19 SEPTEMBER 1925, Page 4



SIR GEORGE HUNTER'S letter to the Prime Minister which was published in the newspapers of Monday was perhaps intended as much for the public as for the exhortation of the Cabinet. If this was in part Sir George Hunter's intention he has certainly' had a handsome success. We can also say that we are grateful to him, for the British nation is always at its best when it recognizes that it is " up against it." Some nations are at their highest pitch when everything seems to turn to their advantage, when they are being- carried forward in the rush of a successful advance, and when applause is poured into their ears. Our own people, for some reason which is 'not entirely explicable,' do not have either their alertness or their capacities fully-- developed until they know that they are near a disaster. This is probably as true of the nation in industry as it is certainly true of the nation in war. Macaulay wrote a glowing passage about the British power of recovery. This power is with us still ; we are convinced that all that is necessary to evoke it is to convince people that the time has come. If we could recover, as we did, from the demoralization in the early part of the nineteenth century the proof is good enough that we can recover from almost anything—provided only that there is the will. We can hardly talk too much, then, about the desperateness of our position in the world's markets, for talk creates the necessary knowledge, and the will to apply the remedy will follow upon the know- ledge. if history repeats itself the nation will go on announcing its approaching death for some time after the disease is in a fair way to be cured. It is the curious habit of the British people to become suddenly aware of improvements which are due to their own individual energy and common sense but which they failed to notice during the process.

Sir George Hunter's letter is worth examining in some detail, as it suggests many thoughts. He says that the dole is demoralizing hundreds of thousands of our people and weakening or destroying their sense of manly independence. This gloomy view is, however, to some extent contradicted by careful inquiries which have recently been made into the administration of the " dole." The truth is that we have already passed out of the stage in which the undiluted 'economics of " the Manchester School " were accepted as having the force of natural law. The application of steam which brought about the so-called industrial revolution was accom- panied by an economic evangel, very sincerely preached and very earnestly intended, to the effect that labour could never hope to be paid more than was acci-. dentally left over after capital had not only reinforced, but rewarded itself. It was sad, but so it must be ;. thrift, self-respect and energy would do much to 'remedy the hardness of natural law. And indeed a great many cases could be cited to prove what miracles were per- formed .by these qualities. Experience and the public conscience, however, have left their mark on an economic doctrine which was derived from a realization of the first crash of intense national` competition. It is now accepted in practice, even when the textbooks seem to lag behind in giving a warrant for what is being done, that wages are not a by-consideration in industrial adjustment and that a man who is unemployed has a claim to some support other than that which is provided in circumstances of humiliation by the Poor Law. This accounts for the steady growth of unemployment' insurance.

And here we come back to Sir George Hunter's remarks' about the - dole. The dole cannot really be a dole if it is the product of a scientific system of insurance— as it purports to be. The unemployment grants are provided partly by the employers, partly by the workers,, and partly by the State. The employers, of course, have had a new burden placed upon them, but it is not repudiated by those who realize that the relief from: gloomy anticipations of unemployment and consequent' starvation makes for efficiency among the workers.} As for that part of the insurance paid by those in work,‘ it is a tax upon their energy in the interests of their' less fortunate fellows. The third part, nominally paid' by that useful abstraction the State, is paid by the public in general. The authors of Unemployment In- surance in Great Britain (Macmillan and Co.), whose pamphlet we reviewed on August 22nd, came to the conclusion that the alleged evil effect of insurance on the willingness of the worker to accept unemployment has been " greatly exaggerated," and that the pre- cautions are' sufficient to check substantial abuse.'

Nevertheless it must be admitted that there are probably, 5 - per cent. of unemployed who will never willingly, work so long as they can receive as a grant enough to keep body and soul together, and that there is a very real danger of demoralization setting in among the young men who are at the age when they ought to be learning trades but are not learning them owing to the terrible trade depression. The point, however, is that unemployment insurance is a milestone which we have passed and to which we cannot go back. We could not retrace our steps even if we would, any more than we can restore to its former authority that economic doctrine which was partly inspired by current misuses of the Darwinian theory.

To talk, therefore, about a wholesale reduction of wages as a cure for our distress is tantamount to accepting class warfare as inevitable. There are, of course, excep- tions, but in the main our problem is to get better value for the wages which are paid and not to reduce the wages themselves. In this matter we still have a great deal to learn from America, where cheap articles are produced though all the costs of production (including, above all, the wages) are high.

The adjustments which had long been going on in the relations between Capital and Labour were 'not changed in essence by the War ; they were only.

accelerated. If as a nation we fold our hands now and say that .nothing can be done except to waif stolidly for our fate to overtake us because we are being knocked out by the dole and by higher wages and shorter hours, we shall indeed, of our own volition, be treading the path to ruin. We must see where the good is to be found in the new conditions and grasp it. It is hopeless to think that we can' take back' what has been by those who are acutely conscious of- victory, after struggle, though we are not without hope that the Trade Unions. will of their own accord alter many of their customs and regulations which madly restrict output.

One of the most urgent problems before us is to make' the dole much more. scientific. The respectiVe functions of the Insurance Fund and the Poor Law should be much more clearly distinguished. As soon' as possible the Poor Law ought to be abolished nitogether, for the Boards of Guardians 'who dispense money to the very people who have voted them into office have in many places become both a scandal and a danger. Here is a sphere in which the system of popular suffrage, is wholly misplaced ; those who dispense public money should be appointed from above and not elected from below.

Sir George Hunter goes on to point out in effect that it is absurd to inquire into the mining industry alone when almost. every other.trade is on the brink of disaster. He recommends that a . Royal Commission should be appointed to inquire into the reasons for the appalling state of all our industries and also for the comparative prosperity of other countries. Frankly this proposal leaves ns cold. ,Nothing would be gained by setting up a Royal Commission for such a gigantic task. In order to escape superficiality or even levity, it would have to spend years in the inquiry and by the time its Report was ready the situation would probably have changed radically for the . worse or for the better. The Labour Government appointed a Committee to inquire into our external trade, and the Report which it has already issued is an extremely able and useful document. Sir George Hunter acknowledges its usefulness but he suggests that the Committee's terms of reference should be widened. But surely the terms of reference are already wide enough to take in every conceivable subject—except perhaps that of currency deflation. While we are looking at other countries which have no unemployed but which have destroyed their credit, those other countries are looking with amazement, not unmixed with awe, at what this country has actually done since the War. We have published many articles arguing that in the interests of restoring our credit and " looking the dollar in the face," we have proceeded much too fast and have sacrificed flesh and blood to an ideal which could easily have been postponed. Still, we have done it. It has been a mar- vellous performance. We pay every penny that we owe and our credit stands very high. We believe that we shall receive the prize when the race is over,. but the pace that has been set us has been almost beyond human endurance.

A particular gloom has affected all sober observers during the past week when they read of the appreciable tilt to the Left which was given to the Trade Union Congress at Scarborough. Gone are the days when the Independent Labour Party was the party of the extremists. That party is now evolutionary ; it stands for convincing the nation and obtaining its ends by the apparatus of democracy—by the voice of the majority. We must recognize the new fact that the extremists of to-day are the leaders of individual Trade Unions. It is they who support the Minority Movement which can hardly be distinguished from Communism, though it is separate from the Communist Party. These men are fascinated by the doctrine of the one big union and by the scheme of joining with the " Reds " of Moscow and forming one great International. They use the :Dawes Scheme as a stick with which to beat such men as Mr. Ramsay MacDonald and Mr. J. H. Thomas. But what is the end of these things ? The best brains are in the heads of those Labour leaders who had office in the Labour .Government. These men will not go under in silence. They believe in democracy. The Minority Movement believes in the rule of the Proletariat—which is only a new name for a new tyranny. It is the rule of one class over the rest. When this issue becomes more clear there will be a split. The sheep and the goats will be sorted out and new parties will be formed. Revolution is not so near as some people think. Common sense still runs strong m the veins of the people.

We are .conscious of having written perhaps too optimistically in circumstances which we admit are profoundly depressing ; but that is only because we believe in the great power of recovery and the genius for an uphill struggle to which we have already referred. If we did not believe in these things we should not believe in the future of our country. The disease from which the nation suffers is intensely complicated. Indeed we are suffering from a variety of diseases. We should much like to be helped in the work of diagnosis by any great employers of labour, or those in charge of youth, or members of Trade Unions, who might be willing to put at our disposal their observations on the causes of the present trouble which we suspect to be in a consider- able part psychological. What is wrong with England ? Will they respond to our appeal ?