i6 
LAND & WATER 
December 7, 1916 
if any change has been occasioned. If through inis- 
management, ignorance or carelessness work is ?poiled 
or defective the entire loss falls on the firm responsible. 
'fhe Government does not attempt to interfere with 
a firm's particular methods of manufacture. On the 
contrary, every encouragement is given by the various 
Government depaitments concerned to help firms in 
increasing their output and in settling any disputes 
and overcoming friction with workmen. Herein lies 
the secret of much of the success achieved by the ad- 
ministration of the Ministry of Munitions which has suc- 
ceeded in securing and maintaining all the advantages 
of individual initiation and enterprise under State organ- 
'sation. 
Mutual Aid 
A spirit of mutual aid has also been fostered among 
firms which were formerly bitter rivals. Information 
as to improved methods of manufacture, instead of being 
kept profoundly secret as heretofore, is freely offered by 
firms to each other whenever requested, chiefly no 
doubt from patriotic motives with a view of winning 
the war as quickly as possible. 
What benefits, if any, has this association of the 
Government with private firms conferred upon industry 
at large ? Does it tend to improve industrial conditions ? 
Does it make for efficiency or the reverse ? These 
questions have an all-important bearing — not only upon 
the present war but —upon the future of British industry, 
and particularly in view of the coming trade war for 
which we have now to prepare. There can be no doubt 
that State control has proved enormously beneficial 
to the nation and has tended to efficiency and con- 
sequently to increase of production. In the first place, 
the mere substitution of the co-operatix^e for the com- 
petitive system alone, has been of incalculable value. 
Instead of the sordid spectacle of a dozen or more firms 
competing to secure contracts for certain limited supplies 
in which prices are driven down to the farthest point 
scarcely consistent with a bare living wage for labour 
and a minimum rate of return to capital, we are presented 
with the picture of an unUmited demand for goods 
at jair (in many ca.ses high) prices, enabling the employer 
to pay labour the highest wages in this country's in- 
dustrial history and giving abundant returns to capital 
with a surplus for taxation. The result is an era of the 
greatest industrial prosperity ever known ! 
borne writers will see in this a complete demonstration 
of the claims of State Socialists as to the benefits accruing 
from the State ownership of all the means of production. 
But we have not yet arri\ed at this stage. Wc are at 
present enjoying the advantages of individual efficiency 
combined with Slate organisation. Had the Government 
adopted the principle of State ownership, the results 
would most likely have been different. Very wisely, 
Mr. Lloyd-George at the outset of his administration, 
invited the leading manufacturers and business men 
to join him, ;'nd most readily and loyally they responded. 
Instead of becoming a mere politically controlled 
organisation operated by politicians and their friends, 
the controlled firms have been entirely free from all such 
peniicious influences. The hitherto insuperable ob- 
jection to the State ownership of industries has been the 
fear that the efficiency of private ownership and manage- 
ment would be exchanged for State wastefuhiess and mis- 
management. Whether in the future the State can be so 
improved as to dissipate such fears remains to be seen. 
If it can, the claims of State socialism are brought within 
the scope of practical politics. Until then, the associa- 
tion of the State with Industry should be strictly Umited 
and defined. Within such limits, the association has 
so far proved itself to be useful and beneficial in introduc- 
ing the co-operative spirit, in greatly increasing the 
remuneration of labour, in organising a great variety 
of industries to one particular end, and in adjusting and 
settling differences between labour and capital, In 
my judgment this association of the State with industry 
should be continued after the war. Merely to be in the 
position of umpire in any future disputes, would alone 
fully justify such association. But there are other 
considerations. 
It will be noticed that one of the main sucC2sses of 
State control has been the equalisation of industrial and 
labour conditions throughout the country. Instead of 
allowing a few firms to take the cream of the orders whilst 
others are scarcely able to employ themselves on half 
time, each controlled firm has been provided with suffi- 
cient to keep its plant running to its full capacity. This 
IS due to the fact that the Government has acted as a sort 
of National Clearing House, distributing orders for goods 
fairly and impartially, and collecting and distributing 
the supplies in response thereto. This is an unquestion- 
able advantage to the nation and (juite impossible under 
the pre-war laissez-faire, go-as-you-please, devil-take- 
the-hindmost policy. How to organise and maintain 
a similar system for producing and distributing the muni- 
tions of life after the war is a problem which ought to be 
worked out immediately. Its solution will contain the 
means for achieving the future industrial prosperity of the 
Empire and the welfare and happiness of all classes. 
The Ministry of Munitions has opened a branch known 
as the Welfare Department under the direction of Mr. 
Seebohrn Rowntree, which promises enormous benefits 
to our industrial classes. Inquiries and investigations 
arc being made ail over the country regarding the physical 
conditions existing in our works, the health of the workers, 
the lighting, heating, ventilating, the canteen and sanitary 
arrangements, the number of working hours, the question 
of Sunday labour, the amount of sickness and its causes, 
special industrial diseases and their cure, the question of 
fatigue and its cause, of workers' food, their home life 
and housing, the employment of women and children, 
etc. Here we find a really practical and honest attempt 
by the Government to humanise labour conditions, to 
bring about changes under which employees will cease 
to be regarded as merely macliines, or money-making 
instruments for the benefit of employers. The truth has 
at last dawned on the minds of very many of our leaders 
of thought, that the health, prosperity and happiness 
of the vast masses of our population is not only an end 
worth pursuing in itself, but is an important factor 
in maintaining the industrial prosperity of the nation. 
The Labour Factor 
The labour factor is the most valuable, the most 
precious asset a nation can possess — ^and it ought to be 
treated as such ! Together with the land it is our only 
fundamental source of wealth. We are witnessing to- 
day a practical demonstration of a truth I pointed out 
many years ago to the chief of the Labour Bureau in 
Washington during the period of the McKinley Tariff' 
Bill discussion. It was the claim of the party of high 
protection at that time, that tariffs were directly the 
cause of industrial prosperity which resulted in high 
wages. My contention was and is to-day that high wages 
are the cause of trade prosperity. This can easily be shewn. 
Consumption is the parent of demand, and demand is 
the parent of supply. The great consuming classes are 
the industrial workers. Give them the means to make 
their demands effective — namely, high wages — and they 
at once create the demand sufficient to keep themselves in 
constant employment. In short, industrial prosperity 
instead of being intermittent and like the weather, variable 
and uncontrollable, ought to be continuous so long as the 
prime factors, land and labour, remain unexhausted. The 
secret of continuous trade activity many are beginning to 
understand. This is, to return to the original factors 
of production the bulk of the produce, sufficient for their 
full growth, health and development, according to their 
needs so that consumption, demand and supply can 
develop in the same proportion. 
The State has the supreme power of effecting tliis happy 
consummation. It can assist in organisation, in main- 
taining the principle of co-ojieration, in humanising 
industrial conditions, in ending finally all contentions 
between the two factors, labour and capital, in solving 
the problem of the distribution of wealth in such a manner 
as will ensure a continuous steady growth of trade year 
after year and therefore the constant and regular em- 
ployment of e\ery man and woman in the particular 
occupation for which each one is best fitted. No Govern- 
ment since the factory system first started has ever had 
a better opportimity nor fewer obstacles to encounter 
in solving our industrial problems than the present one. 
Can the Coalition members and their successors rise to 
the occasion. And will thev ? 
