THE PRESIDENTIAL ADDRESS 15 



In the upshot, therefore, the injuries to labour, though not to 

 capital, are regarded as equitably a charge to be borne by society 

 in general through taxation, and to be put upon neither the causing 

 nor the suffering business unit. 



And it may well be assumed that taken throughout, the gains of 

 society as a whole from the rapid advance are ample enough to cover 

 a charge for consequential damages. But society is not consciously 

 doing anything to regulate the rate of change to an optimum point 

 in the net balance between gain and damage. 



The willingness of society to accept this burden is probably mainly 

 due to the difficulty of fairly placing it, for we find that when it can 

 actually be isolated and the community happens fortuitously to 

 have a control, or the workers a power to induce, it will be thrown, 

 not upon the attacking industry, if I may so call it, but upon the 

 defender. Thus in the United States recently, the price of consent 

 to co-ordinating schemes made for the railroads to reduce operating 

 expenses, has been an agreement on this very point. If staff is 

 dismissed, as it was on a large scale in the depression, because of 

 fewer operations and less stock in consequence of reduced carriage 

 through the smaller volume of trade, or through road and sea com- 

 petition, no attempt is made to put any of the social cost upon the 

 railroads, and the dismissed staff become part of the general unem- 

 ployed. But if the self-defence of the companies against competition 

 takes the form of co-operation with each other to reduce operations 

 and stock and, therefore, costs, any resultant dismissals are made 

 a first charge upon them. The agreement is elaborate, and has the 

 effect of preventing any adjustments which an ordinary business 

 might readily make when it throws the burden on society, unless 

 those adjustments yield a margin of advantage large enough to pay 

 for their particular special effects. Thus the rapidity of adjustment 

 to new conditions, not to meet the case of higher profits to be made 

 at the expense of workers, but rather to obviate losses through new 

 competition, is materially affected, and a brake is put upon the 

 mechanism of equilibrium in this industry which does not exist in 

 its rivals, or in any others where the power exists to throw it upon 

 the community. A similar provision exists in the Argentine, and it 

 is imposed by Act of Parliament in Canada, but as one of the concerns 

 is nationally owned, and the current losses fall upon the national 

 budget, its charge is really socially borne in the end. In this 

 country such provisions were part of the amalgamation project of 

 1923, and of the formation of a single transport authority in London 

 in 1933 and, therefore, did not arise through steps taken to meet 

 new factors of competition. But the opportunity for their imposi- 

 tion came when rights to road powers and rights to pooling arrange- 

 ments were sought by the railways— both of them adjusting mechan- 



