PRESIDENTIAL ADDRESS. 439 



of trade ana for restoring the national wealth, will without any doubt be 

 prepared to make heavy sacifices to regain what has been lost. The Govern- 

 ment will offer advantages in the shape of low railway rates and canal 

 facilities, and, as far as possible, bounties on export business and on shipping 

 to encourage and extend foreign trade. Manufacturers and merchants will 

 cut down profits, and workpeople will be carefully taught that only by increased 

 productivity and by a period of low wages can that which has been lost be 

 regained. One foresees a remarkable attempt by a united and determined 

 nation to make good in as short a period as possible the waste and loss 

 occasioned by the war and the blockade. German goods for export will be 

 cheap, and the low price will be still further emphasised by the depreciation 

 of the mark. For so long as the mark is at a discount there will be a jiro tanto 

 advantage to export trade, and although the mark may eventually regain its 

 par value, a few months or even weeks will have an appreciable influence on 

 reopening foreign business. 



Thus a comparison of English and German possibilities in foreign trade 

 on the resumption of peace shows that there are certain advantages on both 

 sides. The German advantages are solid and appreciable, but if England is 

 seething with industrial friction the advantages she possesses will be neutralised 

 and her failure a certainty. 



This leads us to consider whether a policy can be devised which will 

 remove causes of friction and assure to our industries a new era of prosperity. 



The Need for National Organisation. 



It is at first sight curious, but still very natural, that Press and public 

 should from time to time be obsessed with one idea. As the war developed 

 there has been a growing tendency to demand Organisation in every sphere 

 of national life. The striking successes scored by Germany have been 

 universally, and probably rightly, ascribed to thoroughness of organisation and 

 complete preparedness before provoking the conflict. As a consequence, a 

 comparison has been made between English and German military policy, greatly 

 to the detriment of the former. And, not content with this, further com- 

 parisons have been made, with the result that, if one believed all that was 

 printed in the newspapers or accepted what passes in private conversation, 

 we should be led to believe that rule of thumb has been the leading British 

 characteristic. It has been forgotten that Germany has for many decades 

 prided herself on her Army, even as England has relied on her Navy. One 

 has been a great military power; the other equally great at sea. The test 

 of war has proved that Germany was a rery difficult country to oppose by 

 land, but that in naval matters England is supreme. The economist, however, 

 has to go further and investigate into those matters which are connected with 

 his science — namely, the production, the distribution, and the consumption 

 of wealth. Can it be said that the want of organisation and other faults of 

 our military system are typical of what has been going on in the industrial 

 and commercial sphere? I for one cannot bring myself to accept the truth 

 of this. Had our economic interests been carried on under so-called War 

 Office principles we could not have built up the great position we occupy 

 as world traders. What, then, are the facts? To answer this question one 

 should remember the leading facts connected with our industrial development. 

 This brings out some points which the superficial observer inevitably misses. 

 For upwards of a century our industries have been gradually developing, 

 and the progress has on the whole been along healthy lines — each decade has 

 seen some advance more or less great. 



German attention to industry and commerce is much more recent. She was 

 able to benefit by our experience, nor was she slow in doing so. To take a simple 

 illustration. A manufacturing firm of fifty years' standing has developed a 

 system and has equipped factory and workshop as occasion demanded. A rival, 

 seeing the possibility of competing successfully in the same business, organises 

 a new company, raises the necessary capita!, and is able to commence operations 

 with plant, machinery, and equipment of all kinds absolutely up to date, and 

 even with some new improvements. In these circumstances, provided that the 

 management be good and that there is a demand for the goods produced, the 

 ^lew firni has on the manufacturing side considerable advantages. The older 



