Finance
The State and Industry ,
THAT there has been some improvement in the domestic trade of the country during the past year there can be no question. Evidence of it is afforded in the improved figures of employment, in the traffics of the railway companies, and in the financial results of some of the leading Industrial undertakings. That the im- provement has not fully extended to our export trade and, indeed, to international trade generally, is no doubt to be explained very largely by the unsatis- factory state of international politics, which causes a feeling of unrest, and by the innumerable exchange and other restrictions which are hampering international trade. It cannot, however, be too clearly recognized that until there has been an improvement in our export trade the economic position of the country is far from satisfactory, for the very growth which is taking place in our imports should suggest that to pay for them we must send abroad the necessary volume of goods and render the necessary supply of services.
A NOTABLE SPEECH.
It was with satisfaction, therefore, that those who attended the Annual Dinner of the British Bankers' Association last week perceived that the views on the industrial situation expressed by Mr. Walter Runciman, who was the chief guest of the evening, were of a thorough- ly sound character. The President of the Board of Trade was responding to the toast of ".The Government," proposed by the President of the Association, in the course of which Mr. Reginald McKenna eulogized the present Government for having been instrumental in bringing about a great improvement in the general financial situation. When, said Mr. McKenna, he looked back upon the condition 'of the country in the autumn of 1931 and contrasted it with our condition today, he found nothing but ground for congratulation. Mr. Runciman, however, while acknowledging the congratulations of the President of the British Bankers' Association and while recognizing that in many directions of industry there had had to be a certain amount of State planning and State control, very wisely suggested that while such " planning " and control " might be necessary as temporary measures, they contained certain elements of danger. Moreover, while in no way apologizing for the steps which the Government had found it necessary to take for the protection of certain industries, Mr. Runciman referred more especially to advantages resulting from trade agreements which have been entered into and expressed the hope that the general tendency of our policy would be to lower the barriers of international trade.
A WORD OF WARNING.
Indeed, the President of the Board of Trade went somewhat further and sounded a distinct note of caution with regard to State interference with industry, expressing the opinion that " nothing would be more disastrous to the British business world than that it should become over-regulated and that because of its being grouped into large units it should become embarrassed with top- hamper." I have, continued Mr. Runciman, " a horror of business organizations having to provide themselves each with a representative whose business it will be to run up to Whitehall and pull the strings to prevent interference with his business and promote it with other people."
Even in the matter of rationalization and groupings of certain industries, Mr. Runeiman detected some possible risks and dangers. These processes, he contended, might go too far in the direction of eliminating competi- tion, and he reminded: his hearers that it was under pressure of competition that in days gone by we employed more and more machinery in our works and factories and improved the design and equipment of our ships. " It (Continued on page 794.) Finance (Continued from page 792.) was competition, and still is competition, which turns depression to good account."
CAPITAL AND LABOUR.
These views expressed by Mr. Runciman found very general endorsement by the bankers and others who formed his audience • and this endorsement, I believe, was due not merely to the fact that the President of the Board of Trade was enunciating certain principles with which they were in accord, but because it was felt that he had touched upon certain points which not only threatened clanger in the future but even today were not without their influence in restraining business enterprise and checking a trade revival. It is, however, I think necessary to remember that codes and restrictions do not always emanate either from industrial organizers or from the State. They have in many instances arisen out of the demands -of Labour for fixity of hours and wages which have, in their turn, tended to bring about combines in industry not always to the advantage of the consumer. And when this is so, sooner or later the defect in organiza- tion reacts upon all sections of the community, including the wage-earners themselves. It will be well, indeed, if Capital and Labour together will study these combined problems of economics and social welfare, for I firmly believe that in a more general and intelligent co-operation between -Capital and Labour will be found the surest means for this country holding its own over a long period of years in the matter of legitimate international-: coin. mercial competition. Time was, and it should come again, when whatever small defects may have existed in our system, low prices and low costs of living, combined with intense industry and efficiency, added to the wealth of the country as avfhole, and rendered our standard of living a high one compared with other nations, while our accu- mulation of wealth, tending as it did to overflow in loans to other countries, ministered directly to the expansion of international trade, with its good effect upon employ . ment in all countries.
ARTHUR W. KIDDY.
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