104 SECTIONAL ADDRESSES; 



and weak selling, and it is this further organisation which is presented as 

 industrial rationalisation. Hence the terminology which is applied to the 

 excesses, or destructiveness, or anarchy, of modern industrial competition. 

 As a matter of industrial psychology, the desire to be at the head of 

 wide-reaching organisations may have just the same motives as the desire 

 for control in other spheres. It comes up against the same problem of 

 exceptions which political, military, or ecclesiastical organisation wishes 

 to incorporate in a system. It may indeed be said that, upon the 

 possibility of creating in industry, and reconciling with public opinion, 

 spheres of influence which will make industrial leadership as attractive as 

 political or any other form of leadership, depends the sujiply to industry 

 of the highest organising ability. There are recent cases in which, when 

 such a sphere in industry was open, it has been preferred to political 

 office. As compared with the services just mentioned, industry had, 

 however, to evolve into a condition of large and influential units of 

 enterprise, in order that any further step might appear possible. The 

 data quoted above show how this position has been reached. 



IV. 



In the problem of industrial organisation there is involved an element 

 which does not belong to the other great types of organisation. In the 

 latter, the desire for efficient unity of control, strengthened by personal 

 aspirations for great influence and authority, is not complicated by the 

 special industrial fact that the resources involved are personal and subject 

 to the risk of loss. It is in all the cases regarded as of national importance 

 that resources should not be wasted or lost, and the desire for rationalisation 

 appeals to this conception of general economy, but industry is unlike other 

 administrations as regards the origin of resources, and the incidence of 

 liability. It is necessary, therefore, to consider to what extent the 

 evolution just described affects this liability, as distinct from the pure 

 impulse to higher organisation ; that is to say, what is the place of 

 mitigation of risk, as compared with that of leadership itself, in the move- 

 ment for combination. 



Leadership may be got either by fighting it out, the ' method of 

 bankruptcy,' or by some method of absoqjtion in one organisation. It is 

 one of the claims of the combination method that, whether by Trusts or 

 Cartels, the latter is adopted, so that the fringe of smaller businesses is more 

 humanely or rationally dealt with than under the former method. On the 

 other hand, the maintenance of over-investment in this way is often the 

 basis of criticism of modern combines, because somehow it must be a 

 charge on the community through prices, so that it is asserted that it is 

 not the rational way of creating system. 



And on the other hand, leadership may be maintained by steps taken 

 to prevent or impede the entrance of new enterprises into the field. 

 Development is desired from within, so far as possible through the dis- 

 cretion of one governing body. It is held that this also is the rational 

 procedure, by which industries will become systems of administration, and, 

 as will be shown later, impediments on independent new enterprises have 

 sometimes been imposed with legal authority. 



