the  harassing  problems  which  faced  con- 
sumers in  the  protected  markets  of  Germany  and  the  United 
States.  The  new  associations,  however,  are  intended  to  be 
more  than  mere  price-determining  bodies  :  as  already  stated 
they  may,  and  are,  intended  to  develop  into  closely  knit 
organisations  for  the  purpose  of  organising  production  more 

37 


effectively.  The  normal  cost  of  manufacture  may  therefore 
be  expected  to  be  considerably  lower  than  it  would  be  if  the 
industry  concerned  were  permitted  to  continue  uncontrolled. 
But  the  power  of  the  new  organisation  over  price  will 
certainly  be  no  less  than  before.  It  may  even  be  greater  and, 
in  the  absence  of  any  safeguard,  the  benefit  of  improved 
organisation  may  be  monopolised  by  the  manufacturers.  It 
is  clear,  therefore,  that  the  problem  which  confronts  the 
nation  is  to  secure  that  the  benefit  of  such  improvements  as 
may  be  secured  by  manufacturing  co-operation  is  transferred 
to  the  consumer  without  destroying  the  incentive  to  collective 
action  on  the  part  of  manufacturers. 

How  is  this  to  be  done  ?  There  seems  to  be  no  simple 
solution  applicable  to  all  cases.  We  have  already  appointed 
committees  to  enquire  into  charges  of  profiteering.  The 
majority  of  these  committees  have  reported  the  existence  of 
combinations,  which,  however,  have  not  been  found  guilty  of 
charging  unreasonable  prices.  But  the  danger  lies  in  the 
future  rather  than  in  the  present — when  high  prices  are  due  to 
shortage  and  inflated  currency,  and  exist  independently  of 
collective  action  on  the  part  of  sellers.  As  a  remedy,  an 
investigation  '  after  the  event '  provides  little  consolation  to 
the  consumer.  Nor  may  we  expect  that  the  danger  of  an 
outcry  leading  to  investigation  and  exposure  will  deter  a  self- 
regarding  association.  On  the  other  hand,  it  is  not  a  pleasant 
prospect  for  an  association  which  seeks  to  do  the  right  thing, 
to  be  called  upon  to  justify  its  action  every  time  circumstances 
over  which  it  has  no  control  compel  it  to  raise  prices. 

A  great  deal  may  be  achieved  by  publicity.  It  is 
encouraging  to  note  that  one  or  two  Joint  Industrial  Councils 
have  determined  to  institute  an  elaborate  enquiry  into  the 
systems  cf  costing  prevailing  in  the  industries  which  they 
control.  Scientific  costing  will  enable  a  live  estimate  to  be 
made  of  the  cost  of  producing  an  article,  and  to  ascertain  the 
specific  cost  is  the  first  step  in  determining  the  price  which 
should  be  charged  to  the  consumer.  Costs  vary  from  one  firm 
to  another.  It  would  therefore  be  possible  for  an  association 
to  fix  a  standard  price  which  covered,  yet  barely  covered,  the 
highest  cost,  and  secured  exorbitant  profits  to  the  majority  of 
the  firms.  If  such  a  course  were  held  to  be  justified  it  might 
even  prove  highly  profitable  to  maintain  one  or  a  small 
number  of  firms  in  a  state  of  inefficiency.  If  the  benefits  of 
combination  are  to  be  shared  between  manufacturers  and 

38 


consumers,  those  of  the  former  which  are  avoidably  inefficient 
must  be  penalised  for  their  inefficiency.  The  problem  is  thus 
to  fix  a  price  which  will  be  equitable  as  between  producers 
and  consumers.  What  constitutes  an  equitable  price  is 
clearly  not  a  question  which  can  easily  be  answered.  It 
is  bound  up  with  the  question  of  determining  what  is  an 
equitable  return  on  capital.  But  it  is  a  question  which  must 
be  faced.  And  it  is  probable  that  it  will  be  dealt  with  by  a 
method  similar  to  that  employed  in  fixing  equitable  rates  of 
wages  in  trades  covered  by  the  Trades  Boards'  Act.  Trades 
Boards  consist  of  representatives  of  employers  and  workpeople 
and  of  independent  members  appointed  by  the  government. 
Failure  to  agree  on  the  part  of  the  former  involves  a  form  of 
arbitration  by  the  latter.  Similarly  the  public,  through  the 
government,  might  be  represented  —  by  expert  accountants 
and  others  —  upon  price  associations.  The  prices  suggested 
by  the  associations  would  only  become  operative  if  they  were 
approved  by  the  independent  members,  who,  if  they  were  not 
satisfied  that  such  prices  were  equitable,  would  be  empowered 
to  refer  the  matter  to  an  arbitration  tribunal.  By  such  means 
the  public  would  be  protected  against  associations  which 
merely  sought  their  own  interests  ;  and  those  associations 
which  honestly  aimed  at  serving  the  true  interests  of  society 
would  be  protected  against  unjust  suspicions.  Given  an 
arrangement  of  the  character  described  above  the  associations 
would  be  able  to  stabilise  prices.  Under  competitive 
conditions  prices  are  apt  to  fluctuate  between  wide  limits, 
being  excessively  low  during  depression  and  unreasonably  high 
during  a  boom  in  trade.  Stability  is  worth  having  and 
worth  paying  for,  particularly  during  the  present  period  of 
uncertainty. 


39 


NATIONALISATION. 

THE  world  has  always  ami  everywhere  been  peopled  by  two 
Sorts.  It  is  thus  to-day  in  England.  The  two  Sorts  are  the 
Actives  and  the  Not-So-Actives,  or  Passives,  though  their 
passivity  is  only  relative.  Even  in  this  vigorous  land  there  is 
a  great  Passive  Mass. 

Nationalisation  has  failed  as  a  controversy.  Why  ? 
Because  the  nation  has  seen  in  it  no  one  definite  clear  issue  : 
because  the  terms  used  by  the  controversialists  have  been 
obscure :  because  the  very  diversity  of  their  views  has  kept 
them  out  of  touch  with  each  other. 

The  Practical  Men,  who  judge  Nationalisation  by  objective 
standards  as  a  metrTod  of  getting  work  done,  find  it  wanting. 
The  Men  of  Feeling  hope  by  Nationalisation  to  satisfy  a  host 
of  yearnings.  Their  instinct  and  sentiment  reach  out  towards 
it.  For  the  former  Nationalisation  is  a  bad  organisation-idea, 
for  the  latter  a  cloudy  symbol  of  vague  aspirations. 

The  Actives  combat  Nationalisation  in  the  name  of 
Freedom,  and  of  the  Enterprise  which  Freedom  makes 
possible.  The  Passives  see  in  Freedom  only  the  Freedom  of 
others.  In  the  vigorous  Activity  of  the  Actives  the  Passives 
scent,  chiefly,  danger  for  themselves.  Their  need  is  Protec- 
tion. The  War  bureaucracies  pleased  them.  Nationalisation, 
which  must  work  by  Bureaucracy,  would  continue  the  War 
Protection.  The  Passives  value  Bureaucracy  not  for  what  it 
does,  but  for  what  it  arrests  or  prevents.  Its  wastefulness 
and  inefficiency  and  repression  are  not  fatal  faults  in  their 
eyes. 

To  give  the  Passives  their  way  would  undermine  the  entire 
effort  of  the  nation.  There  is  no  enterprise  but  private 
enterprise,  for  bureaucracy  is  not  enterprising.  The  nation 
depends  on  the  personal  energy  and  initiative  of  its  citizens. 
There  is  really  no  substitute  for  free  leadership  by  the  capable 
men  in  the  various  walks  of  life.  If  favouring  conditions  of 
freedom  are  refused  them,  the  Actives  will  migrate  to  freer 
lands.  Those  who  remain  will  be  the  sufferers. 

A  nation  can  pay  too  dearly  for  the  Protection  of  the 
Passive  Mass.  There  is  no  merit  in  Passivity.  Every  means 
of  cure  and  prevention  must  be  used  against  it.  Leadership 
can  be  left  free  and  yet  humanised  and  moralised :  but  not  by 
bureaucracy,  which  would  nullify  it.  The  Passive  Mass  can 
be  protected  abundantly  without  Nationalisation. 

40 


THE  FACTS  OF  THE  CASE  IN  DIAGRAM  (VI). 

OF  all  the  many  political  questions  which  have  exercised 
men's  minds  in  the  past,  none  have  been  pursued  with  more 
eager  anticipation,  none  have  been  regarded  with  more  mis- 
giving, than  the  extension  of  the  franchise.  Progressives  in 
all  countries,  however  they  may  have  disagreed  on  other 
points,  have  been  at  one  in  believing  that  the  enfranchisement 
of  the  people  is  the  avenue  to  reform,  whilst  reactionaries 
have  been  equally  unanimous  in  maintaining  that  electoral 
concessions  are  but  milestones  on  the  road  to  perdition. 

In  the  struggle  which  has  revolved  round  this  perennial 
question,  the  honours  of  war  have  been  fairly  equal,  for, 
although  the  forces  of  conservatism  succeeded  again  and 
again  in  retarding  any  considerable  movement  towards  uni- 
versal suffrage,  they  have  had  to  fight  a  rearguard  action  all 
the  time  and  have  been  steadily  driven  back  from  one  defen- 
sive position  after  another  until  at  last  they  have  had  to 
accept  the  inevitable. 

It  is  impossible  to  judge  what  the  result  would  have  been 
if,  owing  to  the  absence  of  opposition,  a  wide  extension  of  the 
franchise,  such  as  has  now  been  achieved,  has  been  won  before 
the  people  were  ready  for  it ;  but  we  are  persuaded  that  the 
stability  of  the  United  Kingdom  would  be  better  assured 
to-day,  had  electoral  reform  moved  more  quickly  during  the 
nineteenth  century. 

When,  in  1867,  the  Government  proposed  to  increase  the 
number  of  electors  by  a  paltry  half  million,  it  was  thought 
that  things  were  moving  at  breakneck  speed.  "  No  doubt," 
said  Lord  Derby  in  the  House  of  Lords,  "  we  are  making  a 
great  experiment  and  taking  a  leap  in  the  dark,  but  I  have 
the  greatest  confidence  in  the  sound  sense  of  my  fellow 
countrymen  and  I  entertain  a  strong  hope  that  the  extended 
franchise  we  are  now  conferring  upon  them  will  be  the  means 
of  placing  the  institutions  of  the  country  on  a  firmer  basis  and 
that  the  passing  of  this  measure  will  tend  to  increase  the 
loyalty  and  contentment  of  a  great  portion  of  Her  Majesty's 
subjects." 

The  following  table  shows  the  gradual  increase  of  the  per- 
centage of  electors  between  1863  and  1900. 


Population.  Electors.           Percentage. 

1863  29,445,000  1.332,599  4-5 

1872  31,874,184  2,574,039  8.0 

1883  35,449,721  3,181,701  8.9 

1886  36,313,581  5,707.53i  15-7 

1900  41,154,646  6,732,613  16.3 

In  1910  only  one-third  of  the  male  population  was  enfran- 
chised; in  1918  two-thirds  of  the  total  number  of  adults 
became  entitled  to  vote  at  parliamentary  elections. 

The  diagrams  which  we  print  this  month  are  designed  to 
show  the  growth  of  the  electorate  during  the  last-mentioned 
period,  and  to  indicate  how  many  persons  exercised  their 
right,  how  many  abstained,  how  many  failed  to  qualify  and 
how  many  were  denied1  the  opportunity  of  registering  their 
vote  owing  to  certain  seats  not  being  contested. 

Diagram  No.  II  refers  to  the  election  of  December,  1910 
(which  took  place  some  three  months  before  the  Census  of 
1911),  and  consists  therefore  of  the  1814  squares  which  repre- 
sent the  population  as  then  ascertained.  The  number  of 
persons  ineligible  on  account  of  age  and  sex  are. calculated 
from  the  Census  return,  the  number  of  electors  are  taken  from 
the  House  of  Commons  White  Paper,  No.  69,  of  1911,  and  the 
number  of  actual  voters  from  a  return  issued  by  the  National 
Unionist  Association. 

Although  5,234,293  votes  were  cast  at  the  Election  under 
review,  it  is  to  be  observed  that  the  number  of  individuals 
who  actually  went  to  the  poll  cannot  have  reached  that 
figure.  A  certain  number  of  plural  voters,  who  strictly  speak- 
ing ought  not  to  be  included,  are  represented  in  the  total. 
The  error  is  unavoidable  as  there  is  no  authentic  evidence  on 
which  to  base  an  estimate  of  the  number  of  these  pluralists. 
House  of  Commons  White  Paper,  No.  242,  1919,  indicates 
221,901  "Business  Premises"  voters  who  presumably  had 
also  a  residential  qualification,  but  this  document  refers  to 
a  different  year  and  the  figure  given  is  known  to  be  an  entirely 
incomplete  return  of  the  voters  registered  in  two  or  more 
constituencies. 

The  number  of  abstaining  electors  is  arrived  at  by  adding 
the  actual  voters  in  contested  elections  to  the  electors  in 
constituencies  where  there  was  no  contest  and  deductiug  the 
sum  from  the  national  electorate.  The  number  of  potential 
electors  who  were  not  qualified  to  vote  is  found  by  adding 
the  total  electorate  to  those  ineligible  on  account  of  age  and 
sex  and  deducting  the  sum  from  the  national  population. 

42 


DIAGRAM  No.  11. 

Election  of  December,  1910. 

(Aote.— The  fipires  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


Klcctors  in  Uncontcsled 
Constituencies. 


is 


tft 


BBBBBBBBBBBBBBBBBBBB 

•••••••••••••'•••••lil11 


ACTUAL   VOTERS. 

BBBBBBBBBBBBBBBBBBBBBB 


.  IBBBBiBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
Potential  Electors  who  had  not  qualified  for  the  vote. 

IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 


IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
IBBBBBBBBBBBBBBBBUBBBBBBBBaBBBBBBBBBBBBB 
IBB BBBB BBBBBBBBBBBBBBBBBBBB BBBBB BBBBB BBI 

Ineligible  on  account  of  Sex. 

IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

SBBBBBBBBBBBBBBBBBBfl 
IBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBB 


IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
•••••••••••  ••«••••••••• 


759 


mmmnmmmmm 

Ineligible  on  account  of  Age 


IBBBBHBBHBMRBBBr 


. 

BBBBBBBBBBBBBB 

BUiBBBBBBBBBBBB 

BBBBBBBBBBBBBB 


GROWTH  OF  THE  ELECTORATE. 


Scale—  Each  Square  of  Colour  represents  25,000  persons. 


This  group  of  the  unqualified  is  composed  mainly  of  persons 
who  were  not  registered  as  possessing  the  residential  status 
required  by  the  Act  then  in  force.  It  includes  a  number  of 
persons  of  foreign  extraction  who  had  not  been  naturalised, 
and  also  certain  British  subjects  who  had  been  in  receipt  of 
poor  law  relief. 

Diagram  No.  12  is  built  on  similar  lines  to  No.  n.  The 
population  at  the  end  of  1918  cannot  be  estimated  with 
complete  accuracy,  and  the  figure  we  have  adopted  is  arrived 
at  by  adding  to  the  total  shown  in  the  last  Census  seven- 
tenths  of  the  former  decennial  increase.  Some  will  consider 
this  too  high  an  estimate,  but  against  war-losses  may  be  set 
the  effect  upon  the  population  caused  by  the  facts  that  during 
the  four  years  1914-1918  all  emigration  ceased  and  many 
British  people  who  had  been  living  abroad  returned  home. 

Of  the  1910  squares  in  the  diagram,  the  new  electorate  (as 
created  by  the  Representation  of  the  People  Act)  accounts 
for  856  squares,  representing  roughly  21,392,322  persons.  The 
number  of  abstainers  at  the  last  election  was  abnormally  high 
for  many  reasons  which  are  unlikely  to  operate  on  'future  occa- 
sions. For  one  thing,  party  political  organisations  had  been 
allowed  to  rust  during  the  war,  for  another,  the  result  was 
considered  as  a  foregone  conclusion,  and  so  there  was  less 
canvassing  than  usual  and  less  excitement.  Moreover,  certain 
sections  of  the  Press  deliberately  preached  abstension  as  a 
party  move. 

The  98  squares  of  "unqualified"  consist  of  87  squares 
representing  women  and  eleven  squares  representing  men.  In 
order  to  qualify  for  the  vote  a  woman  must  be  over  thirty  and 
either  a  Local  Government  elector  or  the  wife  of  one.  There 
is  a  six  months'  residential  qualification  for  all  electors  except 
in  the  special  case  of  naval  and  military  voters  referred  to 
below. 

The  157  squares  apportioned  to  those  who  are  ineligible  on 
account  of  sex  consist  of  all  women  between  twenty-one  and 
thirty  years  of  age.  Included  amongst  the  799  squares  of 
"  ineligible  on  account  of  age "  are  54  squares  reserved  for 
sailors  and  soldiers,  under  the  special  conditions  prevailing 
during  a  general  election  held  in  war  time.  The  provision  in 
force  in  December,  1918,  was  as  follows.  Persons  between 
nineteen  and  twenty-one  years  of  age  who  were  on  the  register 
under  section  5  (4)  of  the  Act  were  entitled  to  vote.  No 
information  is  available  as  to  the  number  who  exercised 
this  privilege  and  in  the  diagram  no  attempt  has  been  made 
to  form  an  estimate. 

44 


DIAGRAM  No.  12. 

Election  of  December,  1918. 

(Note.— The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


mmmmmmmmmmmmmmmmmmm 

mmmmmmmmmmmmmmmmmmu 

aw*mmmmm*mmm*mmmmmmm 


C-  mmammammmmmmmmmmmAUummammutzmmmmmmmmmm 
mmmvmmm*mommmxmmm*ma*mm»m*ammummmmmmM 

ACTUAL  VOTFRS 

mmmmmmm*mmmmfL^'l'JALj   vv*^tt^«    -ammmmummmn 

]mmmmmmmmmmmmmm'mm*mmmmmmmmmmmmmmmmmmmmm* 


IBBBPBBBBBBBBBBB.BBBBBBBBBBBBBBBBBBBBBBBJ 


Electors  in  Uncontested  Constituencies. 


302  ammi 

Abstaining  Electors, 


mmmmmmmmmmmmmmm 


•••••••&••••••••••••••••••••••••••••••! 

•••••••••••••••••••••••I 

mwn wemaaaauaaai 


Potential  Electors  who  had  not  qualified  for  the  vote. 


^7  Ineligible  on  account  of  Sex. 


799 

-1BBBBBBBBBBB! 

INELIGIBLE 

ITUU^SUinbC 


Ineligible  nnless  jn  Naval  or 
Military  Service. 


BBBBBBBBfl; 
BfcBBBBBB* 

BBBBJR 


on  account  of  Age 

*        •'•,.;-. 

IBBMBBBM-BninHBBB'VBJIBBBBB'BBflBBBBBBI 

[BIIBBBiniiBB-BBBBBBMBB.B«|iB«BBBBBBBJiBBBI 
IBgBBBBBBBBBBflraSMuMBBBBBBBB        BBBBI 

IBBBBBmttMIIHB:BBB-«BBiBBBB»iBBBBiB«BBBI 


GROWTH  OF  THE  ELECTORATE. 

Scale— Each  Square  of  Colour  represents  25,000  persons. 


THE  NEW  MAP  OF  EUROPE  (VIII). 
THE  SERBO-CROAT-SLOVENE   STATE.  3. 

Croatia-Slavonia. 

CROATIA-SLAVONIA  has  an  area  of  approximately  1,600  square 
miles,  and  a  seaboard  on  the  Adriatic  90  miles  in  length,  on 
which  are  situated  the  small  harbours  of  Bakar  and  Zengg 
and  the  all-important  city  and  port  of  Fiume  (see  below).  Of 
the  population  of  2\  millions,  62  per  cent,  are  Croats,  27  per 
cent.  Serbs  and  other  Slav  elements,  the  residue  consisting 
chiefly  of  Magyars  and  Germans. 

Geographically,  Croatia-Slavonia  has  proved  vitally  import- 
ant to  Hungary  a.9. forming  a  corridor  to  the  sea.  This  fact 
largely  accounts  for  the  close,  but  difficult,  relations  between 
the  two  countries  since  mediaeval  times.  Politically,  Croatia- 
Slavonia,  until  1919,  formed  a  kingdom  united  to  the  Crown 
of  Hungary ;  but  the  nature  of  the  tie,  whether  one  of  subjec- 
tion or  of  alliance  on  an  equal  footing,  had  never  been 
precisely  denned,  and  was  a  matter  of  acute  controversy 
between  Magyar  and  Slav  historians. 

The  country  is  well  supplied  with  communications.  Its 
position  made  development  of  its  road  and  railway  systems  a 
matter  of  moment  to  the  Hungarian  Government,  while  its 
north-eastern  and  southern  boundaries,  for  the  greater  part  of 
their  length,  march  with  important,  navigable  rivers,  viz.,  the 
Drave,  the  Danube,  and  the  Save. 

About  one-third  of  the  area  of  the  country  is  under  tillage, 
another  third  meadow  or  pasture,  and  the  rest  forest-land. 
The  annual  production  of  cereals  and  wine  is  about  50  per 
cent,  greater  than  that  of  Bosnia  and  Herzegovina,  but  live 
stock  is  not  so  abundant,  sheep,  for  instance,  not  being  kept 
to  anything  like  the  same  extent  as  in  those  countries.  The 
forest-lands  of  Croatia-Slavonia  cover  nearly  3^  million  acres 
and  contain  a  great  variety  of  timber,  but  they  have  received 
scant  attention  both  from  the  inhabitants  and  from  the  Hun- 
garian authorities.  So  far  as  they  are  known,  the  minerals 
are  of  no  great  importance  ;  there  are  a  few  lignite  and  iron 
mines,  but  the  annual  output  falls  short  of  j£ioo,ooo  in  value. 

The  only  factories  of  any  size  are  those  engaged  in  wood- 
working and  the  production  of  foodstuffs.  There  are  a  few 
chemical  and  metallurgical  works.  As  in  all  Balkan  countries, 
the  industrial  situation  has  been  completely  disorganised  by 

46 


the  events  of  the  past  eight  years,  and  both  capital  and  labour 
are  urgently  needed  to  revive  existing  industries — hitherto 
almost  exclusively  under  Hungarian,  Austrian,  or  German 
control — and  to  embark  upon  new  ones. 

Estimates  of  the  value  of  the  external  trade  of  Croatia- 
Slavonia  are  difficult  to  arrive  at,  and  such  separate  statistics 
as  exist  are  unreliable.  The  chief  exports  are  live  stock  and 
timber,  the  chief  imports  grain  and  textiles.  Trade  with 
countries  other  than  Austria  and  Hungary  has  hitherto  been 
of  small  account,  but  the  same  openings  for  foreign  capital 
and  enterprise  are  afforded  as  in  Bosnia,  especially  now  that 
the  restrictions  formerly  placed  by  the  Hungarian  Government 
upon  foreign  undertakings  have  been  removed.  There  has 
been  a  noteworthy  development  of  local  banking  in  recent 
years,  and  a  large  number  of  savings-banks  and  credit  associa- 
tions have  come  into  existence  throughout  the  country. 

We  can  hardly  omit  some  notice  of  Fiume,  with  which  the 
fortunes  of  Croatia-Slavonia  are  so  closely  allied.  The  terri- 
tory is  8  square  miles  in  extent,  and  the  city  has  a  population 
of  50,000,  of  which  Italians  form  50  per  cent,  (increasing), 
Serbo-Croats  26  per  cent,  (declining),  and  Germans  and  Mag- 
yars the  remainder.  The  tonnage  entered  and  cleared  at  the 
port  averaged  7  million  tons  yearly  before  the  war,  and  the 
value  of  the  incoming  and  outgoing  trade  £15,000,000.  Dur- 
ing the  last  quarter  of  the  nineteenth  century  the  port  of 
Fiume  developed  with  extraordinary  rapidity  ;  Hamburg  alone 
among  European  ports  could  show  a  comparable  record. 

While  its  position  and  commercial  importance  make  the 
retention  of  Fiume  a  matter  of  vital  concern  to  the  new  State, 
its  loss  to  Hungary,  it  cannot  be  denied,  is  incalculable.  On 
the  other  hand  the  political  sympathies  of  the  bulk  of  its 
inhabitants  are  decidedly  not  in  favour  of  Jugo-Slav  ideals. 
Meanwhile  the  Italian  patriot,  D'Annunzio,  has  descended 
upon  the  city  and  rules  there  as  dictator  without  active  inter- 
ference, as  yet,  from  any  of  the  leading  Powers  which  signed 
the  Peace  Treaty  with  Austria  in  1919. 

Carniola. 

The  Slovene  element  in  the  Serbo-Croat-Slovene  State  is 
contributed  by  Carniola,  a  small  inland  territory,  3,800  square 
miles  in  extent,  lying  to  the  north-west  of  Croatia-Slavonia. 
The  Slovenes  form  95  per  cent,  of  the  population  of  Carniola 

(which  numbers   about  600,000),  and  overflow  into  the  ad- 

• 
47 


joining  provinces  of  Carinthia  and  Styria,  where  they  account 
respectively  for  25  per  cent,  and  30  per  cent,  of  the  totals. 
The  frontiers  of  the  new  State  will  therefore  include  part  of 
Lower  Carinthia  and  Lower  Styria,  where  Slovenes  predomin- 
ate. The  Slovenes  have  inhabited  these  regions  since  the 
sixth  century,  but  unlike  the  Serbs  and  Croats  they  never 
established  an  independent  kingdom.  Carniola  became  and 
remained  a  country  which,  since  the  end  of  the  thirteenth 
century,  has  formed  part  of  the  Hapsburg  dominions. 

Economically,  the  country  is  rather  more  highly  developed) 
and  relatively  more  productive  than  the  other  South  Slav 
states.  It  possesses  a  very  complete  road-system,  and  is  tra- 
versed by  the  Sud-bahn  from  Vienna  to  Fiume,  and  by  the 
Tauern  Railway  from  Munich  to  Trieste,  in  its  local  lines. 
Its  agricultural  production  is  very  similar  in  kind  to  that  of 
Bosnia  and  Croatia,  but  viticulture,  fruit-growing,  and  cattle- 
and  horse-breeding  receive  a  greater  share  of  attention. 
Nearly  45  per  cent,  of  the  area  is  forest-land,  upon  which 
much  State  care  has  been  bestowed  of  late  years ;  but  the 
forest  industries  are  capable  of  considerable  expansion.  There 
are  a  few  lignite  mines,  which  produce  normally  about  400,000 
tons  a  year,  but  infinitely  more  important  are  the  valuable 
quicksilver  mines  of  Idria.  The  manufactures  of  the  country, 
while  supplying  no  more  than  local  needs,  and  therefore  on  a 
small  scale,  are  yet  of  a  much  more  varied  and  up-to-date 
character  than  in  the  other  South  Slav  countries. 

Separate  statistics  for  the  external  trade  of  Carniola  are  not 
obtainable,  but  a  great  volume  of  transit  trade  passes  through 
the  country. 

Enough  perhaps  has  been  said  to  afford  a  general  estimate 
of  the  economic  importance  of  the  Serbo-Croat-Slovene  State, 
leaving  out  of  account  for  the  present  the  question  of  Dalmatia 
and  the  Adriatic  sea-board.  It  is  true  enough  that  without 
the  possession  of  at  least  one  of  the  more  important  com- 
mercial ports  on  the  Adriatic,  the  economic  future  of  Jugo- 
slavia will  be  seriously  handicapped.  Yet,  after  all,  the 
internal,  economic  cohesion  of  the  country  is  a  matter  of  even 
greater  concern.  The  task  before  its  statesmen  is  to  develop 
the  great  and  varied  resources  of  the  new  State  and  pool  them 
for  the  benefit  of  its  component  peoples.  In  this  way  they 
will  strengthen  enormously  the  loose  ties  of  political  and 
racial  union,  and  build  up  a  compact  economic  power. 

48 


LABOUR  AND   BOLSHEVISM  IN  THE  U.S.A. 

AT  the  present  moment  the  revolutionary  Press  in  this  country 
is  engaged  in  a  persistent  attempt  to  represent  American 
Labour  in  the  mass  as  the  victim  of  a  veritable  "  White 
Terror,"  organised  by  the  Government  of  the  United  States  at 
the  instance  of  reactionary  Capitalism.  As  a  considerable 
amount  of  ignorance  prevails  regarding  industrial  condi- 
tions in  the  States,  it  may  be  opportune  to  point  out 
the  radical  difference  that  exists  between  Labour  problems 
there  and  those  we  have  to  face  in  Great  Britain.  Here, 
much  as  it  may  be  divided  by  shades  of  opinion,  British  Labour 
is,  after  all,  British.  But  the  proportion  of  American-born 
among  the  industrial  proletariat  of  the  United  States  is  in- 
finitesimal. The  immense  majority  is  composed  of  foreign 
immigrants,  who  remain,  often  after  years  of  residence  in 
the  United  States,  as  alien  in  habits  of  life  and  thought  to  the 
native  population  as  when  they  first  landed  in  the  New  World. 
The  Bill  recently  passed  by  Congress  for  "the  Americanisation 
of  the  Alien"  was  supported  by  statistics  which  showed  that 
out  of  30,000,000  immigrants,  only  some  3,000,000  could  speak 
English,  while  over  5,000,000  were  unable  to  read  or  write. 
Within  the  period  ranging  from  three  to  nine  years  after  their 
arrival,  only  8  per  cent,  of  the  Russians  had  taken  out 
naturalisation  papers.  "How  can  we,"  remarked  a  writer 
in  the  New  York  Tribune  in  commenting  upon  the  Bill,  "ever 
hope  for  a  united  nation  amid  such  conditions?  What  can 
we  expect  except  that  extreme  leaders,  appealing  to  these 
alien  groups  in  their  own  tongue,  can  easily  win  them  to 
stupid  and  suicidal  attacks  upon  that  which  they  do  not 
understand." 

That  is  in  fact  what  has  happened.  Revolutionary  propa- 
ganda of  the  most  extensive  and  intensive  character  has  been 
carried  on  among  the  foreign  population,  by  Russian  and 
German  agitators.  According  to  evidence  given  before 
the  sub-Committee  appointed  by  the  American  Senate  to 
enquire  into  Bolshevist  activities,  a  large  number  of  the 
present  Russian  Soviet  officials  spent  the  previous  years  of 
their  exile  in  preaching  revolution  in  the  United  States. 

Under  these  circumstances  it  is  not  surprising  that  the  forces 
of  law  and  order  in  the  New  World  are  determined  to  stamp 
out  tendencies  which,  if  permitted  to  develop,  would  render 
the  American  continent  an  easy  prey  for  these  enemies  of 

49 


society.  The  rapid  spread  of  Bolshevist  propaganda  imported 
from  Europe  was  assisted  by  internal  organisations  such  as  the 
I.W.W.,  whose  members  are  almost  exclusively  recruited  from 
the  ranks  of  the  alien  population.  The  Industrial  Union  o^ 
the  I.W.W.  was  launched  in  Chicago  in  1905,  and  in  its  very 
first  declaration  of  policy  the  principle  of  the  class-war  was 
adopted.  "  The  working  class  and  the  employing  class  have 
nothing  in  common,"  is  the  phrase  in  its  "  preamble."  It  soon 
fell  into  the  hands  of  leading  anarchists  such  as  Berkman  and 
Emma  Goldman,  since  deported,  who  were  friends  of  Trotsky 
when  he  was  in  New  York.  On  the  ist  May  last  year,  bomb 
outrages,  which  occurred  simultaneously  in  nine  cities,  were 
traced  to  I.W.W.  influence  and  led  to  the  arrest  of  John 
Johnson,  President  o"f  the  Pittsburg  branch.  Papers  found 
among  the  wreckage  in  Washington  show,  moreover,  that  the 
programme  of  this  organisation  is  parallel  in  every  sense  with 
that  which  has  been  put  into  practice  in  the  Russian  Soviet 
Republic. 

What  part,  one  must  next  consider,  have  American-born 
labour  and  the  Trade  Unions  played  in  the  war  that  is  waging 
between  the  alien  proletariat  and  the  existing  order.  Three 
years  ago,  there  was  only  a  handful  of  genuine  Americans  in 
the  large  audience  of  Russians  and  Germans  who  heard 
Trotsky  say,  "  I  am  going  back  to  Russia  to  overthrow  the 
Provisional  Government  and  stop  the  war  with  Germany  and 
allow  no  interference  from  any  outside  Government.  I  want 
you  people  here  to  organize,  and  to  keep  on  organising,  until 
you  are  able  to  overthrow  the  darned  rotten  Capitalistic 
government  of  this  country."  Since  that  date  the  current  of 
Trade  Union  opinion  has  drifted  in  a  left-wards  direction  in 
the  United  States  as  it  has  in  almost  every  European  country. 
Over  there,  however,  the  Trade  Union  movement  has  never 
achieved  the  homogeneity  or  the  highly  developed  organisa- 
tion characteristic  of  British  Unionism.  This  is  partly  due  to 
the  fact  that  America  is  a  continent,  where  totally  different 
conditions  obtain  in  different  parts  of  its  vast  area.  In  some 
industrial  districts  local  Trade  Unions  function  with  remark- 
able efficiency ;  in  others  they  are  still  too  weak  to  secure 
recognition  from  the  industrial  magnates  by  whom  their  mem- 
bers are  employed.  The  American  Federation  of  Labour, 
strong  as  it  became  under  the  leadership  of  Mr.  Gompers,  was 
rather  the  voice  of  the  native-born  workman  than  a  central 
representative  body  controlling  and  unifying  the  policy  of  the 
local  industrial  organisations. 

5° 


Politically  speaking,  the  American  workers  are  still  without 
any  class  organisation  at  all.  There  is  no  Labour  Party  in 
the  United  States,  and  Mr.  Gompers  has  remained  as  hostile  to 
the  formation  of  a  labour  block  in  Congress  as  to  the  revolu- 
tionary tactics  of  the  political  strike.  Since  the  war,  however? 
the  pressure  of  the  extremists  in  the  Federation  and  their 
growing  number  has  forced  him  to  espouse  demands  which  he 
feared  to  resist.  Neither  Mr.  Gompers  nor  the  American 
Federation  of  Labour  were  directly  involved  in  the  steel 
strike  declared  in  September,  1919.  But  in  the  national 
strike  of  miners,  which  quickly  followed  the  failure  of  the 
Industrial  Conference  called  by  President  Wilson  with  the 
object  of  giving  both  employers  and  employed  an  opportunity 
to  reach  a  better  understanding,  the  American-born  workman 
made,  for  the  first  time,  common  cause  with  the  alien.  It  was 
then  that  the  idea  of  a  Triple  Alliance  between  the  Industrial 
Unions,  the  Railroad  Brotherhoods,  and  the  Farmers,  first 
took  shape,  and  Mr.  Gompers,  whose  authority  had  been 
weakened  through  his  impotence  at  the  Industrial  Conference* 
then  ranged  himself  definitely  on  the  side  of  the  strikers.  But 
the  Government,  backed  by  the  coal-owners  and  also  by 
public  opinion,  met  the  demands  of  the  men,  which  included 
a  60  per  cent,  rise  in  wages,  and  shorter  hours,  with  a  stern 
refusal.  Federal  troops  in  large  numbers  were  moved  into 
the  mining  districts  and  an  injunction  declaring  the  strike 
illegal  was  issued  from  the  Federal  Court  at  Indianopolis  on 
3ist  October.  This  drastic  action  caused  Mr.  Gompers  and 
the  official  Trade  Union  leaders  to  withdraw  their  support  of 
the  strike,  but  it  did  not  prevent  a  stoppage  of  work  by 
753,000  miners,  chiefly  foreigners,  who  were  urged  by  alien 
agitators  to  defy  the  law.  During  the  raids  conducted  by  the 
Department  of  Justice  on  the  offices  of  the  revolutionary 
organisations,  2,500  persons  were  arrested,  of  whom  not 
5  per  cent,  were  American  citizens.  Among  the  offices  raided 
were  the  headquarters  of  the  "Union  of  Russian  Workers," 
which  had  75  branch  depots  in  New  York  alone-  Twenty-five 
tons  of  Bolshevist  literature  were  discovered  there.  Some  of 
the  documents  seized  on  the  premises  of  this  organisation  and 
printed  in  the  Russian  language  were  published  by  the  Depart- 
ment of  Justice.  Among  them  was  a  manifesto  couched  in 
the  following  terms :  "  We  must  conscientiously  hasten  the 
elementary  movement  of  the  class-struggle.  We  must  convert 
local  strikes  into  general  ones  and  the  latter  into  armed  revolt 
of  the  labouring  classes  against  Capital  and  the  State.  During 

5' 


this  revolt  we  must,  at  the  first  favourable  opportunity,  pro. 
ceed  to  the  seizure  of  all  means  of  production  and  all  articles 
of  consumption,  and  name  the  working  classes  masters,  in  fact, 
of  all  wealth.  At  the  same  time  we  must  mercilessly  destroy 
all  remains  of  governmental  authority  and  class  domination 
by  liberating  prisoners,  demolishing  prisons  and  police  offices, 
and  destroying  all  legal  papers  pertaining  to  the  private 
ownership  of  property,  all  field  fences  and  boundaries  must 
likewise  be  demolished  and  all  certificates  of  indebtedness 
burnt.  In  a  word,  we  must  take  care  that  everything  is  wiped 
off  the  earth  that  is  a  reminder  of  the  right  of  private 
ownership." 

But  measures  adopted  with  ample  justification  by  the 
Government  against  alien  agitators  have,  unfortunately,  led 
a  few  of  the  more  Conservative  capitalists,  notably  in  the 
Steel  and  Mining  industries,  to  take  up  an  attitude  of  hostility 
to  the  Trade  Union  movement  as  a  whole.  The  effect  of 
this  has  been  to  drive  many  American-born  workers  into  the 
arms  of  the  advocates  of  the  class-war.  With  a  view  to 
counteract  this  tendency,  a  new  National  Labour  Party  has 
lately  been  founded  in  Chicago  with  State  Socialism  as  a 
platform.  It  has  a  very  mixed  membership  which  is,  however, 
united  in  a  common  antipathy  to  the  I.W.W.  and  the  other 
Communist  organisations.  Coincidentally,  the  defection  of 
the  farmers  from  the  projected  Triple  Alliance  has  demon- 
strated the  absence  of  solidarity  between  the  agricultural  and 
industrial  interests  in  the  United  States.  In  reply  to  an  appeal 
launched  by  Mr.  Gompers,  the  farming  community  has 
announced  its  intention  to  stand  by  the  bourgeoisie  and  the 
owners  of  property  in  any  future  struggle  which  may  arise 
between  capital  and  labour.  On  the  question  of  national- 
isation, Mr.  Gompers  finds  himself  at  variance  with  certain 
sections  of  his  Federation,  though  he  can  rely  on  the  support 
of  the  building  trades.  But  Mr.  Gompers  is  now  an  old 
man,  and  there  are  signs  that  the  Federation  as  a 
representative  unity  will  not  survive  him.  At  the 
Convention  held  a  few  weeks  ago  in  Montreal,  it  came 
near  to  a  definite  split  on  the  rocks  of  nationalisation,  when 
Mr.  Gompers'  policy  on  this  vital  issue  was  defeated  by  a 
combination  of  railway  and  miners'  delegates.  More  than 
any  other  man  Mr,  Gompers  has  kept  the  bulk  of  native-born 
labour  in  the  path  of  sane  progress,  but  it  is  improbable  that 
his  mantle  will  fall  upon  any  leader  with  sufficient  influence 
and  courage  to  keep  the  wolves  out  of  his  fold. 

52 


UNEMPLOYMENT: 

Towards   a   Solution. 

SUCH  are  the  anomalies  of  the  conduct  of  modern  States,  that 
while  five  years  of  war  kept  us  clothed  and  fed  and  fully 
employed,  with  the  return  of  peace  comes  the  old  fear  of 
compulsory  idleness  and  want.  We  all  know  that  the  world 
is  an  indifferent  place  to  live  in ;  and  that  a  share  of  our 
troubles  is  due  to  the  mistakes  of  those  whom  we — the  people 
— elect  to  control  our  interests,  cannot  be  denied.  The 
present  organisation  is  full  of  faults,  and  evil  consequences 
which  are  not  inevitable  arise  continually  through  ignorance 
in  places  where  there  might  be  knowledge,  through  indiffer- 
ence where  there  might  be  understanding  and  a  sympathy  of 
interests.  Whether  the  revolutionary  proposals  of  "advanced" 
Labour  would  cope  as  satisfactorily  with  the  problem  is  more 
questionable.  But  those  who  have  fairly  studied  the  matter 
know  that  there  is  no  evidence  in  favour  of  drastic  changes  on 
communistic  lines. 

The  Unemployment  Insurance  Act  will  never  solve  the 
question.  Like  similar  governmental  efforts  in  Italy,  Poland* 
Austria,  France  and  Denmark,  it  consists  in  waiting  till 
unemployment  exists  and  in  distributing  doles  until  the  trade 
depression  passes.  The  Trade  Unions  and  the  great  Friendly 
Societies  have  come  hopelessly  to  loggerheads  over  the 
question  of  administration.  The  Labour  Party  has  come 
down  on  the  side  of  Trade  Unions,  whose  attitude  is  one  of 
opposition,  but  the  discussion  evoked  by  the  contracting  out 
clauses  have  stimulated  thought,  which  is  something  gained. 

The  effects  of  State  control  imposed  during  the  war  have 
been  to  give  the  death-blow  to  bureaucratic  socialism,  to 
stimulate  communism  among  extremists,  to  unite  the  nation 
in  a  determination  to  resist  the  creation  of  new  Government 
departments,  and  to  consider  the  solution  of  national 
problems  such  as  unemployment  as  a  matter  which  primarily 
concerns  industry  itself.  As  soon  as  the  Bill  became  public 
property  and  it  was  discovered  that  an  industry,  if  it  chose  to 
create  a  special  scheme,  giving  equal  or  superior  advantages, 
could  ignore  the  Government  and  all  Labour  Ministry  officials, 
industry  after  industry  intimated  that  it  was  in  this  direction 
that  they  hoped  to  find  the  solution. 

The  main  causes  of  unemployment   are  well-known.     On  a 

53 


national  or  a  world-wide  scale  its  origin  is  invariably 
economic.  Varying  world  harvests,  says  the  orthodox 
economist,  produce  alternating  booms  and  depressions  in 
world  trade.  The  mat-distribution  of  purchasing  power  is 
the  explanation  of  the  Marxian.  The  problem  is  as  old  as 
the  hills  and  becomes  more  and  more  complicated  the  further 
we  get  from  primitive  conditions.  Under  the  Pharoahs  such 
labour  as  productive  industry  could  not  absorb  was  turned  on 
to  the  building  of  a  new  pyramid  or  two,  and  paid  for  out  of 
foodstuffs  accumulated  in  "store-houses"  in  "fat"  years. 
But  no  such  simple  expedient  would  meet  the  case  to-day. 

If  we  are  to  move  towards  a  solution,  the  first  step  is  for 
each  well-organised  industry  to  consider  itself,  for  the  purpose 
of  the  unemployment  problem,  as  a  separate  entity.  The 
Employers'  Association  and  the  Trade  Union  Federation 
should  come  together  in  an  endeavour  to  solve  the  problem. 
The  benefit  should  be  high  for  unmerited  unemployment  :  the 
cost  being  divided  between  the  Employers  and  the  Trade 
Unionists.  Under  a  system  of  mass-production  or  organised 
team-piecework,  part  of  the  funds  may  be  obtained  by  savings 
in  the  unit  cost  of  the  commodity  produced.  The  important 
feature  should  be  that  if  unemployment  is  high  very  heavy 
charges  should  fall  on  both  the  Trade  Union  and  the  Em- 
ployers :  while,  inversely,  the  practical  abolition  of  unemploy- 
ment should  relieve  both  the  Employers  and  the  Trade  Union 
from  a  serious  financial  drain.  With  some  such  plan  in 
operation,  both  parties  would  always  be  thinking  of  new 
methods  whereby  unemployment  could  be  avoided. 

As  things  are,  many  employers  prefer  a  system  under  which 
a  cash  payment  absolves  them  from  responsibility,  while,  as 
was  stated  by  a  Trade  Union  leader  recently,  the  majority  of 
the  working-class  prefer  an  unemployment  problem  with  the 
right  to  grumble  about  it,  to  the  necessary  effort  of  thinking 
out  and  paying  for  a  solution.  In  illustration  he  quoted  the 
optional  unemployment  scheme  of  the  Workers'  Union  which 
gives  good  benefits  but  which  only  five  per  cent,  of  the 
members  have  joined.  These  facts  are  all  to  the  bad,  and  go 
a  long  way  towards  explaining  why  so  little  has  been  done 
to  prevent  the  recurrence  of  cycles  of  unemployment. 

There  are  a  number  of  industries,  however,  which,  while 
theoretically  subject  to  seasonal  depression,  could  give  con- 
tinuous employment  if  appropriate  foreign  markets  were 
expanded  and  developed.  Such  a  scheme  would  demand 
additional  capital,  careful  planning,  hard  thinking,  some  good 

54 


men  and  much  patience  but,  if  threshed  out  by  the  Employers 
and  Trade  Unionists  in  consultation,  it  has  possibilities  as  a 
partial  solution  of  the  problem. 

Unemployment  amongst  farm  labourers  is  rife  during  certain 
months  of  any  year.  Much  could  be  done  to  mitigate  the 
evil  by  arrangements  between  farmers,  landowners,  Trade 
Unions,  Rural  Councils  and  the  Government.  Repairs  to 
roads,  fences,  buildings,  the  work  of  land  draining,  of  hedging 
and  ditching,  could  be  postponed  to  the  slack  periods,  while 
small  afforestation  schemes  could  be  worked  in  conjunction 
with  this  industry  in  most  districts. 

Every  industry  should  be  considered  on  its  own  merits  in 
the  light  of  the  suggestions  already  indicated,  but  if  unem- 
ployment still  persists,  a  scientific  system  of  short  time  should 
be  introduced  wherever  possible.  During  the  war  the  cotton 
industry  devised  an  effective  palliative  in  this  way,  while  the 
boot  and  shoe  trade,  sections  of  the  iron  and  steel  trade  and 
other  industries  have  had  longer  experience  of  operating  such 
schemes. 

We  believe  that  much  of  the  unemployment,  now  threatened, 
could  be  avoided  if  all  concerned  would  get  down  to  the  task 
in  a  reasonable  spirit.  The  short-sighted  refusal  of  officials 
in  the  building  trades  to  allow  any  dilution  means  that 
thousands  of  willing  men  will  be  unable  to  find  employment. 
These  will  fail  to  have  effective  purchasing  power,  and  trades 
which  would  be  stimulated  by  the  money  that  otherwise  could 
be  earned  and  spent,  will  be  still  further  depressed.  The 
mining  and  building  industries  are  sure  of  full  employment  for 
years  to  come  and  both  could  absorb  more  labour.  En- 
gineering, shipbuilding,  metal  and  allied  trades — in  all  these 
industries  the  prospects  are  excellent  if  the  Trade  Unions 
would  stabilise  wages  so  that  firm  contracts  could  be  made. 

The  twenty  thousand  members  of  the  Seamen's  and  Fire- 
men's Union  could  all  be  absorbed  if  the  coal  output  was 
increased,  and  the  same  factor,  combined  with  a  steady 
production  of  manufactured  articles,  would  settle  things  for 
the  cotton  and  woollen  industries  by  creating  the  necessary 
means  for  paying  for  an  adequate  supply  of  raw  material. 
The  list  could  be  prolonged  until  only  the  casual  trades 
remain.  These  must  become  in  a  special  sense  the  responsi- 
bility of  the  Government,  not  only  in  the  direction  of  an 
adequate  unemployment  benefit,  but  also  in  the  field  of  de- 
casualisation. 

55 


VIEWS  OF  THE  MINORITY   PRESS. 

PERHAPS  the  most  important  episode  in  current  Labour  politics 
is  the  categorical  refusal  of  the  Labour  Party  Executive  to 
accept  the  affiliation  of  the  Communist  Party  (Third  Edition). 
On  this  subject,  writing  in  the  Labour  Leader,  Mr.  Philip 
Snowden  said: — "No  other  course  was  open  to  them  (the 
Labour  Party  Executive),  for  the  applicants  for  affiliation 
frankly  stated  that  they  did  not  accept  the  constitution  and 
policy  of  the  Labour  Party,  and  that  their  object  for  seeking 
affiliation  was  to  be  able  to  carry  on  more  effectively  from 
the  inside,  their  campaign  for  the  destruction  of  the  Labour 
Party." 

Writing  in  the  same  paper  on  Labour  and  Bolshevism,  Mr. 
Arthur  Ponsonby  said: — "The  Communist  Party  support 
whole  heartedly  the  dictatorship  of  the  proletariat  and  the 
inauguration  of  a  new  social  order  by  revolutionary  violence, 
but  their  affiliation  to  the  Labour  Party  has  been  declined  and 
they  stand  alone.  The  I.L.P.  have  received  the  specific 
conditions  for  admission  of  parties  to  the  Communist  Interna- 
tional, and  as  these  conditions  are  directly  contrary  to  the 
letter  and  spirit  of  the  I.L.P.  constitution,  their  decision  on 
the  subject  becomes  perfectly  easy." 

W.  McLaine,  in  a  prominent  article  in  the  Communist  on 
this  subject,  remarked  : —  "  The  Communist  Party  has  done 
its  duty  in  applying  for  admission.  The  Executive  of  the 
Labour  Party  have  refused  the  application.  What  now  ? 
Obviously  we  are  in  a  strong  position.  We  can  tell  the 
masses  that  their  reactionary  leaders  are  afraid  of  our  views, 
and  afraid  of  our  presence  at  their  meetings.  Our  appeal  to 
the  rank  and  file  is  strengthened.  We  now  say  :  '  We  have 
expressed  our  desire  to  work  with  you  and  to  share  in  your 
struggles.  Your  leaders  have  deliberately  weakened  your 
forces  by  refusing  to  accept  our  offer." 

The  Daily  Herald  (Sept.  14)  in  accordance  with  its  usual 
habit,  disapproves  of  the  action  of  the  Labour  Party — "We 
protest  against  this  decision.  .  .  .  We  said  when  the 
Communist  Party  applied  for  affiliation  that  we  were  very 
glad  it  had  applied.  Now  that  its  application  for  affiliation 
has  been  refused,  we  can  only  say  we  are  very  sorry  it 
has  been  refused." 

The  deprecatory  tone  of  the  comment  is  only  what  might 
be  expected  under  the  circumstances.  The  Daily  Herald  is  on 
delicate  ground  when  quarrels  develop  between  the  Labour 

56 


Party  and  the  Communists,  inasmuch  as  whilst  the  financial 
support  of  the  great  trade  unions  cannot  be  dispensed  with, 
the  policy  of  the  paper  is  plainly  Communistic.  As  Litvinoff 
remarked  to  Tchicherin,  "  In  Russian  questions  it  acts  as  if  it 
were  our  organ." 

The  views  of  Arthur  McManus,  Chairman  of  the  new 
Party,  are  also  hospitably  received  by  the  Dally  Herald  which, 
on  September  24th,  contains  his  denunciation  of  "  this  treach- 
erous exclusion  of  the  Communist  Party  from  the  Labour 
Party."  In  The  Communist  Mr.  McManus  further  contends 
that  "  Those  arguing  for  affiliation  to  the  Labour  Party  did 
not  urge  for,  nor  contemplate  working  with,  the  Labour 
P°rty.  The  antagonism  to  the  Labour  Party  was  general, 
but  those  for  affiliation  held  the  opinion  that  such  antagonism 
would  be  best  waged  within  their  camp." 

These  expressions  of  opinion  draw  the  following  comment 
from  the  Glasgow  Forward  : —  "  The  exclusion  is  clear,  but  the 
'  treachery  '  adjective  wants  some  explanation.  .  .  .  First 
you  announce  that  you  are  going  to  visit  a  man  with  the 
object  of  garroting  him  in  his  back  parlour,  and  when  he 
hears  this  and  refuses  to  open  the  door  to  you,  you  shout 
'  treachery  '  through  the  keyhole." 

The  so-called  National  or  British  Communist  Party  which 
applied  for  and  has  been  refused  affiliation  to  the  Labour 
Party,  is  not  the  same  Communist  Party  with  which  Miss 
Sylvia  Pankhurst  is  associated.  The  latter  body,  is  up 
in  arms  against  the  Communist  Party  which  has  been 
ridiculed  by  Forward.  A  gentleman  named  H.  Rubinstein, 
writing  in  the  Workers'  Dreadnought  (Miss  Pankhurst's  organ), 
lets  himself  go  in  the  following  terms: — "We  have  to  make 
Communists.  Ourselves  first.  That  will  not  be  done  either 
by  weak-backed,  would-be-respectables  of  Maiden  Lane,  who 
are  busy  fraternising  with  well-fed  '  fakirs  '  of  Bob  Williams' 
and  Hease's  type,  or  petty  intellectualists  like  Robert  Dell. 
.  .  .  Let  us  harden  ourselves,  harden  and  train.  Look 
at  the  Bolsheviks !  We  must  become  at  once  visionary  and 
devilish  as  they  are.  .  .  .  Then  we  shall  be  able  to 
carry  out  a  merciless  war  against  all  Opportunists.  Then 
we  can  go  out  into  the  limelight  of  every  burning  crisis, 
and  shout  out  the  brazen  Communist  criticism  on  everything  ; 
and  shout  so  that  the  masses  hear  it.  Then  we  can  fall  in  and 
show  the  way  for  every  destructive  force  now  inherent  in  the 
British  Empire,  the  Big  Enemy.  Then  we  can  make  the 
Revolution  —  on  the  eve  of  which  we  already  live." 

57 


FOOD   FOR  THOUGHT. 

EVER  since  the  signing  of  the  Armistice  the  state  of  tension 
in  the  world  of  industry  has  been  steadily  growing  in  volume 
and  in  strength.  Endless  enquiries  into  specific  grievances 
have  been  held,  a  vast  amount  of  thought  has  been  expended 
on  the  question  of  how  best  to  achieve  industrial  peace  and  a 
great  number  of  apparently  promising  suggestions  for  improv- 
ing the  relations  between  workers  and  employers  have  been 
put  forward  by  responsible  people.  In  spite  of  so  much  effort 
results  are  most  disappointing  and  the  solution  of  our  per- 
plexities seems  more  remote  than  ever. 

What  is  the  reason  for  all  this  ill-success  ?  Is  the  problem 
incapable  of  solution,  or  is  it  that  we  have  mishandled  the 
situation?  To  accept  the  first  alternative  would  be  to  admit 
that  the  present  industrial  system  is  unworkable,  to  confess 
that  evolution  has  proceeded  on  lines  that  lead  to  desperation, 
or  to  believe  the  reign  of  reason  has  departed  from  the  earth. 
There  remain  the  far  more  probable  explanations  that  we 
have  failed  to  tackle  the  problem  in  the  right  spirit  and  that 
we  have  started  our  deliberations  at  the  wrong  end. 

m    K    as 

It  is  our  view  that  excessive  optimism,  clung  to  in  the  face 
of  the  logic  of  warning  events,  is  very  largely  responsible  for 
the  failure  which  has  attended  so  many  well-intentioned 
efforts.  When  a  crisis  approaches,  our  normal  equanimity 
is  ruffled,  but  directly  the  immediate  danger  is  removed,  we 
relapse  into  the  old  attitude  of  self-consolation  which  consists 
in  believing  that  nothing  very  serious  is  the  matter  and 
that  everything  will  pan  out  all  right  in  the  end.  People 
will  not  face  the  unpalatable  truth  that  the  old  comfortable 
order  has  gone,  never  to  return,  and  that  industrial  peace 
can  only  be  secured  if  somebody  is  prepared  to  pay  the 
price. 

Sacrifices  are  called  for  and  will  have  to  be  made  sooner  or 
later,  and  that  by  all,  but  optimism  denies  that  the  evil  day  has 
already  dawned  and  so  the  real  issue  is  dodged  whilst  we 
laboriously  busy  ourselves  with  non-essentials.  Labour 
has  been  promised  a  good  time  and  is  in  no  sort  of  mood 
for  sacrifice,  nor  will  it  be  until  it  sees  unmistakable  proof 
of  a  readiness  on  the  part  of  employers  to  initiate  and 
practice  self-abnegation. 

&    m    m 

58 


As  a  consequence  of  the  disinclination  of  all  parties  to 
undergo  a  surgical  operation,  a  succession  of  palliative 
measures  are  undertaken  in  the  forlorn  hope  that  the  disease 
will  heal  itself.  Naturally  the  result  is  repeated  failure 
because  no  amount  of  tinkering  with  symptoms  has  ever 
effected  a  radical  cure.  Conferences  and  enquiries  and 
industrial  courts,  excellent  and  necessary  machines  as  they 
are,  for  the  settlement  of  disputes  in  a  normally  sound  com- 
munity, can  achieve  little  when  the  subjects  they  deal  with 
are  only  the  outward  signs  of  an  inward  malady.  Temporary 
agreements  are  patched  up  and  insincere  compromises  are 
arrived  at,  but  nothing  that  really  matters  is  ever  settled  once 
and  for  all.  We  are  not  much  nearer  a  mutual  understanding 
of  the  fundamental  principles  that  must  eventually  govern 
industry  than  we  were  two  years  ago. 

Take,  for  example,  the  question  of  the  basis  on  which  wages 
in  the  coal  trade  should  be  fixed.  All  is  confusion.  The 
Government  and  the  Employers  hold  that  wages  should  be 
based  on  output,  but  the  principle  is  repudiated  by  a  dominant 
section  in  the  Miners'  Federation.  Mr.  Bevin  objects  to 
wages  being  determined  by  the  cost  of  living,  or  what  he 
stigmatises  as  "  the  fodder  basis  "  Mr.  Straker  is  opposed  to 
wages  being  fixed  by  the  price  of  coal.  Mr.  Smillie  refuses  to 
submit  the  question  to  an  impartial  tribunal,  and  neither  party 
will  accept  the  figures  that  the  other  puts  forward. 

•  •     • 

Take,  again,  the  question  of  the  call  for  increased  produc- 
tion. The  way  is  blocked  by  Labour's  fear  that  greater 
output  per  worker  will  mean  more  unemployment.  The  fear 
is  based  on  a  short-sighted  view,  but  -past  experience 
provides  evidence  that  it  is  not  altogether  unfounded.  Proof 
to  the  contrary  must  be  adduced  or  an  adequate  scheme  of 
insurance  against  unemployment  must  be  forthcoming.  Labour 
must  have  an  absolute  guarantee  that  no  section  of  workers 
shall  suffer  as  a  result  of  giving  greater  output.  This  is  one 
of  the  fundamentals,  but  so  far  no  such  guarantee  has  material- 
ised. "  The  business  of  those  who  believe  in  the  essential 
virtue  of  private  enterprise  is  to  remove  its  evils."  We  are 
satisfied,  not  only  that  profit-making  is  legitimate,  but  that  it 
is  ultimately  beneficial  to  labour.  Nevertheless  we  claim 
that  the  first  call  on  industry  is  the  necessity  for  providing 
a  living  wage  to  the  rank  and  file  from  January  to  December. 
Unless  this  obligation  is  discharged  by  each  and  every  industry, 
the  profits  made  by  the  defaulters  are  not  immaculate. 

•  •     4 

59 


DAY    BY   DAY. 

(A  monthly  Record  of  the  principal  events,  at  home  and  abroad, 

which  have  a  direct  bearing  upon  the  maintenance,  or  otherwise ,  of 

peace  in  industry/ . 

Sept.        The  Ministry  of   Labour  statistics  indicate  a  rise  of  six 
1st-      points  in  the  cost  of  living  during  the  month  of  August,  and  a 
total  rise  of  161  points  since  July  1914. 

Changes  effected  in  the  rates  of  labour  during  the  month 
gave  a  total  increase  of  ^£2  50,000  a  week  in  the  wages  of 
1,100,000  workpeople.  The  working  hours  of  rather  less  than 
1,000  people  were  reduced  by  an  average  of  5^  hours  a  week. 

262  trade  disputes  involved  86,000  people  and  a  loss  of 
768,000  working  days. 

Unemployment  in  the  Insured  Trades  rose  from  2  73  to 
2.88  per  cent,  and  the  numbers  on  the  live  registers  of  ihe 
Employment  Exchanges  rose  from  271,504  to  281,032. 

The  Executive  Council  of  the  Association  of  British 
Chambers  of  Commerce  passed  a  resolution  condemning  the 
new  demands  of  the  miners  as  "  wholly  unjustifiable,  and 
very  injurious  to  the  national  interest,"  and  begging  the 
Government  not  to  entertain  them. 

The  Industrial  Court  awarded  minimum  hourly  rates  in  the 
paper-making  industry  varying  from  is.  5d.  to  25.  The  claim 
for  an  advance  was  based  partly  on  the  cost  of  living  and 
partly  on  the  plea  that  the  adoption  of  the  three-shift  system 
had  increased  opportunities  of  production  at  some  expense  to 
the  workers'  comfort. 

Italy  :  On  August  3oth  the  engineering  employers,  acting 
singly,  decided  to  lock  out  metallurgical  workers  as  a  protest 
against  the  strike  tactics  employed  by  the  workers  during  the 
past  month.  Various  forms  of  the  "work-to-rule"  movement 
had  been  practised  in  Milan  and  Turin  throughout  the  month 
of  August.  The  Metal  Workers'  Union  replied  by  instructing 
their  members  to  remain  in  the  works  and  take  over  the 
control  of  the  industry  in  Milan. 

2nd.  The  miners  decided  to  hand  in  strike  notices  to  expire  on 

September   25111.      The  Triple  Alliance  set  up  a  Publicity 
Committee  to  present  the  miners'  case  to  the  public. 
3rd.  Negotiations  in  the  E.T.U.  dispute  failed. 

Sir  Robert  Home  suggested  that  the  question  of  increased 
wages  in  the  mining  industry  should  be  submitted  to  the 
Industrial  Court  or  some  impartial  body. 

Italy.     The   metal   workers    continued    to    occupy    fresh 
factories.    Labriola,  the  Socialist  Minister  of  Labour,  promised 
to  examine  the  proposal  that  the  workers  should  assume  the 
management  of  factories. 
60 


5th.  The   Minister  of   Labour  exercised  his  power   under  the 

Industrial  Courts  Act  1909,  and  appointed  a  Court  of  Inquiry 
into  the  circumstances  of  the  E.T.U.  dispute.  Masters  and 
men  were  recommended  to  suspend  strike  and  lock-out 
notices  meanwhile. 

6th.  Trade  Union  Congress  opened  at  Portsmouth,  Mr.  J.  H. 

Thomas  presiding. 

The  E.T.U.  dispute  will  be  investigated  by  a  Court  of 
Enquiry  composed  of  an  independent  Chairman  and  equal 
numbers  of  employers  and  workmen  who  may  or  may  not  be 
connected  with  the  industry.  The  men  are  willing  to  call  off 
the  strike  pending  the  investigation,  but  the  employers  refuse 
to  suspend  the  lock-out. 

A  manifesto  condemning  the  printing  strike  in  Manchester 
and  Liverpool  was  issued  by  the  Federation  of  Printing  and 
Kindred  Trades  and  approved  by  the  Joint  Industrial  Council 
of  the  Printing  Trades. 

7th.  Robert  Smillie  severely  criticised  the  methods  by  which 

delegates  to  the  T.U.C.  are  elected.  It  was  admitted  by 
Mr.  Thomas  that  bartering  votes,  though  nominally  forbidden, 
was  practised  by  most  of  the  unions. 

Sir  Robert  Home  invited  Mr.  Smillie  to  bring  delegates 
from  the  Miners'  Executive  to  a  Board  of  Trade  meeting  on 
September  gth. 

Italy :  The  Executive  Council  of  the  General  Confedera- 
tion of  Labour,  the  Executive  of  the  Parliamentary  Socialist 
Party  and  the  principal  Trade  Councils  of  Italy  reject  the 
Government's  offer  of  arbitration  and  place  the  conduct  of 
affairs  in  the  hands  of  a  joint  committee  of  the  Labour  Con- 
federation and  the  Socialist  Party. 

8th.  The  Labour  Joint  Committee  on  the  Cost  of  Living,  in 

their  Interim  Report  on  Money  and  Prices,  ascribe  the  rise 
in  prices  to  currency  expansion  rather  than  contraction  of 
production  ;  but  though  they  think  a  reduction  of  20  per 
cent,  might  be  effected  by  deflation,  they  look  to  the  develop- 
ment of  productive  capacity  all  over  the  world  to  bring 
about  ultimately  a  substantial  fall  in  prices. 

The  draft  constitution  for  the  amalgamation  of  all  Ex-service 
organisations  has  been  agreed  upon. 

The  T.U.C. ,  after  hearing  a  statrment  of  the  miners'  case 
by  Mr.  Hodges,  passed  a  resolution  expressing  their  opinion 
that  the  claims  of  the  miners  "are  both  reasonable  and  just 
and  should  be  conceded  forthwith." 

9th.  The    Daily    Herald    announced    that     Francis    Meynell 

(Director)  is  in  possession  of  ^75,000  of  Bolshevik  gold  ''to 
be  held  in  trust  for  the  Third  International,  and  to  be  offered 
to  the  Daily  Herald  if  need  arose." 

61 


The  Miners'  Executive  conferred  with  Sir  Robert  Home 
and  rejected  his  proposal  that  they  should  settle  with  the 
employers  a  wage-system  based  on  tonnage  rates,  and  submit 
the  whole  wage  question  to  the  arbitration  of  the  Industrial 
Court. 

The  T.U.C.  passed  a  resolution  to  secure  that  unemploy- 
ment shall  be  a  charge  upon  the  industry  concerned  and  that 
pay  during  unemployment  shall  be  at  a  rate  not  less  than  85 
per  cent,  of  the  wages  earned.  A  large  majority  agreed  to 
the  formation  of  a  General  Staff  for  Labour  to  take  the  place 
of  the  present  Parliamentary  Committee. 

Italy  :  The  metallurgical  Manufacturers  demand  the 
evacuation  of  the  factories,  but  the  workers  insist  upon  a 
settlement  first.  The  dockers  and  railwaymen  at  Genoa  join 
the  movement. 

10th-  The  T.U.C.  passed  a  resolution  to  prevent  the  General 

Federation  of  Trade  Unions  from  representing  British  Labour 
in  the  International  Movement. 

llth.  Mr.   Lloyd  George  suspended  all   negotiations   with  the 

Soviet  Legation  in  London  until  the  question  of  the  ,£75,000 
offered  to  the  Daily  Herald  has  been  satisfactorily  cleared 
up.  M.  Kameneff  returned  to  Russia. 

At  the  conclusion  of  the  proceedings  of  the  T.U.C.  a 
special  committee  was  appointed  to  investigate  Mr.  Smillie's 
allegations  that  some  of  those  elected  to  the  Parliamentary 
Committee  had  bartered  votes  for  the  position.  The  old 
Committee  will  remain  in  office  pending  the  investigation. 

The  Building  Re-settlement  Committee  of  the  J.I.C.  for 
the  Building  Trade  have  agreed  with  the  Government  upon 
certain  modifications  of  the  original  plan  to  expedite  housing 
and  will  approach  the  trade  unions  with  a  view  to  immediate 
action. 

Italy  -.  The  National  Conference  of  the  Confederation  of 
Labour  passed  a  resolution  declaring  that  the  present  move- 
ment had  for  its  object  "  the  achievement  of  trade  union 
control  of  workshops  and  factories  in  the  metal  industry,  and 
ultimately  the  socialisation  of  the  industry  itself." 
13th.  The  New  Communist  Party  applied  for  affiliation  to  the 

Labour  Party  and  was  refused. 

The   Mines   Department  of  the  Board  of  Trade  published 
figures   showing   that   the   possible    surplus    in    the    mining 
industry  is  less  than  half  the  figures  stated  by  the  miners. 
14th.  The  Daily  Herald  announced  its  decision  not  to  accept 

the   offer  of  ^75,000  from  the  Third  International.       Mr. 
Francis  MeynelFs  resignation  from  the  Board  of  Directors  was 
accepted. 
62 


The  Triple  Alliance  challenge  the  figures  issued  by  the 
Coal  Mines  Department,  which,  they  state,  are  not  based 
on  representative  months.  The  Prime  Minister,  in  a  letter  to 
a  correspondent,  states  the  Government  attitude  towards 
control  and  trade  unions.  The  former,  he  considers,  must  be 
maintained  in  some  form  "until  the  export  price  approximates 
more  closely  to  the  home  price."  He  emphasises  the  value 
of  trade  unions  to  Labour  and  the  Government  and  points 
out  that  their  strength  is  being  attacked  by  those  who  urge 
it  to  "  usurp  the  functions  committed  to  Government  by  the 
whole  body  of  the  people," — not  by  those  who  resist  the 
claim. 

Italy :  The  Employers  met  the  workers  in  conference,  but 
it  is  reported  that  their  offer  was  not  acceptable  to  the 
workers,  who  remain  in  control  of  the  factories. 

15th  In  a  written  statement  issued  from   Downing  Street  the 

Government  showed  that  Kameneff,  in  spite  of  his  denials, 
was  directly  concerned  with  the  sale  of  jewels  in  this  country, 
and  himself  informed  the  Soviet  Government  that  the 
proceeds  had  been  handed  to  the  Daily  Herald.  It  was  also 
shown  that  George  Lansbury's  son  passed  some  of  the  notes 
through  his  own  banking  account. 

16th.  The  dispute  in  the  engineering  trade  was  settled  by  the 

E.T.U.  withdrawing  their  demand  that  foremen  must  be 
members  of  Trade  Unions. 

The  miners'  leaders,  at  their  own  request,  met  Sir  Robert 
Home  in  conference  and  laid  before  him  modified  proposals 
regarding  the  question  of  the  price  of  coal. 

Italy  :  The  Prime  Minister,  Signer  Giolitti,  intervenes  on 
the  side  of  the  workers  and  declares  the  Government's 
acceptance  of  the  principal  of  syndical  control. 

17th.  Mr.    Smillie   refused   to   countenance  the    Government's 

determination  to  make  any  increase  in  miners'  wages  con- 
tingent on  output,  but  agreed  to  meet  Sir  Robert  Home 
again  on  Monday. 

Italy  :  Employers  and  workers  in  the  metallurgical  trade 
agree  to  place  the  industry  in  the  control  of  a  joint  Com- 
mittee of  equal  numbers  of  representatives  of  the  General 
Confederations  of  Manufacturers  and  of  Labour.  Signer 
Giolitti  assumes  responsibility  for  the  terms  agreed,  the 
masters  accepting  them  because  they  are  imposed  by  the 
Government,  not  because  they  agree  the  principal. 
19th.  The  unauthorised  strike  of  the  Manchester  and  Liverpool 
members  of  the  Typographical  Society  ends.  The  printers' 
dispute  was  officially  settled  on  July  ist,  but  the  Manchester 
and  Liverpool  workers  remained  on  strike  in  defiance  of  the 
National  Executive  of  their  own  Union.  Newspaper  publi- 
cation has  been  entirely  suspended  in  the  two  cities  since 
August  28th. 

63 


20th.  Miners'  Dispute  :    Both  Sir  Robert  Home  and  the  Miners' 

representatives  adhered  exactly  to  the  position  taken  up  on 
Saturday. 

21st.  The  German  Independent  Socialist  Party,  as  a  result  of 

their   mission  to   Russia,   have   publicly   declared   their   dis- 
approval of  the  Third  (Moscow)  International. 

The  Master  Cotton  Spinners'  Federation  will  consider  the 
question  of  a  general  lock  out  if  the  strike  of  spinners  and 
piecers  at  Oldham  is  not  ended  by  September  28th. 

The  National  Delegate  Conference  of  Miners  adopted 
Mr.  Smillie's  statement  that  nothing  had  emerged  from  the 
negotiations  with  the  Government  to  justify  the  prevention  of 
a  strike. 

22nd.  The  Premier  discussed  the  coal  crisis  with  representatives 
of  the  Triple  Alliance,  but  no  agreement  was  reached. 

23rd.  Mr.  Smillie  suggested  that  the  acceptance  of  the  Govern- 
ment's offer  should  be  referred  to  the  districts  and  decided  by 
ballot.  The  plan  was  rejected  by  a  block  vote  taken  at  the 
Conference. 

24th.  The    Miners   accepted   the   Prime   Minister's   proposal  to 

suspend  strike  notices  for  a  week,  and  meanwhile  to  discuss 
with  the  owners  a  datum  line  of  output  in  relation  to  wages. 

Italy :  The  Government's  decision  has  given  rise  to  con- 
siderable dissatisfaction  among  the  more  extreme  syndicalists, 
and  attacks  by  the  workers  have  led  to  bloodshed  in  Turin 
and  Rome. 

28th.  Italy  :  The  workers  in  possession  of  metallurgical  factories 
having  ballotted  on  the  Government's  offer  and  accepted  the 
terms  by  a  large  majority,  are  leaving  the  factories  in  good 
order.  The  workers  will  take  a  general  holiday  until  Oct.  4th. 
Oldham  cotton  mills  will  be  re  opened  on  October  5th. 
The  Operatives'  Association  have  urged  the  unofficial  strikers 
to  return  to  work. 

29th.  Miners  and  Owners  were  unable  to  agree  as  to  the  proposed 
datum  line  and  both  sides  reported  to  the  Prime  Minister 
that  a  deadlock  had  been  reached. 

The  Medical  Association  have  decided  to  authorise  doctors 
in  North  Notts  to  strike  for  a  fee  of  26s.  per  annum  for 
attendance  on  miners  and  their  families  Strike  notices  will 
not  be  issued  until  all  forms  of  negotiation  have  failed. 

30th.  The  section  of  the  Wages  (Temporary  Regulation)  Act  1911 
embodied  in  the  Industrial  Courts  Act  1919  expired  and 
industries  are  now  free  to  regulate  their  own  wages. 

The  out-of  work  donation  to  ex-Service  men  is  extended  to 
November  8th,  when  the  Unemployment  Insurance  Act  (1920) 
will  come  into  force. 

64 


No.  XXXIX 

NOVEMBER 


MCMXX 


"Tolerance   is   based   on    the   will    to    unity, 
when  that  is  flouted   tolerance  may  be  folly." 


INDUSTRIAL 
PEACE 


CONTENTS 

The  State  and  Tolerance 

The  Slump  in  Trade 

The  Facts  of  the  Case  in  Diagram,  VII 

The  Business  Man's  View 

The  Wages  Problem,  III 

The  Output  and  Distribution  of  Coal 

Food  for  Thought 

Day  by  Day 


INDUSTRIAL     PEACE 


•I 
THE  STATE  AND  TOLERANCE. 

IT  is  one  of  the  chief  boasts  of  moderns,  when  they  compare 
the  practice  of  to-day  with  what  was  usual  and  accepted  in 
earlier  times,  that  the  spirit  of  tolerance  has  grown  stronger 
and  that  the  limits  of  individual  freedom  have  been  expanded. 
It  is  more  than  a  boast :  it  is  the  truth.  So  great  has  our 
tolerance  become  that  the  limits  of  individual  freedom  are,  in 
many  quarters,  almost  forgotten.  Their  nature  is  very 
vaguely  realised,  if  it  is  realised  at  all. 

It  is  not  unprofitable  to  ask  ourselves  on  what  tolerance  is 
based.  Why  should  the  State,  an  agency  of  a  certain 
character,  permit  its  citizens  to  enjoy  an  almost  unlimited 
freedom  ?  The  answer  lies  in  the  character  of  the  State. 

In  the  State  a  society  expresses  its  general  purpose  of 
concord  and  co-operation.  Its  moral  root  is  the  belief  in 
brotherhood  and  peace.  It  symbolises  the  community's 
awareness  of  its  own  unity.  But  for  the  friendly  social 
instincts  of  citizens,  to  which  it  bears  witness,  the  State 
could  not  come  into  existence,  or  grow,  or  function.  The 
State  is  the  great  Fellowship.  Its  fruits  are  peace,  justice  and 
security. 

The  strength  and  the  wisdom  of  the  State  make  possible  a 
multitude  of  other  and  subordinate  fellowships.  The  keynote 
of  modern  life,  which  proceeds  under  the  protection  of  the 
State,  is  organisation.  Under  this  sure  shield  the  associative 
instincts  of  men  have  built  up  a  towering  structure  of  diverse 
co-operative  effort.  For  many,  citizenship  means  the  nearer 
subordinate  fellowships,  their  ties,  their  benefits,  their  loyalties 
—  and  these  things  alone.  In  the  multitude  of  its  children  — 
the  more  personal  or  special  associations  —  the  State  itself  is 
apt  to  be  forgotten.  Yet  it  is  the  State,  distant,  impersonal 
and  severe  as  it  may  seem  to  be,  that  makes  possible  the 
peaceful  fruition  of  all  the  more  intimate  issues  of  work  and 
life. 

The  worth  of  citizenship  lies  in  the  development  of  fellow- 
ship, the  Great  Fellowship  and  all  the  lesser  fellowships.  The 
method  and  the  spirit  of  all  these  are  similar.  The  State  and 
all  its  true  children  teach  the  lesson  of  brotherhood. 

Neither  the  State  nor  any  of  its  children  is  free  from  the 
temptation  to  forget  this  lesson.  All  organisations  whatsoever 

66 


to  which  human  associatlveness  gives  rise  run  this  risk.  Most 
individuals  have  a  keen  sense  of  what  is  right  and  just.  They 
readily  recognise  the  limits  set  on  egoism  by  justice  and  social 
feeling.  But  organise  these  fair-minded  individuals  in  a  body 
for  some  common  purpose,  and  the  group-mind  that  then 
emerges  gives  signs  of  unscrupulousness.  It  is  easy  for  a 
member  of  a  group  to  confuse  group-interest  with  right.  It  is 
thus  that  might  comes  to  be  thought  right. 

Thus  egoism  drives  States  to  confuse  their  own  interest 
with  right,  and  to  embrace  the  rule  of  might  as  their  principle. 
Within  a  State,  again,  the  subordinate  fellowships  may  be 
tempted  to  enforce  their  interests  against  the  State  or  against 
other  subordinate  fellowships.  It  is  not  malice,  primarily,  or 
any  form  of  evil  that  brings  this  on.  The  very  warmth  and 
force  of  a  fellowship  —  of  whatever  sort  it  may  be — often 
leads  hopes  and  ambitions  astray.  There  are  organisations 
to-day  in  England,  the  trade  unions,  that  sprang  from  belief  in 
brotherhood  and  the  need  for  defence.  They  began  in  weak- 
ness. Now,  in  their  strength,  some  of  them  are  turning  aside 
to  strife  and  defiance.  Some  of  them  seem  to  use  antagonism 
as  their  spirit  and  force  and  threats  as  their  method. 

But  the  worth  of  these  organisations  for  their  members 
cannot  excuse,  much  less  justify,  a  faith  in  selfish  strife  against 
other  fellowships  and  against  the  Great  Fellowship.  The 
method  of  antagonism  is  just  a  breach  of  faith.  The  State 
gives  freedom  and  security,  the  two  chief  fruits  of  concord, 
on  the  implied  understanding  that  concord  will  thereby  be 
furthered.  To  use  this  freedom  as  the  opportunity  for 
aggression  is  to  defeat  and  disparage  the  fundamental  social 
instinct.  It  is  to  take  the  benefits  of  the  State  with  one 
hand,  and  to  undermine  it  with  the  other. 

If  the  will  to  concord  is  seriously  assailed  what  follows? 
The  whole  will  of  society  is  clouded  and  weakened.  A 
defensive  guarded  mood  replaces  confident  energy.  In  an 
atmosphere  of  menace  verging  into  bursts  of  force,  vigour  falls 
away.  Concord  is  the  only  condition  in  which  men  can  put 
the  most  into  their  lives  and  get  the  most  out  of  life.  The 
loss  of  concord  brings  on  discouragement,  and  even  paralysis 
and  anarchy. 

If  the  State  stands  for  concord,  what  has  the  State  to  say 
to  organisations  that  inflame  and  exploit  discord  ?  Tolerance 
appears  to  be  based  on  the  will  to  unity.  Where  that  is 
flouted,  tolerance  may  be  folly. 

67 


THE  SLUMP  IN  TRADE. 

WHEN  the  war  broke  out  it  was  generally  expected  that  its 
immediate  economic  effect  would  be  to  create  unemployment 
on  a  vast  scale,  and  one  of  the  first  acts  of  the  Government  was 
to  make  provision  for  the  relief  of  distress.  But  the  unexpected 
happened.  The  rapid  growth  in  the  size  of  the  army  and  in 
the  need  for  munitions  proved  far  more  than  sufficient  to 
compensate  for  the  loss  of  the  export  trade.  The  market  for 
labour  seemed  to  be  illimitable.  When  the  prospect  of  peace 
grew  strong  it  was  again  felt  that  the  return  of  the  soldiers 
and  sailors  to  civilian  life  and  the  disappearance  of  the  need 
for  munitions  would  result  in  the  disorganisation  of  the  labour 
market.  The  general  demand  for  a  reduction  of  hours  of  work 
which  was  made  in  the  fall  of  1918  represented,  in  part,  a 
reaction  against  the  strain  of  war  work  in  the  factories,  but 
also,  to  a  large  extent,  a  feeling  that  such  a  reduction  would 
lessen  the  amount  of  unemployment  which  seemed  otherwise 
to  be  inevitable.  Once  more  the  unexpected  happened.  The 
transition  proved  far  less  difficult  than  had  been  anticipated, 
and  ex-service  men  as  well  as  munition  workers  were  rapidly 
absorbed  by  industries  serving  the  ends  of  peace. 

We  then  began  to  take  stock  of  our  position.  We  became 
fairly  confident  that  a  depression  of  trade,  accompanied  by 
serious  unemployment,  was  neither  inevitable  nor,  if  the  inter- 
national situation  was  properly  handled,  probable.  The  war 
had  resulted  in  wholesale  destruction  of  property ;  capital 
expenditure  for  development  purposes  had  been  postponed 
and  could  now  be  undertaken  ;  repairs  had  been  neglected 
and  now  called  for  attention.  The  whole  world  was  suffering 
from  a  shortage  which  could  only  be  removed  by  long  and 
strenuous  effort.  It  appeared  that  several  years  would  be 
required  to  make  up  the  leeway.  Hence  the  cry  for  economy 
and  greater  output  and  the  emphasis  laid  upon  payment  by 
results,  a  system  which  would  provide  a  strong  and  enduring 
stimulus  to  effort.  The  cry  for  economy  was  unheeded,  and 
we  witnessed  a  veritable  orgy  of  extravagance.  Workpeople 
in  many  of  the  most  important  industries  fought  against 
schemes  designed  to  increase  output,  fearing  they  would  but 
create  unemployment.  Even  while  the  controversy  was  at 
its  height  many  trades  experienced  a  severe  set-back  ;  and 
these  were,  and  are,  trades  in  which  the  system  of  payment 
by  results  is  applied  to  process  workers.  We  are  now  witness- 

68 


ing  a  slump  in  trade  which  may  become  even  more  severe 
as  the  winter  advances.  Many  employers  who,  but  a  few  weeks 
ago,  were  emphasising  the  need  for  greater  production  are 
themselves  to-day  restricting  output,  and  experiencing  diffi- 
culty in  disposing  of  their  reduced  supplies.  It  cannot  be  said 
that  the  world  has  recovered  from  the  effects  of  the  war  :  on 
the  contrary  there  seems  to  be  considerable  evidence  in  support 
of  the  view  that  it  is  even  worse  off  than  in  November,  1918, 
and  that  the  need  for  real  economy  and  larger  output  is 
greater  than  ever.  Even  when  recovery  is  complete  there 
will  be  room  for  further  development. 

Depression  and  unemployment  are  not  new  phenomena  in 
industry.  They  occur  with  startling  and  disquieting  regular- 
ity. They  alternate  with  periods  of  abnormal  activity 
and  overtime,  and  the  recurring  alternations  have  strength- 
ened the  belief  that  overtime  merely  accelerates  and 
intensifies  unemployment.  But  the  present  slump  in  trade 
is  due  to  a  combination  of  circumstances  which  were  either 
created  or  strongly  influenced  by  the  war,  and  may  thus  be 
examined  without  special  reference  to  those  which  preceded 
it.  It  is  noteworthy  that  the  slump  in  trade  appeared  first 
in  Japan,  then  in  the  United  States  of  America,  and  after- 
wards in  this  country.  All  three  present  similar  features 
which  are  significant  in  this  connection.  Industries  essential 
for  war  were  developed  to  a  great  extent  during  the  conflict 
and  enabled  the  States  to  render  considerable  assistance  to 
their  Allies.  The  transition  to  normal  conditions  has  been 
rapid,  and  the  States  appear  to  be  in  a  stronger  position 
than  any  others  to  render  further  assistance  to  the  nations 
which  have  suffered  most.  It  seems  as  though  they  had 
recovered  too  rapidly  in  comparison  with  other  countries. 

At  one  time  in  its  history  this  country  was  practically  an 
economic  entity,  and  could  exist  without  assistance  from 
abroad.  During  the  nineteenth  century  the  last  trace  of 
economic  independence  disappeared.  When  war  broke  out 
we  depended  mainly  upon  other  parts  of  the  world  for  the 
necessaries  of  life  and  for  the  bulk  of  our  raw  materials,  and 
these  were  paid  for  by  the  export  of  manufactured  goods  and  of 
coal.  Thus  there  were  established  large  manufacturing  indus- 
tries (such  as  the  woollen,  cotton  and  steel)  which  depended 
largely,  in  some  cases  mainly,  upon  foreign  markets.  Some 
of  these  are  still  closed.  For  some  time  after  the  Armistice 
was  declared,  the  exporting  industries  were  fully  occupied 

69 


in  replenishing  the  stocks  of  British  customers  and  in  supply- 
ing the  most  urgent  needs  of  our  former  Allies.  But  the  home 
market  has  been  largely  satisfied,  for  the  moment,  and  allied 
nations  have  had  troubles  of  their  own  to  which  further 
reference  will  be  made.  It  is  clear  that  the  great  exporting 
industries  will  not  be  restored  to  health  while  their  markets 
are  confined  within  such  narrow  space.  Commercial  inter- 
course with  the  rest  of  the  world  is  the  first  condition  of 
recovery.  It  is  not  sufficient,  however,  merely  to  remove 
hindrances  of  a  political  character  to  foreign  trade.  Foreign 
nations  must  be  in  a  position  to  pay  for  the  goods  which  we 
are  prepared  to  supply.  During  the  war  Government  purchases 
were  sufficient  to  maintain  the  industries  in  full  employment. 
But  these  were  paid  for  out  of  the  compulsory  and  voluntary 
savings  of  those  people  whose  incomes  were  more  than 
sufficient  to  meet  urgent  requirements,  and,  in  essence,  such 
savings  were  secured  through  loans,  taxes,  and  currency 
inflation.  Final  payment  was  partly  deferred,  and  will  be 
made  to  holders  of  Government  loan  stock  over  a  long  period 
of  years.  When  commercial  intercourse  is  fully  restored, 
foreign  states  may  not — some  obviously  will  not — be  able  to 
pay  immediately  by  the  export  of  goods  of  equivalent  value. 
If  they  have  no  foreign  bonds  in  their  possession  which  they 
can  sell — as  France  has  recently  been  selling — in  order  to 
provide  means  of  payment,  they  must  obviously  be  given  credit 
in  the  form  of  special  loans.  Whether  they  sell  bonds  which 
they  now  hold  or  issue  special  loans  it  is  clear  that  some  people 
in  other  countries — mainly  U.S.A.  and  Great  Britain — must 
accept  them.  In  other  words,  if  we  send  woollen  goods  or 
machinery  to  Poland  or  Russia  we  must  be  content  to  wait 
for  payment  and  in  the  meantime  accept  bonds,  either  directly 
or  through  the  Government.  Here  we  are  faced  with  one  of 
the  greatest  difficulties  of  the  situation.  The  floating  debt  of 
this  country  needs  to  be  funded,  i.e.,  calls  for  the  more  per- 
manent investment  of  the  genuine  savings  of  the  community. 
Capital  is  also  needed  at  home  for  housing  and  other  essential 
enterprises.  Private  citizens  show  no  strong  inclination  to 
save  and  invest  in  such  manner.  Woollen  manufacturers  and 
other  business  men  are  in  many  cases  suffering  from  a  shortage 
of  capital.  Although  they  may  have  made  enormous  profits 
during  the  past  few  years,  a  great  part  of  such  profits  is  in 
the  form  of  stocks,  which  are  rapidly  depreciating  in  value  ;  a 
considerable  part  is  required  to  finance  the  business  on  the 
present  high  level  of  prices  and  wages,  and  most  of  the 

70 


remainder  is  paid  in  Excess  Profits  Duty,  the  revenue  from 
which  is  needed  to  meet  current  State  expenditure.  At  the 
same  time  banks  are  tending  to  restrict  credits.  It  follows 
that  if  we  are  to  assist  in  the  restoration  of  foreign  trade  we 
must  be  prepared  either  to  economise  to  a  greater  extent  than 
we  are  now  doing  or  to  accept  further  inflation  of  credit, 
with  its  attendant  evils. 

A  few  simple  examples  may  be  given  in  illustration  of  these 
statements.  Suppose,  first,  that  a  rich  Englishman  decides 
not  to  purchase  a  motor-car  which  he  had  intended  to  use  for 
pleasure,  and  that  the  car  —  or  a  slightly  different  car  —  is 
therefore  made  on  Russian  account,  and  employed  abroad  in 
some  important  service.  If  the  Englishman  invests  the  money, 
he  saves  in  purchasing  Russian  bonds,  the  motor  firm  is  paid 
without  the  creation  of  fresh  currency.  If,  however,  he 
decides  to  buy  a  car  and  the  firm  thus  makes  two  cars,  it  will 
be  necessary  for  our  Government  to  finance  Russia  by  paying 
her  debt  to  the  firm.  The  Government  may  only  be  able  to 
do  so  by  drawing  a  cheque  upon  its  "  Ways  and  Means " 
account,  that  is,  its  overdraft  at  the  Bank  of  England.  Thus 
the  credit  currency  of  the  nation  is  increased  by  this  amount, 
and  the  immediate  effect  of  such  increase  is  abnormal 
prosperity  in  the  motor-car  industry.  In  the  second  place, 
suppose  that  Russia  requires,  not  motor-cars  but  woollen 
goods.  The  effect  of  abstinence  on  the  part  of  the  English- 
man is  to  reduce  the  demand  for  motor-cars  and  to  increase 
the  demand  for  woollen  goods  ;  and  the  effect  of  payment  by 
the  Government  from  "  Ways  and  Means "  account  is  to 
stimulate  the  demand  for  woollen  goods  without  injuring  the 
motor  trade.  These  are  not  ultimate  effects,  which  will  call 
for  further  examination.  But  the  simplified  illustrations 
which  have  been  taken  call  attention  to  two  questions,  the 
first  being  whether  it  is  possible  to  re-establish  international 
trade  without  further  inflation  of  currency,  and,  if  so,  whether 
it  is  likely  that  it  will  be  done  ;  the  second  being  the  problem 
created  by  the  recent  enormous  development,  here  and  in 
other  countries,  of  certain  industries  (such  as  the  making  of 
steel  and  steel  products)  which  were  essential  during  the  war, 
at  the  expense  of  other  industries  which  were  not  essential 
during  that  period.  There  is  strong  reason  to  believe  that 
the  recent  one-sided  development  of  industry  has  not  only 
intensified  the  difficulty  of  the  present,  but  may  also 
profoundly  influence  the  economic  policy  of  most  of  the 
industrialised  states  when  normal  conditions  of  trade  are 

restored. 

(To  be  continued). 


THE  FACTS  OF  THE  CASE  IN   DIAGRAM, 

VII. 

OF  all  the  subjects  that  occupy  men's  thoughts  there  is  none 
that  recurs  with  more  frequency  than  money.  People  may 
pretend  to  despise  it,  they  may  talk  of  "filthy  lucre"  as  the 
root  of  all  evil,  and  profess  to  be  proof  against  its  influence, 
but  as  most  of  the  transactions  in  their  daily  life  are  concerned 
directly  or  indirectly,  with  pounds,  shillings  and  pence,  they 
cannot  help  forming  the  habit  of  exaggerating  their  import- 
ance in  the  national  economy. 

As  a  result  of  the  over-emphasis  given  to  the  functions  of 
money,  people  are  apt  to  mistake  what  is  only  a  token  for  the 
real  thing,  and  to  confuse  the  ideas  of  money  and  wealth. 
Out  of  this  confusion  grow  many  strange  rumours  which  again, 
in  their  turn,  lead  to  serious  error. 

The  avalanche  of  paper  money  that  has  descended  upon 
Europe,  the  increases  in  money  wages  and  salaries,  the  rise 
in  the  cost  of  living,  and  other  associated  phenomena,  have  had 
an  unsettling  effect  on  the  public  mind,  and  people  with  no 
clear  conception  of  the  economic  position  are  at  a  loss  to 
reconcile  the  presence  of  so  apparent  a  profusion  of  money 
and  so  obvious  an  absence  of  commodities.  There  was  a  time 
when  they  knew  to  a  nicety  exactly  how  far  money  would  go, 
and  whether  they  had  much  or  little  they  accepted  the 
situation  because  it  was  familiar.  Now  that  money  is  more 
plentiful  and  satisfaction  still  as  remote  as  ever  they  feel 
resentment,  are  full  of  suspicion  and  ready  to  believe  any 
fairy  tale  that  comes  along.  A  man  may  be  acquainted 
theoretically  with  the  knowledge  that  the  purchasing  power 
of  the  sovereign  is  less  than  half  what  it  used  to  be,  he  may  be 
aware  in  a  general  way  that  the  currency  has  been  inflated, 
but  nevertheless  he  is  reluctant  to  accept  the  practical 
application  of  the  facts  of  the  case  in  propria  persona,  he 
experiences  a  sense  of  grievance  when  he  has  to  pay  double 
for  everything.  Consequently  he  is  prone  to  suspect  that  he 
is  the  victim  of  a  conspiracy  and  he  imagines  a  profiteer 
behind  every  shop  counter. 

Under  these  circumstances  the  importance  of  an  accurate 
conception  of  the  relation  between  money  and  wealth  can 
hardly  be  overestimated.  The  question  is  a  large  one  and  can 
be  approached  from  many  different  angles,  but  before  embark- 
ing upon  more  complicated  issues  it  is  necessary,  first  of  all, 

72 


DIAGRAM  No.  13. 


( A ote.— The  figure*  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


61 


GOLD. 


26 
Bank 

Notes. 


17  Silver 
Bronze 


&  I 

,,-! 


• 


•BBBBBBBBBBBBBBBBBBBBB 


BBBBBBBBBBBBB4BBBBBBBBBBBI 

BBBBBBBB-BBBBBBBBBBBBBBBBBBI 
BBBBBBBBBB.BBBBBBBBBBBBBB-BBI 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 


BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

CRFDIT 

BBBBBBBBBBBBBBL      IWHffl     JBBBBBBBBBBBBBB 

(1021  Squares). 

BBBJIB.BBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBB«BBBBBBBBBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBIRBBaBBBBBBBBBBBBBBflBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBB'iBBBBBBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
iBBBBBBBBBBBBBBBBBBBBBBJIBBBBBBBBBBBflBBBB 
BBB'BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 


CURRENCY  AND  CREDIT,  1914. 


Scale— Each  Square  of  Colour  represents  £2,000,000. 


to  get  a  clear  idea  of  the  actual  proportion  between  currency 
and  credit  at  the  present  time  as  compared  with  the  normal 
state  of  affairs  in  this  respect  before  the  war. 

The  diagrams  which  we  print  this  month  are  designed  to 
illustrate  this  particular  aspect  of  the  question.  They  are 
based  on  the  following  factors.  The  National  Income  of  the 
United  Kingdom  for  1913-1914,  is  estimated  by  Dr.  Bowley 
(The  Division  of  the  Product  of  Industry,  page  21.)  to 
have  amounted  to  two  thousand,  two  hundred  and  fifty 
millions  of  pounds.  This  total  represents  the  estimated  value 
of  all  the  remunerated  services  of  the  community  (whether 
rendered  by  Labour  or  Capital  as  well  as  the  interest  on 
foreign  holdings)  at  that  time  and  is  taken  as  the  foundation 
of  Diagram  No.  13.  Adopting  two  million  pounds  as  the 
unit  of  measurement,  the  National  Income  of  1914  will  be 
represented  by  1125  squares. 

According  to  the  report  of  the  late  Lord  Cunliffe's  Com- 
mittee on  Currency  (Cd.  9182)  the  amount  of  legal  tender 
money  in  circulation  in  the  United  Kingdom  on  June  3Oth, 
1914,  consisted  of  Bank  of  England  notes  (excluding  reserve  of 
notes  in  the  Banking  Department)  £29,784,000  ;  gold  (exclud- 
ing coin  held  in  the  Issue  Department)  £123,000,000;  silver 
and  bronze  £34,000,000.  These  figures  do  not  include  Scotch 
and  Irish  Bank  notes  which,  though  not  legal  tender,  are  in 
considerable  demand  and  must  be  reckoned  as  circulating 
currency.  In  1914  the  value  of  such  notes  in  circulation  was 
£21,613,000. 

Collecting  these  totals  into  squares  representing  £2,000,000 
apiece  we  allot  26  squares  for  Bank  notes,  61  squares  for  gold 
and  17  squares  for  metallic  currency,  or  a  total  of  105  squares 
for  all  the  money  in  actual  circulation  in  1914.  The  remaining 
1021  squares  contained  in  the  diagram  represent  Credit  in  the 
form  of  cheques,  bills  of  exchange,  banking  facilities,  etc.  It 
will  be  seen,  therefore,  that  there  is  only  enough  money  in 
the  country  to  pay  for  one-tenth,  or  thereabouts,  of  the  annual 
community  services.  If  all  rent,  interest,  wages  and  salaries 
fell  due  and  had  to  be  settled  in  cash  on  the  same  day  there 
would  be  a  shortage  of  money  for  the  purpose  to  the  extent 
of  more  than  eighteen  shillings  in  every  pound.  Comparing 
currency  and  population  we  find  that  in  1914,  if  all  the  money 
was  divided  equally,  the  share  of  each  individual  man,  woman 
and  child  would  have  been  approximately  £4.  I2S.  8d. 

Diagram   No.    14   exhibits   the  currency  in  circulation  in 

74 


DIAGRAM  No.  14. 

(Note. —  The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


IMBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBB 


PBBBBBBBBBBBBBBBBBinrBBBllYBBBBBBBBBBBBBBB 

EBBBBBBB 
BBBBBBB 


Bank  Notes. 

Bronze. 


80 




Silver  and      b  ••••  B  •••••• 


IBBBBBBBBBBBBBBBBBBBBBBBJBBBBBBBI 
IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 


IBBBB 

IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBiBBI 
IBBBBBBtBBBBBBBBBBBBVMBBBBBBBBBBBBBBBBBI 
IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 

IBBBVBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 


BBBBBBBBBBBB 


By~— *S5J  BBBBBBBBBB 

IBBBBBBBBBBBBBBEU920  Squares).      9BBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBEt      I      .        ^  ••••••••••••••• 

EBBBBBBBBBBBBBBBBBBBB BBB BBBBBBBBB 
IBBBBBBBBBBBBtfBBBBBBBBBBBBBBBBBBB 
IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
IBBBBBBBBBBBB BBBBBBB BBBBBBBBBBBBBBBBBBBB 


BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBB BBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBPBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBB.BBBB  BBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB^ 
BBBBBBBBBBBBBBBBB BBBBBBBBB BBBBBBBBB BBB 
BBBBBBBBBBBBfl BBBBBBBBB BBBBBBBBB BBBBfl 
BB BBBBBBBBB •••••••••••••• BBB BBBBBBBBBB 

•••• BBBBBBBBB BBB BBB BBB BBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 


BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB>BBI 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBBBBBMBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBB.BBBBBU1BBBBBBBBBBBBBBBBBBVBBBI 

mmmmmmmmmmmmnmmumuwrmmmmmmmmmmmmmmmmmm\ 


BBBBBJBIBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB! 


CURRENCY  AND  CREDIT,   1920. 

Soalc— Each  Square  of  Colour  represents  £2,000,000 


March,  1920.  Mr.  Edgar  Crammond's  estimate  of  the  National 
Income,  which  he  places  at  four  thousand,  four  hundred 
millions  of  pounds,  is  taken  as  the  basis  for  the  diagram, 
which  consists  therefore  of  2200  squares,  each,  as  before, 
representing  services  valued  at  £2,000,000.  This  increase  of 
nearly  100  per  cent,  in  the  National  Income  as  compared  with 
1914  does  not  mean  that  the  sum  of  community  services  has 
doubled,  it  rather  signifies  the  extent  of  the  fall  in  the  value 
of  money. 

Reverting  to  the  question  of  currency  we  learn  from  Board 
of  Trade  Paper  (Cmd.  734)  that  in  March,  1920,  the  money  in 
circulation  consisted  of  Currency  notes  to  the  value  of 
£335,372,000,  Bank  notes  to  the  value  of  £105,271,000  and 
metallic  currency  to  the  value  of  £64,631,000,  or  a  total  of 
£505,274,000.  Adding  £54,269,000  for  Scotch  and  Irish  notes 
we  get  a  grand  total  which  occupies  280  squares  in  the 
diagram,  viz.,  168  squares  for  currency  notes,  80  squares  for 
Bank  notes  and  32  squares  for  metallic  currency.  These  leave 
us  with  1920  squares  representing  credit. 

The  interesting  point  emerges  that,  whereas  the  currency 
has  increased  by  169  per  cent.,  credit  has  only  expanded  by 
some  88  per  cent.  This  may  be  due  in  part  to  a  change  in 
the  habits  of  the  people  who  now  use  currency  notes  for 
payments  that  were  formerly  made  by  cheque,  but  so  great  a 
difference  cannot  be  completely  accounted  for  by  this  cause 
alone. 

It  will  be  observed  that  the  proportion  between  currency 
and  the  National  Income  has  not  undergone  any  drastic 
change  since  1914.  In  that  year,  as  we  have  seen,  there  was 
about  a  florin  in  money  for  every  pound  of  the  National 
Income.  In  1920  there  was  about  half-a-crown. 

Again,  comparing  currency  and  population,  we  find  that  in 
1920,  if  all  the  money  in  the  United  Kingdom  was  divided  up 
into  equal  portions,  the  share  of  each  individual  would  amount 
to  £11.  145. 

With  this  inflation  of  currency,  that  is  to  say,  with  more 
money  about  and  less  goods,  high  prices  are  easily  under- 
standable. 


76 


THE  BUSINESS  MAN'S  VIEW. 

ECONOMICS,  as  a  scientific  theory,  has  generally  failed  to 
attract  much  popular  attention,  or  to  convince  those  most 
in  need  of  its  guidance.  The  complexity  of  the  science,  and 
the  costly  mistakes  in  which  erroneous  schools  of  thought 
have  involved  us,  are  partly  to  blame,  but  the  main  reason 
is  probably  to  be  found  in  the  fact  that  business  men  refuse 
to  indulge  in  theoretical  speculations  about  a  problem  whose 
practical  solution  they  regard  themselves  as  already  engaged 
upon. 

But  a  good  deal  of  economics  may  be  learned  without  going 
to  theoretical  text-books.  In  the  pages  devoted  to  Company 
Reports,  the  daily  papers  give  us  an  opportunity  of  studying 
the  effects  of  wars  and  legislation,  of  rising  and  falling  prices, 
of  wages,  taxes,  of  unemployment,  and  of  all  the  many  con- 
flicting currents  that  go  to  make  or  mar  commercial  enter- 
prise from  the  producers'  or  managers'  point  of  view. 

These  Reports  have  the  merit  of  being  uncoloured  by  party 
politics  or  journalistic  bias.  They  are  the  actual  experiences 
of  a  thousand  different  men — mainly,  if  not  exclusively,  men 
of  unusual  thrift,  enterprise,  intelligence  and  capacity  for 
work.  They  are,  it  is  true,  ex  parte  statements,  and  cannot 
be  considered  to  cover  anything  like  the  whole  field,  but  taken 
together  they  form  a  valuable  commentary  on  a  good  many 
aspects  of  the  question  as  to  the  ways  and  means  by  which 
the  nation  does,  in  fact,  secure  its  livelihood. 

During  the  coming  months  we  shall  give  a  series  of  extracts 
from  the  reports  of  the  ordinary  meetings  of  companies  of  all 
sorts  and  sizes,  and  shall  endeavour  by  various  groupings  to 
illustrate  both  accepted  and  controversial  economic  theories, 
to  refute  current  fallacies  and,  perhaps,  to  indicate  to  those 
best  able  to  interpret  the  evidence,  paths  that  lead  a  little 
further  towards  the  road  of  progress  and  reform.  This  month 
we  deal  with  some  aspects  of  the  economic  outlook  in  two 
important  groups  of  industry. 

I.    PRINTING  AND  PUBLISHING  TRADES. 

The  only  two  reports  to  come  under  our  notice  during  the 
month  in  this  industry  are  those  of  George  Newnes,  Limited, 
and  Benn  Brothers,  Limited.  In  each  case  the  dividend 

77 


declared  on  the  ordinary  shares  is  15  per  cent.*  Sir  John 
Benn,  the  Chairman,  pointed  out  that  the  latter  Company, 
being  responsible  for  the  publication  of  "  a  dozen  representa- 
tive journals,  touching  every  corner  of  British  industry,  con- 
stitutes a  very  reliable  barometer  of  British  trade  generally,1' 
and  we  have,  therefore,  chosen  more  particularly  extracts 
from  his  address  as  being  of  wider  interest  and  value  to  the 
general  reader.  It  was  pointed  out  that  whereas  the  revenue 
of  the  firm  had  gone  up  £70,000,  practically  the  whole  of  this 
sum  had  been  absorbed  by  the  increased  charges  of  the  printers 
and  paper-makers.  "Since  war  began,"  the  Chairman  said, 
"  our  printing  charges  have  increased  nearly  two  and  a  half 
times,  while  payments  to  our  shareholders  have  remained 
stationary."  The  increase  in  printers'  wages  Sir  John  Benn 
regarded  as  fully  justified,  but  he  confessed  to  a  feeling  of 
alarm  at  the  growing  disregard  of  the  need  of  increased 
production.  Speed  is  as  essential  to  the  Press  as  to  the 
railways,  any  failure  to  comply  with  this  requirement  he 
regarded  as  a  damaging  blow  to  the  industry  upon  which  both 
printers  and  publishers  depend.  The  present  state  of  the 
industry  did  not  yield  enough  to  induce  investors  to  risk  new 
capital,  and  the  progress  of  the  printing  and  publishing  trades, 
therefore,  depended  largely  on  the  printers  giving  high  pro- 
duction in  return  for  good  wages.  It  was  further  pointed  out 
that  printing  has  already  received  a  severe  check,  and  that 
there  is  a  vast  mass  of  new  thought  and  information  which  is 
denied  to  the  public  by  reason  of  the  prohibitive  level  of 
printing  prices. 

II.    IRON,  STEEL,   AND  COAL  TRADES. 

In  the  Iron,  Steel,  and  Coal  Trades  we  have  the  reports  of 
Bolckow,  Vaughan  &  Company,  Limited ;  Guest,  Keen  & 
Nettlefolds,  Limited,  and  the  Sheepbridge  Coal  and  Iron 
Company,  Limited.f 


*  Dividends  of  companies  quoted  will  hereafter  be  stated  (wherever  possible) 
without  comment,  but  at  the  outset  we  would  call  our  readers'  attention  to  the 
fact  that  it  is  necessary  to  interpret  the  figures  in  the  light  of  present  day  taxa- 
tion and  money  values  in  order  to  estimate  them  fairly.  For  example,  a 
dividend  of  15  per  cent,  less  income  tax  at  6/-  in  the  £  represents  a  net  receipt 
of  11.5  per  cent,  to  the  investor,  which,  with  the  decreased  purchasing  power  of 
money,  is  in  actual  value  equivalent  to  not  more  than  6  per  cent,  in  1914. 

|  The  dividends  declared  on  the  ordinary  shares  by  these  three  Companies 
respectively  were : — (i)  la  per  cent. ;  (2)  10  per  cent,  with  a  bonus  of  i/-  per 
share,  both  free  of  income  tax  ;  (3)  10  per  cent. 

78 


Sir  J.  E.  Johnson-Ferguson,  Chairman  of  Bolckow,  Vaughan 
&  Company,  Limited,  drew  attention  to  the  fact  that  this 
Company's  shares  were  held  by  10,605  people  with  an  average 
holding  of  £605. 

In  view  of  the  unrest  in  the  coal  industry,  all  three  firms 
gave  exact  figures  relating  to  the  actual  conditions  in  their 
own  works,  and  these  are  most  interesting  if  summarised  and 
compared  together. 

Sir  J.  E.  Johnson-Ferguson  showed  that  in  the  year  ending 
June,  1920,  there  were  643  more  men  employed  in  the  collieries 
than  in  1914,  and  the  wages  of  the  individual  man  were  rather 
more  than  double.  The  tonnage  raised  in  1920  was  a  little 
more  than  two-thirds  of  the  tonnage  raised  in  1914,  while  the 
average  output  per  man  was  170.36  as  compared  with  263.37 
tons  in  1914.  The  wages  cost  of  a  ton  of  coal  in  1914  was 
6s.  4-O4d. ;  in  1920  it  was  195.  7.96d.  In  addition  the  men 
have  free  houses  and  free  coal. 

Speaking  for  Guest,  Keen  &•  Nettlefolds,  Limited,  the  Earl 
of  Bessborough  stated  that,  in  their  experience,  every  advance 
in  wages  had  been  followed  by  a  decrease  in  output.  The 
average  output  per  man  in  the  South  Wales  Coalfields  in  1913 
was  243  tons;  in  1920  it  was  about  200  tons.  The  retainable 
profit  which  the  Company  had  on  the  whole  of  their  collieries 
last  year  was  not  more  than  sixpence  a  ton  of  coal. 

Lord  Aberconway,  Chairman  of  the  Sheepbridge  Coal  £r  Iron 
Company,  Limited,  spoke  favourably  of  the  miners  as  he  knew 
them,  but  declared  that  increased  output  was  a  matter  entirely 
in  the  men's  hands.  Dealing  with  the  attempt  to  suggest  that 
the  coal-owners  had  tried  to  reduce  output,  he  pointed  out 
that  the  development  of  collieries  had  been  very  much  im- 
peded, in  recent  years,  by  the  shortage  of  men,  by  the  difficulty 
of  getting  materials,  and  by  the  difficulty  of  getting  capital  at 
a  time  when  so  much  Socialist  agitation,  amounting  to  threats 
of  confiscation,  was -going  on.  The  total  output  per  man  in 
their  collieries  in  1914  was  755  tons  a  year,  in  1920  it  was 
561  tons — roughly  24  per  cent,  less  than  it  was  before  the 
war.  The  cost  of  working  was  145.  lod.  a  ton  higher  than  in 
1914.  The  wage  percentage,  compared  with  1911,  was  162 
per  cent.  up.  Absenteeism  amounted  to  25  per  cent. 

Lord  Aberconway  drew  attention  to  the  fact  that  we  are 
now  nearly  50  million  tons  short  of  pre-war  production.  That 
affected  the  country  in  every  possible  way.  It  affected  foreign 
trade  food  supplies,  because  every  ship  that  used  to  take  food 

79 


out  to  the  Argentine  and  various  parts  of  the  world  brought 
back  food-stuffs  and  raw  materials,  and  the  freight  for  the 
double  voyage  was  not  greater  than  the  single  voyage  home 
now,  with  the  result  that  the  country  got  its  food  and  raw 
materials  at  a  much  cheaper  rate  than  it  could  get  them  to- 
day with  no  coal  being  sent  abroad  to  relieve  the  situation. 
That,  of  course,  affected  the  cost  of  living  for  the  poorer 
classes.  It  restricted  the  output  of  ships,  and  that  restricted 
the  output  of  steel,  and  that,  in  turn,  restricted  the  output  of 
iron.  The  whole  thing  worked  back  to  the  output  of  coal  in 
the  home  collieries. 

Lord  Bessborough  gave  the  number  of  shareholders  in  his 
Company  as  11,000,  with  an  average  holding  of  less  than 
£800  each.  The  net  profit  on  the  year's  working  available 
for  division  was  £860,509  135.  The  wages  bill  for  the  same 
period  was  £7,635,000,  or  nearly  nine  times  as  much  as  the 
profit. 


80 


THE  WAGES  PROBLEM,  HI. 

THE  second  article  on  this  subject  was  devoted  to  the  con- 
sideration of  the  problem  of  relative  wages  and  salaries.  It 
will  henceforth  be  assumed  that  this  problem  has  been  solved, 
that  is,  that  even  if  Smith  is  not  content  with  the  absolute 
amount  of  his  remuneration,  he  is  at  least  satisfied  with  the 
relation  it  bears  to  Johnson's  remuneration.  It  will  further 
be  assumed  that  all  are  paid  according  to  time  (whether  it  be 
by  the  hour,  week  or  year)  and  that  every  worker  does  a  fair 
day's  work.  The  question  naturally  arises  —  Is  it  a  matter  of 
importance  whether  the  individual  is  paid,  say,  los.  or  ;£io 
per  week  ?  To  state  the  question  otherwise  :  does  a  general 
rise  in  the  rate  of  remuneration  (which  leaves  relative  rates 
unchanged)  secure  an  improvement  in  the  standard  of  living  ? 
The  reply  is  not  so  obvious  as  would  appear. 

The  Labour  associations,  during  the  war  and  after, 
repeatedly  pressed  for  advances  in  wages.  It  was  discovered  by 
experience,  however,  that  such  advances  were  followed  —  and 
inevitably  followed  —  by  advances  in  prices,  that  the  net  gain 
to  labour  was  comparatively  small,  and  that  even  this  small 
gain  was  mainly  secured  at  the  expense  of  other  workers,  the 
majority  being  of  the  professional  classes.  This  has  become 
so  evident  that  the  recent  memorandum  of  the  Labour 
Committee  on  Prices  declared  in  favour  of  a  halt,  and 
advocated  an  attempt  to  reduce  the  cost  of  living. 

In  pre-war  days  trade  unions  frequently  demanded,  and 
secured,  advances  in  wages  to  their  members,  who  thereby 
enjoyed  a  higher  standard  of  living.  It  was  therefore 
concluded  by  most  people  that  if  trade  unionism  were 
universalised,  workers  of  all  categories  would  be  able  to 
secure  corresponding  improvements  by  similar  methods.  But 
such  people  begged  the  question.  It  was  at  least  possible 
that  those  who  obtained  advances  through  the  employment  of 
economic  power,  enjoyed  a  higher  standard  of  living  at  the 
expense  of  the  unorganised  workers,  whose  remuneration  was 
unchanged  in  amount  but  reduced  in  purchasing  power 
through  the  rise  in  prices  of  goods  made  by  the  organised 
groups.  If  this  was  the  actual  result,  the  latter  were  largely 
responsible  for  the  sweating  of  the  badly-paid  workers,  and 
universal  trade  unionism  would  merely  defeat  its  own  end. 

81 


Such,  indeed,  was  the  view  expressed  in  the  early  years  of  the 
nineteenth  century  by  the  classical  economists,  who  emphasised 
the  futility  of  collective  action  on  the  part  of  workers.  And 
who,  in  the  face  of  the  experience  of  the  last  six  years,  would 
say  that  they  were  further  from  the  truth  than  those  modern 
theorists  who  pin  their  faith  to  mechanical  advances  in  general 
money  wages  ?  If  the  latter  are  right,  such  advances  must 
have  been  secured  from  some  source  other  than  wages  and 
salaries.  But  the  only  other  sources  are  the  rent  of  land  and 
the  remuneration  of  capital.  There  appears  to  be  no  evidence 
that  either  of  these  suffered  as  the  result  of  such  advances. 
The  facts  are  so  complex  that  it  is  practically  impossible  to 
reason  from  them,  and  we  are  inevitably  thrown  back  upon 
first  principles. 

Merely  to  call  a  shilling  a  pound  would  obviously  benefit 
nobody  if  the  change  affected  existing  contracts  of  all  kinds. 
A  debt  or  a  capital  investment  of  £1,000  would  be  called  one 
of  £20,000.  But  if  average  wages  were  raised  (to  take  an 
extravagant  illustration)  from  £i  to  £20  per  week  existing 
contracts  of  other  kinds  would  not  immediately  be  affected. 
A  debenture  holding  of  £1,000  would  remain  unchanged  —  in 
other  words,  its  value  to  the  owner  would  be  enormously 
reduced.  The  on-cost  charge  represented  by  the  interest  on 
that  debenture  would  not  be  altered,  and  total  costs  and 
prices  would  presumably  not  be  advanced  in  the  same  ratio  as 
wages  and  labour  costs.  It  would  therefore  appear  that 
labour  had  secured  a  gain  at  the  expense  of  capital.  But 
such  gain  would  not  be  permanent.  New  factories  could  only 
be  erected  at  correspondingly  increased  costs :  and  they  would 
not  be  forthcoming  until  (through  shortage)  the  prices  of  the 
goods  produced  in  such  factories  had  risen  sufficiently  to 
remunerate  the  new  debenture  holders,  who  would  now 
need  to  invest  £20,000  in  order  to  provide  what  could  at  first 
be  provided  for  £1,000.  Further,  if  the  policy  of  demanding 
repeated  advances  were  consistently  pursued,  debenture  stock 
would  lose  its  attraction  and  would  thus  need  to  offer  higher 
rates  than  before,  so  that  instead  of,  say,  four  per  cent  being 
paid  on  £1,000,  perhaps  five  per  cent  would  need  to  be  paid 
on  £20,000.  Finally,  in  spite  of  the  loss  to  the  original 
debenture  holder  of  £1,000,  the  prices  would  advance  (through 
shortage)  possibly  to  a  greater  extent  than  that  represented 
by  the  rise  in  costs,  and  holders  of  Ordinary  Stocks  would 
enjoy  greater  dividends.  Although  the  argument  is  presented 

82 


through  a  high  artificial  illustration,  it  fits  the  facts  of 
industry  as  we  know  them.  A  period  of  rising  prices  and 
wages  is  a  period  of  loss  to  holders  of  secured  stocks,  and  a 
period  of  gain  to  the  average  holder  of  speculative  shares. 

No  reference  has  hitherto  been  made  to  the  factor  of  foreign 
competition.  Some  of  our  standardised  manufacturing 
industries  depend  largely  upon  foreign  markets,  where  they 
frequently  compete  upon  fairly  even  terms  with  rival 
industries  abroad.  A  considerable  rise  in  general  wages 
and  salaries  in  this  country,  but  confined  to  this  country, 
would  place  our  rivals  at  a  corresponding  advantage  and 
result  in  loss  of  trade  to  exporting  firms  and  unemployment 
among  the  employees.  Even  if  the  trade  were  one  in  which 
we  enjoyed  an  unchallenged  monopoly  abroad,  the  rise  in 
prices  would  result  in  a  fall  in  demand  from  foreign  customers, 
whose  buying  power  had  not  been  increased.  Those  trades  in 
which  we  were  competing  against  foreign  rivals  for  our  own 
market  would  be  similarly  threatened.  At  what  point  such 
reactions  would  begin  to  be  felt  experience  alone  could  show ; 
but  it  is  evident  from  the  simple  cases  which  have  been 
selected,  that  we  are  not  entirely  our  own  masters,  but  must 
fix  money  wages  at  a  level  determined  largely  by  conditions 
abroad.  Hence  the  need  for  international  labour  legislation. 


THE  OUTPUT  AND  DISTRIBUTION  OF  COAL. 


WHEN  there  has  been  a  marked  tendency,  over  a  number  of 
years,  to  increase  the  numbers  engaged  in  an  industry,  to 
decrease  the  hours  of  service  and  to  push  up  the  rates  of  pay, 
it  is  natural  that  in  attempting  to  arrive  at  a  permanent  basis 
of  agreement,  emphasis  should  be  laid  on  the  importance  of 
output.  But  success  in  the  management  of  the  coal-mining 
industry  is,  from  a  national  point  of  view,  in  some  respects 
as  much  dependent  on  the  economy  as  on  the  production  of 
the  raw  material.  Costs  of  production — whether  much  or 
little  be  produced — must  be  as  low  as  possible  :  there  must  be 
some  guarantee  that  the  wages  taken  and  the  man-power 
used  result  in  a  reasonable  output  of  coal.  But  in  empha- 
sising the  importance  of  output  in  relation  to  one  or  two 
aspects  of  the  industry,  there  is  some  danger  of  leaving  an 
impression  on  the  public  mind  that  coal  itself  is  an  inexhaust- 
ible source  of  wealth,  limited  only  by  the  national  capacity 
for  mining  it. 

The  diagrams  on  the  opposite  page  are  intended  to  stimulate 
thought  on  some  other  aspects  of  the  question.  The  differ- 
ence in  height  of  the  two  columns  shows  the  total  decrease  in 
output  in  1919  as  compared  with  output  in  1913 — a  difference 
of  191  squares  representing  close  on  48  million  tons  of  coal. 
The  small  diagrams  below  show  that  it  now  requires  nearly 
seven  per  cent,  more  men  to  get  239  million  tons  of  coal  than 
it  took  in  1913  to  get  nearly  287  million  tons.  In  1913  there 
were  1,101,000  men  engaged  in  and  about  the  mines;  in  1919 
there  were  1,185,300. 

1913  1919 


44 


Scale. — Each  square  represents  23,000  persons.     The  numbers  in  the  blocks  refer  lo 
the  number  of  squares. 

Turning  to  the  separate  items  in  the  scheme  of  distribution, 
we  see  that  we  have  accommodated  ourselves  to  the  greater 

84 


DIAGRAM  No.  15. 


(Note.— The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


1913 


1919 


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OUTPUT  AND  DISTRIBUTION  OF  COAL. 

Scale— Each  square  of  Colour  represents  250,000  tons. 


part  of  our  reduced  output  by  cutting  down  our  exports.  In 
1919  we  exported  less  than  one-half  of  the  amount  we  ex- 
ported in  1913.  (For  1920  the  export  trade  is  still  lower  and 
would  be  represented  in  our  diagram  by  only  eighty  squares). 
The  total  reduction  in  output  in  1919  was  47,812,000  tons, 
just  over  38  millions  of  which  are  accounted  for  by  the  reduc- 
tion in  the  export  trade,  while  9!  million  tons  less  are 
consumed  at  home. 

Owing  to  the  difficulty  of  securing  exact  and  comparable 
returns  for  the  years  under  review,  it  is  not  possible  to  state 
accurately  where  the  decrease  in  consumption  has  taken 
place,  but  the  general  conclusion  to  be  drawn  from  an  exam- 
ination of  the  detail  as  displayed  in  the  diagram  is  that 
the  decreased  consumption  is  due,  not  to  economies  in  use 
but  to  reductions  in  actual  industry.  For  example,  consump- 
tion in  and  about  the  mines  is  apparently  greater,  railways 
are  using  about  one  million  tons  less,  there  is  a  reduction  in 
bunker  coal,  and  there  is  apparently  almost  50  per  cent,  less 
coal  used  in  the  iron  and  steel  industry.  In  short,  we  appear 
to  be  using  our  mining  resources,  both  as  regards  labour  and 
the  raw  material  itself,  to  poor  advantage.  We  are  stinting 
bunker  coal,  partly  through  actual  shortage  and  partly  through 
the  high  price  demanded,  although  we  know  that  the  cost  of 
living  in  this  country  is  conditioned  iby  the  cheapness  and 
efficiency  of  our  carrying  trade.  We  are  stinting  export, 
though  we  know  that,  as  carriers  of  that  coal,  we  get  a 
return  to  this  country  far  greater  in  value  than  the  amount 
for  which  the  coal  actually  exchanges.  The  shortage  of 
bunker  coal,  by  the  way,  may  prove  a  blessing  in  disguise 
and  take  us  one  step  along  the  road  to  economy  in  the  use 
of  our  resources,  for  many  shipping  firms  have  already  adapted 
their  engines  to  the  use  of  oil.  In  increasing  output,  we  in 
this  country  should  bear  in  mind  that  it  is  to  our  advantage 
to  economise  in  all  the  uses  of  coal,  not  by  going  without,  but 
by  avoiding  wasteful  methods  of  consumption.  The  supply  in 
these  islands  is  not  unlimited,  and  it  is  obtained  at  the  cost  of 
much  laborious,  unpleasant  and  dangerous  effort.  Not  to 
produce  enough  to  maintain  our  industries  must  cripple  trade 
and  reduce  every  source  of  wealth  in  the  country;  on  the 
other  hand,  to  waste  coal,  or  to  use  it  extravagantly,  means 
an  unnecessary  use  of  labour  that  might  be  turned  to  greater 
national  advantage  in  other  ways,  and  a  reduction  in  the 
amount  of  coal  available  for  export. 

86 


An  account  of  our  coal  output  and  its  destination  is  incom- 
plete without  some  reference  to  the  geographical  sources  of 
the  supply,  and  although  lack  of  space  has  prevented  us  from 
showing  this  pictorially,  the  following  table,  giving  the 
sources  of  the  total  output  in  1913,  and  as  estimated  for  1920, 
are  of  interest. 

Coal  Output. 


CoalOutput,i9i3 

Coal  Output, 

District 

B.O.T.  Journal 

1920 

26  Jane,  1919. 

(Estimated). 

Northumberland 

14,819,000 

11,650,000 

Durham               - 

4T>533»ooo 

32,500,000 

Yorkshire            - 

43,671,000 

37,5OO,OOO 

Lanes.  Ches.  and  N.  Wales 

28,134,000 

22,690,000 

Derby,  Notts,  and  Leics.  - 

33,097,000 

30,710,000 

Stafford,  Salop,  War.  and  Worcs.     - 

20,843,000 

18,170,000 

S.  Wales  and  Monmouth  - 

56,830,000 

48,365,000 

Other  English  Districts     - 

5,346,000 

5,090,000 

Scotland             - 

42,456,000 

32,760,000 

Ireland                - 

83,000 

IIO,OOO 

Total 

286,812,000 

24O,OOO,OOO 

m 


FOOD  FOR  THOUGHT. 

"  THE  people  of  this  country  were  never  in  such  a  dangerous 
position  as  at  the  present  moment.  The  great  mass  of  the 
people  do  not  know  how  near  the  precipice  we  are.  The 
remedy  lies  in  settling  down." 

In  these  words  Mr.  J.  H.  Thomas  warned  his  audience  at 
Hull  on  the  7th  November,  1920,  of  the  dangers  of  industrial 
unrest.  We  believe  that  his  diagnosis  is  correct  and  that  the 
remedy  which  he  proposes  is  sound.  On  the  same  day  his 
colleague,  Mr.  C.  T.  Cramp,  (Industrial  Secretary  of  the 
N.U.R.)  uttered  a  very  similar  warning  at  Manchester.  "  I 
should  not  be  surprised,"  he  said,  "  if  some  of  the  greatest 
industrial  conflicts  we  have  ever  had  take  place  this  winter. 
.  .  .  Whatever  may  be  achieved  by  raising  wages  or  by 
altering  the  condition  of  industry — for  a  number  of  years  there 
will  be  a  lowered  standard  of  life  throughout  Europe.  I  do 
not  complain  of  that  as  long  as  the  lower  standard  of  life  is 
applied  all  round.  I  would  be  prepared  to  live  on  bread  and 
cheese  and  onions  if  the  dukes  are  prepared  to  do  the  same. 
.  .  .  I  do  not  believe  that  Bolshevism  is  practicable  in  this 
country." 

•    ••    <• 

Taking  these  pronouncements  as  having  been  uttered  in  all 
sincerity,  as  we  are  most  willing  to  do,  we  conclude  that 
Messrs.  Thomas  and  Cramp  have  seen  the  red  light  of  Bol- 
shevism, and,  recognising  that  danger  signal,  are  prepared  to 
do  all  in  their  power  to  avoid  a  crash  similar  to  that  which 
has  befallen  Russia.  Of  Mr.  Thomas  it  has  been  said,  not 
without  a  measure  of  truth,  that  he  aspires  to  be  Codlin  at 
Downing  Street  and  Short  at  Unity  House,  and  it  is  not  always 
easy  to  reconcile  the  two  impersonations  nor  to  be  certain, 
when  he  is  on  neutral  ground,  which  role  predominates.  Be 
that  as  it  may,  the  main  points  are  that  he  realises  that  it  is 
the  people  who  are  in  danger  and  that  the  situation  can  be 
saved  by  "  settling  down."  These  are  fundamental  truths 
and  if  Mr.  Thomas  acts  up  to  his  professions  and  resists  the 
temptations  of  "unsettling"  his  followers  he  will  deserve  the 
undying  thanks  of  his  generation. 

88 


Mr.  Cramp  is  less  definite  and  does  not  say  whether  he 
welcomes  or  whether  he  deplores  the  great  conflict  which  he 
thinks  may  come  upon  us  this  winter.  The  matter  is  of 
importance  because  he  is  one  of  those  in  whose  power  it  lies 
to  influence  future  events  to  a  very  considerable  extent.  If 
Mr.  Cramp  and  his  colleagues  in  the  Council  of  Action  decide 
in  favour  of  industrial  peace  there  will  be  no  great  conflict 
whilst,  on  the,  other  hand,  if  they  elect  to  accentuate  the 
bitterness  of  the  class-war  a  prevalence  of  unrest  is  inevitable. 
Mr.  Cramp  does  not  believe  that  Bolshevism  is  practicable  in 
Great  Britain,  but  again  we  are  left  in  doubt  whether  his 
conclusion  is  arrived  at  with  regret  or  with  relief.  What  we 
do  know  is  the  side  he  will  be  on  if  the  issue  is  joined,  for, 
speaking  at  Carlisle  in  May,  1919,  he  declared  "  Whenever 
you  say  you  are  ripe  for  revolution  I  am  with  you.11 


Mr.  Cramp  sees  further  and  clearer  than  those  of  his 
colleagues  who  would  have  us  believe  that  the  high  level  of 
prices  and  the  stagnation  of  real  wages  can  be  removed  by 
Government  action  or  remedied  by  the  adoption  of  Com- 
munism. He  recognises  that  the  waste,  disorganisation  and 
destruction  inseparable  from  five  years  of  war  must  result  in 
a  lower  standard  of  life  throughout  Europe,  and  he  assumes 
that  Britain  will  not  continue  to  escape  the  privations  that 
have  befallen  our  neighbours.  In  this  last  particular  we  hope 
that  his  pessimistic  forecast  may  not  be  realised.  So  far  we 
have  weathered  the  storm  with  unexpected  success  and  as 
reconstruction  is  more  advanced  in  this  country  than  elsewhere 
we  may  reasonably  look  forward  not  only  t6  the  maintenance 
of  our  present  standard  of  living  but  even  to  a  steady  reduc- 
tion in  its  cost.  If,  however,  this  hope  is  to  be  justified  we 
must  not  cultivate  the  strike  fever,  but  "settle  down'1  to 
manufacture,  distribute  and  sell  the  goods  which  alone  can 
make  good  the  vacuum  caused  by  the  late  orgy  of  devastation. 
If  the  crying  needs  of  the  day  are  for  the  expansion  of  industry 
and  the  consequent  increase  of  productivity  we  cannot  afford 
to  repeat  the  recent  experiment  of  a  coal  strike  which  is 
estimated  to  have  thrown  a  million  and  a  half  people  out  of 
work,  to  have  injured  our  foreign  trade,  to  have  diminished 
the  output  of  coal  by  fourteen  million  tons  and  to  have  caused 
*  loss  of  at  least  as  many  pounds  in  wages  to  the  miners  alone. 
If  we  are  to  have  a  revolution  to  satisfy  the  class-war 

89 


merchants  we  must  find  some  avenue  other  than  industrial 
ferment  or  the  resulting  upheaval  will  cause  the  promised 
spoils  of  victory  to  wither  before  they  can  be  gathered. 

•  •     • 

What  is  perhaps  the  most  interesting  feature  in  Mr.  Cramp's 
speech  occurs  in  the  passage  that  we  have  already  quoted, 
and  in  which  he  declares  his  readiness  to  live  on  bread  and 
cheese  and  onions  if  the  dukes  would  do  the  same.  "  One 
touch  of  nature  makes  the  whole  world  kin,"  and  Mr.  Cramp's 
suggestion,  fantastic  though  it  may  seem  to  be,  nevertheless 
gets  very  close  to  the  heart  of  the  problem.  The  demand  for 
equality  of  sacrifice  is  a  perfectly  sincere  and  a  very  human 
cry  which  rises  unbidden  to  the  lips  of  a  large  number  of  law- 
abiding,  intelligent  and  fair-minded  people.  We  would  fain 
believe  that  the  reason  why  this  appeal  falls,  for  the  most 
part,  on  unheeding  ears  is  due,  not  to  the  crude  and  selfish 
reluctance  of  those  who  have  to  share  their  plenty  with  those 
who  are  in  want,  but  to  some  more  complex  and  worthier 

consideration. 

•  •     • 

Logically  there  is  no  case  for  equality.  The  thing  demanded 
has  never  existed  in  this  world  and,  so  far  as  we  can  see, 
never  will  exist  in  any  real  sense.  As  man  advances  in 
civilisation  the  more  glaring  inequalities  are  subdued  by 
gradual  stages,  but  when  force  is  used  with  the  idea  of 
hastening  the  evolutionary  process,  the  attempt  seldom,  if 
ever,  produces  benefits  that  compensate  for  the  calamities 
which  accompany  the  upheaval.  The  experiment  has  been 
made  again  and  again,  and  the  example  of  Russia  is  no 
exception  to  the  rule.  Not  only  has  Lenin  failed  to  equalise 
the  miserable  fate  of  his  dupes,  but  he  has  been  driven  to 
standardise  inequality  as  a  measure  of  State,  and  that  at  a 
level  far  below  what  has  been  experienced  in  any  civilised 
country  within  human  memory. 

m    m    m 

The  vision  of  dukes  living  on  onions  is  a  diverting  picture 
which,  besides  providing  excellent  copy  for  the  newspapers, 
might  actually  be  good  for  ducal  souls,  but  Mr.  Cramp's 
challenge  must  not  be  taken  too  literally  and  a  certain 
amount  of  picturesque  rhetoric  is  allowable  when  driving 
points  home.  The  fact  that  altruism  is  often  of  greater 
potency  than  logic  in  practical  affairs  is  a  truth  not  yet 

90 


sufficiently  apprehended,  and  its  virtue  fails  altogether  if  any 
trace  of  ostentation  or  advertisement  is  allowed  to  creep  in 
to  mar  the  dignity  of  the  sacrifice.  For  these  and  other 
reasons  we  shall  never  see  British  folk  indulging  in  stage- 
managed  scenes  for  public  edification.  Any  good  that  is 
achieved  in  this  sphere  must  be  done  for  conscience  sake  and 
by  stealth. 

•    9-    • 

If  any  man,  peer  or  peasant,  loves  his  country  and  would 
serve  her  in  time  of  peril,  he  need  not  wait  for  heroic 
occasions  nor  seek  exclusive  means.  Opportunity  is  ever 
present  and  comes  to  all.  He  who  obeys  the  call  of  sacrifice 
may  receive  no  individual  reward  nor  may  his  light  shine 
before  men,  but  he  will  know  that  he  has  performed  his  share 
of  a  great  and  necessary  work.  The  man  who  fails  to  obey  is 
false  to  his  heritage  because  he  retards  that  work  and,  in  the 
long  run,  injures  both  himself  and  the  nation  to  which  he  owes 
so  much.  Every  act  of  sacrifice  counts  two  on  a  division  and 
so  is  of  double  worth.  It  indicates  the  better  way  to  those 
who  doubt,  and  it  smooths  the  path  for  weaker  brethren. 
Equality  can  never  come  by  compulsion,  for  the  compeller 
must  necessarily  be  more  powerful  than  the  compelled,  and 
power  presupposes  inequality.  The  spirit  of  altruism  is  frozen 
in  the  chilly  air  of  class-hatred,  it  can  only  expand  in  the 
genial  atmosphere  of  peace  and  goodwill.  The  fury  of  the 
elements  made  ^Esop's  traveller  secure  his  cloak  more  firmly ; 
it  was  the  warmth  of  the  sun  that  made  him  discard  it. 


m    m 


91 


DAY   BY  DAY. 

( A  monthly  Record  of  the  principal  events,  at  home  and  abroad, 

which  have  a  direct  bearing  upon  the  maintenance,  or  otherwise,  of 

peace  in  industry) . 

Oct.  The  Ministry  of  Labour  records  a  rise  of  three  points  in  the 

1st.          cost  of  living  during  September,  and  a  total  rise  of  164  points 
since  July,  1914. 

Changes  effected  in  the  rates  of  labour  during  the  month 
gave  a  total  increase  of  ^49,100  in  the  weekly  wages  of 
219,000  workpeople.  The  hours  of  labour  of  about  1,500 
workers  were  reduced  by  an  average  of  three  a  week. 

212  trade  disputes  involved  104,000  workpeople  and  a  loss 
of  1,135,000  working  days. 

Unemployment  in  the  Insured  Trades  rose  to  3.80  per 
cent.,  and  the  numbers  on  the  Live  Registers  of  the  Employ- 
ment Exchanges  rose  from  281,032  to  311,126. 

Mine  Owners  present  a  new  offer  to  the  Miners,  giving  an 
increase  of  2/-  per  shift  for  an  output  of  248,000,000  tons. 
The  Miners  postpone  strike  notices  and  propose  to  ballot  on 
October  nth  and  i2th  for  or  against  acceptance  of  the  offer. 
2nd.  Messrs.  Steel,  Peach  &  Tozer  of  Sheffield  gave  seven  days' 

notice  to  1,000  of  their  workmen  owing  to  lack  of  orders. 

It  is  announced  that  The  Daily  Herald  will  be  sold  at  2d. 
a  copy  on  and  after  October  nth.  Of  the  .£400,000  appealed 
for  last  year  only  ^90,000  has  been  subscribed,  and  Labour 
is  urged  by  the  Directors  to  give  further  support  to  the  paper. 

The  French  General  Confederation  of  Labour  rejected  the 
Third   (Moscow)    International   by   a   large   majority.      The 
Italian  Socialist  Party  has  declared  its  adherence  to  the  Third. 
4th.  At  a  meeting  convened  by  the  Mayor  of  Coventry  (where 

there  are  4,500  unemployed),  representatives  of  the  "  Coventry 
Soviet "  demanded  that  factories  should  be  taken  over  by  the 
City  Council  and  the  Unemployed  Workers'  Committee  (or 
Coventry  Soviet)  for  the  production  of  commodities  needed 
by  Russia.  The  Management  and  foremen  would  be  elected 
by  the  workers. 

6th.  The  special  committee,  appointed  by  the  T.U.C.  to  investi- 

gate Mr.  Smillie's  charges  that  seats  on  the  Parliamentary 
Committee  were  wen  by  bartering  votes,  report  their  agree- 
ment with  the  charge,  but  feel  that  no  good  purpose  would  be 
served  by  a  re-election  this  year.  The  General  Council  will 
be  elected  next  year  by  groups  and  the  evils  complained  of 
automatically  eliminated. 
92 


The  Committee  appointed  to  investigate  the  cost  of  wool- 
tops  and  yarns  and  the  British  Wool  Federation  have  reached 
a  deadlock.  The  four  Labour  delegates  have  tendered  their 
resignation. 

The  Transport  Workers'  Federation  decided  to  urge  the 
Ministry  of  Labour  to  consider  Mr.  Bevin's  scheme  for  a 
guaranteed  weekly  dockers'  wage  of  ^4.  He  estimates  the 
cost  to  the  industry  at  ^2,600,000  a  year. 

Following  the  example  of  the  industrial  workers,  peasants  in 
Italy  and  Sicily  are  seizing  the  land  and  dividing  it  into  small 
lots  to  be  worked  by  the  peasants  on  a  co-operative  basis. 

Profiteering  Acts :  The  Report  of  the  Committee  on  the 
oils,  fat  and  margarine  trade  states  that  there  is  at  present 
keen  competition  between  the  principal  groups  of  manufac- 
turers, and  that  the  high  prices  following  decontrol  were  due 
entirely  to  shortage  of  supplies.  They  suggest  that,  should  a 
combine  occur  in  the  future  and  the  industry  become  a  mon- 
opoly, the  Government  should  fix  a  reasonable  maximum 
profit  on  turnover. 

7th.  Coal  Crisis :   Mr.  Smillie  advises  the  Miners  to  accept  the 

Owners'  offer  as  a  temporary  measure. 

Italy  :  Delegates  sent  to  Russia  by  the  General  Confedera- 
tion of  Labour  report  that,  in  their  opinion,  the  revolution  in 
Russia  has  completely  failed.  Capitalism  has  been  destroyed, 
but  nothing  has  been  substituted,  and  its  evils  have  been 
intensified. 

8th.  The  Cabinet  has  under  consideration  a  scheme  submitted 

by  Sir  Henry  Maybury,  Director  General  of  the  Roads  De- 
partment for  the  Ministry  of  Transport,  which,  if  adopted, 
would  absorb  the  labour  of  500,000  unemployed  men. 

llth.  It  is  reported  that  numerous  peasant  risings  on  a  large  scale 

have  taken  place  in  Russia  against  the  Soviet  Government. 
There  is  a  growing  demand  for  the  summoning  of  a  Constitu- 
ent Assembly. 

12th.  Printing  Trade  dispute:    The  Employers'  offer  of  an  in- 

crease of  5/-  to  2/6,  according  to  district,  in  place  of  the  men's 
demand  for  a  flat  rate  of  i5/-,  was  rejected  by  the  Federation. 
The  employers  suggested  that  the  matter  should  be  referred  to 
some  form  of  mediation. 

13th.  The  Miners'  Ballot  shows  an  overwhelming  majority  against 

acceptance  of  the  owners'  offer.  (For:  171,428;  Against: 
635.098), 

14th.  The  miners'  leaders  decide  that   strike  notices  must  be 

allowed  to  expire  on  the  i6th.  The  Prime  Minister  presses 
for  further  negotiation. 

93 


Italy  :  A  two-hours  general  strike  was  carried  out  as  a 
protest  against  the  arrest  of  political  offenders  opposing  the 
country's  policy  towards  Russia. 

18th.  Coal  Crisis :    One  million  miners  on  strike.      Emergency 

orders  are  put  into  force  forbidding  food-hoarding,  and  ration- 
ing of  coal,  gas  and  electricity. 

The  procession  of  unemployed  organised  to  accompany  the 
delegation  of  fifteen  London  Mayors  to  interview  the  Premier 
was  the  occasion  of  serious  riots  in  Whitehall  and  Downing 
Street. 

The  Soviet  delegates,  Zinovieff  and  Losovsky,  have  been 
ordered  to  leave  Germany  as  a  result  of  speeches  delivered  by 
them  urging  the  people  to  begin  a  class-war. 

19th.  Parliament  re-assembled.     Mr.    Brace   suggested   that   the 

coal  dispute  should  be  settled  by  the  immediate  granting  of 
the  2S.,  a  National  Wages  Board  set  up  for  the  industry,  and 
all  attention  concentrated  on  how  to  increase  output,  but  the 
Premier  rejected  the  proposals  as  affording  no  guarantee  of 
better  output. 

All  racing  suspended  until  the  end  of  the  strike  ;  train  and 
steamship  services  curtailed. 

The  Government's  plans  for  dealing  with  unemployment 
were  announced.  They  include  a  large  scheme  for  the  con- 
struction of  new  roads  throughout  the  country ;  the  employ 
ment  of  further  large  numbers  of  ex-Service  men  on  housing, 
a  large  increase  in  the  numbers  admitted  into  the  skilled 
ranks  of  the  foundry,  iron-puddling  and  railway-wagon 
building  trades. 

Miss  Sylvia  Pankhurst  was  arrested  in  connection  with  the 
publication  of  an  article  which  appeared  in  The  Worker's 
Dreadnought,  the  Communist  organ  of  which  she  is  editor. 

The  attemps  of  the  J.I.C.  to  effect  a  settlement  of  the 
wages  demand  of  the  Road  Transport  Workers  having  failed, 
the  National  Federation  has  declared  in  favour  of  a  sectional 
strike  of  180,000  workers  to  secure  a  minimum  weekly  wage 
of  £4  is. 

21st.  The   N.U.R.    Executive    informed    the   Government   that 

unless  the  miners'  claims  are  granted,  or  negotiations  resumed 
within  48  hours,  the  railwayman  will  cease  work  on  Sunday 
night  at  midnight.  No  official  decision  was  announced  by  the 
Transport  Workers,  but  Mr.  Robert  Williams  declared  in 
favour  of  a  general  strike  within  24  hours. 

22nd.  The    Times   expresses  its  faith  in  the  intentions  of  both 

owners  and  miners  to  increase  output,  and  advocates  the 
immediate  concession  of  the  wage  demand.  The  Parliament- 

94 


ary  Committee  of  the  Trades  Union  Congress  convened  a 
national  conference  for  October  2yth  in  the  interests  of  peace. 
Both  Mr.  J.  H.  Thomas  and  Mr.  Bowerman,  on  behalf  of  the 
Congress,  express  disapproval  of  the  sympathetic  strike 
threatened  by  the  railwaymen.  The  Miners'  Executive  was 
summoned  to  London  and  a  joint  meeting  with  the  Executive 
of  the  N.U.R.  arranged. 

24th.  The  Government  and  the   Miners'  Federation   discussed  a 

new  proposal  made  by  the  Government.  The  nature  of  the 
proposal  was  not  made  public.  The  railwaymen  comply  with 
the  Miners'  request  that  they  should  suspend  their  threatened 
strike  and  not  further  prejudice  the  chances  of  peace.  The 
Transport  Workers  and  other  important  trade  unions  will 
await  the  Wednesday  Conference  before  taking  definite  action. 

25th.  Alderman  MacSwiney,  Lord  Mayor  of  Cork,  died  in  Brixton 

Prison  at  the  end  of  73  days'  hunger  strike. 

26th.  A  foreigner  who  refuses  to  disclose  his  identity,  arrested 

and  charged  at  Bow  Street  under  the  Aliens  Act  1920,  is 
believed  by  the  police  to  be  a  courier  employed  between 
Lenin  and  the  revolutionary  party  in  this  country.  When 
arrested  the  man  was  carrying  letters  from  Sylvia  Pankhurst 
to  Lenin  and  Zinovieff  and  memoranda  on  the  training  of  the 
Red  Army. 

27th.  Coal  Crisis  :    A  serious  hitch  in  the  negotiations  between 

the  Miners  and  the  Cabinet  was  reported.  In  the  absence  of 
any  official  statement,  it  was  rumoured  that  agreement  having 
been  reached  that  the  miners  should  receive  wages  based  on 
the  value  of  output  for  not  more  than  two  months,  during 
which  period  permanent  machinery  in  the  shape  of  a  National 
Wages  Board  should  be  set  up  for  the  future  regulation  of 
wages,  the  South  Wales  representatives^  on  the  Miners' 
Executive  refused  the  terms  on  which  the  wages  are  to  be 
awarded  during  the  experimental  period.  According  to  The 
Times,  the  South  Wales  miners  suddenly  claimed  the  right  to 
wholly  new  wage  rates  during  the  experimental  period,  and 
claim  the  whole  of  the  profit  on  the  increased  coal  tonnage 
after  the  deduction  of  the  owners'  statutory  profits.  The 
Daily  Herald's  version  is  that  the  Government,  in  drawing  up 
the  mutually  agreed  scheme,  made  subtle  changes  advan- 
tageous to  the  owners  and  unfair  to  the  miners  regarding  the 
distribution  of  the  "  pool,"  and  attempted  to  degrade  the 
National  Wages  Board  into  a  national  committee  on  output. 
The  T.U.C.  meeting  was  postponed  for  24  hours. 
The  Emergency  Powers  Bill  passed  its  third  reading  in  the 
Commons.  Labour  amendments  providing  that  no  powers 

95 


of  military  or  industrial  conscription  could  be  taken  under 
the  Bill,  and  that  striking  or  peacefully  persuading  others  to 
strike  should  not  be  an  offence,  were  accepted. 

28th.  The  Miners'  Executive  agree  to  recommend  the  men  to 

adopt  the  Government's  proposals.  A  ballot  will  be  taken 
on  November  2nd,  and  if  there  is  a  majority  in  favour  of 
acceptance,  work  will  be  resumed  not  later  than  November 
8th.  The  men  will  receive  the  zj-  unconditionally  until 
January  3rd,  thereafter  until  a  permanent  basis  has  been 
agreed  by  the  National  Wages  Board,  wages  will  be  governed 
by  a  sliding  scale  which  takes  account  of  output  and  the 
price  of  export  coal.  The  September  export  Trade  will  be 
taken  as  a  basis  warranting  the  payment  of  one-half  of  the 
present  award,  and  a  further  i/-  will  be  paid  for  every 
additional  ,£288,000  in  the  weekly  export  trade. 

Sylvia  Pankhurst  sentenced  to  six  months'  imprisonment  in 
the  second  division  on  a  charge  of  publishing  in  The  Workers1 
Dreadnought  seditious  matter  likely  to  cause  disaffection 
among  his  Majesty's  forces  and  the  civilian  population. 

The  House  of  Lords  passed  the  Emergency  Powers  Bill 
in  all  its  stages. 

29th.  Coal  Crisis  :  In  issuing  ballot-papers,  the  Miners'  Executive 

recommend  acceptance  of  the  terms  offered. 

Coal  Crisis  :  The  Executives  of  the  South  Wales  and  of  the 
Lancashire  miners  advise  their  members  to  vote  against 
acceptance  of  the  proposed  scheme. 

30th.  Belgium  :  The   National  Congress   of  the   Socialist  Party 

rejected  the  Third  International  as  being  opposed  in  principle 
to  the  international  socialist  movement  and  calculated  to 
weaken  the  working  class  movement  towards  liberation. 
(Votes  for  rejection  :  493, 1 75  ;  against,  76,223). 


No.  XL 

DECEMBER 


MCMXX 


"  The  essence  of  trade  is  that  it  is  an 
adventure  in  which  failures  are  the  stages  of 
progress." 


INDUSTRIAL 
PEACE 


CONTENTS 

On  Collective  Bonus 

If  Labour  Rules 

The  Facts  of  the  Case  in  Diagram,  VIII 

The  Compleat  Conciliator 

The  Slump  in  Trade,  II 

The  Business  Man's  View,  II 

Food  for  Thought 

Day  by  Day 

83      ffi 


„,. 

* 

o    >IY.   ?>•»    ^ 


INDUSTRIAL     PEACE 

sss^*s*-fi!fi!fi*ajiss^^^ss**^«-s5s^j;ss^^^as^;sss!ssssss^^ 
ON  COLLECTIVE  BONUS. 

A  great  many  people  unacquainted  with  industry  are  asking, 
"What  is  Collective  Bonus?"  Others,  who  are  conversant 
with  industry,  think  the  answer  of  little  moment.  They  know 
that  all  fashions  in  remuneration  have  their  day,  and  that  none 
will  deliver  mankind  thoroughly  from  the  material  or  moral 
impediments  in  the  way  of  the  production  of  wealth.  They 
remember  the  recent  refusal  of  the  coal-miners  to  accept  a 
collective  bonus  on  a  national  scale,  even  as  a  temporary 
makeshift.  More  recently,  distinguished  speakers  at  a  lunch, 
held  under  the  auspices  of  the  Higher  Production  Council,  sang 
the  praises  of  Collective  Bonus.  Mr.  Asquith  picked  out  as  a 
model  the  well-known  Priestman  scheme.  But  between  the 
extremes  of  opinion  regarding  Collective  Bonus  there  must  be 
a  middle  way.  Collective  Bonus  is  not  the  panacea  which 
some  enthusiasts  think  it.  Nor  are  the  cynical  right  in 
believing  it  an  illusory  device.  It  is  a  very  distinctive 
method,  and  like  most  methods  it  only  answers,  or  it  answers 
best,  under  the  specific  conditions  which  favour  it.  Let  us  try 
to  see  what  these  are. 

Collective  Bonus  is  a  compromise.  It  arises  naturally  and 
most  frequently  where  a  trade  or  an  establishment  has  been  on 
time-wages,  and  the  management  has  sought  to  replace  time- 
rates  by  piece-rates.  The  workmen,  disliking  individual  piece- 
rates,  consent  to  an  experiment  in  a  collective  piece-rate. 
This  consent  rests  on  various  grounds.  Some  workmen  regard 
a  collective  piece-rate  as  a  mild  way  of  killing  a  piece-work 
proposal.  Others  like  the  emphasis  which  such  schemes  lay  on 
solidarity  and  co-operation.  Some  like  experiments  and  enjoy 
the  stimulus  which  the  running  of  a  scheme  brings  into  the  life 
and  the  politics  of  a  workshop.  Not  many  believe  strongly  in 
the  method,  for  they  know  the  difficulties  too  well.  Collective 
schemes,  therefore,  are  the  management's  child.  Their  accept- 
ance in  the  first  instance  by  the  workmen  and  their  success  in 
running  depends  primarily  on  the  initiative  of  the  management. 

The  essence  of  a  collective  scheme  is  that  a  standard 
output  for  a  whole  shop  or  a  whole  establishment  is  fixed,  and 
on  this  a  standard  wage  is  paid,  while  increases  in  output 
bring  proportionate  increases  in  wages.  The  standard  output 
may  be  fixed  by  value  in  money,  or  by  the  number  of  articles 
produced,  or  by  their  weight.  The  scales  of  increase  also 

98 


offer  many  possibilities  of  variation.  What  suits  one  manu- 
facture or  one  establishment  may  fail  to  suit  others.  More 
important,  a  method  of  organisation  which  pleases  one  set 
of  employees  may  be  impracticable  elsewhere.  The  personal 
factor  is  very  important.  But  ordinarily  the  technical  factor 
must  be  present  to  call  forth  the  spirit  which  alone  can  make 
collective  bonus  a  success.  By  the  technical  factor  is  meant  a 
necessity  in  the  nature  of  the  work  itself  for  close  co-operation 
among  producers  of  all  sorts.  Jn  a  machine-tool  works,  for 
instance,  a  great  many  skilled  specialists  work  at  close 
quarters,  jobs  passing,  to  some  extent,  from  hand  to  hand  and 
back  again,  so  that  delay  or  bad  work  at  any  point  is  apt  to 
.prejudice  the  whole  movement  of  production,  while  the 
contribution  of  each  man  to  the  total  result  would  be  difficult 
to  disentangle  from  the  result,  or  even  impossible.  If  the 
effectiveness,  and  therewith  the  value,  of  each  man's  work 
depends  on  how  his  mates  are  working,  and  if  the  total 
result  cannot  easily  or  conveniently  be  analysed  into  individual 
contributions,  then  any  scheme  that  will  promote  or  reward 
harmony  and  helpfulness,  as  of  the  essence  of  efficiency, 
is  to  be  welcomed. 

Let  us  follow  out  the  typical  collective  scheme  as  it  was 
conducted  (or  tried),  for  instance,  in  many  machine-tool  works 
during  the  war.  A  men's  bonus  committee  was  a  necessity. 
The  committee  would  keep  an  eye  on  the  progress  of  work  in 
the  shops  and  would  check  the  records  of  the  management. 
Here  was  the  germ,  and  indeed  more  than  the  germ,  of  Joint 
Control.  The  committee  could  focus  the  public  opinion  and 
the  "  politics  "  of  the  workshop.  The  spirit  of  -criticism  and 
agitation  could  find  a  useful  channel  of  expression  and  work. 
A  sort  of  public  life  was  possible — an  opportunity  of  real 
value,  for  of  unrest  and  inefficiency  some  part  at  least  is  due 
to  lack  of  self-expression  and  consultation  and  responsibility. 
"Works  Committees"  and  similar  organisations  are  apt  to 
suffer  from  having  no  very  definite  or  important  functions, 
and  from  being  tempted,  therefore,  to  make  trouble  rather 
than  to  do  real  work.  A  collective  bonus  scheme,  in  a  good 
shop,  is  bound  to  stimulate  the  interest  of  workmen  in  their 
employment,  and,  in  educating  them,  to  improve  their  status 
as  well. 

But  a  lasting  success  is  very  difficult  to  achieve.  Without 
good-will  between  the  employer  and  the  workmen  success  is 
impossible.  The  employer,  moreover,  must  accept  the 
measure  of  joint  control  which  the  scheme  involves  and 

99 


be  prepared  to  disclose  some  at  least  of  his  business  records 
to  his  committee.  The  men,  on  their  side,  must  bring  good- 
will to  the  transaction  and  accept  the  duty  of  making  the 
best  of  the  joint  venture.  They  must  identify  themselves 
in  interest  with  their  employers  more  thoroughly  than  is 
usual  or  easy  for  them.  Wage-earners  by  custom,  and  often 
time-workers  by  preference,  they  feel  that  their  trade  union 
solidarity  is  not  quite  compatible  with  a  very  intimate 
concern  in  the  prosperity  of  a  particular  firm.  Here  is  a 
general  handicap  that  weakens  collective  working  even  where 
the  employer  is  popular  and  trusted.  On  the  other  hand,  the 
workmen  may  be  well-disposed  towards  their  employer 
without  being  "together"  among  themselves.  The  decisive 
factor  in  Collective  Bonus,  after  all,  is  the  morale  of  the  shop. 
Workmen  who  are  suspicious  or  hostile  towards  their 
employer  will  probably  be  the  same  towards  each  other, 
and  where  they  are  so,  no  bonus  scheme  will  work  well. 
The  bonus  committee  will  have  little  authority,  or  its 
members  will  have  a  very  short  tenure,  or  no  good  men 
will  join  it,  or  it  may  be  ignored  in  favour  of  mass  meetings 
of  the  whole  shop.  Even  if  the  men  adopt  the  scheme 
heartily,  its  working  may  set  them  at  variance.  If  one 
department  or  gang  suspects  that  it  has  to  earn  bonus 
for  some  idler  or  consistently  unlucky  department  the 
scheme  is  at  once  in  danger.  The  limits  of  solidarity 
within  the  workshop  are  soon  reached.  Individuals  and 
gangs  and  departments  within  a  large  whole  inevitably 
become  differentiated  from  each  other  in  respect  of  efficiency. 
The  better  producers  are  likely  to  demand  a  special  premium 
within  the  general  scheme  of  bonus.  This  process  may 
be  carried  to  great  lengths.  From  the  theoretical  point 
of  view  wages  might  reasonably  be  made  to  depend  on 
two  variables:  (i)  the  general  output,  and  (2)  the  specific 
contribution  thereto  of  smaller  groups.  But  at  this  point 
the  whole  scheme  is  apt  to  break  down  into  group  piece-work 
without  the  collective  framework.  The  double  way  of 
reckoning  by  results  is  excellent  in  theory,  but  in  industry 
arrangements  must  be  simple.  If  they  are  complicated  they 
are  suspected  as  tricks  to  deceive  and  defraud. 

Collective  Bonus,  then,  calls  for  considerable  moral  and 
mental  cultivation  in  employers  and  workpeople.  The  work, 
moreover,  must  be  such  as  to  impose  in  considerable  measure 
the  spirit  of  good-will  and  co-operation,  and  the  scale  of 
the  work  should  not  exclude  acquaintance  and  contact. 
But  the  most  important  conditions  of  success,  perhaps,  are 
the  moral  conditions. 


IF  LABOUR  RULES. 

IF  "  the  workers  "  make  up  their  mind  to  rule  and  go  the 
right  and  straightforward  way  about  the  business,  there  is  no 
sort  of  impediment  to  the  realisation  of  their  political 
ambitions.  The  prize  is  within  the  grasp  of  any  combination 
that  can  persuade  the  majority  of  their  fellow-citizens  to 
entrust  them  with  the  task  of  governing  the  country.  This 
very  obvious  fact  cannot  be  hidden  from  the  leaders  of  the 
Labour  Party,  but  they  have  got  into  the  habit  of  talking  and 
acting  as  if  the  direct  and  constitional  road  to  power  were 
blocked  by  some  unsurmountable  obstacle,  and  that  they  have 
therefore  to  originate  some  novel  and  unauthorised  approach 
to  Downing  Street.  Of  the  many  strange  beliefs  that  are 
engendered  by  this  mental  attitude  the  most  prevalent  appears 
to  be  that,  if  a  party  is  actuated  by  high  ideals,  exclusion 
from  office  constitutes  an  injustice,  if  not  a  fraud.  Another 
popular  article  of  faith  is  that  if  a  party  is  fit  to  govern  it 
ought  to  be  given  the  opportunity  of  demonstrating  that 
fitness  in  practice  without  having  to  undergo  the  preliminary 
ordeal  of  the  polls. 

And  so  the  question,  "  Is  Labour  fit  to  rule  "  is  being  asked 
and  debated  with  almost  pathetic  frequency  and  quite  un- 
necessary ardour.  One  might  as  well  ask  "Is  Mr.  Arthur 
Balfour  fit  to  command  the  Grand  Fleet?"  To  both  questions 
the  answer  should  be  very  similar.  If  Mr.  Balfour  had  joined 
the  navy  in  his  youth  and  gone  through  the  mill,  his  fitness  or 
otherwise  for  high  naval  command  would  have  been  put  to 
the  test.  His  intellectual  attainments  and  his  sincerity  of 
purpose  would,  no  doubt,  stand  him  in  good  stead  as 
commander-in-chief,  but  they  would  hardly  count  in  the 
balance  as  compared  with  other  qualifications  for  the  appoint- 
ment. 

If  the  Labour  Party  serves  its  political  apprenticeship  and 
secures  a  majority  in  the  House  of  Commons  it  succeeds  ipso 
facto  and  its  fitness  cannot  then  be  questioned.  The  one  and 
only  title  to  office  in  a  democratic  state  is  the  concrete  and 
accomplished  fact  that  the  electorate,  wisely  or  foolishly, 
deliberately  or  in  haste,  has  shown  a  decided  preference  for 
one  group  over  its  rivals.  Faced  with  the  logic  of  such  con- 
siderations, impatient  politicians  are  sometimes  apt  to  attempt 

101 


to  explain  away  their  ill  success  at  the  polls  by  suggesting 
that  they  are  not  given  a  fair  chance — that  the  dice  are  loaded 
against  them.  The  suggestion  is  unworthy  and  untrue.  Had 
there  been  a  conspiracy  on  the  part  of  the  so-called  ruling 
classes  to  bar  the  road  to  the  apirations  of  Labour,  the  Repre- 
sentation of  the  People  Act  would  not  have  been  put  on  the 
Statute  Book  without  a  struggle.  It  is  said  that  Labour 
cannot  find  the  money  for  electoral  campaigns  on  a  sufficient 
scale.  This  is  true  in  a  narrow  sense  but  not  in  a  wide  one. 
Lack  of  funds  does  not  stand  in  the  way  of  Direct  Action.  The 
recent  Miners'  strike  cost  the  men  no  less  than  fourteen 
millions,  and  expenditure  on  propaganda  is  never  stinted.  The 
fact  is  that  the  believers  in  the  effiacy  of  the  "  short  cut '' 
squander  the  sinews  of  war  in  the  alarum  and  excursions 
demanded  by  Direct  Action,  and  starve  their  political  machine. 

Mr.  J.  H  Thomas,  M.P.,  is  one  of  those  Labour  Leaders 
who  believe  (with  occasional  lapses)  that  the  method  of  the 
ballot  box  is  preferable  to  unconstitutional  force,  and  it  is 
somewhat  disappointing,  therefore,  to  find  that  his  book — 
When  Labour  Rules,  reacts  in  a  contrary  direction.  There 
is  a  plethora  of  confident  assertion,  a  super-abundance  of 
promise,  a  vast  amount  of  ill-informed  criticism,  but  very 
little  in  the  shape  of  constructive  statesmanship.  He  falls 
headlong  into  all  the  specious  but  unprofitable  ecstacies  that 
keep  labour  in  the  wilderness,  and  seems  to  think  that 
vehement  emphasis  and  admirable  intentions  are  sufficient 
credentials. 

"  However  true  or  false  future  events  may  prove  my  vision 
to  be,  I  do  assert  with  all  the  vehemence  at  my  command  that 
Labour  Rule  will  be  entirely  beneficent,  and  that  its  dealings 
with  high  and  low,  rich  and  poor,  will  be  marked  with  broad- 
minded  toleration  and  equity." 

Mr.  Thomas  cannot  expect  to  escape  criticism  because  he 
chooses  to  speak  as  a  prophet  instead  of  reasoning  from 
experience  of  the  past.  His  word  as  a  successful  Trade  Union 
Leader  will  be  accepted  without  question  by  many  working 
men  and  women.  He  knew  when  he  wrote  the  book  that  by 
putting  his  name  on  the  title  page  he  would  stifle  the  spirit  of 
enquiry  in  the  majority  of  his  readers.  Such  knowledge  laid 
the  author  under  the  obligation  to  establish  his  "  vision"  on 
a  sure  foundation  of  facts,  but  he  makes  no  attempt  to  justify 
his  conclusions.  He  is  mindful  that  most  men  like  material 
comfort  and,  confident  of  his  own  skill  in  the  role  of  beneficent 

102 


autocrat,  he  essays  to  win  support  for  his  dictatorship  by 
lavish  promises  of  -wealth  and  ease. 

In  the  England  of  To-morow  there  will  be  shorter  hours  of 
labour  with  free  education,  free  boots,  clothes  and  food  for 
children ;  free  clubs,  theatres,  operas ;  cheap  fares  to  the 
sea-side  ;  fifteen  years  of  leisure  to  all  workers  who,  having 
experienced  considerable  ease  during  their  working  years  may, 
Mr.  Thomas  thinks,  be  expected  to  enjoy  life  up  to  the  age  of 
seventy-five.  All  these  things  cost  money,  but  as  to  how 
that  will  be  obtained,  Mr.  Thomas  says  never  a  word.  The 
appeal  is  not  original,  Jack  Cade  was  just  as  positive,  just  as 
vehement. 

Chapter  III — To-day  and  Yesterday — is  devoted  to  indicating 
"how  very  clear  the  evidence  is  that  Labour  has  reached 
that  stage  in  its  development  which  justifies  it  in  the  belief 
that  it  is  fit  to  rule."  But  here  Mr.  Thomas  proves  himself 
a  wretched  advocate.  The  best  he  can  do  is  to  summarise 
the  social  progress  of  the  last  century,  and  pointing  to  the 
many  things  that  have  been  done  in  the  interests  of  Labour  and 
of  the  poor,  claim  them  all  as  Labour's  own  accomplishment. 

"  Not  only  is  Labour  fit  to  govern,  but  the  needs  of  the 
country  demand  that  it  shall  govern  .  .  .  The  Labour  Party  is 
ready  and  willing  and  able  to  open  the  door,  and  the  Labour 
Party  is  the  only  party  which  is  prepared  to  throw  the  door 
wide  and  lead  the  way  into  an  era  of  progress  and  sanity." 
One  looks  in  vain  in  the  succeeding  chapters  for  some  clear 
exposition  of  a  policy  which  shall  justify  the  claim  and  the 
boast.  But  whether  he  speaks  on  nationalisation,  finance, 
housing,  foreign  policy,  our  dependencies,  the  liquor  trade  or 
even  the  League  of  Nations,  Mr.  Thomas  is  indefinite,  hesi- 
tating and  contradictory.  Thus,  on  page  10,  he  does  not 
think  that  human  nature  will  ever  alter  much.  On  page  153 
he  thinks  that  the  young  man  of  twenty  in  possession  of  a 
fortune  "slacks  and  lazes  and  .  .  .  does  not  develop  and 
expand  his  abilities,  as  he  certainly  would  if  he  had  the  prod 
of  having  to  earn  his  own  living.  It  is  that  that  makes  a  man 
strive  for  development,  and  improvement  and  advancement, 
and  it  is  that  striving  which  makes  the  world  go  round."  But 
on  page  177,  when  defending  nationalisation  or  municipalisa- 
tion,  Mr.  Thomas  says  that  "it  would  not  sterilise  industry — 
personal  industry  I  mean — to  think  he  (man)  was  more  or  less 
secure  in  his  position.  He  would  still  do  his  best — perhaps 
better  than  if  he  worked  for  himself.  I  think  that  as  the  idea 

103 


of  the  State  grew — the  idea  of  all  working  for  all,  with,  of 
course,  the  security  of  his  own  position — we  should  get  a 
higher  idea  of  work.  It  would  spell  service  rather  than  mere 
income."  When  all  monopolies  are  nationalised  "we  shall 
cause  to  grow  up  amongst  us  a  large  army  of  civil  servants 
who  will  not  shelter  behind  bundles  of  red  tape  and  indulge 
in  laziness,  but  who  will  be  fired  by  a  common  ambition  to 
succeed  .  . ." 

But  Mr.  Thomas  disclaims  any  intention  of  applying  the 
principle  of  nationalisation  generally  (page  177).  In  detail, 
it  is  true,  he  proposes  to  control  everything  and  to  confiscate 
all  wealth  beyond  what  he  considers  good  (page  152),  but  he 
lacks  the  courage  to  be  definite  when  discoursing  on  the 
principle. 

When  Mr.  Thomas  displays  ignorance  of  the  working  of  the 
Poor  Law  as  he  does  in  assuming  that  the  genuine  seeker 
after  work  is  made  to  break  stones  if  he  needs  a  bed  in  the 
casual  ward  (page  176),  it  is  fairly  certain  that  he  will  not 
prove  a  sound  guide  on  international  finance  and  the  handling 
of  the  dominions  and  dependencies.  Unfortunately  his  super- 
ficiality in  these  realms  may  escape  the  notice  of  his  less  well 
informed  readers. 

Mr.  Thomas  is  an  autocrat  of  very  decided  opinions,  and 
like  most  of  his  type  he  is  too  sure  of  himself,  and  too  eager 
to  experiment  in  beneficent  autocracy  to  spend  much  time  in 
verifying  his  facts  or  collecting  reliable  evidence.  If  we  agree 
that  we  would  like  to  have  the  material  blessings  that  he 
offers,  he  is  sure  that  he  can  get  them  for  us.  He  is  so  eager 
and  so  occupied  in  persuading  us  to  accept  the  programme 
that  he  has  never  really  thought  much  about  the  ways  and 
means. 

From  his  own  book  it  is  obvious  that  if  suddenly  given  the 
opportunity  he  craves  of  leading  "  the  way  to  a  new  era  of 
progress  and  sanity,"  he  would  find  himself  totally  unprepared 
to  make  the  start. 


104 


THE  FACTS  OF  THE  CASE  IN  DIAGRAM, 

VIII. 

OF  all  the  many  vexed  questions  that  exercise  the  mind  of 
the  enquirer  into  current  social  problems,  none  are  more 
practical  and  few  more  perplexing  than  those  which  are  con- 
cerned with  the  distribution  of  the  National  Income.  The 
controversy  as  to  what  constitutes  a  fair  division  of  the 
nation's  earnings  will  endure  whilst  men  of  varying  capacities 
exist  and  as  long  as  wealth  remains  a  desirable  possession. 
This  bone  of  contention  is  as  old  as  civilisation,  though  the 
origin  and  intensity  of  the  grievance  has  naturally  varied 
with  the  economic  conditions  of  the  period.  To-day  we  seem 
to  be  approaching  the  culmination  of  a  wave  of  unrest  that  has 
long  been  gathering  and  which  now  threatens  to  burst  into  a 
fury,  prepared  to  destroy  even  that  which  it  has  in  an  attempt 
to  take  and  enjoy  that  which  it  believes  is  withheld  unfairly. 

The  pity  of  the  situation  is  that,  so  far  as  facts  and  figures 
are  concerned,  the  controversialists  who  most  bitterly  criticise 
the  existing  social  system  are  ready  to  adopt  any  method  of 
calculation  and  to  accept  any  result  that  fits  in  with  their 
preconceived  ideas  on  the  subject  of  the  distribution  of  wealth. 
Erroneous  deductions  have  been  drawn  from  such  statistics  as 
are  available  by  well-meaning  but  ill-informed  exponents. 
Because  they  promise  greater  wealth  for  less  effort  to  the 
many  who  are  poor,  the  catch  phrases  into  which  these 
deductions  crystallise  are  taken  up  and  repeated  until  they 
become  an  inalienable  belief  accepted  without  question  by 
large  sections  of  the  public.  Few  take  the  trouble — or  indeed 
have  the  time  or  knowledge  to  check  the  reasoning  for  them- 
selves and  as  "men  and  women  live  principally  by  catchwords" 
it  is  inevitable  that  such  picturesque  but  untrue  statements  as 
"one-half  of  the  entire  income  of  the  United  Kingdom  is 
enjoyed  by  about  twelve  per  cent  of  its  population  "  will  be 
greedily  absorbed  and  digested. 

It  is  not  easy  to  acquire  precise  knowledge  of  the  wealth  of 
a  modern  state  and  it  is  even  more  difficult  to  demonstrate 
the  facts  of  its  distribution,  but  something  nearer  the  truth 
than  the  dictum  above-quoted  can  at  least  be  done.  We 
propose  therefore  to  examine  this  question  and  exhibit 
diagrammatically  what  we  believe  to  be  as  near  an  approxi- 
mation to  the  actual  situation  as  it  may  be  possible  to  indicate 
by  this  method.  Figures  for  the  year  1920  are  not  available 


at  present  and  we  have  to  go  back  to  1907  in  order  to  find  a 
substantial  basis  for  our  calculations.  The  only  reliable 
evidence  we  have  of  the  income  derived  from  industry  in  the 
United  Kingdom  and  of  the  proportions  in  which  it  is  shared 
is  provided  by  the  Census  of  Production  which  was  taken  in 
1907,  and  which  deals  with  all  the  manufacturing  and  mining 
industries  in  the  country.  In  his  Division  of  the  Product  of 
Industry,  Professor  A.  L.  Bowley,  in  order  to  keep  as  close  as 
possible  to  ascertained  statistical  facts,  checks  his  division  of 
the  National  Income  by  an  analysis  of  the  actual  facts  dis- 
closed by  the  Census  and  the  diagram  which  we  print  this 
month  is  based  on  his  work. 

According  to  the  Census,  the  net  output  of  industry  in  1907 
was  £712,000,000.  From  this  total  Professor  Bowley  deducts 
£53,000,000,  the  product  of  government  work  and  of  railway 
shops  which  contain  no  element  of  profit,  and  £15,000,000 
paid  in  excise  duties  before  sale.  The  remaining  £644,000,000 
can  then  be  divided  up  into  wages,  salaries,  depreciation, 
rates,  rents,  royalties,  interest  and  profits. 

A  careful  dissection  of  the  Wage  Census,  1906,  and  of  all  the 
evidence  offered  by  the    1907  Census,  gives  us  the  following 
estimate    of    the    proportions   into   which    the    product    was 
divided  : — 

Wages  ...  ...  ...  £344,000,000 

Salaries  ...  ...  ...  £60,000,000 

Depreciation  ...  ...  £57,000,000 

Rates  ...  ...  ...  £10,000,000 

Rents,  Royalties,  Interest  and  Profits       £188,000,000 

It  will  be  observed  that  the  sum  of  these  amounts  gives  us  a 
total  of  £659,000,000  instead  of  £644,000,000,  but  it  is  obvious 
that  as  we  are  concerned  with  the  proportion  that  the  figures 
bear  to  each  other,  and  not  with  the  exact  totals,  the  slight 
percentage  of  error  involved  by  an  arbitrary  adjustment  does 
not  invalidate  the  general  truth  of  the  deductions  drawn. 

We  have  taken  £644,000,000  as  our  total  amount  to  be 
divided,  and  reduced  each  of  the  above  items  proportionately. 
Diagram  No.  16  consists,  therefore,  of  2,576  squares,  each 
square  representing  a  quarter  of  a  million  pounds.  Of  these, 
wages  absorb  1,345,  and  80  of  the  234  alloted  to  salaries 
represent  individual  earnings  of  less  than  £160  a  year  and  are, 
for  our  purpose,  virtually  the  same  as  wages.  Rents,  Royalties, 
Interest  and  Profits  account  for  735  squares.  Taking  the 
results  as  they  are,  in  these  industries  the  relative  shares  of 

106 


DIAGRAM  No.  16. 

( Note.— The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group. J 


IBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmum 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
•BBBBBBBBBBBBBBBBBBBBBBB-BBBBBBBBBBBBBBBB 
•  BBBMBBBBBBBBBBBB-BBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBHBBBBBBBBBBBBBBBBBBBBBBBBB 
•BBBBBBBBBBBVBBBABBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
MBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBUBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBHBB 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBE 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

BBBBBBBBBBBBBBBBBflBBBBBBflBBBBBBBBBBBBBBB 
•BBBBBBBBBBBBflflBBBBBBBBBBflBBBBBBBBBBBBBB 

•  BBBBBBBBBBJBBBBBBBBBlBBBflBBBBBBBBBBBBBBBB 

WAGES. 

•  BBBBBBBBBBBBBBBBt-       1BBBBBBBBBBBBBBBBB 
••BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBffBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
VBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBflBBBBBBBBB-BBBBBBBBBBBBBBflBBBB 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
; '  .'    -  .  .": 

^  ^  |r«— — •—  i_—niL  _  ^    _^ 

80  Salaries   under   £160.  ' 


BBBBBCalar.Vc    over    S16O    9BBBBBBB 

1VBBBBBBBBBB    3aIaneS    over    5  XD^BBBBBBBBBBBBB 

••••  BBBBBBIIBi. a««E»K 


»^- 
Kates. 


BBBBBfLBBBBBBJiBBBBBBBBBBBBBB 

Depreciations  BMBBBBBBBBB 

BBBBBBBBBBBBBBBBBBBBBBBBBB- 

BBBBBB.VBBBB 
BBBBBIBB 


MBB  Bl  Bfl  BB|  BB 
BW  BB  IB  ••  BB  ^w  w  v  n>  ••*—  —  —  — 

BVBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 

Rents,  Royalties,  Interest  and  Profits 

essential  to  national  and  industrial  upkeep.  -  '•- 

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBH 
•BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBi 


BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB^TBI 
"  • 


1BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBBBBBBBBBflBBBBBBBBBBflBBaBBBBBBBI 

Rents,  Royalties,  Interest  and  Profits 

BB  B  BB  BBBBB  BBlLBli  B  BB  BB  BB  B  B  B  B  B  B  B  B  B  B  B  B  B  B  B  B  B I 
•  •••••••••  Possibly  available  tor  other  purpose*. 4BBBBBBBBBI 

BBBB«BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBI 


DIVISION  OF  THE  NET  OUTPUT  OF 
INDUSTRY,  1907. 

Scale  s    Each  square  of  colour   represent*  S250.0OO. 


Wages  (including  the  salaries  under  £160).  Salaries  and  Rents, 
etc.,  are  62  per  cent,  6  per  cent  and  32  per  cent  respectively. 

Thus  far  it  would  appear  that  Rents,  Profits,  Royalties  and 
Interest  appropriate  nearly  one-third  of  the  product  of 
industry.  But  these  735  squares  by  no  means  represent  a  sum 
that  might,  under  a  socialist  system,  be  divided  with  impunity 
among  the  6,062,000  wage  earners  and  340,000  small  salaried 
workers  for  which  the  diagram  accounts. 

In  the  first  place,  in  1907,  Income  Tax  was  at  one  shilling 
in  the  pound,  and  deducting  this  as  a  level  tax  levied  on  every 
pound,  without  making  allowance  for  rebate  or  additions  for 
surplus  tax,  would  reduce  the  total  by  37  squares.  In  the 
second  place,  Professor  Bowley  estimates  that  if  the  employers, 
instead  of  remunerating  themselves  according  to  the  profits 
made,  received  salaries  on  the  same  basis  as  managers  who  do 
not  own  the  businesses  they  conduct,  £40,000,000  of  the  profits 
would  have  to  be  devoted  to  this  purpose.  £40,000,000  is  repre- 
sented by  160  squares  on  the  diagram.  Thirdly,  it  is  generally  — wE*fw 
admitted  that  capital  performs  a  valuable  service;  and  theP 
supply  of  capital  will  not  be  maintained  unless  some  suitable 
return  is  made  for  the  use  of  it.  The  capital  of  the  firms 
dealt  with  was  estimated  in  the  Census  at  £1,200,000,000, 
which  with  interest  limited  to,  say,  four  per  cent,  accounts 
for  another  172  squares.  Thus,  even  in  1907,  when  the 
expenses  of  the  State  were  about  one-seventh  of  what  they 
now  are,  of  the  735  squares  absorbed  by  Rents,  Profits, 
Royalties  and  Interest,  369  are  accounted  for  as  necessary 
payments  in  the  interest  of  industry  and  national  upkeep.  If 
we  compare  the  remaining  366  to  the  1,425  squares  devoted 
to  wages  and  small  salaries,  Rents,  Royalties  and  Profits, 
properly  so  called  are  seen  to  be  25-7  per  cent  of  the  sum 
divided  between  the  two.  Or,  assuming  that  Rents,  Royalties 
and  Profits  are  unjust  and  useless  payments  for  which  no 
service  is  returned,  and  that  they  could  be  taken  from  their 
owners  and  paid  to  the  wage-earners  in  the  industry,  it  would 
appear  that  6,402,000  workers  might  divide  between  them 
£91,500,000,  or  receive  an  annual  addition  to  their  wages  of 
£14  55.  lod. 

Since  1907  the  National  Income  has  increased  enormously 
both  in  actual  volume  and  in  nominal  value.  During  this 
period  changes  have  also  taken  place  in  the  division  of  the 
product  of  industry.  In  future  diagrams  we  propose  to  examine 
these  phenomena.  For  the  present  it  is  sufficient  to  observe 
that  the  changes  have  not  been  disadvantageous  to  labour. 

1 08 


THE  GOMPLEAT  CONCILIATOR. 

LET  the  reader  be  reassured.  This  article  will  not  weary  him 
with  proof  that  conciliation  is  a  good  and  necessary  thing,  or 
that  Mr.  Whitley,  with  his  Whitley  Councils,  is  one  of  the 
greatest  benefactors  of  mankind.  These  things  are  true. 
They  have  often  been  proved.  Here  they  are  assumed.  This 
assumption  being  made,  let  us  consider  how  conciliation 
should  be  carried  out.  For  there  is  an  Art  of  Conciliation, 
scarcely  exceeded  in  importance  by  the  Will  to  Conciliation 
itself.  Both  Will  and  Art  must  be  cultivated  if  Whitleyism  in 
its  various  forms  and  in  its  many  occasions  is  to  succeed  fully. 

Some  think  that  it  is  enough  to  bring  the  quarrelling  parties 
together  into  one  room,  to  seat  them  round  a  table  and  put 
the  least  aggressive  man  in  the  chair.  This  is  not  so.  There 
is  often  a  prior  painful  stage  when  two  rooms  are  necessary. 
If  the  quarrel  is  old  and  rancorous,  it  does  not  help  to  fling 
the  parties  at  each  other  even  across  the  most  pacific  of  green 
table-covers.  They  have  to  be  brought  together  very  grad- 
ually. They  have  first  to  be  told  nice  things  adroitly  mixed 
with  home  truths  about  themselves  and  the  other  party.  The 
adept  will  bring  them  together  only  after  he  has  probed  both 
sets  of  minds  and  struck  a  keynote  which  both  may  respect. 
This  preliminary  work  of  the  candid  friend  and  common 
confidant  is  perhaps  the  best  contribution  he  has  to  offer,  at 
least  in  the  more  acute  cases. 

This  preliminary  work  may  be  very  difficult.  The  Con- 
ciliator cannot  count  on  being  told  either  side's  story  in  any 
connected  or  plausible  way.  He  may  even  be  tempted  to 
throw  up  the  sponge,  believing  that  both  parties  are  lying  to 
him  :  but  this  would  be  a  mistake.  Both  sides  are  apt  to 
keep  silence  about  the  really  important  points  and  to  talk 
about  all  the  rest.  Both  will  have  much  in  their  minds,  much 
that  has  lain  hidden  there  under  some  ban  of  silence.  Their 
words,  incoherent  and  crooked  and  aimless  as  they  may 
sound,  will  be  the  outcrop  of  some  old  grievance,  or  slight,  or 
disability  long  brooded  over  and  argued  about.  This 
exaggerated  sensibility  and  these  rueful  memories  will 
obscure  the  facts  and  distort  the  motives  in  the  case,  and 
even  tempt  the  Conciliator  to  doubt  the  dictates  of  his  own 
common  sense.  But  let  him  be  patient  and  tenacious  and 
above  all  humane.  In  due  time  he  will  penetrate  through  the 

109 


mixture  of  assertiveness  and  repression  to  real  facts  and  sober 
states  of  mind.  He  must  remember  two  things.  First,  being 
himself  a  sort  of  consultant  physician,  he  is  only  called  in 
because  and  when  the  malady  is  serious.  Their  own  inflated 
feelings  mislead  his  patients.  Second,  the  patients,  even  in 
their  best  health,  do  not  excel  in  the  power  of  thinking  clearly 
or  expressing  themselves  clearly. 

At  the  two-room  stage,  the  Conciliator  should  do  his  best 
sincerely  to  win  the  confidence  of  both  sets  of  patients  by 
understanding  their  contentions,  and,  where  he  can  do  so 
honestly,  by  expressing  sympathy  with  those  of  their  conten- 
tions which  are  sound.  In  detail  he  should  try  to  promote 
the  spirit  of  accommodation.  Both  sides  will  naturally  stress 
the  strong  points,  or  rather,  the  one  strongest  point  of  their 
case.  If  they  persist  in  this  no  agreement  is  likely  to  be 
reached.  The  Conciliator  must  loosen  the  obstinacy  of  their 
moods.  He  must  make  them  feel  that  the  case  is  very 
complex,  that  among  the  multitude  of  points,  some  tending 
one  way  and  some  another,  no  single  point  can  be  all- 
important.  But  in  doing  all  this  he  must  encourage  both 
sides  to  vent  whatever  ill-will  or  grudges  or  accusations  they 
may  harbour  against  the  other.  He  will  learn  from  this,  of 
course,  but  they  will  win  relief  of  mind.  Utterance  can  often 
be  by  itself  a  cure  of  supposed  evils  If  the  Conciliator  does 
but  give  each  side  the  chance  of  self-expression  he  may  have 
given  them  what  was  their  truest  need.  If  Tragedy  works  by 
Purgation  of  the  Emotions,  and  is  therefore  good,  so  may 
Conciliation,  too,  do  good. 

Let  us  now  bring  the  parties,  thus  prepared,  into  the  same 
room.  There  are  rooms  and  rooms.  Some  rooms  are  too 
small  and  some  too  large  for  the  purpose.  Some  are 
impossible.  Some  rooms  have  chairs,  and  others  none.  Very 
few  have  chairs  enough  and  of  the  right  sort.  Much  depends 
on  the  mise-en-scene.  Some  postures  of  the  body  conduce  to 
peace  and  others  to  combativeness.  The  room  and  its 
furniture  ought  to  impress  gently  on  those  who  use  it  a 
genteel  and  friendly  standard  of  behaviour.  An  armchair  is 
in  itself  a  lesson  in  civility.  But  by  itself  the  armchair  will 
not  create  the  armchair  mood  if  the  parties  come  together  in 
a  hurry  straight  from  the  strenuousness  of  toil,  preoccupied, 
strained  and  slightly  irritable.  No  one  can  adjust  his  mind  in 
a  moment  to  diplomacy  and  accommodations.  There  must  be 
fair  warning.  The  humane  ritual  of  conciliation  is  only 

no 


beginning  now  to  be  understood.  Some  clumsy  practitioners 
think  it  can  be  managed  standing  up,  or  with  the  socially 
inferior  side  standing  up  or  sitting  down  anyhow :  whereas 
Conciliation  should  be  done  solemnly,  ceremoniously,  with 
social  courtesy,  both  in  the  large  matters  and  in  the  small 
ones.  And  just  as  rooms  differ  from  rooms,  so  do  times  from 
times.  The  morning  is  bad.  Those  are  the  hours  of  energy, 
not  of  tact.  Just  after  lunch,  too,  is  bad.  The  judgment  is 
then  a  little  in  eclipse.  Tea  ushers  in  the  diplomatic  hour. 
It  is  astonishing  how  much  better  a  case  goes  if  it  is  taken  at 
tea-time  and  prefaced  with  tea  and  cigarettes.  A  little 
general  talk,  a  little  tea,  a  little  smoke  at  five  o'clock  will 
often  do  what  neither  force  nor  guile  could  do  at  ten  in  the 
morning.  When  the  day's  work  is  nearly  over,  men  may  be 
tired,  but  they  are  wiser  and  more  tolerant  and  more  friendly. 
This  is  why  the  House  of  Commons  meets  towards  tea-time. 
Legislators  may  spend  furious  mornings  and  dull  afternoons 
upon  their  private  concerns — such  is  the  subtle  secret  of  the 
English  constitution — but  only  touch  the  Nation's  business 
when  tea-time  brings  kindlier  thoughts. 

The  importance  of  Atmosphere,  indeed,  in  Conciliation  can 
hardly  be  exaggerated.  Nothing  that  would  help  to  create 
the  right  atmosphere  "should  be  ignored  or  omitted.  But 
when  the  Conciliator  has  made  the  fullest  use  of  all  favouring 
circumstances  of  time  and  place  and  manner,  he  will  still  find 
that  much,  or  perhaps  everything,  turns  on  his  own  efforts  and 
his  own  personality.  "Personality"  is  indispensable.  Mere 
goodness,  or  honesty,  or  sense,  or  information  will  not  suffice: 
nor  will  technical  knowledge  or  qualifications  :  nor  will  a 
great  and  well-deserved  reputation  won  in  fields  distinct  from 
Conciliation.  Since  so  much  depends  on  "Personality"  in 
the  Conciliator,  let  us  try  to  see  what  this  means.  It  seems 
to  include  four  main  ingredients.  First,  the  Conciliator  must 
himself  be  versatile  in  thought  and  feeling.  He  must  be  full 
of  wits  and  also  elastic.  Second,  he  must  be  very  sensitive 
towards  what  is  going  on  in  the  minds  of  his  patients.  He 
will  often  prove  this  sensibility,  and  his  good  sense  besides,  by 
ignoring  completely  what  is  going  on  in  those  minds.  He 
must  see  well  enough  to  know  when  to  be  blind.  And,  third, 
he  must  have  the  faculty  of  giving  rapid  and  pleasing 
expression  to  what  his  patients  may  be  thinking.  For  his 
patients  may  be  assumed  to  have  but  moderate  powers  of 
expression.  The  fourth  ingredient  is  not  a  faculty  so  much  as 


in 


a  quality.  The  Conciliator  must  himself  radiate  the  Spirit  of 
Conciliation.  He  must  be  prepared  to  preach  a  little,  and 
careful  to  make  his  preaching  inoffensive.  He  must  show 
forth  in  himself  the  authentic  Will  to  Conciliation.  He  must 
try  adroitly  to  make  his  patients  understand  —  perhaps  a 
vague  feeling  is  better  here  than  a  clear  conception  —  that 
the  whole  affair  is  a  piece  of  their  moral  conduct.  He  had 
better  not  talk  much  about  such  things  as  brotherliness  and 
co-operation  and  goodwill.  But  he  ought,  from  the  Chair,  to 
make  them  felt.  It  is  not  necessary  that  the  Conciliator 
should  be  incurably  benign,  a  sort  of  blessed  Lord  Shaftesbury 
come  back  to  earth.  After  all,  the  Conciliator's  role 
resembles  that  of  the  headmaster  of  a  Public  School,  who  is 
there  to  be  feared  and  not  only  to  be  obeyed,  copied, 
respected,  admired,  or  even  loved.  The  Conciliator  must  be 
free  to  scold  a  little.  He  will  please  one  party  greatly  by 
scolding  the  other:  and  then,  watching  his  opportunity,  he 
will  similarly  please  the  other  party.  He  thus  purges  the 
emotions  of  both.  He  must  promote  the  flow  of  reason  and 
unreason  dispassionately,  and  gradually  carry  his  patients  to 
the  point  where  issues  go,  so  to  speak,  into  solution  and 
become  plastic  and  tractable.  He  may  then,  if  he  is  lucky, 
obtain  an  agreement.  And  he  must  sacrifice  himself.  Now 
and  then  he  must  risk  a  testy  word,  which  he  will  act  rather 
than  feel.  He  may  allow  himself  a  slight  error,  or  utter  a 
jarring  note,  provided  that  it  unites  the  two  sides  against  him 
and  prejudices  no  solid  elements  in  the  case.  For  his  patients 
know  that  the  Conciliator  was  necessary  to  them,  and  they 
desire,  not  unnaturally,  to  triumph  a  little  over  him  in 
revenge  at  some  point  or  other.  If  he  gets  his  agreement  he 
will  voice  the  general  joy.  But  he  will  be  careful  to  say  that 
the  whole  affair  was  superfluous,  pardonable  for  once,  but  not 
to  be  repeated.  Conciliation,  like  the  Day  of  Judgment, 
should  be  unique. 


m    w    as 


112 


THE  SLUMP  IN  TRADE,  II. 

IN  the  first  article  emphasis  was  laid  upon  the  most  important 
factor  in  the  present  trade  depression,  namely,  the  difficulty  in 
scouring  commercial  contact  with  those  European  countries 
which,  before  the  war,  provided  extensive  markets  for  the 
products  of  the  textile  and  other  manufacturing  industries. 
This  difficulty  is  due  partly  to  political,  but  mainly  to 
economic  considerations.  The  poverty-stricken  countries  of 
Europe  are  in  great  need  of  our  products,  but  are  not  in  a 
position  to  pay  for  them.  The  difficulty  which  they  ex- 
perience in  finding  means  of  payment  for  what  they  already 
owe  is  reflected  in  the  state  of  the  exchanges,  which,  in  turn, 
prevents  any  extension  of  trade  in  the  form  of  imports  from 
this  country.  The  exchanges  with  most  European  countries 
are  so  strongly  in  our  favour  (that  is,  the  English  sovereign  is 
equivalent  to  so  large  a  sum  in  marks,  francs,  krone,  etc.), 
that  a  price  which  seems  moderate  when  expressed  in  terms 
of  English  money  becomes  prohibitive  in  terms  of  German, 
French  or  Austrian  money. 

On  the  other  hand,  costs  and  prices  of  goods  made,  for 
example,  in  Germany,  which  are  extremely  high  in  terms  of 
marks,  seem  ridiculously  low  when  translated  into  English 
money  at  current  rates  of  exchange.  German-made  goods 
may  thus  be  exported  to  this  country  and  sold  here  at  prices 
far  below  the  cost  of  producing  similar  goods  in  British 
factories.  And  there  seems  to  be  little  doubt  that  the 
existing  depression  is  due,  in  part,  t®  the  competition  of 
European  sellers  protected  by  the  unfavourable  rate  of  their 
exchanges.  Makers  of  electrical  fittings  and  pressed  metal 
ware  are  suffering  from  such  competition. 

It  should  be  observed  that  European  competition  is  most 
effective  in  the  case  of  those  products  made  from  raw 
material  obtained  within  the  country  where  they  are  manu- 
factured. That  it  is  effective  in  any  degree  is  due  to  the  fact 
that  costs  and  prices  have  not  risen  to  the  extent  to  which 
the  currency  of  that  country  has  depreciated  in  terms  of  our 
own  currency.  If  wages,  costs  and  prices  in  general  had 
risen  in  Germany  to  the  extent  indicated  by  the  depreciation 
of  the  mark,  German  and  British  Manufacturers  would  be 

113 


competing  on  terms  of  equality.  Such,  however,  is  not  the 
case.  It  is,  of  course,  true  that  the  prices  of  things  imported 
into  Germany  reflect  the  depreciation  of  the  mark ;  but  the 
costs  and  prices  of  goods  made  in  Germany  have  risen  to 
a  far  less  extent,  and  are  thus  relatively  very  cheap.  It 
follows  that  those  goods  which  are  made  from  raw  materials 
obtained  in  Germany  itself  are  relatively  much  cheaper  than 
goods  made  in  Germany  from  materials  obtained  from 
abroad ;  and  that  the  latter  in  turn  are  relatively  cheaper 
than  goods  imported  into  Germany  in  the  finished  or 
manufactured  form.  Consequently  we  are  suffering — or  in 
danger  of  suffering — most  acutely  from  the  competition  of 
imported  manufactured  goods  made  in  Germany  (or  some 
other  country)  from  raw  materials  obtained  in  that  country. 
To  the  examples  already  given  may  be  added  synthetic  dyes 
and  household  furniture.  As  we  write  we  learn  that  Belgian 
steel  is  quoted  for  delivery  in  this  country  at  prices  con- 
siderably below  the  bare  cost  of  British  manufacture. 

Hence  the  cry  for  protection  against  foreign  competition 
favoured  by  such  abnormal  conditions.  But  the  solution  is 
not  so  simple  as  would  appear  at  first.  Moderate  protective 
duties  would  prove  quite  ineffective.  It  is  hardly  likely, 
indeed,  that  anything  short  of  prohibition  would  serve  the 
purpose  of  protecting  our  competing  industries.  Further, 
if  the  rates  of  exchange  are  to  be  restored  to  a  healthy 
condition  either  Germany  and  her  neighbours  must  be 
permitted  to  export  freely,  to  a  far  greater  extent  than  they 
import  from  other  countries ;  or  they  must  be  provided  with 
credits  by  those  countries  whose  currencies  are  more 
valuable.  Finally,  if  Germany  is  to  begin  to  pay  an 
indemnity  immediately,  she  must  be  allowed  to  do  so  by 
exporting  such  goods  as  she  is  capable  of  producing. 
Without  further  elaboration  it  may  be  concluded  that, 
whether  we  like  it  or  not,  the  poverty-stricken  European 
states  must  be  granted  credit,  and  our  late  enemies  must 
be  permitted  to  pay  the  indemnity  in  the  form  of  a  long- 
dated  loan.  People  who  refuse  to  accept  these  conditions 
are  simply  burying  their  heads  in  the  sand. 

The  competition  of  German  dyes  calls  for  closer  examina- 
tion. It  was  stated  in  the  previous  article  that  certain 
industries  proved  essential  to  military  efficiency  during  the 
late  war,  and  were  therefore  developed  in  most  of  the 
important  belligerent  States.  Such  industries  fall  into  two 

114 


rough  categories,  exemplified  by  steel  and  dye  manufacture. 
The  world  producing  capacity  of  essential  industries  of  both 
categories  is  in  excess  of  normal  world  requirements.  But 
industries  of  the  first  category,  of  which  steel  manufacture 
and  engineering  are  examples,  would  find  an  immediate 
outlet  for  such  of  their  products  as  are  in  excess  of  normal 
requirements  through  the  abnormal  demand  for  reconstruction 
purposes.  So  great  is  the  real  need  of  the  world  for  railways, 
engines,  engineering  products,  etc.,  that  if  the  desired  re- 
construction were  taken  in  hand,  nearly  all  the  metal 
industries  of  the  world  would  be  fully  employed  for  some  years 
to  come.  And  when  the  leeway  had  been  made  up  the 
normal  annual  requirements  would  have  grown  sufficiently 
to  provide  a  large  and  regular  market  for  those  industries. 
These  are  now  suffering  from  depression  for  the  reason  that 
reconstruction  has  been  held  up  by  political  considerations. 

The  problem  is  more  serious  and  difficult  in  the  case  of 
industries  of  the  second  category,  such  as  dye  manufacture. 
Because  they  were  essential  for  war,  the  world  producing 
capacity  has  been  enormously  increased  during  the  last  six 
years.  But  the  world  demand  is  determined  by  the  producing 
capacity  of  those  industries,  such  as  textile  manufacture, 
to  which  they  are  ancillary.  The  world  producing  capacity 
of  the  latter  is  certainly  no  greater  than  in  1914.  It  may 
confidently  be  stated,  therefore,  that  the  producing  capacity 
of  these  essential  industries  is  considerably  greater  than  world 
requirements  in  time  of  peace.  It  must  be  reduced  before 
economic  health  is  restored.  But,  for  political  reasons,  we  are 
likely  to  foster  the  further  growth  of  such  industries.  The 
United  States  and  Germany  may,  and  probably  will,  do 
likewise  ;  already  our  chemical  manufacturers  have  convinced 
their  chief  customers,  the  textile  manufacturers,  that  German 
competition  is  more  than  a  mere  threat,  and  that  such 
competition  will  injure  both  themselves  and  the  community. 
We  do  not  propose  to  discuss  here  and  now  the  remedy, 
which  must  obviously  be  determined  by  political  rather  than 
economic  considerations ;  but  it  is  necessary  to  call  attention 
to  this  important  contributory  factor  in  the  present  depression 
of  trade. 

The  last,  though  by  no  means  the  least  important  cause,  of 
the  present  slump  is  to  be  found  in  the  speculation  which 
preceded  it.  The  nation  indulged  in  an  orgy  of  extravagance, 
followed  by  highly  speculative  enterprise  and  the  uncertainty 

"5 


and  instability  which  speculation  of  the  nature  of  industrial 
gambling  begets.  True  speculation  means  wise  prevision ; 
better  industrial  development  is  conditioned  by  it,  for  industry 
provides  for  future  rather  than  present  needs.  Personal 
extravagance,  when  sufficiently  widespread,  cannot  continue 
without  end  ;  sooner  or  later  capital  requirements  have  to 
be  provided  for,  such  provision  being  forced  upon  the  com- 
munity by  currency  inflation  and  high  interest  rates.  Industries 
concerned  with  the  more  essential  needs  assert  themselves 
sooner  or  later.  But  excessive  expenditure  upon  luxuries 
gives  a  twist  or  bias  to  industrial  effort  while  it  lasts,  and 
leads  manufacturers  to  prepare  for  future  demands  which  do  not 
eventuate.  Before  such  failure  becomes  evident,  business  men 
become  apprehensive,  and  the  feeling  of  apprehension  spreads 
over  a  large  part  of  the  industrial  field.  Soon  the  prevailing 
note  in  the  business  world  is  uncertainty,  and  nothing  is  so 
stultifying  as  uncertainty,  which,  by  the  mere  fact  of  its 
existence,  produces  stagnation  and  loss. 

There  seems  to  be  little  doubt  that  we  are  now  experiencing 
a  reaction  of  this  character  in  industries  which  are  not 
subject  to  foreign  competition,  but  which,  as  in  motor-car 
building  and  lace-manufacture,  depend  largely  upon  luxuriou5 
expenditure.  And  the  depression  in  such  industries  is 
intensified  by  the  crisis  in  those  industries  which  have 
hitherto  failed  to  recover  the  former  markets  abroad,  or  are 
subjected  to  the  competition  of  foreign  manufactures  favoured 
by  the  abnormal  state  of  the  exchanges.  The  many  parts  of 
our  economic  organisation  are  interdependent,  and  anything 
which  injures  one  part  inevitably  injures  most  other  parts. 
These  appear  to  be  the  main  factors  to  be  considered  in 
seeking  a  remedy.  Nor  should  it  be  forgotten  that  the 
economic  effect  of  unwise  expenditure  on  the  part  of  the 
State  is  at  least  as  great  as  in  the  case  of  the  individual. 
It  may  be  much  more  serious,  for  the  reason  that,  whereas 
an  individual  cannot,  for  any  length  of  time,  spend  far 
beyond  his  means,  the  State  may  impose  burdensome  taxa- 
tion upon  industry  to  pay  for  its  extravagance,  or,  alternately, 
inflate  the  curr«ncy  and  thus  intensify  the  evil  of  depression. 

(To  be  concluded.) 


116 


THE  BUSINESS  MAN'S  VIEW,  II. 

(These  articles  consist  of  a  series  of  extracts  from  the  reports 
of  Company  Meetings,  grouped  to  give  the  reader  an  opportunity 
of  studying  the  effects  of  the  many  conflicting  currents  that  go  to 
make  or  mar  commercial  enterprise.  Though  these  reports,  giving 
as  they  do  only  the  managers'  point  of  view,  cannot  be  considered 
to  cover  the  whole  field,  they  may,  nevertheless,  provide  a  valuable 
commentary  on  a  good  many  aspects  of  the  question  as  to  the  ways 
and  means  by  which  the  nation  does,  in  fact,  secure  its  livelihood  ) 

LAST  month  we  dealt  with  some  aspects  of  the  economic 
situation  in  the  Printing  and  Publishing  Trades,  and  in  the 
Iron,  Steel  and  Coal  Industry.  This  month  we  quote  the 
views  of  authoritative  men  in  the 

Shipbuilding   and   Shipping   Trades. 

Sir  Frederick  Lewis  gave  a  valuable  review  of  some  of  the 
causes  and  effects  of  the  trade  situation  as  revealed  in  the 
affairs  of  Furness,  Withy  and  Company,  Limited.  Referring 
to  the  Company's  shipbuilding  programme  he  explained  why 
no  new  contracts  have  been  entered  into.  It  has  become,  he 
said,  impossible  to  make  any  reliable  estimate  of  the  final  cost 
of  a  vessel  or  of  the  date  of  delivery.  He  instanced  cases 
where  contracts  were  abandoned  because  it  was  obvious  that, 
given  present  high  costs,  the  vessels  when  built  would  be 
commercially  impracticable  for  use. 

Apart,  however,  from  uncertain  costs  in  the  shipbuilding 
industry  itself,  Sir  Frederick  Lewis  considers  that  inflated 
prices  generally  and  the  state  of  the  coal  industry  in  particular 
render  it  difficult  to  gauge  future  shipping  requirements  There 
are  at  present  some  8^  million  tons  more  shipping  than  existed 
six  years  ago,  but  in  the  Chairman's  opinion,  trade  has  not 
increased  proportionately.  Prior  to  the  war  some  70,000,000 
tons  of  coal  were  exported,  largely  to  neighbouring  countries, 
which  necessitated  short  journeys.  Some  50,000,000  tons  of 
this  are  now  being  supplied  from  the  United  States,  South 
Africa  and  Australia.  A  much  greater  number  of  ships  is 
consequently  required  for  the  same  amount  of  trade,  and  what 
would  otherwise  be  a  surplus  of  tonnage  is  thus  kept  employed. 

The  Chairman  commented  on  the  effects  of  the  coal  shortage 
both  on  costs  and  on  employment. — "I  could  tell  you  of 
instances  of  ships  having  to  wait  several  weeks  for  coal,  and 
at  the  present  moment  there  are  hundreds  of  vessels  lying  idle 

117 


in  our  ports  waiting  either  for  bunkers  or  for  coal  cargoes.  As 
a  result  of  so  many  ships  lying  idle  the  working  costs  are 
enormously  increased ;  furthermore  the  very  small  amount  of 
coal  that  is  available  for  export  means  that  a  great  many 
vessels  have  to  sail  in  ballast,  the  effect  of  which  is  .... 
to  keep  prices  higher  than  they  need  be.  If  the  coal  export 
were  normal  our  export  trade  would,  at  present  prices,  be 
increased  by  £200,000,000  per  annum." 

One  effect  of  the  coal  difficulty  has  been  to  induce  the 
Company  to  convert  many  of  their  steamers  into  oil  burners, 
and  to  ensure  supplies  of  oil  by  acquiring  an  interest  in  the 
largest  oil-distributing  organisations.  This  last  point  illus- 
trates the  economic  theory  known  as  the  law  of  substitution 
and  demonstrates  the  difficulty  of  maintaining  complete 
monopoly  of  any  sort.  The  same  tendency  is  at  work  to-day 
in  a  variety  of  ways.  Harrassed  business  men  seek  to  stabilise 
their  undertakings  by  rendering  themselves  independent  or 
partially  independent  of  those  who  presume  upon  their  force 
to  hold  industry  to  ransom. 

Similar  facts  find  expression  at  the  fifty-fifth  Annual  General 
Meeting  of  Palmers'  Shipbuilding  and  Iron  Company,  Ltd.* 
When  we  read  in  the  Daily  Herald  (November  2Oth)  that  a 
slump  in  trade  is  being  "  artificially  created  by  the  bosses,  so 
that  the  desire  of  the  workers  for  an  improved  standard  of 
living  can  be  turned  down  with  impunity,"  it  is  as  well  to 
have  definite  evidence  against  the  probability  of  so  unthink- 
able a  charge.  No  evidence  is  brought  by  the  accusers,  who 
doubtless  make  their  statement  in  the  hope  that  their  readers 
will  assume  that  "  if  it  says  it  in  the  Daily  Herald,  it  is  so." 
One  of  the  particular  examples  given  as  unemployment  due  to 
this  "bosses'  slump"  is  the  unprecedented  idleness  in  the  sea- 
faring industry. 

We  have  already,  in  this  and  the  preceding  article,  dealt 
extensively  with  the  effects  of  the  present  state  of  the  coal 
industry  on  trade.  Mr.  Mure  Ritchie,  speaking  as  Chairman 
of  Palmers'  Shipbuilding  Company,  says:  "with  regard  to 
shipbuilding  output,  our  new  tonnage  has  not  reached  those 
proportions  at  which  we  are  aiming,  due  to  circumstances 
beyond  our  control.  There  has  been,  during  the  past  year,  a 
great  shortage  of  steel  plates,  which  has  retarded  progress, 
and  this  has  been  further  accentuated  by  the  inability  of  the 
railways  to  meet  the  demands  of  manufacturers,  while  the 

*  Dividend,  12^  per  cent. 
118 


moulders'  strike  at  the  end  of  last  year  held  up  construction 
both  of  ships  and  machinery.  .  .  .  We,  as  builders,  have 
viewed  with  regret  the  continued  demands  made  by  Labour. 
Such  demands,  and  the  attitude  of  labour  generally  in  refer- 
ence to  production,  are  preparing  the  way  for  a  position  of 
very  serious  moment  to  the  workers,  inasmuch  as  they  are 
hastening  the  return  of  those  lean  times  which  they,  not  less 
than  ourselves,  dread,  and  in  which  we  all  surfer.  Shipowners 
generally  have  ceased  to  place  orders.  Some  have  already 
cancelled  contracts.  . 

"  As  regards  the  industrial  future,  almost  everything  depends 
upon  the  Labour  position.  ...  I  am  convinced  that  there 
is  ample  work  in  Britain  for  years  to  come  and  that  there  need  be 
no  unemployment  of  any  willing  to  do  an  honest  day's  toil  for 
good  pay,  but  the  ca'canny  policy  of  many  trade  union  leaders, 
and  coal-miners  in  particular,  is  destroying  credit,  killing 
enterprise  and,  unless  changed,  can  only  bring  disaster  in  the 
country  and  ruin  to  the  workers." 

That  the  workers  themselves  are  at  least  partially  to  blame 
for  the  shortage  of  steel  plates — a  complaint  repeated  on 
many  sides — is  evidenced  by  Bolckow,  Vaughan  &•  Company, 
Limited,  who  report  that  their  new  plate  mill  has  been 
standing  idle  for  months  "because  of  its  very  perfection, 
which  has  led  certain  of  the  men  to  go  on  strike.  They  claim 
to  have  a  veto  on  and  a  voice  in  the  selection  of  the  men  who 
are  to  work  this  mill."  In  other  words,  improvements  in  the 
plate-making  industry  are  being  met  with  opposition  by  the 
workers  who  fear  that  increased  output  per  head  means 
unemployment. 

Sir  J.  E.  Johnson-Ferguson,  Chairman  of  Bolckow,  Vaughan 
&  Company,  Limited,  bears  further  testimony  to  the  same 
effect.  "On  all  hands,"  he  says,  "you  hear  of  shipowners 
trying  to  cancel  orders  they  had  placed  for  ships  .  .  .  The 
present  cost  of  ships  is  such  that  ships  built  at  present  prices 
cannot  in  the  future  be  made  to  pay.  Until  that  cost  is 
materially  reduced  the  demand  for  ships  will  apparently  fall 
off,  and  that  must  affect  the  demand  for  plates.  Those  who 
cannot  produce  them  at  the  very  lowest  possible  price  will 
undoubtedly  before  long  be  obliged  to  close  down  their  mills. 
Employers  will  not  go  on  producing  at  a  loss  merely  to  find 
employment  for  men  who  resist  the  introduction  of  improved 
machinery  or  methods.  It  is  true  that  the  best  modern  plant 
involves  labour-saving  appliances,  by  that  and  by  increased 
output  alone  can  cost  be  reduced  ...  It  is  a  well-known  fact 

119 


that  the  more  cheaply  an  article  can  be  produced,  the  more 
demand  there  is  for  it,  and  therefore  the  more  employment 
there  is.  Nothing  leads  so  soon  to  unemployment  as  the 
retention  of  old  and  out-of-date  machinery  or  methods  of 
production." 

Turning  to  the  facts  as  they  appear  to  those  engaged  in 
shipping  services,  Sir  Frederick  Lewis,  presiding  over  the 
Twenty-Second  General  Meeting  of  Manchester  Liners, 
Limited,*  points  out  that  whilst  the  costs  of  operating 
steamers  have  increased,  compared  with  last  year,  freights 
have  shown  a  marked  decline.  Moreover  the  world's  tonnage 
is  greater  by  several  million  tons  than  it  was  before  the  war, 
but  the  world's  trade  has  not  increased  proportionately. 
"  Cheap  commodities,"  he  continues,  "  invariably  increase  the 
volume  of  transportation,  and  increased  production  is  the 
only  thing  that  can  have  any  real  effect  on  prices  and  stimu- 
late demand  ...  If  our  coal  output  and  export  were  increased 
to  the  pre-war  figure,  the  extra  revenue  coming  into  the 
country  would  improve  our  trade  to  the  extent  of  something 
like  £200,000,000  a  year,  with  resultant  benefit  to  the  ex- 
changes." 

Sir  Owen  Phillips,  Chairman  of  the  Argentine  Navigation 
Company,  Limited,  announced  that  his  board  had  postponed 
placing  orders  for  new  vessels  owing  to  labour  troubles  in 
Argentina,  and  to  the  enormously  high  cost  of  building 
passenger  and  cargo  steamers.  Labour  is  in  receipt  of  higher 
remuneration  than  ever  before,  but  the  workers  and  many  of 
their  leaders  do  not  appear  to  realise  that  high  wages  can 
only  be  maintained  by  increased  production.  "At  present," 
we  are  told,  "in  every  port  in  the  world  there  are  valuable 
steamers  either  lying  idle,  or  loading  and  discharging  so 
slowly  that  the  time  they  occupy  in  the  port  is,  in  many 
cases,  double  the  time  they  occupied  in  pre-war  days  .  .  .  until 
such  a  state  of  affairs  is  remedied  it  is  hopeless  to  expect 
prices  of  commodities  and  the  cost  of  living  to  fall  to  a 
reasonable  level.  The  great  world-demand  for  manufactures 
after  the  termination  of  hostilities  has  now  received  a  decided 
check,  owing  to  the  continuous  advance  in  prices,  which,  in 
turn,  are  due  to  ever-increasing  working  costs  General 
prosperity  depends  on  the  revival  of  this  demand,  which  can 
only  be  secured  by  cheapening  production.  This  the  workers 
have  it  in  their  own  hands  to  achieve  by  improving  output 
all  round." 

*  Dividend  15  per  cent.,  free  of  income  tax. 
I2O 


FOOD  FOR  THOUGHT. 

THERE  are  three  schools  in  which  Economic  Truth  can  be 
learnt.  The  first  is  the  harsh  one  of  practical  experience 
where  everybody  has  to  pay  for  his  own  mistakes  and  where 
signal  punishment  is  meted  out  to  those  who  break  the  rules. 
The  lesson  takes  many  years  to  acquire,  and  all  the  while  the 
kicks  greatly  outnumber  the  half-pence.  The  second  is  the 
school  of  vicarious  knowledge  in  which  the  pupils  watch  the 
performances  of  other  people  and  save  themselves  by  learning 
to  avoid  similar  mistakes.  The  third  is  the  school  of  books, 
lectures  and  examinations  in  which  the  theory  of  Economic 
Thought  can  be  studied  and  the  problems  of  the  day 
interpreted  in  the  light  of  the  knowledge  thus  gained. 

m    m    m 

In  general  it  has  been  the  British  habit  to  explore  only  the 
first  of  these  channels,  but  the  logic  of  events  is  beginning  to 
make  us  pay  attention  to  the  study  of  economic  and  kindred 
subject-,  to  a  much  greater  extent  than  heretofore.  In  the 
days  when  the  cost  of  living  was  standardised,  when  wages 
seldom  moved  upwards  or  downwards  except  fractionally,  and 
when  industry  was  stable,  nearly  everybody  carried  on  by  rule 
of  thumb,  ignoring  external  experiments  and  leaving  theory  to 
those  who  were  disposed  to  devote  themselves  to  the  study  of 
what  was  deemed  a  dull  and  unprofitable  science.  It  is  now 
evident  that  the  whole  tenor  of  our  daily  life  is  intimately 
associated  with,  and  dependent  upon,  economic  law ;  and 
thinking  men  of  all  classes,  faced  with  the  necessity  of 
deciding  between  many  contradictory  explanations  of  the 
existing  state  of  affairs,  realise  that  it  is  their  business  to  look 
into  the  matter  at  first  hand. 

s    m    ffi 

The  object  lesson  provided  by  poor  distracted  Russia  is 
too  immense  and  too  tragic  to  escape  the  attention  of  the 
least  observant,  and  the  vicarious  experience  that  issues 
from  that  catastrophe  is  going  a  long  way  to  save  the 
situation  in  Western  Europe  ;  for,  in  spite  of  many  honest 
misconceptions  and  not  a  few  deliberate  misrepresentations, 
the  forlorn  facts  of  the  case  are  gradually  being  established 
beyond  any  shadow  of  doubt. 

•    -•     • 

The  joint  effect  produced  by  the  disturbance  of  industrial 
relations  at  home,  and  by  the  realisation  of  more  sensational 
developments  abroad,  has  been  to  create  an  unprecedented 

121 


demand  for  economic  knowledge,  and  people  are  asking  not 
•nly  for  authoritative  pronouncements  on  points  of  fact,  but 
also  for  educative  facilities,  so  that  they  may  study  the 
question  for  themselves.  That  pioneer  in  the  field  of  adult 
education  —  Mr.  Albert  Mansbridge  —  observes  that  "the 
willingness  of  men  and  women  over  twenty  years  of  age  to 
settle  to  systematic  study  is  one  of  the  most  hopeful  signs  of 
the  times  in  present-day  England."  This  revival  is  not 
confined  to  persons  connected  with  the  teaching  profession 
but  touches  all  sorts  and  conditions  of  men,  thus  vindicating 
the  claim  of  the  W.E.A.,  "  that  every  normal  man  or  woman, 
if  properly  approached,  is  ready  to  reach  out  for  education  to 

the  utmost  capacity." 

•    «     « 

The  crux  of  the  matter  lies  in  the  problem  of  discovering 
the  proper  method  of  approach.  According  to  Mr.  J.  R. 
Clynes,  "our  educational  system  has  not  yet  reached  the  point 
of  teaching  the  mass  of  the  community  some  of  those  simpler 
and  elementary  facts  in  political  economy  which  it  would 
be  well  for  every  man  and  woman  in  the  country  to  know." 
This  being  the  case,  it  follows  that  our  educational  system  must 
be  supplemented  by  some  form  of  popular  teaching  that  will 
reach  the  mass  of  the  community.  The  University  Extension 
Lecture  movement  and  the  University  Tutorial  Classes  have 
done  good  work,  but  their  scope  is  still  too  limited  to 
embrace  more  than  a  tithe  of  those  who  might  become 
students  if  sufficient  opportunities  were  provided. 

gD        an        ani 

Ruskin  College,  Oxford,  is  alive  to  the  popular  demand  for 
knowledge,  and  is  advertising  a  Correspondence  Department 
for  the  teaching  of  History,  Literature,  Social  Psychology, 
Political  Science,  Sociology,  Economics  and  other  subjects. 
As  the  general  trend  of  this  teaching  is  likely  to  be  based  on 
Marxism,  and  calculated  to  stimulate  class  consciousness,  it 
becomes  all  the  more  necessary  that  increased  efforts  should  be 
made  to  counteract  an  influence  with  so  strong  and  exclusive 

a  bias. 

•     •     • 

The  connection  between  educational  and  welfare  work  is 
so  close  that,  as  Mr.  Beresford  Ingram  said  at  the  Lecture 
Conference  for  Welfare  Supervisors,  which  took  place  last 
September,  "  it  is  difficult  to  differentiate  the  two  terms." 
That  statement  is  far  reaching,  and  it  is  only  with  its 
restricted  application  that  we  here  propose  to  deal.  If  the 

122 


Welfare  movement  is  to  achieve  more  than  the  elimination  of 
physical  discomforts,  more  than  the  provision  of  material 
advantages,  its  supervisors  and  helpers  must  be  qualified 
to  act  not  only  as  friends,  but  also  as  guides  and  philosophers. 
The  Welfare  worker,  whose  equipment  consists  only  of  a  kind 
heart  plus  a  certain  amount  of  technical  knowledge,  will 
never  be  a  conspicuous  success  in  the  handling  of  men  or 
women,  and  he  will  miss  many  golden  opportunities  of 
exerting  effective  influence. 

•  •     • 

That  these  considerations  are  appreciated  by  the  organisers 
of  the  Industrial  Welfare  Society  is  abundantly  manifest  from 
the  Report  of  the  Lecture  Conference  that  has  recently  been 
published,  and  which  we  strongly  advise  our  readers  to  obtain, 
for  it  is  full  of  good  things.  Mr.  Henry  Clay's  address  on  "The 
Economic  Background"  is  particularly  informing.  He  reminded 
his  audience  that  care  for  the  physical  welfare  of  the  personnel 
of  industry  is  primarily  the  responsibility  of  the  Home  Office, 
and  that  the  true  function  of  the  welfare  supervisor  "is  relative 
to  the  conflict  of  interests  that  divides  employers  and  employed, 
that  issues  in  strikes  and  lock-outs."  "  He  relieves  the  tension 
of  the  conflicting  interests,  softens  the  shock  and  prevents 
unnecessary  misunderstanding  and  ill  feeling.  So  he  helps  to 
remove  what  is  the  chief  hindrance  to  the  effective  working  of 

the  industrial  machine." 

•  •     • 

It  is  Mr.  Clay's  view  that  the  conflict  of  interest  to  which 
he  refers  is  inevitable  and  must  persist  though  the  private 
employer  is  superseded  by  Government  control, 'though  nation- 
alisation is  achieved  and  though  Syndicalism  triumphs.  We 
are  inclined  to  think  he  over  emphasizes  this  divergence  of 
interest  and  we  believe  that  as  education  spreads  it  will  be 
found  that  community  of  interest,  though  not  so  obvious  a 
factor  as  its  more  familiar  rival,  can  be  demonstrated  to  be 
ultimately  the  more  potent  of  the  two.  Whether  this  belief 
is  well  founded  or  otherwise,  there  is  no  doubt  that  if  the 
welfare  supervisor  is  to  act  as  a  shock-absorber  he  must  be 
exceptionally  well  acquainted  with  the  geography  of  the 
social,  industrial  and  economic  situation  of  the  sphere  in 
which  he  works.  The  essence  of  his  usefulness  consists  in  his 
detachment  from  extremism  and  this  attitude  of  mind  can 
only  be  cultivated  successfully  by  men  of  broad  understanding. 
This  brings  us  back  to  the  point  from  which  we  started  and 
reinforces  our  plea  for  more,  and  ever  more  education. 

123 


DAY    BY   DAY. 

(A  monthly  Record  of  the  principal  events,  at  home  and  abroad, 

which  have  a  direct  bearing  upon  the  maintenance,  or  otherwise,  of 

peace  in  industry j  . 

Nov.  The  Ministry  of  Labour  records  a  rise  of  twelve  points  in 

1st.         the  cost  of  living  during  October — a  total  rise  of  176  per  cent, 
since  July  1914. 

Changes  effected  in  the  rates  of  labour  during  the  month 
gave  a  total  increase  of  over  ^n8,oeo  in  the  weekly  wages  of 
over  780,000  people. 

164  trade  disputes  involved  1,200,000  work-people  and  a 
loss  of  13,474,000  working  days. 

Unemployment,  which  had  been  rising  steadily  during  the 
first  two  weeks,  increased  rapidly  during  the  latter  fortnight 
of  the  month  as  a  result  of  the  coal  miners'  strike.  Un- 
employed in  Trade  Unions  rose  from  2.2  to  5.3  per  cent. ; 
the  numbers  claiming  out-of-work  benefit  rose  from  274,0*0 
to  500,000.  Many  of  the  principal  industries  were  on  short 
time  at  the  end  of  the  month. 

Mr.  Vernon  Hartshorn,  M.P.,  tendered  his  resignation  from 
the  Miners'  Federation  as  a  protest  against  the  calumny  and 
insult  to  which  he  and  his  colleagues  were  subjected  by 
certain  sections  of  the  Welsh  miners  during  the  recent 
negotiations. 

2nd.  Erkki  Veltheim,  the  Bolshevist  courier  arrested  on  October 

2$th,  was  sentenced  to  six  months  hard  labour  and  to  be 
deported. 

The  special  committee  of  twenty  appointed  by  the  I.L.P., 
issued  their  draft  programme  for  the  future  policy  of  the 
Party.  The  Chairman,  Mr.  Ramsay  Macdonald,  did  not  sign 
the  draft,  and  Mr.  Philip  Snowdeii  criticised  parts  of  the 
programme  adversely. 

3rd.  Coal  Crisis :  The  Miners'  delegates  declared  the  strike  at 

an  end  and  advised  the  men  to  resume  work  at  once.  The 
ballot  showed  a  majority  of  8,459  against  the  Government 
offer. 

4th.  The  Executive  Committee  of  the  Second  International  met 

in  London  to  discuss  the  reorganisation  of  the  international 
working-class  movement.  Belgium,  Holland,  Sweden  and 
Germany  were  represented.  The  I.L.P.  Executive  will  attend 
the  conference  at  Berne  on  December  5th,  which  is  being 
convened  by  German  Independent  Socialists  for  a  similar 
purpose. 

Typographical  Association  dispute  :  Employers  have  agreed 

124 


to  an  advance  of  55.  a  week  to  all  adult  members  in  all  towns. 
The  offer  will  be  submitted  to  a  ballot. 

5th.  Owing  to  the  strike,  the  coal  output  for  the  week  ended 

October  23rd  was  only  12,500  tons.  The  output  for  the 
preceding  week  was  4,611,600  tons. 

Mr.  William  Brace  has  accepted  the  post  of  Labour  adviser 
to  the  Department  of  Mines.     He  will,  in  consequence,  retire 
from  Parliament  and  from  the  Miners'  Federation. 
8th.  Coal  Strike :  Mr.  Bridgeman  estimates  the  loss  in  output  of 

coal  at  i3-i4,ooo,e«o  tons,  and  the  loss  in  wages  to  the 
miners  at  ^£14-15, 000,000.  Approximately  350,000  people 
not  connected  with  mines  were  thrown  out  of  work,  and  a 
large  number  put  on  short  time.  Sir  Robert  Home  states 
that  the  Government  spent  about  .£4,750  on  publicity,  etc. 
9th.  Following  the  alleged  dismissal  of  employees  of  the  General 

Accident,  Fire  and  Life  Assurance  Comporation,  because  of 
their  membership  of  the  Guild  of  Insurance  Officials,  the 
Corporation's  employees  throughout  the  country  are  striking 
for  the  recognition  of  the  Guild. 

10th.  Mr.  Cecil  L'Estrange  Malone,  Communist  M.P.  for  East 

Leyton,  was  arrested  in  Dublin  on  a  charge  of  delivering,  a 
seditious  speech  in  the  Albert  Hall  on  November  7th. 

12th.  The  Daily  Herald  reports  that  Mr.  Herbert  Smith,  Presi- 

dent of  the  Yorkshire  Miners'  Association,  and  Vice-President 
of  the  Miners'  Federation,  is  considering  the  advisability  of 
resigning  his  offices  in  consequence  of  the  hostile  criticism  by 
extremists  to  which  the  leaders  were  subjected  during  the 
mines  dispute. 

The  J.I.C.  of  the  Building  Industry  are  unable  to  agree  to 
the  plan  outlined  by  the  operatives  for  the  reorganisation  of 
the  industry  as  a  "  self-governing  democracy."  It  is  proposed 
under  the  scheme  to  eliminate  the  capitalist,  but  to  remunerate 
management  at  a  rate  commensurate  with  ability.  The 
surplus  earnings  of  the  industry  would  be  devoted  to  pur- 
chasing the  original  capital  and  goodwill,  to  expansion,  educa- 
tion and  research,  the  reward  of  "distinguished  services,"  etc. 
The  employers  object  that  the  scheme  would  result  in  the 
formation  of  an  anti-social  monopoly. 

16th.  The  strike  of  the  employees  of  the  General  Accident.  Fire 

and  Life  Assurance  Corporation,  Ltd.,  has  the  support  of 
practically  all  "  black-coated  "  trade  unionists.  The  Prime 
Minister  has  been  asked  to  receive  a  deputation,  and  the 
Ministry  of  Labour  to  endeavour  to  negotiate. 

The  technical  and  supervisory  engineers  in  all  the  electrical 
undertakings  of  the  United  Kingdom  threaten  to  cease  work 
on  December  i4th  if  the  agreement  arrived  at  by  the  National 
Joint  Board  several  months  ago  is  not  acted  on.  The  salaries 
of  the  workers  involved  range  from  ^£270  to  ^650  a  year. 

125 


The  undertakings  in  which  these  men  hold  responsible  posts 
are  essential  to  public  service.  Only  about  one-third  of  the 
men  have  obtained  the  conditions  agreed  upon  by  the  Joint 
Board. 

17th.  Assurance  Strike :  The  Prime  Minister  will  not  personally 

receive  a  deputation  from  the  Guild,  but  has  requested  the 
Ministry  of  Labour  to  deal  with  the  question.  The  Cor- 
poration explains  that  its  attitude  is  not  one  of  hostility  to 
trade  unionism  in  general  but  to  craft  unionism,  which 
organises  the  members  of  rival  companies  in  one  union  and 
tends  to  lead  to  the  disclosure  of  confidential  information. 

19th.  Mr.  Malone  was  sentenced  at  Bow  Street  to  six  months 

imprisonment  in  the  second  division  and  bound  over  in  two 
sureties  of  ^1,000  each  for  12  months.  Notice  to  appeal 
was  given  and  bail  allowed. 

20th.  An  unofficial  national  delegate  conference  of  the  A.E.U. 

called  for  the  resignation  of   Mr.   J.   T.   Brownlie  from   his 
position  as  President  of  the  Union  en  account  of  his  arrange- 
ment to  act  as  labour  adviser  to  the  Hulton  Press. 
21st.  Dissatisfied   with  the  long  delay  of  the  J.I.C.   in  dealing 

with  the  national  claim  for  a  izs.  increase,  two  thousand 
tramway  workers  at  a  meeting  in  Manchester  passed  a  resolu- 
tion to  break  away  from  the  Council  so  far  as  wages  are 
concerned,  and  to  press  their  eriginal  demand  for  £i  a  week. 
Mr.  J.  R.  Clynes,  M.P.,  principal  speaker  at  a  meeting  in 
support  of  the  League  of  Nations  Union,  was  subjected  to 
many  hostile  interruptions  by  socialist  members  of  the  Labour 
Party. 

Mr.  J.  H.  Thomas  was  called  upon  by  a  vote  of  Newport 
railwaymen  to  resign  his  Secretaryship  of  the  N.U.R.  because 
of  his  attitude  during  the  Miners'  strike. 

22nd.  The  Report  of  the  Departmental  Committee  on  the  Two- 

Shift  system  recommends  the  employment  of  women  and 
young  persons  of  sixteen  years  and  over  on  shifts  of  not  more 
than  eight  hours  duration  between  the  hours  of  6  a.m.  and 
10  p.m.  The  Labour  repreientatives  on  the  Committee  are 
Mr.  W.  A.  Appleton  and  Miss  J.  A.  Varley. 

International  Trtide  Union  Conference  (I.T.U.C.)  opened. 
The  President,  Mr.  W.  A.  Appleton,  sent  a  letter  announcing 
his  resignation.  Mr.  Appleton  claimed  the  right  to  work  for 
Labour  as  a  trade  unionist  without  adopting  the  political 
opinions  of  the  Socialists  in  the  Labour  Party,  and  declared 
his  adhesion  to  the  principle  maintained  by  Mr.  Samuel 
Gompers  and  the  American  Federation  of  Labour.  His 
resignation,  he  wrote,  would  set  him  "free  to  preach  peace 
within  nations  as  well  as  peace  between  nations"  Mr.  J.  H. 
Thomas  was  unanimously  nominated  to  fill  the  vacant 

126 


presidency.  Whereas  the  American  Federation  of  Labour 
has  refused  to  support  the  Conference  because  of  its 
revolutionary  tendencies,  the  Third  (Moscow)  International, 
in  a  letter  signed  by  Lenin,  Bukharin,  Zinovieff,  Radek,  Bela 
Kun,  Tom  Quelch,  Losovosky  and  others,  condemns  it  as  "  a 
congress  of  yellow  leaders  who  continually  betray  the 
fundamental  interest  of  the  Labour  movement  ..." 

The  Printing  and  Kindred  Trades  Federation  and  the 
Typographical  Association  have  accepted  by  ballot  the 
Employers'  offer  of  55.  a  week  increase  to  male  workers,  and 
as.  to  women. 

23rd.  International  T.U.C.     A  resolution  was  passed  declaring 

that  it  was  the  duty  of  the  Labour  movement  to  "  use  all 
means  to  fight  the  world  reaction  which  threatened  the 
growth,  existence  and  the  very  life  »f  the  trade  union  move- 
ment." The  dominant  note  of  the  day's  discussions  was  the 
conviction  that  governments  throughout  the  world  were  to-day 
organised  and  controlled  by  a  hostile  capitalist  class  for  the 
supression  of  the  freedom  of  the  workers.  The  overthrow  of 
this  class  and  the  organisation  of  a  new  society  was  of  more 
immediate  importance  than  the  betterment  of  conditions  of 
work,  which  had  hitherto  been  the  primary  object  of  trade 
unionism. 

24th.  The  Cabinet  Committee  on  Unemployment  show  in  their 

Report  that  the  Government  is  committed  to  a  total  expendi- 
ture of  ;£i  oo,  000,000  on  unemployment  relief  schemes,  and 
that  schemes  for  productive  work  have  been,  and  are  being, 
planned. 

The  I.T.U.C.  was  asked  to  approve  the  principle  recom- 
mended by  the  Bureau  that  while  piece-work  would  in  many 
instances  increase  production,  it  was  desirable  to  prevent  the 
return  of  exploitation  by  capitalism,  and  -to  this  end  a 
guaranteed  minimum  wage  and  maximum  output  must  be 
fixed.  It  was  decided  to  demand  the  enforcement  of  the 
Washington  eight-hour  day  decision  by  all  nations.  A  letter 
was  received  by  the  Congress  from  the  Ural  Trade  Unions 
(145,000  members)  stating  that  Russian  workers  were  not 
represented  at  the  congress  because  the  Soviet  Government 
forbade  it,  because  "a  free  and  independent  trade  union 
movement  does  not  exist  in  Russia  at  present.  All  the  work- 
men's unions  ham  been  turned  by  the  Stviet  Government  into 
Government  institutions  which  do  not  organise  trade  disputes 
nor  fight  for  the  wtrkmen's  ideals  It  is  at  present 

absolutely  impossible  for  the  Russian  labour  class  to  express  its 
opinion  openly^  owing  to  the  political  and  economic  serfdom 
which  has  been  introduced  into  Russia  by  the  Soviet  Govern- 
ment. The  leaders  of  the  Russian  trade  unitns  art  severely 

127 


and  cruelly  persecuted  by  the  Soviet  Government ;  many  of 
them  have  been  shot ;  many  are  still  in  prison  and  camps,  or 
fist  in  exile." 

Joiners  in  the  shipbuilding  industry  have  declared  their 
intention  to  strike  on  December  4th  if  the  employers  carry 
out  their  proposal  to  cease  payment  of  a  izs.  bonus  granted 
last  Spring,  in  order  to  compete  with  the  buildiag  trade  and 
maintain  the  necessary  supply  of  labour. 

26th.  At  a  meeting  of  the  Clerical  Officers'  Association  of  the 

Civil  Service  a  proposal  to  make  a  grant  of  ^50  to  the 
Daily  Herald  was  abandoned  after  a  stormy  discussion. 

John  Steel  and  Robeit  Valentine  Harvey,  members  of  the 
Revolutionary  Communist  Party,  were  sentenced  to  four 
months  hard  labour  at  Birmingham  for  seditious  speeches. 

The  I.T.U.C.  passed  a  resolution  condemning  the  improper 
methods  of  the  Moscow  International  and  rejecting  the 
calumnies  directed  against  the  I.T.U.C.  The  Conference 
claimed  to  represent  26,000,000  organised  workers  in 
eighteen  countries  and  declared  that  the  International  Feder- 
ation of  Trade  Unions  aimed  at  the  abolition  of  the 
capitalist  system,  while  taking  into  account  the  customs, 
traditions  and  the  particular  situation  in  each  country. 
Norway  alone  opposed  the  resolution  of  censure,  and  Italy 
refused  to  vote  on  the  ground  that  although  they  disapproved 
of  the  polemical  methods  of  the  Russians,  the  Italians  had 
entered  into  an  engagement  with  Moscow  to  assist  all  efforts 
made  to  exclude  the  Right  wing  from  the  trade  union  move- 
ment, and  to  create  Communists  Committees  within  the 
trade  unions  for  the  purpose  of  re-organising  the  movement 
on  more  advanced  lines. 

A  resolution  in  favour  of  the  socialisation  of  land  and  other 
means  of  production  was  carried  unanimously,  and  it  was 
recommended  that  negotiations  should  be  entered  into  with 
the  International  of  Miners,  Seafarers  and  Transport  Workers, 
with  a  view  to  first  socialising  the  mineral  and  transport 
industries. 

28th.  The    I.T.U.C.    at    its    final    sitting    passed   a   resolution 

introduced  by  Mr.  J.  H.  Thomas,  that  the  policy  of  Govern- 
ment chiefs,  even  Communists,  acting  as  leaders  of  the 
Workers'  International  Movement  is  inadmissible. 

29th.  At  a  conference  of  the   International  Transport  Workers' 

Federation,  representative  of  1,357,000  railway  workers,  Mr. 
J.  H.  Thomas  foreshadowed  a  severe  struggle  in  the  next  few 
months  over  new  demands  by  the  railwaymen  of  this  country 
for  a  share  in  management. 

30th.  The   strike    of  joiners    in    the   shipyards   throughout    the 

country  commenced  on  the  Tyne  and  at  Banow, 

t*S 


No.  XLI 

JANUARY 

MCMXXI 


"  Dangerous  doctrines  may  lurk  behind  fair 
promises  like  poisonous  adders  in  a  basket  of 
fruit." 

—Sayings  of  Hatasu. 


INDUSTRIAL 
PEACE 


CONTENTS 

Labour  in  1920 

The  Brussels  International  Conference 

The  Facts  of  the  Case  in  Diagram,  IX 

The  Business  Man's  View,  III 

The  Man  and  the  Machine 

The  Slump  in  Trade,  III 

Food  for  Thought 

Day  by  Day 


INDUSTRIAL     PEACE 


LABOUR  IN  1920. 

IN  view  of  those  who  are  faced  with  unemployment  or  already 
held  in  its  grip,  who  are  impoverished  by  the  high  cost  of 
living  or  burdened  by  ruinous  taxation,  the  record  of  the  year 
1920,  may  well  be  regarded  as  disastrous,  but  if  we  take  the 
good  with  the  bad  and  attempt  to  strike  a  mean  it  will  be 
found  that  there  are  many  gains  to  balance  losses.  As  long 
as  trade  is  trade  there  will  be  booms  and  slumps  which  must 
be  measured,  not  by  reference  to  extreme  heights  or  depths, 
but  against  averages.  This  does  not  mean  that  there  should 
be  any  slackening  in  our  efforts  to  remove  the  curse  of  unem- 
ployment and  the  evils  of  poverty,  but  it  does  imply  that  the 
most  important  question  we  can  ask  ourselves  is  whether  the 
general  trend  of  events  is  moving  in  the  right  or  in  the  wrong 
direction.  Whilst  it  must  be  admitted  that  many  hopes  have 
been  dashed,  it  must  also  be  recognised  that  much  that  is  of 
permanent  value  has  been  accomplished  during  the  year  by 
the  Government,  by  Employers  and  by  organised  Labour. 

The  chief  cause  for  congratulation  lies  in  the  very  consider- 
able progress  that  all  parties — and  more  particularly  Labour — 
have  made  in  self-knowledge,  in  the  understanding  of  their 
respective  functions,  rights  and  duties,  and  in  the  recognition 
of  the  limits  imposed  by  economic  facts. 

As  organisation  has  developed,  the  responsibilities  of  Labour 
leaders  have  become  greater  and,  on  that  account,  better 
defined  and  more  clearly  realised.  On  the  other  hand  the 
dislocation  of  pre-war  relations  brought  about  by  the  deval- 
uation of  money  and  by  the  partial  collapse  of  the  European 
credit  system,  the  non-fulfilment  of  vague  and  impracticable 
promises,  which  had  given  rise  to  unreasonable  expectations, 
and  many  other  factors,  contributed  to  create  an  atmosphere 
altogether  unfavourable  to  the  growth  of  peace  in  industry. 
The  mass  of  workers  began  the  year  in  a  mood  of  disappoint- 
ment, suspicion  and  hostility.  They  expected  great  things  of 
their  leaders  and  those  of  a  censorious  temperament  have  not 
concealed  their  impatience  at  what  they  consider  a  slow  rate 
of  progress.  A  great  deal  of  credit  must  be  accorded  to  men 
who  under  these  difficult  circumstances  have  acquitted  them- 
selves so  well,  and  who  despite  the  heavy  tasks  laid  upon 
them,  have  not  only  secured  substantial  gains  for  their  clients, 
but  have  also  come  to  at  least  a  partial  realisation  of  the 

130 


truths  that  minority  rule  enforced  by  violence  cannot  lead  to 
plenty,  and  that  the  fomenting  of  class  hatred  cannot  induce 
peace. 

Final  figures  have  not  yet  been  published  showing  the 
aggregate  gains  secured  during  the  year  in  wages  and  in 
reduced  hours  of  work,  but  the  achievements  in  these  directions 
have  been  notable  both  because  of  their  magnitude  and  on 
account  of  the  fact  that,  for  the  greater  part,  they  have  been 
won  either  through  the  mediation  of  the  National  Wages 
Board,  or  through  the  machinery  recently  inaugurated  for  the 
settlement  of  industrial  disputes  on  constitutional  lines. 

The  Dockers'  demand  for  a  wage  of  i6s.  a  day  was  sub- 
mitted to  a  special  court  provided  for  by  the  Industrial  Courts 
Act,  1919  The  Chairman,  Lord  Shaw,  found  the  dockers' 
claim  to  be  justified,  awarded  the  i6s.  a  day  asked  for,  and 
recommended  the  introduction  of  a  system  of  registration  and 
maintenance  grants  to  counteract  the  evils  of  unemployment. 
Slackness  of  trade  robbed  the  dock-workers  of  the  immediate 
fruits  of  their  victory  and  subsequently,  in  October,  Mr.  Bevin 
approached  the  Government  with  a  scheme  of  insurance  and 
registration  which  will  guarantee  a  weekly  wage  of  £4  all  the 
year  round. 

Operatives  in  the  cotton  industry  demanded  wage-increases 
of  from  60  to  75  per  cent,  but  submitted  their  demands  to  the 
arbitration  of  the  Ministry  of  Labour  and  finally  accepted  Sir 
David  Shackleton's  award  of  28^  to  38^  per  cent,  increase. 
In  March,  the  Industrial  Court  accorded  substantial  increases 
to  the  engineering,  shipbuilding  and  repairing  trades,  on  the 
ground  that  wages  should  depend  in  part  upon  the  state  of 
the  market — the  value  of  the  labour  fluctuating  with  the  value 
of  the  goods  marketed.  Railway  workers,  printers,  paper- 
makers,  tailors  and  agricultural  labourers,  all  received  sub- 
stantial concessions  through  the  medium  of  the  Joint  Indust- 
rial Councils  or  National  Wages  Boards.  In  one  conspicuous 
instance,  that  of  the  tramway  workers,  the  prolonged  efforts 
of  the  J.I.C.  proved  friutless.  The  employers  (Municipal 
authorities  for  the  most  part)  having  stated  that  the  industry 
already  shows  a  deficit- of  £3,300,000  a  year  and  that  they 
cannot  agree  to  arbitration,  the  Ministry  of  Labour  has 
appointed  a  special  court  of  enquiry  into  the  condition  of  the 
service. 

The  Industrial  Courts  Act,  1919,  expired  in  September  and 
industries  are  now  free  to  regulate  their  own  wages,  but  the 
the  Ministry  of  Labour  has  the  right  to  set  up  a  court  of 

131 


enquiry  in  cases  when  the  parties  cannot  agree.  The  findings 
of  the  court  are  not  binding,  but  the  principle  has  received 
popular  assent  and  public  opinion  is  generally  strong  enough 
to  enforce  justice  when  once  the  facts  are  understood. 

The  history  of  the  negotiations  in  the  mining  industry 
illustrates  a  variety  of  tendencies  now  operating  throughout 
the  Labour  world.  In  the  early  Spring  the  miners  conducted 
a  propaganda  campaign  throughout  the  country  to  gain 
support  for  a  policy  of  nationalisation.  The  campaign  was  a 
failure,  but  the  principle  having  been  approved  by  the  Trades 
Union  Congress,  at  the  request  of  the  Miners'  Federation,  a 
special  conference  was  called  in  March  to  determine  whether 
Labour  approved  of  enforcing  the  demand  for  nationalisation 
by  direct  action.  A  majority  of  2,717,000  favoured  intensive 
political  propaganda  for  this  end,  but  an  even  larger  majority 
rejected  the  policy  of  attempting  to  obtain  it  by  Direct 
Action. 

The  details  of  the  long  negotiations  which  followed  are  too 
fresh  to  need  recapitulation.  As  regards  output,  the  success 
of  the  scheme  adopted  has  been  demonstrated  by  the  fact  that 
the  miners  are  entitled  to  a  further  is.  6d.  a  shift.  The 
financial  side  of  the  problem  is  still  obscure. 

At  the  commencement  of  the  strike,  the  N  U.R.  threatened 
to  cease  work  within  48  hours  if  the  claims  of  the  miners 
were  not  granted,  or  negotiations  resumed,  but  at  a  specially 
convened  meeting  of  the  T.U.C.  Mr.  J.  H.  Thomas  and  Mr. 
Bowerman,  on  behalf  of  the  Congress,  declared  against  a 
sympathetic  strike,  and,  at  the  miners'  own  request,  the 
railwaymen  withdrew  their  threat.  In  May  and  June 
sporadic  attempts  were  made  to  compel  the  Government  to 
change  its  policy  in  Ireland,  but  the  National  Union  of 
Railwaymen  and  subsequently  the  Trade  Union  Congress 
refused  to  endorse  a  policy  of  Direct  Action.  The  Council  of 
Action,  called  in  August  to  deal  with  the  Polish-Russian 
crisis,  was  empowered  to  use  any  means  to  enforce  its 
decisions.  But  though  its  objects  were  to  prevent  war,  to 
secure  recognition  of  the  Soviet  Government  and  to  establish 
unrestricted  commercial  relations  with  Russia,  the  Council 
has  so  far  refrained  from  precipitate  action. 

An  investigation  of  the  state  of  affairs  in  Russia  by 
delegates  appointed  by  the  Labour  Party,  and  by  unofficial 
socialists  has  convinced  the  more  responsible  leaders  that  the 
dictatorship  of  the  minority  is  a  weapon  no  less  dangerous  to 
those  who  wield  it  than  to  those  against  whom  it  is  used. 


The  Labour  Parties  of  this  country,  and  of  Germany,  France, 
Italy  and  Belgium  have  definitely  rejected  the  Moscow 
International  and  only  the  extreme  Communist  groups,  who 
do  not  represent  Labour,  but  are  a  class  unto  themselves, 
approve  of  Leninism. 

The  countenance  given  by  the  Labour  Party  to  the  Daily 
Herald  as  its  semi-official  organ  calls  for  some  comment. 
Despite  the  repeated  denials  of  its  editor,  Mr.  Lansbury,  the 
paper  stands  clearly  for  the  fomentation  of  class-hatred  and 
of  violent  revolution.  In  spirit,  whatever  it  may  be  in  theory, 
it  is  opposed  to  all  authority  wherever  vested.  Both  Mr. 
Clynes  and  Mr.  Thomas  have  had  occasion  to  protest  against 
the  attempt  made  by  the  paper  to  discredit  them  as  leaders 
and  to  urge  the  men  who  looked  to  them  for  guidance  to  act 
in  defiance  of  their  advice.  The  unsavoury  story  of  the 
intended  use  of  money  from  Moscow  to  subsidise  the  paper 
and  still  more  the  quibbles  and  evasions  which  followed  the 
disclosure  undoubtedly  shocked  British  Labour.  The 
Daily  Herald  is  thoroughly  communistic  in  its  outlook,  and 
Labour  officials  must,  and  do,  know  that  the  trade  union  and 
labour  news  is  distorted  in  order  to  fit  in  with  the  policy  of 
the  Moscow  International,  but  there  are  two  reasons  why 
there  is  a  reluctance  to  discountenance  its  vagaries.  In  the 
first  place  the  Daily  Herald  is  the  only  well-established  non- 
capitalist  organ  and,  therefore,  unpalatable  as  its  tenor 
undoubtedly  is  to  the  majority  section  of  the  Labour  Party, 
it  is  considered  better  than  nothing  at  all.  In  the  second 
place  the  trade  unions  have  invested  their  money  in  the  paper 
and  are,  therefore,  committed  to  its  support.  The  only 
avenue  left  to  those  who  have  at  heart  the  work  of  educating 
and  justly  informing  the  men  and  women  they  represent  and 
guide  is  to  increase  their  influence  until  they  are  strong  enough 
to  dictate  the  policy  of  the  paper.  Meanwhile  the  incubus  of 
the  Daily  Herald  remains  a  serious  handicap  and  makes  for 
dissension  within  the  ranks  of  Labour. 

The  avowed  policy  of  the  Labour  Party  may  still  be  the 
abolition  of  the  Capitalist  system  of  competitive  endeavour, 
but  the  true  aim  of  Labour  is  the  betterment  of  its  own 
conditions.  As  the  leaders  gain  in  knowledge  of  the  factors 
governing  the  conditions,  other  means  are  recognised  and 
adopted,  and  as  knowledge  and  understanding  supplants 
ignorant  hostility,  the  prospect  of  social  and  industrial  peace 
slowly  but,  we  believe,  steadily  improves. 

'33 


THE    BRUSSELS    INTERNATIONAL 
CONFERENCE. 

THE  recent  International  Financial  Conference  at  Brussels 
unanimously  adopted  the  resolutions  of  the  four  commissions 
appointed  to  examine  various  aspects  of  the  commercial  and 
financial  situation.  The  reports  of  these  commissions  together 
form  a  document  of  extraordinary  interest  and  great  import- 
ance, their  aims  were  definitely  constructive,  and  their  chief 
recommendations,  universally  applicable,  must  form  the  basis 
of  the  future  economic  policies  of  European  States.  Each  of 
the  commissions  dealt  with  one  subject,  the  four  subjects 
being  (a)  Public  Finance,  (b)  Currency  and  Exchange,  (c) 
International  Trade,  (d)  International  Credits.  The  four 
reports  are  more  than  complementary.  They  show  that  the 
subjects  with  which  they  deal  are  inseparable.  If  the  titles 
of  the  first  two  were  interchanged  they  would  appear  hardly 
less  relevant. 

The  report  on  public  finance  emphasises  the  need  for 
reducing  recurring  State  expenditure  within  the  limits  of 
annual  revenue.  Such  reduction  is  to  be  effected  by  rigid 
economy  in  domestic  affairs ;  by  abolishing  all  expenditure  on 
armaments  beyond  that  which  is  necessary  to  preserve  national 
security;  by  abolishing  subsidies  on  bread,  coal  and  other 
essentials,  and  by  raising  the  charges  for  transport,  postal  and 
other  public  services  to  their  commercial  level.  Budget 
deficits  not  only  obstruct  industrial  development  but  also, 
sooner  or  later,  lead  to  further  inflation  of  credit  and  currency, 
which  in  turn  produces  greater  instability  of  the  foreign 
exchanges  and  a  further  fall  in  the  purchasing  power  of 
domestic  currency.  The  report  on  currency  and  exchange 
emphasises  the  need  for  preventing  further  inflation  of  credit 
and  currency  "by  (i)  abstaining  from  increasing  the  currency 
(in  its  broadest  sense  .  .  )  and  (ii)  by  increasing  the  real 
wealth  upon  which  such  currency  is  based."  If  this  is  to  be 
done,  "  governments  must  limit  their  expenditure  to  their 
revenue.  (We  are  not  considering  here  the  finance  of  recon- 
structing devastated  areas)";  superfluous  expenditure  must  be 
avoided ;  governments  and  municipalities  should  gradually 
repay  or  fund  their  floating  debts  and  refrain  from  creating 

134 


additional  credits  which,  for  public  or  private  purposes,  should 
only  be  granted  to  meet  urgent  economic  needs. 

So  far,  it  will  be  seen,  the  two  reports  cover  the  same 
ground ;  and  as  they  start  from  different  points  and  their 
surveys  produce  identical  results,  their  conclusions  may  be 
accepted  with  confidence.  Whether  we  start  from  a  con- 
sideration of  the  cost  of  living,  the  problem  of  unemployment, 
the  question  of  taxation,  or  the  problems  of  currency  inflation 
and  foreign  exchanges,  we  are  compelled  to  traverse  the 
whole  economic  field.  And  the  impartial  investigator  seems 
in  all  cases  to  arrive  at  the  conclusion  that  the  two  essential 
preliminaries  to  industrial  stability  are,  first,  the  reduction  of 
State  expenditure  to  an  annual  sum  which  can  be  raised  by 
such  taxation  as  will  not  impose  too  great  a  strain  upon 
industry  and  individual  taxpayers  ;  and  secondly,  the  removal 
of  hindrances  to  international  trade.  If  the  tax  revenue  is 
insufficient  to  meet  the  normal  expenditure  of  the  State  the 
difference  may  be  obtained  in  one  of  three  ways :  by  the  issue 
of  notes  ;  by  the  sale  of  Treasury  bills  (or  their  equivalent  in 
foreign  countries)  or  by  an  overdraft  on  the  Bank  of  England. 
The  connection  between  the  issue  of  notes  and  inflation  is 
direct  and  obvious.  Treasury  bills  tend  to  inflate  currency 
in  that  they  are  frequently  purchased  from  Bank  credits 
specially  created  for  the  purpose.  A  payment  from  *  Ways 
and  Means  Account ' — the  Treasury's  overdraft  at  the  Bank 
of  England — almost  invariably  means  the  creation  of  fresh 
currency. 

Recurring  deficits  thus  tend  to  economic  instability  in  two 
ways.  First,  they  increase  the  future  burden  upon  the  State 
income,  and  therefore  the  difficulty  of  avoiding  a  future  deficit. 
This  effect  is  cumulative,  and  weakens  the  credit  of  the  State. 
Secondly,  the  rise  in  prices  due  to  the  inflation  already 
described  tends  to  be  permanent,  and,  in  turn,  leads  to 
advances  in  wages  and  costs  and  consequently  to  the 
necessity  for  further  extension  of  credit  and  currency  in  order 
to  provide  means  for  the  payment  of  such  wages.  And  the 
rise  in  wages  and  general  prices  reacts  unfavourably  upon 
Government  expenditure.  Moreover,  if  the  Government 
incurs  a  deficit  by  embarking  on  unproductive  expenditure  it 
employs  labour  which  might  have  been  employed  in  normal 
industrial  development,  and  thereby  reduces  the  supply  of 
capital  goods  and  raises  the  rate  of  interest.  By  diverting 
labour  from  useful  channels  ;  by  adding  to  the  risks  of  future 


contracts  in  private  industry,  and  by  steadily  increasing  the 
burden  of  taxation,  Government  expenditure,  paid  for  by 
mortgaging  the  future,  constitutes  an  industrial  risk  of  great 
magnitude,  and  thus  retards  true  economic  development. 

The  first  two  reports  further  refer  to  international  relations, 
which  formed  the  chief  subject  of  the  last  two  reports.  The 
report  on  public  finance  points  out  that  "  the  restoration  of 
the  devastated  areas  is  of  capital  importance  for  the  re- 
establishment  of  normal  economic  conditions."  The  second 
is  even  more  emphatic,  and  states  that  as  soon  as  possible 
"  impediments  to  international  trade "  should  be  removed. 
One  of  the  great  hindrances  to  the  resumption  of  such  trade, 
the  third  report  informs  us,  is  the  instability  of  the  exchanges. 
But  the  second  report  states  that  "  attempts  to  limit  fluctua- 
tions in  Exchange  by  imposing  artificial  control  on  Exchange 
operations  are  futile  and  mischievous."  How,  then,  is  the 
international  problem  to  be  solved  ?  Peaceful  relations  must 
be  fully  restored,  reports  the  Commission  on  International 
credits ;  the  strong  must  help  the  weak,  and  the  weak  must 
help  themselves  to  the  extent  of  acting  upon  the  financial 
recommendations  contained  in  the  first  two  reports.  If, 
however,  the  strong  are  to  help  the  weak  it  must  be  from 
genuine  savings,  not  by  further  inflation  of  currency.  More- 
over, assistance  should  be  given,  not  by  the  Governments  of 
the  stronger  states,  but  by  individuals.  The  latter  now  fight 
shy  of  investments  which  provide  such  assistance  on  account 
of  the  absence  of  satisfactory  guarantees  of  repayment.  The 
provision  of  such  guarantees,  and  of  machinery  for  facilitating 
the  granting  of  credits  to  the  weaker  states  form  the  subject 
of  a  number  of  specific  recommendations  which  deserve  the 
close  attention  of  business  men  but  cannot  be  discussed  within 
the  limits  of  a  single  article. 

The  gospel  of  the  four  Commissions,  and  of  the  Conference, 
is  thus  a  simple  one.  The  world  is  in  a  mess.  It  can  only 
get  out  of  this  mess  by  means  of  strenuous  effort  on  the  part 
of  all  workers,  stern  economy  by  individuals  and  States, 
freedom  of  trade  between  nations,  and  assistance  to  those 
weaker  States  which  not  only  require  assistance,  but,  by  their 
own  policies  and  the  efforts  of  their  citizens,  show  that  they 
deserve  it.  But  the  economic  situation  in  the  chief  industrial 
States  was  showing  signs  of  changing  even  while  the  Com- 
missions were  preparing  their  reports.  They  foresaw  that 
rapid  deflation  of  currency  might  produce  an  economic  crisis 

'36 


and  industrial  depression,  but  they  were  dealing,  in  the  main, 
with  a  situation  in  which  orders  were  plentiful,  labour  was 
relatively  scarce,  and  prices  were  pursuing  an  upward  course. 
To-day  industry  is  in  a  depressed  state ;  market  prices  have 
'  broken '  ;  workers  who,  a  few  months  ago,  were  being 
exhorted  to  greater  effort  are  working  short  time  or  looking 
in  vain  for  opportunity  to  work ;  currency  (and  credit)  is 
being  rapidly  deflated  in  the  sense  that  what  was  being  used 
and  is  still  available  for  use,  is  lying  idle.  If  the  Commissions 
were  reporting  under  the  present  conditions  would  their 
recommendations  have  been  influenced  by  such  conditions  ? 
We  think  they  would  be  modified  to  some  extent.  The 
fundamental  conditions  remain  unchanged.  The  world  is 
bare  of  stocks ;  large  masses  of  people  are  clothed  in  rags 
while  the  looms  of  this  country  are  without  orders.  Europe 
requires  railways,  railway  stock  and  engineering  material, 
while  our  metal  works  are  employed  on  their  last  contracts. 
We  believe  that  if  the  Commission  on  International  Credits 
had  foreseen  this  condition  of  things  it  would  have  recom- 
mended the  granting  of  credits  to  weaker  countries  by  the 
stronger  States,  not  merely  by  individuals  in  such  States.  We 
believe  it  would  have  recommended  the  stronger  States  to 
place  orders  with  their  own  manufacturers  for  supplies  of 
standardised  durable  goods  to  be  held  by  the  States  for 
delivery  to  the  impoverished  countries  of  Europe.  In  this 
way  employment  would  have  been  stabilised ;  the  existing 
depression  would  be  mitigated ;  the  boom  by  which  it  will  be 
followed  in  due  course  would  be  rendered  less  speculative  and 
dangerous  in  character,  and  the  workers  in  the  country  would 
come  to  realise  that  a  period  of  trade  activity  and  intense 
effort  on  their  part  was  not  inevitably  followed  by  a  slump 
and  a  period  of  unemployment. 


THE  FACTS  OF  THE  CASE  IN  DIAGRAM,  IX. 

OUR  diagram  of  last  month  dealt  with  the  vexed  question  of 
the  distribution  of  the  National  Income.  Basing  our  calcula- 
tions on  the  Census  of  Production  (1907),  we  charted  the  net 
output  of  industry  which  we  proceeded  to  divide  proportion- 
ally between  wages,  salaries,  depreciation,  rates,  royalties, 
interest  and  profits.  Though  fairly  representative  of  the 
whole  field,  our  figures  referred  only  to  the  productive 
industries  included  in  the  above-mentioned  Census,  which 
accounted  for  nearly  all  the  products  of  mining  and  manu- 
facture, for  about  36  per  cent  of  the  Home  Income  and  for  50 
per  cent  of  the  Wage  Earners  in  the  United  Kingdom.  The 
value  of  the  net  output  dealt  with  was  six  hundred  and  sixty- 
four  millions  of  pounds. 

In  order  to  obtain  an  estimate  of  the  total  National  Income, 
all  remunerated  services  rendered  by  the  community  and  all 
net  imports  have  to  be  added  to  the  value  of  goods  produced 
in  the  country.  This  was  the  method  adopted  in  the  Report 
on  the  Census  of  Production  and  the  approximate  total  of  two 
thousand  and  thirty  millions  of  pounds  was  arrived  at.  It  is 
probable,  however,  that  this  is  an  under-estimate  and  that  the 
value  of  new  investments  abroad  was  not  allowed  for 
sufficiently. 

The  estimate  of  Mr.  Edgar  Crammond  is  higher  and 
accounts  for  an  expenditure  of  two  thousand,  one  hundred 
and  fifty-three  millions  at  the  period  under  review.  Taking 
this  estimate  as  our  basis,  Diagram  No.  17  will  consist  of 
2,153  squares,  each  square  representing  one  million  pounds 
sterling.  Proceeding  to  divide  this  total  number  of  squares 
under  the  main  heads  of  National  Expenditure  as  disclosed  by 
the  Census  of  Production,  we  find  that  rather  more  than  two- 
thirds  of  the  National  Income  was  expended  on  food,  drink, 
tobacco,  dress,  housing,  distribution  and  miscellaneous 
services,  leaving  just  under  one-third  for  depreciation,  saving 
and  national  services. 

Under  normal  circumstances  there  is  little  variation  from 
year  to  year  in  the  amount  of  the  National  Income,  and  the 
headings  under  which  it  is  expended  undergo  but  little  annual 
change.  Human  requirements  in  respect  of  food,  clothing, 
housing  and  the  cost  of  distribution  arc,  to  a  large  extent, 

138 


DIAGRAM  No.  17. 

(Note.— The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 


483 

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286 

MISCELLANEOUS. 


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EXPENDITURE  OF  THE  NATION'S  INCOME,   1907. 

Scale:   each  square  of  colour  represents  £1,000,000. 


fixed  quantities,  and  if  income  diminishes  or  if  other  expendi- 
ture increases,  a  deficit  arises  which  has  to  be  made  good  by 
a  corresponding  saving  in  some  other  direction. 

In  1907  the  expenditure  by  Government  and  local 
authorities,  combined,  on  public  services  amounted  to  but 
8.5  per  cent  of  the  National  Income.  In  1920  it  is  likely  to 
reach  the  alarming  figure  of  30  per  cent.  This  means  that 
our  expenditure  in  other  directions  must  be  cut  down  by  21.5 
per  cent,  but  as  we  have  remarked  already,  no  substantial 
portion  of  this  can  come  out  of  food  or  clothes  or  houses,  and 
it  follows  therefore  that  the  sums  normally  set  aside  for 
depreciation  and  saving  will  have  to  surfer. 

It  is  estimated  that  we  shall  not  be  able  to  save  more  than 
5  per  cent  of  our  total  income  in  1920,  as  contrasted  with  the 
15  per  cent  saved  in  1907.  The  situation  thus  created  is  of 
a  sufficiently  serious  nature  to  justify  drastic  measures.  The 
necessity  for  the  re-establishment  of  foreign  trade  and  for  the 
development  of  our  native  industries  is  universally  admitted, 
but  cannot  be  given  effect  to  unless  we  can  find  adequate 
finance  for  these  operations.  One  of  two  obvious  alternatives 
must  be  faced.  We  must  increase  our  income  or  reduce  our 
expenditure,  and  neither  course  is  easy.  On  the  one  hand, 
Labour  looks  askance  at  any  practical  measures  that  lead  to 
increased  production,  and  on  the  other,  diminished  expenditure 
can  only  be  achieved  by  economies  that  may  prove  extremely 
costly  in  the  long  run.  If  schemes  of  social  betterment  are  to 
be  starved,  if  the  progress  of  education  is  to  be  retarded  and 
if  industrial  development  is  to  stand  still — our  last  state  may 
be  worse  than  our  first.  A  determination  to  reduce  the 
National  Debt  at  the  earliest  possible  moment  is  highly  com- 
mendable, but  in  view  of  the  urgent  need  that  exists  for 
present  requirements  in  other  directions,  it  is  a  question 
whether  it  would  not  be  better,  for  posterity  as  well  as  for  the 
present  generation,  that  that  process  should  be  retarded  some- 
what in  order  to  give  us  a  breathing  space  in  which  to  tackle 
the  immediate  crisis  that  confronts  the  nation. 


140 


THE  BUSINESS  MAN'S  VIEW,  III. 

(These  articles  consist  of  a  series  of  extracts  from  the  reports  of 
Company  Meetings,  grouped  to  give  the  reader  an  opportunity  of 
studying  the  effects  of  the  many  conflicting  currents  that  go  to 
make  or  mar  commercial  enterprise.  Though  these  reports,  giving 
as  they  do  only  the  managers'  point  of  view,  cannot  be  considered 
to  cover  the  whole  feld,  they  may,  nevertheless,  provide  a  vahiable 
commentary  on  a  good  many  aspects  of  the  question  as  to  the  ways 
and  means  by  which  the  nation  does,  in  fact,  secure  its  livelihood.) 

Textile  and  Allied  Industries. 

FACTS  and  opinions  of  considerable  interest  concerning  the 
group  of  industries  which  are,  perhaps,  most  peculiarly  British, 
are  given  by  the  Right  Hon.  Lord  Fairfax  in  an  address  to  the 
shareholders  of  the  Amalgamated  Cotton  Mills  Trust, 
Limited.* 

In  the  first  eleven  months  of  this  year  the  exports  of  yarn 
and  cotton  manufactured  goods  from  this  country  amounted 
to  £375,000,000  out  of  the  total  exports  of  the  United 
Kingdom  of  £1,040,000,000,  or  roughly  36  per  cent  of  the 
whole.  These  figures  speak  for  themselves  and  it  is  unnecess- 
ary to  emphasise  the  importance  of  so  vast  a  trade  to  the 
commercial  status  of  this  country. 

Lord  Fairfax  makes  a  noteworthy  comment  on  the  relation 
between  production  and  wages  in  the  62  industrial  concerns 
controlled  by  the  Amalgamation. |  "I  would  like  to  observe," 
he  says,  "that  the  output  of  production  in  return  for  wages 
paid  in  the  cotton  trade  is  one  which  reflects  great  credit 
upon  cotton  operatives,  and  if  only  work-people  in  other 
trades  would  follow  their  fine  example,  and  give  a  greater 
production,  it  would  be  one  of  the  first  steps  towards  national 
financial  rehabilitation,  and  their  own  well-being."  The 
cotton  industry  of  this  country  is,  on  both  the  employers'  and 
the  workers'  side,  now  the  most  highly  organised  trade  in  the 
world  and  its  workers  are  reckoned  amongst  the  ablest, 
thriftiest  and  most  intelligent  citizens  of  the  country.  Wages, 
in  the  main,  are  based  on  a  piece-work  system. 

Of  the  general  outlook  in  the  industry,  Lord  Fairfax  says  : 

*  Dividend  at  the  rate  of  7^  per  cent  free  of  income  tax. 

t  The  Amalgamation,  as  such,  will  be  dealt  with  in  a  later  article  on  Combines. 

141 


"  All  the  evidence  we  can  obtain  leads  us  still  to  believe  that 
stocks  of  finished  cotton  goods  in  many  markets  are  practic- 
ally exhausted,  but  the  difficulty  of  finance,  coupled  with  the 
sensational  drop  in  raw  cotton,  has  caused  buyers  to  hold  off. 
There  are  various  causes  that  are  operating  against  the 
confidence  of  buyers  the  world  over,  one  of  the  most  impor- 
tant factors  being  the  state  of  the  foreign  exchanges,  which  is 
undoubtedly  a  most  serious  feature  resulting  from  the  effects 
of  the  war.  The  resumption  of  trade,  however,  can  only  be 
deferred  for  a  period  when  buyers  will  find  it  necessary  to 
satisfy  the  demand  for  goods  in  their  respective  countries. 
This  latest  demand  has  also  been  intensified  by  the  great 
shortage  of  goods  resulting  from  four  years'  reduction  of 
output  during  the  war,  and  decreased  production  through 
reduced  hours  of  labour. 

"  The  question  of  the  present  cost  of  raw  material  is  one 
which  is  receiving  serious  attention  from  the  trade.  To-day 
the  price  of  cotton  in  Liverpool  is  well  below  the  actual  cost  of 
growing  and  transporting  it  there.  The  law  of  supply  and 
demand  must  eventually  operate,  and  adjust  prices  to  such  a 
level  as  will  be  remunerative  to  cotton  growers,  and  those 
who  handle  the  raw  material.  It  is  difficult  to  forecast  trade 
prospects  for  the  ensuing  twelve  months,  as  although  we 
know  for  a  fact  that  cotton  goods  are  badly  needed  the 
world  over,  we  also  realise  that  money  must  become  easier 
for  the  home  trade,  and  foreign  exchanges  more  stable  before 
foreign  buyers  can  resume  purchasing  in  large  quantities,  or 
even  for  their  absolute  needs."  Attention  is  drawn  to  the 
peculiar  circumstances  of  the  present  depression — "  The 
Lancashire  cotton  spinner  has  learned  by  experience  to 
accept  periods  of  depression,  which  seem  to  come  around  in 
natural  cycles.  The  depression  this  time,  however,  has  not 
come  from  its  usual  cause,  that  is  over-production.  We 
know  in  Lancashire  that  our  goods  are  wanted  all  over  the 
world,  and  the  depression  from  which  we  are  suffering  is 
caused  by  factors  quite  outside  our  own  trade,  viz.,  financial 
difficulties,  excessive  taxation,  and  the  unsettled  state  of  the 
foreign  exchanges." 

Mr.  T.  Henry  Morris  (Amalgamated  Textiles  Limited*) 
expresses  similar  views  on  the  outlook  for  the  woollen  trade. 
He  welcomes  the  fall  of  from  30  to  50  per  cent  which  has 

*  Interim  dividend  10  per  cent  for  the  half  year. 
142 


occured  in  recent  months  in  the  price  of  wool.  "  It  is  greatly 
to  the  advantage  of  the  industry  and  to  the  consuming  public 
that  we  should  be  able  to  move  back  to  pre-war  conditions 
and  values  at  an  early  date." 

"The  world  is  bare  of  all  commodities,  and  especially 
clothing.  The  demand  for  wool  products  is  ever-growing, 
and  as  it  will  probably  be  some  years  before  countries  like 
France,  Belgium  and  Germany  can  secure  their  pre-war 
output,  there  must  be  a  large  demand  for  supplies  from  our 
own  country  and  the  Empire  beyond  the  seas,  and  if  exchange 
difficulties  could  be  satisfactorily  arranged,  from  every 
country  in  the  world." 

While  Lord  Fairfax  refers  to  "  over-production "  as  a 
recognised  condition  in  the  clothing  industry,  Mr.  Morris, 
unwittingly  perhaps,  but  nevertheless  very  distinctly,  fore- 
shadows the  possibility  of  the  same  phenomenon  in  the 
woollen  trade  in  years  to  come  and  some  comment  on  what  is 
alternately  described  as  "over-production"  or  "under- 
consumption," according  to  the  angle  from  which  it  is 
viewed,  seems  called  for.  In  economic  theory  it  is  generally 
assumed  that  "  over-production  "  is  a  misnomer,  because  the 
nation  has  never  produced  more  than  would  satisfy  its  total 
needs,  if  the  wage-earners  of  the  country  had  the  necessary 
purchasing  power  to  create  a  sufficient  demand.  This,  taken 
as  a  statement  concerning  the  aggregate  production  of  the 
whole  nation,  is  doubtless  true.  But  it  is  obvious,  from  Mr. 
Morris's  speech,  that  particular  circumstances  may  so  far 
encourage  the  development  of  any  one  industry  that,  when 
these  circumstances  cease  to  operate,  the  product  of  the 
industry  is  in  excess  of  demand.  Thus,  if  British  industry  is 
called  upon  to  supply  deficits  in  Germany,  France  and 
Belgium  for  some  years,  it  is  probable  that  as  these  countries 
recover  their  strength,  British  textiles  will  hardly  find  a 
sufficient  market.  "Over-production,"  when  it  occurs  in  all, 
or  nearly  all,  industries  at  once,  may  only  be  another  word  for 
"  under-consumption,"  but  real  over-production  in  an  industry 
particularly  favoured  by  circumstances  may  quite  well  occur, 
and  its  occurrence  means  loss  to  the  community  as  a  whole 
and  suffering  to  a  section. 

In  view  of  the  proposed  legislation  for  the  dye  industry, 
and  of  its  close  relation  to  the  textile  industry,  Mr.  L.  B. 
Lee's  address  to  the  Calico  Printers'  Association*  is 
particularly  relevant. 


^ 

*  io  per  cent  dividend. 

r*I\ 

,'4M.  » 

-'  to*  .-.'vfeMl  "< 

Speaking  of  the  general  trade  situation,  Mr.  Lee  considers 
it  unwise  to  speculate  on  the  probable  duration  of  the 
present  depression.  "There  can  be  little  doubt,"  he  says, 
"that  the  shortage  of  goods  in  most  of  the  world's  markets, 
which  was  the  inevitable  result  of  the  war  and  the  unrest 
which  followed,  has  not  yet  been  made  up.  The  demand, 
were  it  the  only  factor,  would  certainly  be  such  as  to  ensure  a 
period  of  maximum  production,  but  high  values,  the  continued 
uncertainty  as  to  prices,  coupled  with  the  general  financial 
stringency  and  the  difficulties  of  exchange  in  many  markets, 
are  all  influences  which  react  upon  any  general  desire  to  take 
up  fresh  supplies  of  even  the  most  necessary  goods.  A  great 
deal  has  been  said  on  the  probable  fall  in  value  of  textile 
productions,  and  this  has  had  the  result  of  delaying  business 
in  some  markets.  Personally  I  find  it  difficult  to  appreciate 
the  arguments  which  have  led  to  the  suggestion  that  much 
lower  prices  may  be  looked  for  in  the  immediate  future,  as  the 
full  effects  of  the  advances,  both  in  wages  and  materials,  have 
not  yet  reached  the  entire  length  of  the  chain  of  distribution, 
so  that  the  ultimate  consumer  is,  in  my  opinion,  likely  to  be 
faced  with  higher  rather  than  lower  prices." 

He  warns  the  workers  that  a  time  has  come  for  a  halt  in 
the  progress  towards  higher  wages  and  shorter  hours.  Costs 
of  production  have  reached  such  a  point  that  it  is  doubtful 
whether  the  industries  of  the  country  can  be  maintained  at 
their  present  (September  1920)  volume,  bearing  in  mind  that 
we  exist  almost  entirely  by  our  export  trade.  "  There  are  already 
signs  that  these  high  costs  are  curtailing  demand  in  many 
directions,  with  the  inevitable  result  that  the  workman  will  have 
a  reduced  wage  to  draw  in  the  near  future.  Any  further  con- 
cessions .  .  .  must  add  to  the  difficulties  of  the  situation. 

"In  the  interests  of  all  parties  the  time  has  arrived  to  deal 
with  further  demands  with  the  greatest  care,  or  the  entire 
trade  will  be  jeopardised.  A  certain  amount  of  adjustment 
is  necessary,  as  labour  conditions  generally  are  in  such  a 
chaotic  condition  that  it  is  difficult  to  form  a  clear  idea  of  the 
position,  but  there  is  no  doubt  on  one  point — that,  as  long  as 
industry  is  controlled  and  responsibility  removed,  so  long 
shall  we  have  continual  unrest." 

Coming  to  the  question  of  dyestuffs,  Mr.  Lee  draws  atten- 
tion to  the  fact  that  we  have  "just  passed  through  a  period 
of  colour  shortage  not  less  acute  than  that  which  obtained 
during  the  critical  years  of  the  war ;  and  it  has  only  been  by 

144 


the  dyes  received  from  Switzerland  and  America  (and,  since 
the  Sankey  judgment,  from  Germany  also)  that  the  colour 
consuming  trades  have  been  able  to  preserve  a  reasonably 
full  volume  of  production,  and  so  contribute  their  share  to 
that  re-establishment  of  industry  which  is  the  primary  necessity 
of  our  national  existence.  .  . 

"  Despite  the  unsettlement  that  has  hampered  colour  pro- 
duction in  the  last  year,  some  progress  is  now  being  made.  .  . 
It  would,  however,  be  unwise  to  found  upon  the  progress  made 
any  expectations  of  an  early  or  complete  dependence  on  a 
home  production  adequate  in  quantity,  variety  or  excellence ; 
and  the  necessity  of  keeping  open  the  source,  in  the  first 
place  from  Switzerland,  and  supplementary  to  this,  from 
Germany,  is  no  less  insistent  than  it  has  been  in  past  years." 
After  a  detailed  criticism  of  the  policy  of  protection  advocated 
in  the  colour  controversy,  Mr.  Lee  pleads  for  a  cautious 
survey  of  the  whole  situation  before  any  final  scheme  is 
adopted,  in  view  of  the  fact  that  the  advocates  of  protection 
have  "  confined  their  arguments  to  colour-making  works  and 
have  made  no  reference  to  those  works  engaged  in  the 
manufacture  of  heavy  and  fine  chemicals,  the  plant  for  which 
constitutes,  from  the  point  of  view  of  national  security,  an 
even  more  important  factor  than  that  of  the  colour-making 
plants  themselves.  Indeed,  the  huge  German  colour  works, 
which  are  the  basis  of  this  argument,  are  manufacturers  of 
heavy  chemicals  on  a  scale  comparable  to  that  of  the  great 
alkali  works  in  this  country.  This  limitation  of  the  claim  for 
special  protection  to  colour-making  works  alone  emphasises 
the  necessity  that  the  plausible  argument  pf  public  safety 
should  not  be  allowed  to  be  used  for  the  promotion  of 
sectional  interests.  .  .  The  necessity  for  this  is  emphasised  by 
the  fact  that  the  Government  is  "  scrapping "  the  gigantic 
chemical  and  explosive  plants  which  were  erected  at  enormous 
cost  during  the  war  and  which  constituted  an  essential  factor 
in  our  very  existence  as  a  nation." 


'45 


THE  MAN  AND  THE  MACHINE. 

As  America  is  the  home  of  the  expert,  and  efficiency  is  a 
characteristically  American  ideal,  it  is  natural  that  the 
"efficiency  expert"  should  have  become  a  familiar  feature  of 
industrial  life  in  the  United  States.  It  cannot  be  said, 
however,  that  these  adepts  realised,  generally  speaking,  all 
that  they  promised  to  the  harassed  employer,  conscious  that 
his  relations  with  his  employees  were,  for  some  reason  he 
failed  to  fathom,  as  unsatisfactory  as  his  output.  The  methods 
adopted  by  most  of  them  were  calculated  to  speed  up  pro- 
duction by  mechanical  means,  which  were  only  temporarily 
successful,  and  had  the  permanent  disadvantage  of  irritating 
the  workers.  But  the  idea  of  calling  in  a  specialist  to 
diagnose  the  symptoms  and  to  prescribe  a  cure  for  an  ailing 
business  was  good,  provided  that  the  specialist  possessed  the 
necessary  qualifications.  Such  a  specialist  America  seems  to 
have  discovered  in  the  person  of  Mr.  William  R.  Basset,  who, 
discarding  the  discredited  title  of  "  efficiency  expert  "  describes 
himself  simply  as  an  industrial  engineer. 

In  the  course  of  his  investigation  into  the  ills  that  industry 
is  heir  to,  Mr.  Basset  has  built  up  a  large  organisation,  which 
has  assisted  him  in  diagnosing  and  prescribing  for  over  1500 
industrial  and  commercial  enterprises  that  were  not  working 
to  the  satisfaction  either  of  employers  or  employed.  To-day 
Mr.  Bassett  has  condensed  the  fruits  of  his  eighteen  years' 
experience  in  Europe  and  in  the  United  States  into  a  book 
called  "When  the  Workmen  Help  you  Manage"  and  pub- 
lished by  the  Century  Company,  New  York. 

Though,  as  his  title  suggests,  Mr.  Basset  believes  that 
industrial  peace  can  only  be  purchased  at  the  price  of  con- 
siderable readjustments  in  the  attitude  of  Capital  and  Labour 
towards  each  other,  he  does  not  advocate  the  abolition  of  the 
existing  social  order.  His  book  is  written  from  the  managerial 
point  of  view,  and  its  object  is  reconstructive,  not  revolu- 
tionary. "I  most  firmly  believe,"  he  writes  in  the  opening 
chapter,  "  that  the  Capitalist  system  is  the  best  if  it  is 
grasped  in.  its  entirety — if  it  is  understood,  and  if  it  is 
administered  with  skill  and  intelligence."  Experience  has 
taught  him  that  "  it  is  perfectly  possible  to  balance  the 
relations  between  the  man  who  works  with  his  money  and 
the  man  who  works  with  his  hands  so  that  each  will  be 
content,  not  with  his  share,  for  that  is  impossible,  but  with 

146 


the  fairness  of  the  division,  and  will  be  entirely  satisfied  that, 
when  a  dispute  arises,  it  is  the  detail  and  not  the  system  that 
is  at  fault." 

Our  failure  to  attain  that  balance  is,  in  Mr.  Basset's 
opinion,  responsible  for  the  industrial  unrest  which  is  seething 
to-day  in  every  part  of  the  world.  The  cure  for  it  is  not,  he 
believes,  to  be  found  in  such  sedative  medicine  as  welfare 
work  and  illusory  profit-sharing.  The  problem  is,  moreover, 
not  a  social  but  an  industrial  one,  for  "  efficient  labour  rests 
upon  the  stimulation  of  the  creative  faculty  through  proper 
work  arrangements,  while  efficient  capital  rests  upon  the 
stimulation  of  the  reproductive  faculty  through  proper  plan- 
ning." The  two  can  only  function  efficiently  in  unison  if 
they  rest  "upon  the  steady  balance  of  adequate  respective 
remuneration."  Interdependence,  not  dependence,  is  the 
ideal  to  be  attained,  and  the  fact  that  we  are  as  yet  so  far 
from  it  is  due,  according  to  this  author,  much  more  to 
defective  management  than  to  the  apparently  unreasonable 
demands  of  labour. 

Briefly  stated,  Mr.  Basset  detects  evidence  of  this  faulty 
management  in  the  generally  imperfect  adjustment  of  wages 
to  effort,  and  in  the  soul-deadening  subordination  of  the  man 
to  the  machine.  That  the  root  origin  of  the  revolt  of  the 
workers  is  spiritual  rather  than  material  is,  of  course,  as  true 
of  Europe  as  of  America.  In  dealing  with  the  practical 
question  of  wages,  Mr.  Basset  starts  with  the  principle  that 
the  only  just  criticism  lies  in  their  relation  to  effort,  and 
asserts  that  "  wages  can  only  be  profitably  paid  for  service, 
not  for  men."  They  should,  therefore,  above  a  universal 
living  minimum,  "only  be  limited  by  the  value  of  the  service 
rendered.  In  the  United  States,  however,  not  one  employer 
in  a  thousand  accepts  this  principle.  The  only  ones  who  do 
so  are  those  who  have  worked  out  the  adjustment  of  wages 
to  the  cost  of  the  finished  product,  these,  we  are  told,  "  seldom 
complain  of  high  rates."  To  bewail  the  size  of  his  pay-roll 
is,  in  Mr.  Basset's  view,  the  hall-mark  of  inefficient  manage- 
ment, and  he  adds  "  nowhere  in  business  is  blank  stupidity  so 
rigidly  standardized  as  in  wages."  But  given  the  workman 
who  is  worthy  of  his  salt,  no  wages  are  too  high,  for  "the 
efficient  employer  should  pay  wages  so  high  that  his  less 
efficient  competitor  will  go  out  of  business." 

"  If  the  wage  system,"  he  continues,  "  is  to  survive  the 
coming  test,  it  must  be  sound  and  equitable,"  and  equity 


entails  not  only  adequate  remuneration  but  year  -  round 
employment.  It  is  indeed  obvious  that  so  long  as  a  man  is 
liable  to  be  discharged  at  any  moment  he  will  never  become 
a  good  or  reliable  worker.  Seasonal  employment  is  not  only 
disastrous  to  Labour,  but  to  Capital  as  well,  and  it  is  also 
attributed  by  Mr.  Basset  to  bad  organisation.  "  I  have  never 
yet  seen,"  he  declares,  "  a  business  that  could  not  be  put  on  a 
year-round  production  with  profitable  results,"  and  he  gives 
instances  where  conversion  has  followed  on  his  advice  with 
benefit  to  the  employer,  who  thus  avoids  "the  economic  waste 
of  operating  a  plant  to  capacity  for  half  a  year  and  then 
letting  it  stand  idle  for  the  other  half,"  and  also  to  the 
employed,  who  gain  the  security  essential  to  contentment  and 
efficiency.  Mr.  Basset  also  urges  the  wisdom  of  letting  the 
worker  know  how  he  stands  in  relation  to  the  industrial 
machine  through  the  publication  of  charts  showing  clearly 
"  the  cost  of  materials,  the  cost  of  labour,  the  cost  of  adminis- 
tration, the  cost  of  selling  and  the  final  profit,  with  a  separation 
in  each  of  the  direct  and  the  indirect  cost."  Such  frank 
statements  both  convince  the  worker  that  he  is  receiving  a 
fair  share  of  the  total  gains,  and  demonstrate  where  economies 
in  production  can  be  most  easily  effected. 

But  it  is  when  he  comes  to  analyse  the  spiritual  causes  of 
unrest  that  Mr.  Basset  is  most  illuminating.  "  The  study  of 
human  reactions,"  as  he  calls  it,  is  as  vital  for  industry  as  it  is 
for  life.  Unfortunately  it  is  a  study  that  has  been  woefully  neg- 
lected by  those  who  deal  with  labour  conditions,  and  hitherto 
only  the  most  enlightened  employers  realize  the  "  antipodal 
distinction  between  filling  a  factory  with  men  and  getting 
a  working  force."  As  a  result  industry  has  become  de-human- 
ized. In  our  ignorance  of  the  importance  of  the  human 
element  in  industry,  we  have  thought  that  we  might  substitute 
something  for  the  creative  instinct  inherent  in  every  man, 
"  something  made  of  metal  and  propelled  by  power."  And 
through  this  subordination  of  the  man  to  the  machine,  we 
have  destroyed  the  natural  interest  in  his  work,  and  the 
creative  faculty  so  stifled  finds  vent  in  revolutionary  dreams 
which  seem  to  promise  wider  opportunities. 

As  the  division  of  labour  which  connotes  repetitive  processes 
is  the  very  basis  of  large-scale  industry,  Mr.  Basset  seeks 
other  outlets  for  the  creative  spirit  of  the  worker  and  these  he 
finds  in  the  establishment  of  progressive  measures  of  self- 
government. 

(To  be  concluded.) 

148 


THE    SLUMP    IN   TRADE,  III. 

SINCE  the  second  article  was  written  the  depression  in  trade 
seems  to  have  grown  in  intensity,  and  has  been  the  subject  of 
discussion  in  the  House  of  Commons.  The  Government 
practically  admitted  its  inability  to  do  more  than  mitigate 
the  suffering  which  inevitably  accompanies  a  prolonged  period 
of  unemployment,  and  appeared  helpless  in  face  of  the  world 
forces  in  operation.  The  Prime  Minister  created  amazement 
by  favouring  emigration.  The  proposal  that  such  a  course 
will  lessen  unemployment  is  based  upon  the  assumption 
that  this  island  is  overpopulated  to  such  an  extent  that 
a  proportion  must  be  permanently  unemployed.  But 
during  the  trade  boom  which  preceded  the  war,  labour — 
particularly  skilled  labour — was  scarce.  We  were  deeply 
concerned,  moreover,  at  the  decline  in  the  birth-rate  and  the 
danger  that  before  another  generation  had  passed  the  popula- 
tion would  be  stationary.  During  the  war  we  lost  hundreds 
of  thousands  of  able-bodied  young  men,  and  many  thousands 
returned  permanently  incapacitated.  The  present  supply  of 
labour  is  probably  considerably  less  than  it  would  have  been 
if  there  had  been  no  war,  even  when  full  allowance  is  made 
for  the  emigration  which  would  have  taken  place  during  the 
war  period.  And  there  is  a  great  deal  of  economic  leeway  to 
be  made  up,  here  and  abroad,  by  our  own  efforts.  How,  then, 
can  we  assume  that  the  country  is  overpopulated?  Moreover, 
even  when  a  country  is  overpopulated  it  means,  not  unemploy- 
ment for  some,  but  harder  work  for  everybody  in  order  to 
maintain  a  decent  standard  of  comfort.  Emigration  is 
obviously  no  remedy  for  unemployment. 

It  is  necessary  to  distinguish  carefully  between  palliatives 
and  true  remedies.  The  former  are  important,  and,  in  time 
of  actual  crisis,  the  more  urgent.  Let  it  be  stated  at  once 
that  the  real  remedy  for  the  present  depression  is  to  be  found 
in  the  restoration  of  international  trade  on  a  pre-war  basis. 
It  remains  to  be  seen  what  can  be  done  to  foster  and  quicken 
such  restoration,  and,  in  the  meantime,  to  tide  the  unemployed 
over  the  present  period  of  suffering. 

Doles,  whether  or  not  they  be  camouflaged  by  being  granted 
under  the  form  of  unemployment  insurance  pay,  through  the 
amendment  of  the  present  act,  are  unsatisfactory  to  the 
recipients  though  necessary  at  a  crisis.  Moreover,  they 
involve  a  loss  of  labour-force  which  might  (and,  as  far  as 


possible,  should)  be  employed  in  providing  useful  service.  Can 
it  be  so  employed  to-day  ?  Some  can  and  will  be  employed 
in  road-mending  and  other  public  work  requiring  little  or  no 
skill.  The  regular  staff  engaged  in  such  work  should  be 
reinforced  to  the  utmost  limit  by  a  "floating"  supply  of 
unemployed  workers  who  would  return  to  their  normal 
occupations  as  trade  improved.  In  this  way  arrears  of  public 
work  would  be  more  rapidly  overtaken.  House  building  offers 
a  far  more  extensive  field  for  employment  of  a  more  or  less 
permanent  character  to  younger  men  who  have  not  yet  learnt 
any  skilled  trade.  The  building  trade  unions  have  hitherto 
rejected  schemes  of  dilution,  partly  on  the  ground  that  a 
considerable  number  of  skilled  workers  are  still  employed  on 
"luxury"  buildings,  and  partly  on  the  ground  that  it  would 
accelerate  and  intensify  depression  and  unemployment  in  their 
own  trade.  The  first  objection  seems  to  be  based  upon  a 
fallacy.  Since  the  requisite  supply  of  labour  is  available  and 
can  easily  be  trained  there  is  no  reason  why  we  should  not 
permit  "  luxury "  building  while  pushing  forward  schemes 
for  erecting  dwelling  houses.  Nor  has  the  second  objection 
any  real  force  at  the  present  time.  Not  only  is  it  necessary 
to  relieve  the. scarcity  of  houses  of  any  kind,  but  the  problem 
of  abolishing  the  slums  and  providing  better  housing  conditions 
for  the  poor  is  as  urgent  as  ever.  It  is  a  significant  commen- 
tary on  labour  politics  that  while  the  labour  movement  before 
the  war  was  making  a  serious  endeavour  to  improve  housing 
conditions  it  now  seems  to  give  moral  support  to  a  policy 
which  makes  such  improvement  impossible.  The  unions 
should  be  prepared  to  admit  at  once  all  adults  who  desire  to 
learn  the  various  trades  and  are  able  to  find  employment.  The 
number  able  to  find  employment  would  be  regulated  by  the 
supply  of  building  materials,  so  that  the  danger  of  immediate 
overcrowding  would  be  extremely  remote.  By  reducing  the 
number  of  juveniles  admitted  to  apprenticeship,  the  numbers  in 
the  trade  five,  ten  and  twenty  years  hence  could  be  adjusted 
to  requirements.  For  every  year  a  small  percentage  die  or 
give  up  their  trade.  The  situation  at  present  is  that  (as  was 
stated  in  a  previous  article)  industrial  development  during  the 
last  few  years  has  been  lopsided,  and  it  is  necessary  to  restore 
the  balance.  This  involves  a  considerable  influx  of  labour 
into  the  building  trades. 

It  is  generally  agreed  that  the  economic  recovery  of  Europe 
is  conditioned  by  the  granting  of  credits  to  the  weaker  States, 

150 


which  are  in  sore  need  of  what  the  world  is  able  to  provide, 
but  are  unable  to  pay  for  it.  Two  kinds  of  credit  are 
necessary,  and  these  may  be  illustrated  by  the  case  of 
Germany.  The  internal  currency  of  that  country  has  been 
considerably  inflated  and  depreciated  during  the  past  six  years. 
But  the  foreign  value  of  the  currency  has  been  depreciated 
to  a  far  greater  extent.  Germany  has  been  importing 
goods  to  meet  urgent  requirements,  and,  being  unable 
to  pay  in  gold,  goods,  or  by  the  sale  of  securities,  or, 
again,  by  contracting  a  loan  abroad,  she  has  been  forced 
to  sell  marks  for  what  they  will  fetch.  Hence  the  enor- 
mous fall  in  the  value  of  the  mark,  and  the  low  price, 
in  this  country,  of  imports  of  dye-stuffs,  small  metal  ware,  etc. 
It  is  therefore  necessary  that  those  countries,  the  currencies  of 
which  are  greatly  depreciated  in  value  abroad,  should  be 
granted  long  credits  which  would  enable  them  to  repurchase 
the  exported  currencies  and  so  restore  the  foreign  exchanges 
to  a  level  corresponding  to  the  internal  value  of  their  cur- 
rencies— though  not  to  their  pre-war  values.  If  this  were 
done  it  would  bring  relief  to  some  of  our  trades  now  suffering 
from  competition  due  to  the  present  abnormal  exchange  con- 
ditions. Moreover,  since  foreign  currencies  on  sale  in  the 
international  market  are  the  subject  of  speculative  dealings, 
and  their  prices  are  governed  largely  by  political  considerations 
and  the  probability  of  ultimate  repayment,  the  mere  assurance 
that  credits  were  forthcoming  to  enable  such  countries  to 
redeem  their  currencies  (held  abroad)  would  be  sufficient  to 
raise  their  prices  to  a  considerable  extent.  The  relief  would 
therefore  be  quickly  felt  although  the  actual  negotiations 
might  be  prolonged. 

The  second  form  of  credit  would  take  the  form  of  a  loan 
which  would  enable  Germany  to  import  raw  materials  and 
other  goods  to  meet  urgent  requirements  without  incurring 
the  risk  of  a  further  collapse  of  the  exchange.  With  the  form 
which  such  a  loan  should  take  we  are  not  here  and  now 
concerned.  It  is  sufficient  to  observe  that  a  considerable 
period  must  elapse  before  it  can  be  negotiated  between  the 
many  countries  affected,  and  that  it  cannot  therefore,  of 
itself,  immediately  react  upon  unemployment.  But  two 
things  may  be  done  immediately.  In  the  first  place  the 
Government  could  lay  down  the  guiding  principle  that  it 
should  retain  the  option  of  supplying,  in  the  form  of  direct 
export  of  goods,  a  certain  proportion  of  any  loan  which  the 


nation  granted  to  one  of  the  European  States.  This  principle 
was  generally  applied  by  France  before  the  outbreak  of  war. 
In  the  second  place  the  Government  might  immediately  place 
orders  for  goods  in  anticipation  of  such  exports,  and  store  the 
goods  until  required.  The  chief  requirements  of  European 
States  in  need  of  credit  will  consist  partly  of  foodstuffs  and 
partly  of  cotton  and  woollen  goods,  machinery  and  other 
standardised  products.  They  will  not  differ  materially  in 
size,  shape,  gauge,  quality,  etc.,  from  those  purchased  in  the 
ordinary  course  of  trade  before  the  war.  During  the  war  the 
Government  controlled  the  textile  and  other  trades  with  the 
assistance  of  committees  of  experts.  These  could  be  resus- 
citated, and,  strengthened  by  accountants  and  lawyers,  assume 
responsibility  for  placing  contracts  at  fair  prices.  It  should 
be  observed  that  the  depression  appeared  first,  and  is  most 
acute,  in  precisely  those  industries  supplying  standardised 
products  for  foreign  markets.  If,  by  means  of  Government 
orders,  they  were  revived,  the  supplies  would  not  only  be 
assured  of  an  ultimate  market  without  serious  loss,  but  would 
tend  to  modify  the  boom  in  trade  which  is  bound  to  appear 
sooner  or  later,  and  may  otherwise  be  very  intense  and  lead 
to  subsequent  disaster.  Moreover,  trade  begets  trade.  The 
revival  of  the  chief  manufacturing  industries  would  lead  to 
the  revival  of  the  multitude  of  minor  dependent  industries. 
Finally,  in  so  far  as  we  granted  loans  to  the  weaker  States 
which  were  employed  in  purchasing  foodstuffs  from  China, 
India  and  other  countries,  our  export  trade  with  the  latter 
would  be  stimulated. 

It  is  necessary,  however,  to  emphasise  the  fact  that  trade 
activity  does  not  necessarily  denote  the  enjoyment  of  a 
correspondingly  high  standard  of  living.  We  would  not  be 
enjoying  the  use  of  the  goods  made  on  Government  account, 
and  would  therefore  not  be  better  off,  immediately,  than  if  such 
goods  were  dumped  into  the  Atlantic.  The  real  benefit 
would  be  felt  in  years  to  come.  But  the  suffering — which  is 
inevitable  until  Europe  is  restored  to  a  sound  economic 
position — would  be  more  widely  distributed.  Nor  should  it 
be  forgotten  that  the  only  real  cost  would  be  the  loss  of 
interest  on  the  sum  paid  for  the  goods  by  the  Government, 
for  the  period  which  elapses  until  the  credit  arrangements  are 
completed,  together  with  any  loss  that  might  be  suffered  in 
resale  to  the  assisted  nations.  This  might  be  less  than  the 
amount  paid  in  doles  if  the  workers  remain  in  idleness. 

152 


FOOD   FOR  THOUGHT. 

The  Coming  Revolution,  by  Mr.  Gerald  Gould,  must  be  ranked 
as  an  important,  even  as  a  valuable  book  ;  not  indeed  on 
account  of  its  logic,  its  scholarship  or  its  veracity,  but  because 
of  a  certain  illuminating  quality  that  it  possesses.  Its  import- 
ance consists  in  the  light  which  it  throws  on  the  outlook  of 
the  Daily  Herald  group  of  propagandists,  its  value  in  the 
revelation  which  it  furnishes  on  the  inner  working  of  the 
mental  processes  of  that  same  group.  Here,  in  a  nutshell,  are 
presented  not  only  the  views  of  the  author  himself,  but  also 
by  inference  the  mentality  of  his  colleagues.  We  therefore 
commend  this  book  to  the  notice  of  those  of  our  readers  who 
are  sufficiently  well-informed  to  see  through  the  pretences  of 
sincerity,  the  assumptions  of  infallible  virtue  and  the  arro- 
gance of  egoistical  assertion  which  are  so  abundantly  dis- 
played in  its  pages.  To  those  less  well  equipped  we  advise 
abstention  or,  alternatively,  extreme  caution. 

•  •     • 

The  Preface  by  Mr.  George  Lansbury  is  written  in  charac- 
teristic vein.  He  starts  with  the  sweeping  pronouncement 
that,  "  The  whole  basis  of  society  rests  on  armed  force  ready 
at  all  times  to  be  used  on  the  side  of  vested  interests  and 
special  privilege."  The  impression  conveyed  (and,  we  fear, 
intended  to  be  conveyed)  by  this  statement  is  that  of  the  great 
mass  of  British  citizens  being  held  in  subjection  by  armed 
force,  but  if  Mr.  Lansbury  had  taken  the  {rouble  to  think, 
before  committing  himself  to  this  particular  blunder,  he  would 
have  realised  that  such  a  state  of  affairs  is  approximately  true 
of  only  one  country  in  the  world,  namely,  Russia.  He  would 
also  have  remembered  that  he  is  the  prime,  and  almost  the 
sole,  apologist  in  this  country  for  that  regime. 

•  •     A 

In  a  sense — in  a  relatively  infinitesimal  sense — the  state- 
ment we  have  quoted  is  true.  Mr.  Lansbury,  for  example, 
has  a  vested  interest  in  the  sanctity  of  his  own  home.  If  this 
is  invaded  by  Bill  Sykes,  or  encroached  upon  by  the  Arch- 
bishop of  Canterbury,  a  policeman  can  be  summoned  to  deal 
with  the  intruder,  and  the  requisite  degree  of  force  can  be 
used  for  that  purpose.  The  protection  afforded  by  the  law  to 


Mr.  Lansbury  in  such  a  dilemma  can  be  invoked  by  others  to 
the  extent,  for  instance,  of  the  employment  of  soldiers  to  pro- 
tect municipal  buildings,  or  even  privately-owned  factories, 
from  mob  violence.  If,  on  the  other  hand,  a  landowner 
attempts  to  close  a  right  of  way,  public  opinion  justifies  the 
use  of  force  for  the  vindication  of  what  the  lawyers  call 
"  right  of  user."  In  the  broadest  sense,  however,  it  must 
be  perfectly  well  known  to  Mr.  Lansbury  that  force  is  re- 
sorted to  by  our  Government  with  the  utmost  reluctance  and 
only  when  such  action  would  be  approved  by  the  majority  of 
the  people,  could  the  vote  of  a  national  plebiscite  be  taken 
on  the  issue. 


Those  who  remember  the  advice  given  to  the  nation  by  the 
Editor  of  the  Herald  during  the  air-raids,  when  he  exhorted  us 
to  stop  building  aeroplanes  lest  the  enemy  should  retaliate 
and  "civilisation  be  blotted  out,"  will  not  be  surprised  at  Mr. 
Lansbury  's  diatribe  against  the  methods  of  modern  warfare. 
We  do  not  complain  of  his  denunciation  of  the  use  of  poison- 
gas,  though  it  is  arguable  that  refusal  to  reply  in  kind  to 
German  inventiveness  would  have  been  a  betrayal  of  our  own 
men  leading  to  greater  misery  in  the  long  run,  but  the  rest  of 
the  argument  in  which  he  contrasts  the  moral  aspect  of  the 
Red  Terror  in  Russia  with  that  of  the  normal  manufacture  of 
armaments  for  national  defence  is  extravagant  to  the  point  of 
absurdity.  The  purple  passage  referred  to  is  as  follows:  — 
"  But  even  if  the  ghastly  horrors  charged  against  them  were 
true,  I  should  contend  that  the  Bolsheviks,  and  revolutionists 
generally,  are  angels  of  light  compared  with  the  civilised  men 
who,  in  workshop  and  laboratory,  scheme  to  produce  poison- 
gas  and  violet  rays  for  choking  and  blinding  hundreds  and 
thousands  of  their  fellow  men,  and  with  those  who  build  large 
and  small  ships,  submarines,  aeroplanes  and  all  the  other 
engines  of  terrorism."  A  little  further  on  he  says:  —  "The 
teaching  of  the  Churches  ...  is  alone  responsible  for  the 
fact  that  bloody  revolutions  take  place."  We  will  not  discuss 
this  interesting,  if  somewhat  novel  thesis,  except  to  protest 
that  if  a  bloody  revolution  should  take  place  in  this  country  in 
the  near  future,  it  would  be  the  height  of  ingratitude  and  the 
depth  of  self-decrying  ordinance  on  Mr.  Lansbury's  part  to 
rob  the  Daily  Herald  of  its  share  in  any  credit  that  might 
attach  to  the  proceedings. 


The  book  itself  covers  a  vast  area  of  ground  which  we  can- 
not here  attempt  to  review.  It  adopts  the  pose  of  deprecating 
the  use  of  violence  and  forthwith  proceeds  to  preach  force. 
It  speaks  with  evident  relish  of  "  compulsion  by  direct 
action,"  and  is  horrified  at  the  spectacle  of  Ulstermen 
preparing  to  defend  themselves  against  aggression,  In  order 
to  provide  some  sort  of  a  cloak  for  such  obvious  contradic- 
tions the  old  dodge,  immortalised  by  ^Esop's  wolf,  is 
resurrected  and  any  hint  of  resistance  against  aggression  is 
dubbed  provocation.  In  the  first  chapter  we  are  told  that  the 
purpose  of  the  book  is  not  propagandist  and  then  follow  two 
hundred  and  seventy-six  pages  of  something  that  is  nothing 
else  but  naked  propaganda  of  the  extremist  type.  In  the 
second  chapter  Mr.  Gould  says  : — "  Labour  is  not  a  single 
concrete  entity  for  whom  anybody  but  a  megalomaniac 
would  undertake  to  speak,"  and  throughout  the  rest  of  the 
book  he  presumes  to  speak  for  Labour  without  any  appear- 
ance of  hesitation  or  restraint. 


The  main  contentions  voiced  by  the  author  in  the  name  of 
Labour  are  that  the  whole  Labour  movement  is  united  in 
demanding  a  rise  above  the  pre-war  standard  of  living,  and 
that  there  is  sufficient  wealth  in  the  country  to-day  for  every 
family  to  enjoy  an  income  of  over  £500  a  year.  With  regard 
to  the  first  contention,  it  is  the  earnest  desire  of  all  right- 
thinking  people  that  the  standard  of  living  should  not  be 
reduced  but,  confronted  as  we  are  by  the  fact  that  the 
aggregate  wealth  of  the  country  is  now  less  than  it  was  in 
1914,  the  present  is  not  an  opportune  moment  for  demanding 
"a  rise  above  it,"  nor  can  the  threat  of  revolution  to  enforce 
that  demand  be  justified  on  any  ethical  grounds  whatever. 
The  second  contention  is  utterly  preposterous  and  must  be 
based  either  on  a  complete  misunderstanding  or  on  a  wilful 
misrepresentation  of  the  facts  of  the  case,  but  this  is  a 
subject  that  we  must  return  to  on  a  future  occasion. 


'55 


DAY    BY   DAY. 

(A  monthly  Record  of  the  principal  events,  at  home  and  abroad, 

which  have  a  direct  bearing  upon  the  maintenance,  or  otherwise,  of 

peace  in  industry;  . 

Dec.  The  Ministry  of  Labour  records  a  fall  of  seven  points  in 

1st.          the  cost  of  living  during  November.     The  index  figure  was 

169  per  cent,  above  that  of  July,   1914.     The  cost  of  food 

alone  fell  nine  points  (index  figure  182  per  cent,  above  July, 

1914). 

Changes  effected  in  the  rates  of  Labour  during  the  month 
gave  a  total  increase  of  nearly  ^690,000  in  the  weekly  wages 
of  1,900,000  workpeople. 

136  trade  disputes  involved  the  unemployment  of  1,138,000 
people  and  a  loss  of  3,631,000  working  days.  Unemployment 
among  trade  unionists,  which  rose  to  5.3  per  cent,  during  the 
coal  strike,  was  registered  as  3.7  per  cent,  at  November  26th. 
There  were  520,353  names  on  the  live  registers  of  the 
Employment  Exchanges. 

Public  buildings  have  been  seized  and  occupied  by  the 
unemployed  in  a  number  of  the  working-class  boroughs  of 
London.  The  object  is  apparently  to  secure  headquarters  for 
the  organised  relief  of  distress. 

A  scheme  to  amalgamate  nineteen  unions  of  dock  and 
transport  workers  into  the  Transport  and  General  Workers' 
Union  has  been  approved.  The  amalgamation  will  combine 
500,000  members  under  one  executive  possessing  the  power 
to  call  a  strike,  and  will  strengthen  the  Triple  Alliance  by 
placing  this  section  more  on  a  line  with  the  other  two. 
3rd.  Cotton  mills  will  run  only  three  days  a  week  until  further 

notice.  One  hundred  thousand  operatives  are  thus  placed  on 
half-time  and  half- pay. 

The  General  Federation  of  Trade  Unions  have  refused  to 
support  the  Dockers'  demand  for  Mr.  W.  A.  Appleton's  resig- 
nation from  the  presidency,  and  have  instructed  the  latter 
that  their  complaints  must  be  lodged  in  a  constitutional 
manner  at  the  annual  meeting. 

4th.  Serious  unemployment  is  developing  in  the  Clyde  shipyards. 

The  joiners  are  on  strike,  the  pattern-makers  are  claiming 
higher  wages,  and  the  shipwrights  have  announced  their 
decision  to  abolish  piecework  and  to  work  on  time-rate  only. 
Meanwhile  contracts  for  steamers  and  marine  engines  are 
being  cancelled  daily. 

156 


The  whole  of  the  Welsh  tinplate  trade  employees  (27,000) 
have  received  notice  that  there  will  be  no  more  work  at  the 
end  of  the  month. 

7th.  The  municipalities  have  refused  the  tramway  workers'  claim 

to  a  wage  increase  of  i  zs.,  and  decline  to  arbitrate.  A  national 
balance  sheet  for  the  industry  showed  that  there  is,  under 
existing  conditions,  a  loss  of  ^3,300,000  a  year.  The  in- 
crease asked  for  involves  a  further  ;£i,  100,000. 

The  National  Alliance  of  Employers  and  Employed  urged 
the  Minister  of  Labour  (i)  to  pay  unemployment  insurance 
money  irrespective  of  whether  the  applicant  had  worked  four 
weeks  or  not,  (ii)  to  call  upon  each  industry  to  assess  its  total 
unemployment  and  arrange  schemes  for  the  division  of  avail- 
able work,  (iii)  to  make  special  arrangements  to  increase  the 
mobility  of  labour,  (iv)  to  arrange  for  the  balance  of  unem- 
ployed labour  to  be  dealt  with  by  district  councils  of 
employers  and  trade  unionists.  Dr.  Macnamara  definitely 
negatived  the  first  claim. 

8th.  The  Friendly  and  Approved  Societies  have  withdrawn  from 

their  share  in  the  administration  of  the  Unemployment  Insur- 
ance Act.  They  complain  that  they  invariably  receive 
unfavourable  treatment  at  the  hands  of  the  Ministry.  Their 
members  number  three  and  a  half  millions. 

9th.  The  Committee  on  Trusts  report  that  they  are  not  satisfied 

that  the  combine  formed  in  the  glass  bottle  trade  by  the 
British  Glass  Industries,  Limited,  is  to  the  interest  of  the 
public. 

12th.  For  the   purpose   of    absorbing  the   unemployed   in   the 

industry,  the  Engineering  and  National  Employers'  Federation 
and  the  A.E.U.  have  agreed  that,  subject  to  the  approval  of 
the  works  committee  in  each  case  concerned,  a  three  shift 
system  shall  be  introduced  in  engineering,  boiler  making  and 
foundry  works. 

The  Shop  Assistants'  Union  have  decided  by  ballot  not  to 
strike  unless  the  employers  in  the  London  Stores  refuse  to 
apply  generally  the  award  of  the  Arbitration  Court  in  the 
case  of  the  Army  and  Navy  Stores  which  is  now  being  con- 
sidered. 

The  majority  of  the  electrical  undertakings  concerned  in 
the  threatened  strike  of  the  technical  engineers  have  agreed 
to  the  terms  of  the  Whitley  award.  Only  56  undertakings 
are  in  disagreement. 

13th.  Electricity  dispute  :  The  Ministry  of  Labour,  having  been 
appealed  to  by  the  Joint  Board,  will  negotiate  directly  with 
those  undertakings  who  still  refuse  to  accept  the  Joint  Board's 
ruling.  Strike  notices  will  be  suspended  meanwhile. 

'57 


Italy  :  The  directors  and  managers  of  the  Fiat  Company  in 
Italy  have,  at  the  request  of  the  men,  again  taken  over  the 
control  and  management  of  the  works.  A  few  weeks  ago, 
the  Chairman,  as  a  result  of  the  Socialistic  claims  of  the  men, 
offered  to  sell  the  works  and  let  the  men  run  them  on  a  co- 
operative basis.  The  offer  was  refused,  and  the  chairman, 
chief  engineer  and  others  resigned  on  the  grounds  that  it  was 
impossible  to  carry  on  business  whilst  a  spirit  of  animosity 
existed  between  the  men  and  the  directors. 

15ih.  Henry  Littlefield,  charged  with  assaulting  the  Chairman  of 

the  Deptford  Branch  of  the  Operative  Bricklayers'  Society 
stated  that  although  he  had  been  a  bricklayer  on  and  off  since 
1905  he  was  debarred  admission  to  the  union,  and  as  a  result 
his  wife  and  children  were  starving.  He  asserted  that  his 
admission  was  refused  because  he  had  laid  750  bricks  in 
7j  hours. 

The  National  Executive  of  the  Labour  Party  urged  the 
Government  to  adopt  an  emergency  unemployment  measure 
providing  403.  a  week  for  men  and  253.  for  women,  with 
additional  allowances  for  dependents.  They  pointed  out  that 
such  a  distribution  would  increase  demand  and  stimulate 
trade. 

The  N.U.C.  reports  that  there  has  been  a  wholesale 
reduction  in  the  clerical  staffs  of  the  engineering  and  iron  and 
steel  trades  and  that  there  is  widespread  unemployment 
among  clerks. 

Many  of  the  unemployed  can  get  no  benefit  under  the 
Unemployment  Act,  1920,  and  there  is  a  widespread  feeling 
that  owing  to  the  nature  of  the  emergency,  and  to  the  fact 
that  the  situation  is  likely  to  improve  in  the  early  spring,  the 
present  disqualification  should  be  temporarily  suspended. 

The  Minister  of  Labour  has  decided  to  hold  an  enquiry 
under  Part  2  of  the  Industrial  Courts  Act  into  the  application 
of  the  Tramway  Workers  for  an  advance  of   123.     The  em- 
ployers refused  to  submit  the  question  to  arbitration. 
16th.  The  members  of  the  National  Union  of  Boot  and  Shoe 

Operatives  have  rejected  the  piece-work  system  now  prevailing 
and  voted  in  favour  of  day  wages  and  a  limited  output. 
T.  F.  Richards,  president  of  the  Union,  recommended  the 
decision,  which  was  taken  in  the  belief  that  it  will  increase 
employment  in  the  trade. 

The  application  by  the  workers  in  the  shipbuilding  industry 
for  an  increase  of  sixpence  an  hour  has  been  adjourned  for 
six  months,  during  which  period  a  joint  committee  will  con- 
sider the  possibility  of  adjusting  wages  according  to  the 
fluctuations  of  trade. 

158 


Mr.  E.  Bevin  and  Mr.  J.  Cliff  will  present  the  tramway 
men's  case  at  the  Court  of  Enquiry  set  up  by  the  Minister  of 
Labour. 

18th.  The   Central   Committee   under   the   Profiteering  Acts  is 

investigating  the  subject  of  the  multiplication  of  transactions 
in  the  distribution  of  commodities.  Various  instances  where 
commodities  in  universal  demand  have  been  unnecessarily 
passed  from  hand  to  hand,  with  a  profit  at  each  transaction 
have  given  rise  to  the  enquiry.  Communications  on  the 
subject  should  be  sent  to  the  Secretary,  The  Central  Profiteer- 
ing Committee,  54  Victoria  Street,  S.W.  i. 

20th.  The  Minister  of  Labour,  in  a  letter  to  the  Building  Trades 

Federation,  proposes  that  50,000  ex-Service  men  be  admitted 
and  trained  for  the  building  industry.  In  return  the  Govern- 
ment will  pay  ^"5  for  each  man  trained,  will  guarantee  50  per 
cent,  of  a  man's  wages  as  to  the  first  22  hours  per  week,  and 
75  per  cent,  for  the  rest  of  time  lost  through  stress  of 
weather,  and  will  promote  a  scheme  whereby  the  industry 
itself  will  supplement  the  amounts  payable  under  the  Unem- 
ployment Insurance  Act. 

22nd.  45>ooo  miners  in  the  Rhondda  Valley  struck  work  because 

the  Ocean  Coal  Company  refused  to  reinstate  eleven  men 
dismissed  because  their  places  could  no  longer  be  worked 
remuneratively.  The  miners  are  asking  for  a  special  confer- 
ence of  the  South  Wales  Miners'  Federation  to  proclaim  a 
general  strike  throughout  South  Wales  coalfields.  It  is  under- 
stood that  similar  notices  have  been  served  on  men  in  other 
parts  of  the  Rhondda  Valley,  and  that  a  general  movement  is 
being  made  to  cope  with  the  ca'  canny  policy  of  some  of  the 
miners. 

In  Lancashire  and  Cheshire  there  were  106,083  claims  for 
unemployment  insurance  benefit  and  40,103  ex-Service  men 
applied  for  the  special  out-of-work  donation  during  the  week. 
The  Premier  informed  a  deputation  from  the  chief  munici- 
palities that  it  was  impossible  for  the  Exchequer  to  increase 
from  30  to  75  per  cent,  its  contribution  towards  local  unem- 
ployment relief  works. 

23rd.  John  Davidson  Bell  and  Thomas  Scott  (or  Taylor)  were 

sentenced  to  six  months  hard  labour  and  Anker  Petersen  to 
three  months,  on  charges  of  transmitting  seditious  literature 
from  Tyne  Dock  to  Liverpool.  Scott  and  Bell  claimed  to  be 
members  of  the  Communist  Party. 

The  Unemployment  Insurance  (Temporary  Provisions 
Amendment)  Act  became  law.  This  Act  permits  unemployed 
in  any  Insured  Trade  to  claim  up  to  eight  weeks'  benefit  pro- 
vided they  have  been  employed  at  least  ten  weeks  since 
December  3151,  1919,  or  four  weeks  since  July  4th,  1920. 

159 


27th.  Mr.  Lloyd  George  and  other  members  of  the  Government 

held  an  informal  conference  on  unemployment.  Sir  Allan 
Smith  and  Mr.  Henderson  presented  the  views  of  the  employ- 
ers and  employed. 

Actual  records  quoted  by  Dr.  Macnamara  show  that  con- 
siderably over  half  a  million  men  and  women  are  unemployed. 

29th.  At  the  request  of  the  Council  of  Action,  a  special  confer- 

ference  of  the  British  Labour  Party  considered  the  question 
of  dealing  with  unemployment.  A  resolution  was  passed 
condemning  the  Government  for  delay  in  securing  peace 
and  trade  with  Russia.  The  Government  was  called  upon 
to  take  effective  steps  to  restore  the  economic  life  of  Central 
Europe  by  providing  credits  and  removing  all  blockading 
influences.  Meanwhile,  when  work  is  unobtainable,  it  is 
considered  that  maintenance  should  be  provided  at  the  rate 
of  at  least  403.  for  householders  or  253.  for  single  men  and 
women. 

The  output  of  coal  during  the  five  weeks  ending  December 
i8th  was  at  the  rate  of  260,758,000  tons  a  year,  and  the 
miners  will,  therefore,  receive  a  further  rise  of  is.  6d.  per 
shift  in  January. 

30th.  The  members  of  the  unions  composing  the  National  Feder- 

ation of  Building  Trade  Operatives  are  to  ballot  for  or  against 
acceptance  of  the  Government's  scheme  for  the  training  of 
ex-soldiers. 

31fit.  1'he  National  Warehouse  and  General  Workers'  Union  and 

the  Amalgamated  Union  of  Co-operative  and  Commercial 
Employees  became  merged  into  the  National  Union  of 
Distributive  and  Allied  Workers,  the  membership  of  which  is 
nearly  200,000. 


m 


1 60 


No.  XLII 

FEBRUARY 


MCMXXI 


A  man's  own  efforts  make  him  a  man." 

— Hitopadesa. 


INDUSTRIAL 
PEACE 


CONTENTS 

A  Vital  Industry 

Unemployment  Insurance 

The  Facts  of  the  Case  in  Diagram,  X 

Economy  and  Education 

The  Financing  of  Exports 

The  Business  Man's  View,  IV 

Food  for  Thought 

Day  by  Day 
Our  Economic  Scheme 


IND  U  STRI  AL     PEACE 


A  VITAL  INDUSTRY. 

THE  Educational  Scheme  which  we  announce  this  month  (and 
of  which  fuller  particulars  are  given  later  in  this  issue)  is  based 
on  the  following  considerations. 

Though  few  people  will  be  found  to  deny  that  the  value  of 
education  is  incalculably  great,  still  fewer  advance  beyond 
the  stage  of  paying  lip-service  to  the  cause  they  rate  so  highly. 
A  superfluity  of  critics  profess  to  be  scandalised  by  what  they 
are  pleased  to  describe  as  "  the  appalling  ignorance  of  the 
masses,"  but  they  fail  to  move  a  finger  to  lift  the  reproach 
they  complain  of.  They  seem  to  forget  that  ignorance  is  the 
common  heritage  of  all  mankind,  that  nothing  except  education 
can  oust  it,  and  that  education  is  not  a  thing  which  springs 
up  in  a  night  of  its  own  accord  like  a  mushroom,  but  a  thing 
which  has  to  be  planted  and  cultivated  before  it  can  thrive. 

The  late  Mr.  Choate  was  right  in  describing  education  as 
the  chief  industry  of  every  nation — and  if  we  neglect  to 
develop  that  industry  no  natural  ability  on  which  we  may  be 
tempted  to  pride  ourselves  will  enable  us  to  maintain  our 
place  in  the  world. 

This  is  the  position.  Knowledge  cannot  be  acquired  unless 
facilities  for  learning  are  provided,  adult  men  and  women  are 
demanding  increased  opportunities  for  self-education  and  the 
existing  machinery  for  satisfying  their  cravings  is  quite 
inadequate. 

Under  these  circumstances  "  Industrial  Peace  "  proposes  to 
make  an  experiment  and  to  provide,  according  to  the  means 
placed  at  its  disposal,  certain  facilities  for  study.  We  anti- 
cipate objections.  We  shall  be  told  that  the  scale  on  which 
our  operations  must  perforce  be  conducted  is  too  trifling  to 
achieve  any  substantial  result.  We  answer  that  half  a  loaf  is 
better  than  no  bread  and  that  unless  some  beginning  is  made 
there  can  be  no  ending.  We  shall  be  reminded  that  a  little 
knowledge  is  a  dangerous  thing.  We  agree  and  reply  that 
those  to  whom  our  proposition  applies  are  already  in  posses- 
sion of  at  least  a  little  knowledge  which  we  intend  to  amplify. 
"  Mony  pickles  make  a  mickle."  We  shall  be  accused  of 
exploiting  education,  with  the  object  of  bolstering  up  the 

162 


existing  social  system,  and  we  shall  refute  the  charge  by 
carrying  out  our  project  with  absolute  fairness.  Those 
entrusted  with  marking  the  examination  papers  will  act 
impartially,  and  all  views,  whether  capitalistic  or  socialistic, 
will  receive  the  same  treatment  provided  that  they  are 
relevant  and  logical.  Finally  it  may  be  thought  that  we  are 
commercialising  the  fountain  of  learning.  If  so  we  can  only 
plead  in  extenuation  of  our  offence  that  this  scheme  of  ours 
only  offers  prizes,  it  does  not  solicit  fees. 

Our  main  object  will  be  to  induce  as  large  a  number  of 
persons  as  possible  to  study  Political  Economy  and  we  address 
ourselves  in  the  first  instance  to  the  teaching  profession.  Our 
reasons  for  selecting  Economics  and  for  concentrating  upon 
the  school-teacher  are  as  follows.  Education  may  be  practical 
or  it  may  be  ornamental.  There  is  much  to  be  said  for  both 
types  but  perhaps  the  latter  has  been  somewhat  favoured  in 
this  country  at  the  expense  of  the  former.  Dexterity  can  be 
acquired  at  the  lathe  or  at  the  piano.  We  prefer  the  lathe. 
If  a  practical  science  is  desired  none  lends  itself  so  readily  as 
Economics,  which  is  neither  more  nor  less  than  the  study  of 
man  in  his  endeavour  to  make  both  ends  meet. 

Moreover  this  subject  has  hitherto  been  the  Cinderella  of 
British  curricula,  scorned  by  proud  sisters  and  relegated  to 
the  basement,  and  a  desire  to  redress  these  slights  in  some 
measures  inclines  us  to  essay  the  part  of  fairy  godmother. 
And  there  is  a  third  reason.  The  value  of  education  does  not 
reside  exclusively  in  its  function  of  developing  the  mind,  there 
is  also  the  question  of  its  specific  application  to  be  taken  into 
account.  It  is  easier  to  apply  knowledge  when  the  surround- 
ings are  familiar  than  when  they  are  novel  and,  as  Mr.  J. 
R.  Clynes  reminds  us — "  our  educational  system  has  not  yet 
reached  the  point  of  teaching  the  mass  of  the  community 
some  of  those  simple  and  elementary  facts  in  Political 
Economy  which  it  would  be  well  for  every  man  and  woman 
in  the  country  to  know." 

If  the  maximum  reward  of  educational  effort  is  sought,  no 
field  is  so  promising  as  the  scholastic  profession,  which, 
besides  having  learnt  how  to  learn,  may  be  counted  upon  to 
impart  its  knowledge  to  the  rising  generation  in  ever  broaden- 
ing circles,  until  perhaps  the  nation  can  emerge  from  that 
morass  in  which,  according  to  the  critics  aforesaid,  it  is  so 
deeply  involved. 

So  much  for  the  general  outline  of  the  considerations  upon 

163 


which  our  project  is  based.  Let  us  explain  how  we  propose 
to  give  effect  to  the  scheme. 

There  are  two  methods  of  bringing  students  into  contact 
with  facilities  for  study.  One  is  the  classroom  and  the  other 
is  through  the  post  office.  Financial  and  geographical 
limitations  compel  us  to  adopt  the  latter  alternative. 

The  first  problem  to  be  solved  relates  to  the  difficulty  of 
getting  into  touch,  through  the  post,  with  potential  students. 
We  hope  the  solution  will  be  found  in  the  good  offices  of  the 
National  Union  of  Teachers.  The  second  problem  relates  to 
the  difficulty  of  providing  for  the  supply  of  books  for  the  use 
of  those  students  who  may  accept  our  invitation.  This 
touches  the  root  of  the  matter  for,  as  our  main  object  is  to 
induce  as  many  persons  as  possible  to  read  economics,  the 
whole  scheme  would  collapse  unless  some  method  were 
devised  to  relieve  candidates  of  the  necessity  for  providing 
themselves  with  expensive  books.  In  this  dilemma  we 
appealed  to  the  Central  Library  for  Students,  with  the 
fortunate  result  that  the  hearty  co-operation  of  that  organisa- 
tion has  been  secured.  We  are  also  indebted  to  the  authors 
of  the  selected  books  and  pamphlets  for  their  generosity  in 
waiving  their  royalty  rights  in  respect  of  books,  etc., 
supplied  in  pursuance  of  the  scheme.  Last,  but  by  no  means 
least,  we  have  to  thank  the  Central  Council  for  Economic 
Information,  which,  by  providing  funds  to  cover  the  cost  of 
the  prizes  and  administrative  expenses,  has  turned  what  would 
otherwise  have  remained  a  nebulous  conception  into  the 
practical  proposition  which  is  described  in  greater  detail  on 
pages  190  and  191  of  this  issue. 


164 


UNEMPLOYMENT  INSURANCE. 

The  Tendencies   of   Reform. 

LESS  than  a  year  ago  the  Government  passed  a  great  Act  to 
extend  the  system  of  compulsory  insurance  against  unemploy- 
ment That  Act  brought  twelve  million  workpeople  within 
the  scope  of  insurance.  It  made  unemployment  insurance  a 
reality  in  the  thoughts  and  the  lives  of  the  great  majority  of 
wage-earners.  Its  principles,  however,  were  those  of  the 
original  Act  of  ten  years  ago.  Bold  and  far-reaching  as  was 
the  Act  of  1920,  it  has  not  quenched  the  debate  on  the 
principles  and  methods  to  be  observed  in  this  sort  of  insur- 
ance, and  the  present  crisis  of  unemployment,  though  it  may 
seem  to  call  for  exceptional  and  abnormal  measures  of  relief, 
has  quickened  the  debate  on  theory. 

At  present  the  State,  the  employer  and  the  wage-earner  pay 
not  very  unequal  contributions  into  the  Unemployment  Fund. 
On  behalf  of  the  wage-earners,  the  Labour  Party  has  steadily 
condemned  the  contributory  principle.  How  far  "organised 
Labour  "  represents  "Labour  "  in  this  matter  is  obscure.  The 
vociferous  opposition  to  the  contributory  principle  is  probably 
overdone.  Wage-earners  would  probably  not  refuse  to  pay 
something,  provided  that  another  aspect  of  their  view  were 
listened  to  They  are  inclined  to  claim  that  the  industries  in 
which  there  is  employment  for  them  for  all  but  a  small  percent- 
age of  their  time  should  provide  for  them  during  that  small 
percentage  also.  They  regard  themselves  as  just  as  essential 
to  industry  as  the  other  two  members  of  the  Trinity  that 
preside  over  production,  viz.,  shareholders  and  staff.  On  the 
one  hand,  they  hear  of  reserves  accumulated  for  the  stabilising 
of  dividends.  They  appreciate  the  practice  of  making  good 
years  pay  for  bad  ones.  They  think  the  principle  of  stabilising 
dividends  by  a  levy  for  reserves  so  good  that  they  wish  their 
wages  to  be  stabilised  in  this  way.  On  the  other  hand,  they 
envy  members  of  staff  who  are  not  taken  on  and  dismissed  at 
short  notice,  but  enjoy  a  much  more  secure  status  and,  so  to 
speak,  an  all-the-year-round  wage.  They  are  aware,  more- 
over, that  the  employer's  contribution  to  the  Unemployment 
Fund,  when  taken  as  a  percentage  on  his  total  wage-bill,  is  a 
veritable  bagatelle. 

This  is  indeed  a  natural  and  attractive  way  to  argue.  "  My 
industry  from  year  to  year,"  the  wage-earner  says  to  himself, 

165 


"suffers  4.9  per  cent,  of  unemployment.  This  is  a  small 
figure  as  a  percentage,  but  the  source  of  immense  worry  in 
prospect,  and  of  considerable  suffering  when  it  arrives.  When 
it  does  come,  there  ought  to  be  a  retaining  fee  waiting  for 
me.  That  retaining  fee  ought  to  be  a  reasonable  percentage 
of  my  average  wage.  The  boss  ought  to  insure  himself 
against  this  item  just  as  he  does  against  other  risks  by  piling 
up  a  reserve.  But  the  boss  isn't  quite  the  organiser  he  ought 
to  be,  at  least  when  it  comes  to  considering  the  comfort  and 
peace  of  mind  of  his  'hands  ' ".  He  isn't.  The  boss,  in  truth, 
is  usually  afraid  to  lay  another  burden  on  industry  :  though 
his  fear  is  pardonable  in  this  black  month  of  February.  On 
the  other  hand,  even  in  this  month  funds  must  be  found,  in 
one  way  or  another,  to  tide  unemployed  men  and  women 
through  idle  weeks.  As  there  is  no  possibility  of  avoiding 
such  expenditure,  discussion  as  to  the  method  and  the  basis 
of  the  expenditure  may  be  useful. 

In  the  minds  of  the  unemployed  themselves  two  things  are 
urgent :  (i)  the  amount  of  the  unemployment  benefit,  and 
(ii)  the  conditions  attached  to  it.  The  two  points  are  con- 
nected :  for  an  insurance  scheme  founded  on  right  principles, 
on  right  ways  of  regarding  the  wage-earners,  on  a  right 
determination  of  their  status  in  industry  would  inevitably 
tend  to  be  satisfactory  in  the  amounts  of  its  benefits.  No 
workman  can  be  expected  to  content  himself  with  a  small 
dole  from  the  State.  Even  the  State-Socialist  must  feel  that 
as  regards  unemployment  it  is  his  industry  and  not  the  State 
that  should  be  responsible  for  him.  In  the  eyes  of  the  State 
he  is  but  No.  X,  one  of  millions,  and  hardly  a  distinct  per- 
sonality. The  State,  of  course,  must  take  a  highly  generalised 
view  of  men  out  of  work.  But  an  industry  could  take  and 
ought  to  take  account  of  specific  status  and  personal  circum- 
stances. What  a  man  is  worth  to  an  industry  when  out  of 
work  should  bear  a  definite  relation  to  his  work  for  it  when 
work  is  available  for  him.  If  industries  or  even  individual 
employers  could  be  induced  to  accept  the  principle  of  pro- 
portional levy  on  total  wages-bill — well,  they  would  do  more 
thereby  to  secure  social  and  industrial  peace  than  could  be 
achieved  by  almost  any  other  piece  of  organisation.  There 
is  no  greater  evil  in  working-class  life  than  the  fear  of  un- 
employment. There  is  no  psychological  factor  that  impedes 
the  smooth  movement  of  work  so  much  as  this  fear.  Much  is 
heard  in  these  days  about  the  right  of  wage-earners  to 

166 


"control."  On  behalf  of  wage-earners,  some  sensible  and 
some  foolish  forms  or  items  of  control  are  agitated  hotly  in 
every  corner  of  the  country.  But  whatever  may  happen  to 
the  more  ambitious  claims  to  share  in  control,  or  to  monopo- 
lise it,  very  few  wage-earners  are  satisfied  with  their  status 
in  industry,  and  every  time  they  think  of  the  evils  of  un- 
employment they  reflect  how  weak  a  foothold  they  have  in 
the  industries  to  which  they  give  their  years  and  their  strength. 
In  face  of  much  preaching  about  goodwill  and  co-operation 
they  are  inclined  to  answer:  "We  will  believe  your  assertions 
about  goodwill  when  you  accord  us  a  real  right  to  draw  on 
industry  for  a  retaining  fee ;  we  shall  co-operate  when  you 
make  us  feel  co-operators  and  insiders  by  accepting  responsi- 
bility for  the  periods  when  work  is  not  available  for  us, 
instead  of  turning  us  adrift  as  mere  hirelings  or  directing  us  to 
the  State  for  a  dole."  The  concession  of  status  and  of 
unemployment  insurance  benefits  adjusted  to  status  would  be 
an  unmistakable  proof  of  sincerity. 

It  would  be  a  burden,  of  course,  on  industry.  There  are 
burdens  and  burdens  This  burden,  however,  would  bring  its 
reward.  In  dealing  with  men  from  whom  you  wish  willing 
and  effective  work  much  depends — every  employer  knows  it — 
on  psychological  factors.  To  reassure  his  workmen  against  a 
chronic  fear,  which  tempts  them  daily  to  "  ca'  canny,"  and  to 
conciliate  their  pride  must  surely  be  good  business  as  well  as 
good  morals.  Our  Unemployment  Insurance  Act  is  very  new. 
Some  may  think  that  it  ought  to  be  allowed  to  stand  for  a 
reasonable  term  of  years.  But  these  are  the  days  of  recon- 
struction. It  may  be  long  years  before  the  nation  is  again  in 
the  mood  to  make  radical  and  rapid  changes.  "Away  from 
the  State"  is  the  popular  cry.  Yes,  but  towards  what? 
Towards  a  more  intimate  and  humane  and  responsible  organi- 
sation of  activities  by  the  localities  and  the  interests  that  are 
immediately  concerned  with  them.  The  State  is  not  a  good 
organiser.  But  it  can  send  a  watchword  pealing — the  watch- 
word of  Organisation.  It  can  point  the  way.  It  has  already 
made  the  idea  of  unemployment  insurance  familiar  and  won 
it  acceptation.  The  industries  must  themselves  carry  the 
work  of  insurance  farther  than  the  State  could,  and  on  better 
principles. 


167 


THE  FACTS  OF  THE  CASE  IN  DIAGRAM,  X, 

THE  seventeen  diagrams  which  we  have  published  during  the 
last  nine  months  refer  exclusively  to  the  United  Kingdom. 
This  month  we  propose  to  extend  our  field  of  enquiry  and 
show  how  the  nation  stands  when  we  come  to  compare 
British  methods  and  results  with  those  employed  and  obtained 
in  other  countries.  There  are  many  reasons  why  we  should 
make  a  beginning  with  the  United  States,  for,  besides  being 
our  most  formidable  trade  rival  in  the  markets  of  the  world, 
America  is  the  best  example  of  what  may  be  termed  "ex- 
perimental industry."  Starting  with  traditions  very  similar 
to  our  own,  the  trade  of  the  United  States  has  developed  on 
novel  lines  with  great  rapidity  and,  on  the  whole,  with  sur- 
prising success.  It  behoves  us,  therefore,  to  look  into  the 
matter  with  care,  not  necessarily  with  a  view  to  slavish 
imitation,  but  in  a  spirit  of  enquiry,  in  order  that  we  may 
investigate  our  own  methods  in  the  light  of  American 
experience  and  modify  our  industrial  practice  in  accordance 
with  the  lessons  learned. 

Not  so  very  long  ago  we  used  to  be  told  that  Great  Britain 
possessed  what  was  called  "  industrial  supremacy."  The  term 
was  conveniently  vague,  but  presumably  it  was  intended  to 
imply  that  we  produced  more  commodities  and  enjoyed  more 
wealth  than  any  other  nation,  but  whatever  may  have  been 
the  significance  of  the  phrase,  and  whatever  justification  there 
may  once  have  been  for  such  a  boast,  the  important  fact 
remains  that  in  all  material  respects  which  are  measurable  we 
cannot  now  approach  the  American  standard. 

Prior  to  1907  we  had  no  means  of  estimating  our  industrial 
position  with  any  degree  of  accuracy,  but  the  Census  of 
Production  taken  in  that  year  put  an  end  to  the  era  of  indus- 
trial fiction  and  disclosed  the  actual  facts  of  the  situation  so 
far  as  Great  Britain  was  concerned.  By  comparing  the  results 
then  made  apparent  with  similar  results  revealed  by  the 
American  Census  of  Production  of  1909,  we  were  able,  for  the 
first  time,  to  get  a  clear  idea  of  the  relative  productivity  of 
the  two  countries.  It  is  a  little  unfortunate  that  both  investi- 
gations were  not  made  exactly  at  the  same  time,  but  the 
difference  of  two  years  is  not  of  great  importance  in  any  case, 
and  can  be  allowed  for  in  comparative  calculations. 

168 


DIAGRAM  No.   18. 

(Note.  —  The  figures  in  this  diagram  refer  to  the  number  of  squares  in  each  group.) 

America.  Great  Britain. 


240 


Amount  of  Capital 
invested  in  Industry 

per  thousand  Workers. 


•••••••••»• •••••• 

••••••••••••••• 


Horse  Power  employed 


s 

••••• 


•••••••••••••••••••a 


• 
• 


228      «••»•••••••••»• 


mmmmmmmmmmmmmm^mtimm 

Hours  Worked 

•••••••••pr  immmm 

thousand  Workeit**Mfe 


••••••§.•••]?&•§•••••• 

•  •  •  •  V*  thousand  WorkcM,  m  m  , 


240 


Wages  Earned 

•  •••IT         *  *••••! 

per  thousand  Worker*. 

•••••••••••••••••••I 


106  mm 


Capital 

per  1000 


*«••• 
mmmmmmmmmm 

mmmmmmmmmm 
mmmmmmmmum 


•••••••••A 

•  ••••••••I 

•  ••••••••I 


•••• 


240 

*•••••••• ••••••••••• 

Hours  Worked 

per  thousand  Workers. 

IB  HI  Bi  HI  IB  Bl  El  IB  Bl  Bi  Bl  Bl  Bl  ^B  ^3  Bl  HI  Bl  Bl  • 


80 

Wages  " 


1000. 





THE  RELATION  OF  CAPITAL  AND  OUTPUT  TO 
LABOUR  AND  WAGES:  A  COMPARISON. 


Without  quoting  the  precise  figures*  it  may  here  be  stated 
that  the  private  manufacturing  industries  of  the  United  States 
produced  in  1909  a  volume  of  goods  valued  at  over  250  per 
cent,  more  than  the  total  output  of  all  British  industries  in 
1907,  notwithstanding  the  fact  that  the  number  of  workers 
who  contributed  to  the  American  result  was  only  ten  per  cent, 
greater  than  the  number  who  contributed  to  the  total  British 
output.  After  all  adjustments  are  made  it  appears  that  the 
average  production  of  the  American  is  quite  three  times  as 
much  as  that  of  the  British,  industrial  worker. 

If  this  result  were  attained  at  the  cost  of  longer  hours,  or  if 
the  larger  output  were  unaccompanied  by  a  corresponding 
benefit  to  the  workers  in  the  form  of  increased  wages,  the 
example  of  America  would  have  no  attraction  for  us,  but,  as  our 
diagram  shows,  the  hours  of  labour  worked  in  America  were 
fractionally  shorter  than  in  our  country,  whilst  the  wages  paid 
in  Britain  amounted  to  only  one-third  of  those  earned  in  the 
United  States.  It  is  in  the  combination  of  these  three  factors 
— output,  wages  and  hours,  that  the  significance  of  the  com- 
parison consists. 

Diagram  No.  18  differs  from  its  predecessors  in  not  being 
drawn  to  a  single  and  comprehensive  scale.  Obviously  there 
can  be  no  common  denominator  to  which  such  diverse  subjects 
as  are  here  dealt  with  can  be  reduced.  The  method  employed 
is  to  adopt  an  arbitrary  number  of  squares  to  represent  the 
American  total,  to  convert  dollars  into  pounds  sterling,  to 
calculate  the  British  equivalent  under  the  various  headings, 
and  then  to  show  comparable  results  by  allotting  the  appro- 
priate number  of  squares  to  each  section.  Whilst  this  method 
does  not  give  aggregates  representing  the  gross  amounts  of 
capital  invested,  horse-power  employed,  hours  worked,  output 
obtained  and  wages  earned,  it  does  give  an  accurate  repre- 
sentation of  the  relative  position  as  between  British  and 
American  industry  in  those  respects. 

For  the  purposes  of  the  diagram,  the  twenty-six  industries 
for  which  suitable  data  can  be  extracted  from  the  British  and 
American  Censuses  of  Production  have  been  selected  and  the 
net  output  per  thousand  workers  per  year  in  those  industries 
has  been  shown.  As  the  only  source  from  which  wages  can 
be  paid  is  net  output,  it  follows  that  high  wages  cannot  be 


*  For  the  actual  figures  see  the  chapter  on  British  Industrial  Inefficiency  in  J.  Ellis 
Barker's  "Economic  Statesmanship. 

170 


expected  where  the  output  is  low,  and  when  we  compare  the 
actual  wages  paid  in  the  two  countries  we  find  that  they  vary 
directly  as  the  output  varies,  that  is  to  say,  the  average 
American  workman  earns  as  much  in  one  week  as  the  average 
British  workman  earns  in  three. 

Coming  to  the  question  of  the  amount  of  capital  invested  in 
manufacturing  industries  in  Great  Britain  and  the  United 
States  respectively,  we  find  fifteen  hundred  millions  of  pounds 
in  the  former  category  and  thirty-six  hundred  and  eighty-six 
millions  of  pounds  in  the  latter.  Reducing  these  figures  to  the 
amount  of  capital  invested  per  wage-earner  employed  we  get 
£246  as  against  £557.  That  is  to  say,  the  capital  per  worker 
is  from  two  to  three  times  as  great  in  the  United  States  as  in 
the  United  Kingdom,  and,  as  Mr.  Ellis  Barker  remarks,  "  We 
cannot,  therefore,  wonder  that  output  and  wages  per  worker 
also  are  from  two  to  three  times  as  great  in  the  United  States 
as  in  Great  Britain." 

With  regard  to  the  length  of  working  hours  there  is  a  lack 
of  sufficient  data  for  accurate  comparison.  It  is  generally 
admitted,  however,  that  the  advantage  lies  with  America. 
We  have  asssessed  this  advantage  at  five  per  cent,  which 
modest  figure  we  have  reason  to  believe  is  an  underestimate. 

Our  diagram  does  not  take  into  account  the  differences  in 
the  type  of  machinery  used  in  the  two  countries  because  the 
Censuses  of  Production  are  silent  on  the  subject,  but  we  have 
included  engine  power  as  one  of  the  factors  that  explain  the 
increased  output  obtained  in  America  as  compared  with 
Britain.  In  the  United  States  the  horse-power  employed  per 
thousand  workers  was  2,409  units  as  against  1,182  units 
employed  in  great  Britain.  Bringing  this  result  into  line  with 
the  others  we  get  240  squares  for  America  and  nSfor  Britain, 
as  shown  in  the  diagram. 

Taking  all  the  results  together  it  is  impossible  to  resist  the 
conclusion  that  if  we  are  to  maintain  even  our  present 
position  relative  to  America,  not  to  mention  the  prospect  of 
improving  upon  it,  we  shall  have  to  employ  more  capital  and 
more  horse-power  in  our  factories  before  we  can  begin  to 
compete  on  anything  like  equal  terms. 


m     m 


171 


ECONOMY  AND  EDUCATION. 

THE  cry  for  economy  is  more  than  a  mere  "  stunt  "  on  the 
part  of  interested  individuals  :  it  is  the  response  to  imperative 
need.  The  Brussels  financial  conference  laid  stress  upon  the 
fact  that  economic  recovery  was  not  to  be  expected  in  a  State 
which  failed  to  strike  a  true  balance  between  public  revenue 
and  expenditure.  Here  we  have  succeeded  in  achieving  a 
surplus  which,  if  less  than  anticipated,  will  probably  be  fairly 
substantial  and  may  be  employed  in  the  reduction  of  war  debt. 
But  we  are  not  yet  out  of  the  wood,  and  it  behoves  us  not  to 
halloo.  The  tax  revenue  has  been  reinforced  by  sums  obtained 
from  the  sale  of  surplus  stores.  The  Excess  Profits  Duty 
which,  for  the  last  four  years  has  contributed  so  handsomely 
to  the  income  of  the  State,  is  dying  a  natural  death.  The 
depression  of  trade  is  bound  to  be  reflected,  in  due  course,  in 
the  revenue  derived  from  income  taxation.  Moreover,  it  is 
held  that  the  income  tax  is  already  so  heavy  as  to  be  a  serious 
drag  upon  individual  enterprise,  and  that  the  rate  of  tax 
should  be  reduced.  The  task  of  finding  an  adequate  and 
sufficiently  regular  income  is  likely  to  increase  in  difficulty 
during  the  next  year  or  two. 

The  increase  in  normal  government  expenditure  since  1914 
consists  of  three  obvious  factors.  The  first  and  most  important 
is  the  annual  charge  for  pensions  and  interest  on  the  war  debt. 
The  cost  in  respect  of  pensions  is  likely  to  grow  in  the  immed- 
iate future.  Fresh  claims  are  made  as  new  consequences  of 
old  injuries  appear.  The  debt  charge  may  be  regarded  as 
practically  constant  until  interest  rates  on  industrial  capital 
fall  sufficiently  to  justify  a  conversion  scheme  similar  to  that 
successfully  applied  by  Goschen  about  forty  years  ago.  The 
second  factor  is  the  cost  of  new  ventures  by  the  State,  the 
creation  of  new  government  departments  and  the  extension  of 
those  already  in  existence.  The  third  is  the  cost  of  advances 
in  the  salaries  and  wages  of  public  servants  due  to  the  rise  in 
the  cost  of  living.  Thus  the  total  expenditure  of  government 
has  increased  proportionately  more  than  money  has  depre- 
ciated. If  the  percentage  charges  had  remained  the  same  the 
net  burden  would  have  been  no  greater  than  before.  But,  in 
spite  of  the  fact  that  first,  the  disbursements  of  the  State  in 
the  form  of  interest  payments,  salaries,  etc.,  represent  income 
which  is  itself  taxable,  and,  secondly,  the  individual  costs  ©f 
most  State  services  have  risen  less  than  the  extent  suggested 

17* 


by  the  depreciation  of  money,  the  net  burden  which  the  nation 
will  be  compelled  to  bear,  in  providing  public  revenue  for  the 
next  few  years,  is  probably  not  less  than  twice  as  heavy  as  in 
1913-14.  Most  of  the  additional  burden  will  fall  on  the 
shoulders  of  the  relatively  rich,  and,  if  not  reduced  to  the 
practical  minimum  and  wisely  distributed,  may  produce 
serious  injury  to  trade  and,  indirectly,  to  those  (the  relatively 
poor)  who  appear  to  escape  the  consequences  of  the  war. 

Economy  is  to  be  sought  through  efficiency.  To  be  efficient 
is  to  take  the  long  view.  Shortsighted  economy,  which 
consists  of  merely  reducing  immediate  costs,  and  postponing 
developments,  is  not  worthy  of  the  name  of  economy.  If, 
however,  many  who  now  call  themselves  economists  were  in 
power  we  should  be  witnessing  the  introduction  of  a  cheese- 
paring policy  which,  sooner  or  later,  would  lead  to  expenses, 
far  greater  than  those  immediately  avoided, 

Government  departments  which  perform  no  valuable  func- 
tions should  be  scrapped ;  those  which  are  inflated  should  be 
reduced  to  their  proper  size.  Effective  control  of  adminis- 
trative expenses  would  probably  result  in  more  efficient  work 
at  reduced  costs.  At  the  present  time,  however,  two  depart- 
ments are  the  object  of  severe  attack,  not  on  the  ground  that 
they  are  overstaffed  relatively  to  the  amount  of  work  they  do, 
but  on  the  ground  that  they  are  performing  functions  which, 
useful  though  they  may  be  in  themselves,  the  State  cannot 
afford  under  the  present  critical  conditions.  Abolish  these 
costly  functions,  it  is  said  ;  reduce  immediate  costs  and  let 
the  future  take  care  of  itself.  These  departments  are  the 
Ministry  of  Health  and  the  Board  of  Education.  The  work 
of  the  former  may  be  a  subject  of  legitimate  controversy. 
We  submit  that  the  provision  of  Education,  on  the  lines  of  the 
Act  of  1918,  and  of  recent  University  development,  is  so 
necessary  that  serious  curtailment  of  opportunities  during  the 
next  few  years  would  constitute  extravagance  rather  than 
economy.  The  nation  cannot  now  afford  to  neglect  education 
as  it  has  done  in  the  past. 

Business  men  recognise  the  need  for  scientific  research  in 
the  sphere  of  industry.  Nor  are  they  slow  to  admit  that  the 
study  of  pure  science  in  the  Universities  is  frequently  of 
greater  ultimate  value  to  industry  than  more  restricted 
research  in  industrial  laboratories.  The  needs  of  University 
departments  of  applied  science  and,  in  hardly  less  degree,  of 
pure  science,  have  but  to  be  specified  to  secure  fairly  generous 

173 


response.  The  need  for  commercial  training  is  not  yet  so 
clearly  admitted,  but  the  changes  which  have  been  introduced 
during  the  last  two  decades  in  the  requirements  of  commerce 
and  business  administration  are  becoming  increasingly  recog- 
nised, and  their  recognition  has  called  forth  a  considerable 
measure  of  support  for  schemes  of  commercial  training  in 
Universities  and  other  institutions.  We  do  not  believe  that 
the  business  world  would  rejoice  if  the  Chancellor  of  the 
Exchequer  starved  Universities  requiring  funds  for  development 
along  the  lines  already  indicated. 

But  we  are  afraid  that  education  in  the  broader  sense  may 
be,  allowed  to  suffer  during  the  next  few  years.  To  economise 
on  education  of  this  character  would  be  socially  disastrous. 
The  nation,  in  pursuing  such  a  policy,  would  be  resembling 
the  small  employer  who  is  content  with  a  hideous,  badly 
equipped  workshop,  antiquated  tools  and  obsolete  methods  of 
production,  yet  wonders  why  he  is  never  far  removed  from 
insolvency.  We  need  the  spirit  of  enterprise  exhibited  by  the 
manufacturer  who  realises  the  need  for  planning  well  in 
advance,  who  is  ready  to  spend  money  on  tools  and  is  content 
to  wait  for  the  results  of  his  initiative  and  wise  speculation. 
That  the  benefits  of  education  in  day  school,  continuation 
school  and  University  may  not  be  immediately  realised  does 
not  lessen  but  rather  increases  the  urgency  of  expenditure  in 
this  direction.  We  have  too  long  been  content  with  the  ideals 
of  the  nineteenth  century.  Youths  are  growing  into  men  who 
work  fewer  hours  per  day  than  their  fathers  and  'enjoy' 
greater  leisure. 

Leisure,  without  the  instrument  for  employing  it  with 
interest,  will  become  a  bore  to  the  individual  and  a  source  of 
danger  to  the  community.  This  is  already  recognised  by 
many  employers,  who  are  rapidly  assuming  social  respon- 
sibilities which  were  once  ignored,  and  making  the  factory 
the  centre  of  organisation  of  many  social  and  educational 
activities.  We  do  not  fear  the  attitude  of  individual  employers 
so  much  as  that  of  the  organisations  to  which  they  belong, 
and  which  (like  trade  unions)  are  frequently  more  reactionary 
in  their  policies  than  the  majority  of  their  members.  At  a 
time  when  investments  which  do  not  mature  rapidly  are  cast 
aside  in  favour  of  those  which  provide  quick  returns,  it  is 
important  that  we  should  not  withhold  investment  in 
Education,  which,  if  it  brings  profit  but  slowly,  suffers  no 
depreciation  and,  in  due  course,  repays  the  capital  many 
times  over. 

174 


THE   FINANCING  OF  EXPORTS. 

INDUSTRIAL  recovery  is  conditioned  by  a  revival  of  the  export 
trade.  Before  the  war  some  of  our  best  customers  were  the 
States  of  Central  and  Eastern  Europe.  So  great  has  been  the 
disorganisation  and  loss  produced  by  the  war  that  most  of  the 
European  States  are  no  longer  able  to  pay  their  way.  If  they 
are  to  be  restored  within  a  reasonable  period  to  their  former 
economic  strength,  which  will  make  them  good  customers  of 
our  exporting  manufacturers  and  merchants,  some  of  them 
must  be  granted  assistance  in  exactly  the  same  way  as  were  new 
countries,  such  as  Canada  and  Argentina,  in  the  days  of  their 
infancy.  Apart  from  this  fact,  exporters  to  those  disorganised 
countries  are  now  exposed  to  risks  beyond  those  which 
accompany  trade  under  normal  conditions.  First  there  is  the 
"  political  "  risk  due  to  the  unstable  character  of  the  Govern- 
ments. Bolshevism  is  a  real  danger  in  some  places,  and  a 
Bolshevist  Government  might  repudiate  all  the  obligations  of 
the  State  or  of  individual  traders  to  foreign  creditors. 
Secondly,  there  is  a  twofold  economic  risk  due  to  the  present 
abnormal  financial  and  individual  conditions.  None  of  the 
continental  States  has  yet  been  able  to  reduce  current  expen- 
diture within  the  limits  of  revenue.  Further  inflation  of 
currency  (reacting  on  foreign  exchange  rates)  is  therefore 
inevitable  ;  in  some  cases  the  currency  is  practically  worthless, 
in  others  it  may  easily  become  so.  Closely  connected  with 
this  danger  is  the  further  danger  that  the  instability  of  general 
economic  conditions  may  destroy  the  solvency^of  an  individual 
importer  who  would  normally  be  regarded  as  above  suspicion. 
The  need  for  restoration  and  the  difficulties  connected  with 
medicinal  trade  constitute  the  problems  which  it  is  hoped  to 
solve  by  systems  of  export  credits  and  credit  insurance.  It  is 
clear  that  the  exporter  in  this  country  cannot  be  expected  to 
carry  the  above  risks  himself  and  at  the  same  time  supply 
Europe  with  goods  at  prices  within  the  reach  of  individual 
customers. 

The  first  scheme  which  we  may  consider  for  facilitating 
trade  with  European  countries  in  need  of  assistance  is  that 
submitted  by  Ter  Meulen  to  (and,  in  principle,  endorsed  by) 
the  Brussels  Financial  Conference  of  last  summer.  This 
scheme,  as  amended  at  Geneva  by  the  Provisional  Economic 

175 


and  Financial  Committee  appointed  by  the  Council  of  the 
League  of  Nations,  is  fairly  well  known.  Its  essential  features 
and  limitations  may  be  illustrated  as  follows.  An  English 
woollen  merchant  is  in  a  position  to  enter  into  a  contract  for 
the  supply  of  raw  wool  to  a  Polish  textile  manufacturer,  but 
is  unwilling  to  undertake  what  appears  to  him  a  grave  risk  of 
loss  without  charging  a  price  which  the  industry  could  not 
bear.  To  enable  him  to  secure  the  wool  at' a  reasonable  price 
the  Polish  manufacturer  enlists  the  support  of  his  government. 
The  latter  (with  the  approval  of  an  International  Commission 
set  up  by  the  League  of  Nations)  issues  an  interest-bearing 
bond — essentially  a  mortgage  bond — upon  its  own  property  of 
specified  gold  value,  and  lends  it  (on  agreed  terms)  to  the 
manufacturer  who,  in  turn,  sends  it  to  the  English  merchant  as 
collateral  security  for  the  wool  obtained  from  this  country. 
The  Polish  Government,  moreover,  arranges  to  buy  sufficient 
English  money  to  pay  interest  on  the  bond  (now  held  here), 
and  to  provide  a  sinking  fund  for  its  redemption  and,  in  general, 
a  reserve  for  contingencies.  (It  is  already  obvious  that  the 
scheme  assumes  that  the  Polish  government  is  able  to  purchase 
English  currency.)  Suppose  the  Polish  manufacturer  receives 
six  months  credit  from  the  English  exporter  of  wool.  The 
latter  may  either  wait  to  be  paid  on  maturity  or,  if  he  is  in 
need  of  cash,  draw  a  bill  and  discount  it  at  the  bank,  sur- 
rendering to  that  institution  the  Polish  bonds  given  as 
collateral  security.  If,  at  maturity,  the  manfacturer  fails  to 
meet  the  bill,  and  the  government  fails  to  redeem  the  bond, 
the  property  represented  by  the  latter  will  be  administered  by 
the  International  Commission. 

It  is  a  cumbrous  method  of  financing  trade.  Obviously  many 
months  would  be  needed  to  bring  it  into  operation,  and  the 
need  is  urgent.  Moreover,  its  scope  is  deliberately  restricted 
to  cover  trade  in  commodities  (such  as  raw  materials)  essential 
to  industrial  reconstruction.  It  is  doubtful  whether  the  impor- 
tation of  food  stuffs  and  other  goods  for  consumption  would 
be  approved  under  the  scheme,  Clearly  it  eliminates  the  chief 
risks  to  which  the  English  exporter  would  otherwise  be 
exposed.  Some  political  risk  would  remain.  If  the  Govern- 
ment repudiated  its  obligation  it  might  prevent,  as  far  as 
possible,  the  administration  of  the  assets  by  the  International 
Commission.  Even  if  it  adopted  a  passive  attitude  it  is  by  no 
means  clear  that  its  assets  would  be  realisable  for  the  payment 
of  an  external  debt,  which,  in  the  last  resort,  can  only  be  paid 

176 


by  an  excess  of  exports  over  imports.  It  is  questionable 
whether,  in  a  case  such  as  this,  the  pledging  of  specific  assets 
materially  strengthens  the  guarantee  of  a  government. 

The  limitations  of  the  proposed  system  of  export  credits, 
and  particularly  the  urgency  of  the  need  for  a  scheme  which 
can  be  operated  without  delay,  have  led  to  the  consideration 
of  schemes  of  credit  insurance.  The  essential  feature  of  such 
schemes  is  the  pooling  of  the  abnormal  risks  of  non-payment 
and  delay  of  payment  between  the  government,  banks  and 
insurance  companies.  No  scheme  comparable  in  definiteness 
with  the  Meulen  scheme  has  yet  been  put  forward,  but 
people  seem  substantially  agreed  on  two  points.  The  first  is 
that  the  purely  political  risk  should  be  borne  by  the  govern- 
ment. The  second  is  that  if  a  credit  is  not  promptly  met  at 
maturity  the  banks  should  unload  it  upon  insurance  companies, 
the  latter  being,  by  their  very  nature,  better  able  to  carry  a 
'  lock-up '  of  capital  than  the  former.  If  the  debtor  defaulted 
presumably  the  loss  would  be  divided  between  the  two 
institutions. 

Proposals  for  credit  insurance  regard  the  general  problem 
from  the  point  of  view  of  the  exporter,  who  now  experiences 
considerable  difficulty  in  finding  markets  abroad.  An  approved 
scheme  would  thus  be  of  wider  scope  than  the  Meulen  scheme 
and  would  cover  the  export  of  goods  which  are  essential  to 
comfort  though  they  would  not  necessarily,  or  quickly, 
stimulate  the  exports  of  the  necessitous  countries.  Conse- 
quently the  current  proposals,  shrouded  though  they  are  in 
mist,  do  recognise  that  extended  credits  may  be  necessary 
Reference  is  made  to  twelve  months1  credit,  renewable  for  a 
further  period  of  six  months. 

And  this  is  the  crux  of  the  problem.  How  could  a  country 
like  Poland,  ravaged  by  war,  with  a  population  half-starved 
and  ill-clad,  be  expected,  under  the  Meulen  scheme,  to  be  able 
to  buy  English  sovereigns  to  secure  public  bonds  deposited  by 
her  manufacturers  as  collateral  security  for  the  import  of 
wool  ?  During  the  war  we  borrowed,  for  ourselves  and  our 
Allies,  approximately  a  thousand  million  pounds  from  the 
United  States.  The  several  loans  all  mature  within  the  next 
five  or  six  years.  We  recognise  so  clearly  the  difficulty  which 
would  be  experienced  in  meeting  the  loans  at  maturity  that 
we  are  about  to  negotiate  for  a  long-term  loan  which  will 
release  us  from  pressing  obligations,  and  enable  us  to  pay  at 
leisure.  In  the  same  way  we  must  be  prepared  to  send 

177 


essential  goods  to  the  devastated  countries  of  Europe  and  to 
wait  for  payment  until  they  have  recovered  from  the  effects 
of  the  war.  Schemes  of  export  credit  and  credit  insurance  are 
of  greatest  value  in  respect  of  those  countries  which  are  not 
thoroughly  disorganised  by  the  war  and  the  peace  which 
followed  it,  but  are  still  sufficiently  strong  to  justify  the  belief 
that  assistance  in  the  form  of  credit  need  only  be  for  a  short 
period.  In  short,  they  are  mainly  applicable  where  they  are 
least  needed,  and  likely  to  work  most  smoothly  (if  adopted) 
where  they  are  almost  superfluous. 

A  cautious  manufacturer  in  a  highly  necessitous  State,  such 
as  Austria  or  Poland,  is  hardly  likely  to  import  raw  material 
which  must  be  paid  for  in  a  few  weeks,  or  months,  unless  he 
has  some  sort  of  guarantee  that  he  will  be  able  to  buy  foreign 
money  at  a  reasonable  price  when  the  time  for  payment 
arrives.  But  such  a  guarantee  is  not  often  to  be  found  ;  the 
demand  for  such  money  is  so  abnormal  in  relation  to  supply 
that  the  rate  of  exchange  with  foreign  countries  fluctuates 
between  wide  limits  within  short  periods.  Trade  is  thus 
highly  speculative  which  once  represented  stable  investment. 
Hence  the  growth,  in  such  cases,  of  the  system  of  barter,  and 
of  '  finishing  credits,'  that  is,  '  of  credits  under  which  a  lien  in 
favour  of  the  exporter  or  a  banker  is  maintained  on  the  raw 
material  in  all  its  different  stages  and  upon  the  proceeds  of 
the  manufactured  article.' 

Thus  we  dare  not  hope  that  export  credits  and  credit 
insurance  will  do  much  for  countries  in  the  position  of  Austria 
and  Poland.  The  Commission  on  Austria  recommended  that 
she  be  granted  a  long-term  loan  of  £50,000,000  spread  over 
five  years.  Our  Government  appears  to  have  rejected  the 
proposal  on  the  ground  that  such  loans  should  be  provided  by 
individuals  rather  than  the  Government.  But  a  loan  to 
Austria  or  Poland  would  be  of  a  highly  speculative  character, 
involving  (to  be  effective  as  a  restorative)  interference  with 
internal  financial  administration.  It  is  not  desirable  that 
individuals  should  bear  the  risk  attaching  to  speculation  of 
that  character.  The  financing  of  highly  necessitous  states  is 
essentially  a  matter  for  governments,  not  for  individuals  ;  and 
is  the  corollary  to  the  participation  of  the  Government  in 
schemes  of  export  credits  and  credit  insurance  for  the  final 
restoration  of  countries  such  as  Italy,  France  and  Germany, 
which  require  assistance  far  less  urgently  and  for  far  shorter 
periods. 

178 


THE  BUSINESS  MAN'S  VIEW,  IV. 

(These  articles  consist  of  a  series  of  extracts  from  the  reports  of 
Company  Meetings,  grouped  to  give  the  reader  an  opportunity  of 
studying  the  effects  of  the  many  conflicting  currents  that  go  to 
make  or  mar  commercial  enterprise.  Though  these  reports,  giving 
as  they  do  only  the  managers'  point  of  view,  cannot  be  considered 
to  cover  the  whole  field,  they  may,  nevertheless,  provide  a  valuable 
commentary  on  a  good  many  aspects  of  the  question  as  to  the  ways 
and  means  by  which  the  nation  does,  in  fact,  secure  its  livelihood.) 

"  THE  question  which  the  community  has  to  face  is  whether 
the  cost  of  the  crisis  into  which  the  community  has  been 
plunged  is  to  be  paid  for  in  money  which  can  be  spared  or  in 
misery  and  irreparable  human  degradation."  The  above 
statement  is  quoted  from  the  report  on  an  unemployment 
policy  submitted  by  the  Joint  Committee  appointed  by  the 
Trade  Union  Congress  and  the  Labour  Party.  Elsewhere  the 
report  asserts  that  the  Government,  instead  of  treating  the 
maintenance  of  the  unemployed  as  a  national  charge,  propose 
to  place  the  whole  burden  on  the  workers  themselves.  Such 
statements,  as  dangerous  as  they  are  false,  form  the  customary 
menu  offered  to  readers  of  The  Daily  Herald  That  they 
should  appear  amongst  the  considered  statements  of  such  men 
as  Sidney  Webb,  Arthur  Henderson,  C.  W.  Bowerman  and 
Arthur  Greenwood,  is  almost  unbelievable. 

The  first  statement  is  only  a  variant  of  the  old  phrase  that 
"  there  is  plenty  of  money  in  the  country,  all  that  is  wrong  is 
its  distribution."  The  second  assumes  that  if  the  workers 
take  a  share  in  distributing  the  hardship  of  unemployment  by 
working  short  time,  the  capitalist  and  the  taxpayer  will 
thereby  be  relieved  of  a  burden  they  can  and  ought  to  bear. 
The  palliative  may  not  be  a  remedy,  but  though  they  may  be 
ill-able  to  afford  it,  unless  the  working-class  as  a  whole  bear 
some  part  of  each  other's  burdens,  the  unemployed  are  likely 
to  grow  and  grow  in  numbers  until  not  merely  the  capitalist 
but  capital  itself  is  utterly  consumed  and  the  country  swept 
bare  of  reproductive  goods. 

An  analysis  of  the  report  on  the  trading  of  Messrs.  Vickers 
Limited,  during  the  four  years  1916-1920  supplies  us  with  a 
number  of  useful  commentaries  on  the  vague  assumptions  that 
the  capitalist  goes  on,  inviolate  and  triumphant,  through  all 

179 


the  vicissitudes  of  trade, and  gives  a  direct  refutation  of  most  of 
the  claims  and  accusations  rife  to-day  concerning  the  deliber- 
ate determination  of  the  Government  and  the  Capitalist  to 
disorganise  and  disrupt  so  that  they  may  "grind  the  faces  of 
the  poor  "  and  "  batten  on  the  people." 

At  the  annual  meeting  of  Messrs.  Vickers,  Limited,  it  was 
disclosed  that  no  dividends  could  be  declared  on  the  ordinary 
shares  of  the  Company,  whose  total  capital  was  stated  at 
£20,000,000,  and  that  shares  for  which  the  original  owners 
had  paid  as  much  as  523.  6d.  were  now  only  worth  155.  6d.  in 
the  market.  Now,  during  the  war,  at 'any  rate,  labour  found 
a  highly  remunerative  market  particularly  in  engineering  and 
armament  workshops,  but  the  Government  made  special  (and 
successful)  efforts  to  prevent  the  capitalist  from  levying  toll 
on  the  nation  in  its  hour  of  need.  The  total  dividends  paid 
to  shareholders  during  the  four  years  amounted  to  £3,967,112, 
or,  if  we  add  the  amounts  deducted  for  income  tax,  5^ 
millions.  The  wages  bill  for  the  corresponding  period  was 
46  millions.  Moreover,  during  the  years  when  labour  was 
earning  exceptionally  high  wages,  the  owners  of  capital  in 
the  Company  received  considerably  less  dividend  than  their 
shares  had  previously  earned. 

The  Chairman,  Mr.  Douglas  Vickers,  M.P.,  showed  that  for 
the  period  under  review,  up  to  the  end  of  1919,  four  and  three- 
quarter  millions  had  been  paid  in  Excess  Profits  Duty, 
considerably  more  than  the  amount  actually  received  by  the 
shareholders. 

The  feelings  of  the  shareholders,  who  were  disappointed  at 
the  non-materialisation  of  an  expected  dividend,  were  presum- 
ably much  the  same  as  those  of  Labour  when  an  advance  of 
wages  is  withheld  or  a  reduction  threatened,  and  some  voiced 
their  discontent.  "The  shareholders,"  it  was  argued,  "put 
at  the  disposal  of  tKe  Directors  a  large  sum  of  money  in  the 
way  of  premiums  on  shares,  and  they  had  a  right  to  have  a 
return  on  that  money."  The  Chairman  explained  the 
difficulties  of  the  position.  High  prices  of  raw  materials, 
high  wages  and  enormous  taxes  have  generally  absorbed  the 
liquid  cash  of  the  majority  of  manufacturing  concerns.  The 
Government,  in  settling  its  account  with  them,  had  taken 
large  payments  in  cash  and  left  them  with  the  buildings 
erected  at  the  Government's  desire  to  cope  with  the  require- 
ments of  the  war.  The  Company  had  vast  sums  locked  up  in 
this  way  and  whereas,  on  the  one  hand,  they  could  not  pay 

1 80 


dividends  with  bricks  and  mortar,  on  the  other  hand,  the 
proper  maintenance  of  the  buildings  absorbed  further  monies 
that  might  otherwise  have  been  available.  A  reserve  of 
£3,200,000  was  considered  necessary  to  guarantee  the  stability 
of  the  firm  under  present  conditions.  Meanwhile,  their  shares, 
like  those  of  a  great  many  industrial  concerns,  had  gone  down 
in  value.  New  capital  is  almost  impossible  to  obtain.  "  We 
now  find,"  the  Chairman  said,  "companies  of  good  standing 
making  issues  of  notes  and  debentures  which  the  investing 
public  will  hardly  touch  even  at  prices  giving  a  return  fifty 
per  cent  greater  than  would  have  been  expected  on  Ordinary 
Shares  before  the  war.  Preference  Shares  find  hardly  any 
market  at  all,  and  Ordinaries  are  impossible  to  issue  since  the 
Excess  Profits  Duty  has  kept  down  dividends  till  they  return 
little  more  than  the  new  trust  securities.  In  the  impossibility 
of  raising  new  capital,  buying  has  come,  at  home,  nearly  to  a 
standstill." 

The  last  sentence,  quoted  in  italics,  supplies  a  significant 
link  connecting  the  troubles  of  the  capitalist  with  those  of  the 
unemployed.  In  this  case,  we  have  lack  of  capital  clearly 
resulting  in  lack  of  work.  Elsewhere  in  the  Report  we  get 
the  same  forces  operating  in  slightly  different  order  to  produce 
a  like  effect.  The  chairman  explained  that  the  Cunard 
Company  were  endeavouring  to  hold  up  contracts  placed  with 
Messrs.  Vickers  because  the  joiners  were  making  demands 
which  they  considered  excessive.  Joiners'  work  has,  of  course, 
a  very  large  influence  on  the  cost  of  a  big  liner  and  the  post- 
ponement of  the  work  until  the  wages  in  the  industry  are  more 
reasonable  would  greatly  reduce  the  total  cost  of  the  vessels. 
But  the  result  of  the  joiners'  demands  is,  in  the  words  of  the 
Chairman,  "  a  check  to  general  trade  such  as  we  have  not 
experienced  for  many  years,  and  the  engineering  trade  is 
suffering  as  much  as,  or  more  than,  any." 

The  shareholders,  being  for  the  most  part  reasonable  men, 
saw  the  difficulties  of  the  situation  and  accepted  their  share 
in  the  general  trouble  by  passing  the  Company's  balance-sheet 
as  it  stood. 


181 


FOOD   FOR  THOUGHT. 

IT  is  a  sign  of  the  times,  and  a  healthy  one,  that  so  many 
people  should  be  setting  their  brains  to  work  on  the  problem 
of  how  best  to  secure  peace  in  industry.  It  is  true  that  there 
is  no  approximation  to  exact  agreement  as  to  the  method  to 
be  pursued  to  this  end,  but  new  ideas  are  wont  to  travel  by 
divers  routes,  and  ultimate  conclusions,  if  they  are  to  be  of 
permanent  value,  never  arrive  except  through  the  gateway  of 
compromise.  Lord  Haldane  voices  the  belief  that  nothing 
except  education  will  succeed  in  eradicating  industrial  strife 
and  we  are  not  prepared  to  dispute  the  efficacy  of  his  proposed 
remedy.  Sir  Lynden  Macassey  attributes  the  prevalance  of 
unrest  to  the  demise  of  the  spirit  of  service  and  undoubtedly 
he  is  on  one  of  the  right  roads.  Mr.  Austin  Hopkinson 
deplores  the  decay  of  the  "  aristocratic  principle"  and  thinks 
that  the  situation  can  alone  be  saved  by  its  reincarnation. 

•  •     • 

Mr.  Hopkinson's  article  in  a  recent  number  of  the  Nineteenth 
Century  is  written  in  a  style  reminiscent  of  Plato.  He 
propounds  the  definition  of  a  new  motive  for  industry  and 
would  recognise  no  leadership  as  good  except  that  which  rests 
on  unpaid  service  for  work's  sake  and  for  love  of  humanity. 
He  appeals  to  employers  to  relinquish  all  else  and  to  obey 
this  unselfish  motive.  He  visualises  industrial  crusaders  rising 
above  the  materialism  of  ordinary  men  and  basing  their  claim 
to  command  on  moral  superiority  alone.  The  theme  is 
attractive,  as  is  a  rainbow,  but  like  that  celestial  phenomenon 
it  belongs,  we'  fear,  to  the  clouds  rather  than  to  the  earth. 
How  to  breed  this  motive,  how  to  teach  and  confirm  it,  how 
to  find  enough  men  who  by  nature  and  training  will  sub- 
ordinate personal  gain  to  social  service,  how  to  build  up  a 
new  self-denying  order  in  the  industrial  world  ?  These  are  the 
questions  that  remain  unanswered.  Mr.  Hopkinson  suffers 
from  the  same  sort  of  optimism  that  infects  all  those  social 
reformers  who  count  on  a  sudden  change  in  the  heart  of 

mankind. 

•  •     • 

Replying  to  Mr.  Hopkinson,  in  the  current  number  of  the 
same  periodical,  Mr.  James  Kidd  develops  the  theme,  not 
indeed  without  idealism,  but  in  more  mundane  fashion.  He 
calls  for  a  system  that  would  reconcile  Capital  and  Labour 
"  in  a  growing  consciousness  that  each  and  everyone  engaged 

182 


in  industry  represent  both  ...  a  system  encouraging 
prudence,  effort  and  adventure  by  assuring  to  investor  and 
worker  alike  their  legitimate  reward."  He  believes  that  such 
a  system  is  immediately  practicable,  and  that  if  put  into 
operation  by  the  Trade  Union  movement  it  would  restore  our 
national  prospects  with  astonishing  rapidity.  "If,  applying 
their  resources  and  energy  to  constructive  work,  the  Trade 
Unions  announced  their  intention  of  identifying  themselves 
with  industry  and  that  by  way  of  investment  attended  by 
corresponding  representation  on  the  Board  of  Management, 
instantly  such  a  confidence  and  courage  would  inspire  our 
people  that  the  recovery  of  our  stability  would  be  the  dismay 
of  every  enemy  and  the  wonder  of  the  world." 

5      5      5 

We  believe  that  Mr.  Kidd's  proposition  would  achieve  all 
that  he  claims  if  it  could  be  carried  out,  but  whilst  so  many 
Labour  leaders  maintain  their  present  mood,  which  is  one 
that  seems  to  prefer  even  the  most  abortive  form  of  hostility 
to  the  most  fruitful  form  of  co-operation,  there  is  but  a  slender 
prospect  of  any  constructive  policy  receiving  a  hearing  on  its 
merits.  As  long  as  the  fiction  obtains  credence  that  the  era 
of  capitalism  is  necessarily  the  era  of  exploitation,  so  long 
will  suspicion  bar  the  path  of  progress. 

s     k-:     ~ 

The  idea  that  anybody  would  be  permanently  better  off  if 
there  were  a  drastic  redistribution  of  the  national  income  on 
an  equality  basis  is  responsible  for  more  than  half  of  the 
hostility  and  suspicion  that  embitters  and  obscures  the 
industrial  situation.  This  is  the  obsession  that  must  be 
exorcised  before  industrial  peace  can  be  achieved,  this  is  the 
bugbear  that  must  be  removed  before  there  can  be  any 
substantial  improvement.  The  facts  of  the  case  have  been 
stated  and  proved  over  and  over  again  by  responsible  statisti- 
cians, but  the  wildest  estimates  continue  to  be  scattered 
broadcast  by  people  like  Mr.  Gerald  Gould  and  Mr.  Tom 
Mann  who,  with  a  reckless  disregard  for  both  arithmetic  and 
commonsense,  encourage  expectations  that  can  never  be 
realised.  The  results  that  would  follow  the  pooling  of  all  the 
incomes  of  the  better-off  people  amongst  the  poorer  have 
recently  been  restated  by  Sir  Josiah  Stamp.  Next  month  we 
propose  to  return  to  this  all  important  question  in  more 
detail. 

'83 


DAY    BY   DAY. 

(A  monthly  Record  ef  the  principal  events,  at  home  and  abroad, 

which  have  a  direct  bearing  upon  the  maintenance,  or  otherwise,  of 

peace  in  industry/ . 

Jan.  The  Ministry  of  Labour  records  a  fall  of  four  points  in  the 

1st.         cost  of  liring  during  December.     (Index  figure  165  per  cent 
above  July  1914 .) 

115,000  people  received  a  total  weekly  wage  increase  of 
^28,500  ;  over  4,000  sustained  decreases  amounting  to  over 
^2,000  per  week. 

99  trade  disputes  involved  the  unemployment  of  72,000 
workpeople,  and  the  loss  of  429,000  working  days.  The 
percentage  of  unemployment  among  trade  unionists  rose  to 
6.1,  and  to  5.8  among  the  11,900,000  workpeople  who  benefit 
under  the  Unemployment  Insurance  Act. 

Under  the  provisions  of  the  Employment  of  Women, 
Young  Persons  and  Children  Act  it  is,  from  to  day,  illegal  to 
employ  any  child  under  14  in  any  industrial  undertaking 
unless  the  child  was  already  so  employed. 

Unemployment :  The  Government  is  appointing  an  advisory 
committee,  including  representatives  of  employers  and  work- 
men, to  investigate  unemployment  and  propose  remedies. 
Meanwhile  employers  are  asked  to  arrange  general  part-time 
work  instead  of  reducing  the  actual  numbers  employed. 

The  French  Socialist  Party  voted  in  favour  of  adhesion  to 
the  Third  (Moscow)  International.  (Votes  for,  3,208; 
against,  1,022 ;  abstainers,  397.) 

3rd.  Profiteering  Acts :  The  Sub-Committee  appointed  to  investi- 

gate the  conduct  of  the  milk  trade  find  that  the  large 
combinations  of  distributors  have  dealt  well  and  fairly  by  the 
public,  but  that  in  some  districts  producer-retailers  have 
charged  unnecessarily  high  prices.  It  is  advocated  that  all 
milk  should  be  delivered  in  bottles,  and  the  Committee 
consider  that  this  could  only  be  carried  out  by  combination 
among  the  distributors,  or  by  allowing  the  municipalities  to 
distribute  the  milk. 

Unemployment:  The  new  Committee  of  fifteen,  over 
which  Dr.  Macnamara  will  preside,  will  first  investigate  Sir 
Allan  Smith's  scheme  that  each  trade  shall  deal,  so  far  as 
possible,  with  its  own  unemployment.  The  scheme  is 
supported  by  Mr.  Arthur  Henderson  on  behalf  of  the  Labour 
Party.  Sir  Robert  Home  and  a  representative  body  of 
bankers  discussed  the  question  of  export  credits  as  a  method 
of  dealing  with  unemployment  by  promoting  trade  revival. 

An  attempt  to  raid  the  Town  Hall  and  Public  Library  at 
Islington  was  frustrated  by  the  police.     Some  twenty  arrests 
were  made. 
184 


4th.  The   sub-committee   on   the   reconstruction  of  the    Inter- 

national, appointed  by  the  Labour  Party  and  the  Trade 
Union  Congress  have  definitely  condemned  the  methods  of 
Bolshevism.  In  a  letter  to  the  Communist  and  Socialist 
Parties  of  the  world,  they  state: — "Bolshevism  tried  to 
establish,  not  only  over  Russia,  but  over  every  country  in  the 
world,  the  method  of  seizing  political  power  by  armed  force, 
holding  that  power  by  the  same  means  and  changing  the 
whole  economic  structure  of  society  by  decree  and  sup- 
pression. .  .  .  An  International  based  upon  Moscow 
principles  can  never  represent  more  than  the  smallest  and 
least  influential  fraction  of  the  Socialist  movement  ...  we 
must  decline  Moscow  conditions  and  Moscow  methods." 

The  Industrial  Court  awarded  wage  advances  of  33.  6d.  to 
43.  to  workers  in  the  chemical  industry.  The  employers 
contended  that  the  outlook  in  the  industry  was  bad,  and  that 
wages  had  already  advanced  more  than  cost  of  living.  The 
Court  held  that,  although  the  outlook  is  in  some  respects 
disquieting,  the  claim  was  justified  on  the  ground  that  rates 
were  unduly  low  before  the  war. 

Unemployment :  The  Government's  proposal  to  relieve  the 
incidence  of  unemployment  by  a  general  system  of  short-time 
is  adversely  received  by  the  National  Alliance  of  Employers 
and  Employed,  and  by  the  National  Labour  Party. 
6th.  Unemployment :  The  London  members  of  the  Parliament- 

ary Committee  of  the  T.U.C.  and  of  the  National  Executive 
of  the  Labour  Party  have  refused  to  sit  on  the  proposed  joint 
committee  to  be  appointed  by  the  Government  to  enquire 
into  unemployment.  The  whole  question  of  unemployment 
and  under-employment  in  all  its  aspects,  both  industrial  and 
political,  will  be  considered  at  a  special  Labour  Conference 
on  Jan.  n. 

7th.  The  Industrial  Court  has  awarded  workers  in  the  Soap  and 

Candle  Trades  a  minimum  wage  of  735.  for  men  and  435.  6d. 
for  women — an  advance  of  45.  and  25.  6d.,  respectively. 
10th.  All  restrictions  on  the  export  of  coal  and  supply  of  bunker 

coal  are  removed,  subject  to  inland  needs  being  fully  met. 

Unemployment:  The  A.E.U.  have  voted  in  favour  of  an 
additional  levy  of  is.  per  week  per  member  for  13  weeks. 
The  scheme  will  provide  an  extra  55.  to  single  men  out  of 
work,  i  os.  to  married  men  and  25.  6d.  per  child. 

The  Cotton  Reconstruction  Board's  scheme  comes  into 
operation.  Under  this  scheme  the  totally  unemployed  men 
will  receive  an  additional  75.  6d.  per  week ;  women  will 
receive  6s.,  boys  35.  9d.  and  girls  33.  6d.  Several  unions  in 
the  cotton  industry  have  been  compelled  to  reduce  or  suspend 
payment  of  benefit. 

185 


llth.  The  Industrial  Court  awarded  substantial  wage  increases  to 

the  employees  of  the  Army  and  Navy  Co-operative  Society. 

Tramways  Industry  Court  of  Inquiry  appointed  by  the 
Ministry  of  Labour  met. 

Unemployment :  The  Labour  Party,  after  a  full  discussion 
of  the  amended  terms  of  reference  for  the  proposed  Govern- 
ment Committee  of  Enquiry  on  Unemployment,  refused  to 
participate  in  the  enquiry  and  declared  their  intention  of 
submitting  their  own  proposals  for  dealing  immediately  with 
the  situation  at  a  Joint  National  Conference  of  the  T.U.C. 
and  the  Labour  Party  on  January  27th.  A  definite  programme 
and  policy  is  to  be  pressed  on  the  Government  in  the  House 
of  Commons. 

Mr.  W.  H.  Stevenson  has  been  appointed  to  fill  the  vacancy 
of  Parliamentary  Correspondent  in  the  Labour  Party's  Press 
and  Publicity  Department.  Mr.  Stevenson  was  formerly  a 
clerk  at  the  Ferndale  Collieries,  and  Chairman  of  the 
Rhondda  branch  of  the  I.L.P.  He  is  at  present  on  the  staff 
of  The  Christian  World. 

12th.  Unemployment :    The   published  correspondence  between 

the  Government  and  the  Labour  Party  regarding  the  investi- 
gation of  unemployment  shows  that  the  final  terms  of 
reference  offered  by  the  Government  and  refused  by  Labour 
were : —  (i)  To  consider,  report  and  make  recommendations 
on  the  causes  of  the  present  unemployment,  (ii)  To  report 
within  one  month  on  the  schemes  now  operating  for  the 
relief  of  hardship,  and  to  recommend  desirable  improvements, 
(iii)  To  report  within  three  months  on  the  feasibility  of 
developing  supplementary  insurance  schemes  in  each  industry 
or  group  of  industries. 

13th.  The  action  taken  by  the  French  Government  against  the 

General  Confederation  of  Labour  was  concluded.  The  court 
ordered  the  dissolution  of  the  Confederation  on  the  ground 
that  it  had  pursued  political  and  revolutionary  aims  outside 
the  limits  laid  down  by  the  Waldeck-Rousseau  Act  and  had 
tried,  by  means  of  revolutionary  syndicalism,  to  force  the 
workers  along  a  road  they  did  not  wish  to  follow. 

14th.  Unemployment :  The  Labour  Exchanges  registered  927,000 

workers  as  unemployed. 

Electrical  engineers  have  called  a  strike  of  all  municipal 
employees  in  Ilford  as  a  protest,  it  is  alleged,  against  the 
Council's  refusal  to  accept  the  National  Joint  Board's  award 
in  the  recent  dispute.  All  municipal  services  are  suspended 
and  about  5,000  factory  workers  are  thrown  out  of  work. 

15th.  Unemployment :  It  has  been  officially  announced  that  the 

working  week  in  Government  dockyards  and  other  establish- 
ments will  be  reduced  by  seven  hours  a  week  from  January 
186 


a jrd.  Woolwich  workers  passed  a  resolution  to  resist  the 
measure. 

17th.  At  the  request  of  the  Ministry  of  Labour,  represented  by 

Sir  David  Shackleton,  the  Ilford  District  Council  agreed  to 
postpone  a  resolution  dismissing  all  strikers  who  had  not 
returned  to  work  by  noon  on  the  following  day.  A  delega- 
tion was  appointed  to  meet  Dr.  Macnamara  on  the  i8th. 

The  Social  Democratic  Party  of  Norway  have  left  the 
official  Labour  Party  and  formed  a  new  organisation  for  all 
parties  who  reject  the  Moscow  International. 

18th.  Electrical  Engineers  :    The  National  J.I.C.   has  approved 

the  adoption  of  a  new  scheme  of  wage  rates  for  the  manual 
workers  in  the  industry.  The  rates  will  be  based  on  a  cost  of 
living  figure  150  per  cent  above  pre-war  rates  and,  above  that 
rate,  will  advance  or  fall  10  per  cent  for  every  fluctuation  of 
10  points  in  the  cost  of  living.  Should  the  cost  of  living  fall 
below  150  per  cent,  corresponding  wage  reductions  must  be 
mutually  agreed  upon,  or  failing  agreement,  referred  to  the 
J.I.C.  and  the  Industrial  Court. 

19th.  Ilford  municipal  strike  was  settled,  the  employers  agreeing 

to  adopt  the  decisions  of  the  J.I.C.  for  a  period  of  six 
months,  and  to  set  up  councils  under  the  presidency  of 
Sir  David  Shackleton  to  discuss  matters  in  dispute  with  both 
the  clerical  staff  and  the  manual  workers. 

20th.  Wages  and  the  Cost  of   Living  :    The   fall   in   the   index 

number  to  165  per  cent,  above  the  figure  for  July  1914 
involves  the  first  reduction  in  wages  under  the  sliding  scale 
agreement  in  the  Wool  and  Worsted  industries  in  Yorkshire. 
The  reductions  range  from  2s.  to  43.  6d.  and  take  effect  from 
February  ist. 

22nd.  Unemployment :    Mr.  J.  H.  Thomas,  M  P.,  stated  that  the 

N.U.R.  had  20,000  unemployed  members  -who  were  receiving 
155.  unemployment  pay  from  the  union.  It  had  been  decided 
to  impose  a  compulsory  levy  on  all  members  to  enable  the 
society  to  pay  at  least  £,2  a  week  to  the  married,  and  255.  to 
the  single  men. 

24th.  Unemployment :  the  Labour  Report  states  that  co-operation 
with  the  Government  was  refused  because,  having  previously 
refused  to  give  effect  to  the  recommendations  of  the  National 
Joint  Industrial  Conference  in  1919,  and  to  the  report  of  the 
Sankey  Commission  on  Coal  Mines,  there  was  no  guarantee 
that  the  Government  would  put  into  operation  the  suggestions 
of  the  proposed  committee.  The  causes  of  the  distress  are 
attributed  to  the  Government's  post-war  policy.  Peace 
abroad,  trade  credits  and  the  stabilisation  of  the  exchanges 
are  recommended  to  stimulate  foreign  markets,  a  big  demand 
at  home  to  be  fostered  by  maintaining  wages,  undertaking 

187 


public  works  on  a  big  scale,  and  distributing  unemployment 
relief  at  rates  not  less  than  405.  per  week  for  a  householder, 
and  253.  for  single  men.  Pressure  on  the  labour  market  to 
be  reduced  by  adopting  a  universal  eight-hour  day,  abolishing 
overtime,  increasing  educational  facilities  and  providing 
training  schemes  for  men  and  women,  with  maintenance 
during  training. 

A  system  of  short  time  came  into  force  in  the  dockyards, 
employment  will  thereby  be  available  for  from  4  to  5  thousand 
unemployed. 

25th.  Unemployment :    the   Government   have   authorised  Lord 

St.  David's  Committee  to  increase  their  grants  in  assistance  of 
approved  works  by  local  authorities  to  cover  60  per  cent  of 
the  wages  bill  of  additional  unemployed  men  taken  on.  The 
original  grant  was  30  per  cent. 

Italy :  The  Cabinet  have  approved  for  introduction  to  the 
Chamber  Signor  Allessio's  bill  for  the  control  of  industry. 
The  bill  provides  for  separate  control  of  the  following 
industries  (which  will  be  carried  on  by  the  State) :  metallur- 
gical, textile,  building,  mining  and  catering.  New  industries 
and  concerns  employing  less  than  60  men  will  be  exempted 
for  four  years.  Employers  and  workers  will  each  elect  a 
committee  of  nine  to  hold  office  for  three  years.  A  workmen's 
committee  has  the  right  of  access  to  all  information  as  to  the 
whole  conduct  of  the  business,  with  the  exception  only  of 
secret  processes.  It  has  power  to  exercise  control  for  the 
attainment  of  the  improved  industrial  education  of  the 
workers,  better  moral  and  economic  conditions,  the  enforce- 
ment of  labour  laws,  and  cheaper  and  better  production. 

The  Committee  of  the  Miners'  International  Federation 
now  sitting  in  London  resolved  to  forward  to  the  Supreme 
Council  in  Paris  a  demand  that  the  International  Labour 
Office  shall  set  up  an  International  Control  Board  for  the 
sharing  and  exchange  of  all  raw  materials  indispensable  for 
the  restoration  of  all  countries. 

26th.  The  Special  Court  of  Enquiry  appointed  to  investigate  the 
tramwaymen's  claim  for  i  as  a  week  increase  in  wages  was 
opened.  Mr.  E.  Bevin  presented  the  men's  claim.  The 
average  wage  of  a  tramwayman  is  ^3  153.  3d.  It  is  not 
disputed  that  wages  in  the  industry  have  lagged  behind  the 
cost  of  living,  but  it  is  contended  that  the  undertakings  cannot 
afford  higher  wages.  Mr.  Bevin  disputed  the  legitimacy  of 
the  argument  and  quoted  the  principle  underlying  the  Trade 
Boards  Act  that  industries  are  not  worth  preserving  if  they 
cannot  pay  a  living  wage. 

The  Executive  of  the  Miners'  Federation  informed  Sir 
Robert  Home  that  they  "cannot  acquiesce  in  any  proposal 
for  decontrol  until  the  owners  and  the  miners'  representatives 

188 


are  able  to  present  to  the  Government  a  jointly  agreed  plan 
for  the  national  control  of  the  industry  which  will  effectively 
substitute  the  present  arrangements. 

27th.  Mr.  Bevin,  speaking  again  on  behalf  of  the  tramwaymen, 
said  that  the  present  unemployment  was  unacceptable  as  a  plea 
for  not  advancing  wages  just  now,  because  the  unemployment 
was  artificial.  "  It  is,"  he  said,  "a  condition  of  things  brought 
about  by  the  machinations  of  financiers  to  enable  them  to 
lower  the  standard  of  living." 

Unemployment :  The  Special  Conference  of  the  T.U.C. 
and  the  Labour  Party  passed  a  resolution  that  every  effort 
should  be  made  during  the  next  month  by  Labour  members 
of  Parliament  to  get  the  Government  to  adopt  the  measures 
outlined  in  the  Labour  report  for  the  relief  of  unemployment. 
A  second  conference  is  called  for  February  23rd  to  discuss 
further  plans  should  Parliament  refuse  to  give  effect  to  the 
recommendations. 

29th.  The  adult  miners'  wages  for  February  will  be  at  the  rate 
of  is.  9d.  a  shift  less  than  those  paid  in  January.  The  fall 
in  the  rate  of  output  is  attributed  mainly  to  short  time  due  to 
trade  depression. 

At  a  "  Unity  Conference "  held  in  Leeds,  the  three 
sections  of  British  Communists,  viz.,  the  Communist  Party 
of  Great  Britain,  the  British  section  of  the  Third  International 
and  the  Communist  Labour  Party,  agreed  to  fuse  on  the  basis 
of  the  Moscow  statutes. 

30th.  The  National  Union  of  British  Fishermen  have  called  a 
strike  at  Grimsby.  The  owners  contend  that  they  are  losing 
money  on  trawling,  and  must  reduce  the  present  poundage 
paid  to  the  crews  on  the  amount  of  the  catch.  The  Union 
replied  by  demands  for  higher  wages  and  certain  changes  in 
the  basis  of  payment.  Both  sides  refused  to  submit  the 
claims  to  arbitration. 

A  Correction. 

In  last  month's  issue  we  made  a  reference  in  our  Day  by 
Day  notes  (entry  for  December  7th,  page  157)  to  the  efforts 
made  by  the  National  Alliance  of  Employers  and  Employed 
to  deal  with  unemployment.  The  Alliance  have  since  called 
our  attention  to  the  fact  that  our  summarised  statement  of  their 
first  resolution  is  not  quite  accurate.  Whereas  the  four  weeks 
qualification  for  unemployment  benefit  was  originally  intended 
to  date  from  November  8th,  1920,  it  was  finally  allowed  that 
the  period  should  date  from  July  4th.  This  important 
alteration  in  date,  which  made  it  possible  for  every  man  to 
qualify  during  a  period  of  good  trade,  was  secured  largely  as 
a  result  of  the  intervention  of  the  National  Alliance  of 
Employers  and  Employed  and  virtually  conceded  the  grace 
aimed  at  in  their  first  resolution. 

189 


OUR    ECONOMIC    SCHEME. 

For  the  purpose  of  the  scheme  outlined  in  our  leading  article 
it  is  proposed  to  form  eight  groups  of  students,  each  being 
limited  to  a  membership  of  one  hundred  individuals  who  must 
be  Teachers  in  Elementary  Public  Schools.  These  groups 
(which  will  be  open  on  equal  terms  to  men  and  women)  will 
be  arranged  as  follows  : — (i)  East  of  Scotland,  (2)  West  of 
Scotland,  (3)  North  of  England,  (4)  East  of  England,  (5)  West 
of  England,  (6)  London  Area,  (7)  South  of  England,  (8)  Wales. 

In  the  months  of  February,  April  and  May,  1921,  an 
examination  paper  will  be  published  in  Industrial  Peace,  of 
which  a  free  copy  will  be  sent  to  all  candidates,  who  will  also 
receive  a  selection  of  the  Oxford  Tracts  on  Economic  Subjects. 
No  entrance  fee  will  be  charged,  nor  will  entrants  be  under 
any  obligation  beyond  being  expected  to  conform  to  the  rules 
laid  down  for  the  conduct  of  the  competition. 

The  examiners  will  award  cash  prizes  to  the  total  value  of 
£1,280 — i.e.,  £160  to  each  of  the  eight  groups,  apportioned  as 
follows,  viz.,  one  first  prize  of  fifty  pounds,  one  second  prize 
of  thirty  pounds,  one  third  prize  of  twenty  pounds,  and  twelve 
prizes  of  five  pounds  each.  In  the  first  instance  fifteen  prizes  of 
£5  each  will  be  awarded  in  each  group  to  those  candidates 
who,  in  the  opinion  of  the  examiners,  have  submitted  the  best 
answers  to  the  questions  set  in  the  three  papers  above  referred 
to,  preference  being  given,  in  cases  of  doubt,  to  those  who 
appear,  from  internal  evidence,  to  have  given  the  most  careful 
study  to  the  books  set.  The  first,  second  and  third  prizes 
(consisting  of  sums  of  £45,  £25  and  £15,  respectively,  in 
addition  to  the  sum  of  £5  already  received)  will  be  awarded 
on  the  results  of  a  further  paper  which  will  be  set  in  August 
and  which  will  be  open  only  to  the  fifteen  prize  winners  in 
each  group. 

The  questions  set  in  the  examinations  papers  will  be  such 
as  can  be  adequately  answered  by  candidates  having  a  know- 
ledge of  the  following  : — 

(i.)  The  Economics  of  Everyday  Life  (Cambridge  Univer- 
sity Press,  Fetter  Lane,  E.G.)  by  Sir  Henry  Penson,  M.A., 
Lecturer  in  Modern  History  and  Economics  at  Pembroke 
College,  Oxford. 

190 


(ii.)  Social  Economics  (Methuen  &  Co.,  Essex  Street, 
W.C.)  by  J.  Harry  Jones,  M.A.,  Professor  of  Economics  in  the 
University  of  Leeds  and  formerly  Fellow  of  the  University  of 
Wales. 

(iii.)  The  selection  of  Oxford  Tracts  already  mentioned. 
We  have  been  fortunate  in  securing  the  services  of  the  authors 
of  those  books,  who,  together  with  Mr.  John  Murray,  M.A., 
M  P.,  the  Editor  of  the  Oxford  Tracts  on  Economic  Subjects 
have  consented  to  act  as  Examiners. 

The  Central  Library  for  Students  (20,  Tavistock  Square, 
London,  W.C.  ij,  will  lend  copies  of  the  recommended  books 
to  those  who  are  unable  to  purchase  them  for  themselves. 
No  charge  will  be  made  for  the  use  of  the  books,  but  borrowers 
must  pay  cost  of  postage.  Application  should  be  made  on  the 
form  provided  for  that  purpose. 

For  the  August  test  a  higher  standard  will  be  looked  for 
by  the  examiners,  and  candidates  who  aspire  to  win  the  larger 
prizes  should  read  The  Ethics  of  Citizenship  (Maclehose 
Jackson  &  Co.,  Glasgow)  by  John  Maccunn,  LL.D.,  Emeritus 
Professor  of  Philosophy  in  the  University  of  Liverpool.  At 
least  one  question  on  the  ground  covered  by  this  book  will  be 
set  in  the  August  paper.  This  book  can  also  be  obtained  on 
loan  from  the  Central  Library  for  Students. 

Candidates  who  wish  to  enter  for  the  competition  must  fill 
in  the  attached  form  and  post  it  to 
The  Secretary, 

Study  Scheme, 

c/o  Industrial  Peace, 

20  Magdalen  Street,  Oxford. 

The  first  hundred  applicants  in  each  group  will  receive  the 
necessary  papers  by  return  of  post.  The  writers  of  appli- 
cations received  too  late  for  inclusion  in  any  group  will  be 
notified  to  that  effect  by  postcard,  and  their  names  will  be 
registered  in  order,  as  received,  so  that  they  may  be  con- 
sidered later  should  opportunity  arise. 

In  submitting  their  application,  candidates  need  not  trouble 
to  specify  the  particular  group  in  which  they  wish  to  compete. 
This  will  be  decided  by  the  Secretary  in  accordance  with  the 
information  contained  in  the  application  form. 


191 


-I.  P."  STUDY  SCHEME. 
Paper  No.  I. 

(Each  question  must  be  answered  on  a  separate  sheet  of  paper). 
Candidates  must  write  their  name  clearly  at  the  head  of  each 
sheet  of  paper. 

Answers  should  be  as  brief  as  possible,  and  no  single  answer 
must  exceed  750  words. 

All  answers  must  be  received  by  The  Secretary,  "/.  P."  Study 
Scheme,  at  20  Magdalen  Street,  Oxford,  not  later  than  April  30. 
To  facilitate  correction,  candidates  are  asked  to  send  in  their 
answers  as  early  as  possible. 


1.  Explain  fully  and  give  practical  illustrations  of  the  state- 
ments : —  (a)  No  one  is  economically  independent,     (b)  All 
economic  life  consists  of  an  interchange  of  services. 

2.  Discuss  briefly  the   most  important  considerations  con- 
nected  with  (a)   the  accumulation,   (b)   the  employment,  of 
capital. 

How   is   industry  affected  when  there   is  a  shortage  of 
capital  ? 

3.  It  is  usual  to  say  that  the  price  of  an  article  depends  on 
demand  and  supply.     What  is  the   precise  meaning  of  these 
two  terms  in  Economics  ?     Show  how   demand   and   supply 
influence  one  another. 

4.  Examine  the  factors  on  which  the  geographic  distribution 
of  industry  depends. 


(NoTE. — The  first  three  questions  are  based  on  The  Economics 
of  Everyday  Life,  the  fourth  on  a  knowledge  of  Social 
Economics.) 


192 


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