118 SECTIONAL ADDRESSES. 



The aspect of rationalisation in which labour is interested as a further 

 ad»ance is that of control. By this is meant the sharing of administrative 

 industrial control by labour as such. There are various methods by which 

 shareholding may be extended to employees, but in the cases where such 

 holdings give a share in administrative control they imply that the 

 labour qualification is not itself adequate, and that employees must 

 qualify as capitalists. Copartnership schemes have their own place in 

 schemes of industrial progress ; but the question is different, how far on 

 the basis of work alone it is rational to distribute shares in control. 



The existence of organised wage-bargaining is not a solution of this 

 question, because it relates mainly to the terms on which labour is sold or 

 delivered. The terms of delivery— that is, the conditions of work — are 

 pushed up to a margin called by Mr. Goodrich the ' frontier of control ' ; 

 but this, while it compels the management to make some internal arrange- 

 ments concerning employment, is at its utmost rather to be compared 

 with terms of sale and delivery of products between their consumer and 

 producers, the sellers not thereby entering into the buyers' administration 

 of their own concerns. This has nowhere been more clearly put than in 

 the first clause of the Engineers' Agreement, which stated that ' the 

 employers shall not interfere with the proper functions of the Trade 

 Unions, and the Trade Unions shall not interfere with the employers in 

 the management of their business.' This was called the ' General 

 Principles of Employment.' It implied two administrations, related as 

 buyer and seller of a service. 



The difficulty of overcoming this dualism within the individual 

 business is that of obtaining any equation between units of labour and 

 capital. The idea of a franchise implies a basis of qualification, and in 

 this case a rule for equating a certain amount of labour of a certain grade 

 to a certain holding of capital. This is the point taken by the exponents 

 of the New Zealand Companies Empowering Act of 1924. By that Act 

 it is possible to issue ' Labour shares,' entitling the holders to full voting 

 powers, but Companies have themselves to decide what is the right dis- 

 tribution of these shares in relation to those of the holders of capital. It 

 is very difficult to see a basis of general application. 



It should be pointed out, however, that the idea of control by some 

 kind of industrial franchise is one carried over from politics to industry, 

 and that industry is not alone in not having hitherto applied it. Such 

 other fields of administration as the Army and the historic Churches do 

 not proceed on this method either. The conditions are not regarded as 

 being such as to place these spheres in pari materia with politics as to 

 their fundamental principles of control. Many criticisms of industrial 

 structure in this respect come from sources where authority is a much 

 more marked feature of administration than it is in industry. 



Difficulties of this kind arise mainly when the question is of a share, 

 in the control of individual businesses. A solution within that sphere 

 may be found in time along the path first broken by the New Zealand 

 Act. Meanwhile, however, the process of industrial grouping for the 

 purposes of technical rationalisation does itself tend to make possible a 

 degree of rationalisation as labour understands it. For it creates units 

 of enterprise which are on the same scale as labour organisation, that is,. 



