J2 
LAND & WATER 
December 6, 191 7 
nieiits roniaiked tu ;t frieud tlie ollur day" : ' W >' ha\(' learnt 
tliat had trade is anotlier naino for disorf,'anisati(in." 
If we look at au\- particular industry as an orsaniscd so. ut> 
for producing a particular tliinij, we s*>e at inice that a great 
deal of cnerf;\- and a .threat deal of capita! are sinip!\- squandered 
lor the reason tiiat the principle of the division of lalx)Hr is 
not applied in anv scientific sense. It xyould follow if that 
principle was applied that the different establishments in an 
industry- would produce the particular variety «f article tor 
which they were Ix-st fitted, and that there would be a govern- 
ing sense of persjjective in the arrangement and structure of 
its organisation. The old economists thought that the system 
of l(iisse:-fiiin- would secure this, and that if trade were left 
alone, each commoditv would Ix- produced in the place where 
it was easiest to produce it. This was a. very rough law and in 
practice it doe.s not i)revail. It is not trup, in fact, of the 
economy of the world, for it' does not take aca)unt of the 
timbitions and the prejudices of nations. A people is often 
reluctant to admit that geography has determined once and 
for all the limits and the-character of its production. Inside 
the Ix)undaries of a nation there is a similar impatience of the 
laws of economic predestination, even if those laws are clear 
and unmistakable. But the discovery of those laws deiXMids 
on a comparative survey of dift'erent facts of the industry . and 
such a survey was as a rule impt)ssiblc under fh? old charter 
conditions. During the war it has Ix^en a matter of life and 
death to find out where and liriw this or tliat article c(juld be 
l)roduced with the least wviste of energy and plant, and that 
guiding criterion will not disapjiear after peace. 
Buying and Selling 
Look again at the whole machineiy of buying and selling. 
Our expi-rience in industry has been not unlike our experience 
in agricultiu-e. It is distressing to contrast the plight, we 
may almost sjxMk of it as the wilful plight, of the English 
fanner witlv something to sell and that of tjie I'rench or 
Italian peasant. In tlie one case there is no organisation ; 
individual sellers deal with individual middleinen : there is 
waste of transport, and men whose business it is to ]irodua* 
spend time in the (juite difteront function of marketing. 
There are, in the various stages that sei^aratc producer from 
consumer, intennediaries who serve no useful purpose, making 
their proffts out of cnnsmner or producer or both. In the 
oilier case, the peasant lie longs to a co-operative society 
\\iiich collects his produce, carries it to market and sells it 
with full knowledge of the special business of the market. 
In industry there is something of tlu^ same contrast, for oiu- 
producers send out armies of competing travellers to little 
towns on the Continent to collect single orders for single firms, 
whareas one man fully ecjuipped with knowledge of languages 
and foreign customs could take the place of a dozen and do 
th?'r work more effectively. 
jiut if we merely get a number of trade organisations, 
working on sound and modem lines to increase production 
and eliminate waste, are we not merely putting ourselves into 
the hands of a number of Trusts ? How can we secure the 
interests of the consumer } 
It is here that the experiments of the war are full of in- 
stniction and guidance. The first principle in tho.se experi- 
ments is the public ownership of the raw material. Tlie groat 
example of course is the purchise of the wool grown at home 
afld in the Australasian Dominions. 
Now the immediate effect of this iX)licy is to eliminate one 
demoralising feature of trade ; the gambling in the raw 
material, with its sinister consecjuenccs to industry and to the 
consumer. The policy of public purchase was dictated by 
national necessity. So nKjmentoiis a departure from custom 
could not have been taken tnider any otjier conditions^. But 
it is becoming quite clear that national necessity- will survive 
the war, and that after peace it will be essential to our ^safety 
to continue this policy-, at any- rate in certain cases and for a 
certain time. With a greatly reduced shipjiing service for 
the world, with a scarcity in food and raw material, w-e cannot 
possibly trust ourselves, our industries, our fortunes to the 
rough scramble of the market. Organisation will be just as 
necessary, at any rate for some time after the war, as it has 
Ix'en during the war, to ensure suppli<'s and to prevent irre- 
gularity and w-aste. Here then is one principle of fundamental 
importance, for if the State buys the raw- material, it helps to 
that extent to control prices, and it acquires at once a right to 
some say in the distribution and use of that material. It 
would bc' as unreasonable after peace, as it woidd be during 
war. to say that the different industries that require a par- 
ticular raw material or the different producers in a single 
industry are to fight it out .;mong themsc^lves, and that the 
.■^tatc is quite indifferent whether or not this industry, or this 
district, or this group of estq.blislinients finds itself without 
luiv share in the necessaries of production. We don't want 
civil war bctw-i'en Yorkshire and the ^Midlands, between the 
cloth manufacturer and the hosier, between the man w-ho 
uses leather to make saddles and the man who uses leather to 
make lx)ots. The system known as rationing will therefor.; 
continue to be necessary as between industries, districts and 
individuals after the war. 
An Important Innovation 
There is another important innovation during the war wliicli 
>trengt!iens the hands of the (ioveniment as representing the 
consumer in dealing with a trade association. There has lx;eii 
man\- experiments in fixing prices, some of them more success- 
ful than others. But the most imixjrtant system that has 
Ix-en fried is the sy.stem of costings. This system is well 
established in America, but in England it is quite modem, 
and if it had not Ix-en for the shock of the war, it would pro- 
bably have bt^en slow- in development. 
It is notorious that before the war a great many men of 
business took no tn)uble, whatever to ascertain or understand 
the details and ilistribution of their expenditure. When the 
.Ministry of Mmiitions set u)) in business the application of 
some standard of costs was imj>erativ-c, for it was obvious that 
the strictest economy- would be necessary if the nation was to 
prosecute the war with energy and success. When millions 
of men and great quantities of plant were to be diverted from 
productive to unproductive work, the waste of energy or plant 
or public money becanfe a serious crime against the nation. 
The Di^partment had the advantage for this purpose of its 
own experience as a i^rotlucer, for it set up national factories, 
and at the same time it had the advantage of its opportnnity- 
of comparing costs and. processes in the different establish 
ments to which it gave contracts. What it has been learning 
gradually has Ix'en how much a particular operation should 
cost if undertaken under the best conditions, and thus it has 
cUscovered not only where that particular operation had bettei 
be performed, but how- much it should cost. If a particidar 
manufacturer said he could not make a shell at the fixed price, 
the Department could examine his costs with him and givi 
him the l^enefit of the experience of other manufacturer.- 
and the experience of the factories administered directly by 
the ;\tinistry. 
The principle has Ixx'n adopted in other industries and 
notably in the w-oollen and worsted industry. Its introduc- 
tion serves two i)iirposes. It helps to teach manufacturers 
the importance {\i costings, and it helps to protect the State 
from extortion. But it is obvious that this device enables 
the State to protect the consumer as well as the taxpay-er, and 
that it is practicable in greater or less degree to control prices 
by^ this method. A trade association which takes its raw 
material from the State, allocates it on some recognised prin- 
ciple of justice and public convenience, and is prevented from 
forcing up prices by a control exercised by means of a system 
of costings and a public audit, is a very different body from the 
kind of Tmst that menaces society-. Such safeguards an- 
imperatively necessary, for an organised industry collecting int. > 
one volume the energy and ix)wer both of employers and of 
workmen, would be able to apply a dangerous pressure if the- 
consumer had no effective means of defence. , And y'et 
the industry- loses nothing of its effective power as a producing 
fjiganisation. It has evei-y encouragement to promote 
research, efficiency, economy and good administration, for 
the stimulus to the pursuit of these objects is not the 
speculative profit of the individual trader, but the general 
sense for the common interests of the industry. 
The war has taught us that there is a type of relationship 
between the State" and industry which avoids the e\-ils of a 
crippling State control on the one hand, and those associated 
with the dangerous powerof a Trust on the other. In a further 
article it will be interesting to examine the light thrown by 
these experiments on the prospects of the Whitley Councils. 
Poland may yet cause tr()ul)le lietween Germany aud Aii.stria. 
The Tngliche liuudsclKm describes the proposed Polish settle- 
ment as " an astonishing demand upon the nerves, patience, and 
good humour of the (".erman nation." It continues ; 
"If the Hapsbui-g Kaiser of Austria is. w-ith our approval, to 
be crowned King of Poland, then the last trace of any German 
rights or influence in Poland will have vanished. Wo "shall our- 
selves ha\-c done what no Power in the world coidd have other- 
wise done, and our troops in Poland will onh- be Hapsburg 
police and our three years' sacrifices will have been made, not for 
ourselves, but for otfier people. Our position in Poland at the 
general peace conference will ha\-e been campletelv thrown awav. 
Who has the courage to do this fateful thing ? Not a Chancellor, 
for in reality wc lia\-e no Chancellor, but only an irresponsible 
Foreign Secretary, ft is he, Kuhlman, who "during the inter- 
regnum ot tw-iliglu between the old aud the new era has been 
busy with his friend Czcniin deciding Germanv's fate. What 
coidd be more fatal than a Hapsbnrg Poland strengthened bv a 
Ha))sburg Galicia '. It would, too, be a thorn- in the flesh between 
u.s and -Vustria-IIuugary. ... 
