by these conditions, and I may consider possible things which other employers with different experience might consider impossible.

2 (a) By Labour I presume you mean manual-worker wage-earners, who usually belong to Trade Unions, as distinguished from directors, managers, and staff, who also labour, but not, as a rule, so much with their hands as with their heads. Labour, then, should, I think, revise their attitude towards production; the maximum output possible should be aimed at by the exercise of energy and intelligence, and especially by the fullest working of the machinery provided.

The introduction of machinery should be welcomed instead of objected to, and would be so if the workmen realised that the greater and cheaper the output, the greater the number of men employed, and the higher the wages which can be paid.

2 (6) Capital is not a happy phrase. I believe you intend to cover not only the question of money which may be subscribed by the public, but the enterprise and imagination which must be thrown into a business by the leaders of it and their staffs. Without imagination directed by judgment and experience and inspired by enterprise, Capital would be a dead thing. Here I may say I think it is true that the Capital of one generation is the savings of the previous one, and it is equally true that the enterprise, energy, and experience of the present generation are precious assets handed down from the previous one. Accepting these premises, I think the duty of the leaders and employers is to inspire their men with confidence in their judgment, fairness, and justice, and propose such a scheme of working conditions that the men

may feel that their extra exertion will be properly rewarded, and that no advantage will be taken of the disclosure of their powers of production by the adoption of a suicidal policy of cutting rates.

Some system of payments by results must be introduced which will give the men this confidence and lead to a reduction in the cost of production. Money, of course, is a mere measure of value, but things produced for the use and enjoyment of the people as a whole are the real values. Barter and exchange are the only final methods, and he that does not produce has nothing to exchange in the long run.

What should this system of payment by results be? At present there is in practice piecework and two systems of premium bonus, and for each of these systems advantages are claimed. In all three, however, the difficulty is to fix a price or the time in which the work should be carried through. When these are being established, it is thought that the men "ca' canny" for the purpose of getting a price or time at which it is easy to attain what is considered by the workman to be a suitable wage, and the knowledge that this policy may be adopted is the first step towards disagreement. Further, a good man has to keep down his production so that the inferior man is not shown up, and that, I think, has been at the root of many of the troubles. It is a human feeling on the part of the men for one another, but everyone knows that men are not equal. Which system should be adopted I am not prepared at the moment to say, but, in any case, it should be a system which will give the men confidence to exert themselves as much as they can without the feeling that they will be taken

advantage of if they earn high wages; and the price or time, once fixed, should not be changed, unless new machinery or working methods are introduced, and then only in consultation and in agreement with the men. With the system adopted there should be a scheme for compensating a workman for suggestions or inventions which lead to reduction in cost. Such schemes have been adopted in certain works, and the Ministry of Munitions has also introduced such a system, with what success in this latter case I cannot say. The fixing of the advantage gained by the man's invention would be quite automatic, as it would be a function of the difference between the rate before and after the invention was adopted. I am not prepared to give a full set of rules for such a scheme, but it might well be that the estimated or actual saving for a fixed period should be the reward, and that this should be divided into three equal parts, one part to go to the inventor, one part to the factory, and one part to be divided among all the workmen in the factory, because, while the inventor deserves his reward, he could not have made his invention without the use of the factory, and, finally, he may probably have been influenced by the general body of men, whom it is desirable, also, to encourage to similar inventiveness, and who might fail to keep up the enthusiasm unless they got some general reward.

2 (c) As to the State, we have often heard the expression "We are all Socialists now," and there are many functions which must be undertaken by the State. It is a difficult thing to lay down hard and fast lines as to where State intervention should begin and end. It has been pointed out how enormously production has

been increased by State intervention under the Ministry of Munitions at the present time, but all those who are involved know how much this has led to indiscipline, and how terribly wasteful the effort is. The nation had no choice, however; the circumstances existing meant one-sided agreements, which would not have been tolerated under less dangerous conditions, and the final realisation of this may lead to national service of a kind which will not specially regard any particular interest, but, fairly and impartially applied, may solve many of the "after-thewar problems which give considerable anxiety to those who are most greatly interested in the prosperity of their country. Generally, State activities, even from the distributive point of view, are expensive; from the manufacturing point of view, they have been rather conspicuous by their failures.

There is a danger of creating more State supervisors to look after State producers than it is possible to support. Further, it may be desirable from the political point of view to make disfranchisement a condition of State employment; that is to say, State servants would have no Parliamentary vote or municipal vote, as the temptation to the prospective M.P. to buy State workers' organised votes by promises which are inimical to the best interests of the nation seems generally too great to be resisted. The officials of a government should be the servants and not the masters of the people.

I recognise that I have touched only the fringe of the subject, in that so far as the first two items are concerned I have dealt only with the question of remuneration. The subject is so vast and has so many

aspects that it is impossible to do much more within reasonable limits of space. I am not without hope that on both sides sensible views will prevail, and that instead of organised discontent we may have organised content with fair dealing on both sides.

MR. W. L. HICHENS

(Chairman of Messrs. Cammell, Laird & Co., Ltd.)

There are few problems more interesting to speculate upon than the industrial situation after the War; none where prophecy is more dangerous. For one cannot deduce that the inexorable logic of events will bring this or that consequence in its train, because we live in an age of violent upheaval, when old landmarks are vanishing, and the one certain fact is that things can never be the same again. The next few years after the War will be pregnant with great opportunities for good or for evil; the tide will be at the flood, and will carry us on to the black rocks of destruction if the crew mutiny, or to the calm waters of concord if each man learns to fulfil his appointed function as a member of the ship's company. An impartial student of the industrial situation before the War, and even during the earlier part of the War, would probably have favoured the hypothesis of shipwreck. "For," he would have argued, "the mass of the people are wholly indifferent, and refuse to face the great industrial issue, just as they and their leaders refused to face the Irish issue and the European issue. They prefer to be carried down the swift stream of time, and to reflect, with a philosophic or lethargic