F.— ECONOMIC SCIENCE AND STATISTICS. 149 



may have economic reactions, but I am leaving the whole of this field to 

 the succeeding paper by Sir Henry Rew on the effect of land-tenure 

 systems on production. 



In stressing the iniportance of the right of bequest without diffusion, 

 reference is frequently made to the continuity of management and interest 

 in large businesses. A man of energy and resource builds up a great 

 business, and one of his incentives is the knowledge that he is training 

 his son to follow him and make it greater and better. The old instinct 

 which vented itself in landed estates passes to commerce. It is urged 

 that the right to bequeath and the power to keep the control in the family 

 has been an actual feature in economic development, in this country at 

 any rate, and a study of the history of typical firms, especially in the 

 North of England, during the first three-quarters of the nineteenth century, 

 does much to confirm it. But it is doubtful whether such a practice 

 occupies a sufficiently important place to-day to deserve a front place in 

 the general argument. Two modern features have seriously influenced 

 it. The fiirst is the growth of an independent managerial class as a pro- 

 fession who can, for a salary, pass from business to business and lead 

 its administration. The second is the facility with which private businesses 

 at the height of success pass into the joint-stock form, often with a public 

 issue of preference shares, and the family taking the cash and retaining 

 the equity.i^ The percentage of profit made by private businesses out 

 of the total changed from 70 to a little over 30 in a period of forty years. 

 It would be a bold thing to say that a big business depended to any serious 

 extent upon continuation of direct family control or interest for a number 

 of generations. On the contrary, the infusion of new blood and outside 

 interest has rejuvenated many a business that has been living on its 

 traditions. The death of a rich part-owner rarely affects modern business. 

 The proportion of wealth, excluding War Loan, passing in the form of shares 

 at death, has increased from 32 to 48 per cent, of the whole in ten years. 

 However important this element of inheritance may have been in the 

 past, it is now relatively insignificant in dealing with the whole mass of 

 accumulated saving. 



A correspondent who raises no claim to be an economist sends me a 

 thoughtful letter in which he says : — 



' I live in the country and have some opportunities of observing and 

 reflecting upon the more primitive social and economic order of the country- 

 side, centuries behind the specialised professional labour of the city only 

 a dozen miles away. As long as sons generally followed their father's 

 trade— as I suppose they mostly did in England until a century ago— it 

 seemed reasonable that a son shoidd inherit his father's tools, and this 

 not so much because he is a son as because he is a junior partner in business. 

 For any outside body, parish, county, or state to step in with an extraneous 

 €laim to these tools or to some of them is simply to shatter the economic 

 order and the chance of maintaining production just when the business 



'^ Fide Chapman and Ashton on 'Sizes of Businesses' {Statistical Journal, 1914) 

 and ' Growth of Textile Businesses ' (S.J., 1926). Out of 221 concerns in 1884, 127 

 were private firms with a modal size of 20,000 spindles, the mode for companies being 

 about 80,000. In 1924, out of 203, only 5 were private, with 20,000 spindles as a 

 maximum. The mode of the companies was about 110,000 spindles. 



