PRESIDENTIAL ADDRESS. 497 



sinews of war consist of consumable goods.' Therefore, since his time it was 

 recognised that, if war should come, the strength of the nation on the economic 

 side was to be found in the efficiency of its productive system, in the soundness 

 of its credit and finance, and in the success of its schemes of social betterment 

 which provided a vigorous and patriotic population. To have contributed 

 something towards the making of free men in a free land is an achievement of 

 which the economists of this country have no reason to be ashamed. Moreover, 

 with freedom there is the power of initiative and organising ability. And if 

 more than twelve months of war have taught us anything, it is how much 

 modern warfare involves just those qualities of initiative and organising ability 

 which are required for the successful prosecution of industry and commerce. 

 To the economist it must be a matter of profound regret that circumstances 

 have made it necessary to divert these powers from the arts which sustain and 

 brighten life towards causing the evils of death and destruction. Still it is 

 the hard and grievous fact with which we have to reckon; and, to make the 

 reckoning complete, account has to be taken of the genius of our people in 

 which the work of British economists may claim to have some share. We 

 should not be misled by that curious national trait which no foreigner ever 

 completely understands — namely, our inveterate habit of praising the methods 

 of our rivals as if they were unapproachable in their excellence. In the 

 seventeenth century it was the Dutch who were said to be our commercial 

 masters, and very similar things were vrritten later about the French. There- 

 fore, to everyone who is patient enough to look beneath the surface, there is 

 no reason to be perturbed by the commonplaces that are to be found in every 

 newispaper concerning 'the triumphs of German organisation.' No doubt there 

 is very much we can learn from them in systematic arrangement, but what is 

 of first-rate importance is the different spirit that informs the two methods. 

 German organisation involves a mechanical rigidity, and its initiative is severely 

 limited. Ours, on the other hand, is spontaneous and free. No doubt it is 

 slower in starting — often it may seem to us to be painfully slow — but what 

 it can achieve in the end is something greater, for it is the expression of the 

 free soul of a free people. Therefore, for this reason alone, there can be no 

 doubt as to the successful result, for, whether the time required be long or 

 short, the goal of victory must be reached by that nation which can bring 

 initiative to bear upon the economic side of war. And, however much we may 

 have suffered at the beginning from the peaceful habit of mind that limited 

 our preparations to a bare minimum, we have in our industrial organisation, 

 however much at times we may depreciate it ourselves, a wonderfully developed 

 instrument, which only needs to be made available for supplying the almost 

 innumerable needs of modern armies. That there has been delay in making 

 some parts of it available as quickly as was desirable and seemed possible, 

 arose in part from the conditions under which our system has grown up and 

 under which it works. Freedom of enterprise depends to a very large extent on 

 the circulation of rapid and reliable information. British initiative has been 

 accustomed to base its judgments upon data collected from various sources. 

 Modern warfare has introduced secrecy and the suppression of news. This, it 

 appears to me, has been one cause, and perhaps the main one, for the slowness 

 of the adjustment of our organisation to war conditions. Initiative has been 

 deprived of one of the important aids upon which it was accustomed to rely. 

 Therefore the problem, which it is to be hoped is at present in process of 

 solution, is how to avoid the disclosure of information which might be of 

 value to an enemy and at the same time to supply our productive workers 

 with sufficient data to enable them to form accurate opinions as to how their 

 efforts can best help the national cause. 



In a country in which the ideal of peace has flourished there must always 

 be a considerable dislocation of industry when it diverts its peace-organisation 

 to the purposes of war. As regards Great Britain that dislocation has exerted 

 its force in two distinct waves. First there was the mobilisation and then 

 the recruiting for the new army, concurrently with which there was the diver- 

 sion of demand caused by the provision of the manifold needs of the forces. 

 At the beginning of the present year this first change might be described aa 



' Wealtli of Nations, i. p. 407. 

 1915. K K 



