FINANCE PUBLIC AND PRIVATE
PROBLEMS OF INDUSTRY
By ARTHUR W. KIDDY.
Ix my Financial Notes last week I expressed the view that while the reaction in high-class investment securities . was natural and, within limits, was justified, the investor would do well to watch opportunities for acquiring stocks on any important fall. In a few directions a rally has already occurred, although there has been no real change in the situation. Briefly stated, the reaction which occurred at the beginning of the final fortnightly settle- ment of the past half-year was the inevitable outcome of insufficient consideration having been given to the many difficult problems with which the country is still con- fronted ; while, as is usually the case, there was then a tendency for the position to be accentuated by speculative operations for the fall, and it is the closing of those posi- tions which accounts for the moderate rally of the past few days. Just, however, as the previous depression was emphasized by such developments as the news from China, the financial congestion arising from an overdose of new capital issues and the inevitable realizations at the end of the half-year, so the closing of " bear " positions was due to the belief, rightly or wrongly, that for the moment those influences had been adequately discounted.
FUTILE DEBATES.
Meanwhile, it may be noted that in one or two depart- ments of the Stock Exchange, and notably in Home Railways and certain stocks in the industrial group, there has been no recovery in values. The reason, of course, is to be found in the growing anxiety with regard to the general industrial depression. Nor can it be said that anxieties in that direction have been relieved by the recent Parliamentary debate on the subject of unemploy- ment. I should doubt if these full-dress debates on financial and economic subjects ever have produced any- thing very illuminating. The attacking party usually 'tends to exaggerate the position and to distort and some- times to misrepresent the causes operating. On the other hand, the defendants are too often inclined to minimize the trouble and to give explanations which the man in the street—whose judgment can never be ignored— regards as wholly inadequate, while on both sides of the debate lip-service is paid to certain general principles which, if the tribute were practical and sincere, would save half our troubles from arising. If, for example, the platitudinous utterances of successive Chancellors of the Exchequer concerning the necessity for economy in national expenditure were followed by corresponding . action, the overburdened taxpayer would be relieved to- -morrow ; while, if the need for harder work and more intense effort on the part of Labour to which all parties pretend now to subscribe were really recognized and acted upon, we should not have the present figures of unemployment and our foreign trade balance would be in a very different position from what it is. Writing, as I do, within a few hours of the delivery of the Premier's speech, it is impossible to deal adequately with his treatment of the unemployment problem. Broadly speaking, however, I suppose I should be fairly summarizing Mr. Baldwin's conclusions if I said that, while he has once again expressed his belief that many of our industrial problems of the day can only be solved along the lines of closer co-operation and greater good will between employers and employed, he also is of opinion that certain of our key industries require what can only be described as artificial support in the shape either of subsidies or protection. The latter course is denied to him by reason of his election pledges, and there- fore it looks as though the Government were inclined to fall back upon the second alternative. That many of these industries are in desperate need of aid of some kind or another cannot be gainsaid, but, while I do not propose in this short article to enter into the many controversies, connected alike with subsidies and with protective duties, I feel that the matter which really gives rise to concern is the continued failure to face those realities of the industrial problem connected with the volume and quality of work given by Labour in return for a required wage, to say nothing of the rigid observance of the sanctity of contract when once employers or employed have given mutual undertakings. Shorter hours, Trade Union res- trictions, and the growing political power of Trades Unions, have undermined the whole discipline of industry, and whether the points involved are the effective working Of the mines, adequate facilities on the railways, reliability in the postal service, or even the discharge of the duties of a domestic servant on a scale justified by the greatly increased wage, the service would seem to be poorer and the national efficiency correspondingly weaker when compared with the pre-War period. Nor is it sufficient to explain all this away by speaking of the demoralizing influences of the War. Individual businesses can have temporarily demoralizing influences, but if we arc to regard them as adequate permanent excuses the business will gradually disappear.
CO-OPERATION ESSENTIAL.
In saying this, however, I must not be understood as dogmatizing as to the undesirability of many industries in the present serious position receiving some kind of special aid if only, as it were, to set things going once again. The point which I am emphasizing is that such aid will be futile if it is not accompanied by an adequate response on the part of Labour. To take a practical illustration either of a coal or an iron and steel concern, which may be finding it impossible to work with profit under present conditions. It is conceivable that in such a case some " bounty " on the one hand, and some con- cession on the part of the shareholders in consenting to writing down of capital may assist matters and, if accom- panied by readiness on the part of Labour to give its own contribution for a time in the shape of longer hours and greater output per man, everything may yet be well in the sense that all parties making the temporary sacrifice will ultimately receive an adequate return and the country itself may find the experiment justified by success in meeting foreign competition and in increasing the whole wealth of the country. If, however, the contributiOn of Labour is omitted, I do not hesitate to say that the experiment will end in disaster. It will do so because, by the very reason of its injustice, the general confidence which is essential for the success of the experiment will be lacking. Labour, because it has not been called upon to make its contribution, will misunderstand the whole situation and will make further impossible demands ; while Capital, as represented by the shareholders, because of unfair treatment, will also no longer flow to the indus- tries of the country. Those, therefore, who, in seeking the solution of our present industrial situation, fail to state these plain truths to Labour and to Labour leaders, cannot be regarded as serving the permanent interests of the nation as a whole. Moreover, in saying this, I do not believe I am voicing any isolated view, but am faith- fully recording the opinion of most fair-minded business men who are deeply concerned with the present outlook.
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