FINANCE—PUBLIC & PRIVATE.
[BY OUR CITY EDITOR.]
UNEMPLOYME N T.
[To the Editor of the SPECTATOR.] SIR,—To the many political and financial factors tending to restrain business on the Stock Exchange there is now added the prospect of an early General Election, for that event is always disliked, alike in business and financial circles. Even under ordinary circumstances, the prospect of an election tends to disturb general trade, and when the election seems likely to turn on fiscal questions the chances of disturbance are naturally greater. Equally in financial and Stock Exchange activities, election uncertainties tend to restrict business ; and when, as seems likely to be the case on the present occasion, the issues involve a direct challenge to the community by the Labour Party, which places in the forefront of its programme a Capital Levy, it is scarcely surprising that the City should feel more than common interest, not to say anxiety, with regard to an early political contest.
That inherent conditions on the Stock Exchange are fairly sound, and that in many departments there is a disposition for prices to improve under reasonably favourable influences, is clear from the steadiness of most departments in spite of the disturbing political factors. Not the least interesting feature is the con- tinued advance in Oil shares, which seems to lend significance to the rumours I mentioned last week as to the possible linking up of interests between the Royal Dutch and Shell group and the Anglo-Persian, in which latter concern the British Government is a large holder.
Inasmuch, however, as the inimediate course of markets seems likely to be determined, first, by whether a General Election is really imminent, and secondly, by the result of the contest, you may -wish to know what are the views of the City concerning the main points which seem likely to be at issue. For, while on matters such as the great fiscal controversy and other problems affecting domestic politics opinions differ in the City as elsewhere, I think it may fairly be stated that there is a consensus of views concerning the main points. Turning aside for the moment from the question of Free Trade and Protection, it must, I think, be common ground that the main problem and the one forcing most of the other issues to the front is that of unemployment. That is a concrete fact from which we cannot escape, and even if it is true, as I think it is, that the chief explanation is to be found in circumstances beyond our control, such as the political and financial chaos in Europe, the thet remains that the problem of unemploy- ment calls aloud for attention. Possibly, on the principle that desperate needs require desperate remedies, the problem has immediately revived, in acute form, the fiscal controversies, and that, in itself, lends additional importance to any political contest. Finally, however, we have the leader of the Labour Party seeing in the situation an opportunity for advocating the remedy of a Capital Levy, so that, unless conditions change mean- while, it looks as though the country might have three issues before it at one and the same time—namely : (a) Free Trade; (b) a measure of Protection; (c) Capital Levy, and (presumably) no other immediate change in fiscal policy. I need scarcely say what are the views of business circles concerning the Capital Levy idea, though in your next issue I hope to- deal with some of its fallacies. At the moment I want to draw your attention to the latest utterances by one of our leading bankers concerning the whole problem of unemployment. At the annual meeting of the Institute of Bankers held to-day, Sir Herbert Rambling, the Deputy Chairman of Barclay's Bank, made it the subject of his inaugural address, and there is no doubt that his sound common-sense remarks admir- ably express and focus this consensus of City view to which I have referred. While in no way ignoring factors such as chaotic exchanges, monetary policies, protective tariffs and so forth, Sir Herbert goes to- the very root (Continued on next page.) of the matter in his outspoken utterances with regard to what he describes as "the heresy of limiting output," whether that heresy is evidenced either by Capital or by Labour. "I say," said Sir Herbert, "without hesitation, that although we are losing much trade because of the European position—a position-largely outside our Control —we are losing more as a result of our high production costs—a position within our control." Having then dealt briefly with the Ca' canny policy as adopted by Labour, Sir Herbert Hambling laid great stress upon the fact that this heresy of limiting output is not confined to Labour or to any one class. He drew attention to a statement recently made by Mr. McCurdy, the Chairman of the Committee appointed by the Government to investi- gate the question of trusts, in the course of which state- ment Mr. McCurdy said :— " When I was Chairman of the Committee on Trusts in 1918,1 was impressed by the fact that the trade combinations formed in this country appeared almost exclusively to be formed, not to organize mass production, but for the purpose of restricting pro- duction and preventing what the manufacturers consider undesirable competition in what appears to them to be a strictly limited market."
In other words, in place of the policy of small profits and quick returns, which means a large turnover and more employMenta policy so freely adopted in the United States—the motive of many . of those who have controlled our industries since the War seems to be that of obtaining the 'maximum profit. There is little doubt that these conditions have arisen largely out of the profiteering days of the War 'whet' labour was scarce and prices were abnormally high, but the City as a whole supports Sir Herbert Hambling's view "that if all re- strictions on output were removed by labour, and if all our trading interests aimed at -making a large total profit by securing a small profit on each individual item of a big output, rather than by making a large profit on a small output, we should increase 011n overseas trade, 'develop our home markets, and provide a large number of Our unemployed with remunerative work." I believe, Sir, that I shall have your cordial support in giving the prominence I have done to these views of Sir Herbert Hambling, if only for the reason that they deal with what may be termed the least popular, although probably the most important, aspect of the unemploy- ment problem. It is-one thing on the public platform and elsewhere to deal with currency and fiscal controversies in the abstract, and it is quite another thing to speak straight out either to the wage earner or the employer, as the case may be. Nevertheless, I venture to think that it is the human aspect of the unemployment problem which requires to be emphasized to-day. We know that the great ordeal of the War has left its mark upon all of us, and if we are candid we not only know, but must admit, that whereas the opening years of the War were characterized by Self-sacrifice, not only on the part of those who went to the Front, but on the part of those who stayed at home, the later years were characterized by a spirit of profiteering on the part of Capital and Labour alike which is responsible in no small degree for some of those problems with which we are confronted to-day. A restoration of mutual confidence between Capital and Labour, followed by efficient co-operation, is the first essential for any trade revival. I do not know whether Sir Herbert Hambling's inau- gural address will be printed separately as a pamphlet, but if it is; I would advise all those readers of the Spectator who are interested in the economic problems Of to-day to get a copy and 'read the very common-sense observations of one of our foremost bankers upon the great problem of unemployment.—! am, Sir, yours faithfully,
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