December 7, 191 6 
LAND & WATER 
State Control of Industries 
By Arthur Kitson 
WITH the establishment of a Ministry of 
Munitions there occurred one of the most 
remarkable industrial revolutions in British 
history. By a mere stroke of the pen, a 
large proportion of the industries of Great 
Britain were suddenly transformed from indepen- 
dent competitive enterprises into one vast co 
operative system for the object of producing munitions 
and supplies for military and naval purposes. This 
revolution was accomplished not only without bloodshed, 
riots or friction, but was actually welcomed by the 
majority of the industrial classes concerned ! Over 
four thousand independent firms, employing between 
2,000,000 and 2,300,000 people, have thus been brought 
under direct Go\-ernment control. 
It will be interesting to see how this control was 
accomplished, what it in\-oh-es, and what beneiits it 
has achieved. Under the special Defence of the Realm 
Act, very elastic and far-reaching powers were con- 
ferred upon the Go\ernment. The acquisition of these 
powers was comparatively simple, requiring merely the 
vote of Parliament. The extraordinary feature was, 
the cheerful readiness with which the pubhc accepted 
these innovations and interferences with their rights 
and liberties. Indeed, it is a fact worth noting, that from 
the very beginning of the war the public readiness to 
surrender their liberties and privileges for the national 
safety and welfare, has always been far in ad\'ancc of 
the Government demands. On the question of providing 
ways and means no Government has ever had a smoother 
task. The one serious criticism which has been heard 
from all classes is, the tardiness of the (lovernment 
in employing more fully and speedily the help and 
assistance offered. 
The limits of the State control of our industries 
have not yet been defined. The powers conferred 
would permit the Government to do anything considered 
to be essential for the national safety. When the 
writer received the official announcement that his works 
were to be controlled, his associate — the head of a large 
Midland engineering firni' — wrote as follows : " This 
will not affect your • business except in the matter of 
profits. The Government will take charge of e\'ery- 
thing in excess of a certain percentage." 
Since that was written, however. Government control 
has made considerable progress. As to various details 
of procedure it may be stated that contracts for such 
supphes as can most readily be furnished by the Con- 
tractors, are offered them. The contractor tenders at 
his own price. If this appears excessive, he is either 
invited to headquarters or a representative of the Army 
Contracts Department or Ministry of Munitions may 
call and explain that his tender is too high, that other 
firms are doing similar work for a less figure, and he 
is asked to reconsider his estimate. If he insists on his 
price terms, his tender may be refused or the contract 
may be given him with the understanding that if it is 
found that he is making excessive profits, the Government 
will exercise their right to reduce the contract price. 
The books of the State-controlled firm are open to the 
inspection of Government auditors at all reasonable 
times. Weekly or fortnightly reports have to be sent 
to headquarters on special forms stating the condition 
of each contract and the progress of work. In- 
spectors, both general and local, visit all such firms from 
time to time to see that Government orders are being 
pushed forward and not impeded or hindered by other 
work. No restrictions are imposed upon firms for tender- 
ing or executing orders for their own clients — except 
the understanding that Government contracts must 
always take precedence. It naturally follows that where 
Government contracts are large enough to engage a 
firm's entire plant, all other work has to be indefinitely 
postponed. 
Controlled firms cannot add new machinery to their 
plant without the Government's consent. Nor can 
machine and tool makers supply such firms without 
special sanction and certificates. Various conditions 
are also imposed upon controlled firms regarding rates 
of wages, hours of employment, holidays, etc. " Sweat- 
ing " is of course not permitted under any circumstances. 
The sale and purchase of material — particularly metals, 
such as copper, nickel, brass and steel, are all State- 
regulated, and special forms and certificates setting 
forth the class of work, numbers of Government orders, 
for which the material is required, must accompany 
everv order. So far, however, as the management and 
running of these controlled factories is concerned, little 
A Busy Scene in a Big Workshop 
