238 TRANSACTIONS OF SECTION F. 



companies leave to add to their charges something towards meeting this cost. 

 The compani'es found still greater difficulty in obtaining a settlement with 

 their customers as to the amount which should be so added. The question was 

 still awaiting a final settlement at the outbreak of war. 



But the case of the railways seems irrefragable. They point out that their 

 earnings are barely sufficient to meet the claims on them and leave a suitable 

 return to their shareholders. And when answer is made that these critics and 

 customers are indifferent as to this, they point out that, unless they can do 

 it, they will be unable to meet the demands of the districts which they serve. 

 No railway serving a prosperous and growing district can continue to render 

 the services required unless it is able to raise capital to be expended on the pro- 

 vision of those additional facilities for which the expansion of the district 

 calls. But to attract capital the railway must be able to show a revenue of 

 which the surplus, after meeting all expenses, will serve to pay adequate 

 interest. Even before the war, the never-ceasing demands of the workmen, and 

 the ever-increasing obligations placed on the companies by Parliament as to 

 the facilities to be given, were rendering it more and more difficult to find 

 the necessary capital. It cannot be said that the return to the shareholders 

 of all classes was inordinate. The 1,300 million pounds of railway stock earned 

 a surplus of 50 million pounds in 1913 — not quite 4 per cent. It is evident, there- 

 fore, that one or other of the following things must happen. Either the railway 

 development must cease, and with it, to a large extent, the development of the 

 country, or the revenue must be increased per unit of traffic, or the expenses 

 must be diminished either by reduction of the actual charges or by improve- 

 ments in the methods of operating. 



We may dismiss the first of these possibilities, for we must decline to 

 believe that the country will cease to develop. It would be with gi'eat reluct- 

 ance that we should accept an increase of the charge per unit of traffic. We 

 would rather hope that by adopting better operating methods we should reduce 

 costs and so reduce charges. It is to this side of the question that we must 

 address ourselves. In doing so we may pass from the special case of railways 

 to the general case of the national industries. 



There has been a persistent demand by labour throughout the countiy for 

 better pay, and an equally persistent demand for more leisure. To these 

 demands no objection can be taken. On the contrary, rightly understood, 

 they must meet with approval by all who desire to see the country, as a 

 whole, happy and prosperous. But we must consider how they can be satisfied. 

 This is a question to which recently a great deal of attention has been given. 

 In its satisfactory solution lies all our hope for the future. 



To begin with, the only source from which satisfaction can be is the 

 sum-total of the product of the industry of the country, and indeed of the 

 world, in the period under consideration. It must be noted that in many 

 cases the product may not be realised within that period, as, for ex- 

 ample, when a manufacturer holds large stocks of goods which he has 

 not yet marketed, but on which much the greater part of the cost has been 

 paid. It must also be noted that a very considerable part of the industry 

 of the country does not add to the total product which is the subject of division, 

 but is in fact a charge on that product. The whole burden is borne by those 

 engaged in providing commodities or services necessary for the members. We 

 touch at this point a very difficult problem, the proper solution of which may 

 possibly show us how all our economic troubles may be ended. I can do no 

 more than state it as briefly as may be. 



There can be no question that a very great part of human activities is spent, 

 and the resulting product used, in providing things which cannot be called 

 necessaries of existence. The simplest food, clothing, and shelter may be said 

 to coyer all that comes under this head. But life that gives us nothing but 

 the indispensable minimum of these essentials would be so dull and monotonous 

 as to be hardly worth the exertion needed to procure them. We must have more 

 than these if we are to get enjoyment as well as mere life. How much more can 

 we claim — perhaps we might say, extort — from our environment? And how 

 shall this extra tribute be shared among us? 



If we made a complete analysis of the result of the product of industry 

 we should be astonished to find how large is the amount which remains after the 



