19 SEPTEMBER 1925, Page 28


IT is rather difficult, when observing, on the one hand, the acute depression in our key industries with a growing number of unemployed, and, on the other hand, the quiet cheerfulness of the Stock Markets and of the City generally, not to speculate as to how far this comparative cheerful- ness in financial circles is consistent with the unsatis- factory economic position of the country as reflected in trade conditions. Without in any way suggesting that it is a case of the City fiddling while our industrial centres are burning, one cannot help wondering whether in the course of the next year or two we shall find that the philosophic attitude of financial circles towards the trade depression and the growing Communist agita- tion will be found to be justified, or whether we should do well to heed the warnings of those who profess to see in the present trade depression and Labour unrest elements threatening some serious industrial and social crisis at a later date.


At the recent Congress at Scarborough, for example, and especially during the closing days of the Congress, we had some sorry exhibitions of extremist speeches, and some of the closing resolutions, in particular, were un- fortunately of a character calculated to give some aid to the activities of the Bolshevist emissaries from Russia. Yet, it might fairly be said that with the exception, perhaps, of English Railway stocks, which faithfully reflect- the anxiety concerning the Labour outlook, the City on the whole was quite unmoved by the Scarborough Congress. The Stock Markets have pursued the even tenor of their way with strength. in gilt-edged securities resulting from easy monetary conditions, while in the more speculative markets there has been considerable animation and strength in Foreign Government securities and in Rubber shares, and even several of the Home Industrial shares like Courtaulds • and. Bradford Dyers have been a strong market. The Foreign Trade Returns continue to be unsatisfactory as showing a further shrinkage in the general turnover, while the latest figures of unemployment are almost the worst on record. To some extent, no doubt, the tendency to purchase high- class investment stocks may be accentuated by anxiety with regard to the future, but from the cheerfulness of most departments it is evident that at present, at all events, the Stock Exchange does not allow itself to become unduly alarmed even by the general industrial outlook.


It is, of course, quite true, as I have frequently pointed out in these colmnns, that to a certain extent and within certain limits, trade depression even counts among the factors favourably affecting the Stock Markets, and especially the gilt-edged _section. In normal times-it is a truism that you cannot have a boom in trade and a boom in stocks at the same time, the .reason, of course, being that- both movenients make demands upon financial faerlities-andthat the double strain is usually an impossible one. - GiVen; therefore, a diversion both of attention and of, funds from trade activities, _there is the very great probability of securities deriving considerable benefit. Ilforeover, I think it is . probable that at the present moment the concentration of attention upon securities is increased not only by the trade depression itself, but by the -fact that few, if any, can see any signs of any early improvement on a scale sufficiently important to affect monetary conditions. Wherever the fault may lie for the trade depression, whether in Labour or in deficient organization by industrial Capitalists, there are unfor- tunately no signs at present even of a recognition of the realities of the position and of the causes which may have to be dealt with drastically. Consequently the disposition is to apprehend a continuance of the trade depression for a -considerable period. This disposition, moreover, is probably accentuated-- by a -realitation of the fact that some months must elapse before the Coal Commission can Conclude its enquiries and Present its Report, and it is the coal and transport industries which largely constitute the key to the general poSition.


And yet, notwithstanding the philosophical attitude of the City towards our economic and social problems, it will be well that their serious character should not be ignored. Quite apart from the demoralization of the community following upon periods of prolonged un- employment, we are, as regards many of our industries, in what can only be described as an impossible position, and while it may be perfectly true that there are many industries in the country which are in a fairly prosperous state, that does not affect the gravity of the situation as reflected in the coal and iron and steel industries, while in spite of fairly satisfactory dividends, the depreciation within a twelvemonth of-over £100,000,000 in capital Values of our Railway stocks shows that even in that sheltered industry conditions are far from satisfactory.


Now,"although I know the point is a somewhat Obvious one, I suggest that we shall never reach a solution of our complex and difficult industrial problems so long as the great sections directly concerned with the matter maintain _ .

their present attitu e of dogmatic negation. Although not expressed in So 'many words, the Government, by its attitude of inactivity, declares that expenditure cannot be reduced, although it knows. that the great burden of taxation is playing no small.part in aggravating the indus- trial depression. In some industries, at all events, conditions could he bettered by fusion and co-operation, together with improved methods making for economies and.more-efficient output. ---For the most part, however, there is no indication on the part of leading industrialists of willingness to move in these directions. Finally, we have Labour asserting that however else the problem of industrial depression and unemployment is to be solved, there must be no question either of reduced wage or of increased houri of labour, or even of a relaxation of Trade Union restrictions, however much it may be shown that' such relaxation might aid the situation. . So long as this attitude is maintained by all the parties concerned, it is useless to expect. any- improvement in the situation. Indeed, inasmuch as other countries are taking more practical and common-sense y iew of the probleMs they have: to face and are not adopting this attitude of negation, the chances are that our depression here may increase rather: than diminish owing to the stress of foreign competition.. The question is, therefore, whether 'we shall have to wait for still worse conditions to drive home stern lesson's and bring together the forces which ought now to be co- operating with a view to improving the position, or whether we may hope to bring about such co-operation at; some earlier date.

It is just here, I think, that we should do well to note: the fact that in spite of the blatant utterances of the Communists, there is a large section of Labour at they present time which is beginning to perceive, first, the irlcsomeness of Trade Unionism when overdone and con-, verted into huge political organizations, and also to recognize that the seriousness of the situation calls for an end to this war between Labour and Capital if fresh wealth is to be created and if the standard of comfort at present enjoyed by the workers as a whole is to he main-: tamed. Here then, surely, is an opportunity for a wise Government to give a strong lead, first, in the direction" Of effecting drastic economies in expenditure, then or insisting that these economies shall extend to Local as: well as National Expenditure, and, finally, of ensuring- that every movement making for increased industry and efficiency on the part of the individual worker shall have Government support. Every movement in the opposite direction, however much it may be sponsored by Trade. Unions, should be resolutely opposed by a democratic Government elected not by one section of the community but by the whole nation.