FINANCE-PUBLIC AND PRIVATE
THOSE who do not happen to confine their daily reading to one particular newspaper must be a little puzzled as to the industrial outlook in this country. For the most part the views taken by leading journals do not err on the side of optimism. The prolonged and undoubted trade depression is commented upon and is attributed to various causes according to the general standpoint of the writer. It must he confessed, too, that for the most part facts and figures are on the side of those who take a serious view of our industrial position, such facts, for example, as the steady rise in the adverse visible trade balance, and such figures as those presented by the weekly records of unem- ployment, though as regards the latter it is satisfactory to note that there has been a small improvement of late.
• MANUFACTURING, SUNSHINE.
On the other hand, readers of certain of the so-called popular journals might almost suppose from the articles which have appeared recently, that we are at the begin- nings of' a great trade boom and are about to experi- ence a great fresh wave of . prosperity. In these directions the disposition is to inveigh' against all who would suggest needed reforms if we are to be assured of trade prosperity, and, indeed, such critics are often reck- lessly, charged with asserting that England is_ " down and out, ;or something of that sort. No doubt those who. feel it their duty to criticize and point out shortcomings are in a somewhat difficult position as they often speak to two audiences. The criticisms and the suggestions are. primarily intended for home consumption and are meant to be a stimulus and not a hindrance to trade. In the United Statei and in' other foreign countries, however;: it is ciuite possible that the point of-such criticisms, may be missed and the impression be conveyed that industrial conditions here are somewhat worse than is actually the case. Even, however,' after Making all allowance for that: possibility, I fancy that these criticisms, when soberly and reasonably expounded, are likely to be of more service to the cause of industry than the almost frantic efforts of some journals to make us believe that a true act of faith wilren§iu-e-thelieditthings and- the- continuance of coin- menial prosperity. In these quarters the Cone system is increasingly popular.
VIEWS OF THE F.B.I. PRESIDENT.
During the past week the City, which clearly recognizes the dangers alike of over-pessimism or excessive optimism, has been much impressed by the straightforward and sensi- ble views expressed by Colonel Vernon Willey, the President of the Federation of British Industries, on his return from the United States. These views have been expressed in various quarters, but chiefly in an interview which appeared in the Morning Post of last Saturday, and in a long letter from Colonel Willey which appeared in Monday's Times. I have often wished when writing for the Spectator on our industrial problems that it could be possible for some of our fair-minded leaders of Labour to pay a prolonged visit to the United States to observe the workings of industry in that country and to make their own contrast with the-spirit prevailing here. Colonel Willey, of course, avowedly is representative of Capital rather than of Labour, but in the contrast which he now makes between the industrial conditions in the two countries his fair-mindedness in revealing our short- comings both on the side of Capital as well as of Labour is perhaps proved by the fact that the Daily Herald has seized upon his letter to the Times as constituting a charge solely against the Capitalist. Of course, it is nothing of the kind, and the fact that the Daily Herald should have taken thisone-sided view is unfortunately but another- example of the many obstacles which will have to be overcome before we can insure the greatly to be desired co-operation between Capital and Labour.
- A POWERFUL PLEA.
What Colonel Willey pleads for is a new spirit in Industry in this -country, and he prefaces his appeal for such a spirit by stating in emphatic terms the bad effect prcckiced in the United States by our present conditions of chaos in which such ingredients as doles, subsidies, strikes and restriction of output figure so prominently. And, further, .Colonel Wiley shows how, in the face of keen competition on the part of America and Germany, we cannot hope to hold our own, much less make progress, so long as this chaos continues (small comfort here, I am afraid, for the Cone School). Colonel Willey then deals at close quarters with- the reforms which are necessary both as regards industrial organization from the Capital side and co-operation on the _part of Labour. " Our enlightened Trade Union leaders," says Colonel Willey in his letter to the Times," know that neither Act of Parliament nor act of violence can permanently produce wages higher than the profits of industry can fairly accord." Having laid down that cardinal principle on the side of Labour, Colonel Wiley is just as emphatic in pleading for the fullest share by Labour of the rewards of industry.
FINANCING TRADE. .
-Because -it is a matter- which affects the welfare of trade and industry, I want also to refer briefly to an interesting article in the current number of the National Review by Mr. J. F. Darling, the well-known banker. In that article Mr. Darling deals with what maybe termed the mechanism of financing-, our trade - activities and, without pleading for a general policy of " cheap money," his plan is fora general enlargement of our credit basis on lines which he indicates in great- detail, and - he further asks that the credit shall be very _specially at the service of the trader as distinct from the Mere speculator. First, as to the enlargement of credits. If I interpret Mr. Darling correctly, he considers that _Rani passe with in- dustrial expansion the Bank of England; as distinct from the joint-stock banks, should be greater lenders of credit and, inasmuch as the Bank of England can only be expected to make advances, or to discount on bona fide first-class Bills, Mr. Darling suggests that the advances of joint-stock banks should be placed into groups of what he describes as " eligible and ineligible." These terms signify on the one hand the group justifying rediscount operations by the Bank of England and the other the group for which such operations would be inadvisable. To determine the application of the terms, Mr. Darling pro- poses that a kind of Central- ebniinittee, With representa- tives from the Treasury, the Banks, and Trade, should be appointed, and I am afraid it is just here that the workability of the plan begins to break down, for Mr. Darling is too experienced a banker not to realize the difficulties of exposing the private business of the various banks to any such central committee.
DISCRIMINATION.
The other aspect of Mr. Darling's scheme is that con- cerned with the penalizing of the speculator and- the granting of special privileges to the genuine trader. Excepting that I think Mr. Darling is a little unmindful of the fact that there are divers kinds of speculation, some of which are inseparably intermingled with com- mercial operations themselves,_ many, of course, will be in sympathy with the motives inspiring his proposals. Occasions not infrequently arise when, because of over- speculation -rather than of overtrading, a high. Bank Rate has to be imposed, and the innocent trader suffers with the speculator in the imposition of these high rates.' That is quite true, and just as we would like to do- away with all suffering by the innocent on account of the guilty, so in Commerce and Finance it is, of course, the genuine trader who should be encouraged, and the rank specu- lator who should be discouraged. Here again, however, no one probably knows. better than Mr. Darling what powers 'of discrimination are already in the hands of our banking institutions; and banking circles in- the City which have read Mr. Darling's article with interest, but are terribly familiar with the complexity of the problem, scarcely feel that he has evolved a plan which will meet the difficulty with which he desires to deal.
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