736 REPORT— 1894. 



of the contractor, wherever possible, by the direct employment of workmen under 

 salaried management. 



The facts and statistics piven in the paper show precisely what has been done 

 in these respects, together with such economic results as can already be discerned. 

 It is contended that the Council's action is warranted by all administrative expe- 

 rience, and that it has the support of economic science. It is suggested that the 

 ' economic heresy ' is with the opponents of this policy. The experience of the 

 National Government, other local authorities, and private customers is adduced in 

 support of the policy of insisting that contractors should act on a like principle. 

 The contractor's tendency, if let alone, is to seek his profits in a diminution, not 

 necessarily of the cost of production to the community, but of the expenses of pro- 

 duction to himself. The lesson of economic science is that it is advantageous to the 

 community that there should be a constant upward shifting of the plane on which 

 competition works (cf. the Factory, Sanitarj', and Adulteration Acts), and espe- 

 cially that its pressure should be taken off the standard of life, and placed on the 

 brains of the administrators and directors of industry. 



The supersession of the contractor, or entrepreneur, by direct employment under 

 salaried management is shown to be part of a widespread tendency, common not 

 only to other governing bodies, but also to large industrial undertakings of every 

 kind. This ' integration of processes ' can be traced in all important undertakings. 

 So far as the change of policy can be assigned to a particular date, it appears to 

 have taken place between 1875 and 1885. Economic advantage in this suppression 

 of the subsidiary entrepreneur, or contractor, is found {a) in saving middleman 

 profit ; (6) in saving expense of incessant checking of the quality of his product ; 

 and (c) in increased convenience of having all parts of work done under direct 

 control. The London County CouncQ, in doing as much as possible of its own 

 work, is thus merely conforming to an industrial tendency, strongly marked, not 

 only in other local governing bodies, but also throughout the industrial world. 

 The elimination of the contractor may or may not be economic heresy, but the 

 business history of England during the past twenty years indicates that it is 

 industrial orthodoxy. Formerly the best business management was held to be 

 that which managed least ; nowadays it is that which can safely and efficiently 

 administer most. 



4. On Co-operation in Agriculture. By Harold Moore. 



It was pointed out that many systems of working land in order to give the 

 workers the profits earned by them had been tried. These were divided into four 

 classes, viz., communal farming, being those cases where the co-operators worked 

 on equal terms for the benefit of the community, as tried at Ratalime in Ireland ; 

 co-operative tenancy, where the co-operators jointly took the position of ordinary 

 tenants, as at Assington in Sufiblk, and elsewhere ; profit-sharing, where the 

 labourers had some share in the management, as tried by Lord Spencer in North- 

 amptonshire and by Mr. Bolton King in Warwickshire ; and profit-sharing as a 

 voluntary arrangement made by landowners working their own property, as 

 carried out by Mr. Albert Grey in Northumberland and by others. The reasons 

 why the first three systems were not likely to be successful were pointed out, and 

 it was urged that for co-operation in agriculture to succeed it was necessary that 

 distinct individual interest should be combined with those advantages which 

 co-operation would give. This it was claimed could be done by the establishment 

 of the intending co-operators on one farm, giving to each one a particular portion 

 of the land on perpetual lease or other secure tenure, and securing for their 

 general benefit agricultural credit banks, farm factories, and other means of co- 

 operation which would assist in working the land and realising that portion of the- 

 produce which would not be consumed. Instances were then given of this system 

 of co-operation which is now being introduced with useful results, it being finally 

 urged that this was the best system by which those agricultural labourers now in 



