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HIS DOCUMENT IS THE PROPERTY OP HIS BRITANNIC MAJESTY'S GOVERNMENT.)
fl 5
C RET.
COPY NO. //-
O.P. 88(53).
CAB
I NET.
REORGANISATION OP THE IRON AND STEEL INDUSTRY.
Memorandum by the Chancellor of the Exchequer .
1
My colleagues will remember that when in April 1932
duties were imposed on iron and steel on the recommendation
of the Import Duties Advisory Committee, I reported to the
Cabinet that- one of the intentions of the Committee in
recommending the duties was to stimulate reorganisation in
the industry.
Sir George May and his colleagues have been
actively pursuing this object and a National Committee of
representatives of the Iron and Steel Industry has now
submitted a scheme under which reorganisation can take
place.
I circulate herewith the papers which I have
received from Sir George May on the subject.
I should
propose, if the Cabinet approves, to reply to him in the
following terms which I have agreed with the President of
the Board of Trade.
"Dear Sir George May,
I have to thank you for your letter of the
27th March covering various documents concerning
the draft scheme for the future reorganisation of
the Iron and Steel Industry together with your own
Memorandum on the same subject.
I have now carefully considered these documents
and after consultation with my colleagues I desire
to make the following observations upon them.
From the outset the.Government have made clear
their view that an efficient and prosperous iron and
steel industry is essential to this country, and
that the duties imposed on foreign imports were
intended to provide opportunity for the
r e o r g a n i s a t i o n which was n e c e s s a r y for
this
purpose.
From t h e b e g i n n i n g a l s o t h e y h a v e
expressed the opinion t h a t those engaged in
the i n d u s t r y were b e s t q u a l i f i e d to formulate a
s a t i s f a c t o r y scheme o r s c h e m e s , and r e c o g n i s i n g
a l l t h e d i f f i c u l t i e s which had to be overcome they
have been ready to afford reasonable time for
o r d e r l y a n d c a r e f u l p l a n n i n g so l o n g a s t h e y
c o u l d be s a t i s f i e d t h a t p r o p e r p r o g r e s s was b e i n g
made.
A c c o r d i n g l y I w e l c o m e t h e e v i d e n c e now
a f f o r d e d t h a t work on r e o r g a n i s a t i o n h a s b e e n
s t e a d i l y proceeding and I regard the present
proposals as c o n s t i t u t i n g a r e a l step forward
the required
direction.
You w i l l h o w e v e r r e c o g n i s e
s t a g e h a s b e e n r e a c h e d and t h a t
done b e f o r e the i n d u s t r y can b e
equipped and o r g a n i s e d .
in
t h a t only the
first
much r e m a i n s t o b e
said to be properly
I t r u s t , therefore, that the industry as a
whole and a l l s e c t i o n s t h e r e o f w i l l p r e s s on w i t h
t h e work which they have so w e l l b e g u n .
I under­
s t a n d t h a t o p i n i o n In t h e i n d u s t r y i s s t i l l
over­
whelmingly a g a i n s t invoking compulsory powers, and
I hope t h a t the i n d u s t r y w i l l b e a b l e t o b r i n g about
a p r o p e r m e a s u r e of r e o r g a n i s a t i o n on a v o l u n t a r y
basis.
While the Government must n e c e s s a r i l y
reserve
complete d i s c r e t i o n as to the precise
action,
l e g i s l a t i v e o r o t h e r w i s e , t h e y may d e e m i t e x p e d i e n t
t o t a k e i n a n y c i r c u m s t a n c e s w h i c h may a r i s e , I d e s i r e
t o a s s u r e you and them t h a t , so l o n g a s t h e Government
i s s a t i s f i e d of t h e d e t e r m i n a t i o n of t h e i n d u s t r y
to
set i t s house in order, they w i l l be ready t o give
s u c h s u p p o r t t o i t s e f f o r t s a s may f r o m t i m e t o t i m e
appear necessary to enable t h i s great e n t e r p r i s e
to
be brought to a successful
conclusion.
the
I shall
progress
be g l a d
made.,"
if
you w i l l
(Initialled)
'reasury
Chambers,
51st
March,
S . W. 1 .
1935.
k e e p me
N.C.
informed
of
SCHEDULE OF ENCLOSURES.
Date.
(I)
Letter from Sir George May to the
Chancellor of the Exchequer
(II) Memorandum by the Chairman of the
Import Duties Advisory Committee
(Ill)
(IV)
March' 27th,
1933.
March 24th,
1933.
Letter from the Chairman of the
National Committee for the Iron and
Steel Industry to the Chairman,
Import Duties Advisory Committee
March 13th,
1935.
Scheme for the Reorganisation of the
Iron and Steel Industry
Llarch 14 th,
19
(V) Minutes of Meeting of the National
Committee for the Iron and Steel
Industry
(VI) Resume of Events from June 3rd, 1932, in
connection with the National Committee
for the Iron and Steel Industry.
i
March 10th,
1933.
March 10th,
1953.
ENCLOSURE
I.
Import
Duties
Advisory
Caxton House
Committee,
(West
Tothill
Block)
Street,
S .W. 1 .
27th March,
Dear
Chancellor,
Reorganisation
We h a v e
of
the
a
draft
Iron
(i)
I
The
(iii)
the
now r e c e i v e d
Steel
for
the
enclose
future
Iron
from
Industry,
and S t e e l
the
appointed
copies
Coirmiittee
in June
of
last,
the
of:­
scheme
itself,
also
submit
consideration
invite
special
of
with
covering
memorandum.
the m e e t i n g of the N a t i o n a l
o n l o t h M a r c h , 1933, a t w h i c h
approved in general o u t l i n e
6.
a memorandum on t h e
the
attention
Government,
to
the
last
whole
and
three
thereof.
Yours
sincerely,
(Signed
Rt.
Industry.
National
organisation
herewith
The M i n u t e s of
Committee held
t h e scheme was
b y 26 v o t e s t o
I
to
of
The l e t t e r from t h e Chairman of t h e
N a t i o n a l Committee s u b m i t t i n g t h e scheme.
(ii)
the
and
scheme
industry.
for
1935.
Hon. Neville Chamberlain, M.P.,
C h a n c e l l o r of t h e E x c h e q u e r ,
H.M. T r e a s u r y ,
W h i t e h a l l , S.S/.1.
) G.E.
MAY.
would
position
venture
paragraphs
ENCLOSURE
II,.
-
211
THE REORGANISATION OF TiiTi: IRON AND STEEL INDUSTRY.
MEMORANDUM 3Y THE CHAIRMAN OF THE IMPORT DUTIES ADVISORY COMMITTEE.
It is now 10 months since the Import Duties AdvisoryCommit tee were invited by the Chancellor of the Exchequer to
endeavour to carry through a reorganisation of the Iron and
Steel Industry in connection with the grant of protection and
matters have at last reached a stage at which it is possible to
report progress.
Before receiving that invitation the Committee had
already given some consideration to the economic position of the
industry.
In their first report they expressed the view that
this industry could not be dealt with on the broad lines
adopted in that report in the case of other industries;
a prosperous iron and steel industry was regarded as essential
alike to the economic progress of the country and to the
national security and we recommended an exceptional level of
protection as a temporary measure pending the preparation of a
permanent scheme for placing the industry again on a sound
foot ing.
In view of the great complexity of the problem - the
so called iron and steel industry being in fact a collection of
ten or a dozen industries closely inter-twined with each other ­
we early came to the conclusion that it would be very much
better from every point of view if the industry could be induced
to undertake its own reorganisation rather than that a scheme
should be imposed upon it against its opposition by external
authority.
We have throughout striven to this end and still
remain of this opinion.
We began by calling a conference fully representative
of the producers of iron and steel and suggested the appointment
of a series of committees to work out a scheme.
-5­
We ourselves
nominated
a national
committee
in
four
regional
iron,
At
turn
steel
that
appointed
committees
castings,
conference
was p r e p a r e d
to
reorganisation
measure
committee
of
and
four
forgings
carry
it
our
protection
as
and
executive
special
clear
a
purpose
that
intention
to
for
steels
wrought
respectively.
provided
satisfactory
this
committee,
sub-committees
and
through
was
this
a smaller
v/e m a d e
it
for
the
scheme
industry
of
recommend " s u c h
was n e c e s s a r y
t o make
that
a
scheme
effective".
The
a more
a
discussions
hopeful
spirit
of
preparation
September
matters
with
that
industry
co-operation,
but
actual
of
a
the
of
the
that
simply
meant
against
extensive
devoting
of
existing
price
no b r i e f
anxious
for
for
any
the
responsibility
Alfred
The
results
of
the
the
of
Committee
the
all
that
in
help
meetings
and
admitted
discussion
we
was
gathered
strongly
reorganisation
amalgamations
to
of
Committee
industry
ideas
to
trying
to
on t h e
and
that
build
up
shifting
it
was
a
sands
that
the
problem was
far
solution
and
that
case
solution
in
gave
of
aporoach.
should
be
one
to
lend
a consultative
personal
Committee
in any
line
we o f f e r e d
these
the Executive
that
and
action
They
of
agreements
view
simple
but
Hurst
course
energies
sale
them.
slow
series
Executive
compulsory
any p a r t i c u l a r
that
Sir
was
the
definite
a
develop
associations.
We e x p r e s s e d
intricate
the
in
to
to
was very
arranged
with
led
tended
progress
take
the
current
its
and
trade
of
in
explanation
defensive
structure
we m u s t
frankly
and
and
reorganisation
members
position
true
of
We a c c o r d i n g l y
on t h e
of
scheme
progress
accordingly
undoubtedly
the
individual
lack
initiated
in
we d e c i d e d
discussed
the
outlook
forward.
the
thus
them
me a u n a n i m o u s
10th
which
they
they
so
were
seen
in
October
which
that
they
I
held
still
accepted
services
if
assurance
we
We w e r e
the
capacity
discussions
on t h e
-6­
for
too
of
desired.
a
meeting
attended
would
when
proceed
forthwith
to
prepare
a
scheme
Sir
Alfred
Hurst
to
Sir
Alfred
Hurst
may h a v e
subsequent
been
proceedings
invaluable
knowledge
assist
of
in
the
been
giving
industry.
Not
of
the
Committees
referred
themselves
of
The
months
is
National
seen
the
to
co-operation
has
to
industry
he
with
the
the
the
also
that
course
industry
of
has
fuller
etc.,
numerous
several
at
work
meetings
trade
been glad
enclosed
industry
the
of
letter
a
to
past
from
the
for
the
scheme
with
the
covering
avail
the National
scheme was a c c e p t e d
in
general
view
Committee
of
the
had been
of
the
nature
of
extended
consuming
for
Chairman
of
interests
A
Committee
scheme
this
the
future
outline
the
five
memorandum.
of
representatives
the
opinions,
above but
proceedings
submitting
the
of
In
in
Committee
attended
have
any a s s i s t a n c e
render
meeting
appended.
this
only
of
Committee
of
able
from
invited
help.
in
the minutes
which
of
his
outcome
organisation
of
the
Apart
personalities,
the
in
subsequently
the Advisory
in
Associations
they
them.
his
forces,
and
is
copy
at
also
the
personnel
meeting
affected
to
by
include
the
scheme.
As
of
stated
approval
was
dissentients
object
were
of
to
not
iron
the
are
scheme
steel
in
makers
se,
make
meeting,
and
considerably
modified
as
other
of
the
dissentients,
Steel
it
scheme.
final
Company
of
the
of
6,
the
resolution
and
of
iron,
that
with
of
those
that
they
This
was
raised
is
steel
Scotland
some p r o s p e c t
of
-
further
producer
a firm
six
not
their
other
desirable
view
the
who d i d
considered
result
only
to
foundry
but
there
a
letter
26 v o t e s
identified
to
the
by
per
sufficiently
and
Mitchell's
carried
three
the
participate
at
i n Mr.
interests
producers
should
unexpectedly
that
it
may
discussion.
Of
i s Mr.
Waiter
responsible
in
be
the
Gray
1929
for only 2.5 per cent, of the total output of steel;
the
others being Mr. A.K. McCosh of Sir William Baird and Company
who produce only pig iron, and Mr. C.E. Lloyd of
Messrs. II. Hingley and Sons who are chiefly concerned with
wrought iron.
Mr. Lloyd s opposition was based in the main
1
on the absence of provision in the scheme for compulsory
powers.
There were two absentees from the meeting who had
net sent word of their attitude, one of whom v/as Sir John
Beale of British (Guest, Keen and Baldwins) Iron and Steel
Company, with an output in 1929 of about 5 per cent, of
the total.
Sir J o a n Beale had opposed the scheme at
earlier meetings as being premature, but was not present
or represented at the final meeting.
It is stated in "che covering memorandum that the
scheme "may perhaps more correctly be described as a scheme
for establishing the machinery whereby a reorganisation cf
the industry may be effected rather than as a scheme of
reorganisation itself".
If by reorganisation is meant the
actual alteration of the present distribution of production
among the several units, the amalgamation of units, the
improvement of this plant and the elimination of that, the
control of prices, the pooling of effort in research,
purchasing, marketing, etc., this statement is undoubtedly
true, but progress in these several directions is bound to be
slow without a strong central drive and adequate machinery
through which it can operate.
So much effort has been
exerted in the past and - in the absence af effective machinery
to support it - with so little permanent result that it has
seemed advisable now to concentrate on the machinery.
It will be seen that the machinery contemplated
in the scheme is of a comprehensive character, far more
comprehensive than anything which the industry has previously
had in mind.
Bearing in mind the strong individualistic
tendencies hitherto prevalent in the industry, the keen
internal rivalry that has existed in recent years, and the
recurrent failures to secure any enduring basis of co-ooeration
it is, we think, a notable achievement to have secured for it,
even in general outline, so large a measure of support.
The questions for immediate consideration are two:­
(l) Is it designed to operate in the right directions?
(2) Will it operate effectively?
The needs of the industry in regard to reorganisation
are many sided.
Owing probably to comparisons with the
enormous units operating in America and on the Continent
the attention of reformers, especially those outside the
industry, has been concentrated in recent years on extensive
physical amalgamations almost to the exclusion of other
aspects of the problem.
This tendency is strongly marked in
the admirable report on the industry prepared by Mr. Bruce
Gardner in 1930.
But it was recognised in that report that
amalgamations, even if carried out to the fullest extent
there envisaged, would need to be supplemented by an effective
central organisation with extensive functions and
considerable powers and also by special schemes dealing with
particular sections of trie industry.
The authors of the
present plan do not dissent from the view that a large
measure of consolidation of production in the more efficient
units, with the elimination of redundant plant, will be
necessary, but they hold that physical amalgamation is not
the only means to this end.
The iron and steel industry of
this country is not quite of the same mass production
character as that of its rivals:
it is far more varied and
specialised, and care must be taken that in striving after
the advantages 0 1 ' mass production we do not impair our
exceptional position as specialists.
If the right kind of
amalgamations are to be secured the process must be one of
growth rather than of forcible imposition from above, and
must inevitably, therefore, take time.
Meanwhile, the needs
of the industry for avoiding uneconomic competition, for
concentrating production on the more efficient units, for
setting up a central control that will make sectional control
effective, for providing a national organisation capable of
conducting negotiations with other industries and interests
at home and competitors abroad, - all these needs and others
are urgent.
Put in a nutshell, whereas Mr. Gardner's report
begins with amalgamation and relegates other action to a
secondary position, this scheme reverses the order, trusting
that the processes set in operation under the scheme will
lead inter alia to such amalgamatiens as are found by
experience to be desirable.
In considering ho v. far these purposes are likely
7
to be attained it is important to remember that the scheme is
framed oh a voluntary basis.
The only measure of compulsion
contemplated is such as can be applied by the industry itself
to its own members without statutory powers.
For this to be
1
effective the proposed Corporation must obviously command the
support - indeed the whole-hearted support - of the great
majority of producers of pig iron and ingot steel, and the
several Associations, while loyally supporting the Corporation.,
must themselves enjoy similar backing from their own members.
Opinion in the industry is still overwhelmingly against
invoking compulsory powers from any external authority for
this purpose, though tho contrary view is gaining ground:
indeed, the change of outlook in the last six months in regard
to reorganisation generally is remarkable.
The present scheme
woulo. have had little chance of acceptance in September last.
Even no.v, some of the support accorded to it is rather
-
half-hearted, and many qualifications on points of detail ­
some of which may later prove to be points of substance - are
covered by the words "general outline" in the resolution of
approval;
nevertheless, we are confident that support and
indeed enthusiasm will steadily develop with the progress of
negotiations, and we attach such importance to the industry
tackling its own reorganisation that wc are anxious to give
it the fullest opportunity therefor.
But there is no gainsaying the fact that the rate
of progress will be greatly affected by the Government s
1
attitude to the scheme.
If the industry can be given clearly
to understand that the statement that a prosperous iron and
steel industry is vital to this country is no empty platitude,
that if the industry fails to put its own house in order the
alternative of Government action will be resolutely faced, but
that if on the other hand the industry presses on with, its
scheme it can rely on Government backing either to deal with
a recalcitrant minority or to support it against the most
determined onslaught by a re-formed Continental steel cartel,
then there is every prospect that the present apathetic
acquiescence in some quarters, and even the small amount of
opposition, will be won over to active support, and that the
need for Government intervention will never arise.
As a Committee, therefore, we recommend the scheme
to the favourable consideration of the Government.
Subject
to any direction^ or assurances which the Government may feel
able to give, we should propose in replying to the National
Committee to say that we regard the scheme as a satisfactory
beginning in the development of an effective organisation;
that it represents, of course, little more at present than
an outline of proposed machinery and of the objects to be
aimed at;
and that the energy and singlemindedxiess with
which that machinery is det up and applied and those objects
are pursued must determine the Committee's attitude in
regard to protective measures in future.
The Committee would
propose to maintain their present intimate relations with the
industry and do all in their power to assist the progress of
the scheme.
The scheme has already received a considerable
amount of unauthorised publicity, and it is desirable that
it should be published officially at an early date.
On
receiving the Government's decision we propose to reply to
the National Committee forthwith, and to issue that reply
together with Mr. Mitchell'3 letter and enclosures to the
Press .
Public opinion can play a useful part in keeping
the industry steadfastly along the path which it has now
planned for itself.
(Signed) G.E. MAY.
24th March, 1955.
ENCLOSURE
III,
NATIONAL COMMITTEE FOR THE IRON & STEEL INDUSTRY.
Caxton House,
Tothill Street,
Westminster, S.W.I.
13th March, 1933.
Sir George May, Bt.,
Chairman,
Import Duties Advisory Committee,
Caxton House,
Tothill Street, S.W.I.
Dear Sir,
In our first Report to you, dated 29th September,
we stated that "the industry has devised an organisation
which is progressively working towards the national
solution of its many problems", but pointed out that
progress was handicapped by the then tentative nature of
the protective duties which were subject to review every
three months.
This on the one hand encouraged the con­
tinued consumption of foreign material and the maintenance
of low price levels by competing countries in their deter­
mination to retain their market in this country, and on
the other hand, the same uncertainty handicapped the
prospective expenditure of additional capital.
After receipt of this Report you were good enough
to attend a meeting of the National Executive Committee on
October 10th at which the difficulties of the problem were
frankly discussed: the Committee then gave you a definite
assurance that they would press on with the preparation of
a scheme.
This assurance enabled yon to recommend to the
Lords Commissioners of His Majesty's Treasury that the
duties should be continued for a further period of not less
than two years from the 26th October, 1932 "subject to
satisfactory progress being made in the preparation of the
scheme of Reorganisation and in putting the approved scheme
into force", and in due course the Treasury made an Order
giving effect to this recommendation.
I have now to report that after you had left the
meeting of October 10th Sir William Larke and I were re­
quested by the Committee forthwith to prepare a Memorandum
on the future course of procedure and were authorised to
consult Sir Alfred Hurst who had been good enough to offer
to assist the Committee, and I would like to say here how
much we have valued the assistance we have received from
Sir Alfred Hurst which,has been most useful and very
ungrudgingly given.
In the preparation of the scheme we
have also been helped by discussions with the Chairmen of
the four Regional Committees.
A Memorandum suggesting in broad outline a scheme
of reorganisation was first submitted to the National
Executive Committee on the 27th October .1932 and, after
amendment in the course of further discussions, was sub­
mitted to the National Committee on November 16th, 1932.
The National Executive Committee, after considering it,
passed
the
following
resolution
'nemine
contradicente':­
"That t h e s t r u c t u r e of t h e scheme h e a c c e p t e d
i n p r i n c i p l e and t h a t t h e Sub-Committee
responsible for its preparation be
requested
t o d r a f t t h i s scheme i n g r e a t e r d e t a i l f o r the
c o n s i d e r a t i o n of t h e Executive Committee i n
t h e f i r s t i n s t a n c e , and on a p p r o v a l by them,
t h e scheme t o b e s u b m i t t e d t o t h i s Committee
f o r a p p r o v a l o r amendment b e f o r e
further
action is taken."
Following this resolution further
consideration
was g i v e n t o t h e m a t t e r by t h e Sub-Committee and by t h e
E x e c u t i v e C o m m i t t e e a n d t h e s c h e m e w h i c h I now e n c l o s e w a s
recommended to t h e N a t i o n a l Committee by a r e s o l u t i o n passe
by t h e N a t i o n a l E x e c u t i v e Committee a t i t s m e e t i n g h e l d on
F e b r u a r y 22nd i n t h e f o l l o w i n g t e r m s : ­
"That t h i s scheme b e r e f e r r e d t o t h e N a t i o n a l
Committee and recommended for a c c e p t a n c e by
them as p r o v i d i n g machinery whereby t h e
p r o g r e s s i v e o r g a n i s a t i o n o f t h e i n d u s t r y may
be achieved. "
The scheme was t h e r e u p o n c i r c u l a t e d t o t h e t h i r t y
f o u r members o f t h e N a t i o n a l C o m m i t t e e and a s p e c i a l m e e t i n g
of t h e Committee was convened on t h e 1 0 t h March.
At t h a t
meeting a f t e r f u l l d i s c u s s i o n the following r e s o l u t i o n was
moved and c a r r i e d b y t w e n t y - s i x v o t e s t o s i x :
" T h i s N a t i o n a l C o m m i t t e e a c c e p t s t h e Memorandum
d a t e d F e b r u a r y 22nd and t h e g e n e r a l o u t l i n e of
t h e scheme r e f e r r e d t o t h e r e i n , and d i r e c t s
that
i t be forwarded forthwith to the Import Duties
Advisory Committee, t o g e t h e r v/ith a s t a t e m e n t
of t h e measure of s u p p o r t a c c o r d e d t o i t b y
this
Committee, t h i s a c t i o n being in fulfilment
of
the undertaking given by the National Executive
Committee on O c t o b e r 1 0 t h l a s t t o t h e Chairman
of t h e Import D u t i e s Advisory Committee."
Of t h e s i x d i s s e n t i e n t s , t h r e e a r e m a k e r s o f
f o u n d r y p i g i r o n who i t i s u n d e r s t o o d d i d n o t o b j e c t t o t h e
scheme p e r se b u t c o n s i d e r e d t h a t t h e i r i n t e r e s t s were n o t
s u f f i c i e n t l y i d e n t i f i e d w i t h t h o s e of t h e o t h e r p r o d u c e r s
o f i r o n a n d s t e e l t o make i t d e s i r a b l e t h a t t h e y s h o u l d
p a r t i c i p a t e in t h e scheme.
Of t h e o t h e r d i s s e n t i e n t s ,
one
was a m a n u f a c t u r e r o f p i g i r o n , one a w r o u g h t i r o n m a k e r
arid t h e o t h e r a s t e e l m a k e r .
We t r u s t t h a t t h e A d v i s o r y C o m m i t t e e w i l l a g r e e
t h a t the e n c l o s e d scheme should, s u b j e c t t o t h e maintenance
cf p r o t e c t i v e d u t i e s a t an e f f e c t i v e l e v e l , p r o v i d e s a t i s ­
f a c t o r i l y f o r t h e p r o g r e s s i v e r e o r g a n i s a t i o n of t h e
i n d u s t r y - a r e o r g a n i s a t i o n which should enable i t again t o
t a k e i t s r i g h t f u l p l a c e i n t h e n a t i o n a l economy, and i n s o
d o i n g t o make a n i n c r e a s e d c o n t r i b u t i o n t o n a t i o n a l e m p l o y ­
ment.
Yours
faithfully,
(Sgd.)
CHARLES M I T C H E L L .
ENCLOSURE
IV.
Strictly Private and Confidential.
14th March, 1 9 3 3 .
The Reorganisation of the Iron and Steel Industry.
I.
MEMORANDUM.
1. At the m e e t i n g of representatives of the Iron and Steel Industry w i t h t h e Import Duties
Advisory Committee on t h e 3rd J u n e , 1 9 3 2 , a n undertaking w a s given on behalf of the industry in
return for t h e grant of protection t o prepare a scheme of reorganisation. T h e assurance then given
w a s categoricafly renewed b y the E x e c u t i v e Committee of t h e National Committee of t h e industry
o n the 1 0 t h October. T h e s c h e m e a p p e n d e d hereto has been prepared in accordance w i t h the
resolution of the National C o m m i t t e e at their m e e t i n g o n the 16th N o v e m b e r , 1932. I n arriving
at that resolution t h e N a t i o n a l Committee recognised that t h e problems of t h e industry were far too
complex a n d m a n y sided t o admit of a n y simple or immediate solution. T h e scheme now presented
m a y perhaps more correctly be described as a scheme for establishing t h e machinery whereby a
reorganisation of the industry m a y be carried o u t rather t h a n a s a scheme of reorganisation itself
a n d its ultimate success will entirely depend upon the vigour a n d singlc-mindedness with which that
machinery is used. It has purposely been drawn on broad lines and with an elastic structure, so
as t o be readily adaptable t o t h e c o n s t a n t l y changing conditions of trade a n d industry.
2. T h e case for a reorganisation of t h e British Iron a n d Steel Industry arises partly from the
general world situation in regard t o production a n d c o n s u m p t i o n and partly from features peculiar
to itself. I n few industries did t h e War period result in s o large a n expansion of world productive
capacity as in t h e Iron a n d Steel I n d u s t r y : i n few has t h e post-war period seen so marked a
development of economic nationalism. On the other hand, there has in t h e last three years been
a great falling off in t h e world d e m a n d for iron a n d steel, a n d t h e prospects of an early return to the
level of 1929 are not encouraging. Under such conditions it seems probable that the orderly progress
of the industry c a n only b e secured b y t h e regulation of production in relation to demand both b y
international agreements a n d also, e v e n within the protection of tariff walls, by applying s o m e degree
of control t o t h e individual producers of each country. T h e attached scheme a i m s first, therefore,
at setting u p a n organisation in this country w h i c h will h a v e t h e power t o negotiate such arrange­
m e n t s w i t h producers abroad, a n d will b e in a position t o a p p l y the necessary degree of control at
h o m e t o t h e benefit b o t h o f t h e industry a n d of t h e nation generally.
3. B u t in regard t o t h e British Iron a n d Steel I n d u s t r y mere regulation of production in relation
to d e m a n d will n o t alone suffice t o place it i n a position t o p l a y its proper part in t h e national economy.
T h e Iron a n d Steel I n d u s t r y of this country reached m a t u r i t y i n the d a y s of individualism and the
continuance of free access t o foreign supplies of raw a n d semi-manufactured materials has resulted
in its retaining m u c h of i t s c o m p l e x individualistic organisation long after its competitors in other
countries h a v e become highly rationalised. S u c h a situation might be tolerable in years of pros­
perity, b u t under conditions of surplus production the existence of m a n y small, out-of-date, or
inefficient p l a n t s has handicapped others in keeping abreast of their competitors abroad. A consider­
able a m o u n t of leeway b o t h in e q u i p m e n t a n d in organisation has, therefore, t o be made u p in various
sections of the industry before i t s condition can b e considered t o be thoroughly sound.
4. If foreign analogies are t o be trusted, further consolidation of t h e industry b o t h b y w a y
of horizontal groupings a n d vertical a m a l g a m a t i o n s will b e found desirable, b u t this process is
necessarily difficult and l e n g t h y a n d it is impossible t o trust t o this course for an immediate, or even
ultimately a complete, solution of present difficulties. "\Miile leaving full scope for such consolidation,
therefore, t h e s c h e m e proceeds t o seek a solution b y co-operative action under which the interests of
t h e industry are safeguarded t o t h e m a x i m u m possible e x t e n t , while it is evolving an organisation
adequate t o present d a y needs.
5. F o r this purpose i t is proposed t o adapt and improve on the existing machinery of Trade
Associations and t h e National Federation of Iron and Steel Manufacturers, grouping the Associations,
which arc a t present m a i n l y price m a i n t e n a n c e bodies, i n t o a smaller number of effective instruments
for the control of production in t h e several m a m divisions of the industry, and giving a n e w central
organisation t h e power, which t h e Federation n o w lacks, to support a n d co-ordinate t h e activities
of the Associations and to give effect to t h e will of the industry in matters of general policy extending
b e y o n d t h e sphere of a n y one Association. I t is proposed t o mark t h i s considerable development
b e y o n d t h e existing p o w e r s and functions of t h e Federation b y constituting t h e new organisation
" T h e Iron and Steel Corporation of Great Britain."
6. It is believed that national interests, n o less than those of the industry itself, can best be
served if this m a t t e r of reorganisation is taken in hand b y t h e industry rather than b y external
authority and the scheme has been framed on this basis. I t is hoped that the scheme m a y be made
effective w i t h o u t s t a t u t o r y power, but it m u s t be recognised that this depends on its acceptance
ultimately b y the bulk of the industry. Assuming t h a t at the outset all substantial producers of pig
iron a n d ingot steel a n d a good majority of t h e manufacturers of secondary products join the proposed
Corporation, it would be able to exert pressure on a n y opposing section b y suitable rebate schemes.
These might provide on the one h a n d for preferential prices for supplies to members of the Corpora­
tion and on the other bind purchasers b y m e a n s of special rebates to take o n l y products of the Cor­
poration. Should, however, the minority of the i n d u s t i y standing out against the scheme prove to
be substantial, it would probably b e c o m e necessary to seek s t a t u t o r y powers.
7. An important question arises at the outset as to w h a t is t o b e regarded as the Iron and
Steel Industry for the purpose of t h e scheme. T h e ramifications of the industry e x t e n d i n t o every
phase of the national life and if the tariff on imported iron and steel is to be maintained at an effective
-level, the G o v e r n m e n t and Parliament will need t o be assured that the interests of consumers of
steel are properly safeguarded. F o r this purpose it is essential t h a t the Corporation, to which it is
proposed to entrust considerable powers, should contain a considerable representation of the con­
suming interests. This does not m e a n that all users of steel should be so represented, including such
substantial industries as shipbuilding, the railways or the motor car industry. Indeed, this would
give an unnecessarily cumbrous structure besides introducing excessive diversity of interest.
Perhaps
the m o s t convenient principle to follow would be t o include all t h e main activities which are c o m m o n l y
associated w i t h t h e manufacture of iron a n d steel. The application of this principle results in a
reasonable balance of interest in the Corporation a n d at the s a m e time brings within its purview
m o s t of the difficulties arising from the competition of fully integrated plants with secondary pro­
ducers purchasing semi-finished steel as their raw m a t e i i a l .
-
S. T h e wide range of interests so brought together in the Corporation necessarily involves a
strict limitation of its powers of interference w i t h t h e affairs of separate Associations and still more
w i t h t h e interests of individual producers. T h e general conception underlying t h e scheme is that
the respective Associations s h o u l d be the responsible agents for securing the efficient working of
each section of t h e industry, being each a u t o n o m o u s in its o w n sphere, a n d that the functions of
the Corporation s h o u l d be generally of a stimulating and co-ordinating character. In t h e former
c a p a c i t y it would bring t o t h e assistance of each Association t h e stimulus of the general opinion of
the organised industry, backed b y t h e co-operation of other Associations, as a n d when required, and
by the powerful instrument of a central fund collected b y a l e v y on the national production of pig
iron a n d ingot steel. A s a co-ordinating b o d y it w o u l d use its influence to secure that mutually
consistent policies were followed b y t h e several Associations, it would adjust differences between them,
and in collaboration with t h e m w o u l d take part in negotiations with outside interests. The Corpora­
tion acting alone w o u l d h a v e n o power of interference with the rights of a n y individual producer.
9 . Probably one of the m o s t important activities of the Corporation would be that of guiding
and moulding the evolution of the present fifty or so existing associations of very varying character
and effectiveness into the smaller n u m b e r of powerful production Associations envisaged under the
scheme. I t is desirable t h a t the n u m b e r of associations should be kept as small as possible, con­
sistently with reasonable h o m o g e n e i t y of interest (i) in order to increase their importance ; (ii) to
facilitate a policy of interchange in production ; and (iii) to secure greater compactness and efficiency
in t h e general organisation. There is n o reason w h y one Association should n o t comprise a number
of sections each dealing with a homogeneous group of products and co-ordinated b y the main Associa­
tion. This would u n d o u b t e d l y be necessary in t h e case of the very comprehensive Association
proposed for the tmspecialised section of the steel industry. In order that this difficult process of
forming the n e w association m a y be carried through within a reasonable period and without much
waste of effort, it is proposed to constitute the Corporation at the outset, though it must then of
course b e on a s o m e w h a t provisional basis.
T h e representation of a n y Association on the Council
of the Coiporation would naturally c o m e u p for revision as each w a s formally approved.
10. This does not imply that t h e Corporation would be established during t h e initial period
alongside t h e Federation. Such a course would only lead to duplication and confusion. T h e Cor­
poration is intended to be the lineal descendant of the Federation, absorbing, as and when constituted,
all t h e existing functions and organisation of that b o d y .
T h e change over could not, however,
in a n y event be made until t h e existing members of the Federation had decided b y the necessary
two-thirds majority v o t e , required under its constitution, on its dissolution.
II.
SCHEME OF FUTURE ORGANISATION.
I. General Organisation. T h e British Iron a n d Steel Industry shall be organised on t h e basis
of a number of approved Associations, each dealing with a group of similar products, and a central
body co-ordinating Associations a n d incorporated either under R o y a l Charter or under the Companies
Act, called the Iron a n d Steel Corporation of Great Britain.
2. Membership. All producers of iron and steel in t h e U n i t e d Kingdom, and all firms in t h e
United Kingdom substantially engaged in the,manufacture of products-of a n y of the classes n a m e d in 6 (d)
below, shall be entitled t o b e c o m e ordinary members of their appropriate Associations a n d of the
Corporation and all necessary steps shall be taken t o secure as soon as possible that the Corporation
includes all such producers of iron a n d steel a n d that t h e respective Associations include all firms
substantially engaged in each section of t h e industry. W i t h this end in view all members of t h e
Corporation shall automatically become members of t h e Associations dealing with their respective
products when c o n s t i t u t e d a n d approved.
3.
Functions.
T h e Corporation shall be empowered
(a) t o provide services of an advisory character for t h e assistance of its members a n d
Associations, e.g., statistics, trade intelligence as t o h o m e a n d foreign markets a n d
transport facilities, research of all kinds, propaganda a n d guidance on e m p l o y m e n t ,
financial, technical, transport, legal a n d other questions ;
(b) t o promote t h e formation of approved Associations on the lines set out below a n d t o
exercise such measure of supervision over t h e m in m a t t e r s of general policy a n d matters
affecting more than one Association a s is necessary t o secure the orderly progress of
the i n d u s t r y ;
(c) b y agreement with approved Associations t o provide, or assist in the provision of, services
of general benefit t o their members, s u c h a s secretarial services, central purchasing,
c o m m o n marketing, research, etc. ;
(d) t o assist approved Associations in a n y measures calculated to promote t h e efficient
organisation of their respective sections of t h e industry including :
(i) t h e promotion of desirable a m a l g a m a t i o n s of existing undertakings a n d extensions
a n d improvement of p l a n t as a n d w h e n required ;
(ii) t h e prevention of unnecessary duplication of p l a n t whether b y existing m e m b e r s
of the association or b y other producers.
(e) t o co-operate with approved Associations in promoting t h e export trade in iron a n d s t e e l ;
( / ) t o adjust m a t t e r s i n dispute between Associations a n d t o decide a n y question referred
to it under t h e rules of a n y A s s o c i a t i o n ;
(g) t o a c t on behalf of t h e industry generally—in collaboration, where appropriate, with
representatives of a n y Associations specially concerned—in all negotiations a n d other
proceedings with outside interests, e.g., other industries, transport authorities, t h e
Government, Parliament, foreign Governments, foreign industries, etc.
4. Management of the Corporation. T h e Corporation shall operate through an Annual General
Meeting, a Council, a n E x e c u t i v e Committee and four Regional Committees, together with national
Advisory Committees for Wages, Transport, Research a n d other m a t t e r s as m a y be found necessary.
5. Annual General Meeting. A n A n n u a l General Meeting, which all members of t h e Corporation
will be entitled t o a t t e n d , shall be called b y t h e E x e c u t i v e Committee. T h e meeting shall receive a n
annual report a n d s t a t e m e n t of accounts from the Council a n d give such/iirections a s m a y be necessary
from time to time i n regard t o t h e general scope of t h e activities of t h e Corporation.
b.
Constitution of Council.
T h e Council of t h e Corporation shall be constituted a s follows :
(rt) a whole t i m e permanent chairman t o be appointed b y t h e members of t h e Council selected
under (c) a n d (d) ;
(b) the Chairman of the British Iron a n d Steel E x p o r t Association (Clause 14) ;
(c) nine representatives of the four Regional Committees, i.e., t h e Chairman a n d one nominee
of each Committee ( t w o from t h e Midlands). These nine to be all producers of pig iron
or ingot s t e e l ;
(d) one m e m b e r specially representative of each of t h e following t e n sections of the industry,
being n o m i n a t e d b y t h e appropriate Associations a s a n d w h e n formed a n d in t h e m e a n ­
t i m e b y existing Associations covering t h e products in question :
W r o u g h t Iron
Special Steels
Steel Castings
Forgings
Re-rolled Products
Sheets
Tin Plates
Tubes
Wire
Fabricated Steelwork.
T h e Council shall appoint a Secretary w h o shall also be Secretary of the E x e c u t i v e
Committee.
7. Meetings, etc., of Council. T h e Council shall meet a t least once a quarter a n d all elected
members shall hold office for three years a n d b e eligible for re-election.
8. Executive Committee. T h e ordinary administration of t h e Corporation, subject t o the
general a u t h o r i t y of t h e Council, shall be in t h e h a n d s of an E x e c u t i v e C o m m i t t e e of eight, as follows :
(a)
(6)
(c)
(d)
T h e Chairman of t h e Corporation acting a s Chairman of t h e Committee.
T h e Chairman of t h e British Iron a n d Steel E x p o r t Association.
T h e four Chairmen of t h e Regional Committees.
T w o other members elected b y t h e t e n representatives in G (d) a b o v e , one to retire e v e r y
t w o years b u t t o b e eligible for re-election.
9. Regional Committees. A Regional Committee, representative of interests comprised in the
Corporation shall be c o n s t i t u t e d for each of t h e four regions, t o be elected b3' members of t h e Cor­
poration in t h e respective regions. In order t o secure t h e establishment of authoritative Committees
at the earliest possible m o m e n t after t h e inception of t h e scheme, the first election shall be m a d e by
existing m e m b e r s of t h e Federation in t h e respective regions.
One-third of t h e members shall retire
every t w o years, b u t to be eligible for re-election.
10. Functions of the Regional Committees. T h e Regional Committees shall exercise such
powers a n d duties a s m a y from t i m e to time b e delegated t o t h e m b y t h e Council of t h e Corporation.
11.
ways:
Income of the Corporation.
T h e income of t h e Corporation shall be derived in t w o
(a) b y a n annual l e v y per t o n , p a y a b l e b y producers of pig iron a n d ingot steel under legal
agreement for a term of n o t less t h a n t e n years : such agreement shall provide a maxi­
m u m rate of l e v y for each class of product w i t h i n which limits t h e Council m a y levy
such a proportion as m a y from t i m e to t i m e prove n e c e s s a r y ;
(b) b y a l e v y o n all members of t h e Corporation w h o do n o t produce p i g iron or ingot steel
not exceeding 5 / - per £ 1 0 0 w a g e s paid p e r a n n u m or b y such other m e t h o d s as m a y be
approved.
12. Associations. W i t h a v i e w t o t h e avoidance of wasteful competition a n d t h e concentration
of production in t h e more efficient units, t h e industry shall be organised into a n u m b e r of production
Associations each comprising t h e manufacturers of a group of products. T h e existing Associations
shall b e combined, a s soon a s m a y b e , into t h e following Associations t o b e approved under Clause 13
below:
1. P i g Iron a n d Ferro Alloys.
2. B l o o m s , slabs, billets, plates, angles, sections, joists, sheet a n d t i n plate bars, rails
a n d re-rolled products such as rods, bars, h o o p a n d strip.
3. Wrought Iron in all forms.
4. Special Steels i n all forms.
5. Steel Castings.
6. Forgings.
7. Sheets.
8. Tinplates.
9. T u b e s .
10. Wire.
11. Fabricated Steelwork.
13. Constitution of Associations. A s a condition of approval b y t h e Corporation t h e constitu­
tion of each Association shall contain provisions, t o t h e satisfaction of t h e Council of t h e Corporation—
(a) for ensuring its permanence a n d comprehensiveness ;
(b) for preventing wasteful competition a m o n g i t s m e m b e r s while reasonably safeguarding
t h e interests of t h e members of other associations in t h e Corporation ;
(c) for securing t h e progressive concentration of production i n t h e more efficient plants ;
(d) for eliminating redundant a n d inefficient plants b y agreement w i t h proprietors on p a y ­
ment of suitable c o m p e n s a t i o n ;
(e) for affording assistance, where necessary, t o t h e export trade ;
( / ) for s u b m i t t i n g for t h e concurrence of t h e Council of t h e Corporation decisions on general
policy, agreements, a n d other matters affecting other sections of t h e industry.
14. British Iron and Steel Export Association. A l l Associations approved under Clause 13 shall
be eligible for membership of a British Iron a n d Steel E x p o r t Association or Company, t h e constitution
of w h i c h shall c o m p l y w i t h t h e provisions of Clause 13 (a) (J) (e) a n d ( / ) a b o v e .
AS A P P R O V E D
B Y N A T I O N A L COMMITTEE
10th March, 1 9 3 3 .
W.J.L.
ENCLOSURE V
Private & Confidential.
MINUTES OF THE MEETING OF THE NATIONAL COMMITTEE FOR THE
IRON AND STEEL INDUSTRY HELD AT CAXTON HOUSE ON FRIDAY,
1 0 t h MARCH, 1933 AT 1 0 . 3 0 A.M.
PRESENT:
Mr. C. M i t c h e l l ( I n t h e C h a i r ) ,
Major J . M . Bevan, Mr. Fred C l e m e n t s ,
Mr. J o h n C r a i g , C . 3 . E . , Mr. J . D a v i s o n ,
Mr. E . J . Fox, Mr. E . J . G e o r g e ,
M r . A . J . G r a n t , Mr. A. Gray,
Mr. W.G. Gray, Mr. J . H a l l i d a y ,
Mr. A. H i b b e r t , C a p t . R . S . H i l t o n ,
Mr. J . E . Jame s , M r . C.W. K a y s e r ,
Mr. C . E . L l o y d , Mr. W.R. L y s a g h t ,
Mr. A . C . M a c d i a r m i d , Mr. A.K. McCorh,
Mr. A.N. M c Q u i s t a n , C o l . J . 3 . N e i l s o n ,
C a p t . A.H. Read, Mr. F . J . R e e s ,
Mr. Fred S m i t h , S i r T. K a r r i s S p e n c e r ,
Mr. H.G. S t o b a r t , Mr. R . F . Summers ( r e p r e s e n t i n g
Mr. H. Summers), Mr. D.N. T u r n e r ,
Mr. E . A . W i l l s o n , S i r C h a r l e s W r i g h t , B t , C . B .
0
Also
Pre s e n t
Mr.
Sir
Mr.
Mr.
G.S.McLay, S i r A l f r e d H u r s t , K . B . E . , C.B.
William Larke . K.B.E. ( S e c r e t a r y ) ,
M.S. B i r k e t t , O.B.E. ( A s s t . S e c r e t a r y ) ,
W.G. Tubman.
A p o l o g i e s f o r i n a b i l i t y t o be p r e s e n t vrere i n t i m a t e d
from S i r J o h n B e a l e , S i r W i l l i a m F i r t h and Mr. G.H. J o h n s o n .
IS.
MINUTES.
The M i n u t e s of t h e M e e t i n g h e l d on November
1 6 t h , 1 9 3 2 , w e r e c o n f i r m e d and s i g n e d .
The Chairman e x t e n d e d t h e h e a r t y welcome o f t h e
Committee t o t h e new members r e c e n t l y a p p o i n t e d by t h e I m p o r t
D u t i e s A d v i s o r y Committee who were p r e s e n t f o r t h e f i r s t t i m e .
1 9 . SCHEME OF ORGANISATION DATED 22nd FEBRUARY.
Before
a s k i n g f o r o b s e r v a t i o n s on t h e scheme of o r g a n i s a t i o n d a t e d
22nd F e b r u a r y , which had been c i r c u l a t e d , Mr. M i t c h e l l gave
a b r i e f r e v i e w of t h e e v e n t s l e a d i n g up to t h e p r e s e n t p o s i t i o n ,
T h i s resume i s c i r c u l a t e d w i t h t h e s e M i n u t e s .
S i n c e t h e scheme was c i r c u l a t e d t h e Committee r e s ­
p o n s i b l e f o r t h e scheme d e s i r e d t o i n t r o d u c e two s l i g h t
m o d i f i c a t i o n s which he would a s k S i r A l f r e d H u r s t t o e x p l a i n .
S i r Alfred Hurst said t h a t the f i r s t m o d i f i c a t i o n d e a l t with
t h e q u e s t i o n of m e m b e r s h i p .
I t was e s s e n t i a l t h a t t h e scheme
s h o u l d h a v e t h e b a c k i n g of a l l i n d i v i d u a l p r o d u c e r s of i r o n
and s t e e l b u t i t was n o t e s s e n t i a l t h a t a l l c o n s u m e r s s h o u l d
be members of t h e C o r p o r a t i o n a s w e l l as of t h e i r r e s p e c t i v e
A s s o c i a t i o n s in t h e i r i n d i v i d u a l c a p a c i t i e s .
I t was t h e r e ­
f o r e p r o p o s e d t o m o d i f y c l a u s e I I d e a l i n g w i t h membership
so t h a t the l i n e s 7 and 8 a t p r e s e n t r e a d i n g
both
C o r p o r a t i o n and A s s o c i a t i o n s i n c l u d e a s f a r a s p o s s i b l e a l l
f i r m s s u b s t a n t i a l l y ongaged i n t h e i n d u s t r y
" should
read " t o secure t h a t the Corporation i n c l u d e s a l l such p r o ­
duce 's of i r o n and s t e e l a s soon as p o s s i b l e and t h a t t h o
r e s p u c t i v e a s s o c i a t i o n s include a l l firms, s u b s t a n t i a l l y en­
gaged i n e a c h s e c t i o n of t h o i n d u s t r y " .
L i n o s 1 1 t o 15 of
c l a u s e I I commencing " v i c e v e r s a " down t o "10 y e a r s " s h o u l d
be o m i t t e d .
The second m o d i f i c a t i o n was i n c l a u s e XI d e a l i n g
w i t h income;
t h e o p i n i o n had b e e n e x p r e s s e d t h a t t h i s c l a u s e
was n o t s u f f i c i e n t l y e l a s t i c and t h a t c o n s i d e r a t i o n might
show t h a t i t was n o t n e c e s s a r y f o r a l l s e c t i o n s of t h e i n d u s t r y
t o c o n t r i b u t e the same amount p e r t o n t o t h e l e v y which was t o
g i v e t h e d r i v i n g power t o t h e . C o r p o r a t i o n .
I t had t h e r e f o r e
been p r o p o s e d t h a t c l a u s e x r s h o u l d be m o d i f i e d t o r e a d a s
follows:
a
by an a n n u a l l e v y p e r ton p a y a b l e by p r o d u c e r s of
p i g i r o n and i n g o t s t e e l under l e g a l a g r e e m e n t f o r a
term of n o t l e s s than ten y e a r s .
Such a g r e e m e n t s h a l l
p r o v i d e a maximum r a t e of l e v y f o r each c l a s s o f p r o d u c t
w i t h i n which l i m i t s t h e C o u n c i l may l e v y such a p r o p o r t i o n
a s may from time t o time p r o v e n e c e s s a r y " .
This l e v y t o be on t h e home p r o d u c t i o n of i n g o t s t e e l and of
p i g i r o n where n o t c o n v e r t e d i n t o s t e e l .
PIr. S t o b a r t a s k e d w h e t h e r i t was e s s e n t i a l t h a t t h e
l e v y c o n t e m p l a t e d u n d e r C l a u s e X I ( b ) s h o u l d be b a s e d on wages
and i t was a g r e e d t h a t some o t h e r b a s i s might be a g r e e d f o r
c e r t a i n s e c t i o n s of t h i s i n d u s t r y , and i t was t h e r e f o r e a g r e e d
t o add t o c l a u s e X l ( b ) " o r by s u c h o t h e r method as may be
approved" .
C a p t . H i l t o n asked whether the a l t e r a t i o n s s u g g e s t e d
by t h e R e g i o n a l Committees had b e e n c o n s i d e r e d , b u t Mr. M i t c h e l l
e x p l a i n e d t h a t the m a t t e r had n o t been r e f e r r e d t o R e g i o n a l
Copies
Committees f o r d e t a i l e d c o n s i d e r a t i o n a t t h i s s t a g e
o f t h e scheme had o n l y been s e n t s o t h a t t h e R e g i o n a l Committees
c o u l d d i s c u s s t h e scheme w i t h t h e i r c h a i r m e n .
If the Midlands
R e g i o n a l Committee wished any m a j o r p o i n t of p r i n c i p l e d i s c u s s e d
he would be g l a d i f C a p t . H i l t o n would b r i n g i t f o r w a r d .
C a p t . H i l t o n s a i d t h a t t h e r e was some d o u b t i n t h e minds of t h e
M i d l a n d s R e g i o n a l Committee w h e t h e r membership of t h e e x p o r t
a s s o c i a t i o n was c o m p u l s o r y u n d e r t h e scheme or n o t ;
it
was p o i n t e d o u t t h a t by c l a u s e XIV a l l t h e a s s o c i a t i o n s were
e l i g i b l e f o r membership of t h e B r i t i s h I r o n and S t e e l E x p o r t
A s s o c i a t i o n o r Company b u t t h a t i t was n o t compulsory on any
a s s o c i a t i o n to j o i n .
C a p t . H i l t o n s a i d t h a t most of t h e
o t h e r p o i n t s were n o t m a t t e r s of p r i n c i p l e and i f i t was u n d e r ­
s t o o d t h a t f u l l c o n s i d e r a t i o n would be g i v e n t o them a t a l a t e r
s t a g e he would n o t r a i s e them on t h i s o c c a s i o n .
The c h a i r m a n
s t a t e d t h a t i t was q u i t e u n d e r s t o o d t h a t t h e door was n o t
c l o s e d t o s u b s e q u e n t m o d i f i c a t i o n of d e t a i l s of t h e s c h e m e .
He hoped t h a t t h e Committee would c o n f i n e i t s e l f t o c o n s i d e r a t i o n
of t h e g e n e r a l o u t l i n e of t h e s c h e m e .
B
Mr. Fox s t a t e d t h a t t h e makers of f o u n d r y and f o r g o
p i g i r o n d e s i r e d t o be e x c l u d e d from t h e scheme.
The scheme
was p r i m a r i l y one f o r t h e s t e e l i n d u s t r y and i n no way c o n c e r n e d
t h e makers o f f o r g o and f o u n d r y p i g i r o n .
Yi/hatever t h e y ( t h e
f o u n d r y and f o r g e makers) d i d c o u l d n e i t h e r h e l p nor i n j u r e t h e
s t e e l i n d u s t r y and i f t h e f o u n d r y p i g i r o n m a k e r s c o n t r i b u t e d
t o a l e v y t o w a r d s t h e o p e r a t i o n of t h e scheme t h e y were i n f a c t
c o n t r i b u t i n g towards t h e i r c o m p e t i t o r s .
One of t h e p r i m a r y
f u n c t i o n s of t h e C o r p o r a t i o n would be p r o p a g a n d a on b e h a l f o f
t h e h e a v y s t e e l i n d u s t r y , and w h i l e a n x i o u s t o s u p p o r t any
scheme f o r t h e r e - o r g a n i s a t i o n o f t h e i n d u s t r y ho f e l t t h e y
c o u l d h a r d l y bo e x p e c t e d t o c o n t r i b u t e t o w a r d s p r o p a g a n d a on
Ho p o i n t e d o u t t h a t t h e p i g i r o n
their competitors' behalf.
i n d u s t r y was now o r g a n i s e d t o p r a c t i c a l l y 100 p e r o e n t i n a
national organisation.
As f a r a s he p e r s o n a l l y was c o n ­
c e r n e d he had no need f o r any t a r i f f p r o t e c t i o n f o r p i g
iron.
Mr. T u r n e r s u p p o r t e d Mr. Fox' v i e w s and s t a t e d
t h a t t h e m a t t e r had b e e n r a i s e d a t t h e m e e t i n g of t h e
M i d l a n d s R e g i o n a l Committee and had t h e sympathy of t h a t
Committee.
I t a p p e a r e d t o him t h a t t h e scheme had b e e n
p r e p a r e d f o r t h e s t e e l t r a d e and t h a t f o u n d r y p i g i r o n
m a k e r s had n o t h i n g w h a t e v e r t o do w i t h t h e s t e e l t r a d e .
I f t h e scheme were p u t b e f o r e t h e p i g i r o n a s s o c i a t i o n s
he was q u i t e s u r e t h e y would r e f u s e t o j o i n t h e p r o p o s e d
Corporation.
Mr. George p o i n t e d o u t t h a t i t was p o s s i b l e f o r
o t h e r producers of p i g i r o n t o i n t e r f e r e w i t h the c l a s s of
p i g i r o n t o which Mr. Fox r e f e r r e d and t h a t h i s i n t e r e s t s
would be b e t t e r s a f e g u a r d e d by becoming a member of t h e
Corporation.
t
Mr. Mc-^uistan p o i n t e d o u t t h a t some f u m a c o s p r o ­
duced a l t e r n a t i v e l y f o u n d r y and b a s i c and f o r f o u n d r y i r o n
t o be c o n t r a c t e d o u t o f t h o scheme would make i t v e r y com­
plicated.
C a p t . H i l t o n t h o u g h t t h a t when t h e words " i r o n and
s t e e l " were u s e d most members t h o u g h t of t h e i r o n which was
t o be e v e n t u a l l y c o n v e r t e d i n t o s t e e l and ho a g r e e d t h a t t h e
f o u n d r y t r a d e had no c o n n e c t i o n , a s a t r a d e , w i t h t h e s t e e l
t r a d e and t h a t t h e scheme m i g h t be c o m p l i c a t e d b y b r i n g i n g
i n m a k e r s of f o u n d r y and f o r g e p i g i r o n .
S i r V/illiam Larkc s u g g e s t e d t h a t i t would bo open
t o t h e f o u n d r y m a k e r s t o j o i n as a n a s s o c i a t i o n w i t h o u t b e i n g
r e q u i r e d t o j o i n i n d i v i d u a l l y and Mr. T u r n e r s t a t e d t h a t i f
t h e q u e s t i o n of j o i n i n g was a l l o w e d t o r e m a i n v o l u n t a r y i t
would p r o b a b l y meet t h e c a s e .
Mr. George p o i n t e d c u t t h a t t h e r e was no e l e m e n t
of c o m p u l s i o n i n t h e scheme w h a t e v e r and no f i r m o r a s s o c i a ­
t i o n was c o m p e l l e d t o j o i n .
Sir Alfred Hurst stated that the p o i n t s just raised
by Mr. Fox and o t h e r s were t h e r e a s o n f o r a l t e r i n g t h e c l a u s e
d e a l i n g w i t h t h e b a s i s o f l e v y so t h a t where t h e t o n n a g e b a s i s
was i n e q u i t a b l e , o r where i t was a g r e e d t h e s e r v i c e s of t h e
C o r p o r a t i o n were n o t so v a l u a b l e t o a c e r t a i n s e c t i o n a s t o
o t h e r s , t h e b a s i s o r r a t e of l e v y m i g h t bo m o d i f i e d .
The
f a c t t h a t f o u n d r y p i g i r o n m a k e r s were i n f a c t members of t h e
F e d e r a t i o n s u g g e s t e d t h a t t h e y found some o f t h e s e r v i c e s
w o r t h w h i l e and the c o n n e c t i o n between t h e f o u n d r y i r o n
i n d u s t r y and t h e s t o o l i n d u s t r y was h a r d l y a s r e m o t e a s
s u g g e s t e d by Mr. T u r n e r .
I t was v e r y u n d e s i r a b l e t h a t t h o
f o u n d r y m a k e r s s h o u l d bo c u t off from t h e C o r p o r a t i o n a l ­
t o g e t h e r b u t membership of t h e C o r p o r a t i o n m i g h t be l e f t
voluntary.
Mr. T u r n e r p o i n t e d o u t t h a t on t h e wholo i t would
be b e t t o r t o l e a v e t h o f o u n d r y makors o u t of the scheme.
Hb d i d n o t see why t h o p o l i c y of t h e f o u n d r y i r o n t r a d e
s h o u l d come under t h e r e v i e w of a committee dominated by s t e e l
p r o d u c e r s ; r a t h e r t h a n the foundry i r o n i n d u s t r y should
be t a x e d f o r t h e b e n e f i t of t h e s t o e l i n d u s t r y he would be
w i l l i n g to see the d u t i e s taken off p i g i r o n .
Mr. George e m p h a s i s e d t h a t t h e r e was n o t h i n g i n t h e
scheme t o compel t h e f o u n d r y m a k e r s t o j o i n b u t he d e p r e c a t e d
m a k i n g p r o v i s i o n i n t h e scheme f o r any s p e c i f i c e x c l u s i o n s .
Mr. T u r n e r asked t h a t h i s p r o t e s t a g a i n s t t h e
i n c l u s i o n of t h e f o u n d r y t r a d e i n t h e scheme be r e g i s t e r e d .
Mr. L y s a g h t a s k e d w h e t h e r i t was p r o p o s e d to form
the A s s o c i a t i o n s b e f o r e t h e C o r p o r a t i o n and S i r A l f r e d H u r s t
r e p l i e d t h a t t h e C o r p o r a t i o n must come f i r s t s i n c e i t would
be l o o k e d t o t o g i v e p o w e r f u l a i d t o w a r d s p e r f e c t i n g t h e
e x i s t i n g a s s o c i a t i o n s and f o r m i n g new o n e s .
Mr. McCosh s t a t e d t h a t t h e scheme u n d e r c o n s i d e r a t i o n
was n o t a scheme f o r r e - o r g a n i s a t i o n b u t f o r t h e s e t t i n g up of
a f u r t h e r body to c o m p l e t e a scheme and c a r ^ i t o u t .
In his
view t h e e l e m e n t of c o m p u l s i o n was i n h e r e n t i n t h e s c h e m e :
it
was no u s e i g n o r i n g t h e f a c t t h a t t h e i n t e r e s t s of v a r i o u s
s e c t i o n s were d i v e r g e n t and i t a p p e a r e d t o him t h a t t h e scheme
proposed t o put a l l the v a r i o u s s e c t i o n s under the domination
of t h e h e a v y s t e e l i n d u s t r y .
The scheme could n e v e r work
w i t h o u t g o o d w i l l and i t was a b s o l u t e l y n e c e s s a r y t h a t e a c h
s e c t i o n s h o u l d f o o l t h a t i t was g e t t i n g a f a i r d e a l .
In
h i s o p i n i o n we were a t t e m p t i n g t o go t o o f a s t and i t would
have b e e n f a r b e t t e r t h a t t h e scheme s h o u l d h a v e been b u i l t
up from t h e R e g i o n a l Committees and the A s s o c i a t i o n s .
This
would h a v e g i v e n c o n f i d e n c e t h a t t h e scheme would o p e r a t e
f a i r l y a s b e t w e e n t h e v a r i o u s a r e a s and s e c t i o n s c o n c e r n e d :
he would be o b l i g e d t o oppose the scheme.
Major H i b b e r t s t a t e d t h a t in o r d e r t o be s u c c e s s f u l
t h e scheme must h a v e 100 p e r c e n t s u p p o r t from a l l t h e
associations.
I n h i s o p i n i o n i t was l o a d e d a g a i n s t t h e p i g
iron manufacturers.
He a g r e e d t h a t i t would have been b e t t e r
f o r t h e C o r p o r a t i o n t o have b u i l t up from t h e a s s o c i a t i o n s .
Sir Alfred Hurst r e p l i e d t h a t a l l a s s o c i a t i o n s r e ­
q u i r e d b a c k i n g up from o t h e r a s s o c i a t i o n s .
Many of t h e
a s s o c i a t i o n s were a t p r e s e n t i n e f f e c t i v e and i t was a b s o l u t e l y
e s s e n t i a l t o h a v e some c o - o r d i n a t i n g and d r i v i n g f o r c e .
Mr. C. Lloyd complained t h a t t h e scheme a v o i d e d a l l
t h e t h o r n y q u e s t i o n s and d i d n o t g i v e a l l t h e h e l p w h i c h S i r
Alfred Hurst claimed for i t .
The o n l y h e l p which t h e
C o r p o r a t i o n c o u l d g i v e t o t h e a s s o c i a t i o n s was by m o r a l
suasion.
Was anyone g o i n g t o bo p r e v e n t e d from e x t e n d i n g
h i s p l a n t o r anyone p r e v e n t e d from s e t t i n g up a new p l a n t
m e r e l y by m o r a l s u a s i o n .
I t m i g h t be s a i d t h a t c o n t r o l
c o u l d be o b t a i n e d by w i t h h o l d i n g s u p p l i e s or b y s e c u r i n g t h e
a d h e r e n c e of consumers t o members of t h e C o r p o r a t i o n by means
of a r e b a t e scheme b u t he c a l l e d t h i s i n t r i g u e .
The scheme
was n o t . d e m o c r a t i c ;
i t was imposed from above and he
s y m p a t h i s e d w i t h t h e s u g g e s t i o n of Mr. McCosh t h a t i t b e r e ­
m i t t e d t o t h e a s s o c i a t i o n s and R e g i o n a l Committees f o r t h e i r
views.
I n h i s o p i n i o n an e l e m e n t of c o m p u l s i o n was e s s e n t i a l
and compulsory powers c o u l d be o b t a i n e d from tho Government a s
t h e y a l r e a d y e x i s t e d i n tho c o a l t r a d e , t h e y were a b o u t t o
be a p p l i e d i n t r a n s p o r t , and tho c o t t o n i n d u s t r y had b e e n
offered them.
S i r A l f r e d H u r s t asked w h e t h e r i n d u s t r y r e a l l y
wanted t o a s k t h e Government t o impose c o n t r o l from w i t h o u t .
He t h o u g h t t h a t t h e c o n s e n s u s o f o p i n i o n was a g a i n s t i t and
t h e scheme had t r i e d t o t a k e a n o t h e r l i n e of a p p r o a c h .
It
l o o k e d t o t h e t r a d e t o p r o v i d e i t s own p.*wer t o c a r r y o u t
i t s own scheme and by means of i t s c o n t r o l of s u p p l i e s and
s y s t e m of r e b a t e s t o consumers i t c o u l d c e r t a i n l y c o n t r o l
wasteful competition.
He a g r e e d t h a t t h e o n l y a l t e r n a t i v e
t o t h e i n d u s t r y c a r r y i n g o u t i t s own scheme was t o a p p l y t o
t h e Government f o r c o m p u l s o r y p o w e r s .
He r e m i n d e d t h e
Committee t h a t t h e r e p o r t o f t h e I m p o r t D u t i e s A d v i s o r y
Committee h a d a g r e e d t h a t "a p r o s p e r o u s i r o n and s t e e l
industry is e s s e n t i a l . "
He a s k e d " I s i t p r o s p e r o u s ? "
Having d e c l a r e d t h a t an e f f i c i e n t and p r o s p e r o u s i r o n a n d
s t e e l i n d u s t r y was e s s e n t i a l t o t h e c o u n t r y p e o p l e o u t s i d e
t h e i n d u s t r y were o b l i g e d t o s e e t h a t t h e c o u n t r y p o s s e s s e d
s u c h an i n d u s t r y and would e n d e a v o u r t o s e c u r e i t i f t h e
i n d u s t r y , i n i t s own i n t e r e s t s , did n o t o r g a n i s e i t s e l f t o
secure i t .
I n o r d e r t o t e s t t h e f e e l i n g of t h e m e e t i n g , L'Ir.
George t h e n p r o p o s e d t h e f o l l o w i n g r e s o l u t i o n : ­
" T h i s N a t i o n a l Committee a c c e p t s t h e Memorandum
d a t e d F e b r u a r y 22nd and t h e Scheme r e f e r r e d t o
t h e r e i n , and d i r e c t s t h a t i t be f o r w a r d e d f o r t h ­
w i t h t o t h e Import Duties Advisory Committee, t o ­
g e t h e r w i t h a s t a t e m e n t of t h e measure of s u p p o r t
a c c o r d e d t o i t by t h i s C o m m i t t e e , t h i s a c t i o n b e i n g
i n f u l f i l m e n t of t h e u n d e r t a k i n g g i v e n by t h e
E x e c u t i v e Committee on O c t o b e r 1 0 t h l a s t t o t h e
Chairman of t h e I m p o r t D u t i e s A d v i s o r y C o m m i t t e e . "
Mr. George s t a t e d t h a t t h e c o m m i t t e e had worked f o r s e v e r a l
months on t h e scheme and most of them f e l t t h a t t h e y d i d not
want c o m p u l s i o n .
The r e - o r g a n i s a t i o n of t h e t r a d e c o u l d
o n l y b e b r o u g h t a b o u t by one of two m e t h o d s , t h a t i s , e i t h e r
v o l u n t a r i l y or c o m p u l s o r i l y .
He d i d n o t s e e how t h e Committee
c o u l d go t o P a r l i a m e n t f o r c o m p u l s o r y powers f o r t h i s would
n e c e s s a r i l y i n v o l v e t h e a c t i v e p a r t i c i p a t i o n of l a b o u r i n t h e
i n d u s t r y and p o s s i b l y t h e s t a t u t o r y f i x i n g of w a g e s .
The
scheme i n c l u d e d t h e l e a s t p o s s i b l e e l e m e n t of c o m p u l s i o n and
i n h i s o p i n i o n was t h e l e a s t t h a t c o u l d be p u t up t o a
Government d e p a r t m e n t and he t h o u g h t t h e Committee would do
well to accept i t .
I t was hoped t h a t t h e C o r p o r a t i o n would
b r i n g t h e a s s o c i a t i o n s i n t o e f f e c t i v e o p e r a t i o n and be power­
f u l .enough t o p r e v e n t t h e e v a s i o n w h i c h had b e e n c h a r a c t e r i s ­
t i c of many e x i s t i n g a s s o c i a t i o n s .
C a p t . H i l t o n s u p p o r t e d Mr. George and s t a t e d t h a t
t o r e f e r t h e " m a t t e r back a t t h i s s t a g e would b e a r e t r o g r a d e
step.
The p a s t t w e l v e months had b e e n a t e s t i n g time i n
t h e h i s t o r y of t h e a s s o c i a t i o n s and i t must be a g r e e d t h a t
t h e e x p e r i e n c e had n o t b e e n s a t i s f a c t o r y ; he was s u r e t h a t
i f t h e scheme were i n o p e r a t i o n a l l a s s o c i a t i o n s would be
assisted.
Mr. L y s a g h t a s k e d i f t h e a s s o c i a t i o n s had had an
o p p o r t u n i t y of d i s c u s s i n g t h e scheme and t h e c h a i r m a n r e p l i e d
-Gnat i t had n o t been r e f e r r e d t o t h e a s s o c i a t i o n s a l t h o u g h many
members of a s s o c i a t i o n s had h a d an o p p o r t u n i t y of s t u d y i n g t h e
scheme i n t h e i r i n d i v i d u a l c a p a c i t i e s .
G a p t . Read s t a t e d t h a t a t a m e e t i n g of t h e R e - R o l l e r s
N a t i o n a l Committee h e l d t h e p r e v i o u s day t h e scheme was a p p r o v e d
i n p r i n c i p l e but t h e Committee w i s h e d t o r e s e r v e t h e r i g h t
t o suggest modifications in various d i r e c t i o n s at a l a t e r d a t e .
A c o m m i t t e e of t h e R e - R o l l e r s , i n c o n j u n c t i o n w i t h t h e S t e e l
M a k e r s , h a d d r a f t e d a scheme f o r c o - o p e r a t i o n i n t h e c o n t r o l
of p r i c e s of s e m i - f i n i s h e d and f i n i s h e d m a t e r i a l but t h e y f e l t
t h a t p r o g r e s s i n t h i s m a t t e r was p a i n f u l l y slow and hoped
t h a t t h e a d o p t i o n of t h e scheme now b e i n g c o n s i d e r e d would
f a c i l i t a t e a r r a n g e m e n t s of this kind. At p r e s e n t t h e r e - r o l l e r s
f e l t t h a t t h e y w e r e a t t h e m e r c y of t h e s t e e l m a k e r s and t h e
f a c t c o u l d not be i g n o r e d t h a t many of them f e l t t h e y w e r e
not having a f a i r deal.
I t was p o i n t e d out f o r i n s t a n c e t h a t
s t e e l m a k e r s l e f t t o o little m a r g i n b e t w e e n t h e p r i c e of b i l l e t
and t h e p r i c e of t h e f i n i s h e d m a t e r i a l and many c o m p l a i n t s h a d
been r e c e i v e d t h a t t h e steel makers were u n d e r c u t t i n g t h e r e ­
rollers.
He h o p e d that t h e present scheme would be a c c e p t e d and
t h a t i t would a s s i s t i n t h e formation of a s s o c i a t i o n s such a s
t h e r e - r o l l e r s d e s i r e d but if much f u r t h e r d e l a y o c c u r r e d i n
c o n c l u d i n g t h e arrangements at -present u n d e r n e g o t i a t i o n b e t w e e n
t h e steel makers and r e - - ? o l l e r s he f e a r e d that t h e r e - r o l l e r s
would h a v e t o reconsider t h e i r a t t i t u d e .
Mr. I T a l l i d a y , as a r e p r e s e n t a t i v e of t h e f a b r i c a t e d s t e e l
i n d u s t r y , r e c o g n i s e d the need that each a s s o c i a t i o n had f o r
h e l p from a central corporation. The position i n some of them
was so c o m p l i c a t e d and d i f f i c u l t that it was i m p o s s i b l e t o go
on unless some such scheme as that outlined were put i n t o e f f e c t .
He t h o u g h t t h a t more weight should b e given t o t h e c o n s t r u c t i o n a l
steel makers in the representation. Ho also t h o u g h t t h e r e s h o u l d
be d i r e c t representation of constructional e n g i n e e r s on t h e
R e g i o n a l Committees and that on tho Executive Committee t h e r e
s h o u l d b e a t l e a s t four members vepresenting c o n s u m e r s . As f a r ­
as t h e f a b r i c a t i n g industry :;as concerned little headway would
be made without the h e l p and force given In t h e scheme and he
gave i t h i s support.
Sir Harris Spencer wished to help i n the r e o r g a n i s a t i o n
as f a r as was c o m p a t i b l e with tho interests of t h e c o n s u m e r s
and reminded the Committee that L'.ir George May had s a i d t h a t
t h e i n t e r e s t s of the consumers v&a&h ho looked a f t e r : up t o t h e
p r e s e n t he had soon little s i g n s oi this. P r i c e s had r i s e n
t o t h e detriment of tho export traae and while the scheme seemed
well conceived, and the authors tfora to be thanked and c o n g r a t ­
ulatod on a good ptooo of work, ho must ask what t h e s t e e l
i n d u s t r y was going t o do to as s:\Su consumers i n t h o e x p o r t
t r a d e . Tho logical way to resist wan b y means of a drawback
and i f i t was suggested that tho same end c o u l d be a c h i e v e d by
s u b s i d i e s t h r o u g h a general fund hi could not agree. I m p o r t e d
steel was not being replaced by homo produced s t e e l and t h e
e f f e c t of tho tariff., had boon to i-horeic.se p r i c e s . Tho most
i m p o r t a n t f u n c t i o n mentioned i n clause X l l l was t h a t d o a l i n g
w i t h the p r e v e n t i o n of wasteful compotit:' on and h e was p r e p a r e d
t o a s s i s t i n t h o r e o r g a n i s a t i o n or the a s s o c i a t i o n s w i t h which
ho was c o n n e c t e d as noon as i t wen clear that t h i s f u n o t i o n of
t h o C o r p o r a t i o n was to bo v i g o r o u s l y proceeded w i t h .
-
Mr, P r a n k Rocs thought chat in s p i t o of t h o r e s o l u t i o n
which had boon p a s s e d by the SOutli T/alos R e g i o n a l Committee a
fow days ago South -Talcs members could s u p p o r t Mr. G e o r g e ' s .
r e s o l u t i o n i f i t w o r e s l i g h t l y m o d i f i e d and ho hoped Mr, George
would a g r e e t o modify i t s l i g h t l y so t h a t South Wales c o u l d
accept i t .
S i r W i l l i a m L a r k e , a s a j o i n t a u t h o r of t h e scheme,
t h o u g h t t h a t i t c o u l d not be f a r out when i t was c r i t i c i s e d
by Mr. L l o y d on t h e one hand f o r n o t g o i n g f a r enough and by
Mr. McCosh on t h e o t h e r a s g o i n g t o o f a r .
He r e m i n d e d t h e
c o m m i t t e e t h a t a s a spokesman f o r t h e i n d u s t r y i n i n t e r v i e w s
w i t h t h e Government and o t h e r s h e had a l w a y s r e p u d i a t e d t h e
s u g g e s t i o n t h a t i t would be n e c e s s a r y t o o r g a n i s e t h o i n d u s t r y
on some such l i n e s a s t h a t of t h e E l e c t r i c i t y Board o r t h e
B r i t i s h B r o a d c a s t i n g Company. He had a l w a y s m a i n t a i n e d t h a t t h e
i r o n and s t e e l m a k e r s w e r e c a p a b l e o f managing t h e i r own a f f a i r s .
A l l would a g r e e t h a t a p r o s p e r o u s and e f f i c i e n t i n d u s t r y was
a s i n e q u a non* f o r t h e n a t i o n and t h e p r o b l e m of p u t t i n g t h e
i n d u s t r y on t h a t b a s i s was now one of u r g e n c y .
The r e c e n t
n e g o t i a t i o n s o f t h e C o n t i n e n t t o renew t h e I n t e r n a t i o n a l S t e e l
C a r t e l was a n a d d i t i o n a l g r o u n d o f u r g e n c y .
E v e r y one of o\rc
c o m p e t i t o r s now had a n a t i o n a l o r g a n i s a t i o n i n a f a i r way t o
becoming e f f e c t i v e .
The C a r t e l i n t e n d e d t o c o n c e n t r a t e i t s
a t t e n t i o n on t h e e x p o r t t r a d e .
T h i s w o u l d d o u b t l e s s soon i n v o l v e
o r g a n i s e d c o m p e t i t i o n a g a i n s t t h i s c o u n t r y i n a l l m a r k e t s of
t h e world and i f t h e C a r t e l s u c c e e d e d i n i t s e f f o r t s t h e p o s i t i o n
of t h e i n d u s t r y i n t h i s c o u n t r y would b e e x c e e d i n g l y d i f f i c u l t .
We c o u l d n o t meet o r g a n i s e d c o m p e t i t i o n on t h e b a s i s of i n d i v i d u a l
units.
F u l l c o n s i d e r a t i o n had been g i v e n t o t h e s u g g e s t i o n t h a t
t h e now C o r p o r a t i o n s h o u l d b e b u i l t up from t h e t r a d e a s s o c i a t i o n s
and w i t h r e g i o n a l r e p r e s e n t a t i o n b u t a s t h e q u e s t i o n was s t u d i e d
i t became c l e a r e r t h a t i t was e s s e n t i a l t o p r o v i d e a c e n t r e
from which i t would be p o s s i b l e t o h e l p each o f t h e a s s o c i a t i o n s
t o t i g h t e n up i t s o r g a n i s a t i o n and t o a f f o r d m u t u a l s u p p o r t f o r
each o t h e r .
He hoped t h e scheme would f a c i l i t a t e t h e c o m p l e t e
o r g a n i s a t i o n i n export m a r k e t s .
He t h o u g h t t h a t t h e e x p o r t s i d e
of t h e i n d u s t r y s h o u l d b e so o r g a n i s e d t h a t a l l p r o d u c t s c o u l d
be e f f e c t i v e l y r e p r e s e n t e d i n a l l t h e m a r k e t s of t h e w o r l d .
If
t h e p r e s e n t scheme w e r e n o t a c c e p t e d t h e o n l y a l t e r n a t i v e , a s
f a r a s h e c o u l d s e e , was t h a t t h e Government would s e t u p a n o t h e r
Committee which would b e f a r l e s s s y m p a t h e t i c t o t h e i n d u s t r y
and m i g h t r e p o r t i n f a v o u r of t h e f o r m a t i o n of t h e o r g a n i s a t i o n
of t h e i n d u s t r y a s a u t i l i t y u n d e r t a k i n g a n d t h e p o s i t i o n o f
t h e i n d u s t r y would be r e n d e r e d h o p e l e s s .
f
The r e s o l u t i o n of t h o S o u t h Wales R e g i o n a l Committee
was t h e n r e a d t o t h e m e e t i n g b u t i t was p o i n t e d out t h a t t h e
scheme h a d o n l y b e e n r e f e r r e d t o R e g i o n a l C o m m i t t e e s f o r
i n f o r m a t i o n and comment.
S i r A l f r e d H u r s t s t a t e d t h a t h e had been a s s o c i a t e d
w i t h t h e work of t h e committee f o r t h e p a s t f i v e m o n t h s and had
v e r y much e n j o y e d t h e c o n t a c t s h e h a d e s t a b l i s h e d and t h e
f r i e n d s h i p s h e had made. He had found t h e work v e r y i n t e r e s t i n g
and h a d b e e n r e c e i v e d s y m p a t h e t i c a l l y i n a l l q u a r t e r s . He had a '
s u s p i c i o n , h o w e v e r , t h a t amongst t h o s e h e had n o t met p e r s o n a l l y ,
t h e r e was a f e e l i n g t h a t h e was t h e nominee of t h e Government on
t h e Committee and t h a t he was a c t i n g u n d e r Government i n s t r u c t i o n s .
Ho wished t o d i s p e l any such i l l u s i o n and t o s t a t e c a t e g o r i c a l l y
t h a t he had r e c e i v e d no i n s t r u c t i o n s from S i r George May, t h e
P r e s i d e n t of t h e Board of T r a d e , o r anyone e l s e i n a u t h o r i t y .
The o n l y h i n t ho had r e c e i v e d was one from t h e C h a n c e l l o r o f
t h e Exchequer t h a t i t would b e i n a d v i s a b l e f o r him t o t a k e t h e
c h a i r a t any m e e t i n g s of t h o i n d u s t r y a s t h i s might e a s i l y bo
m i s i n t e r p r e t e d a s Government i n t e r f e r e n c e .
Ho had c e r t a i n l y
been omphatio i n e x p r e s s i n g h i s c o n v i c t i o n s b e c a u s e t h e y were
g e n u i n e c o n v i o t i o n s . Ho agrood t h a t i t was a b s o l u t e l y e s s e n t i a l
t h a t t h e Corporation should have an independent chairman.
From h i s r e a d i n g of t h e p o s i t i o n i t seemed p r o b a b l e t h a t t h o
m a j o r i t y of t h e c o m m i t t e e would a c c e p t t h e scheme.
I f s o ho
hoped t h a t t h o y would make t h e v o t e unanimous f o r i t would bo
most u n f o r t u n a t e i f i t s h o u l d h a v e t o be a d m i t t e d t h a t t h e
scheme came from a d i v i d e d i n d u s t r y . He would t h e r e f o r e
s u g g e s t t h a t i f on a f i r s t v o t e t h e r e was a m a j o r i t y i n f a v o u r
of t h e scheme t h e c o m m i t t e e would c o n s i d e r t h e a d v i s a b i l i t y of
t a k i n g a f u r t h e r v o t e on which t h e s u p p o r t c o u l d d o made
u n a n i m o u s . He was n o t e x a g g e r a t i n g when ho s a i d t h a t many
i n d u s t r i e s w e r e l o o k i n g t o t h e i r o n and s t o o l i n d u s t r y t o g i v e
a l e a d a n d t h a t t h e i r c o m p e t i t o r s on t h e C o n t i n e n t were w a t c h i n g
d e v e l o p m e n t s p e r h a p s w i t h a c e r t a i n amount o f c y n i c i s m b u t
c e r t a i n l y w i t h some m e a s u r e of a n x i e t y l o s t t h o B r i t i s h i n d u s t r y
s h o u l d r i s e t o t h i s g r o a t o p p o r t u n i t y . Pie s i n c e r e l y hoped i t
would.
Mr. F r a n k Hoos s t a t e d t h a t w i t h s l i g h t m o d i f i c a t i o n
h e t h o u g h t i t would bo p o s s i b l e f o r him t o s u p p o r t t h e schema
and a f t e r some d i s c u s s i o n Mr. C-eorge a c c e p t e d t h e s u g g e s t i o n
t o i n c o r p o r a t e i n h i s r e s o l u t i o n t h e words " t h e g e n e r a l o u t l i n e
of t h o s c h e m e . '
5
Mr. A.';".. McCosh s t a t e d t h a t i t was no u s e i g n o r i n g t h e
f a c t t h a t t h o i n d u s t r y was d i v i d e d about t h e scheme and l i t t l e
good would be done by a t t e m p t i n g t o f i n d a more o r l e s s i n o c u o u s
f o r m u l a on which a l l c o u l d a g r e e .
C o l o n e l N e i l son a s k e d w i t h whom t h e po\mr of making
t h e l e v y r e s t e d and t h e r e p l y was t h a t t h e l e v y would bo f i x e d
by a g r e e m e n t among t h e p r o d u c e r s : h e c o u l d n o t s u p p o r t t h e .
r e s o l u t i o n without reservation regarding the levy,
Mr. C-eorge
in
s t a t e d t h a t t h o i n c l u s i o n of t h e words " g e n e r a l o u t l i n e
the r e s o l u t i o n covered Colonel N e i l s o n ' s r e s e r v a t i o n .
1 1
M r . C r a i g a s k e d what was t h e a l t e r n a t i v e of t h o s e who
w e r e n o t i n f a v o u r of t h e scheme: p r e s u m a b l y t h e a l t e r n a t i v e
was t o a p p l y f o r s t a t u t o r y p o w e r s .
I f t h a t w e r e t h e c a s e would
n o t one of t h e members opposed t o t h e scheme p u t t h i s a l t e r n a t i v e
i n t h e form of an amendment.
Mr. A."I. McCosh d e c l i n e d t o put a n amendment i n t h i s
form b u t p o i n t e d out t h a t i n any Government scheme t h e r e would
a t l e a s t be s a f e g u a r d s f o r t h e r i g h t s of m i n o r i t i e s which were
n o t p r o v i d e d f o r i n t h o p r e s e n t scheme.
Mr. K a y s e r r e f e r r e d t o t h e q u e s t i o n of l e v y and s t a t e d
t h a t a l e v y b a s e d on wages would o p e r a t e i n e q u i t a b l y i n t h o
s p e c i a l s t e e l t r a d e and w h i l e s u p p o r t i n g t h e scheme i n p r i n c i p l e
he must r e s e r v e t h e r i g h t of t h e members of t h e s p e c i a l q u a l i t y
s t o o l i n d u s t r y t o s u g g e s t v a r i a t i o n s i n t h e b a s i s of l e v y .
F u r t h e r , h e t h o u g h t t h e p e r i o d of t e n y e a r s s u g g e s t e d was t o o
l o n g and would l i k e f u r t h e r c o n s i d e r a t i o n g i v e n t o t h i s p o i n t .
The c h a i r m a n a g a i n confirmed t h a t ample o p p o r t u n i t y would bo
g i v e n s u b s e q u e n t l y f o r f u r t h e r c o n s i d e r a t i o n of t h e s e p o i n t s .
He was c o n c e r n e d a t t h e moment t o o b t a i n a c c e p t a n c e of t h e
p r i n c i p l e s of t h e scheme.
Mr. G o o r g o ' s r e s o l u t i o n amended a s
follows:
" T h i s N a t i o n a l Commit t o e a c c e p t s t h e Memorandum
d a t e d F e b r u a r y 2End and t h e g e n e r a l o u t l i n e of t h e
scheme r e f e r r e d t o t h e r e i n , a n d d i r e c t s t h a t i t be
forwarded f o r t h w i t h t o the Import Duties Advisory
Committee, t o g e t h e r w i t h a s t a t e m e n t of t h e measure
of s u p p o r t a c c o r d e d t o i t b y t h i s C o m m i t t e e , t h i s
a c t i o n b e i n g i n f u l f i l m e n t of t h e u n d e r t a k i n g g i v e n
by t h e E x e c u t i v e Committee on O c t o b e r 1 0 t h l a s t t o
t h e Chairman of t h e Import D u t i e s A d v i s o r y C o m m i t t e e . "
was t h e n a g a i n r e e d t o t h e m e e t i n g and c a r r i e d by t w e n t y - f i v e
v o t e s t o f i v e d i s s e n t i e n t s , b e i n g M e s s r s . E . J . F o x , W. Gray,
C. E . L l o y d , A. K. McCosh and D. N. T u r n e r .
M e s s r s . Fox and
T u r n e r i n t i m a t e d t h a t t h e i r o p p o s i t i o n was o n l v d i r e c t e d t o
s e c u r e the" e x c l u s i o n of t h e f o u n d r y p i g i r o n i n d u s t r y .
They
d i d n o t o b j e c t t o t h e p r o p o s e d scheme a s one f o r t h e r e o r g a n i ­
s a t i o n of t h e s t e e l i n d u s t r y .
The Chairman s t a t e d t h a t he
had m e s s a g e s from S i r W i l l i a m F i r t h s u p p o r t i n g t h e scheme and
from Mr. G. H. J o h n s o n o p p o s i n g i t .
2 0 . CIRCULATION OF THE SCHEME.
The Committee a u t h o r i s e d
t h e c i r c u l a t i o n of t h e scheme t o members of t h o s e a s s o c i a t i o n s
who, i t was h o p e d , would form t h e membership of t h e C o r p o r a ­
tion.
The scheme h a v i n g been a c c e p t e d by t h e Committee would
a t t h i s s t a g e be sent for information o n l y .
I t should con­
t i n u e t o be t r e a t e d a s c o n f i d e n t i a l and n o t f o r p u b l i c a t i o n .
The scheme, a s m o d i f i e d , s h o u l d f o r t h w i t h be s u b m i t t e d t o t h e
I m p o r t D u t i e s A d v i s o r y Committee and when t h e i r v i e w s on t h e
scheme h a d b e e n o b t a i n e d a f u r t h e r m e e t i n g of t h e Committee
would be c a l l e d t o c o n s i d e r t h e m .
ENCLOSURE
VI
Private & Confidential.
"
R E S U M E 0?
E V E N T S FROM J U N E
N.F.I .S.M.
16-3-33.
3rd
1932
IN
C O N N E C T I O N W I T H THE
N A T I O N A L C0I.IT/1ITTEB
G I V E N BY MR.
CHAS.
MITCHELL,
CHAIRMAN,
N A T I O N A L C O M M I T T E E ON F R I D A Y ,
A T A M E E T I N G O F THE
MARCH 1 0 t h ,
1955.
The d e l i b e r a t i o n s of t h i s Committee have now r e a c h e d
the c o n c l u s i o n of a d e f i n i t e s t a g e , and i t may be w e l l t o r e ­
mind the members, and p a r t i c u l a r l y t h o s e who have o n l y r e ­
c e n t l y b e e n a p p o i n t e d t o t h i s Committee - (whose a p p o i n t m e n t
we welcome as r e p r e s e n t i n g i n a l a r g e d e g r e e t h e consuming
t r a d e s , w i t h whom we must e s t a b l i s h t h e c l o s e s t c o - o p e r a t i o n
i n o u r m u t u a l i n t e r e s t s ) - of t h e g e n e s i s of t h e Committee
and the Scheme w h i c h i s s u b m i t t e d f o r y o u r c o n s i d e r a t i o n t h i s
morning.
On 3rd J u n e 1 9 3 2 , a m e e t i n g of r e p r e s e n t a t i v e s of
t h e i r o n and s t e e l i n d u s t r y was c a l l e d by S i r George May, a s
Chairman of t h e I m p o r t D u t i e s A d v i s o r y C o m m i t t e e , and a t t h a t
m e e t i n g S i r George May announced tho i n t e n t i o n of t h a t
Committee t o a p p o i n t a c o m m i t t e e o f t h e i n d u s t r y to c o n s i d e r
what form o f o r g a n i s a t i o n c o u l d be a p p l i e d t o t h e i n d u s t r y
v/hich vrould implement t h e p r o m i s e s which had b e e n made on b e ­
h a l f of tho i n d u s t r y by i t s l e a d e r s a t v a r i o u s t i m e s t o
M i n i s t e r s and r e p r e s e n t a t i v e Committees of t h e C a b i n e t and
t h e v a r i o u s Government Committees t h a t have b e e n a p p o i n t e d
t o c o n s i d e r t h e p r o b l e m s of t h e i n d u s t r y .
The q u e s t i o n h a s sometimes b e e n asked why c o n d i t i o n s
s h o u l d be a t t a c h e d to tho g r a n t i n g of p r o t e c t i o n which was
n e c e s s a r y t o s e c u r e t h e s u r v i v a l of t h e i n d u s t r y ;
but p r o ­
t e c t i o n c o u l d o n l y be g r a n t e d w i t h t h o c o n s e n t of P a r l i a m e n t
e n d o r s e d b y p u b l i c o p i n i o n , and s i n c e t h i s was a b a s i c i n d u s t r y
on which i t may be b r o a d l y s t a t e d t h a t a l l o t h e r i n d u s t r i e s
u l t i m a t e l y d e p e n d , and c o n s e q u e n t l y a l a r g e p r o p o r t i o n of o u r
e x p o r t t r a d e , and s i n c e i t a l s o a f f e c t s m a t e r i a l l y t h e i n t e r ­
e s t s of t h e i n d i v i d u a l consumer i n t h e home m a r k e t , i t was
r e c o g n i s e d t h a t t h e i n d u s t r y m u s t be in a p o s i t i o n t o g i v e
a s s u r a n c e s t h a t t h e a p p l i c a t i o n of p r o t e c t i o n would r e s u l t i n
national advantage.
",Vhile t h i s N a t i o n a l Committee was i n f a c t a p p o i n t e d by
t h e I m p o r t D u t i e s A d v i s o r y Committee i n d i s c h a r g e of i t s r e s ­
p o n s i b i l i t y t o c o n s i d e r t h e p u b l i c i n t e r e s t i n any a d v i c e i t
m i g h t t e n d e r t o H i s M a j e s t y ' s Government, i t w i l l b e a g r e e d
t h a t had t h e i n d u s t r y a p p o i n t e d t h e Committee i t must have
been c o n s t i t u t e d o f t h e same p e r s o n n e l .
On 7 t h J u n e 1 9 3 2 , f o u r d a y s a f t e r a p p o i n t m e n t , t h e
N a t i o n a l Committee mot, and e l e c t e d a n E x e c u t i v e Committee and
four Regional Committoes.
Terms of R e f e r e n c e were a p p r o v e d
by the N a t i o n a l Committee on 2 0 t h J u l y .
On 2 8 t h S e p t e m b e r ,
Committee and a p p r o v e d t o be
A d v i s o r y C o m m i t t e e , and t h i s
p r e s e n t e d as a supplement to
a R e p o r t was p r e s e n t e d t o t h i s
forwarded to the Import D u t i e s
R e p o r t , i t w i l l bo remembered, was
t h e R e p o r t of t h e I m p o r t D u t i e s
9 0 0
O
Ay tJ
A d v i s o r y Committee t o the T r e a s u r y r e c o m m e n d i n g t h a t t h e D u t i e s
on i r o n and s t e e l p r o d u c t s s h o u l d be e x t e n d e d f o r a p e r i o d of
two y e a r s a s from O c t o b e r 2 6 t h .
On O c t o b e r 1 0 t h , a t a m e e t i n g of t h e N a t i o n a l E x e ­
c u t i v e C o m m i t t e e , S i r George May was p r e s e n t , when i t was
p o i n t e d o u t t o him t h a t t h e C o n t i n e n t was s t i l l s e n d i n g s t e e l
i n t o t h i s m a r k e t , t h e c h i e f r e a s o n f o r which was t h e u n c e r t a i n t y
a s t o the p e r i o d f o r which t h e D u t i e s would be a p p l i e d .
S i r George May u r g e d t h e i n d u s t r y t o make some p r o ­
p o s a l s on a Scheme embodying n a t i o n a l o r g a n i s a t i o n , b u t he was
d e s i r o u s t h a t t h e i n d u s t r y s h o u l d propound i t s own Scheme;
and w h i l e r e c o g n i s i n g t o t h e f u l l t h e d i f f i c u l t i e s o f t h e Com­
m i t t e e , he asked f o r an a s s u r a n c e t h a t t h e N a t i o n a l Committee
would i m m e d i a t e l y take s t e p s t o d e v i s e s u c h a scheme.
On t h i s
same d a t e ( O c t o b e r 1 0 t h ) t h e Committee u n a n i m o u s l y g a v e S i r
George May an a s s u r a n c e t h a t t h e y would p r o c e e d w i t h t h e p r e ­
p a r a t i o n of s u c h a scheme w i t h o u t d e l a y .
I was a s k e d , w i t h S i r W i l l i a m L a r k e , t o p r e p a r e a
s h o r t Memorandum s k e t c h i n g t h e o u t l i n e of s u c h a s c h e m e . I t was
s u g g e s t e d t h a t S i r A l f r e d H u r s t s h o u l d be c o n s u l t e d , a s he was
w i l l i n g t o l e n d a n y a s s i s t a n c e he m i g h t be a b l e t o r e n d e r i n
o r d e r t h a t t h e I m p o r t D u t i e s A d v i s o r y Committee m i g h t be f u l l y
aware o f b o t h the d i f f i c u l t i e s and t h e p r o g r e s s t h a t was b e i n g
made by t h e C o m m i t t e e .
On November 16th a Memorandum, which had p r e v i o u s l y
been a d o p t e d by t h e E x e c u t i v e Committee w i t h o u t d i s s e n t , was
s u b m i t t e d t o t h i s N a t i o n a l Committee and a d o p t e d i n t h e f o l l o w ­
ing terms:
"That t h e s t r u c t u r e o f t h e Scheme *e a c c e p t e d i n
p r i n c i p l e and t h a t t h e Sub-Committee r e s p o n s i b l e f o r i t s p r e ­
p a r a t i o n b e r e q u e s t e d t o d r a f t t h i s Scheme in g r e a t e r d e t a i l
f o r t h e c o n s i d e r a t i o n o f t h e E x e c u t i v e Committee i n t h e f i r s t
i n s t a n c e , and on a p p r o v a l by them t h e Scheme t o b e s u b m i t t e d
t o t h e N a t i o n a l Committee f o r a p p r o v a l or amendment b e f o r e
further action is taken".
Without r e f e r r i n g in d e t a i l to the i n t e r m e d i a t e s t a g e s ,
t h e Scheme a s now s u b m i t t e d t o you was s u b m i t t e d t o t h e
E x e c u t i v e Committee on F e b r u a r y 1 s t , a f t e r w h i c h amendments
were embodied a s a r e s u l t of t h e d i s c u s s i o n , and a t a f u r t h e r
m e e t i n g on F e b r u a r y 22nd, when i t was r e f e r r e d t o t h i s C o m m i t t e e ,
w i t h t h r e e d i s s e n t i e n t s , i n the following t e r m s :
"That t h i s
Scheme be r e f e r r e d t o the N a t i o n a l C o m m i t t e e , and recommended
f o r a c c e p t a n c e b y them, as p r o v i d i n g m a c h i n e r y whereby t h e
p r o g r e s s i v e o r g a n i s a t i o n o f the i n d u s t r y may be a c h i e v e d . "
I would omphasisG t h e t e r m s of t h a t R e s o l u t i o n a s
b e i n g a t e r s e b u t v e r y a d e q u a t e d e s c r i p t i o n of t h e Scheme
which you a r e now a s k e d t o c o n s i d e r .
I t does n o t i n any way
embody a p r i n c i p l e of c o n t r o l imposed from above on any s e c t i o n
or i n d i v i d u a l of tho i n d u s t r y , b u t i t i s d e s i g n e d t o p r o v i d e an
o r g a n i s a t i o n w i t h i n w h i c h , by p r o g r e s s i v e e v o l u t i o n , u n d e r t h e
c o n d i t i o n s o b t a i n i n g , an e v e r - i n c r e a s i n g d e g r e e of o r g a n i s e d
c o n t r o l o v e r t h e o p e r a t i o n s of t h e i n d u s t r y may be e x e r c i s e d
by t h o s e engaged in and r e s p o n s i b l e f o r i t .
I t i s on t h o s e
g r o u n d s t h a t the Schorao i s commended to you f o r , if p o s s i b l e ,
y o u r unanimous a d o p t i o n , e i t h e r i n i t s p r e s e n t o r some a g r e e d
amended f o r m .
The i m p o r t a n c e of u n a n i m i t y i n a m a t t e r of t h i s k i n d
c a n n o t be e x a g g e r a t e d , s i n c e t o r e n d e r any s u c h Scheme e f f e c ­
t i v e i t i s e s s e n t i a l t o have n o t o n l y a g e n e r a l a c c e p t a n c e of
i t s p r i n c i p l e s but a w i l l i n g n e s s to approach a l l d i f f i c u l t i e s
in connection with i t s r e a l i s a t i o n with a determination to
overcome them and r e n d e r t h e scheme s u c c e s s f u l .
So f a r , no a l t e r n a t i v e h a s b e e n s u g g e s t e d t o a Scheme
cf t h i s c h a r a c t e r , which now embodies t h e g r e a t e s t common mea­
s u r e of c o n s t r u c t i v e c r i t i c i s m which would r e t a i n t h e p r i n c i p l e s
which were u n a n i m o u s l y a c c e p t e d i n t h e f i r s t i n s t a n c e a s t h e
b a s i s f o r t h e Scheme.
While we - l e a s t o f a l l t h e Sub-Commit­
t e e who were r e s p o n s i b l e f o r t h e o r i g i n a l d r a f t - c o u l d l a y no
claim t o having provided for every p o s s i b l e contingency t h a t
m i g h t a r i s e , or f o r p e r f e c t i o n i n t h e Scheme i t s e l f , a s p r a c t i ­
c a l men we must r e a l i s e t h a t i n our own o r g a n i s a t i o n s and i n
t h e d e c i s i o n s we d a i l y t a k e , i t i s i m p o s s i b l e f o r u s t o do more
t h a n e x e r c i s e o u r judgment on t h e c o n d i t i o n s u n d e r which we a r e
w o r k i n g t o t h e b e s t of o u r a b i l i t y and t o a c c e p t t h e r i s k i n ­
volved.
But i n t h e c a s e of t h i s Scheme b e f o r e you t h e r i s k
h a s b e e n r e d u c e d t o a minimmj s i n c e what you a r e a s k e d t o do i s
t o p r o v i d e a C e n t r a l O r g a n i s a t i o n r o u n d which t h e o r g a n i s a t i o n
of t h e i n d u s t r y c a n p r o g r e s s i v e l y p r o c e e d by s e c t i o n s , e a c h
s e c t i o n r e t a i n i n g a l m o s t c o m p l e t e autonomy, a s i n d e e d d o e s e a c h
i n d i v i d u a l w o r k s , e x c e p t t h a t i t i s a s k e d t o conform t o a
n a t i o n a l p o l i c y i n r e g a r d t o p r o d u c t i o n and s a l e s .
But t h i s
p o l i c y w i l l be d e v i s e d by y o u r s e l v e s , and i s n n l y an e x t e n s i o n
of what h a s b e e n common p r a c t i c e i n many s e c t i o n s of t h e i n d u s ­
t r y f o r many y e a r s ; e x c e p t t h a t I s h o u l d p o i n t o u t t h a t a s s o ­
c i a t i o n s must be more e f f e c t i v e and c e r t a i n l y more s t a b l e t h a n
t h e y have b e e n i n r e c e n t t i m e s , which i m p l i e s t h a t a g r e e m e n t s
t o c o - o p e r a t e i n t h e s e v e r a l s p h e r e s of o u r a c t i v i t y must b e
f o r a s u b s t a n t i a l p e r i o d of t i m e , t o p r e v e n t t h e d i s t u r b a n c e
which t h e e x i s t e n c e of a g r e e m e n t s f o r s h o r t p e r i o d s i n e v i t a b l y
i n t r o d u c e s , s i n c e t h e y a r e no s o o n e r s i g n e d t h a n d i s c u s s i o n s
a r i s e a s t o t h e i r m o d i f i c a t i o n or e x t e n s i o n .
On t h e s u b j e c t of a m a l g a m a t i o n s , which many of u s
b e l i e v e t o be i n t h e b e s t i n t e r e s t s of t h e i n d u s t r y a s a whole
where economic a d v a n t a g e can be d e m o n s t r a t e d a s a r e s u l t , i t
i s c l a i m e d t h a t t h i s Scheme p r o v i d e s c o n d i t i o n s i n w h i c h atnal­
g a m a t i o n s w i l l be f a c i l i t a t e d w h e r e v e r c o n d i t i o n s r e n d e r them
desirable.
I n t h e c a s e of p l a n t which by t h e n a t u r a l e v o ­
l u t i o n of new p r o c e s s e s or commercial c o m p e t i t i o n may become
r e d u n d a n t , or a t a r e l a t i v e d i s a d v a n t a g e , t h e Scheme p r o v i d e s
t h e means whereby t h e i n d u s t r y c o u l d d e a l , by c o m p e n s a t i o n ,
p u r c h a s e o r o t h e r w i s e , w i t h any s u c h c o n d i t i o n t h a t might
a r i s e i n any p o r t or s e c t i o n of t h e i n d u s t r y , a l w a y s on t h e
u n d e r s t a n d i n g t h a t t h e s e movements a r e w i t h t h e c o n s e n t of t h e
p a r t i e s i n t e r e s t e d or concerned.
I n d e e d , t h e Scheme h a s
bean devised to s e c u r e t o the i n d u s t r y i n d e f i n i t e l y f o r the
f u t u r e t h e c o m p l e t e c o n t r o l of i t s own p o l i c y and d e s t i n i e s .
The a l t e r n a t i v e i s i n e v i t a b l y t h e i n t r o d u c t i o n of
e x t e r n a l i n t e r f e r e n c e and a g r e a t e r or l e s s m e a s u r e of e x t e r ­
n a l c o n t r o l , s u c h a s has a l r e a d y been e x p e r i e n c e d i n t h e c o a l
i n d u s t r y , and which you w i l l n o t e h a s b e e n v o i c e d i n c o n n e c t i o n
with t h i s industry.
T h i s i n d u s t r y i s e s s e n t i a l t o our n a t i o n a l
i n d u s t r i a l economy, and n* Government, w h a t e v e r i t s p o l i t i c a l
c o m p l e x i o n , c a n a f f o r d to a l l o w i t t * l a n g u i s h t o a p o i n t where
i t ceases t o s a t i s f y adequately our n a t i o n a l needs.
Only
t h i s l a s t week t h e Deputy Chairman of t h e Labour P a r t y s t a t e d
t h a t i f r e t u r n e d t o power t h e y would o r g a n i s e t h e i r o n and
s t e e l i n d u s t r y on n a t i o n a l l i n e s .
The p r e s e n t Government a r e d e s i r o u s of a v o i d i n g any
e x t e r n a l i n t e r f e r e n c e and have urged t h e i n d u s t r y to r e n d e r
even t h e s u g g e s t i o n of i t u n n e c e s s a r y by d e m o n s t r a t i n g i t s
c a p a c i t y t o manage i t s own a f f a i r s and o r g a n i s e i t s e l f on a
n a t i o n a l b a s i s so as t o s t r e n g t h e n i t s c o m p e t i t i v e power i n
t h e e x p o r t m a r k e t s of t h e w o r l d a n d t o s e c u r e t o t h e home
consumer, i n t h e words of S i r George May, ' t h e r i g h t m a t e r i a l
at the right price."
:,
I t h e r e f o r e u r g e t h e unanimous a c c e p t a n c e of t h i s scheme,
w i t h a l l t h e shortcomings which i t may p o s s e s s , s i n c e i t p r o ­
v i d e s t h e m e a n s , by p r o g r e s s i v e d e v e l o p m e n t , f o r e n s u r i n g t o
t h e i n d u s t r y a form of o r g a n i s a t i o n w h i c h , as I b e l i e v e , w i l l
s t r e n g t h e n i t s c o m p e t i t i v e power i n r e l a t i o n t o t h e r e s t of
t h e w o r l d , and a s u b s t a n t i a l improvement i n i t s p r e s e n t economic
p o s i t i o n i n t h e n e a r f u t u r e and a r e t u r n t o c o m p l e t e p r o s p e r i t y
when g e n e r a l w o r l d c o n d i t i o n s p e r m i t .
The a l t e r n a t i v e i s a c o n t i n u a n c e of p r e s e n t c o n d i t i o n s ,
t e n d i n g t o w a r d s f i n a n c i a l c o l l a p s e and c e r t a i n l y t o a c o n d i t i o n
w h i c h no Government would t o l e r a t e w i t h o u t making an a t t e m p t '
t o save the s i t u a t i o n .
T h i s would i n v o l v e f a r g r e a t e r d i f f i ­
c u l t i e s on t h e p a r t of t h o s e r e s p o n s i b l e f o r t h e d i r e c t i o n
a n d c o n t r o l of t h e i n d u s t r y t h a n any m e a s u r e s which i t i s now
p r o p o s e d t h e y s h o u l d t a k o a t t h e i r own u n f e t t e r e d d i s c r e t i o n .
Time h a s p r e s e n t e d t h e o p p o r t u n i t y .
Are we g o i n g t o
s i e z e i t or a l l o w i t t o go b y d e f a u l t ?
I am c o n f i d e n t t h a t
t h e r e i s n o - o n e o u t s i d e t h e i n d u s t r y who i s so c o m p e t e n t t o
c o n t r o l and d i r e c t i t s d e s t i n i e s a s t h o s e who h a v e b e e n r e s p o n s i
b l e f o r i t s p r o g r e s s and condxict h e r e t o f o r e , and I t h e r e f o r e
commend t h i s scheme t o you f o r y o u r unanimous a p p r o v a l , i n
o r d e r t h a t we may r e s t o r e c o n f i d e n c e w i t h i n and w i t h o u t t h e
i n d u s t r y i n i t s f u t u r e , and p o s s i b l y s e t an example t o o t h e r ­
i n d u s t r i e s which w i l l s t i m u l a t e i n d u s t r i a l r e c o v e r y t h r o u g h o u t
t h i s c o u n t r y t o o u r own l a s t i n g b e n e f i t .