(c) crown copyright
Catalogue Reference:CAB/24/216
Image Reference:0043
9 CA
ki
(Tills D o c u m e n t is the Property oi His Britannic Majesty's
(Printed for the Cabinet,
November,
fiover-oment.)
1930.)
MOST S E C R E T .
C P . 392 (30).
Copy No.
5 6
TO BE KEPT UNDER LOCK AND KEY.
It is requested that special care may be taker, t o
easure the secrecy o£ this document.
CABINET.
OBSERVATIONS
ON T H E LIBERAL
DEALING WITH
PROPOSALS FOR
UNEMPLOYMENT.
A t t h e P r i m e M i n i s t e r s r e q u e s t , t h e Ministers c o n c e r n e d h a v e furnished h i m
with t h e i r c o m m e n t s on t h e L i b e r a l p r o p o s a l s c o n t a i n e d i n t h e p a m p h l e t " H o w t o
Tackle U n e m p l o y m e n t " . I n a c c o r d a n c e w i t h t h e P r i m e Minister's i n s t r u c t i o n s ,
t h e Ministerial M e m o r a n d a , prefaced b y a n I n t r o d u c t o r y N o t e a n d S u m m a r y ,
p r e p a r e d u n d e r t h e direction of t h e L o r d P r i v y Seal, a r e n o w circulated t o
the Cabinet.
2,
WHITEHALL
GARDENS,
22nd November,
S.W.1.
1930.
Observations on the Liberal Proposals
for dealing with Unemployment.
CONTENTS.
Page
Part I.—Introduction and Summary.
Section 1.—Introduction
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Section 2.—Summary
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Part n.—Suggested General Remedies.
Section 1.—Industry's Part
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National Conference
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Costs of Distribution
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Section 2.—The Bankers' Part
Section 3.—The State's Part
National Expenditure . .
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, Local Government Expenditure
..
Alleviation of the Burden of National D e b t
Relief of Taxation on Enterprise
..
Trade Facilities
Export Credits
Empire Development . .
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Dominions
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Empire Marketing Board
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Colonies
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Industrial Invention and Research
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Trade Statistics . .
. . . .
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Standardisation . .
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Other State Action
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Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Part III.—Agriculture.
1.—Intrjjduction
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2.—The Family Farm Scheme
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3.—Credit Facilities . .
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4.—Marketing . .
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5.—The Quota Plan . .
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6.—Increasing Consumption of British Foods
7.—Rail Transport
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8.—Road Transport . .
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9.—Docks and Harbours
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10.—Fishery Harbours in Scotland . .
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11.—Liberal Proposals and Scotland
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. . 4 3
46
54
54
55
55
. . 56
58
58
60
. . 61
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82
Part VI.—Finance of the Liberal Proposals..
(1848 C)
100
11/30
63
64
64
67
67
68
69
70
70
71
72
72
73
73
74
74
76
77
78
79
Part V . - L a b o u r Supply
Appendix I.—The Mellon Institute . .
..
..
Appendix II.—Finance of Agricultural Proposals . .
Appendix III.—Electricity Supply Schemes . .
..
5
8
16
16
16
18
20
20
23
24
24
26
28
30
30
30
31
32
37
38
40
Part IV.—Emergency Works of Development.
Section 1.—Roads and Bridges
..
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Scale of Expenditure
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Suggested Expansion of Government Programme
Employment Aspect of Proposals
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N e w Arterial Roads
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Unclassified Roads
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Weak Bridges
Level Crossings . .
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Site Values
Section 2.—Regional Planning . .
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Garden Cities
Satellite Towns . .
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Site Values
Scottish Regional Development
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Section 3.—Telephone Development . .
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Expansion of Construction Programme . . .
Sales Organisation
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New Public Corporation. .
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Section 4.—Electrical Development . .
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Section 5.—Docks and Harbours
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84
8\
. . 85-'
. 9 1
PART I.
Introduction; and Summary of Ministerial
Comments.
(Prepared
under
the direction
of the Lord
Privy
Seal.)
SECTION 1.—INTRODUCTION.
1. The Liberal Report opens with an " Analysis of the Present
Unemployment Situation " which may be accepted in its broad
outline as a reasonable statement of the position. There is room,
of course, for differences of opinion as to the emphasis that should
be laid on different factors, and writers who approached the
subject with a different political or economic outlook would
doubtless distribute the emphasis differently. But in the main,
this section of the Report is written in an objective spirit. Each
of the various factors upon which stress is laid has undoubtedly
contributed in some degree to our present difficulties; and no
factor of obvious importance has been omitted. The only
comments which are called for upon this section relate therefore
to matters of comparative detail.
2. A point which is perhaps rather more than one of detail
occurs at the outset of the analysis. In dividing the present
unemployment figures into three categories, described respectively
as ( 1 ) normal unemployment; (2) cyclical unemployment, and
(3) special unemployment (representing what has become known
as the " hard core " of the problem), the Report almost certainly
underestimates the magnitude of the first category, and, partly
as a result of this, seriously overestimates the magnitude of the
third. The " normal unemployment " is computed at " more
than a quarter of a million of those on the register." It is
most unlikely, however, under the conditions which exist to-day
as regards unemployment insurance and the registration of
persons as unemployed, that the total Live Register figure
would fall nearly as low as a quarter of a million even if our
special industrial difficulties were overcome and active trade
conditions were restored. It has been estimated (U.P.(30) 1 1 )
that the minimum Live Register figure under existing conditions
as regards unemployment benefit, would not, even in years of
good trade, average less than 690,000 for any year.
3. Having computed the " normal unemployment" at more
than a quarter of a million, and having put on one side as
" cyclical unemployment " the increase that has taken place
in the past twelve months, the Liberal Report takes " from three­
quarters of a million up to a million " as the measure of " special
unemployment'' that remains. Indeed, a little later in the Report,
the estimate hardens into the selection of the higher figure, and
we are told that " the really grave problem so far as Great Britain
is concerned is the long-continued dead weight of unemployment
approaching a million falling under the third heading." In view
of the fact that in recent years the total Live Register figure,
including the " normal" element, has on two occasions fallen
slightly below a million, it is evident that this is an overstatement.
After every allowance is made for " normal unemployment," the
core of long-continued unemployment that remains is undoubtedly
a real and formidable phenomenon ; but its order of magnitude is
probably better indicated by a figure of half a million than by
one of a million persons.
4. Similarly the picture which is drawn in the Report of a
relative stagnation, as compared with other countries, of pro­
duction in Great Britain during recent years is darker than is
justified b y the facts.
T h e R e p o r t r e f e r s t o t h e i n d i c e s of
p r o d u c t i o n i s s u e d b y t h e E c o n o m i c a n d F i n a n c i a l S e c t i o n of t h e
L e a g u e of N a t i o n s a s s h o w i n g b r o a d l y " t h a t w h i l s t f r o m 1 9 2 4 t o
1929 production h a s increased in t h e U n i t e d K i n g d o m b y r a t h e r
l e s s t h a n 12 p e r c e n t . , i n t h e U n i t e d S t a t e s i t h a s i n c r e a s e d b y
some 24 per cent., in France b y 27£ per cent., in G e r m a n y b y over
4 7 p e r c e n t . , a n d i n C a n a d a b y n e a r l y 6 6 p e r c e n t . " T h e r e is n o
r e a s o n t o q u e s t i o n t h e s e f i g u r e s , b u t t h e s e l e c t i o n of 1 9 2 4 a s t h e
b a s e y e a r g i v e s a n u n d u l y u n f a v o u r a b l e i m p r e s s i o n of t h e r e l a t i v e
p r o g r e s s of G r e a t B r i t a i n , p a r t i c u l a r l y a s c o m p a r e d w i t h t h e
U n i t e d S t a t e s . F o r , in 1924, t h e U n i t e d S t a t e s w a s u n d e r g o i n g
a m i n o r d e p r e s s i o n of t r a d e a n d c o n s e q u e n t c u r t a i l m e n t of p r o ­
duction which Great Britain escaped, mainly doubtless owing to
t h e l o w e x c h a n g e v a l u e of t h e p o u n d s t e r l i n g d u r i n g t h a t y e a r .
If 1 9 2 5 b e t a k e n a s t h e b a s e y e a r i n s t e a d of 1 9 2 4 , t h e p i c t u r e
p o r t r a y e d b y t h e L e a g u e of N a t i o n s i n d i c e s i s m a t e r i a l l y d i f f e r e n t .
T h i s c a n best b e s h o w n b y reproducing t h e following t a b l e from
t h e " M e m o r a n d u m on P r o d u c t i o n a n d T r a d e , " recently published
b y t h e E c o n o m i c a n d F i n a n c i a l S e c t i o n of t h e L e a g u e of N a t i o n s .
INDICES
OF
INDUSTRIAL
P R O D U C T I O N IN VARIOUS
1925 ^
Country.
A merica—
Canada
United States
Europe—
France
Germany
Poland
Sweden
Switzerland
United Kingdom
U.S.S.R
COUNTRIES.
100.
1926.
1927.
1928.
1929.
117
104
125
102
138
107
154
113
117
95
98
103
95
102
120
122
108
112
107
172
118
120
138
104
117
106
208
130
122
138
127
111
112
240
. —
141
5 . T h u s , if 1 9 2 5 b e t a k e n a s t h e b a s e , t h e r a t e of i n c r e a s e of
p r o d u c t i o n in G r e a t B r i t a i n u p t o 1929, t h o u g h m u c h less t h a n
t h a t of s o m e o t h e r c o u n t r i e s , w a s c o m p a r a b l e w i t h t h a t of t h e
United States and Switzerland.
Indeed, inasmuch as n o one
w o u l d c o n t e n d t h a t t h e i n d u s t r i a l p r o g r e s s of t h e t w o l a t t e r
c o u n t r i e s u p t o 1 9 2 9 w a s u n s a t i s f a c t o r y , t h e r a n g i n g of d i f f e r e n t
c o u n t r i e s a c c o r d i n g t o t h e figures i n t h e l a s t c o l u m n of t h i s t a b l e
i s c h i e f l y s i g n i f i c a n t as s u g g e s t i n g t h a t t h e p e r c e n t a g e r a t e of
i n c r e a s e of i n d u s t r i a l p r o d u c t i o n is a n u n s a f e f o u n d a t i o n f o r
sweeping generalizations.
6 . I t m a y b e w o r t h n o t i n g in t h i s c o n n e c t i o n t h a t if t h e c o m ­
p a r i s o n b e t w e e n p r o d u c t i o n in G r e a t B r i t a i n a n d t h e U n i t e d
S t a t e s is c a r r i e d i n t o t h e p r e s e n t y e a r , i t y i e l d s r e s u l t s w h i c h a r e
a c t u a l l y f a v o u r a b l e t o G r e a t B r i t a i n . F o r , whilst p r o d u c t i o n in
t h e U n i t e d S t a t e s d u r i n g t h e s e c o n d q u a r t e r of 1 9 3 0 h a d f a l l e n
b a c k t o t h e l e v e l of 1 9 2 5 , p r o d u c t i o n i n G r e a t B r i t a i n d u r i n g t h e
s a m e q u a r t e r w a s still 2 p e r cent, a b o v e t h e 1925 level.
7 . T h e e s s e n t i a l t r o u b l e of B r i t i s h p o s t - w a r e c o n o m i c life h a s
b e e n a s e r i o u s l o s s of e x p o r t m a r k e t s j y s o m e of o u r p r i n c i p a l
i n d u s t r i e s r a t h e r t h a n a g e n e r a l s t a g n a t i o n of p r o d u c t i o n a s a
whole.
T h o u g h prior t o t h e present world s l u m p our export
t r a d e as a whole was growing steadily year b y year, it never
r e g a i n e d i t s p r e - w a r v o l u m e . I t is p r o b a b l e , h o w e v e r , t h a t t h e
L i b e r a l R e p o r t o v e r - e s t i m a t e s t h e e x t e n t of t h e d e c l i n e s i n c e p r e ­
w a r d a y s . T t i e figure f o r 1 9 2 9 i s p r o b a b l y n e a r e r 9 0 p e r c e n t ,
t h a n 8 3 p e r c e n t , of t h a t f o r 1 9 1 3 .
(See n o t e i n B a l f o u r
R e p o r t o n e f f e c t s of c h a n g e s of q u a l i t y o n t h e figure a s c r u d e l y
calculated.)
I t m u s t b e r e m e m b e r e d , moreover, t h a t 1913 w a s
a n exceptionally good y e a r ; t h o u g h p e r h a p s t h e s a m e m a y be
s a i d , i n r e l a t i o n t o p r e - w a r s t a n d a r d s , of 1 9 2 9 ,
8 . I t is a d m i t t e d i n t h e L i b e r a l R e p o r t t h a t t h e s e r i o u s d e c l i n e
in t r a d e a n d e m p l o y m e n t , w h i c h h a s o c c u r r e d a s t h e r e s u l t of t h e
w o r l d d e p r e s s i o n , " i s n o e v i d e n c e of a f u r t h e r s e r i o u s r e l a t i v e
f a l l i n g off o n o u r p a r t . " B u t t h e s u g g e s t i o n is m a d e t h a t o u r c o m ­
petitors are likely t o adjust their costs m o r e quickly a n d m o r e
completely than we to the altered conditions, and accordingly to
e m e r g e from t h e d e p r e s s i o n in a s t r o n g e r r e l a t i v e p o s i t i o n .
This
is c e r t a i n l y a p o s s i b i l i t y w h i c h w e c a n n o t a f f o r d t o d i s r e g a r d .
T h e r e is a s y e t , h o w e v e r , n o e v i d e n c e t h a t o u r e x p o r t t r a d e i s
w e a t h e r i n g t h e d e p r e s s i o n a n y w o r s e t h a n t h a t of m o s t o t h e r
c o u n t r i e s , a n d t h e f o l l o w i n g figures r e l a t i n g t o t h e l a s t t h r e e
available m o n t h s are to some extent reassuring : —
E X P O R T S OF C E R T A I N C O U N T R I E S I N /
Country.
U.S.A. . . .
.U.K.
Germany
France
..
..
Canada
Italy (two months)
Japan
Czecho-Slovakia
Sweden
STERLING.
June, July,
August, 1929.
June, July,
August, 1930.
Per cent.
Fall.
£ million.
237-3
179-6
154-7
100-1
63-8
24-5
51-8
30-6
28-3
/ million.
173-6
136-6
135-8
80-5
46-1
18-1
34-3
22-4
22-9
26-8
24-0
15-4
19-6
27-7
26-1
33-8
26-9
19-0
T h u s , so far a t least, o u r e x p o r t s h a v e n o t b e e n m o r e seriously
a f f e c t e d t h a n t h o s e of s e v e r a l o t h e r c o u n t r i e s , i n c l u d i n g n o t a b l y
J a p a n and the United States.
9 . I n d i a g n o s i n g t h e c a u s e s of o u r u n s a t i s f a c t o r y p o s i t i o n , t h e
R e p o r t l a y s s t r e s s o n t h e i n j u r y d o n e t o t h e c o m p e t i t i v e p o w e r of
B r i t i s h - i n d u s t r y , i n t h e f a c e of a f a l l i n g w o r l d p r i c e - l e v e l , b y t h e
i n e l a s t i c i t y of " t h e f a c t o r s a f f e c t i n g B r i t i s h c o s t s of p r o d u c t i o n . "
I t c a l l s a t t e n t i o n , i n p a r t i c u l a r , t o t h e h e a v y b u r d e n of t h e i n t e r n a l
national debt charge which Great Britain has to carry, t o the large
a n d g r o w i n g e x p e n d i t u r e o n social services, t o " less elastic t r a d e
union wage rates " and to trade union restrictions and demarcation
rules. I t asserts t h a t there h a s been in recent years, as t h e result
of t h e i n c r e a s e i n t h e v a l u e of m o n e y , " a g r e a t i n c r e a s e n o t o n l y
i n r e a l fixed c a p i t a l c h a r g e s , b u t i n r e a l t a x a t i o n , q u i t e i n d e p e n ­
d e n t l y of a n y i n c r e a s e d s o c i a l e x p e n d i t u r e " ; a n d t h a t " a n o t h e r
c o n s e q u e n c e of d e f l a t i o n h a s b e e n a f u r t h e r a d d i t i o n t o o u r b u r d e n
of r e a l w a g e s . " T h i s d i a g n o s i s l e a d s u p t o t h e g e n e r a l c o n c l u s i o n
t h a t " t h e p r i n c i p a l c a u s e s of t h e c o n t i n u a n c e of t h e ' r e f r a c t o r y
m i l l i o n ' of u n e m p l o y e d a r e t o b e f o u n d i n t h e f a c t t h a t w e a r e
s e e k i n g t o e n s u r e t o t h e n a t i o n a s t a n d a r d of life h i g h e r t h a n o u r
p r e s e n t r e l a t i v e n a t i o n a l effort a n d efficiency j u s t i f y .
10. N o w i t i s q u i t e t r u e t h a t G r e a t B r i t a i n h a s t o c a r r y a
h e a v i e r b u r d e n of fixed m o n e y c h a r g e s , s u c h a s i n t e r e s t o n t h e
n a t i o n a l d e b t , t h a n m o s t of h e r c o m p e t i t o r s ; a n d i t i s f u r t h e r t r u e
t h a t e v e r y fall in t h e price-level t e n d s t o i n c r e a s e t h e r e a l b u r d e n
of t h e s e c h a r g e s , a n d a l s o t o m a k e i t m o r e difficult for i n d u s t r y t o
p a y w a g e s a t t h e e x i s t i n g l e v e l i n t e r m s of m o n e y . N o n e t h e l e s s ,
so far a s t h e p o s i t i o n b e f o r e t h e w o r l d s l u m p is c o n c e r n e d , t h e
p i c t u r e p o r t r a y e d in t h e L i b e r a l R e p o r t , a p i c t u r e of a s t e a d y
c r i p p l i n g i n c r e a s e i n t h e r e a l b u r d e n of s u c h f a c t o r s a s t h e f o r e ­
g o i n g , i s d e c i d e d l y o u t of f o c u s . A s h a s b e e n p o i n t e d o u t a b o v e ,
t h e r e w a s a c o n s i d e r a b l e increase b e t w e e n 1924 a n d 1929 i n t h e
t o t a l n a t i o n a l p r o d u c t i o n ; s o t h a t , d e s p i t e t h e fall i n t h e p r i c e ­
level, i t is p r o b a b l e t h a t t h e t o t a l n a t i o n a l i n c o m e , a s m e a s u r e d
in m o n e y , i n c r e a s e d r a t h e r t h a n d i m i n i s h e d b e t w e e n t h e s e y e a r s .
The interest charge on t h e national debt did not change appreciably
d u r i n g t h i s p e r i o d , w h i l e t h e t o t a l a m o u n t of d i r e c t t a x a t i o n
d e c r e a s e d . T h u s , t h o u g h i t i s t r u e t h a t t h e r e a l i n c o m e s of t h e
rentier a n d t h e w a g e - e a r n e r w e r e i n c r e a s i n g , t h e r e i s n o e v i d e n c e
t h a t , u p t o t h e w o r l d s l u m p , e i t h e r t h e rentier o r t h e w a g e - e a r n e r
w a s t e n d i n g t o e n c r o a c h o n t h e i n c o m e s of o t h e r c l a s s e s of t h e
community.
1 1 . E v e n a s r e g a r d s t h e i n c r e a s e i n t h e r e a l v a l u e of w h a t t h e
rentier
receives, t h e Liberal R e p o r t overstates t h e case.
It
declares t h a t
" i n t e r e s t o n W a r L o a n w i t n a b u y i n g p o w e r of £ 1 i n t e r m s
of t h e a v e r a g e c o s t of l i v i n g of 1 9 1 7 - 2 0 , is w o r t h s o m e
£1 6s. 8d. o n t h e a v e r a g e of 1 9 3 0 p r i c e s . C o n v e r s e l y , £ 1 , 0 0 0
l e n t i n t h e f o r m e r p e r i o d i s w o r t h t o - d a y i n t e r m s of r e a l
v a l u e s s o m e £ 1 , 3 3 3 ; i n o t h e r w o r d s , t h e r e a l b u r d e n of
interest h a s increased from s a y 5 p e r cent, to 6f per cent."
T h i s i m p l i e s t h a t t h e a v e r a g e c o s t of l i v i n g f o r t h e p e r i o d 1 9 1 7 - 2 0
i s a f a i r m e a s u r e of t h e a v e r a g e v a l u e of m o n e y a t w h i c h t h e
national debt was borrowed.
B u t t h i s is v e r y f a r f r o m b e i n g
true.
A n i m p o r t a n t p a r t of t h e d e b t w a s r a i s e d b e f o r e 1 9 1 7 ,
a n d a l m o s t a l l of i t h a d b e e n r a i s e d b e f o r e t h e l a t t e r p a r t of
1 9 1 9 , w h e n t h e c o s t of l i v i n g b e g a n t o r i s e r a p i d l y t o a v e r y h i g h
l e v e l . T h e a v e r a g e c o s t of l i v i n g ( a s m e a s u r e d b y t h e M i n i s t r y
of L a b o u r i n d e x n u m b e r ) a t w h i c h t h e d e b t w a s b o r r o w e d w a s
p e r h a p s 10 p e r c e n t , h i g h e r (not o n e - t h i r d h i g h e r ) t h a n t h a t
n o w prevailing.
M o r e o v e r , t h i s i n d e x n u m b e r is d e s i g n e d t o
m e a s u r e c h a n g e s i n t h e c o s t of l i v i n g of t h e w o r k i n g c l a s s f a m i l y
a n d it w o u l d n o t b e r i g h t t o c o n c l u d e t h a t t h e i n c r e a s e i n t h e v a l u e
of m o n e y t o s u b s c r i b e r s t o w a r l o a n s h a s b e e n , o v e r t h e p e r i o d in
q u e s t i o n , a s m u c h a s 10 p e r c e n t .
12. A s r e g a r d s w a g e s , t h e L i b e r a l R e p o r t c o n t a i n s t h e f ollowing
passage :—
" Our manufacturers h a v e been compelled again and again
t o r e d u c e t h e i r selling prices whilst in recent years, on t h e
average, wages have remained practically stationary.
From
1 9 2 4 t o d a t e , P r o f e s s o r B o w l e y ' s W a g e I n d e x s h o w s a f a l l of
o n l y 1 - 6 p e r c e n t . D u r i n g t h e s a m e p e r i o d t h e c o s t of l i v i n g
h a s fallen 10 p e r c e n t , w i t h t h e r e s u l t t h a t r e a l w a g e s in t e r m s
of p u r c h a s i n g p o w e r h a v e i n c r e a s e d b y o v e r 8 p e r c e n t .
This
i s o n t o p of t h e i n c r e a s e o v e r p r e - w a r w h i c h h a d a l r e a d y
taken place."
T h e s e figures a r e c o r r e c t , so far a s t h e y g o ; b u t t h e y c r e a t e a
m i s l e a d i n g i m p r e s s i o n b y f a i l i n g t o t a k e a c c o u n t of t h e v e r y
m a t e r i a l increase in o u t p u t p e r h e a d which h a s t a k e n place during
the same period. Actually industrial output per head was about
12 p e r c e n t , h i g h e r i n t h e f i r s t h a l f of t h e p r e s e n t y e a r t h a n i n 1 9 2 4 .
T h i s i n c r e a s e i n o u t p u t i s , of c o u r s e , l a r g e l y a t t r i b u t a b l e t o
i m p r o v e d m e t h o d s of p r o d u c t i o n , i n v o l v i n g t h e u s e of a d d i t i o n a l
c a p i t a l w h i c h h a s t o b e r e m u n e r a t e d o u t of t h e i n c r e a s e d p r o d u c t .
B u t , a f t e r a l l o w i n g a r e a s o n a b l e r e m u n e r a t i o n for c a p i t a l , i t
d o e s n o t a p p e a r t h a t t h e i n c r e a s e i n r e a l w a g e s f r o m 1924 t o 1929
o u t s t r i p p e d t h e g r o w t h of p r o d u c t i v i t y b y v e r y m u c h , if a t a l l .
13. T h u s , t h e g e n e r a l c o n t e n t i o n in t h e L i b e r a l R e p o r t t h a t
t h e f a l l i n g t e n d e n c y of t h e p r i c e - l e v e l h a s s e r v e d t o i n c r e a s e t h e
r e a l b u r d e n w h i c h i n d u s t r y h a s t o c a r r y i n r e s p e c t of d e b t c h a r g e s ,
t a x a t i o n , w a g e s , etc., h a s m u c h less force in relation to t h e p e r i o d
f r o m 1 9 2 4 - 2 9 t h a n i t h a s i n r e l a t i o n t o t h e c a t a s t r o p h i c f a l l of
p r i c e s w h i c h h a s t a k e n p l a c e i n t h e p a s t y e a r . If t h e w h o l e s a l e
p r i c e s of s t a p l e c o m m o d i t i e s r e m a i n a t a n y t h i n g l i k e t h e i r p r e s e n t
l e v e l , a n d if t h e p r i c e s of m a n u f a c t u r e d g o o d s h a v e t o b e l o w e r e d
t o restore equilibrium, t h e total national income, measured in
t e r m s of m o n e y , m u s t i n e v i t a b l y d e c l i n e . I n t h a t c a s e t h e r e a l
b u r d e n of d e b t i n t e r e s t , t h e s o c i a l s e r v i c e s a n d t a x a t i o n w i l l
u n d o u b t e d l y t e n d t o g r o w , a n d B r i t i s h i n d u s t r y m a y find it
difficult t o s u s t a i n m o n e y w a g e s a t t h e i r p r e s e n t level. T h e r e is
n o r e a s o n , t h e r e f o r e , t o d i s s e n t f r o m t h e e m p h a s i s w h i c h is l a i d
i n t h e R e p o r t o n t h e v i t a l i m p o r t a n c e t o G r e a t B r i t a i n of t h e
f u t u r e c o u r s e of w o r l d p r i c e s .
SECTION 2.—SUMMARY.
14. T h e p r o p o s a l s w h i c h Mr. L l o y d George m a k e s t o m e e t
t h e facts revealed b y his diagnosis have been exhaustively
considered b y the various Ministers concerned. Their observations,
f o l l o w i n g t h e s e q u e n c e of t h e L i b e r a l p r o p o s a l s , f o r m t h e b o d y
of t h i s d o c u m e n t . F o r t h e c o n v e n i e n c e of r e a d e r s t h e e n d e a v o u r
h a s been m a d e in t h e s u m m a r y below t o give a general conspectus
of t h e n a t u r e of M r . L l o y d G e o r g e ' s p r o p o s a l s a n d of t h e c o n t e n t
of M i n i s t e r s ' o b s e r v a t i o n s o n t h e m .
15. I t will b e n o t e d t h a t t h e a l t e r n a t i v e r e m e d i e s d i s c u s s e d
a n d r e j e c t e d b y Mr. L l o y d G e o r g e — n a m e l y , P r o t e c t i o n , a n d a
g e n e r a l l o w e r i n g of t h e s t a n d a r d of l i f e — a r e n o t d e a l t w i t h i n t h e
m e m o r a n d a w h i c h follow, a n d t h i s for o b v i o u s r e a s o n s .
Revival of Industry.
16. I n r e l a t i o n t o i n d u s t r y , M r . L l o y d G e o r g e f i n d s t h a t t h e
i m p e r a t i v e n e e d , w h i c h w i l l b e r e a d i l y a d m i t t e d o n a l l s i d e s , is
f o r a s h a r p r e d u c t i o n i n c o s t s of p r o d u c t i o n " t o b e b r o u g h t a b o u t
b y a g r e a t increase in o u r n a t i o n a l p r o d u c t i v e a n d m a r k e t i n g
efficiency."
T o t h i s e n d i n d u s t r y itself, t h e B a n k s a n d t h e
S t a t e m u s t all c o n t r i b u t e .
17. H e p r o p o s e s first, t h a t i n d u s t r y s h o u l d s e c u r e a 10 p e r c e n t ,
reduction in working costs, a n d t h a t , as a preliminary step to
c o n c e r t e d a c t i o n for t h i s p u r p o s e , t h e G o v e r n m e n t s h o u l d s u m m o n
a N a t i o n a l C o n f e r e n c e r e p r e s e n t a t i v e of a l l i n d u s t r i a l a n d c o m ­
m e r c i a l i n t e r e s t s . T h e M i n i s t e r of L a b o u r a n d t h e P r e s i d e n t of
t h e B o a r d of T r a d e a r e c o n v i n c e d t h a t s u c h a C o n f e r e n c e w o u l d
be unable to achieve a n y practical results.
It seems inevitable
t h a t i n t e r e s t w o u l d b e c e n t r e d o n p r o p o s i t i o n s of a g e n e r a l
a n d political character, a n d agreement on these
matters,
a s s u m i n g a g r e e m e n t t o b e p o s s i b l e , w o u l d c o n t r i b u t e l i t t l e , if
a n y t h i n g , t o a r e d u c t i o n of c o s t s i n i n d i v i d u a l i n d u s t r i e s .
The
Ministers consider t h a t each industry should separately u n d e r t a k e
its own internal re-adjustment.
T h e n e c e s s a r y m a c h i n e r y is
a l r e a d y in existence a n d in use a n d a N a t i o n a l Conference w o u l d
serve to retard rather t h a n accelerate progress.
18. M r . L l o y d G e o r g e s u g g e s t s t h a t d i s t r i b u t o r s a s w e l l a s
producers should be represented at the Conference since t h e
b e n e f i t of r e d u c e d p r o d u c t i o n c o s t s w i l l b e l a r g e l y d i s c o u n t e d i n
t h i s c o u n t r y if t h e c o s t s of d i s t r i b u t i o n r e m a i n t o o h i g h .
The
P r e s i d e n t of t h e B o a r d of T r a d e a g r e e s t h a t t h e c o s t of d i s t r i b u t i o n
m u s t t a k e a p r o m i n e n t place in a n y t r a d e review. T h e G o v e r n ­
m e n t h a s a p p l i e d itself v i g o r o u s l y t o t h i s p r o b l e m a n d h a s h a d
p r e p a r e d t h e C o n s u m e r s ' C o u n c i l Bill. T h e E c o n o m i c A d v i s o r y
C o u n c i l i s n o w e n g a g e d i n e n q u i r y i n t o t h e p r e s e n t s y s t e m of
m a r k e t i n g a n d d i s t r i b u t i n g c o n s u m a b l e c o m m o d i t i e s in t h e l i g h t
of t h e w i d e n i n g s p r e a d b e t w e e n t h e c o s t of l i v i n g i n d e x a n d t h e
wholesale price level.
19. T h e p a r t t h a t t h e B a n k s a r e t o p l a y in t h e r e g e n e r a t i o n
of i n d u s t r y i s o n l y l i g h t l y s k e t c h e d . T h e i r a i d i s t o b e e n l i s t e d
a n d t h e i r s e n s e of r e s p o n s i b i l i t y s t r e s s e d . I n a d d i t i o n t h e y a r e t o
be asked to institute a n e w banking organisation somewhat on
t h e l i n e s of t h e C o n t i n e n t a l I n d u s t r i a l B a n k s . T h e P r e s i d e n t of
t h e B o a r d of T r a d e p o i n t s o u t t h a t t h e w h o l e q u e s t i o n of t h e
r e l a t i o n b e t w e e n i n d u s t r y a n d f i n a n c e is a t p r e s e n t u n d e r c o n ­
sideration b y the MacMillan Committee, a n d t h a t a n y discussion
of t h e s e p a r t i c u l a r p r o p o s a l s m u s t b e of a p u r e l y t e n t a t i v e
character.
Subject t o this qualification, the Liberal criticisms
of t h e e x i s t i n g s y s t e m a p p e a r t o h i m t o b e u n f a i r .
20. T h e directions in w h i c h Mr. L l o y d George suggests t h a t
t h e S t a t e c a n assist are m a n y .
H e a d v o c a t e s (1) A r e d u c t i o n b y
10 p e r c e n t , i n S t a t e e x p e n d i t u r e ; (2) A n a l l e v i a t i o n i n t h e b u r d e n
of t h e N a t i o n a l D e b t ; (3) T h e g r a n t i n g of r e l i e f of t a x a t i o n o n
e n t e r p r i s e ; (4) T h e r e s t o r a t i o n of T r a d e F a c i l i t i e s ; (5) T h e
e x p a n s i o n of t h e E x p o r t C r e d i t s G u a r a n t e e S c h e m e ; (6) T h e
d e v e l o p m e n t of t h e E m p i r e ; (7) T h e a s s i s t a n c e of i n d u s t r i a l
i n v e n t i o n a n d r e s e a r c h ; (8) T h e e n c o u r a g e m e n t i n c e r t a i n d i r e c ­
t i o n s of c o n c e r t e d a c t i o n b y i n d u s t r i a l i s t s .
2 1 . (1) W i t h a v i e w t o o b t a i n i n g a d v i c e a s t o t h e m a n n e r i n
w h i c h t h e c o n t e m p l a t e d r e d u c t i o n in s t a t e e x p e n d i t u r e — e s t i m a t e d
at £48 millions—can best be achieved Mr. Lloyd George proposes
(1848C)
c
t h e a p p o i n t m e n t of a n e w G e d d e s C o m m i t t e e . W h i l e i t is c o m m o n
g r o u n d t h a t a r e d u c t i o n of S t a t e e x p e n d i t u r e i s u r g e n t l y n e e d e d ,
t h e C h a n c e l l o r of t h e E x c h e q u e r
finds himself u n a b l e to
a c c e p t e i t h e r t h e s u g g e s t i o n of a G e d d e s C o m m i t t e e o r t h e
p o s s i b i l i t y of a c u t i n e x p e n d i t u r e of t h e o r d e r of £48 m i l l i o n s .
H e p o i n t s o u t t h a t M r . L l o y d G e o r g e ' s c a l c u l a t i o n of p o s s i b l e
s a v i n g s is q u i t e m i s t a k e n , a n d h e r e f e r s t o t h e v e r y s m a l l
e c o n o m i e s i n t h e r e g i o n of s o c i a l s e r v i c e s a c c e p t e d b y M r . L l o y d
G e o r g e himself o n t h e G e d d e s r e p o r t in 1922, w h e n t h e o p p o r ­
t u n i t i e s for e c o n o m y w e r e far g r e a t e r .
I n so f a r a s
the
a n t i c i p a t e d reductions are t o b e s o u g h t in a d m i n i s t r a t i v e costs,
the most ruthless pruning could not produce more than a small
f r a c t i o n of M r . L l o y d G e o r g e ' s t o t a l . T h e C h a n c e l l o r a g r e e s w i t h
t h e view t h a t administrative costs can a n d m u s t be reduced,
b u t h e i s of o p i n i o n t h a t p r o g r e s s i n t h a t d i r e c t i o n c a n b e s t
b e a c h i e v e d b y t h o s e r e s p o n s i b l e f o r t h e v a r i o u s b r a n c h e s of
Government business.
If a r e v e r s a l o r m o d i f i c a t i o n of p o l i c y is
a l s o c o n t e m p l a t e d , i n d i r e c t i o n s s u c h a s t h o s e of s o c i a l i n s u r a n c e ,
h o u s i n g a n d e d u c a t i o n , t h e n i t is, i n t h e C h a n c e l l o r s s u b m i s s i o n ,
i n c o n c e i v a b l e t h a t t h e t a s k of r e v i e w s h o u l d b e e n t r u s t e d t o a n
outside body such as that proposed.
2 2 . (2) O n t h e q u e s t i o n of a l l e v i a t i n g t h e d e b t b u r d e n , M r .
Lloyd George's intentions are obscure. B o t h short term a n d long
t e r m m o n e y r a t e s h a v e fallen—the former m o r e swiftly t h a n t h e
l a t t e r — a n d t h e C h a n c e l l o r finds t h e p r o s p e c t s for c o n v e r s i o n
o p e r a t i o n s i n t h e f u t u r e u n d e n i a b l y g o o d , if t h e y a r e n o t i m p a i r e d
b y t h e a d o p t i o n of i l l - a d v i s e d e x p e n d i t u r e p r o p o s a l s .
2 3 . (3) I n d i s c u s s i n g t h e r e l i e f of t a x a t i o n o n e n t e r p r i s e
Mr. Lloyd George proceeds from t h e assumption t h a t t a x a t i o n
restricts e n t e r p r i s e t o t h e p r o p o s a l t h a t reliefs s h o u l d b e i n t r o ­
d u c e d i n r e s p e c t of c a p i t a l e x p e n d i t u r e o n r e - e q u i p m e n t .
The
C h a n c e l l o r of t h e E x c h e q u e r r e j e c t s t h e a s s u m p t i o n ( q u o t i n g t h e
Colwyn Committee in his support) a n d points out with regard to
t h e p r o p o s a l , t h a t t h e e x i s t i n g s y s t e m u n d e r w h i c h , if m o d e r n
m a c h i n e r y i s s u b s t i t u t e d f o r o b s o l e t e p l a n t , t h e c o s t of t h e o l d
p l a n t , less s c r a p v a l u e , m a y b e c h a r g e d f o r t h w i t h a g a i n s t profits,
i s t h e full m e a s u r e of t h e r e l i e f t h a t c a n b e j u s t i f i e d .
2 4 . (4) M r . L l o y d G e o r g e ' s p r o p o s a l i n r e g a r d t o T r a d e
Facilities is in essence a plea for a s s i s t a n c e t o p r i v a t e e n t e r p r i s e
a s d i s t i n c t from p u b l i c u t i l i t y u n d e r t a k i n g s . T h e Chancellor is
opposed t o this policy, which t h e G o v e r n m e n t h a v e already
rejected, mainly on the grounds t h a t Government credit would
i n effect b e e m p l o y e d t o b o l s t e r u p i n e f f i c i e n t c o n c e r n s ; t h a t t o
a s s i s t i n d i v i d u a l f i r m s a t t h e e x p e n s e of t h e i r c o m p e t i t o r s c o n f e r s
n o benefit on i n d u s t r y as a whole ; t h a t reorganisation within
i n d u s t r y w o u l d b e d e l a y e d b y e n c o u r a g i n g h o p e of e s c a p e f r o m
t h e n e c e s s i t y of c u t t i n g o u t d e a d w o o d .
All t h a t is m o s t useful
in t h e old T r a d e Facilities S c h e m e h a s in fact b e e n a d o p t e d a n d
e x t e n d e d in other w a y s .
2 5 . (5) I n c o n n e x i o n w i t h a n e x t e n s i o n of t h e E x p o r t C r e d i t s
G u a r a n t e e s y s t e m Mr. L l o y d G e o r g e (who d o e s less t h a n j u s t i c e
t o t h e w o r k a l r e a d y a c c o m p l i s h e d ) m a k e s i n effect t w o s u g g e s ­
t i o n s : F i r s t , t h a t g r e a t e r r i s k s s h o u l d b e r u n . T h e P r e s i d e n t of
t h e B o a r d of T r a d e p o i n t s o u t t h a t t h e b u s i n e s s , c o n d u c t e d a s i t
is a t p r e s e n t , is r u n a t a n a n n u a l loss, w h i c h is n o w i n t h e a g g r e g a t e
£ 7 0 , 0 0 0 , a n d t h a t t h e e x t e n s i o n of t h e m a r g i n of r i s k w o u l d o n l y
m e a n a v e r y s m a l l m a r g i n a l i n c r e a s e of t r a d e . S e c o n d , t h a t
special encouragement, should be given through t h e machinery
of t h e s c h e m e t o t r a d e w i t h R u s s i a .
The President indicates
t h a t h e r e again Mr. L l o y d George is m a k i n g suggestions on
inadequate information.
T h e E x p o r t Credits Guarantee Scheme
w a s e x t e n d e d t o R u s s i a i n A u g u s t , 1929, since w h e n
the
D e p a r t m e n t s contracts covering exports to Russia h a v e exceeded
i n a m o u n t t h o s e for all o t h e r c o u n t r i e s p u t t o g e t h e r .
On any
r e a s o n a b l e t e r m s l i t t l e m o r e c o u l d p o s s i b l y b e d o n e i n t h i s field.
2 6 . (6) A v i g o r o u s p o l i c y of E m p i r e d e v e l o p m e n t i s u r g e d o n
the Government.
So far a s t h e D o m i n i o n s are concerned t h e
S e c r e t a r y of S t a t e d r a w s a t t e n t i o n t o t h e d i f f i c u l t y of p r e s s i n g
capital development on autonomous States. The advancement
of E m p i r e T r a d e h a s , of c o u r s e , b e e n u n d e r c o n s i d e r a t i o n b y t h e
I m p e r i a l C o n f e r e n c e . I n t h e c a s e of t h e C o l o n i a l E m p i r e , o n e of
t h e first s t e p s of t h e G o v e r n m e n t w a s t o m a k e a v a i l a b l e f o r t h e
C o l o n i e s g e n e r o u s f a c i l i t i e s f o r c a p i t a l d e v e l o p m e n t , of w h i c h full
u s e is b e i n g m a d e .
2 7 . T h r o u g h t h e m a c h i n e r y of t h e E m p i r e M a r k e t i n g B o a r d
a n i n t e n s i v e p r o p a g a n d a f o r t h e s t i m u l a t i o n of E m p i r e t r a d e is
being c o n d u c t e d a n d r e s e a r c h w o r k for t h e scientific d e v e l o p m e n t
of E m p i r e i n d u s t r i e s i s b e i n g p u r s u e d .
2 S . (7) M r . L l o y d G e o r g e s u g g e s t s t h a t f o r t h e f u r t h e r a n c e of
i n v e n t i o n a n d research in industrial p r o b l e m s a n d processes, a
c e n t r a l i n s t i t u t i o n o n t h e l i n e s of t h e M e l l o n I n s t i t u t e i n A m e r i c a
should be established.
T h e L o r d P r e s i d e n t s v i e w is t h a t t h e
e x i s t i n g r e s e a r c h o r g a n i s a t i o n , w h i c h o p e r a t e s o n t h e p r i n c i p l e of
promoting and assisting research associations formed to serve the
s p e c i a l n e e d s of i n d i v i d u a l i n d u s t r i e s , is b e t t e r s u i t e d t o o u r n a t i o n a l
c o n d i t i o n s ; a n d h e c o n s i d e r s t h a t t h e r e q u i r e m e n t s of t h e v a r i o u s
industries in this respect a r e m o r e a d e q u a t e l y m e t in E n g l a n d
t h a n in A m e r i c a .
2 9 . (8) M r . L l o y d G e o r g e c o n c l u d e s h i s p r o p o s a l s f o r S t a t e
intervention to restore industry b y m a k i n g proposals as to the
b e t t e r c o l l e c t i o n a n d u s e of s t a t i s t i c s , a n d t h e a d v a n c e m e n t of
s t a n d a r d i s a t i o n . T h e P r e s i d e n t of t h e B o a r d of T r a d e s h o w s w h a t
h a s b e e n a n d is b e i n g d o n e i n b o t h t h e s e d i r e c t i o n s . T h e s u g g e s t i o n
t h a t so far a s statistics are concerned British i n d u s t r y h a s t o
w o r k l a r g e l y i n t h e d a r k i s s e e n f r o m t h e v o l u m i n o u s official
statistics published to be quite unfounded.
I t is t r u e t h a t s o m e
i n d u s t r i e s , t h r o u g h f e a r of a n e x t e n s i o n of G o v e r n m e n t a c t i v i t i e s
a n d of d i s c l o s i n g i n f o r m a t i o n t o t r a d e r i v a l s , h a v e s h o w n r e l u c t a n c e
t o c o - o p e r a t e w i t h t h e B o a r d of T r a d e i n t h e v o l u n t a r y c o l l e c t i o n
of s t a t i s t i c s , a n d t h e P r e s i d e n t w i l l c o n t i n u e t o d o e v e r y t h i n g
possible to o v e r c o m e their reluctance.
30. T h e P r e s i d e n t agrees t h a t t h e r e is r o o m for progress in
s t a n d a r d i s a t i o n a n d simplification, t h o u g h h e finds t h a t t h e r e a r e
difficulties i n t h i s c o u n t r y n o t p r e s e n t i n o t h e r s . H e , i n c o n j u n c t i o n
w i t h s t a n d a r d i s a t i o n o r g a n i s a t i o n s h e r e a n d in t h e D o m i n i o n s , is
pressing on with the work.
3 1 . A s a n e a r n e s t of t h e G o v e r n m e n t ' s d e s i r e t o a s s i s t t r a d e
a n d i n d u s t r y in this c o u n t r y t h e P r e s i d e n t d r a w s a t t e n t i o n t o t h e
c r e a t i o n of t h e O v e r s e a s T r a d e D e v e l o p m e n t C o u n c i l , t o t h e
G o v e r n m e n t s p o l i c y of d e s p a t c h i n g t r a d e m i s s i o n s a n d of
p a r t i c i p a t i n g in t r a d e e x h i b i t i o n s .
Revival of Agriculture.
32. So m u c h for i n d u s t r y p r o p e r .
Mr. Lloyd George t h e n
p r o c e e d s t o e l a b o r a t e h i s s c h e m e f o r t h e r e v i v e d of a g r i c u l t u r e ,
t h e c o n d i t i o n of w h i c h h e f i n d s u t t e r l y d e p l o r a b l e .
His
a r g u m e n t briefly a p p e a r s t o be t h i s : n o revival can c o m e u n d e r
the p r e s e n t l a n d o w n i n g a n d t e n a n c y s y s t e m since landlords are
for t h e m o s t p a r t t o o i m p o v e r i s h e d t o p u t t h e n e c e s s a r y c a p i t a l
i n t o t h e l a n d . E q u a l l y r e v i v a l is i m p o s s i b l e s o l o n g a s c o s t s of
p r o d u c t i o n r e m a i n at their present level.
To overcome these
t w o difficulties h e p r o p o s e s t o p l a c e o n t h e l a n d (the S t a t e t o
c a r r y o u t w o r k of r e c o n d i t i o n i n g w h e r e n e c e s s a r y ) , 1 0 0 , 0 0 0
family farmers employing no hired labour.
T h e a v e r a g e e x t e n t of
e a c h f a r m is t o b e 3 0 a c r e s .
33. The
Minister
of
Agriculture
cannot
accept
Mr.
L l o y d G e o r g e ' s v i e w of t h e c o n d i t i o n of a g r i c u l t u r e a s a w h o l e ,
a n d is of t h e o p i n i o n t h a t t h e u s e of t h e f a m i l y f a r m is m u c h
more limited t h a n appears to be suggested.
He points out that
t h e s u c c e s s of p a s t s m a l l h o l d i n g s s c h e m e s h a s t u r n e d m a i i d y o n
t h e e x t r e m e l y c a r e f u l s e l e c t i o n of l a n d a n d p e r s o n n e l , a n d t h a t t h e
(1848C)
c2
t i m e l i m i t i n t r o d u c e d b y Mr. L l o y d G e o r g e for t h e c o m p l e t i o n
of a s c h e m e of t h e m a g n i t u d e c o n t e m p l a t e d w o u l d r e n d e r q u i t e
i m p o s s i b l e t h e e x e r c i s e of a n y t h i n g a p p r o a c h i n g t h e
same
discrimination.
Further, the Liberal scheme would inevitably
d i s p l a c e a v e r y l a r g e n u m b e r of f a r m e r s a n d f a r m w o r k e r s — a
p o i n t w h i c h M r . L l o y d G e o r g e o v e r l o o k s . F i n a l l y , h i s a n a l y s i s of
t h e f i n a n c e of t h e s c h e m e a n d of M r . L l o y d G e o r g e ' s e s t i m a t e of t h e
effect o n a g r i c u l t u r a l e m p l o y m e n t s h o w s b o t h t o b e i n a c c u r a t e .
3 4 . T h e M i n i s t e r s p r o p o s a l s for s m a l l h o l d i n g s c o n t e m p l a t e a
s t e a d y d e v e l o p m e n t on the m a x i m u m scale c o m p a t i b l e with
t h e c a r e f u l s e l e c t i o n a n d p r e p a r a t i o n b o t h of l a n d a n d of t e n a n t ,
a n d t h e s i m u l t a n e o u s e s t a b l i s h m e n t a t s u i t a b l e c e n t r e s of
demonstration farms and holdings.'
3 5 . M r . L l o y d G e o r g e ' s s c h e m e is d i r e c t e d m a i n l y t o c a p t u r i n g
t h e h o m e m a r k e t a n d as a d d i t i o n a l a i d s in t h i s d i r e c t i o n h e
a d v o c a t e s (1) t h e p r o v i s i o n of i m p r o v e d c r e d i t f o r f a r m e r s ,
(2) b e t t e r s y s t e m s of m a r k e t i n g , (3) p r o p a g a n d a t o s t i m u l a t e
c o n s u m p t i o n of h o m e p r o d u c t s , a n d (4) i m p r o v e m e n t s i n t r a n s p o r t
facilities.
3 6 . (1) T h e M i n i s t e r p o i n t s o u t t h a t t h e A g r i c u l t u r a l C r e d i t s
A c t , 192S, gives f a r m e r s r e a d y access t o l o n g t e r m credit o n
t e r m s which compare favourably with Overseas countries, a n d
t h e s e facilities h a v e b e e n extensively used.
I t gives access t o
short t e r m credit on the s a m e t e r m s as apply to other individual
borrowers.
S p e c i a l facilities a r e t o b e p r o v i d e d for u n e m p l o y e d
p u t on the land under the Ministers's proposals.
3 7 . (2) T h e M i n i s t e r s h a r e s t h e v i e w t h a t t h e r e is c o n s i d e r a b l e
r o o m for i m p r o v e m e n t s i n m a r k e t i n g a n d h e l a t e l y i n t r o d u c e d
t h e A g r i c u l t u r a l M a r k e t i n g Bill w i t h t h i s o b j e c t i n v i e w .
Though
h e i s n o t e n t i r e l y o u t of s j ^ m p a t h y w i t h M r . L l o y d G e o r g e ' s
p r o p o s a l t h a t t h e i n i t i a t i v e in t h i s m a t t e r s h o u l d b e e n t r u s t e d
t o s o m e s t a t u t o r y a u t h o r i t y , he h a d t h o u g h t it best t o leave t h e
i n i t i a t i v e w i t h t h e f a r m e r s , in t h e belief, t o w h i c h t h e e x p e r i e n c e
of h i s D e p a r t m e n t l e n d s s u p p o r t , t h a t t h e i r o r g a n i s a t i o n s w i l l
themselves and on their own responsibility adopt a constructive
policy.
T h e q u e s t i o n is. h o w e v e r , b e i n g f u r t h e r e x p l o r e d .
3 S . (3) T h e M i n i s t e r a g r e e s t h a t t h e s t i m u l a t i o n of t h e
c o n s u m p t i o n of h o m e p r o d u c e is a v a l u a b l e a i d t o t h e a g r i c u l t u r a l
i n d u s t r y b u t h e disagrees with t h e view t h a t little h a s been d o n e
in this direction.
T h e w o r k of t h e E m p i r e M a r k e t i n g B o a r d a n d
t h e o p e r a t i o n of t h e A g r i c u l t u r a l P r o d u c e ( G r a d i n g a n d M a r k e t i n g )
Act have contributed substantially to this end, and recently the
G o v e r n m e n t m a d e a g r a n t of £ 5 5 , 0 0 0 for a d v e r t i s i n g N a t i o n a l
Mark Produce.
3 9 . (4) I n d i s c u s s i n g a g r i c u l t u r a l t r a n s p o r t f a c i l i t i e s , M r . L l o y d
G e o r g e s u g g e s t s t h a t r a i l w a y r a t e s for h o m e p r o d u c e s h o u l d
b e r e d u c e d a n d t h a t a n e x t e n s i v e p r o g r a m m e of i m p r o v e m e n t of
r u r a l r o a d s , i n v o l v i n g a n i n i t i a l c o s t of b e t w e e n £ 2 0 m i l l i o n a n d
£30 million, should be u n d e r t a k e n .
4 0 . I t is c l e a r t h a t l o w e r r a i l w a y r a t e s w o u l d b e of b e n e f i t
t o a g r i c u l t u r e , t h o u g h n o d o u b t s o m e of t h e s a v i n g s w o u l d find
their w a y to the distributors.
T h e M i n i s t e r of T r a n s p o r t a n d t h e
M i n i s t e r of A g r i c u l t u r e find, h o w e v e r , t h a t t h e d i f f i c u l t i e s i n t h e
w a y of a r e d u c t i o n a r e f o r m i d a b l e .
Unless the railway companies
a r e p r e p a r e d t o s a c r i f i c e i n c o m e , w h i c h t h e y c a n a t p r e s e n t ill
a f f o r d t o d o , a r e d u c t i o n i n r a t e s c o u l d o n l y b e e f f e c t e d if p r e f e r e n c e
w e r e g i v e n t o h o m e p r o d u c e a t t h e e x p e n s e of i m p o r t e d p r o d u c e ,
o r if r a t e s f o r n o n - a g r i c u l t u r a l p r o d u c t s w e r e i n c r e a s e d , o r if t h e
S t a t e m a d e g o o d t h e loss t o t h e R a i l w a y s . All t h r e e courses a r e
open to the gravest objections.
4 1 . S o f a r a s r u r a l r o a d s a r e c o n c e r n e d , t h e v i e w of t h e M i n i s t e r
of A g r i c u l t u r e a n d of t h e M i n i s t e r of T r a n s p o r t i s t h a t , t h o u g h
m a n y m i l e s a r e s u s c e p t i b l e of i m p r o v e m e n t , M r . L l o y d G e o r g e ' s
p r o p o s a l s w o u l d b e i n c a p a b l e of j u s t i f i c a t i o n o n traffic g r o u n d s
a n d w o u l d b e i n m a n y a r e a s d e t r i m e n t a l t o t h e i n t e r e s t s of
a g r i c u l t u r e . T h e m a k i n g of a r o a d fit f o r s u s t a i n e d m o t o r t r a f f i c
m a k e s it u n f i t , in g e n e r a l , f o r u s e b y h o r s e s a n d c a t t l e . T h e h a u l a g e
f r o m f a r m s i s o n t h e w h o l e l i g h t , a n d if t h e r e c o m e s a r e v i v a l
of a g r i c u l t u r e i n v o l v i n g a n i n c r e a s e i n a g r i c u l t u r a l traffic, t h e p o s i ­
t i o n w o u l d a n d s h o u l d b e m e t b y t h e o r g a n i s a t i o n of c o l l e c t i n g
d u m p s , e t c . , o n m a i n r o a d s . W h e r e , f o r t h e p u r p o s e of s p e c i a l l y
h e a v y traffic, s u c h a s t i m b e r a n d s u g a r b e e t , a n i m p r o v e m e n t i n
r u r a l r o a d s h a s b e e n c a l l e d for, t h e n e c e s s a r y w o r k h a s b e e n p u t
in h a n d .
4 2 . T h e s p e c i a l p o s i t i o n of S c o t l a n d i n r e l a t i o n t o a g r i c u l t u r e
is d e a l t w i t h in a s e p a r a t e n o t e b y t h e S e c r e t a r y of S t a t e .
Emergency Works of Development.
4 3 . P e n d i n g t h e r e g e n e r a t i o n of i n d u s t r y a n d a g r i c u l t u r e ,
M r . L l o y d G e o r g e l o o k s t o a n e m e r g e n c y p r o g r a m m e of w o r k s of
n a t i o n a l d e v e l o p m e n t , c o m p r i s i n g w o r k o n (1) r o a d s a n d b r i d g e s ,
(2) r e g i o n a l d e v e l o p m e n t a n d h o u s i n g , (3) t e l e p h o n e e x p a n s i o n ,
(4) e l e c t r i c a l d e v e l o p m e n t , a n d (5) d o c k s a n d h a r b o u r s , t o
c o n t r i b u t e s u b s t a n t i a l l y t o t h e relief of u n e m p l o y m e n t .
4 4 . (1) R o a d s a n d B r i d g e s . A p a r t f r o m t h e c r e a t i o n of c e r t a i n
n e w a r t e r i a l r o a d s , t h e M i n i s t e r of T r a n s p o r t finds t h a t t h e chief
difference b e t w e e n Mr, L l o y d G e o r g e ' s a n d t h e G o v e r n m e n t s
p r o p o s a l s i s i n r e s p e c t of t h e r a t e a t w h i c h w o r k s c a n b e p u t in
h a n d a n d c o m p l e t e d a n d i n r e g a r d t o t h e a m o u n t of e m p l o y m e n t
t o be afforded.
45. T h e Minister points out t h a t the G o v e r n m e n t are m a i n ­
taining insistent pressure on h i g h w a y authorities with a view to
e x p e d i t i n g t h e e x e c u t i o n of w o r k s , b u t t h a t t h e d i f f i c u l t i e s i n
t h e w a y a r e real a n d s u b s t a n t i a l . T h e e n o r m o u s d e v e l o p m e n t s in
o u r h i g h w a y s y s t e m t h a t h a v e t a k e n place since t h e w a r m a k e it
i n c r e a s i n g l y difficult t o p e r s u a d e t h o s e p r i m a r i l y c o n c e r n e d of
t h e economic justification for expediting f u r t h e r large w o r k s .
A t t e m p t s t o f o r c e t h e p a c e i n v o l v e s u b s t a n t i a l r i s k of p i l i n g u p
c o s t s , w i t h r e p e r c u s s i o n s o n o t h e r c o s t s of p r o d u c t i o n , a n d t h e
s i m u l t a n e o u s e x e c u t i o n of w o r k s o n a n u m b e r of r o a d s , b r i d g e s
a n d level crossings in a n y a r e a w o u l d result in serious dislocation
of t r a f f i c .
46. Mr. Lloyd George suggests t h a t special inducements,
e i t h e r b y w a y of t h e g r a n t of a b o n u s o n w o r k s c o m p l e t e d w i t h i n
a s p e c i f i e d t i m e . o r of l o a n s f r e e of i n t e r e s t , m i g h t b e o f f e r e d t o
local a u t h o r i t i e s . T h e Minister sets o u t t h e g r a v e d i s a d v a n t a g e s
w h i c h t h e a d o p t i o n of t h e first a l t e r n a t i v e w o u l d i n v o l v e a n d
t h e l i m i t e d p o s s i b i l i t i e s of t h e s e c o n d .
47. W i t h t h e proposal to create certain n e w arterial r o a d s t h e
M i n i s t e r of T r a n s p o r t is u n a b l e t o a g r e e . A p a r t a l t o g e t h e r f r o m
financial
considerations, competition with the railways, already
sufficiently wasteful, w o u l d b e intensified a n d n o justification could
b e f o u n d f o r t h e d u p l i c a t i o n of m a n y m i l e s of e x i s t i n g r o a d s w h i c h
have recently been brought u p to a high standard.
4 8 . T h e M i n s i t e r of T r a n s p o r t o b s e r v e s t h a t M r . L l o y d G e o r g e
e s t i m a t e s t h a t t h e e x p e n d i t u r e of £1 m i l l i o n o n r o a d a n d b r i d g e
w o r k w i l l p r o v i d e 5 , 0 0 0 m a n - y e a r s of w o r k . H i s e x p e r i e n c e h a s
s h o w n t h a t 4 , 0 0 0 m a n - y e a r s of w o r k is a f a r m o r e a c c u r a t e
figure.
4 9 . (2) R e g i o n a l D e v e l o p m e n t a n d H o u s i n g .
Mr. L l o y d
G e o r g e ' s p r o p o s a l s e m b r a c e t h e r a p i d a d v a n c e m e n t of r e g i o n a l
p l a n n i n g a n d t h e c r e a t i o n of g a r d e n c i t i e s a n d s a t e l l i t e t o w n s .
W i t h t h e o b j e c t s w h i c h Mr. L l o y d G e o r g e h a s in m i n d t h e Minister
of H e a l t h h a s n o q u a r r e l . S o f a r a s r e g i o n a l p l a n n i n g is c o n c e r n e d ,
a n u m b e r of r e g i o n a l c o m m i t t e e s h a v e a l r e a d y b e e n e s t a b l i s h e d —
i n t h e m a i n a t t h e M i n i s t r y ' s i n s t a n c e — a n d e v e r y effort is b e i n g
m a d e to increase their n u m b e r .
M a n y of t h e s e c o m m i t t e e s h a v e
i s s u e d r e p o r t s . M r . L l o y d G e o r g e i s , h o w e v e r , w r o n g in s u p p o s i n g
t h a t t h e r e a r e i n e x i s t e n c e a n u m b e r of a p p r o v e d r e g i o n a l p l a n s
w a i t i n g t o b e p u t i n t o e x e c u t i o n a n d c a p a b l e of a b s o r b i n g 1 5 0 , 0 0 0
m e n w i t h i n a y e a r . I n f a c t , a r e g i o n a l p l a n i n n o t a s c h e m e of
w o r k a t a l l . I t i s a m e r e s c h e d u l e of c o n d i t i o n s t o w h i c h f u t u r e
development must conform.
5 0 . T h e e s t a b l i s h m e n t of g a r d e n c i t i e s , c a n o n l y b e j u s t i f i e d
if t h e r e i s a r e a s o n a b l e p r o b a b i l i t y t h a t i n d u s t r y w i l l b e a t t r a c t e d
t o t h e site. T h e M i n i s t e r gives r e a s o n s for t h i n k i n g t h a t t h i s
c o n d i t i o n could n o t a t t h e p r e s e n t t i m e b e satisfied.
5 1 . I t i s t h e G o v e r n m e n t s h o p e t h a t o n e r e s u l t of r e g i o n a l
p l a n n i n g w i l l b e t h e e n c o u r a g e m e n t of t h e b u i l d i n g b y l o c a l
a u t h o r i t i e s of s a t e l l i t e t o w n s .
The Government have hitherto
relied o n local a u t h o r i t i e s t o p r o v i d e h o u s e s a n d h a v e left t o t h o s e
a u t h o r i t i e s t h e s e l e c t i o n of s i t e s w h i c h t h e y c o n s i d e r b e s t s u i t e d
for t h e p u r p o s e . T h e M i n i s t e r c a n n o t see his w a y t o p r o p o s e a
r e v e r s a l of t h a t p o l i c y .
5 2 . A s e p a r a t e n o t e b y t h e S e c r e t a r y of S t a t e o n
D e v e l o p m e n t in S c o t l a n d i s i n c l u d e d .
Regional
5 3 . (3) T e l e p h o n e s .
M r . L l o y d G e o r g e ' s v i e w is t h a t , b y
i m p r o v e d s a l e s m a n s h i p , t h e a n n u a l i n t a k e of s u b s c r i b e r s c o u l d b e
increased from t h e p r e s e n t 125,000 p e r a n n u m t o 300,000 p e r
a n n u m a n d t h a t , i n a n t i c i p a t i o n of t h e i n c r e a s e , a l a r g e p r o g r a m m e
of c o n s t r u c t i o n e m p l o y i n g 6 0 , 0 0 0 m e n s h o u l d b e p u t i n h a n d a t
once.
The Postmaster-General states that the available d a t a
indicate t h a t expansion o n a n y t h i n g like the scale c o n t e m p l a t e d
i s a t p r e s e n t u n o b t a i n a b l e a n d h e p o i n t s o u t t h a t , if "his v i e w is
c o r r e c t , t h e p r e m a t u r e c o n s t r u c t i o n of s u f f i c i e n t p l a n t t o m e e t
t h a t e x p a n s i o n w o u l d s a d d l e t h e service w i t h h e a v y c h a r g e s for
i n t e r e s t a n d d e p r e c i a t i o n , for w h i c h t h e c o n s u m e r o r t h e S t a t e
would have to pay.
M o r e o v e r , a t t h e c o n c l u s i o n of t h e p e r i o d of
a r t i f i c i a l e x p a n s i o n , t h e w h o l e of t h e t e l e p h o n e i n d u s t r y w o u l d b e
involved in disorganisation a n d hardship.
54. T h e P o s t m a s t e r - G e n e r a l rejects t h e p r o p o s a l in Mr. L l o y d
George's m e m o r a n d u m t h a t t h e telephone service should be
handed over to a new public corporation.
5 5 . (4) E l e c t r i c a l D e v e l o p m e n t .
T h e M i n i s t e r of T r a n s p o r t
agrees with the view t h a t a more comprehensive and vigorous
s e l l i n g p o l i c y b y t h e u n d e r t a k e r s is r e q u i r e d . H e d o e s n o t , h o w ­
ever, t h i n k t h a t Mr. L l o y d George's p r o p o s e d conference would
s e r v e a n y useful p u r p o s e a n d t h a t for t w o r e a s o n s .
F i r s t , in
e n c o u r a g i n g t h e a d o p t i o n b y u n d e r t a k e r s of t w o p a r t t a r i f f s ,
a s s i s t e d w i r i n g a n d e x t e n d e d facilities for h i r e a n d h i r e p u r c h a s e ,
h e i s a l r e a d y a c t i v e l y e n g a g e d i n g i v i n g effect t o v a r i o u s of
Mr. Lloyd George's suggestions.
Secondly, undertakers have
b e e n s u b j e c t e d d u r i n g r e c e n t y e a r s t o c o n s t a n t p r e s s u r e a n d i t is
t o b e d o u b t e d w h e t h e r a f u r t h e r a p p e a l b y w a y of a g e n e r a l
conference would produce a n y response.
5 6 . D o c k s a n d H a r b o u r s . T h e M i n i s t e r of T r a n s p o r t a g r e e s
g e n e r a l l y w i t h M r . L l o y d G e o r g e o n t h e i m p o r t a n c e of i n c r e a s i n g
t h e e f f i c i e n c y of o u r d o c k s a n d h a r b o u r s , a n d s i n c e t h e p r e s e n t
G o v e r n m e n t t o o k office i m p r o v e m e n t w o r k s t o a v a l u e of n o l e s s
t h a n £10 million h a v e been a p p r o v e d u n d e r t h e H o m e D e v e l o p m e n t
Act.
T h e r e is, h o w e v e r , one i m p o r t a n t limiting c o n s i d e r a t i o n
w h i c h M r . L l o y d G e o r g e a p p e a r s t o o v e r l o o k in h i s p r o p o s a l s for
a n a l l - r o u n d d e v e l o p m e n t of p o r t f a c i l i t i e s , n a m e l y , t h a t e x p e n d i ­
t u r e o n i m p r o v e m e n t s w h i c h s u c c e e d m e r e l y i n d i v e r t i n g traffic
f r o m o n e p o r t t o a n o t h e r is u n e c o n o m i c . A c c o r d i n g l y t h e p o r t s
m o s t f a v o u r a b l y s i t u a t e d f o r v a r i o u s c l a s s e s of t r a f f i c a r e t h e
p o r t s o n w h i c h effort s h o u l d b e c o n c e n t r a t e d .
I t is t h i s policy
which the Government are pursuing.
57. Mr. Lloyd George concludes his m e m o r a n d u m with a n
e s t i m a t e of t h e r e d u c t i o n i n u n e m p l o y m e n t l i k e l y t o r e s u l t f r o m
t h e a d o p t i o n of h i s p r o p o s a l s a n d a n e s t i m a t e of t h e i r n e t c o s t .
58. On t h e e m p l o y m e n t side Mr. Lloyd George h o p e s t o '
p r o v i d e w o r k a t t h e e n d of t w e l v e m o n t h s f o r 7 5 5 , 0 0 0 p e r s o n s .
T h e M i n i s t e r of L a b o u r h a s a n a l y s e d t h e f i g u r e s of t h e L i v e R e g i s t e r ,
a n d i t i s c l e a r t h a t t h e n u m b e r of p e r s o n s n o w i n t h e r a n k s of
t h e u n e m p l o y e d f o r w h o m e m e r g e n c e y w o r k of t h e n a t u r e i n d i c a t e d
a n d under t h e conditions necessarily involved would be suitable,
w o u l d fall f a r s h o r t of M r . L l o y d G e o r g e ' s t o t a l . S h e p o i n t s o u t
f u r t h e r t h a t t h e p r o b l e m of t h e g r a d u a l t r a n s f e r b a c k t o i n d u s t r y
of t h o s e e m p l o y e d o n t h e p r o p o s e d e m e r g e n c y s c h e m e s , a s s u m i n g
t h a t e m p l o y m e n t a n d s u i t a b l e l a b o u r w e r e a v a i l a b l e , is l e f t
untouched.
T h e M i n i s t e r of L a b o u r d r a w s a t t e n t i o n t o a f u r t h e r p o i n t t o
which no consideration seems to h a v e been given in t h e Liberal
Memorandum.
A f o r c e d e x p a n s i o n of p r o d u c t i o n o n t h e s c a l e
contemplated would inevitably drive u p costs—and t h a t at the
m o m e n t w h e n t h e G o v e r n m e n t , on Mr. L l o y d George's plan,
should b e actively engaged in p e r s u a d i n g i n d u s t r y t o reduce costs.
5 9 . T h e p r o p o s a l s for f i n a n c i n g M r . L l o y d G e o r g e ' s s c h e m e s
a r e d e a l t w i t h e x h a u s t i v e l y b y t h e C h a n c e l l o r of t h e E x c h e q u e r .
T h e y f o c u s o n t h e f l o t a t i o n of a S t a t e l o a n of t h e o r d e r of £ 2 5 0
m i l l i o n s . T h e C h a n c e l l o r f i n d s t h a t t h e r a i s i n g of a l o a n f o r t h e
purposes indicated would violate t h e principles governing ex­
p e n d i t u r e f i n a n c e d b y w a y of l o a n a s d i s t i n c t f r o m e x p e n d i t u r e
f i n a n c e d o u t of r e v e n u e . T h e G o v e r n m e n t w o u l d b e j u s t i f i e d i n
r a i s i n g a l o a n , e v e n of r e a s o n a b l e a m o u n t , o n l y if t h e S t a t e h a d
g o o d e c o n o m i c g r o u n d s for u n d e r t a k i n g a d d i t i o n a l d e v e l o p m e n t
works b y its own agency a n d from its own resources.
The
m e m o r a n d a b y t h e various Ministers concerned indicate clearly
t h a t n o s u c h g r o u n d s exist for a n y s c h e m e on t h e scale p r o p o s e d .
60. Mr. L l o y d George e n t e r t a i n s n o d o u b t as t o t h e Govern­
m e n f s ability to raise the m o n e y required upon reasonable terms.
I n t h e C h a n c e l l o r ' s v i e w t h e e x t r a v a g a n c e of t h e p r o p o s a l s itself
proves the contrary.
As t o t h e repercussions on finance a n d
industry, t h e Chancellor gives reasons for t h i n k i n g t h a t t h e y
would be both profound a n d harmful.
PART II.
Suggested General Remedies.
SECTION 1.-INDUSTRY'S PART.
National Conference. .
(Note by
1. T h e r e c o m m e n d a t i o n i s m a d e t h a t t h e G o v e r n m e n t s h o u l d
the Minister c a l l a c o n f e r e n c e of a l l c o n c e r n e d i n i n d u s t r y , i n c l u d i n g e m p l o y e r s ,
of Labour.)
trade unionists, bankers a n d distributors, should place a general
report on t h e industrial position before t h e m a n d ask t h e m t o
d e t e r m i n e h o w " w i t h i n a f e w m o n t h s " a r e d u c t i o n of t h e o r d e r
of 10 p e r c e n t , i n t h e c o s t s of p r o d u c t i o n c a n b e s e c u r e d .
2. I t i s d o u b t f u l w h e t h e r t h e p r o b l e m c a n b e d e a l t w i t h
effectively b y this m e a n s , or w h e t h e r s u c h a conference w o u l d
I t c o u l d , a n d w o u l d , c o n c e r n itself o n l y
accelerate progress.
The employers' representatives or
with general propositions.
m a n y of t h e m w o u l d a d v o c a t e p r o t e c t i o n a n d w a g e r e d u c t i o n .
T h e t r a d e u n i o n i s t s w o u l d s e e k t o d i s c u s s t h e p o s s i b i l i t i e s of
G o v e r n m e n t action in directions which w o u l d arouse a c u t e
controversy with other.interests represented. T h e m e m o r a n d u m
seems t o c o n t e m p l a t e t h a t t h e conference should evolve proposals
f o r d e a l i n g w i t h s u c h q u e s t i o n s a s t h e e f f i c i e n c y of m a n a g e m e n t ,
t h e c o s t a n d e f f i c i e n c y of d i s t r i b u t i o n , t h e c o m p a r a t i v e l e v e l of
c o s t s i n s h e l t e r e d a n d u n s h e l t e r e d i n d u s t r i e s , t h e r e m o v a l of t r a d e
u n i o n restrictions i n so f a r as t h e y exist a n d a r e h a m p e r i n g , a n d
t h e e l i m i n a t i o n of v e s t e d i n t e r e s t s a n d p r e j u d i c e s .
E v e n if i t
were possible t o secure c o m m o n assent t o a n y general propositions
o n s u c h s u b j e c t s a s t h e s e , it is n o t o b v i o u s w h a t h e l p w o u l d b e
g i v e n t o t h e s e c u r i n g of r e d u c t i o n of c o s t s i n i n d i v i d u a l i n d u s t r i e s .
T h e problem varies very widely from industry t o industry. F o r
e x a m p l e , in Iron a n d Steel or Shipbuilding, w h e r e profits h a v e
d i s a p p e a r e d , a n d t h e l o w e r - r a t e d w o r k m e n a r e e a r n i n g i n a full
w e e k n o m o r e t h a n f r o m 4 2 s . — 4 5 s . , a n y r e f e r e n c e t o a 10 p e r
cent, cut would b e received with surprise. T h e position m a y be
v e r y d i f f e r e n t i n s o m e of t h e " s e r v i c e s , " b u t i t is b y n o m e a n s
probable t h a t t h e y w o u l d be induced in such a conference even t o
a c c e p t t h e general p r o p o s i t i o n t h a t t h e r e s h o u l d b e a r e d u c t i o n in
t h e r e m u n e r a t i o n of c a p i t a l a n d l a b o u r .
3. T h e p r o c e s s of i n t e r n a l a d j u s t m e n t i n a n i n d u s t r y m u s t b e
c a r r i e d o u t b y t h e i n d u s t r y itself.
M a c h i n e r y for securing it
exists in all t h e i m p o r t a n t industries, a n d t h e process h a s been
g o i n g o n s t e a d i l y d u r i n g r e c e n t y e a r s a n d is still c o n t i n u i n g . T h e r e
is n o r e a s o n t o t h i n k t h a t t h e p r o c e s s i n i n d i v i d u a l i n d u s t r i e s c a n
b e a c c e l e r a t e d b y s p e c t a c u l a r a c t i o n s u c h a s is p r o p o s e d ; i n d e e d ,
t h e c a l l i n g of a c o n f e r e n c e m i g h t w e l l r e t a r d t h e p r o c e s s b y
encouraging employers and workmen to concentrate
upon
g e n e r a l i t i e s r a t h e r t h a n u p o n t h e p o s s i b i l i t y of p u t t i n g t h e i r o w n
house in order.
4. T h e e x p e r i e n c e of t h e I n d u s t r i a l C o n f e r e n c e of 1 9 1 9 i s n o t
e n c o u r a g i n g . I t is d o u b t f u l w h e t h e r a n y of t h o s e w h o t o o k p a r t
in it w o u l d willingly r e p e a t t h e e x p e r i m e n t .
Cost of Distribution.
( N o t e by
the
tt^B^aul^
of Trade.)
t
5 . T h e G o v e r n m e n t a g r e e t h a t i n a n y r e v i e w of t r a d e c o n d i t i o n s
j
q u e s t i o n of t h e c o s t of d i s t r i b u t i o n m u s t t a k e a p r o m i n e n t
P
'
y a p p r e c i a t e t h e w i d e s p r e a d feeling t h a t retail
p r i c e s h a v e n o t b e e n f a l l i n g a s f a s t a s t h e y s h o u l d i n v i e w of t h e
f a l l in w h o l e s a l e p r i c e s . T h e q u e s t i o n i s , h o w e v e r , o n e i n r e g a r d
t o w h i c h t h e r e is a t t h e m o m e n t v e r y l i t t l e m a t e r i a l o n w h i c h
to form a considered opinion. T h e comparison suggested in the
M e m o r a n d u m b e t w e e n t h e c o s t of l i v i n g f i g u r e s of t h e M i n i s t r y
of L a b o u r a n d t h e B o a r d of T r a d e I n d e x of w h o l e s a l e p r i c e s
d o e s n o t t a k e o n e v e r y f a r , b e c a u s e t h e t w o s e t s of f i g u r e s d o
not really relate to comparable commodities.
Those included
i n t h e B o a r d of T r a d e I n d e x a r c m a i n l y r a w m a t e r i a l s ; o n l y a
f e w s e m i - m a n u f a c t u r e d g o o d s , a n d t h o s e of a r e l a t i v e l y s i m p l e
i e
l a c e
a
n
d
t
h
e
k i n d (e.g., c o t t o n s h e e t i n g ) a r e i n c l u d e d . T h e M i n i s t r y of L a b o u r
I n d e x includes, besides foodstuffs, m a n y m a n u f a c t u r e d articles
such as clothing, boots, p o t t e r y a n d t h e like, as well as i t e m s s u c h
as house r e n t a n d fares.
T h e r e is r e a s o n t o believe t h a t t h e
w h o l e s a l e p r i c e s of f i n i s h e d g o o d s h a v e n o t v a r i e d i n t h e s a m e
m a n n e r a s t h o s e of r a w m a t e r i a l s , a n d t h i s q u e s t i o n is a t p r e s e n t
b e i n g i n v e s t i g a t e d b y t h e B o a r d of T r a d e .
6. T h e f i g u r e s f o r a r t i c l e s of f o o d a l o n e h a v e r e c e n t l y * b e e n
a n a l y s e d b y Pr of e ssor B o w l e y for t h e y e a r s 1 9 2 4 - 3 0 (May).
T h e r e s u l t of t h i s a n a l y s i s is t o s h o w t h a t r e t a i l p r i c e s m a y
n o r m a l l y b e e x p e c t e d t o r e s p o n d t o t h e m o v e m e n t s of w h o l e s a l e
p r i c e s a t a n i n t e r v a l of t w o m o n t h s i n t h e p r o p o r t i o n of 4 t o 5 , a n d
t h a t in fact t h e d e p a r t u r e s from this relation in t h e period in
question h a v e been relatively slight.
7 . B u t e v e n if i t s h o u l d b e f o u n d t h a t t h e fall of r e t a i l p r i c e s
h a s n o t b e e n l a g g i n g u n d u l y b e h i n d t h e fall of w h o l e s a l e p r i c e s
in recent years, t h e r e can be little d o u b t t h a t on the whole t h e
d i s t r i b u t o r s ' m a r g i n e x p r e s s e d a s a p e r c e n t a g e of t h e r e t a i l p r i c e
t e n d s t o be g r e a t e r n o w a d a y s t h a n it was a generation ago. T h e
i n c r e a s e i n t h e d i s t r i b u t o r s ' m a r g i n m a y b e d u e t o a n y o r a l l of
three causes :—
(a) D i s t r i b u t o r s ' c o s t s m a y h a v e r i s e n m o r e t h a n t h o s e
of m a n u f a c t u r e r s .
I n so far a s wages a c c o u n t for a larger
p r o p o r t i o n of d i s t r i b u t o r s ' t h a n of m a n u f a c t u r e r s ' c o s t s ,
t h i s m a y b e t r u e , a n d it is p r o b a b l y also t r u e t h a t t h e w a g e s
included in distributors' costs are t o a greater e x t e n t those
paid in the " sheltered " trades, which have risen m o r e t h a n
those paid in t h e " unsheltered."
(b) D i s t r i b u t o r s m a y b e b e t t e r o r g a n i s e d o r m o r e s k i l l e d
in b a r g a i n i n g t h a n in earlier years, a n d t h u s able t o d o their
b u y i n g a n d selling m o r e efficiently.
(c) D i s t r i b u t o r s m a y b e p e r f o r m i n g m o r e s e r v i c e s t h a n
t h e y d i d i n t h e p a s t , so t h a t t h e r e is m o r e v a l u e for m o n e y
i n t h e p r i c e of r e t a i l a r t i c l e s t h a n u s e d t o b e t h e c a s e .
8 . T h e g e n e r a l c o n c l u s i o n s e e m s t o b e (1) t h a t f a r m o r e i n ­
f o r m a t i o n i s n e e d e d t h a n i s a t p r e s e n t a v a i l a b l e , a n d (2) t h a t t h e
q u e s t i o n is o n e w h i c h s h o u l d b e k e p t c o n t i n u o u s l y u n d e r r e v i e w .
9. N u m e r o u s c o m m i s s i o n s a n d c o m m i t t e e s a p p o i n t e d since
t h e w a r h a v e p o i n t e d t o t h e n e e d f o r c a r e f u l i n v e s t i g a t i o n of
c o s t s of d i s t r i b u t i o n a n d i n p a r t i c u l a r t h e R o y a l C o m m i s s i o n o n
Food Prices recommended t h a t there should be a body " per­
m a n e n t l y i n b e i n g t o w a t c h o v e r t h e s u p p l y of e s s e n t i a l f o o d s t u f f s . "
I n accordance with this r e c o m m e n d a t i o n t h e F o o d Council w a s
a p p o i n t e d b y t h e C o n s e r v a t i v e A d m i n i s t r a t i o n in J u l y , 1925,
" t o i n v e s t i g a t e q u e s t i o n s r e l a t i n g t o t h e s u p p l y o r p r i c e of a r t i c l e s
of f o o d of g e n e r a l c o n s u m p t i o n . "
T h e F o o d Council h a v e h a d
n o s t a t u t o r y basis a n d in some cases h a v e been u n a b l e t o obtain
i n f o r m a t i o n r e q u i r e d f o r t h e p e r f o r m a n c e of t h e i r f u n c t i o n s , w h i l e
their r e c o m m e n d a t i o n s h a v e m o r e t h a n once been ignored b y t h e
traders concerned.
T h e Government are, therefore, asking
P a r l i a m e n t t o set u p a p e r m a n e n t s t a t u t o r y b o d y t o b e called t h e
Consumers' Council which shall h a v e compulsory powers t o obtain
information as t o the production, distribution, supply a n d price
of a r t i c l e s of g e n e r a l c o n s u m p t i o n . I t i s p r o p o s e d t h a t t h e field
of e n q u i r y of t h e C o n s u m e r s ' C o u n c i l s h a l l c o v e r i n t h e first
i n s t a n c e n o t o n l y foodstuffs b u t also fuel a n d c l o t h i n g , a n d p o w e r
w i l l b e t a k e n t o e n l a r g e t h e field a s m a y b e n e c e s s a r y .
I t is
further proposed t h a t in cases where excessive prices a p p e a r t o
b e c h a r g e d a n d w h e r e c o m p e t i t i o n is r e s t r i c t e d t h e C o u n c i l m a y
r e c o m m e n d , a n d t h e B o a r d of T r a d e (if a l l o t h e r m e a n s fail) m a y
m a k e , s t a t u t o r y orders fixing a m a x i m u m price.
10. P e n d i n g t h e p a s s a g e of s u c h l e g i s l a t i o n a C o m m i t t e e of
t h e E c o n o m i c Advisory Council h a s been set u p " t o e x a m i n e a n d
r e p o r t o n t h e p r e s e n t s y s t e m of m a r k e t i n g a n d d i s t r i b u t i n g c o n ­
s u m a b l e c o m m o d i t i e s , i n t h e l i g h t of t h e w i d e n i n g s p r e a d b e t w e e n
* See Lloyds Bank Monthly
(1848C)
Review, June, 1930.
D
t h e c o s t of l i v i n g i n d e x a n d t h e w h o l e s a l e p r i c e l e v e l ; a n d t o
initiate special investigations to ascertain w h a t economies m i g h t
b e effected in p a r t i c u l a r t r a d e s b y r e o r g a n i s a t i o n . " A m o n g t h e
subjects to which the committee have been directing their
a t t e n t i o n a r e possible e c o n o m i e s in r e g a r d t o t h e p u r c h a s e a n d
s t o r a g e of d o m e s t i c c o a l , a n d t h e effect of a d v e r t i s i n g i n i n c r e a s i n g
d i s t r i b u t i v e c o s t s : i n a d d i t i o n a d e t a i l e d i n q u i r y is i n p r o g r e s s
i n t o t h e e c o n o m i e s of m u l t i p l e s h o p s c o m p a r e d w i t h s m a l l s e p a r a t e
businesses.
SECTION 2.—THE BANKERS' PART.
Suggested Industrial Bank.
(Note by
n . T h e J o i n t S t o c k B a n k s a r e c r i t i c i s e d ( p p . 2 1 a n d 27) o n t h e
P r e s i d e n t of o
d t h a t , w h i l e t h e y h a v e a m e a s u r e of c o n t r o l o v e r i n d u s t r y
t h e Board
t h r o u g h t h e i r l o a n s a n d o v e r d r a f t s , t h e m a n a g e m e n t is deficient in
of T r a d e
c o m m e r c i a l e x p e r i e n c e a n d v i s i o n . T h e B a n k s a r e t h u s "said t o
have become a " d e a d hand upon development," rather than a
f a c t o r m a k i n g f o r i n c r e a s e d efficiency. T h e p r o p o s a l m a d e i s t h a t
" t h e i r a i d s h o u l d b e e n l i s t e d a n d t h e i r s e n s e of r e s p o n s i b i l i t y
s t r e s s e d . " T h e s t e p s w h i c h i t is p r o p o s e d t h a t t h e B a n k s s h o u l d
b e u r g e d t o t a k e a r e s e t o u t o n p a g e s 2 7 a n d 2 8 . I t is s t a t e d t h a t
B r i t a i n is n o t so w e l l s e r v e d a s i t s c o m p e t i t o r s in t h e
financing
of n e w a n d t h e d e v e l o p m e n t of e x i s t i n g e n t e r p r i s e s ; t h a t , w h i l e
t h e f o r m a t i o n of S e c u r i t i e s M a n a g e m e n t T r u s t a n d t h e B a n k e r s
Industrial D e v e l o p m e n t C o m p a n y implies some
recognition
of t h i s d e f i c i e n c y , t h e s e i n s t i t u t i o n s a r e i n t e n d e d o n l y f o r t h e
r a t i o n a l i s a t i o n of " w h o l e i n d u s t r i e s " ; a n d t h a t t h e S t a t e
s h o u l d call t o g e t h e r t h o s e best able t o help, including t h e " Big
F i v e , " w i t h a v i e w t o t h e f o r m a t i o n of a n I n d u s t r i a l B a n k t o
finance
individual concerns.
T h i s B a n k is n o t t o b e a " S t a t e
I n s t i t u t i o n , " w h i c h p r e s u m a b l y m e a n s t h a t t h e S t a t e is n o t t o
provide capital, b u t t h e proposal on page 28 t o reintroduce
t r a d e f a c i l i t i e s ( w h i c h is b e i n g s e p a r a t e l y d e a l t w i t h ) s e e m s
s o m e w h a t inconsistent with this.
1 2 . T h e w h o l e q u e s t i o n of t h e r e l a t i o n s b e t w e e n i n d u s t r y
a n d finance s t a n d s r e f e r r e d t o a m o s t e x p e r t C o m m i t t e e u n d e r
t h e c h a i r m a n s h i p of L o r d M a c m i i i a n , t o w h i c h n o r e f e r e n c e
w h a t e v e r is m a d e i n t h i s c o n n e x i o n i n t h e L i b e r a l m e m o r a n d u m ;
a n d i t w o u l d n o t b e d e s i r a b l e t h a t a n y G o v e r n m e n t a c t i o n of
the kind proposed should be taken until their recommendations
h a v e been considered.
For the same reason the comments
w h i c h follow a r e p u t f o r w a r d w i t h all r e s e r v e ; n o conclusive
j u d g m e n t on these m a t t e r s can properly b e reached until t h e
v i e w s of t h e C o m m i t t e e a r e a v a i l a b l e .
r
o
u
n
1 3 . If t h e p o l i c y of t h e B a n k s d u r i n g t h e p o s t - w a r p e r i o d
h a s been open to criticism, it would be p r e s u m a b l y on t h e ground
t h a t until recently t h e y were too r e a d y t o give a c c o m m o d a t i o n ,
w i t h o u t s u f f i c i e n t l y full i n v e s t i g a t i o n of t h e p o s s i b l e n e e d f o r
reorganisation, to old and valued customers whose position
h a d u p to t h e n b e e n satisfactory.
If t h e y e r r e d i n t h i s r e s p e c t ,
t h e y e r r e d in c o m m o n w i t h all w h o h o p e d t h a t t h e d e p r e s s i o n
w h i c h f o l l o w e d t h e b o o m of 1 9 1 9 - 2 0 w o u l d s o o n b e o v e r .
Those
o n c e a l m o s t u n i v e r s a l h o p e s h a v e b e e n falsified a n d t h e B a n k s
find t h e m s e l v e s w i t h l a r g e o u t s t a n d i n g l o a n s w h i c h it is v e r y
difficult t o l i q u i d a t e .
14. N o d o u b t t h e B a n k s , like e v e r y o n e else, h a v e l e a r n e d b y
bitter experience, a n d evidence that t h e y have an appreciation
of t h e n e e d s of t h e p r e s e n t s i t u a t i o n is t o b e f o u n d i n t h e s u p p o r t
given b y the Joint Stock Banks to the Bankers Industrial Develop­
m e n t C o m p a n y , o n t h e A d v i s o r y C o u n c i l of w h i c h a l l t h e p r i n c i p a l
Banks are represented.
A n y s u g g e s t i o n t h a t t h e " s e n s e of
r e s p o n s i b i l i t y " of t h e B a n k s n e e d e d t o b e " s t r e s s e d " w o u l d b e
strongly and justly resented ; but it must be remembered that their
p r i m a r y r e s p o n s i b i l i t y is t o t h e d e p o s i t o r s w h o h a v e e n t r u s t e d
t h e m w i t h t h e f u n d s w h i c h , for r e a s o n s i n d i c a t e d i n t h e p a r a g r a p h
w h i c h follows, it is t h e i r b u s i n e s s t o k e e p i n a l i q u i d f o r m .
15. T h e p r o p o s e d I n d u s t r i a l B a n k would b e s o m e w h a t o n
t h e m o d e l of t h e C o n t i n e n t a l B a n k s , b y w h i c h it is n o d o u b t
inspired.
The criticism that the British Joint Stock Banks are
less s u i t e d t o i n d u s t r i a l n e e d s t h a n t h e C o n t i n e n t a l , a n d p a r ­
t i c u l a r l y t h e G e r m a n , B a n k s is n o t n e w .
That the German
B a n k s h a v e t a k e n a m o r e a c t i v e p a r t i n t h e p r o v i s i o n of f i x e d
c a p i t a l for i n d u s t r y t h a n t h e B r i t i s h J o i n t S t o c k B a n k s is well
known.
O n e r e a s o n for t h i s w a s t h e a b s e n c e — a s c o m p a r e d w i t h
t h e U n i t e d K i n g d o m — o f o t h e r k i n d s of f i n a n c i a l i n s t i t u t i o n s t o
w h i c h i n d u s t r y c o u l d h a v e r e c o u r s e f o r t h e r a i s i n g of c a p i t a l .
W h e t h e r t h e v e r y c l o s e c o n t r o l of i n d u s t r y b y b a n k e r s w h i c h
such a s y s t e m involves would be suited t o our n a t i o n a l genius
is o p e n t o q u e s t i o n ; b u t i n a n y c a s e t h e r e a r e m o r e c o g e n t r e a s o n s
against such an innovation.
T h e s y s t e m of d e p o s i t b a n k i n g
a n d p a y m e n t b y cheque h a s been developed in t h i s c o u n t r y t o
a v e r y m u c h greater e x t e n t a n d earlier t h a n on t h e continent
a n d b y f a r t h e g r e a t e s t p a r t of t h e f u n d s of t h e B a n k s a r e d e r i v e d
from deposits which are repayable either on d e m a n d or a t v e r y
short notice.
I t is n e c e s s a r y f o r t h e s e c u r i t y of t h e d e p o s i t o r s
t h a t the funds which t h e y have thus entrusted to their bankers
s h o u l d b e k e p t sufficiently liquid b y i n v e s t m e n t in easily realisable
securities ; a n d the b a n k i n g position would become unsound
if a l a r g e p r o p o r t i o n of t h e s e f u n d s w e r e l o c k e d u p i n t h e p r o v i s i o n
of f i x e d c a p i t a l f o r i n d u s t r y .
T h e fact t h a t p u b l i c issues were
contemplated at a later stage would not remove this objection,
a l t h o u g h t e n d i n g t o l i m i t t h e a m o u n t of a B a n k ' s m o n e y l o c k e d
u p in i n d u s t r y a t a n y one m o m e n t .
If t h e p r e s e n t p o s i t i o n w e r e
o p e n t o c r i t i c i s m , i t w o u l d n o t b e o n t h e g r o u n d t h a t m o r e of
t h e B a n k s ' f u n d s s h o u l d b e i n v e s t e d in fixed c a p i t a l for i n d u s t r y ,
b u t t h a t , o w i n g t o t h e u n f o r e s e e n l e n g t h of t h e p o s t - w a r
d e p r e s s i o n , t o o g r e a t a p r o p o r t i o n of t h e i r f u n d s h a s b e o m e l o c k e d
u p in frozen overdrafts a n d advances.
1 6 . B e c a u s e i t i s n o t a p r o p e r f u n c t i o n of t h e J o i n t S t o c k
B a n k s t o p r o v i d e fixed c a p i t a l for i n d u s t r y , i t b y n o m e a n s
f o l l o w s t h a t t h e r e is n o s o u r c e f r o m w h i c h s u c h c a p i t a l c a n b e
d e r i v e d . I n t h e first p l a c e , it is n o t a f a c t t h a t S e c u r i t i e s M a n a g e ­
ment Trust and the Bankers' Industrial Development Company
c a n d e a l o n l y w i t h w h o l e i n d u s t r i e s . T h e r e is n o s u c h l i m i t a t i o n
i n t h e A r t i c l e s of A s s o c i a t i o n of t h e f o r m e r , a n d t h e l a t t e r i s
prepared to deal with regional schemes. The Lancashire Cotton
C o r p o r a t i o n , w h i c h c o n t r o l s o n l y a f r a c t i o n of o n e s e c t i o n of t h e
c o t t o n i n d u s t r y , h a s r e c e i v e d t h e financial b a c k i n g of t h e B a n k
of E n g l a n d . B u t a p a r t f r o m t h e s e b o d i e s t h e r e a r e a n u m b e r of
finance
houses in the City which constitute t h e recognised
m a c h i n e r y f o r i s s u e s of c a p i t a l t o t h e i n v e s t i n g p u b l i c .
These
i n s t i t u t i o n s a r e p e r f e c t l y c a p a b l e of d e a l i n g w i t h i n d u s t r i a l
i s s u e s , i n c l u d i n g t h e p r o v i s i o n of m o n e y u n t i l s u c h t i m e a s a
public issue can b e m a d e . I t m a y be noticed t h a t , in the case
of t h e B . I . D . C . , t h e e x p r e s s e d i n t e n t i o n i s t h a t , w h e n a s c h e m e
h a s b e e n a p p r o v e d , t h e p r o v i s i o n of t h e n e c e s s a r y m o n e y s w i l l
t a k e place " through existing agencies."
17. T h e l a t e L o r d P r i v y S e a l w a s a u t h o r i t a t i v e l y i n f o r m e d
t h a t n o s o u n d s c h e m e h a d f a i l e d t o m a k e p r o g r e s s f o r l a c k of
finance ; a n d c e r t a i n p r o p o s a l s , w h i c h , w h e n p u t b e f o r e t h e C i t y ,
were not regarded as comprehensive rationalisation schemes
s u i t a b l e for t h e special i n s t i t u t i o n s set u p t o deal w i t h s u c h
schemes, b u t which were nevertheless considered likely to result
in a hopeful scheme, h a v e been passed on to other City interests
w h o could deal with the matter.
These have been proposals
r e l a t i n g t o c o n c e r n s of s o m e m a g n i t u d e .
I n t h e c a s e of l e s s e r
c o n c e r n s , o n a s c a l e t o o s m a l l t o i n t e r e s t a finance h o u s e i n t h e
C i t y , i t is o f t e n s a i d t h a t t h e r e is a g a p i n t h e financial m a c h i n e ,
a n d t h a t there are no channels b y which a relatively small a m o u n t
of fixed c a p i t a l c a n b e o b t a i n e d a t r e a s o n a b l e c o s t . T h i s c l a s s of
c a s e i s l i k e l y t o e n g a g e t h e a t t e n t i o n of t h e M a c m i l l a n C o m m i t t e e ,
a n d their R e p o r t m u s t be a w a i t e d before a n y definite view c a n
be formed u p o n it. Generally speaking, however, the information
a v a i l a b l e , t o g e t h e r w i t h t h e c h e a p n e s s of m o n e y a n d t h e r i s e i n
t h e p r i c e of g i l t - e d g e d s t o c k s , s u g g e s t t h a t t h e d e f i c i e n c y i s n o t
a d e f i c i e n c y of m o n e y o r of m e a n s t o e x a m i n e p r o p o s a l s r e q u i r i n g
m o n e y , b u t of o p p o r t u n i t i e s f o r p r o f i t a b l e i n v e s t m e n t i n i n d u s t r y
(1848C)
D2
SECTION m - T H E STATE'S PART.
National Expenditure.
(Note by
1 8 . I n t h i s p a r t of t h e L i b e r a l m e m o r a n d u m i t is s t r o n g l y
Chancellor
S
G o v e r n m e n t a t t h e s a m e t i m e t h a t i t is s t r e s s i n g
of the
i m p o r t a n c e of e c o n o m y i n i n d u s t r y , s h o u l d s i m u l t a n e o u s l y
Exchequer.) p l e d g e i t s e l f t o r e d u c e i t s o w n c o s t s b y 1 0 p e r c e n t . T h i s s h o u l d
" n o t o n l y i n c l u d e s a v i n g s r e s u l t i n g from c h a n g e in policy, such,
for i n s t a n c e , as s a v i n g s r e s u l t i n g from f u r t h e r d i s a r m a m e n t a s
this c a n be b r o u g h t a b o u t , but s h o u l d also i n c l u d e savings in t h e
c o s t of c a r r y i n g o u t e x i s t i n g p o l i c i e s . " A s t h e G o v e r n m e n t a r e
asking industry to secure an end which m a y m e a n t e m p o r a r y
r e d u c t i o n s i n r e m u n e r a t i o n of d i f f e r e n t g r a d e s , s o a t t h e s a m e
t i m e G o v e r n m e n t S e r v a n t s s h o u l d b e s e t t h e t a s k of r e d u c i n g
costs a n d should realise t h a t failure m e a n s r e d u c e d r e m u n e r a t i o n .
T h e a u t h o r s of t h e M e m o r a n d u m r e c o m m e n d a c c o r d i n g l y t h a t
t h e G o v e r n m e n t s h o u l d a t o n c e a p p o i n t a s m a l l c o m m i t t e e of
b u s i n e s s m e n , t o r e p o r t w i t h i n 6 m o n t h s , w i t h t h e s a m e t e r m s of
reference as the Geddes Committee, namely, " To m a k e recom­
m e n d a t i o n s t o t h e C h a n c e l l o r of t h e E x c h e q u e r f o r e f f e c t i n g
f o r t h w i t h all p o s s i b l e r e d u c t i o n s in t h e n a t i o n a l e x p e n d i t u r e o n
S u p p l y Services, h a v i n g regard especially to t h e present a n d
p r o s p e c t i v e p o s i t i o n of t h e r e v e n u e " a n d ( t h e m e m o r a n d u m w o u l d
a d d ) " t o t h e effect of t h e p r e s e n t b u r d e n of t a x a t i o n i n r e s t r i c t i n g
industry and employment."
u
t
r
n
e
d
t
n
a
t
t
n
e
e
T h e m e m o r a n d u m then gives s o m e quite general statistics
w h i c h i n t h e v i e w of i t s a u t h o r s i n d i c a t e t h a t l a r g e e c o n o m i e s o u g h t
t o b e possible.
19. I n p r e s e n t c i r c u m s t a n c e s , I a g r e e t h a t economy' is a
necessity a n d t h e m e m o r a n d u m performs a m o s t useful service b y
d r a w i n g a t t e n t i o n so f o r c i b l y t o t h e m a t t e r . I t is in t h e a p p l i c a t i o n
of t h e p r i n c i p l e t h a t I f i n d t h e m e m o r a n d u m w a n t i n g .
I n t h e first p l a c e , i s t h e p r o p o s e d c u t 10 p e r c e n t , of t h e t o t a l
B u d g e t e x p e n d i t u r e ( i n v o l v i n g a s a v i n g of s o m e £ 8 0 m i l l i o n s ) o r
10 p e r c e n t , o n t h e c o s t of S u p p l y S e r v i c e s ( i n v o l v i n g a s a v i n g of
£ 4 8 m i l l i o n s ) ? A s a l m o s t t h e w h o l e of t h e e x p e n d i t u r e other t h a n
t h a t o n S u p p l y S e r v i c e s is o n n a t i o n a l d e b t s e r v i c e s i t is c l e a r t h a t
t h e w h o l e r e d u c t i o n w o u l d h a v e t o fall o n S u p p l y Services, e v e n
if e x p r e s s e d a s a p e r c e n t a g e of t h e t o t a l b u d g e t .
T h u s it is n o t c l e a r w h e t h e r S u p p l y S e r v i c e s a r e t o b e c u t b y
£ 8 0 m i l l i o n s ( 1 0 p e r c e n t , of t h e B u d g e t ) o r £ 4 8 m i l l i o n s (10 p e r
c e n t , of t h e i r o w n c o s t ) .
2 0 . T h e M e m o r a n d u m d r a w s a t t e n t i o n t o a n i n c r e a s e of
a b o u t £ 6 0 m i l l i o n s i n t h e c o s t of t h e S u p p l y S e r v i c e s b e t w e e n
1 9 2 3 a n d 1 9 3 0 . T h a t i n c r e a s e i s a t first s i g h t s u r p r i s i n g a n d ,
i n d e e d , a l a r m i n g ; a n d t h e m e m o r a n d u m is q u i t e justified in
a d d i n g t h a t it has taken place despite substantial a u t o m a t i c
savings on W a r Pensions.
B u t t h e r e a r e t w o f a c t s n o t s t a t e d in t h e M e m o r a n d u m w h i c h
m u s t a t o n c e b e p o i n t e d o u t ; (a) t h e r e c e n t D e - r a t i n g S c h e m e
i n c r e a s e d t h e t o t a l of t h e S u p p l y S e r v i c e s b y £ 4 6 m i l l i o n s ; (6) a n
i n c r e a s e of £ 1 1 m i l l i o n s i n t h e c o s t of t h e P o s t Office h a s a l s o b e e n
i n c l u d e d in t h e figures in t h e M e m o r a n d u m .
The De-rating
S c h e m e h a s increased t h e S u p p l y Services b y £31 millions on
a c c o u n t of t h e n e w B l o c k G r a n t s a n d b y a f u r t h e r £ 1 5 m i l l i o n s ,
r e p r e s e n t i n g a t r a n s f e r t o P a r l i a m e n t a r y V o t e s of s u m s f o r m e r l y
paid from t h e Consolidated F u n d t h r o u g h t h e old Local T a x a t i o n
Accounts.
T h i s l a t t e r t r a n s a c t i o n is a p u r e m a t t e r of b o o k ­
k e e p i n g a n d t h e r e is n o i n c r e a s e d c h a r g e t o t h e t a x p a y e r .
The
i n c r e a s e of £ 3 1 m i l l i o n s o n a c c o u n t of B l o c k G r a n t s is n e w
e x p e n d i t u r e s o f a r a s t h e t a x p a y e r is c o n c e r n e d , b u t t h e y w e r e
p a r t of a s c h e m e of w h i c h , a t a n y r a t e , t h e i n t e n t i o n w a s t o assist
a g r i c u l t u r e a n d p r o d u c t i v e i n d u s t r y b y r e d u c i n g o n e of t h e i r m o s t
o n e r o u s b u r d e n s , viz., local r a t e s .
A s r e g a r d s t h e P o s t Office,
its r e v e n u e h a s increased d u r i n g t h e period in question b y
£ 1 7 ^ m i l l i o n s ; its e x p e n d i t u r e h a s increased b y £11 m i l l i o n s ;
t h e r a t i o of e x p e n d i t u r e t o r e v e n u e h a s c o n s t a n t l y f a l l e n .
In
these c i r c u m s t a n c e s it w o u l d seem u n r e a s o n a b l e t o t r e a t t h e
i n c r e a s e i n P o s t Office c o s t s a s t h o u g h i t w e r e a n i n c r e a s e in d e a d
weight expenditure.
I t a p p e a r s a t o n c e t h e r e f o r e t h a t of t h e £ 6 0 m i l l i o n s i n c r e a s e
referred t o in t h e M e m o r a n d u m , £31 millions r e p r e s e n t s t h e n e w
B l o c k G r a n t s u n d e r t h e D e - r a t i n g S c h e m e , £ 1 5 m i l l i o n s is a m e r e
b o o k - k e e p i n g t r a n s f e r , a n d £ 1 1 m i l l i o n s is a n i n c r e a s e o n P o s t
Office e x p e n d i t u r e , m u c h m o r e t h a n b a l a n c e d b y i n c r e a s e i n
r e v e n u e . I t is, h o w e v e r , d e s i r a b l e t o t r e a t t h e m a t t e r i n a l i t t l e
m o r e d e t a i l so a s t o s h o w o n b r o a d l i n e s w h i c h s e r v i c e s h a v e
increased in cost a n d w h i c h h a v e decreased. T h e following s h o r t
t a b l e , w h i c h is a c o m p a r i s o n of a u d i t e d e x p e n d i t u r e 1 9 2 3 - 2 4 ,
w i t h t h e o r i g i n a l e s t i m a t e s 1 9 3 0 - 3 1 , s h o w s t h a t g r a n t s for l o c a l
a n d o t h e r services, social i n s u r a n c e a n d old a g e p e n s i o n s h a v e
i n c r e a s e d b y £ 8 7 millions, s w a m p i n g e c o n o m i e s effected elsewhere.
4
Increase
or Decrease
since 1 9 2 3 . *
£
G r a n t s for l o c a l a n d o t h e r s e r v i c e s . .
Social I n s u r a n c e a n d Old Age Pensions
W a r Pensions
..
L i q u i d a t i o n of W a r S e r v i c e s a n d r e ­
duction on certain Irish Services.
' All o t h e r services (including Defence)
-4- 5 0 , 0 0 0 , 0 0 0
-f 37,000,000
-21,000,000
­ 17,000,000
­
14,000,000
-f 35,000,000
T h e " G r a n t s for local a n d other s e r v i c e s " include some
a g r i c u l t u r a l g r a n t s , e.g., f o r b e e t s u g a r , b u t t h e y a r e m a i n l y
c o m p o s e d of g r a n t s t o l o c a l a u t h o r i t i e s , v i z . , i n a d d i t i o n t o t h e
n e w B l o c k G r a n t s , t h e g r a n t s for h o u s i n g , e d u c a t i o n , police, e t c . ,
T h e e x p e n s e t o t h e G o v e r n m e n t of a d m i n i s t e r i n g t h e s e g r a n t s
a n d a l s o of a d m i n i s t e r i n g t h e s o c i a l s e r v i c e s i s i n c l u d e d u n d e r t h e
h e a d i n g " All o t h e r s e r v i c e s . "
2 1 . I find t h e m e m o r a n d u m v e r y o b s c u r e o n t h e q u e s t i o n h o w
f a r t h e p r o p o s e d " C o m m i t t e e of b u s i n e s s m e n " w i l l i n t r u d e o n
policy.
T h e o n l y e x a m p l e of a q u e s t i o n of p o l i c y w h i c h t h e
p a s s a g e of " E c o n o m y " g i v e s is " f u r t h e r d i s a r m a m e n t a s i t
c a n b e b r o u g h t a b o u t , " b u t t h a t illustration is t o o v a g u e t o
serve as a guide.
( O t h e r p a r t s of t h e m e m o r a n d u m , i t i s t r u e ,
d e a l w i t h p o l i c y b u t o n l y f r o m t h e p o i n t of v i e w of a d v o c a t i n g
l a r g e e x p e n d i t u r e o n s c h e m e s w h i c h w o u l d b e t h e first t o c o m e
under a n y " Geddes axe.")
I n q u o t i n g t h e t e r m s of r e f e r e n c e t o t h e G e d d e s C o m m i t t e e of
1 9 2 1 t h e m e m o r a n d u m omits t h e r e f e r e n c e t o p o l i c y (" i n s o f a r
a s q u e s t i o n s of p o l i c y a r e i n v o l v e d i n t h e e x p e n d i t u r e u n d e r
d i s c u s s i o n , t h e s e w i l l r e m a i n f o r t h e e x c l u s i v e c o n s i d e r a t i o n of
t h e C a b i n e t ; b u t it will b e o p e n t o t h e c o m m i t t e e t o r e v i e w t h e
expenditure and to indicate the economies which might be
a f f e c t e d if p a r t i c u l a r p o l i c i e s w e r e e i t h e r a d o p t e d , a b a n d o n e d o r
m o d i f i e d ") a n d t h u s l e a v e s i t u n c e r t a i n w h e t h e r a s i m i l a r c o n ­
dition should or should not be prescribed now.
22. The report recognises t h a t , " in t h e i m m e d i a t e p o s t - w a r
p e r i o d t h e r e w e r e c e r t a i n s p e c i a l o p p o r t u n i t i e s for r e d u c i n g
expenditure not present now " ; and that " certain additional
b u r d e n s in r e l a t i o n t o social a n d o t h e r services h a v e b e e n a s s u m e d
w h i c h m u s t c o n t i n u e t o b e b o r n e . " T h e general inference from
t h e l a n g u a g e of t h e m e m o r a n d u m i s t h a t , a p a r t f r o m " f u r t h e r
d i s a r m a m e n t , " t h e r e m a y n o l o n g e r b e m u c h r o o m for r e d u c i n g
e x p e n d i t u r e b y m e a n s of r e v e r s a l s of p o l i c y ; b u t t h a t w i t h t h e
h e l p of a c o m m i t t e e of b u s i n e s s m e n i t s h o u l d b e p o s s i b l e t o m a k e
large s a v i n g s in a d m i n i s t r a t i v e costs. W h e t h e r t h i s b e a fair
i n f e r e n c e o r n o t , i t i s a b u n d a n t l y c l e a r t h a t n o t h i n g s h o r t of a
c o m p r e h e n s i v e r e v i s i o n of p o l i c y c o u l d p r o d u c e a s a v i n g of
£ 4 8 millions (let a l o n e £ 8 0 millions) a n d t h a t , e v e n o n t h e m o s t
o p t i m i s t i c a s s u m p t i o n s , a r e d u c t i o n of a d m i n i s t r a t i v e c o s t s c o u l d
n o t b e e x p e c t e d t o p r o d u c e m o r e t h a n a s m a l l f r a c t i o n of t h i s s u m . f
* Note.—For the reasons given in the preceding paragraph the transfer
of ^15 millions from the Consolidated Fund to Votes and the increase of
£ \ \ millions in Post Office expenditure have been left out of account.
f Cf. on this point the finding of the Alan Anderson Committee on the
pay, etc., of State servants, that " no power except Parliament can
materially reduce the load."
Staff c h a r g e s a r e b y far t h e m o s t i m p o r t a n t e l e m e n t i n
a d m i n i s t r a t i v e c o s t s . C o m p l e t e d s t a t i s t i c s for t h e financial y e a r
1 9 2 9 - 3 0 s h o w t h a t i n t h a t y e a r o u t of a t o t a l e x p e n d i t u r e of
£ 4 3 4 m i l l i o n s o n S u p p l y S e r v i c e s , staff c h a r g e s ( a p a r t f r o m t h e p a y
of officers a n d m e n of t h e fighting s e r v i c e s ) a c c o u n t e d i n r o u n d
figures for £ 8 8 £ m i l l i o n s , d i v i s i b l e a s f o l l o w s : —
N on-Industrial
Staffs.
£ million.
Civil D e p a r t m e n t s
19
Defence D e p a r t m e n t s
6
Revenue Departments..
4 4 (33£ P . O .
alone)
Industrial
Staffs.
£ million.
2
12
5% ( a l m o s t
entirely
P.O.)
69
19i
Of t h e t o t a l e x p e n d i t u r e of £88J- m i l l i o n s , P o s t Office staff
c o s t s a c c o u n t e d f o r n o l e s s t h a n £ 3 9 m i l l i o n s . If, for t h e r e a s o n s
g i v e n a b o v e , t h i s figure b e o m i t t e d f r o m t h e c a l c u l a t i o n , t h e r e
i s l e f t a t o t a l s u m of l e s s t h a n £ 5 0 m i l l i o n s .
In other words,
i t w o u l d b e n e c e s s a r y t o s c r a p t h e w h o l e m a c h i n e r y of G o v e r n m e n t
o r t h e w h o l e of t h e C i v i l S e r v i c e o u t s i d e t h e P o s t Office i n o r d e r
t o s e c u r e a 1 0 p e r c e n t , r e d u c t i o n of s u p p l y e x p e n d i t u r e b y
savings in administrative charges.
Staff c o s t s a r e t h e p r o d u c t of (a) t h e n u m b e r s of staff e m p l o y e d
a n d (b) t h e r a t e s of r e m u n e r a t i o n t o w h i c h t h e y a r e r e s p e c t i v e l y
entitled.
T h e g e n e r a l s t a n d a r d of r e m u n e r a t i o n of t h e C i v i l
S e r v i c e i s n o w t h e s u b j e c t of e n q u i r y b y a R o y a l C o m m i s s i o n .
T h e r e c a n , t h e r e f o r e , b e n o q u e s t i o n of a p p o i n t i n g a n e w c o m m i t t e e
of b u s i n e s s m e n a t t h e p r e s e n t t i m e t o c o n s i d e r t h a t p a r t of t h e
problem.
A c o m m i t t e e , if i t w e r e a p p o i n t e d , w o u l d b e l i m i t e d
i n i t s e n q u i r y t o a n i n v e s t i g a t i o n of t h e n u m b e r s , a s d i s t i n c t f r o m
t h e r a t e s of p a y of t h e C i v i l S e r v i c e .
A p a r t from t h e fact t h a t a n y possible economy resulting from
s a v i n g s of a d m i n i s t r a t i v e c o s t s w o u l d b e t r i v i a l i n c o m p a r i s o n
w i t h t h e t o t a l r e d u c t i o n of e x p e n d i t u r e n o w p r o p o s e d , I a m b y
n o m e a n s s a t i s f i e d t h a t a c o m m i t t e e of b u s i n e s s m e n u n d e r
i n s t r u c t i o n t o c o v e r t h e w h o l e field of G o v e r n m e n t a c t i v i t y
w i t h i n a p e r i o d of s i x m o n t h s w o u l d b e e i t h e r t h e b e s t o r e v e n a
s u i t a b l e i n s t r u m e n t for a n e n q u i r y i n t o staff costs.
T h e p l a i n f a c t is t h a t p r o g r e s s i n t h e s e m a t t e r s c a n b e s t b e
achieved, indeed can only be achieved, b y persistent, detailed a n d
c o n s t r u c t i v e effort t o w a r d s i m p r o v e m e n t i n o r g a n i s a t i o n a n d
office t e c h n i q u e o n t h e p a r t of t h o s e w h o a r e d i r e c t l y r e s p o n s i b l e
f o r t h e v a r i o u s b r a n c h e s of G o v e r n m e n t b u s i n e s s . S i n c e t h e W a r
t h e i n v e s t i g a t i o n s c a r r i e d o u t b y d e p a r t m e n t a l officers i n c o l ­
l a b o r a t i o n w i t h officers of t h e E s t a b l i s h m e n t s D e p a r t m e n t of t h e
Treasury, h a v e led to i m p o r t a n t economies ; with the result t h a t
t h e o u t p u t p e r h e a d of t h e C i v i l S e r v i c e i s d e m o n s t r a b l y b e t t e r
t o - d a y t h a n it w a s before t h e W a r . M u c h still r e m a i n s t o b e d o n e ,
a n d further economies are possible a n d m u s t be secured. B u t I
believe t h a t b e t t e r results will b e a c h i e v e d b y continuing, a n d so
f a r a s n e c e s s a r y , i n t e n s i f y i n g , t h e p r e s s u r e of t h e e x i s t i n g s y s t e m
than b y the alternative plan now suggested.
A C o m m i t t e e of
o u t s i d e p e r s o n s w i t h t h e m e a n s a n d in t h e t i m e at its disposal
c o u l d n o t h o p e t o d i a g n o s e t h e p r o b l e m , m u c h less t o d e v i s e
a p p r o p r i a t e i m p r o v e m e n t s in technique. A cursory survey, for
it could b e n o m o r e , m i g h t i n d e e d t e n d , so far from saving costs,
m e r e l y , for t h e t i m e being, t o c r e a t e u n n e c e s s a r y work.
2 3 . T h e p r e s e n t p o s i t i o n of t h e S u p p l y S e r v i c e s ( o r i g i n a l
e s t i m a t e s , 1 9 3 0 , e x c l u d i n g P o s t Office £ 6 0 m i l l i o n s ) i s : —
G r a n t s for L o c a l a n d o t h e r services
..
Social I n s u r a n c e a n d Old A g e Pensions
W a r Pensions
..
..
..
..
Defence
..
..
..
..
..
T a x Collection
..
..
..
..
Civil Services g e n e r a l l y . .
..
..
£138
£79
£52
£110
£12
£27
millions.
millions.
millions.
millions.
millions.
millions.
£418
millions.
O n t h e l a s t t h r e e i t e m s t h e r e is p l a i n l y n o h o p e of e f f e c t i n g , i n
t h e n e a r f u t u r e , e c o n o m i e s of t h e o r d e r s u g g e s t e d i n t h e M e m o ­
r a n d u m . T a s s u m e , f u r t h e r , t h a t t h e r e i s n o i n t e n t i o n of l o w e r i n g
t h e r a t e of w a r p e n s i o n s . I n o t h e r w o r d s , i t i s c e r t a i n f r o m t h e
s t a r t t h a t t h e p r e p o n d e r a t i n g p a r t of t h e r e d u c t i o n m u s t , b y t h e
f o r c e of c i r c u m s t a n c e s , fall o n g r a n t s t o l o c a l a u t h o r i t i e s , s o c i a l
insurance a n d old age pensions.
I t is t h e r e f o r e e s s e n t i a l t h a t b e f o r e d e c i d i n g u p o n t h e p r o p o s a l
t o a p p o i n t a n e w G e d d e s C o m m i t t e e of b u s i n e s s m e n , t h e G o v e r n ­
m e n t should b e informed m o r e precisely w h a t duties such a
C o m m i t t e e is t o p e r f o r m a n d s h o u l d a l s o c o n s i d e r w h a t s c o p e t h e r e
n o w is for s a v i n g s of t h e m a g n i t u d e c o n t e m p l a t e d i n t h e
memorandum.
24. I t m u s t n o t be forgotten t h a t t h e Geddes C o m m i t t e e m e t
at a time w h e n economies were not only possible b u t were crying
out to be m a d e . T h e Committee now suggested would meet—as
t h e a u t h o r s of t h e M e m o r a n d u m a d m i t — i n c i r c u m s t a n c e s e n t i r e l y
d i f f e r e n t . T h e m o s t f r u i t f u l s o u r c e of i n v e s t i g a t i o n ( t h e u n e m p l o y ­
m e n t i n s u r a n c e p o s i t i o n ) is n o w r e m i t t e d t o a R o y a l C o m m i s s i o n .
I t will b e r e m e m b e r e d t h a t t h o u g h t h e G e d d e s C o m m i t t e e
r e c o m m e n d e d c u t s of £86-1- m i l l i o n s , o n l y £ 5 4 m i l l i o n s of t h i s w a s
a c c e p t e d b y M r . L l o y d G e o r g e in 1 9 2 2 .
Of t h e £S6I- m i l l i o n s , D e f e n c e a c c o u n t e d f o r £ 4 6 £ m i l l i o n s .
O b v i o u s l y t h e o p p o r t u n i t i e s of effecting e c o n o m y o n D e f e n c e a t a
time w h e n t h e E s t i m a t e s totalled over £200 millions were m u c h
g r e a t e r t h a n t h e y a r e t o - d a y w h e n t h i s t o t a l is n o t m u c h m o r e t h a n
£100 millions.
T h e w h o l e of t h e s o c i a l s e r v i c e s ( E d u c a t i o n ,
Health, Labour, W a r Pensions and Old Age Pensions) accounted
for o n l y £26-J- m i l l i o n s of t h e G e d d e s c u t s . E v e n s o t h e a m o u n t
a c c e p t e d b y Mr. L l o y d George's G o v e r n m e n t w a s r e d u c e d t o half
of t h i s a m o u n t , v i z . , £14-1 m i l l i o n s . W h e r e t h e G e d d e s r e c o m ­
m e n d a t i o n s m o s t i n v o l v e d f u n d a m e n t a l c h a n g e s of s o c i a l p o l i c y —
e.g., o n E d u c a t i o n v o t e s — t h e y w e r e l e a s t e f f e c t i v e .
Here their
r e c o m m e n d e d c u t of £ 1 8 m i l l i o n s w a s w h i t t l e d d o w n t o
£61
millions. T h e i r p r o p o s a l s for raising t h e m i n i m u m school age,
for r e d u c i n g t e a c h e r s ' salaries, a n d for r a t i o n i n g t h e local
authorities were
flatly
r e j e c t e d , a n d £ 3 m i l l i o n s of
their
" s a v i n g " w a s s t i g m a t i s e d b y Sir R . H o m e a s a m e r e t r a n s f e r
from votes t o rates.
If M r . L l o y d G e o r g e , w i t h t h e u n e q u a l l e d o p p o r t u n i t y of 1922,
d i d n o t a t t e m p t a s a v i n g of m o r e t h a n £14-J- m i l l i o n s in t h e r e g i o n
of s o c i a l s e r v i c e s , a n d if t h e D e f e n c e E s t i m a t e s h a v e a l r e a d y f a l l e n
n e a r l y 5 0 p e r c e n t , s i n c e t h a t t i m e , i t d o e s n o t l o o k a s if t h e r e w o u l d
b e m u c h c h a n c e t h a t e v e n h e w o u l d effect t o - d a y a n y t h i n g r e m o t e l y
a p p r o a c h i n g h i s figure of £ 4 8 m i l l i o n s — m u c h l e s s £ 8 0 m i l l i o n s .
T o s u m u p , o n a d m i n i s t r a t i o n c h a r g e s t h e r e is n o p o s s i b i l i t y
of e f f e c t i n g s p e c t a c u l a r s a v i n g s : o n d e f e n c e p o l i c y t h e s c o p e for
l a r g e e c o n o m i e s is o v e r w h e l m i n g l y less t o - d a y t h a n i t w a s i n
1 9 2 2 , a n d w e m a y w e l l d o u b t w h e t h e r a n y c o m m i t t e e of b u s i n e s s
m e n w o u l d in this sphere r e c o m m e n d a n y policy s a v i n g w h a t e v e r :
w e m a y b e s u r e t h a t t h e y w o u l d n o t r e c o m m e n d a r e v e r s a l of
t h e p o l i c y of d e - r a t i n g . T h e r e w o u l d t h u s r e m a i n f o r t h e n e w
Geddes A x e t h e social services.
M r . L l o y d G e o r g e is a l i t t l e
v a g u e a s t o h i s i n t e n t i o n s i n t h i s field. B u t if h e w a n t s h i s
b u s i n e s s m e n ' s c o m m i t t e e t o c o n c e n t r a t e o n a l o w e r i n g of t h e
g e n e r a l s t a n d a r d of o u r s o c i a l s e r v i c e s , I e m p h a t i c a l l y d i s a g r e e .
Local Government Expenditure.
2 5 . The M e m o r a n d u m p r o p o s e s t h a t , s i m u l t a n e o u s l y w i t h
t h e a p p o i n t m e n t of t h e s u g g e s t e d n e w G e d d e s C o m m i t t e e , t h e
C o u n t y Councils a n d local authorities generally should be urged
t o r e d u c e t h e i r c o s t s q u i c k l y b y n o t less t h a n 10 p e r c e n t .
T h e l o a n c h a r g e s of l o c a l a u t h o r i t i e s , t h o u g h v e r y h e a v y ,
d o n o t f o r m s o h i g h a p r o p o r t i o n of t h e i r t o t a l e x p e n s e s a s t h e
n a t i o n a l d e b t f o r m s of t h e B u d g e t . O t h e r w i s e t h e i r p o s i t i o n i s
(Note b y the
Chancellor
Exchequer)
n o t v e r y d i s s i m i l a r f r o m t h a t of t h e S t a t e .
T h e services w i t h
w h i c h t h e y d e a l — E d u c a t i o n , R o a d s , P o o r Relief, H e a l t h , P o l i c e —
a r e all a b s o l u t e l y e s s e n t i a l a n d t h e r e is n o g r o u n d for t h e
assumption t h a t great reductions can be m a d e without cutting
o u t a n y u s e f u l s e r v i c e s a n d w i t h o u t a n y l o s s of efficiency.
It
ma3'- b e a d m i t t e d t h a t l a r g e e c o n o m i e s w o u l d b e p o s s i b l e b y a
l o w e r i n g of s t a n d a r d s i n s u c h m a t t e r s a s e d u c a t i o n a n d h e a l t h .
If t h e s t a n d a r d s w e r e l o w e r e d a n d e c o n o m i e s e f f e c t e d t h e r e w o u l d
be some resultant economies t o t h e State in these cases where
g r a n t s still r e m a i n o n a p e r c e n t a g e basis a n d it m i g h t b e possible
to lower Block G r a n t s at t h e next revision. Moreover, a Govern­
m e n t w h i c h h a d a d o p t e d t h e d r a s t i c s t e p of r a d i c a l l y c u r t a i l i n g
i t s o w n e x p e n d i t u r e o n s o c i a l s e r v i c e s w o u l d , a s a m a t t e r of
course, urge local a u t h o r i t i e s (usually it c a n n o t compel t h e m ) t o
d o likewise. B u t , as I h a v e a l r e a d y indicated in m y r e m a r k s on
the suggested Geddes Committee, I a m opposed to this policy.
S h o r t of d r a s t i c a c t i o n of t h i s c h a r a c t e r , i n c r e a s e s i n l o c a l
e x p e n d i t u r e m i g h t b e o b v i a t e d b y t h e c e s s a t i o n of p r e s s u r e f r o m
t h e c e n t r e t o s p e n d m o r e . B u t i t w o u l d b e difficult t o r e c o n c i l e
such a change with the continual exhortations which have been
m a d e to local authorities, coupled with special i n d u c e m e n t s held
o u t t o t h e m , in regard t o u n e m p l o y m e n t works.
Alleviation of the Burden of National Debt.
(Note b y
2 6 . T h e h i g h c o s t of t h e D e b t is r e f e r r e d t o a n d i t is c l a i m e d
t h a t c o u r a g e o u s a c t i o n , t h e n a t u r e of w h i c h i s u n s p e c i f i e d , w o u l d
of t h e
l a r g e l y r e d u c e t h e r a t e of i n t e r e s t p a i d b y t h e S t a t e .
Exchequer.)
I t is n o t e a s y t o u n d e r s t a n d t o w h o m t h i s c r i t i c i s m i s a d d r e s s e d .
N o one at this d a t e can possibly be u n a w a r e t h a t a very great
reduction h a s been m a d e in t h e interest charge this year.
The
r a t e o n i n t e r e s t o n long t e r m securities h a s n o t fallen w i t h
t h e same breathless rapidity as t h e r a t e on short securities, b u t
f r o m t h e n a t u r e of t h i n g s t h a t c o u l d n o t b e e x p e c t e d . E v e n t h e
s o u n d e s t f i n a n c i a l p o l i c 3 ' m u s t h a v e t i m e t o p r o d u c e i t s f u l l effect
on long t e r m rates.
Nevertheless long t e r m rates have very
definitely fallen a n d t h e p r o s p e c t s for c o n v e r s i o n o p e r a t i o n s i n t h e
future are undeniably good.
T h e M e m o r a n d u m continues w i t h some criticisms as t o a
p o l i c y of r e s t r i c t i n g t h e d e m a n d f o r c a p i t a l .
These criticisms
appear to have no relevance to the present Government which has
s o m e w h a t freely e n c o u r a g e d c a p i t a l issues for c o n s t r u c t i v e w o r k s .
T h e effect w h i c h t h e L i b e r a l p r o p o s a l s t h e m s e l v e s w o u l d h a v e o n
t h e l o n g t e r m r a t e of i n t e r e s t is a c o n s i d e r a t i o n of t h e g r e a t e s t
i m p o r t a n c e a n d t h i s s u b j e c t is d e a l t w i t h fully a t a l a t e r s t a g e .
(See P a r t V I . ) .
6
0
r
Belief of Taxation upon Enterprise.
(Note b y
2 7 . T h i s p a s s a g e of t h e R e p o r t i s s h o w n b y i t s c o n t e x t t o
*Jj
r e l a t e t o t h e i n c o m e t a x a n d t h e r e a r e t w o t h e s e s ; t h e first is t h a t
o^the"
t a x a t i o n o p e r a t e s a s a g r e a t e n g i n e f o r t h e r e s t r i c t i o n of e n t e r p r i s e ,
E x c h e q u e r . ) a n d t h e s e c o n d t h a t r e l i e f s s h o u l d b e i n t r o d u c e d i n r e s p e c t of
expenditure on re-equipment.
T h e c o n c l u s i o n is t h a t a C o m ­
m i t t e e s h o u l d b e a p p o i n t e d t o r e v i e w t h e w h o l e q u e s t i o n of t h e
i n c i d e n c e of t a x a t i o n u p o n e n t e r p r i s e , a n d t o r e p o r t w a y s a n d
m e a n s b y w h i c h t h e p r o p o s a l s a d v o c a t e d , if a d o p t e d , c o u l d b e s t
b e carried out in practice.
e
3 1 1 0 1
2 8 . S o f a r a s c o n c e r n s t h e a l l e g a t i o n t h a t d i r e c t t a x a t i o n is a
g r e a t e n g i n e f o r t h e r e s t r i c t i o n of e n t e r p r i s e , I h a v e a l w a y s b e e n
ready to admit that in the present gloomy conditions the psycho­
l o g i c a l effect of a n y i n c r e a s e of d i r e c t t a x a t i o n i n t h e m i n d s of
business m e n would be v e r y serious, far greater indeed t h a n
w o u l d b e w a r r a n t e d b y t h e e c o n o m i c s of t h e c a s e . T h i s i s o n e
of t h e g r e a t r e a s o n s w h i c h m a k e s m e p r o f o u n d l y a n x i o u s t o
a v o i d i n c r e a s e s of t a x a t i o n n e x t y e a r if t h e m e a n s t o a v o i d t h e m
can be found.
29. B u t s u b j e c t t o this I h a v e n e v e r agreed w i t h t h e L i b e r a l
thesis.
I n 1924 t h e L a b o u r G o v e r n m e n t set u p t h e Colwyn
C o m m i t t e e t o e n q u i r e i n t o t h e i n c i d e n c e of t a x a t i o n o n t r a d e a n d
industry, a n d t h a t c o m m i t t e e p r o n o u n c e d v e r y definitely a n d
very authoritatively u p o n this very subject. The Minority Report,
w h i c h w a s s i g n e d b y f o u r m e m b e r s of t h e c o m m i t t e e b r o a d l y
sharing our political views, concluded t h a t direct t a x a t i o n " cannot
i n o u r j u d g m e n t r e d u c e t h e a g g r e g a t e p u r c h a s i n g p o w e r of t h e
c o m m u n i t y , n o r d o w e find t h a t i t r a i s e s p r i c e s o r m a t e r i a l l y
r e d u c e s t h e n a t i o n a l o u t p u t of w o r k , of s a v i n g o r of e n t e r p r i s e . "
( M i n o r i t y R e p o r t , p . 140.)
T h e R e p o r t of t h e M a j o r i t y , m e n of g r e a t d i s t i n c t i o n b u t of
different political t h o u g h t , r e a c h e d no different conclusion : " W e
c o n c l u d e w i t h r e g a r d t o e n t e r p r i s e t h a t t h e e f f e c t s of h i g h i n c o m e
t a x a t i o n . . . o v e r a g r e a t p a r t of t h e i n d u s t r i a l field, w h i l e
a p p r e c i a b l e , h a v e n o t b e e n of s e r i o u s m o m e n t .
B u t it is clear
t h a t t h e y m u s t often h a v e p u t a check on t h e m o r e speculative
c l a s s of b u s i n e s s . . . . W i d e r c a u s e s t h a n t a x a t i o n , h o w e v e r ,
a n d p a r t i c u l a r l y t h e d i s l o c a t i o n of o u r o l d e x p o r t m a r k e t s m u s t
b e h e l d m a i n l y r e s p o n s i b l e f o r t h e l a c k of b u o y a n c y i n r e c e n t
years.
R e l a t i v e l y i n c o m e t a x a t i o n h a s n o t b e e n a f a c t o r of h i g h
importance."
(Majority R e p o r t , p . 451.)
T h e k i n d of relief w h i c h w o u l d b e p r o p o s e d if a n e n q u i r y w e r e
a u t h o r i s e d w o u l d b e a r e l i e f of i n c o m e t a x o n C o m p a n i e s ' r e s e r v e s .
This was considered b y t h e Colwyn Committee.
It was not
recommended.
I t is q u i t e o b v i o u s t h a t a t t h e p r e s e n t t i m e I
c o u l d n o t a f f o r d i t a n d , e v e n if I c o u l d , i t w o u l d g o i n t h e m a i n t o
i n c r e a s e t h e r e s o u r c e s of w e a l t h y c o r p o r a t i o n s a n d w o u l d g i v e n o
relief t o o u r m o s t h a r d - p r e s s e d i n d u s t r i e s w h i c h a r e m a k i n g n o
profits a n d , therefore, p a y i n g n o t a x .
T h e p a r t i c u l a r r e l i e f w h i c h t h e M e m o r a n d u m a i m s a t is for
the business m a n who incurs expenditure on re-equipment.
" Certainly " the M e m o r a n d u m says " the regulations with regard
t o d e p r e c i a t i o n of p l a n t s h o u l d b e m o d i f i e d , a n d p r o b a b l y a s a n
e m e r g e n c y m e a s u r e i t w o u l d be desirable t o go m u c h further in
t h e d i r e c t e n c o u r a g e m e n t of l a r g e s c a l e r e - e q u i p m e n t . "
30. People w h o w r i t e concerning income t a x depreciation
a l l o w a n c e s n e a r l y a l w a y s d o s o w i t h a n a m a z i n g l a c k of k n o w l e d g e
of t h e a c t u a l f a c t s . W h e n a b u s i n e s s m a n s c r a p s p l a n t i n o r d e r
t o s u b s t i t u t e a n o t h e r m a c h i n e of a m o r e e f f e c t i v e o r m o d e r n
c h a r a c t e r h e is e n t i t l e d t o c h a r g e a g a i n s t h i s p r o f i t s t h e e n t i r e
c o s t of t h e o l d m a c h i n e (less i t s s c r a p v a l u e ) , e x c e p t s o f a r a s h e
h a s a l r e a d y w r i t t e n i t off a g a i n s t p r o f i t s i n p r e v i o u s y e a r s . T h a t
f a c t is s e l d o m r e a l i s e d . I t i s a very p r o p e r a l l o w a n c e , b u t i t is
a l s o a full o n e a n d n o t h i n g m o r e c a n b e c o n c e d e d i n t h i s d i r e c t i o n
w i t h o u t a t r a v e s t y of p r o p e r a c c o u n t a n c y m e t h o d s of a s c e r t a i n i n g
profits.
3 1 . M e m b e r s of t h e L i b e r a l P a r t y h a d a n a m e n d m e n t o n t h i s
s u b j e c t on t h e p a p e r d u r i n g t h e r e c e n t F i n a n c e Bill. I disposed
of i t i n a r g u m e n t . A t t h e s a m e t i m e I s a i d t h a t I w a s p e r f e c t l y
p r e p a r e d " t o c o n s i d e r a n y p r o p o s a l p u t f o r w a r d for t h e s a m e
p u r p o s e " free f r o m
t h e i n s u p e r a b l e difficulties w h i c h t h a t
particular proposal contained.
If s o m e u s e f u l p r o p o s a l s h o u l d b e m a d e , t h a t w o u l d b e
a n o t h e r m a t t e r . I n t h e m e a n w h i l e I s e e n o a d e q u a t e g r o u n d for
h a v i n g a t t h e p r e s e n t t i m e a r o v i n g e n q u i r y i n t o t h e i n c i d e n c e of
taxation upon enterprise.
3 2 . I w o u l d l i k e t o a d d o n e final o b s e r v a t i o n . T h e M e m o r a n ­
d u m s u g g e s t s t h a t t h e r e g u l a t i o n s i n r e g a r d t o d e p r e c i a t i o n of
p l a n t for i n c o m e t a x p u r p o s e s a r e i n a d e q u a t e .
I t is s i g n i f i c a n t
t h a t since 1918 t h e r e h a s been on t h e S t a t u t e B o o k a provision
u n d e r w h i c h a n y i n d u s t r y dissatisfied w i t h its depreciation
allowance can appeal through the ordinary authorities to an
i n d e p e n d e n t b o d y of b u s i n e s s m e n p o s s e s s i n g u n f e t t e r e d d i s ­
cretion in this m a t t e r .
N o i n d u s t r y h a s y e t t h o u g h t it w o r t h
w h i l e t o a v a i l itself of t h i s r i g h t .
Trade Facilities.
(Note b y
3 3 . A m o n g t h e a i d s t o e n t e r p r i s e m e n t i o n e d in t h e M e m o r a n d u m
r e f e r e n c e is m a d e t o T r a d e F a c i l i t i e s . " T r a d e F a c i l i t i e s
. . . .
t*the
o n t h e w h o l e h a v e fully justified t h e m s e l v e s , a n d w e r e c o m m e n d
Exchequer.) t h a t T r a d e F a c i l i t i e s b e r e s t o r e d , p r o b a b l y in s o m e m o d i f i e d
f o r m . . . . " N o t h i n g i s s a i d of t h e s t e p s t a k e n b y t h e p r e s e n t
G o v e r n m e n t t o c o n t i n u e a n d e x t e n d all t h a t w a s f o u n d m o s t
useful in t h e original T r a d e Facilities S c h e m e .
t
n
e
C
34. As regards u n d e r t a k i n g s in Great Britain, t h e T r a d e
Facilities Acts were applicable to industrial concerns generally,
b u t t h e i r m o s t useful a p p l i c a t i o n w a s certainly t o public utilities
a n d t h e A d v i s o r y C o m m i t t e e , on whose r e c o m m e n d a t i o n g u a r a n t e e s
were given, constantly urged t h a t its operation should be restricted
t o public utilities. On this—the public utility—side the T r a d e
Facilities scheme has not merely been revived b u t m u c h extended
a n d i m p r o v e d b y P a r t 1 of t h e D e v e l o p m e n t ( L o a n G u a r a n t e e s
a n d G r a n t s ) A c t 1 9 2 9 . T h i s m e a s u r e — w h i c h I o b s e r v e is n o w h e r e
m e n t i o n e d in t h e Liberal M e m o r a n d u m — e n a b l e s assistance t o b e
g i v e n t o c a p i t a l e x p e n d i t u r e for t h e d e v e l o p m e n t , r e c o n s t r u c t i o n
a n d r e - e q u i p m e n t of p u b l i c u t i l i t i e s ; t h e a s s i s t a n c e m a y t a k e t h e
f o r m e i t h e r of a S t a t e g u a r a n t e e , a s u n d e r t h e T r a d e F a c i l i t i e s
A c t s , o r of a c o n t i n u i n g g r a n t f r o m t h e E x c h e q u e r t o m e e t for a
p e r i o d p a r t o r w h o l e of t h e i n t e r e s t o n t h e l o a n . T h e s c h e m e h a s
b e e n m a i n l y o p e r a t i v e o n t h e g r a n t s s i d e , i.e., i t w a s t h e r e f o r m
which we i n t r o d u c e d which h a s been really fruitful in accelerating
a n d s t i m u l a t i n g s c h e m e s of d e v e l o p m e n t .
In one year schemes
i n v o l v i n g n e a r l y £ 2 8 £ m i l l i o n s of e x p e n d i t u r e h a v e b e e n a p p r o v e d
f o r a s s i s t a n c e u n d e r t h e A c t . T h i s c o m p a r e s w i t h a t o t a l of s o m e
£1S.V m i l l i o n s f o r g u a r a n t e e s t o d o m e s t i c p u b l i c u t i l i t y c o n c e r n s
u n d e r t h e T r a d e Facilities A c t s during t h e six years they were in
operation.
3 5 . W e h a v e t h u s m a d e full p r o v i s i o n f o r t h e e n c o u r a g e m e n t
of p u b l i c u t i l i t i e s a n d t h e L i b e r a l p l e a for t h e r e v i v a l of T r a d e
F a c i l i t i e s is r e d u c e d t o a p l e a f o r T r a d e F a c i l i t i e s f o r p r i v a t e
e n t e r p r i s e . T h e i r p l a n is, h o w e v e r , v a g u e .
On page 37 we are told t h a t the State should be prepared to
r a i s e i n d u s t r i a l e f f i c i e n c y " e v e n b y s o m e e x t e n s i o n of T r a d e
F a c i l i t i e s o r b y o t h e r t e m p o r a r y financial h e l p . " T h e e x t e n t a n d
f o r m of a s s i s t a n c e i s t o b e " a m a t t e r f o r c o n s i d e r a t i o n i n e a c h c a s e , "
b u t t h e following essential c o n d i t i o n s a r e laid d o w n :—
(a) e x p e r t s a r e t o b e s a t i s f i e d t h a t t h e e f f i c i e n c y a n d
c o m p e t i t i v e p o w e r of t h e i n d u s t r y w i l l b e p e r m a n e n t l y r a i s e d ;
(b) h e l p i s t o b e l i m i t e d i n d u r a t i o n ;
(c) h e l p i s n o t t o e x c e e d i n v a l u e t h e s a v i n g s i n u n e m p l o y ­
m e n t costs resulting.
3 6 . T e r m s s o g e n e r a l a s t h e s e d o n o t h i n g t o s u r m o u n t t h e difficul­
t i e s — s t i l l e n t i r e l y u n s o l v e d — o f finding a p r a c t i c a b l e a n d u s e f u l
plan.
I t is e a s y t o s a y t h a t S t a t e c r e d i t s h o u l d b e a p p l i e d t o
c o m b i n e r a t i o n a l i s a t i o n a n d i n c r e a s e d efficiency w i t h a d d i t i o n a l
e m p l o y m e n t . B u t r a t i o n a l i s a t i o n , v i t a l a s i t is f o r c o m b a t i n g o u r
d i s t r e s s e s , g e n e r a l l y m e a n s less l a b o u r for g i v e n w o r k : it m a y m e a n
t h e e n t i r e c l o s i n g d o w n of a n i n e f f i c i e n t c o n c e r n . F o r t h e t i m e
b e i n g i t r e d u c e s e m p l o y m e n t . H o w a r e w e t o o v e r c o m e t h e logic
of f a c t s ? Q u i t e t r u e , r e - e q u i p m e n t g i v e s m o r e e m p l o y m e n t f o r
t h e m o m e n t in o t h e r i n d u s t r i e s p r o d u c i n g t h e m o d e m p l a n t t h u s
o r d e r e d . B u t h o w a r e w e t o s e c u r e t h a t t h i s will c o u n t e r b a l a n c e
t h e l o s s of e m p l o y m e n t i n t h e r e n o v a t e d f a c t o r y ?
3 7 . I t i s f r a n k l y u s e l e s s t o s u p p o s e t h a t t h e r e - i n t r o d u c t i o n of
T r a d e Facilities can overcome these f u n d a m e n t a l dilemmas.
Nor
w i l l T r a d e F a c i l i t i e s c o n d u c e t o t h e p e r m a n e n t efficiency of
industry. T h e G o v e r n m e n t h a v e definitely declared against a n
e x t e n s i o n of T r a d e F a c i l i t i e s f o r p r i v a t e e n t e r p r i s e , a n d I b e l i e v e
t h a t decision was entirely right.
3 8 . T h e r e - e q u i p m e n t of a f a c t o r y s o a s t o i n c r e a s e i t s c a p a c i t y
t o p r o d u c e g o o d s for w h i c h t h e r e is a r e a d y d e m a n d d o e s n o t
u s u a l l y p r e s e n t a n y d i f f i c u l t y ; p r i v a t e c a p i t a l is e a s i l y o b t a i n a b l e
f o r t h e p u r p o s e . I t is t h e i n e f f i c i e n t c o n c e r n w h i c h w i l l a s k for
T r a d e Facilities, a n d w h y should a L a b o u r G o v e r n m e n t bolster
u p i n e f f i c i e n t p r i v a t e c o n c e r n s ? If w i t h S t a t e a i d t h e r e i s a n
i n c r e a s e d p r o d u c t i o n of g o o d s w i t h o u t a m a r k e t , n o g o o d h a s b e e n
d o n e . T h e effect of T r a d e F a c i l i t i e s w a s f r e q u e n t l y t o a s s i s t o n e
f i r m i n a n i n d u s t r y a t t h e e x p e n s e of i t s c o m p e t i t o r s , a n d t h e
increased c a p a c i t y (particularly in t h e shipping industry) w i t h no
useful o u t l e t h i n d e r e d t r a d e r e v i v a l a n d e m b a r r a s s e d t h e b o r r o w i n g
concerns.
M a n y n o t a b l e e x a m p l e s of t h i s c o u l d b e g i v e n .
3 9 . N o r w o u l d t h e r e i n t r o d u c t i o n of T r a d e F a c i l i t i e s h a s t e n
rationalisation. On the contrary, the re-introduction would hold
u p s c h e m e s a l r e a d y in p r o g r e s s , for t h e p r o m o t e r s w o u l d h o p e
b y delay to obtain more favourable terms from the Government.
T h e y w o u l d h o p e t o e s c a p e t h e c u t t i n g o u t of d e a d w o o d , a n d t h e
e l i m i n a t i o n of i n e f f i c i e n t m a n a g e m e n t .
I t is n o t t h e b u s i n e s s
of a L a b o u r G o v e r n m e n t t o s o f t e n t h e h a r d r e a l i t i e s of r a t i o n a l ­
isation b y m a k i n g c o m f o r t a b l e gifts t o b a n k e r s , creditors, or
shareholders whose money has really gone. T h e steps recently
t a k e n b y t h e C i t y i n t h e f o r m a t i o n of t h e B a n k e r s ' I n d u s t r i a l
D e v e l o p m e n t C o m p a n y a r e b e g i n n i n g t o h a v e t h e i r effect a n d
t h e r e i n t r o d u c t i o n of T r a d e F a c i l i t i e s w o u l d o n l y h i n d e r t h e
movement.
40. T r a d e Facilities a r e m e r e l y a G o v e r n m e n t g u a r a n t e e for
capital which a p r i v a t e concern desires to raise. Given t h a t t h e
c o n c e r n i s efficient e n o u g h t o b e a b l e t o r a i s e m o n e y o n i t s o w n
c r e d i t — a n d if i t is n o t i t s h o u l d g o w i t h o u t i t — t h e o n l y v a l u e of
t h e G o v e r n m e n t g u a r a n t e e lies i n t h e difference b e t w e e n t h e r a t e
at which the Government can borrow and that at which the
industry can borrow.
This m a r g i n , once wide, is n o w com­
p a r a t i v e l y n a r r o w , a n d t h e a t t r a c t i o n of T r a d e F a c i l i t i e s t o
business m e n is c o r r e s p o n d i n g l y r e d u c e d .
T h e a u t h o r s of t h e
Liberal Plan would no doubt meet this b y saying that we should
g i v e i n d u s t r i e s c h e a p c a p i t a l — s a y a t 3 p e r c e n t , o u t of t h e p u b l i c
p u r s e — b u t I a m n o a d v o c a t e of t h i s p r o p o s a l of g i v i n g p u b l i c
m o n e y t o f a v o u r e d p r i v a t e c o n c e r n s w i t h o u t a n a t o m of e f f e c t i v e
public control.
4 1 . I t is w o r t h w h i l e t o a d d t h a t of t h e £ 7 0 m i l l i o n s of c a p i t a l
guaranteed u n d e r t h e T r a d e Facilities A c t s some £7 millions
only h a s b e e n r e p a i d t o d a t e , a n d t h e loss i n c u r r e d on t h a t s m a l l
p r o p o r t i o n of c a s e s is n o w a p p r o a c h i n g £ 1 m i l l i o n . B u t f o r s p e c i a l
arrangements which we were able to m a k e , a further £2 millions
o d d m i g h t easily h a v e fallen on t h e E x c h e q u e r for p a y m e n t t h i s
year.
T h e h e a v y c o s t of t h e s e g u a r a n t e e s o n t h e E x c h e q u e r
a n d t h e i r d e p r e s s i n g effect o n G o v e r n m e n t c r e d i t a r e n o t n e c e s s a r i l y
decisive considerations, b u t equally t h e y c a n n o t b e ignored.
42. After reviewing t h e whole m a t t e r we as a G o v e r n m e n t
p r o n o u n c e d d e f i n i t e l y a g a i n s t a n e x t e n s i o n of T r a d e F a c i l i t i e s
to private industry when the Development Act was introduced
last y e a r a n d again in r e c e n t m o n t h s w h e n t h e G e n e r a l Council
of t h e T r a d e U n i o n C o n g r e s s r a i s e d t h e q u e s t i o n w i t h p a r t i c u l a r
reference t o shipbuilding.
T h e r e is n o t h i n g i n t h e L i b e r a l
M e m o r a n d u m w h i c h l e a d s m e t o d o u b t t h e w i s d o m of t h i s
conclusion.
(1848C)
E 2
Export Credits.
(Note b y
the
President
of the
Board
of Trade.)
43. T h e r e c o m m e n d a t i o n s in t h e M e m o r a n d u m are very
v a g u e , being m a i n l y t h a t t h e G o v e r n m e n t should " see w h e t h e r
m o r e c a n n o t b e d o n e " a n d r u n r a t h e r g r e a t e r risks t h a n w o u l d
n o r m a l l y b e j u s t i f i a b l e . T h e y s u g g e s t m o r e u s e of t h e s c h e m e for
t h e d e v e l o p m e n t of t r a d e w i t h R u s s i a ; a n d a d d t h a t w h a t e v e r
facilities exist s h o u l d be m a d e m o r e widely k n o w n a n d t h e
c o - o p e r a t i o n of t h e B a n k s s h o u l d b e s o u g h t .
44. This is largely out
follows :—
of d a t e a s w i l l b e s e e n f r o m
what
T h e E x p o r t Credits s c h e m e h a s been largely altered since its
s t a r t i n 1 9 1 9 , a s t h e r e s u l t of t h e r e c o m m e n d a t i o n s of a C o m m i t t e e
representing commercial a n d banking interests which reported
in 1926.
T h e a m e n d e d scheme allows t h e D e p a r t m e n t , on the advice
of t h e S t a t u t o r y A d v i s o r y C o m m i t t e e t o i n d e m n i f y e x p o r t e r s
a g a i n s t risk on a bill, w i t h o u t recourse a g a i n s t t h e exporter, u p
t o 7 5 p e r c e n t , of t h e a m o u n t of t h e b i l l . T h e D e p a r t m e n t a l s o
p r o v i d e s p u r e l y financial f a c i l i t i e s b y g u a r a n t e e i n g 100 p e r c e n t ,
of t h e b i l l w i t h full r e c o u r s e . T h e s c h e m e i s v e r y e l a s t i c a n d t h e
p r e m i u m s v a r y with the risk ; a n d constant i m p r o v e m e n t s are
being introduced.
T h e s c h e m e r e c e n t l y c a m e u n d e r full r e v i e w i n 1 9 2 9 b y a
C o m m i t t e e c o n s i s t i n g of S i r O t t o N i e m e y e r , C o l o n e l t h e H o n .
S i d n e y Peel, a n d Sir William Plender, w h o r e c o m m e n d e d t h a t
a s t h e s c h e m e w a s still e x p e r i m e n t a l , P a r l i a m e n t a r y a u t h o r i t y
for its c o n t i n u a n c e s h o u l d b e o b t a i n e d .
In the Overseas Trade
A c t , 1930, it w a s c o n t i n u e d t o 31st M a r c h , 1935.
T h e C o m m i t t e e further said t h a t it w a s essential t o t h e
s u c c e s s f u l c o n d u c t of t h e e x p e r i m e n t t h a t t h e b u s i n e s s s h o u l d b e
c o n d u c t e d on c o m m e r c i a l lines. T h e y r e c o m m e n d e d t h e a p p o i n t ­
m e n t of a s m a l l E x e c u t i v e C o m m i t t e e w i t h p o w e r s a n a l o g o u s
t o t h o s e of a B o a r d of D i r e c t o r s of a b u s i n e s s u n d e r t a k i n g ,
i n c l u d i n g a u t h o r i t y t o s e t t l e a l l q u e s t i o n s of p o l i c y s u c h a s
r e i n s u r a n c e , t h e n a t u r e of t h e r i s k s t o b e i n s u r e d , t h e d e t a i l s of
p o l i c i e s t o b e i s s u e d a n d t h e a p p o i n t m e n t of staff, a n d g e n e r a l l y
t o w a t c h t h e d a i l y c o n d u c t of t h e b u s i n e s s . T h e G o v e r n m e n t
accepted this recommendation subject to certain reservations
i n r e g a r d m a i n l y t o t h e p r e s e r v a t i o n of M i n i s t e r i a l r e s p o n s i b i l i t y .
U n t i l J u l y , 1929, t r a d e w i t h Russia w a s excluded, b u t a s
f r o m 1st A u g u s t of t h a t y e a r t h e C o m m i t t e e w e r e e m p o w e r e d
t o consider proposals in connection with exports to Russia.
45. Turning n o w to the Liberal suggestions.
(a) Greater
risk
should
be
run.
This r e c o m m e n d a t i o n ignores the extent to which t h e D e p a r t ­
m e n t has gone.
Since t h e p r e s e n t s c h e m e b e g a n in 1926, it h a s
c o v e r e d a n i n c r e a s i n g a m o u n t of e x p o r t s e v e r y y e a r . T h e e x p o r t s
assisted b y t h e D e p a r t m e n t y e a r b y y e a r a r e a s follows :—
£
9 m o n t h s to t h e 31.3.1927
12 m o n t h s
,,
31.3.1928
12
,,
,,
31.3.1929
12
,,
,,
31.3.1930
6
,,
,,
30.9.1930
365,000
2,455,000
4,283,000
5,661,000
5,041,000
Total
..
£17,805,000
T h e t o t a l deficit for t h e p e r i o d 1st J u l y , 1926, t o 3 1 s t M a r c h , 1929,
t h e l a t e s t d a t e t o w h i c h it is a t p r e s e n t possible t o e s t i m a t e
t h e financial r e s u l t s , i s l i k e l y t o b e a b o u t £ 7 0 , 0 0 0 . T h e f a c i l i t i e s
h a v e c o v e r e d a w i d e r a n g e of g o o d s . T h e i n d u s t r i e s w h i c h h a v e
m a d e t h e g r e a t e s t u s e of t h e m h a v e b e e n c o t t o n a n d w o o l l e n
textiles, m a c h i n e r y a n d coal.
In considering whether greater risks should be run,
should b e h a d t o t h e following points :—
regard
(i) t h a t n o m a r k e d i n c r e a s e i n e x p o r t t r a d e is l i k e l y
t o result. T h e e x p o r t e r carries a considerable risk in e v e r y
t r a n s a c t i o n w h i c h t h e D e p a r t m e n t g u a r a n t e e s a n d if t h e
D e p a r t m e n t w e r e willing t o b e less p r u d e n t , t h e s o u n d
e x p o r t e r is n o t o f t e n l i k e l y t o b e s o .
The Department
m i g h t e x t e n d t h e m a r g i n of r i s k , b u t t h e m a r g i n a l i n c r e a s e
of t r a d e w o u l d b e v e r y s m a l l .
(ii) m o r e r i s k y t r a n s a c t i o n s w o u l d l e a d t o g r e a t e r l o s s e s
a b r o a d a n d t h e r e s u l t a n t d i s p o s a l of b a n k r u p t s t o c k o n
o v e r s e a s m a r k e t s w o u l d b e r e s e n t e d b y t h e b u l k of s o u n d
British exporters to those markets.
T h e C h a m b e r s of
C o m m e r c e h a v e c o m p l a i n e d of t h i s i n t h e p a s t a n d w o u l d
complain again.
(iii) A n a n n o u n c e m e n t t h a t t h e D e p a r t m e n t w a s p r e p a r e d
t o l o s e m o n e y m i g h t r e s u l t i n i t s b e c o m i n g t h e v i c t i m of
unsound and unsavoury transactions that would be no
appreciable good to trade.
(b) Trade
with
Russia.
This proposal minimises the very considerable work which
h a s b e e n d o n e since t h e p r e s e n t G o v e r n m e n t allowed t h e s c h e m e
t o b e used for t r a d e w i t h Russia. T h u s d u r i n g the twelve m o n t h s
ending 30th September last, the D e p a r t m e n t s contracts covering
exports to Russia a m o u n t e d to £4,678,000 as against £3,809,000
for all o t h e r c o u n t r i e s . I n a d d i t i o n t h e D e p a r t m e n t h a s offered
t o p r o v i d e f a c i l i t i e s f o r f u r t h e r e x p o r t s of a b o u t £ 2 , 0 0 0 , 0 0 0 .
T h i s b u s i n e s s is still u n d e r d i s c u s s i o n .
The Department is
p r o b a b l y g i v i n g g u a r a n t e e s in c o n n e c t i o n w i t h 6 0 p e r c e n t , o r
7 0 p e r c e n t , of t h e t o t a l e x p o r t s f r o m t h i s c o u n t r y t o R u s s i a a n d
i s e v i d e n t l y t h e p r i m a r y c a u s e of t h e i n c r e a s e i n t h o s e e x p o r t s
during t h e last twelve m o n t h s .
I t is d o u b t f u l w h e t h e r o n a n y
r e a s o n a b l e t e r m s m o r e c o u l d p o s s i b l y b e d o n e i n t h i s field.
T h e e x a m p l e of G e r m a n y i s c i t e d b u t i s n o t a l t o g e t h e r h a p p y .
According to the latest information, increased provision h a s
r e c e n t l y b e e n m a d e for i t s e x i s t i n g e x p o r t c r e d i t s s c h e m e s w h i c h
a r e a v a i l a b l e b o t h for t r a d e w i t h R u s s i a a n d w i t h o t h e r c o u n t r i e s .
B u t the German Government has not renewed, and shows n o
disposition t o r e n e w , t h e special facilities n o w e x p i r e d w h i c h
it m a d e in 1926, w h e n it s e t aside £15,000,000 (increased in 1927
t o £18,000,000) for " l o n g " credits for R u s s i a .
(c) Publicity,
etc.
T h e n e x t p r o p o s a l is t h a t t h e f a c i l i t i e s s h o u l d b e m a d e m o r e
w i d e l y k n o w n , a n d c o - o p e r a t i o n w i t h t h e b a n k s is r e c o m m e n d e d .
(i) I t i s i m p o r t a n t t o m a k e i t c l e a r t h a t a l l t h e s e q u e s t i o n s
of b u s i n e s s d e v e l o p m e n t w e r e d e f i n i t e l y p l a c e d b y t h e
G o v e r n m e n t i n t h e h a n d s of a n E x e c u t i v e C o m m i t t e e a s f r o m
t h e 1st A p r i l l a s t , a n d t h a t b o d y h a s b e e n , a n d i s , a c t i v e l y
c o n s i d e r i n g a l l p o s s i b l e m e a n s of d e v e l o p m e n t .
(ii) I t h a s , f o r i n s t a n c e , r e c e n t l y o p e n e d a n office in
B r a d f o r d , f o l l o w i n g o n t h e o p e n i n g of a n office i n M a n c h e s t e r
some time ago.
(iii) Officers of t h e D e p a r t m e n t v i s i t o t h e r l e a d i n g t o w n s
at regular intervals.
(iv) T h e C o m m i t t e e is n o w c o n s i d e r i n g o t h e r m e a s u r e s ,
i n c l u d i n g c o - o p e r a t i o n w i t h t h e b a n k s , for b r i n g i n g its
facilities p r o m i n e n t l y before b u s i n e s s m e n .
4 6 . G e n e r a l l y , t h e L i b e r a l M e m o r a n d u m s o f a r a s t h i s t o p i c is
concerned, a p p e a r s not to do justice t o the facts. T h e position
i s t h a t t h e D e p a r t m e n t is d o i n g m o r e a n d m o r e b u s i n e s s o n s o u n d
a n d progressive lines.
Empire Development.
Dominions.
(Note b y
t i l 0
Itete^OTthe
Dominions.)
47. The Liberal Memorandum
appears
to include
the
D o m i n i o n s in t h e p h r a s e " t h e Colonial E m p i r e . " I t should be
that
a p p l i c a t i o n of t h e t e r m " c o l o n y " o r " c o l o n i a l "
t o t h e D o m i n i o n s is l i k e l y t o c a u s e r e s e n t m e n t a n d s h o u l d b e
avoided.
n
o
t
e
d
t
h
e
4 8 . So far a s t h e D o m i n i o n s a r e c o n c e r n e d , it is c l e a r t h a t t h e
e x t e n t t o w h i c h i t is p o s s i b l e f o r t h e U n i t e d K i n g d o m G o v e r n m e n t
t o a s s i s t , f i n a n c i a l l y o r o t h e r w i s e , in t h e i r development
is e x t r e m e l y
limited. T h e y are a u t o n o m o u s communhies, a n d their develop­
m e n t i s a s m u c h a d o m e s t i c m a t t e r f o r t h e m a s , e.g., t h e d e v e l o p m e n t
of t h e U n i t e d S t a t e s of A m e r i c a is f o r t h e U n i t e d S t a t e s of
America.
4 9 . I n o n e c a s e , h o w e v e r , n a m e l y t h a t of A u s t r a l i a , t h e U n i t e d
K i n g d o m G o v e r n m e n t did, in 1925, agree t o m a k e a c o n t r i b u t i o n
of £ 1 5 0 , 0 0 0 f o r e v e r y £ 7 5 0 , 0 0 0 ( u p t o a m a x i m u m of £ 3 4 , 0 0 0 , 0 0 0 )
advanced b y the Commonwealth Government to State Govern­
m e n t s for d e v e l o p m e n t a l w o r k s a p p r o v e d b y t h e C o m m o n w e a l t h
Government which appeared to the United Kingdom Government
t o b e s u c h a s t o i n c r e a s e t h e p o w e r s of A u s t r a l i a t o a b s o r b
m i g r a t i o n f r o m t h e U n i t e d K i n g d o m . T h i s s c h e m e is a t p r e s e n t
in a b e y a n c e o w i n g largely t o the fact t h a t , in p r e s e n t circumstances,
n o a d v a n c e s a r e likely, for s o m e t i m e a t a n y r a t e , t o b e m a d e b y
t h e C o m m o n w e a l t h G o v e r n m e n t for s u c h p u r p o s e s : in a n y c a s e
the contribution m a d e under the scheme by the United Kingdom
h a s been v e r y m u c h less t h a n t h e m a x i m u m which w a s a t one
t i m e a n t i c i p a t e d ( £ 1 £ m i l l i o n a s a g a i n s t a m a x i m u m of £ 7 m i l l i o n s ) ,
a n d t h e e x p e r i e n c e o b t a i n e d of t h e w o r k i n g o f t h e s c h e m e h a s n o t
b e e n s u c h a s t o e n c o u r a g e t h e i d e a of i t s e x t e n s i o n .
5 0 . A s r e g a r d s t h e e n c o u r a g e m e n t of E m p i r e trade
(which
t h e Liberal M e m o r a n d u m a p p e a r s to some e x t e n t to confuse w i t h
E m p i r e d e v e l o p m e n t ) , t h i s i s , of c o u r s e , a p r i n c i p a l s u b j e c t of
discussion a t t h e I m p e r i a l Conference n o w in session.
The
Empire
Marketing
Board.
51. T h e E m p i r e M a r k e t i n g B o a r d w a s set u p b y H i s Majesty's
G o v e r n m e n t in t h e U n i t e d K i n g d o m in 1926 t o f u r t h e r t h e
m a r k e t i n g of E m p i r e p r o d u c e i n t h e U n i t e d K i n g d o m a n d t o
a d v i s e t h e S e c r e t a r y of S t a t e for D o m i n i o n A f f a i r s o n t h e e x p e n d i ­
t u r e of a n a n n u a l g r a n t p l a c e d b y P a r l i a m e n t a t h i s d i s p o s a l f o r
that purpose.
Its establishment was recommended by the
I m p e r i a l E c o n o m i c C o m m i t t e e . T h e B o a r d is a n o n - p a r t y b o d y
a n d i t s m e m b e r s h i p i n c l u d e s r e p r e s e n t a t i v e s of t h e D o m i n i o n s
a n d ' of t h e C o l o n i e s .
T h e p u r p o s e of t h e E m p i r e M a r k e t i n g B o a r d i s c l e a r a n d
definite. I t is t o i m p r o v e t h e q u a l i t y a n d i n c r e a s e t h e q u a n t i t y
of E m p i r e p r o d u c t s m a r k e t e d i n t h e U n i t e d K i n g d o m a n d t o m a k e
Empire buying a national habit.
52. T h e B o a r d ' s funds have been devoted to
scientific
research, economic investigation a n d publicity.
Grants under
t h e first of t h e s e h e a d i n g s a r e d e s i g n e d t o h e l p i n i n c r e a s i n g
o u t p u t , i m p r o v i n g q u a l i t y , a n d decreasing w a s t a g e in t h e E m p i r e ' s
p r o d u c t i o n . T h e i m m e n s e a n d g r o w i n g p o w e r of s c i e n c e t o h e l p
t h e p r o d u c e r h a d n o t in t h e p a s t b e e n s o t h o r o u g h l y m o b i l i s e d
within t h e E m p i r e as elsewhere in t h e world. T h e B o a r d has,
therefore, f o u n d m a n y o p p o r t u n i t i e s for
financing
scientific
r e s e a r c h of u r g e n t i m p o r t a n c e t o E m p i r e M a r k e t i n g .
Grants
under the second heading—economic investigation—have helped
t o keep p r o d u c e r s , s c a t t e r e d over t h e E m p i r e , in closer a n d m o r e
i n t i m a t e c o n t a c t w i t h t h e n e e d s a n d t a s t e s of t h e i r w h o l e s a l e
a n d retail customers in the United K i n g d o m . T h e y have, further,
b e e n d e v o t e d t o t h r o w i n g light on w h a t m a y b e t e r m e d t h e general
p r o b l e m s of o r d e r l y m a r k e t i n g , w h i c h p r e s e n t t h e m s e l v e s w i t h
such practical insistence t o all e n g a g e d in E m p i r e trade.
Lastly,
t h e B o a r d ' s p u b l i c i t y h a s a i m e d a t t u r n i n g t h e t h o u g h t s of t h e
p u b l i c t o t h e t h e m e of E m p i r e b u y i n g .
5 3 . S c i e n t i f i c r e s e a r c h , c o n d u c t e d w i t h t h e a i d of g r a n t s f r o m
t h e E m p i r e M a r k e t i n g F u n d , is n o w i n p r o g r e s s in t h e U n i t e d
K i n g d o m , i n e a c h of t h e D o m i n i o n s , a n d i n n u m e r o u s C o l o n i e s .
T h e r a n g e of E m p i r e i n d u s t r i e s a n d c o m m o d i t i e s w h i c h t h e s e
g r a n t s a r e d e s i g n e d t o assist is c o n s i d e r a b l e a n d it w o u l d b e
i m p r a c t i c a b l e to s u m m a r i s e t h e m in a n y brief form.
They are
set o u t fully in t h e B o a r d ' s A n n u a l R e p o r t for 1 9 2 9 - 3 0 .
The
R e p o r t s h o w s t h a t g r a n t s h a v e been m a d e affecting a n i m a l
h u s b a n d r y , b r e e d i n g a n d h e a l t h , t h e e x p o r t of p e d i g r e e l i v e s t o c k ,
entomology, mycology a n d plant pathology, plant breeding,
horticulture, economic b o t a n y , dietetics, forestry, mechanical
t r a n s p o r t , fisheries, wool, flax, d a i r y i n g , p o u l t r y , a n i m a l ecology,
agricultural meteorology, oenology, and geophysics.
54. T h e B o a r d ' s economic investigation includes such activities
a s t h e s y s t e m a t i c s u r v e y of t h e w a s t a g e i n i m p o r t e d E m p i r e
fruits.
T r a d e e n q u i r i e s t o e s t i m a t e t h e e x t e n t a n d n a t u r e of
competitive supplies, a n d to obtain information on m a r k e t require­
m e n t s in r e g a r d t o q u a l i t y , g r a d i n g a n d p a c k i n g , h a v e also b e e n
u n d e r t a k e n . A s e r i e s of r e t a i l m a r k e t s u r v e y s h a s b e e n c a r r i e d
out both nationally a n d in selected areas. W e e k l y intelligence
n o t e s a r e p u b l i s h e d b y t h e B o a r d g i v i n g full m a r k e t i n g i n f o r m a t i o n
for f r e s h f r u i t a n d f o r d a i r ) ' p r o d u c e .
Statistical surveys are
i s s u e d of t h e w o r l d p o s i t i o n a s r e g a r d s t h e p r o d u c t i o n a n d
c o n s u m p t i o n of v a r i o u s f o o d s t u f f s .
5 5 . T h e B o a r d e m p l o y s , a s m e a n s of f u r t h e r i n g t h e s a l e i n
t h e U n i t e d K i n g d o m of E m p i r e p r o d u c t s f r o m h o m e a n d o v e r s e a s ,
s e v e n m e t h o d s of p u b l i c i t 3 , n a m e l y : n e w s p a p e r a d v e r t i s e m e n t ,
posters, leaflets, a n d display m a t e r i a l (including s h o p w i n d o w
bills a n d p o p u l a r leaflets), e x h i b i t i o n s a n d s h o p p i n g w e e k s ,
b r o a d c a s t i n g l e c t u r e s , a n d t h e cinema..
A new experiment was
t r i e d i n t h e f i r s t h a l f of t h i s y e a r b y t h e B o a r d i n G l a s g o w .
A s h o p i n a c e n t r a l p o s i t i o n of t h e c i t y w a s r e n t e d f o r s i x m o n t h s
a n d g i v e n o v e r , f o r p e r i o d s of a f o r t n i g h t e a c h , t o i n d i v i d u a l
Empire countries. The direct contacts thus formed with traders
a n d w i t h t h e g e n e r a l p u b l i c p r o v e d m o s t effective in o p e n i n g
u p n e w a n d i n b r o a d e n i n g e s t a b l i s h e d l i n e s of E m p i r e t r a d e .
7
Colonies.
5 6 . T h e M e m o r a n d u m s t a t e s t h a t " t h e d e v e l o p m e n t of t h o s e
p a r t s of t h e E m p i r e w h e r e t h e s t a n d a r d of l i v i n g i s v e r y l o w
. . . c a n , o v e r a p e r i o d of t i m e , p l a y a n i m p o r t a n t p a r t i n t h e
s o l u t i o n of t h e u n e m p l o y m e n t p r o b l e m .
T h i s is e s p e c i a l l y t r u e
of t h e C o l o n i a l E m p i r e w h e r e v a s t a r e a s e n d o w e d w i t h a l m o s t
limitless n a t u r a l resources a r e still largely u n d e v e l o p e d a n d a r e
under British control." W i t h this view there can be little
d i s a g r e e m e n t p r o v i d e d t h a t t h e l i g h t e m p h a s i s is a t t a c h e d t o t h e
w o r d s " o v e r a p e r i o d of t i m e . "
It would be a mistake to suppose
t h a t t h e d e v e l o p m e n t of t h e C o l o n i a l E m p i r e if it i s t o p r o c e e d o n
s o u n d lines will h a v e in t h e i m m e d i a t e future a n y appreciable
influence o n t h e e m p l o y m e n t p o s i t i o n in t h i s c o u n t r y .
T h e fruits
of t h e p o l i c y a r e t o b e s o u g h t r a t h e r i n t h e i n c r e a s e of t r a d e
which Colonial p r o s p e r i t y will u l t i m a t e l y bring.
57. T h e Colonial E m p i r e , u s i n g t h a t t e r m t o c o v e r colonies,,
protectorates a n d m a n d a t e d territories administered b y His
Majesty's G o v e r n m e n t in t h e U n i t e d K i n g d o m , r e p r e s e n t s an
i m m e n s e a r e a , t h e e c o n o m i c r e q u i r e m e n t s a n d p o t e n t i a l i t i e s of
which a r e in t h e m a i n c o m p l e m e n t a r y t o t h e potentialities a n d
r e q u i r e m e n t s of t h e U n i t e d K i n g d o m .
T h i s a r e a is t o a l a r g e
extent undeveloped.
I t s f u r t h e r d e v e l o p m e n t will result in t h e
i n c r e a s e d p r o d u c t i o n of f o o d s u p p l i e s a n d of r a w m a t e r i a l s s u c h
a s a r e essential for British i n d u s t r i e s . T h e i n c r e a s e d i n c o m e a n d
p r o s p e r i t y r e s u l t i n g f r o m t h e s a l e of s u c h f o o d s u p p l i e s a n d r a w
m a t e r i a l s w i l l r e s u l t i n a n i n c r e a s e d d e m a n d for a n d c o n s u m p t i o n
of t h e m a n u f a c t u r e d p r o d u c t s of w h i c h t h e U n i t e d K i n g d o m
m i g h t b e t h e p r i n c i p a l s o u r c e of s u p p l y .
(Note b y
*
s t a t e fort!
Colonies.)
h e
58. T h e G o v e r n m e n t h a v e s h o w n t h e m s e l v e s fully alive to
t h e i m p o r t a n c e of t h i s a s p e c t of I m p e r i a l p o l i c y . W i t h i n a
m o n t h of a s s u m i n g office, t h e y i n t r o d u c e d i n t o P a r l i a m e n t
t h e Colonial D e v e l o p m e n t Bill, w h i c h b e c a m e l a w a t
the
e n d of J u l y , 1 9 2 9 .
The Advisory Committee
contemplated
under the Act was appointed shortly afterwards.
The Act
m a k e s p r o v i s i o n for a n a n n u a l e x p e n d i t u r e f r o m p u b l i c f u n d s
w h e t h e r b y w a y of g r a n t o r l o a n of a s u m n o t e x c e e d i n g
£ 1 , 0 0 0 , 0 0 0 , i n a i d of a g r i c u l t u r e a n d i n d u s t r y i n t h e C o l o n i e s .
D u r i n g the last fourteen m o n t h s t h e Committee has e x a m i n e d
a t o t a l of 1 8 6 s c h e m e s s u b m i t t e d f r o m 3 1 d i f f e r e n t C o l o n i a l
A d m i n i s t r a t i o n s , a n d h a s r e p o r t e d f a v o u r a b l y u p o n 1 3 6 of t h e s e .
I n n o case h a s G o v e r n m e n t a p p r o v a l been refused t o a r e c o m ­
mendation made by the Committee.
T h e s e 136 s c h e m e s call for
a t o t a l e x p e n d i t u r e of £ 8 , 7 1 5 , 1 8 0 , of w h i c h £ 3 , 4 7 6 , 0 1 0 i s
e s t i m a t e d to be spent in the United K i n g d o m .
The total
assistance r e c o m m e n d e d from t h e Colonial D e v e l o p m e n t F u n d
t o d a t e i s £ 2 , 6 0 3 , 0 5 9 , of w h i c h it w a s c o n t e m p l a t e d t h a t £ 9 8 7 , 8 1 2
w o u l d be r e q u i r e d i n t h e c u r r e n t financial y e a r , £530,638 in
1 9 3 1 - 3 2 , a n d £ 4 5 3 , 4 0 2 in 1 9 3 2 - 3 3 . T h e r e is g r o u n d
for
s u p p o s i n g t h a t a s m a l l p r o p o r t i o n of t h e e x p e n d i t u r e e n v i s a g e d
for t h e c u r r e n t y e a r w i l l i n f a c t n o t b e r e q u i r e d u n t i l a f t e r A p r i l 1 s t
n e x t , b u t i t is r e a s o n a b l y p r o b a b l e t h a t t h e £ 1 , 0 0 0 , 0 0 0 p r o v i d e d
u n d e r t h e D e v e l o p m e n t A c t will b e fully u t i l i s e d d u r i n g t h i s a n d
succeeding years.
5 9 . So f a r £ 7 5 0 , 0 0 0 o n l y h a s b e e n
b u t t h e C h a n c e l l o r of t h e E x c h e q u e r ,
P a r l i a m e n t for t h e f u n d , h a s u n d e r t a k e n
a further £250,000 in the Supplementary
voted by Parliament,
w h o is responsible to
t o i n c l u d e if n e c e s s a r y
Estimates.
60. I t h i n k it o n l y r i g h t t o call a t t e n t i o n t o t h e fact t h a t
c i r c u m s t a n c e s m a y m a k e i t n e c e s s a r y for t h e G o v e r n m e n t t o
c o n s i d e r a t a l a t e r s t a g e w h e t h e r or n o t t o a s k P a r l i a m e n t for
i n c r e a s e d p r o v i s i o n . T h e q u e s t i o n is n o t i m m e d i a t e l y p r e s s i n g ,
b u t a t t h e r e c e n t C o l o n i a l Office C o n f e r e n c e , a t w h i c h m u c h t i m e
w a s given t o q u e s t i o n s affecting economic d e v e l o p m e n t , t h e
r e p r e s e n t a t i v e s of t h e s e v e r a l C o l o n i a l A d m i n i s t r a t i o n s w e r e u r g e d
t o m a k e full u s e of t h e g e n e r o u s f a c i l i t i e s a f f o r d e d b y t h e S t a t u t e ,
a n d it r e m a i n s t o b e seen w h e t h e r t h e r e s p o n s e will b e s u c h as t o
render inadequate the present statutory total.
Industrial Invention and Research.
(Note b y
the Lord
President
of the
Council).
6 1 . F o r c o n v e n i e n c e of d i s c u s s i o n , M r . L l o y d
George's
s u g g e s t i o n s m a y b e a n a l y s e d a s follows :—
(a) T h e c o n d i t i o n s in t h i s c o u n t r y s h o u l d b e s u c h a s t o
f a c i l i t a t e t h e p u r s u i t of i n d u s t r i a l r e s e a r c h a n d t h e d i s c o v e r i n g
a n d w i s e a p p l i c a t i o n of i n v e n t i o n .
T w o i d e a s s e e m t o b e i n v o l v e d in t h e p r o p o s a l s : —
(i) T h e p r o v i s i o n of a d e q u a t e f a c i l i t i e s f o r g r o u p s of
manufacturers and individual manufacturers to have
i n v e s t i g a t i o n s m a d e on p r o b l e m s c o n c e r n i n g their
industries ;
(ii) T h e p r o v i s i o n of f a c i l i t i e s f o r h e l p i n g p r i v a t e i n v e n t o r s
to d e v e l o p ideas, to t e s t t h e m o u t in p r a c t i c e
a n d (?) t o e x p l o i t p r o m i s i n g i n v e n t i o n s u n d e r p r o p e r
conditions.
T o fulfil t h e s e o b j e c t s it i s recommended
t h a t the State should
t a k e t h e i n i t i a t i v e i n f o u n d i n g a n I n s t i t u t i o n o n t h e l i n e s of
t h e M e l l o n I n s t i t u t e of t h e U n i t e d S t a t e s of A m e r i c a .
[See
A p p e n d i x I.)
(b) B e t t e r c o - o r d i n a t i n g of t h e w o r k of v a r i o u s b o d i e s
working under the Government or with G o v e r n m e n t assistance
is d e s i r a b l e , a n d e n q u i r y s h o u l d b e m a d e i n t o t h i s .
6 2 . I t is s u b m i t t e d t h a t t h e R e s e a r c h A s s o c i a t i o n S c h e m e ,
w h i c h w a s f o r m u l a t e d b y t h e D e p a r t m e n t of S c i e n t i f i c a n d
I n d u s t r i a l R e s e a r c h a n d h a s f o r m e d a m a j o r p a r t of t h e D e p a r t ­
m e n f s a c t i v i t i e s s i n c e 1 9 1 7 , fulfils t h e s e r e q u i r e m e n t s , a t l e a s t a s
r e g a r d s t h e d e m a n d s of groups
of m a n u f a c t u r e r s , f a r m o r e
a d e q u a t e l y t h a n t h e Mellon Institute.
T h e o p e r a t i o n s of t h e
M e l l o n I n s t i t u t e h a v e b e e n w e l l k n o w n t o t h e D e p a r t m e n t of
S c i e n t i f i c a n d I n d u s t r i a l R e s e a r c h a n d i t s A d v i s o r y C o u n c i l for
t h e l a s t 15 y e a r s . T h e Mellon I n s t i t u t e w a s f o u n d e d in M a r c h ,
1 9 1 3 , a n d t h e D e p a r t m e n t of S c i e n t i f i c a n d I n d u s t r i a l R e s e a r c h
w a s set u p b y O r d e r in Council in J u l y , 1915.
6 3 . W h e n t h e A d v i s o r y C o u n c i l of t h e D e p a r t m e n t , c o m p r i s i n g
eminent scientists, experienced industrialists, a n d distinguished
a d m i n i s t r a t o r s , a d d r e s s e d t h e m s e l v e s t o t h e t a s k of d e v i s i n g a
s c h e m e t o e n c o u r a g e t h e a p p l i c a t i o n of s c i e n c e t o i n d u s t r i a l
o p e r a t i o n s , t h e y c o n s i d e r e d a n d r e j e c t e d t h e i d e a of f o r m i n g o n e
c e n t r a l i n s t i t u t i o n t o w h i c h i n d u s t r i e s c o u l d t u r n for h e l p a n d
guidance in t h e m a t t e r .
T h e y d i d so for definite r e a s o n s .
An
i n s t i t u t i o n like t h e Mellon I n s t i t u t e — d o i n g excellent w o r k — w a s
well suited, no doubt, to A m e r i c a n industrial m e n t a l i t y ; such
a n i n s t i t u t i o n is e q u a l l y o r e v e n b e t t e r s u i t e d t o G e r m a n
industrial mentality. I t does not appeal to t h e British industrial
m i n d . T h e B r i t i s h i n d u s t r i a l i s t is e s s e n t i a l l y a n i n d i v i d u a l .
He
h a s a r i c h p r i d e i n h i s w o r k a n d t h a t of h i s f o r b e a r s ; h e h a s a
p r o f o u n d d i s t r u s t of G o v e r n m e n t D e p a r t m e n t s ; h e h a t e s h a v i n g
ideas foisted u p o n h i m from outside, a n d h e dislikes h a v i n g t o
a s k for assistance.
64. T h e Advisory Council, therefore, devised a s c h e m e which,
i n t h e i r o p i n i o n , o f f e r e d t h e b e s t c h a n c e of g e t t i n g B r i t i s h
m a n u f a c t u r e r s to use science t o a g r e a t e r e x t e n t in their o p e r a t i o n s .
H i s t o r i c t r a d i t i o n s a n d g r e a t t e c h n i c a l skill, a s for i n s t a n c e in t h e
centuries-old wool i n d u s t r y ;
ignorance due to
indifferent
e d u c a t i o n , as for I n s t a n c e in t h e b o o t a n d shoe i n d u s t r y , o p e r a t e d
t o m a k e t h e i n c u l c a t i o n of n e w s c i e n t i f i c i d e a s difficult of a c c e p t a n c e
o r of u n d e r s t a n d i n g .
In a relatively new industry, such as the
e l e c t r i c a l , w h o s e e v e r y d e v e l o p m e n t is b a s e d o n scientific d i s c o v e r y ,
t h e difficulty w a s n o t so g r e a t .
6 5 . T h e s c h e m e d e v i s e d c o n s i s t e d i n t h e f o r m a t i o n of r e s e a r c h
a s s o c i a t i o n s f o r t h e v a r i o u s i n d u s t r i e s of t h e c o u n t r y ; c o - o p e r a t i v e
o r g a n i s a t i o n s w h i c h c o u l d c a t e r f o r l a r g e a n d s m a l l firms o n a n
e q u i t a b l e b a s i s a n d c o n d u c t r e s e a r c h w o r k f o r t h e b e n e f i t of a l l
contributing to their support.
T o e n c o u r a g e t h e f o r m a t i o n of
t h e s e i n d u s t r i a l r e s e a r c h a s s o c i a t i o n s , P a r l i a m e n t v o t e d t h e s u m of
one million pounds in 1917-18 t o be spent over an agreed period
to supplement the funds supplied b y the contributing
firms.
T h a t f u n d i s n o w o n t h e p o i n t of e x h a u s t i o n , a n d s i n c e t h e
f o r m u l a t i o n of t h e s c h e m e 2 7 r e s e a r c h a s s o c i a t i o n s h a v e b e e n
f o u n d e d a n d 2 0 a r e i n full o p e r a t i o n a t t h e p r e s e n t t i m e .
T h e e s s e n t i a l f e a t u r e s of t h e s e a s s o c i a t i o n s a r e t h e f o U o w i n g .
E a c h is a n o r g a n i s a t i o n set u p b y t h e i n d u s t r y for t h e i n d u s t r y .
T h e y a r e a u t o n o m o u s b o d i e s , a p p o i n t i n g t h e i r o w n staffs a n d
a r r a n g i n g t h e i r o w n p r o g r a m m e s of r e s e a r c h , w i t h i n t i m a t e
k n o w l e d g e of t h e p r o b l e m s t h a t c o n f r o n t t h e i n d u s t r y c o n c e r n e d .
T h e D e p a r t m e n t a s a c o n d i t i o n of i t s g r a n t a i d h a s t o s a t i s f y
itself t h a t t h e r e is d u e p r o s e c u t i o n of r e s e a r c h a n d t h e a n n u a l
p r o g r a m m e s a n d e s t i m a t e s c o m e u n d e r t h e r e v i e w of t h e A d v i s o r y
Council who can m a k e suggestions, b u t who do not a p p r o v e t h e m
a s a c o n d i t i o n of g r a n t . T h e g r e a t e s t p o s s i b l e f r e e d o m i s g i v e n
t o t h e g o v e r n i n g b o d i e s of r e s e a r c h a s s o c i a t i o n s t o w o r k o u t
their own salvation.
T h e A d v i s o r y C o u n c i l felt t h a t t h e
c o n s i d e r a t i o n s a l l u d e d t o a b o v e m a d e it i m p e r a t i v e
that
g r e a t f r e e d o m of a c t i o n s h o u l d b e g i v e n t o t h e s e c o - o p e r a t i v e
r e s e a r c h o r g a n i s a t i o n s if t h e r e s u l t s o b t a i n e d w e r e t o b e u t i l i s e d .
I t i s of l i t t l e u s e t o p r o d u c e r e s u l t s if t h e y a r e n o t a p p l i e d , a n d of
still less u s e t o p u b l i s h t h e r e s u l t s b y a S t a t e r e s e a r c h o r g a n i s a t i o n
t o b e u s e d possibly b y foreign c o m p e t i t o r s w i t h t h e i r livelier
s e n s e of p o t e n t i a l i t i e s .
6 6 . M o s t of t h e r e s e a r c h a s s o c i a t i o n s h a v e n o w b e e n i n e x i s t ­
e n c e f o r 10 y e a r s a n d t h e i r e a r l y g r o w t h h a s b e e n t h e s u b j e c t
of m u c h a n x i e t y o n t h e p a r t of t h e f a r s e e i n g l e a d e r s of i n d u s t r y
r e s p o n s i b l e for t h e i r i n i t i a t i o n a n d t h e i r d e v e l o p m e n t h a s i n v o l v e d
m u c h s y m p a t h e t i c s t i m u l a t i o n b y t h e A d v i s o r y C o u n c i l of t h e
(1848C)
r
Department.
The whole v e n t u r e w a s novel a n d it h a s no counter­
part in any other country.
B u t t h e battle has been largely won
a n d t h e p r o s p e c t s of t h e r e s e a r c h a s s o c i a t i o n s a s a w h o l e m a y b e
said to be bright.
T h e r e a s o n s for o p t i m i s m m a y b e s u b s t a n t i a t e d
b y o n e o r t w o f a c t s , g i v e n a s i l l u s t r a t i o n s of t h e w a y i n w h i c h
these organisations are helping the industries they represent.
On
October 16th " T h e Times " reported t h a t the Cotton Research
A s s o c i a t i o n h a s r e c e i v e d 1,000 e n q u i r i e s f r o m 4 2 6 firms, 4 0 p e r
cent, from spinners a n d 34 per cent, from m a n u f a c t u r e r s ; t h a t
6 S 2 v i s i t s h a v e b e e n p a i d b y r e s e a r c h officers of t h e A s s o c i a t i o n
t o m i l l s of m e m b e r s t o g i v e a d v i c e a n d a s s i s t a n c e ; w h i l e r e c e n t l y
t h e J o i n t C o m m i t t e e of C o t t o n T r a d e O r g a n i s a t i o n s h a s s e t u p
a T r a d e D e v e l o p m e n t S u b - C o m m i t t e e o n w h i c h t h e D i r e c t o r of
t h e R e s e a r c h A s s o c i a t i o n is a p r o m i n e n t m e m b e r .
The work
of t h i s T r a d e C o m m i t t e e p r o m i s e s t o b r i n g i n t o s t i l l c l o s e r c o n t a c t
t h e s c i e n t i f i c w o r k of t h e A s s o c i a t i o n w i t h i n d u s t r i a l o p e r a t i o n s .
6 7 . T u r n i n g t o t h e v a l u e of t h e w o r k d o n e b y t h e A s s o c i a t i o n s
i n b a r d c a s h , it m a y b e s t a t e d a t o n c e t h a t it is i m p o s s i b l e a s a r u l e
t o c o m p u t e i n p o u n d s , s h i l l i n g s a n d p e n c e t h e v a l u e of t h e i r
operations.
B u t it h a s been authoritatively s t a t e d t h a t the value
of t h e b e n e f i t s g a i n e d f r o m t h e o p e r a t i o n s of t h e E l e c t r i c a l
Research Association can be reasonably estimated a t a
figure
a p p r o a c h i n g £ 1 , 0 0 0 , 0 0 0 per annum
f o r a n a n n u a l e x p e n d i t u r e of
£ 2 5 , 0 0 0 a n d a t o t a l c o s t of r o u g h l y £ 1 5 0 , 0 0 0 .
6 S . E n o u g h , p e r h a p s , h a s b e e n s a i d t o p r o v e t h e w i s d o m of
t h e A d v i s o r y Council s o m e 13 y e a r s a g o i n f o r m u l a t i n g t h e i r
s c h e m e of r e s e a r c h a s s o c i a t i o n s . T h e p r e s e n t m e m b e r s of t h a t
Council from their
first-hand
k n o w l e d g e of t h e w o r k of t h e
A s s o c i a t i o n s a r e c o n v i n c e d of i t s s o u n d n e s s ; t h e f a c t s of t h e
position provide an answer to the suggestion t h a t the Government
s h o u l d c o n s i d e r t h e b e s t m e a n s of b r i n g i n g t h e w o r k of t h e
D e p a r t m e n t a n d o t h e r o r g a n s of r e s e a r c h i n c l o s e r t o u c h w i t h t h e
p r a c t i c a l n e e d s of i n d u s t r y .
6 9 . A s s t a t e d a b o v e t h e f u n d of £ 1 , 0 0 0 , 0 0 0 e s t a b l i s h e d i n
1 9 1 7 - 1 S is o n t h e p o i n t of e x h a u s t i o n .
Some two years ago,
w h e n t h e future policy governing State assistance to research
associations w a s r e p o r t e d on b y t h e A d v i s o r y Council, it w a s
r e a l i s e d t h a t t h e r e s i d u e of t h e o r i g i n a l M i l l i o n F u n d w a s q u i t e
i n a d e q u a t e to carry out t h e policy advocated.
Appreciating
t h e n a t i o n a l i m p o r t a n c e of t h e s e p r o p o s a l s a s a f f e c t i n g t h e f u t u r e
i n d u s t r i a l d e v e l o p m e n t of t h e c o u n t r y , t h e T r e a s u r y a g r e e d i n
1928 t o c o n s i d e r w h e n t h e t i m e c a m e , p r o v i s i o n for f u r t h e r g r a n t s
u p t o a l i m i t of £ 1 0 0 , 0 0 0 p e r a n n u m .
P r o p o s a l s b a s e d on t h e m o r e
a c c u r a t e e s t i m a t e of r e q u i r e m e n t s w h i c h c a n n o w b e m a d e , h a v e
accordingly been submitted through the appropriate channel.
T h e s e p r o p o s a l s w i l l , for t h e r e a s o n s a l r e a d y i n d i c a t e d , b e o n t h e
l i n e s of t h e c o n t i n u a n c e a n d of t h e d e v e l o p m e n t of r e s e a r c h
associations a n d o t h e r organisations designed t o assist i n d u s t r y
in t h e m o s t practical w a y . W i t h o u t a d e q u a t e provision for
organised research n o c o n s t r u c t i v e policy for t h e r e c o n d i t i o n i n g
of i n d u s t r y a n d t h e a d v a n c e m e n t of i n d u s t r i a l efficiency c o u l d
be complete.
7 0 . T h e r e m a r k s i n l i n e s 1 0 - 1 2 of p . 3 0 of M r . L l o y d G e o r g e ' s
M e m o r a n d u m a n e n t t h e d i f f i c u l t i e s of t h e p r i v a t e i n v e n t o r a r e
generally agreed b y the Department.
B u t on the other h a n d
the D e p a r t m e n t ^ experience would indicate that (apart perhaps
f r o m t h e d a n g e r of i m p r o p e r financial e x p l o i t a t i o n ) t h e i m p o r t a n c e
of t h i s i s s u e c a n b e e a s i l y e x a g g e r a t e d .
T h e d a y is a l m o s t g o n e
when the private investigator without means, and without
c o n t a c t s w i t h c o m p e t e n t scientific p e r s o n s w h o c a n secure t h e
i n t e r e s t of r e p u t a b l e i n d u s t r i a l i s t s i n a v a l u a b l e i n v e n t i o n , c a n
produce, except on rare occasions, a real a n d i m p o r t a n t a d v a n c e .
T h e p o l i c y of t h e D e p a r t m e n t i n r e l a t i o n t o t h e a s s i s t a n c e of
i n v e n t o r s is described in t h e following e x t r a c t from t h e
of i t s A d v i s o r y C o u n c i l f o r 1 9 2 0 - 2 1 .
Report
A g r e a t n u m b e r of t h e a p p l i c a t i o n s w e h a v e r e c e i v e d
r e l a t e t o i n v e n t i o n s w h i c h , if n o t f a n t a s t i c , a r e a t l e a s t
scientifically u n s o u n d .
T h i s is p e r h a p s t o b e e x p e c t e d , f o r
we t h i n k it will o n l y o c c a s i o n a l l y b e t h e c a s e t h a t a n i n v e n t o r
w h o h a s a g o o d i d e a , a n d t h e c a p a c i t y t o w o r k it o u t , will
seek G o v e r n m e n t assistance.
H e will, as a rule, prefer e i t h e r
t o r e l y u p o n h i s o w n r e s o u r c e s , o r t o a p p r o a c h a firm k n o w n
t o b e i n t e r e s t e d i n d i s c o v e r i e s of t h e k i n d h e h a s m a d e , a n d
likely, therefore, to give h i m i m m e d i a t e r e m u n e r a t i o n .
We
have pointed out t h a t t h e research associations which are
n o w established in s o m e n u m b e r s m a y be m o r e successful
in e n c o u r a g i n g i n v e n t o r s t h a n a G o v e r n m e n t D e p a r t m e n t .
W e h a v e e v e r y h o p e t h a t t h i s will b e the case a n d , accordingly,
w h e r e w e h a v e r e c e i v e d a n a p p l i c a t i o n for a s s i s t a n c e i n
c o n n e x i o n w i t h a n i n v e n t i o n w h i c h a p p e a r s l i k e l y t o b e of
interest to some industry which has established a research
association, we h a v e , as a rule, referred t h e applicant to t h a t
body.
T h e c a s e s of u s e f u l d i s c o v e r i e s w h i c h c a n n o t b e d e a l t
w i t h either b y a n i n d u s t r i a l research association or in con­
n e x i o n w i t h r e s e a r c h u n d e r t a k e n for t h e G o v e r n m e n t services,
a n d w h i c h t h e r e f o r e will still fall t o u s for c o n s i d e r a t i o n ,
will b e few in n u m b e r , j u d g i n g from p a s t e x p e r i e n c e ; b u t
we shall be ready, as in the past, to consider applications
for a s s i s t a n c e in r e s e a r c h r e q u i r e d t o p e r f e c t for c o m m e r c i a l
use a n e w scientific d i s c o v e r y or i n v e n t i o n .
In dealing with
such applications w e require, as a rule, t h a t t h e invention
m u s t first b e p a t e n t e d o r p r o t e c t e d , a n d , b e f o r e r e c o m m e n d i n g
assistance from public funds, we expect the discoverer to
enter into an a g r e e m e n t with the D e p a r t m e n t as to the
t e r m s on which his invention m a y be exploited.
71. T h e nine years which h a v e elapsed since t h a t w a s w r i t t e n
confirm strongly t h e general conclusions therein
expressed.
A p p l i c a t i o n s t o t h e D e p a r t m e n t in connexion w i t h i n v e n t i o n s
a r e c o n t i n u a l l y r e c e i v e d , b u t i n v e n t i o n s of e v e n s u p e r f i c i a l
promise are conspicuously rare.
I n a n y c a s e I w o u l d s t r o n g l y o p p o s e a n y s u g g e s t i o n for a
State o r g a n i s a t i o n t o e x a m i n e , t e s t a n d r e p o r t u p o n p r i v a t e
inventions.
A D e p a r t m e n t of S t a t e w o u l d b e o b l i g e d t o c o n s i d e r
a n d deal more considerately t h a n would a private organisation
w i t h a m a s s of a p p l i c a t i o n s w h i c h w e r e u t t e r l y w o r t h l e s s a n d
w o u l d b e u n d e r t h e c o n t i n u a l n e c e s s i t y of m e e t i n g c r i t i c i s m of
refusal to u n d e r t a k e tests.
Inventors are notoriously—and
naturally—optimists, and t h e y are perhaps distinguished amongst
o t h e r m e n b y t h e z e a l o u s n e s s of t h e i r a t t e m p t s t o s e c u r e t h e
i n f l u e n c e of i m p o r t a n t p e r s o n s i n p r e s s i n g t h e i r c l a i m s .
72. I d o n o t a g r e e t h a t t h e r e is n e e d for f u r t h e r e n q u i r y i n t o
t h e c o - o r d i n a t i o n of S t a t e c o n t r o l l e d o r s u p p o r t e d o r g a n i s a t i o n s
for c o n d u c t i n g i n d u s t r i a l r e s e a r c h .
So f a r a s o r g a n i s a t i o n s c o n ­
trolled b y the Government are concerned, a comprehensive
e n q u i r y of t h i s n a t u r e w a s c o m p l e t e d l e s s t h a n t w o y e a r s a g o
b y t h e R e s e a r c h C o - o r d i n a t i o n S u b - C o m m i t t e e of t h e C o m m i t t e e
of C i v i l R e s e a r c h .
T h e r e c o m m e n d a t i o n s of t h a t C o m m i t t e e a s
regards industrial research have been implemented a n d there
seems no reason to reopen t h e question yet.
T h e m u l t i p l i c i t y of
S t a t e r e s e a r c h o r g a n i s a t i o n s a n d t h e c o m p l e x i t y of t h e i r a d m i n i s ­
t r a t i o n n o d o u b t a p p e a l s t o t h o s e u n f a m i l i a r w i t h d e t a i l s of t h e i r
w o r k a n d f u n c t i o n s t o b e u n n e c e s s a r y , b u t i n v i e w of t h e r e s u l t s
of t h e r e c e n t e n q u i r y i t m u s t b e a s s u m e d t h a t t h e r e a r e s o u n d
r e a s o n s of p o l i c y b e h i n d t h e p r e s e n t s y s t e m .
T h e w i d e r q u e s t i o n s of t h e c o - o r d i n a t i o n of t h e w o r k of s t a t e ­
c o n t r o l l e d a n d s t a t e - a i d e d o r g a n i s a t i o n s for c o n d u c t i n g i n d u s t r i a l
r e s e a r c h , a n d of t h e m a i n t e n a n c e of c l o s e c o n t a c t b e t w e e n t h e
w o r k of s u c h o r g a n i s a t i o n s a n d t h e p r a c t i c a l n e e d s of i n d u s t r y ,
fall t o t h e D e p a r t m e n t of S c i e n t i f i c a n d I n d u s t r i a l R e s e a r c h ,
(1848C)
F
2
a l m o s t alone amongst G o v e r n m e n t D e p a r t m e n t s , to consider.
N o general question h a s in fact m o r e frequently or m o r e contin­
u o u s f y e n g a g e d t h e a t t e n t i o n of t h e D e p a r t m e n t a n d i t s A d v i s o r y
C o u n c i l ( w h i c h , b e i t n o t e d , is c o m p o s e d of e m i n e n t s c i e n t i s t s a n d
i n d u s t r i a l i s t s , a p r o p o r t i o n of w h o m r e t i r e e a c h y e a r ) . A s r e g a r d s
t h e c o - o r d i n a t i o n of t h e w o r k of t h e s e b o d i e s , t h e D e p a r t m e n t
i t s e l f u n d e r t a k e s t h e t a s k of m a i n t a i n i n g c o n t a c t b e t w e e n t h e m ,
i n v a r i o u s w a y s . I t r e c e i v e d t h e r e p o r t s of a l l t h e b o d i e s t o w h i c h
i t g i v e s f i n a n c i a l a s s i s t a n c e , a s w e l l a s o t h e r s , a n d i t a r r a n g e s for
t h e i n t e r - c o m m u n i c a t i o n of k n o w l e d g e of c o m m o n i n t e r e s t . I t a l s o
encourages direct contact between the individual organisations
i n e v e r j ' w a y p o s s i b l e . T h e w o r k of t h e D e p a r t m e n t s o w n o r g a n i s a ­
t i o n is s i m i l a r l y c o - o r d i n a t e d a m o n g s t t h e m s e l v e s a n d w i t h
outside organisations.
The D e p a r t m e n t h a s representatives on
t h e C o u n c i l s of a l l R e s e a r c h A s s o c i a t i o n s t o w h i c h i t g i v e s g r a n t s ,
a n d o n i t s o w n B o a r d s a n d C o m m i t t e e s t h e D i r e c t o r s of R e s e a r c h
Associations concerned with related problems frequently serve.
7 3 . L a s t l y , i n v i e w of t h e o p e n i n g r e m a r k s of t h e s e c t i o n of
Mr. Lloyd George's m e m o r a n d u m t h e following e x t r a c t from
t h e d r a f t r e p o r t (approved in principle, b u t s u b j e c t t o d r a f t i n g
a m e n d m e n t s ) of t h e A d v i s o r y C o u n c i l f o r t h e y e a r e n d i n g
3 1 s t J u l y l a s t m a y b e of i n t e r e s t .
T h e p a s t y e a r h a s been characterised in this c o u n t r y b y
g r o w i n g c o n c e r n a t t h e i n c r e a s i n g t i d e of u n e m p l o y m e n t w i t h
all its a t t e n d a n t evils, a n d in c o m m o n w i t h o t h e r s h a v i n g a
s h a r e i n t h e r e s p o n s i b i l i t y f o r t h e w e l l - b e i n g of t h e S t a t e , w e
h a v e h a d c o n t i n u a l l y in o u r m i n d s t h e n e e d for assisting a n d
a c c e l e r a t i n g t h e r e c o v e r y of B r i t i s h i n d u s t r y a n d t r a d e f r o m
i t s p r e s e n t d e p r e s s i o n . I t is n o t f o r u s t o a t t e m p t a d i a g n o s i s
of t h e o r i g i n of t h e p r e s e n t d i f f i c u l t i e s o r t o d i s c u s s t h e r e m e ­
dies w h i c h m a y b e required to deal w i t h t h e causes underlying
t h e m , b u t s i n c e w e a r e c h a r g e d w i t h t h e d u t y of a d v i s i n g
o n s t e p s t o b e t a k e n f o r t h e a d v a n c e m e n t of t r a d e a n d i n d u s t r y
b y m e a n s of s c i e n t i f i c r e s e a r c h , i t h a s b e e n o u r c o n c e r n t o
c o n s i d e r h o w s c i e n c e c a n h e l p in l a r g e r m e a s u r e t o r e s t o r e o u r
i n d u s t r i e s t o full h e a l t h .
S c i e n c e c a n b y i t s e l f offer n o s o l u t i o n t o t h i s l a r g e p r o b l e m ,
w h i c h h a s m a n y a s p e c t s a n d in w h i c h m a n y influences, s o m e
world-wide a n d some peculiar to this country, are at work.
B u t w e a r e c o n v i n c e d t h a t n o c o m p l e t e s o l u t i o n is p o s s i b l e
w h i c h d o e s n o t i n c l u d e a c c e p t a n c e of t h e h e l p w h i c h s c i e n c e
c a n g i v e . F r o m o u r p o i n t of v i e w t h e i m m e d i a t e q u e s t i o n
is h o w B r i t i s h m a n u f a c t u r e r s a r e t o b e e n a b l e d t o c o m b a t
the intense competition with which they are now confronted
f r o m a l m o s t e v e r y q u a r t e r of t h e g l o b e . T h i s c o m p e t i t i o n
i s o n e m a i n l y of p r i c e , a n d t h e o b v i o u s r e m e d y is t h e p r o d u c ­
t i o n of g o o d s w h i c h a p p e a l m o s t t o t h e p r o s p e c t i v e p u r c h a s e r
a t a p r i c e w h i c h , b e a r i n g q u a l i t y in m i n d , is m o s t a t t r a c t i v e
to him.
T h e full a p p l i c a t i o n of s c i e n t i f i c k n o w l e d g e a n d
s c i e n t i f i c m e t h o d t o e x i s t i n g p r o c e s s e s of m a n u f a c t u r e a n d
t h e a c t i v e p r o s e c u t i o n of r e s e a r c h t o d i s c o v e r n e w p r o c e s s e s
a r e , w e b e l i e v e , e s s e n t i a l if r e m u n e r a t i v e p r o d u c t i o n is t o b e
realised.
A t t h e e n d of t h e l a s t c e n t u r y , a n d e v e n l a t e r ,
Great Britain held a pre-eminent position amongst the
i n d u s t r i a l n a t i o n s of t h e w o r l d .
This position has been
partially lost, a n d while m a n y factors h a v e operated in t h a t
misfortune, we h a v e no doubt t h a t amongst t h e m has been
t h e i n c r e a s e d u s e of s c i e n t i f i c k n o w l e d g e a n d s c i e n t i f i c
m e t h o d b y o u r c o m p e t i t o r s a b r o a d t o overcome disabilities
arising either from natural disadvantages or from
the
a d v a n t a g e which G r e a t Britain held b y its earlier s t a r t as a n
i n d u s t r i a l n a t i o n . F o r e x a m p l e , o n e of t h e g r e a t a d v a n t a g e s
e n j o y e d b y u s i n t h e l a s t c e n t u r y w a s t h e p o s s e s s i o n of v a s t
r e s o u r c e s of p o w e r i n t h e f o r m of c o a l .
T h o u g h we still
possess these resources, their competitive value h a s been
l a r g e l y l o s t , b y t h e d e v e l o p m e n t a b r o a d of a l t e r n a t i v e
s o u r c e s , e.g., w a t e r p o w e r a n d o i l , a s w e l l a s b y t h e w o r k i n g
i n o t h e r c o u n t r i e s of c o a l s u p p l i e s a s r i c h a s o u r o w n .
We
cannot expect t o recover the position we once held unless,
7.9
ft ii
where we possess n a t u r a l a d v a n t a g e s , we exploit t h e m t o t h e
full, a n d w h e r e w e h a v e n o a d v a n t a g e , w e e m p l o y a l l t h e
a g e n c i e s a v a i l a b l e for i n c r e a s i n g o u r efficiency. W e a r e g l a d
t o k n o w t h a t i n m a n y of o u r i n d u s t r i e s t h i s is f u l l y r e a l i s e d ,
and t h a t large research laboratories a n d organisations are
m a i n t a i n e d b y m a n y firms. W e w o u l d a g a i n u r g e as s t r o n g l y
as w e c a n t h a t g r e a t a s t h e t e m p t a t i o n m a y b e , i n t i m e s of
f i n a n c i a l s t r i n g e n c y , t o r e d u c e e x p e n d i t u r e o n w h a t is n o t ,
a t first s i g h t , a n i m m e d i a t e l y p r o d u c t i v e b r a n c h of i n d u s t r i a l
o r g a n i s a t i o n , i t is w h e n t i m e s a r e b a d t h a t r e s e a r c h is m o s t
important.
I t is n o w m o r e t h a n e v e r i n c u m b e n t u p o n u s
t o s e e t h a t t h e r e s o u r c e s of s c i e n c e a r e n o t n e g l e c t e d .
Trade Statistics.
7 4 . O n p a g e 3 1 of t h e L i b e r a l M e m o r a n d u m , t h e s t a t e m e n t is (Note by­
m a d e (following a reference t o t h e position in t h e U n i t e d States) ^
t h a t " s o f a r a s s t a t i s t i c s a r e c o n c e r n e d , B r i t i s h I n d u s t r y h a s t o the^E^ard^
w o r k l a r g e l y i n t h e d a r k " ; a n d t h e r e f e r e n c e c o n c l u d e s w i t h t h e f Trade.)
s u g g e s t i o n t h a t t h e B o a r d of T r a d e s h o u l d " b e p r e p a r e d t o c o l l e c t
a n d issue fuller s t a t i s t i c s , a n d t o e n c o u r a g e i n d u s t r i e s t o d o t h i s
i n fuller m e a s u r e for t h e m s e l v e s " .
e
Q
7 5 . T h e B o a r d of T r a d e f u l l y a g r e e a s t o t h e v a l u e of s t a t i s t i c a l
i n f o r m a t i o n a n d a s t o t h e d e s i r a b i l i t y of d e v e l o p i n g o n w e l l ­
c o n s i d e r e d l i n e s t h e s t a t i s t i c a l m a t e r i a l of i n t e r e s t t o i n d u s t r y a n d
trade. At the same time, however, the statement quoted above,
as to British I n d u s t r y working largely in t h e dark, throws a quite
u n m e r i t e d a s p e r s i o n o n t h e q u a n t i t y a n d q u a l i t y of t h e s t a t i s t i c a l
m a t e r i a l a t p r e s e n t p l a c e d a t t h e d i s p o s a l of i n d u s t r y a n d t r a d e
in this c o u n t r y b y G o v e r n m e n t D e p a r t m e n t s a n d industrial
organisations.
7 6 . I n c o n s i d e r i n g t h e a d e q u a c y of t h e s t a t i s t i c s c o m p i l e d a n d
p u b l i s h e d b y t h e B o a r d of T r a d e a n d o t h e r G o v e r n m e n t D e p a r t ­
m e n t s , a distinction m a y profitably be m a d e between those which
a r e b a s e d o n m a t e r i a l n e c e s s a r i l y c o m i n g t o t h e k n o w l e d g e of
G o v e r n m e n t officials i n t h e o r d i n a r y c o u r s e of t h e i r w o r k , a n d
t h o s e for w h i c h t h e d a t a h a v e t o b e specially o b t a i n e d f r o m
manufacturers and traders.
So far as t h e f o r m e r c a t e g o r y is
concerned, it will h a r d l y be d i s p u t e d t h a t t h e statistics are, o n
the whole, adequate.
For example, the monthly and annual
v o l u m e s of T r a d e a n d S h i p p i n g S t a t i s t i c s c o m p a r e f a v o u r a b l y
w i t h t h e corresponding statistics issued b y t h e principal foreign
c o u n t r i e s ; a n d o u r s t a t i s t i c s of u n e m p l o y m e n t a r e of a c o m p l e t e ­
ness unparalleled elsewhere. I n this respect the highly developed
s t a t i s t i c a l s y s t e m of t h e U n i t e d S t a t e s is s e r i o u s l y l a c k i n g , f o r n o
r e l i a b l e figures of u n e m p l o y m e n t i n t h a t c o u n t r y a r e a v a i l a b l e .
7 7 . I n t h e c a s e of t h o s e s t a t i s t i c s f o r w h i c h m a t e r i a l h a s t o b e
s p e c i a l l y o b t a i n e d f r o m t h e t r a d e i n t e r e s t s c o n c e r n e d , it is c l e a r
t h a t i n t h e a b s e n c e of c o m p u l s o r y p o w e r s t h e a c t i v i t i e s of t h e
G o v e r n m e n t D e p a r t m e n t s a r e l i m i t e d b y t h e w i l l i n g n e s s of t r a d i n g
i n t e r e s t s t o l e n d t h e i r c o - o p e r a t i o n . A s a c o n s p i c u o u s e x a m p l e of
t h e u n w i l l i n g n e s s of m a n y m a n u f a c t u r e r s t o f u r n i s h i n f o r m a t i o n ,
e v e n in w h a t m a y b e r e g a r d e d as their o w n interests, reference
m a y b e m a d e t o t h e a t t e m p t b y t h e B o a r d of T r a d e t o c o U e c t
i n f o r m a t i o n a s t o t h e c o n d i t i o n of i n d u s t r i e s a f f e c t e d b y s a f e ­
g u a r d i n g duties. P a r t i c u l a r s were r e q u e s t e d (generally t h r o u g h
the T r a d e Associations concerned) as to o u t p u t , n u m b e r s employed
a n d , in s o m e cases, p r i c e s ; b u t in n o i n s t a n c e w a s it f o u n d possible
t o o b t a i n c o m p l e t e p a r t i c u l a r s , a n d , i n t h e c a s e of s e v e r a l of t h e
t r a d e s c o n c e r n e d , t h e p a r t i c u l a r s f u r n i s h e d w e r e so i n c o m p l e t e
as t o be almost valueless.
E v e n w h e r e c o m p u l s o r y p o w e r s a r e a v a i l a b l e , difficulties s t i l t
remain.
F o r e x a m p l e , t h e C e n s u s of P r o d u c t i o n is c o n d u c t e d
u n d e r c o m p u l s o r y p o w e r s , b u t g r e a t difficulty h a s b e e n e x p e r i e n c e d
a t e a c h c e n s u s in s e c u r i n g t h e a c c u r a t e c o m p l e t i o n a n d p r o m p t
r e t u r n of t h e c e n s u s s c h e d u l e s i s s u e d t o m a n u f a c t u r i n g
firms.
7 8 . W h i l e t h e n e e d for, a n d v a l u e of, s t a t i s t i c s a r c g r a d u a l l y
becoming m o r e generally recognised, there are certain considera­
tions which m a k e individual manufacturers and traders reluctant
to supply statistical material to Government Departments. Apart
f r o m t h e g e n e r a l o b j e c t i o n t o a n e x t e n s i o n of G o v e r n m e n t
a c t i v i t i e s , s o m e f e a r t h a t , i n s p i t e of a l l s a f e g u a r d s , t h e d e t a i l s of
t h e i r b u s i n e s s will b e c o m e k n o w n t o c o m p e t i t o r s , while in s o m e
c a s e s p u b l i c a t i o n of figures a b o u t t r a d e a n d i n d u s t r y e n c o u n t e r s
o b j e c t i o n on t h e g r o u n d t h a t v a l u a b l e i n f o r m a t i o n will b e given
t o t r a d e r i v a l s in o t h e r c o u n t r i e s . T h e s e c o n s i d e r a t i o n s o b v i o u s l y
affect n o t o n l y a t t e m p t s b y G o v e r n m e n t D e p a r t m e n t s t o c o l l e c t
s t a t i s t i c s o n a v o l u n t a r y b a s i s , b u t a l s o a n y p r o p o s a l s for c o n f e r r i n g
compulsory powers on D e p a r t m e n t s to obtain statistical data.
79. E v e n w h e r e c o m p u l s o r y powers a r e n o t available, however,
t h e B o a r d of T r a d e h a s s u c c e e d e d i n s e c u r i n g a c e r t a i n m e a s u r e of
c o - o p e r a t i o n l e a d i n g t o t h e p u b l i c a t i o n of v a l u a b l e s t a t i s t i c s .
O n e e x a m p l e of t h i s is t h e q u a r t e r l y I n d e x of I n d u s t r i a l P r o d u c ­
t i o n , w h i c h is b a s e d m a i n l y o n i n f o r m a t i o n s u p p l i e d v o l u n t a r i l y
b y T r a d e A s s o c i a t i o n s o r i m p o r t a n t i n d i v i d u a l firms, a n d w h i c h ,
w h i l e n o d o u b t s u s c e p t i b l e of i m p r o v e m e n t , is r e p r e s e n t a t i v e of
m o r e t h a n t w o - t h i r d s of t h e t o t a l m a n u f a c t u r i n g a n d m i n i n g
a c t i v i t y of t h e U n i t e d K i n g d o m , a s a s c e r t a i n e d i n t h e 1 9 2 4 c e n s u s .
A s t i l l m o r e r e c e n t e x a m p l e of s t a t i s t i c s c o m p i l e d t h r o u g h t h e
a s s i s t a n c e of t h e t r a d i n g i n t e r e s t s c o n c e r n e d is t h e S u m m a r y of
R e t a i l T r a d e , c o m p i l e d b y t h e B a n k of E n g l a n d f r o m i n f o r m a t i o n
f u r n i s h e d t o t h e m r e g a r d i n g t h e t r a d e of d e p a r t m e n t a l s t o r e s a l l
o v e r G r e a t B r i t a i n a n d p u b l i s h e d m o n t h l y i n t h e B o a r d of T r a d e
Journal.
N o i n d e x of r e t a i l t r a d e a c t i v i t y h a s h i t h e r t o b e e n
a v a i l a b l e a n d w h i l e t h e figures a t p r e s e n t p u b l i s h e d reflect o n l y
o n e p a r t i c u l a r s e c t i o n of s u c h t r a d e , t h e i r v a l u e h a s b e e n w i d e l y
recognised, a n d t h e y m a y form a basis on which m o r e extensive
s t a t i s t i c s c a n b e p r o d u c e d in f u t u r e .
8 0 . T h e e x t e n t a n d r a n g e of t h e s t a t i s t i c s c o m p i l e d a n d
p u b l i s h e d b y o r t h r o u g h t h e a g e n c y of G o v e r n m e n t D e p a r t ­
m e n t s is g r a p h i c a l l y d e m o n s t r a t e d b y t h e a n n u a l " G u i d e t o
C u r r e n t Official S t a t i s t i c s , " t h e l a t e s t v o l u m e of w h i c h c o n t a i n s
316 octavo pages.
8 1 . T h e s e official s t a t i s t i c s a r e s u p p l e m e n t e d b y a c o n s i d e r a b l e ,
a n d p r o b a b l y i n c r e a s i n g , v o l u m e of s t a t i s t i c s c o m p i l e d b y
i n d u s t r i e s o n t h e i r o w n a c c o u n t . E x a m p l e s of t h e s e a r e t h e d e t a i l e d
figures r e l a t i n g t o t h e I r o n a n d S t e e l I n d u s t r y w h i c h a r e p u b l i s h e d
b y t h e N a t i o n a l F e d e r a t i o n of I r o n a n d S t e e l M a n u f a c t u r e r s , a n d
t h e full s t a t i s t i c s of S h i p b u i l d i n g i s s u e d b y L l o y d s R e g i s t e r of
S h i p p i n g . I n t h e c a s e of t h e E l e c t r i c a l M a n u f a c t u r i n g I n d u s t r y ,
valuable statistics a n d trade information are compiled a n d
published b y the British Electrical and Allied Manufacturers
A s s o c i a t i o n . I n t h e c a s e of s o m e o t h e r t r a d e s (e.g., B o o t a n d S h o e
M a n u f a c t u r i n g ) s t a t i s t i c s a r e c o m p i l e d f o r t h e b e n e f i t of t h e
m e m b e r s of t h e T r a d e A s s o c i a t i o n b u t a r e n o t p u b l i s h e d f o r
general information.
8 2 . I t i s of c o u r s e t r u e t h a t t h e e x t e n s i o n of s i m i l a r s t a t i s t i c a l
activity to other Industries depends very considerably on the
d e g r e e of 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 o n c e r n e d a n d t h e n a t u r e
of t h e firms c o m p o s i n g i t . A l l a d v a n c e s t o w a r d s " r a t i o n a l i s a ­
t i o n , " h o w e v e r , w i l l t e n d n o t o n l y t o m a k e t h e c o l l e c t i o n of
industrial statistics m o r e practicable b u t also t o create a d e m a n d
for s u c h i n f o r m a t i o n ; a n d a g r a d u a l d e v e l o p m e n t m a y , therefore,
b e a n t i c i p a t e d i n t h e e x t e n t a n d a d e q u a c y of t h e s t a t i s t i c s
compiled b y industries on their o w n account.
8 3 . T h e B o a r d of T r a d e h a v e c o n s i s t e n t l y e n c o u r a g e d i n d u s t r y
a n d t r a d e t o c o m p i l e a n d i s s u e full s t a t i s t i c s a n d t h e y will c o n t i n u e
t h e i r efforts in t h i s direction.
Standardisation.
(Note by
the
President
of the
Board of
Trade.)
84. T h e M e m o r a n d u m rightly points o u t t h a t the problem
of s t a n d a r d i s a t i o n a n d s i m p l i f i c a t i o n is a m u c h m o r e difficult
o n e i n t h i s c o u n t r y t h a n i n t h e U n i t e d S t a t e s of A m e r i c a . U n i t e d
K i n g d o m m a n u f a c t u r e r s h a v e t o s u p p l y , firstly, a n o p e n d o m e s t i c
m a r k e t in w h i c h foreign competitors are eager to s t r e n g t h e n
t h e i r f o o t i n g b y m e e t i n g t h e v a r y i n g t a s t e s of c o n s u m e r s , a n d
s e c o n d l y , a g r e a t v a r i e t y of o v e r s e a s m a r k e t s w h e r e t h e i d i o s y n ­
c r a s i e s of t h e c o n s u m e r s h a v e t o b e c a r e f u l l y s t u d i e d .
The
m a n u f a c t u r e r for e x p o r t is o f t e n p u t in t h e d i l e m m a t h a t l o n g
r u n s of s t a n d a r d i s e d g o o d s w o u l d m a t e r i a l l y h e l p t o l o w e r h i s
. c o s t of p r o d u c t i o n a n d p r i c e , a n d t h a t o n t h e o t h e r h a n d h e is
being c o n s t a n t l y criticised for n o t b e i n g r e a d y to m e e t t h e tastes
of t h e b u y e r s i n t h e o v e r s e a m a r k e t s . B u t , s u b j e c t t o t h i s , t h e r e
is u n d o u b t e d l y r o o m , a s t h e M e m o r a n d u m p o i n t s o u t , f o r m u c h
more standardisation a n d simplification.
8 5 . T h e M e m o r a n d u m r e f e r s o n l y t o t h e w o r k of t h e B r i t i s h
E n g i n e e r i n g S t a n d a r d s A s s o c i a t i o n i n r e s p e c t of s t a n d a r d i s a t i o n
" i n i t s o w n field." I t d o e s n o t r e f e r t o c e r t a i n r e c e n t d e v e l o p ­
m e n t s i n r e s p e c t of t h a t A s s o c i a t i o n n o r t o t h e a c t i o n w h i c h h a s
been t a k e n b y t h e G o v e r n m e n t , p a r t l y in connection w i t h t h e
Association a n d partly" distinct from it.
8 6 . T h e d e s i r a b i l i t y of t h e g r e a t e r d e v e l o p m e n t of s t a n d a r d i s a ­
t i o n a n d s i m p l i f i c a t i o n i n t h i s c o u n t r y h a s b e e n a m a t t e r of
i m m e d i a t e c o n c e r n t o t h e B o a r d of T r a d e i n r e c e n t y e a r s .
It
w a s o n t h e i n i t i a t i v e of t h e B o a r d t h a t t h e q u e s t i o n w a s r a i s e d
a t t h e I m p e r i a l C o n f e r e n c e of 1 9 2 6 , w h e n a r e s o l u t i o n w a s p a s s e d
in t h e following t e r m s :—
" T h e Imperial Conference recognising the a d v a n t a g e s
of s t a n d a r d i s a t i o n in, i t s w i d e s t s e n s e , b o t h t o p r o d u c e r s a n d
t o c o n s u m e r s , a n d a p p r e c i a t i n g t h a t w h e n it is p r a c t i c a b l e
to a d o p t standards c o m m o n to the E m p i r e these a d v a n t a g e s
are a u g m e n t e d a n d g r e a t benefit results t o t r a d e w i t h i n t h e
E m p i r e and E m p i r e trade generally, recommends to the
f a v o u r a b l e c o n s i d e r a t i o n of t h e s e v e r a l G o v e r n m e n t s of t h e
Empire that they should take steps to promote the further
d e v e l o p m e n t of s t a n d a r d i s a t i o n , s h o u l d a r r a n g e f o r t h e
e x c h a n g e of i n f o r m a t i o n w i t h t h e o t h e r p a r t s of t h e E m p i r e ,
and, w h e n c o m m o n s t a n d a r d s are possible a n d m u t u a l l y
a d v a n t a g e o u s , s h o u l d c o - o p e r a t e w i t h t h e o t h e r p a r t s of t h e
E m p i r e in r e g a r d t h e r e t o . "
8 7 . I n 1 9 2 7 t h e C h a i r m a n of t h e A u s t r a l i a n C o u n c i l f o r
S c i e n t i f i c a n d I n d u s t r i a l R e s e a r c h a n d of t h e C o m m o n w e a l t h
Engineering Standards Association visited this country, and a n
informal conference was a r r a n g e d between him a n d representatives
of U n i t e d K i n g d o m i n d u s t r i a l a n d t r a d e o r g a n i s a t i o n s a n d of t h e
British Engineering S t a n d a r d s Association.
Following on this
t h e Central Committee for Standardisation a n d Simplification,
s e t u p b y t h e B o a r d of T r a d e (see b e l o w ) , r e p o r t e d t h a t i t w o u l d
b e a d v a n t a g e o u s t o h o l d a n official c o n f e r e n c e b e t w e e n r e p r e ­
s e n t a t i v e s of t h e s t a n d a r d i s a t i o n o r g a n i s a t i o n s i n t h e U n i t e d
K i n g d o m a n d t h e D o m i n i o n s , a t w h i c h t h e q u e s t i o n of c o ­
o r d i n a t i o n a n d c o - o p e r a t i o n b e t w e e n t h e v a r i o u s p a r t s of t h e
E m p i r e i n r e s p e c t of s t a n d a r d i s a t i o n a n d s i m p l i f i c a t i o n c o u l d
b e fully discussed.
A p r o p o s a l t o t h i s effect w a s m a d e
to
H i s Majesty's G o v e r n m e n t s in t h e D o m i n i o n s a n d t o t h e
G o v e r n m e n t of I n d i a a n d w a s u n a n i m o u s l y a c c e p t e d .
It
is n o w t a k i n g p l a c e .
S t a n d a r d i s i n g b o d i e s of o n e k i n d o r
a n o t h e r already exist in Canada, Australia, the U n i o n
of
S o u t h A f r i c a a n d I n d i a , a n d t h e r e is a g o o d d e a l of c o - o p e r a t i o n
between t h e m a n d the British Engineering Standards Association;
active steps are being t a k e n to set u p a similar b o d y in N e w
Z e a l a n d , a n d i t is h o p e d t h a t a r e s u l t of t h e C o n f e r e n c e w i l l b e
t h e e s t a b l i s h m e n t of a s y s t e m of m u c h c l o s e r a n d m o r e r a p i d
co-operation between all these bodies.
88. W i t h regard t o t h e British
Engineering
Standards
A s s o c i a t i o n itself, m u c h v a l u a b l e w o r k h a s b e e n d o n e b y t h a t
b o d y a n d a considerable a m o u n t h a s b e e n d o n e in p a r t i c u l a r
i n d u s t r i e s b y o t h e r b o d i e s , s u c h a s t h e S o c i e t y of M o t o r M a n u ­
facturers and T r a d e r s ; the Cable Makers' Association;
the
B r i t i s h E l e c t r i c a l a n d A l l i e d M a n u f a c t u r e r s ' A s s o c i a t i o n — a l l of
which a r e closely associated w i t h t h e British E n g i n e e r i n g S t a n d a r d s
A s s o c i a t i o n ; t h e F e d e r a t i o n of M a s t e r P r i n t e r s of G r e a t B r i t a i n
a n d I r e l a n d ; a n d a n u m b e r of b o d i e s c o n n e c t e d w i t h t h e c h e m i c a l
i n d u s t r i e s . T h e a c t i v i t i e s of t h e B r i t i s h E n g i n e e r i n g S t a n d a r d s
A s s o c i a t i o n a l r e a d y e x t e n d b e y o n d t b e e n g i n e e r i n g field, a n d
discussions a r e n o w proceeding which m a y result in giving t h e
Association a m u c h m o r e comprehensive scope.
T h i s will b e
m a r k e d b y d r o p p i n g t h e t e r m " E n g i n e e r i n g " from i t s title, a
c o u r s e o n w h i c h t h e C o u n c i l of t h e A s s o c i a t i o n h a s a l r e a d y a g r e e d .
T h e B o a r d of T r a d e a n d o t h e r G o v e r n m e n t D e p a r t m e n t s a r e
r e p r e s e n t e d u p o n t h e C o u n c i l of t h e A s s o c i a t i o n a n d t h e r e is
close co-operation between it a n d t h e G o v e r n m e n t purchasing
Departments.
89. T h e s u b s t a n t i a l financial assistance which w a s a t o n e
time given to the Association b y t h e Government h a d been
r e d u c e d f o r a n u m b e r of y e a r s t o a m e r e l y n o m i n a l c o n t r i b u t i o n
(apart from p a y m e n t s m a d e b y certain G o v e r n m e n t D e p a r t m e n t s
f o r specific services) : b u t i t w a s r e c e n t l y d e c i d e d t h a t t h e
G o v e r n m e n t w o u l d m a k e a c o n t r i b u t i o n t o t h e f u n d s of t h e
A s s o c i a t i o n f o r a p e r i o d of five y e a r s , c o m m e n c i n g w i t h t h e
p r e s e n t financial y e a r , of a m i n i m u m of £ 3 , 0 0 0 a y e a r , r i s i n g t o
a m a x i m u m of £ 5 , 0 0 0 , a c c o r d i n g a s c o n t r i b u t i o n s t o t h e A s s o c i a t i o n
from industrial sources increase a b o v e their present level.
9 0 . I n r e s p e c t of G o v e r n m e n t r e q u i r e m e n t s , i t s h o u l d b e
s t a t e d t h a t since 1924 t h e r e h a s b e e n in e x i s t e n c e a n I n t e r d e p a r t ­
m e n t a l Committee on General Stores whose purpose it is to bring
a b o u t c o - o p e r a t i o n i n r e s p e c t of t h e G o v e r n m e n t p u r c h a s i n g
specifications for g e n e r a l s t o r e s .
T h e B r i t i s h E n g i n e e r i n g S t a n d a r d s Association is repre­
s e n t e d o n t h e m a i n c o m m i t t e e a n d t h e r e is provision for similar
r e p r e s e n t a t i o n on t h e s u b - c o m m i t t e e s , a n d t h e r e is also close
c o n t a c t b e t w e e n t h e c o m m i t t e e s a n d t h e F e d e r a t i o n of B r i t i s h
Industries.
T h e r e a r e also G o v e r n m e n t committees dealing
w i t h building materials, textiles a n d clothing, a n d electrical
a p p a r a t u s a n d material, a n d there are in connection with these
s i m i l a r a r r a n g e m e n t s f o r t h e r e p r e s e n t a t i o n of t h e B r i t i s h
E n g i n e e r i n g S t a n d a r d s A s s o c i a t i o n a n d t h e F e d e r a t i o n of B r i t i s h
Industries.
9 1 . I n 1928 t h e Central C o m m i t t e e (already m e n t i o n e d )
w a s f o r m e d f o r t h e p u r p o s e of e n c o u r a g i n g t h e d e v e l o p m e n t
of s t a n d a r d i s a t i o n a n d s i m p l i f i c a t i o n .
T h i s b o d y , w h i c h is
p r e s i d e d o v e r b y t h e P a r l i a m e n t a r y S e c r e t a r y t o t h e B o a r d of
Trade, includes representatives
of G o v e r n m e n t
purchasing
D e p a r t m e n t s , of t h e B r i t i s h E n g i n e e r i n g S t a n d a r d s A s s o c i a t i o n ,
a n d a n u m b e r of t h e c h i e f i n d u s t r i a l a n d c o m m e r c i a l A s s o c i a t i o n s
of t h e c o u n t r y .
T h e Committee has paid particular attention
t o simplification a n d h a s e n d e a v o u r e d t o explore its possibilities
w i t h r e p r e s e n t a t i v e s of a n u m b e r of i n d u s t r i e s i n r e l a t i o n t o t h e i r
p a r t i c u l a r p r o d u c t s . A g o o d d e a l i n t h e w a y of s i m p l i f i c a t i o n
h a s b e e n d o n e b y v a r i o u s i n d u s t r i e s , b u t t h e w o r k of t h e C o m ­
mittee h a s shown very clearly not only the advantages which
m a y r e s u l t f r o m t h e j u d i c i o u s a p p l i c a t i o n of t h e p r i n c i p l e of
simplification, b u t also t h e difficulties w h i c h a r i s e a n d t o w h i c h
a t t e n t i o n h a s b e e n d r a w n a t t h e c o m m e n c e m e n t of t h i s n o t e .
T h e e s s e n t i a l p r e l i m i n a r y t o s t a n d a r d i s a t i o n of a n y p r o d u c t i s
t h e d e v e l o p m e n t o f a n i n i t i a t i v e i n f a v o u r of i t w i t h i n t h e t r a d e s
concerned, a n d it is t o this p r o b l e m t h a t t h e C e n t r a l C o m m i t t e e
has largely directed its attention. As a step towards t h e develop­
m e n t of t h i s i n i t i a t i v e , t h e B o a r d of T r a d e , o n t h e r e c o m m e n d a t i o n
of t h e C e n t r a l C o m m i t t e e , h a v e r e c e n t l y d e c i d e d t o c o m p i l e a n
i n d e x of i n d u s t r i a l s p e c i f i c a t i o n s , t h a t i s t o s a y , n o t o n l y s p e c i f i ­
cations issued b y standardisation bodies or b y organised t r a d e
associations, b u t also c o m m o d i t y specifications used b y Govern­
ment Departments, Municipal authorities, a n d other
large
purchasers.
T h i s i n d e x will, it is h o p e d , s h o w t h e p a r t i c u l a r
a r t i c l e s i n t h e c a s e of w h i c h t h e i n t e r e s t s c o n c e r n e d m i g h t find
it a d v a n t a g e o u s t o investigate t h e possibility a n d desirability
of g r e a t e r u n i f o r m i t y a n d f u r n i s h m a t e r i a l o n t h e b a s i s of w h i c h
such investigations could b e undertaken.
(Note by
the
President
Board of
Trade.)
Other State Action.
9 2 . O n p a g e 3 1 of t h e L i b e r a l M e m o r a n d u m , r e f e r e n c e is
d e t o directions in which t h e State can facilitate t h e more
efficient o r g a n i s a t i o n of i n d u s t r y .
m
a
9 3 . A s r e g a r d s t h e Export s i d e of t h e t r a d e of t h e c o u n t r y
it m a y be said t h a t t h e Overseas T r a d e D e v e l o p m e n t Council
w a s b r o u g h t i n t o b e i n g precisely for t h e p u r p o s e suggested.
T h e C o u n c i l w a s c r e a t e d a t t h e b e g i n n i n g of A p r i l of t h i s y e a r ,
a n d i t s o r i g i n is t o b e f o u n d i n t h e f a c t t h a t t h e M i n i s t e r i n
c h a r g e of t h e D e p a r t m e n t of O v e r s e a s T r a d e c o n s i d e r e d t h a t t h e
u s e f u l n e s s of t h e d e p a r t m e n t w o u l d b e s t r e n g t h e n e d b y t h e
c r e a t i o n of a n o r g a n i s a t i o n w h o w o u l d e x a m i n e t h e p r o b l e m s of
export trade, study present and potential markets, investigate
r e a s o n s for t h e decline in e x p o r t s b y t r a d e s a n d m a r k e t s , a n d
a s c e r t a i n p o s s i b l e r e m e d i e s w i t h t h e o b j e c t of t h e p r o f i t a b l e
e x p a n s i o n of B r i t i s h t r a d e .
94. T o c a r r y o u t this w o r k it w a s n e c e s s a r y t o receive t h e
a s s i s t a n c e a n d c o - o p e r a t i o n of i n d u s t r y .
A S t a n d i n g Council
was formed, presided over b y the Minister.
In order t h a t the
CounciTs w o r k s h o u l d b e a s specific as possible, w h e n p a r t i c u l a r
t r a d e s o r m a r k e t s a r e b e i n g r e v i e w e d , s p e c i a l r e p r e s e n t a t i v e s of
t r a d e a n d i n d u s t r y a r e i n v i t e d t o a t t e n d t h e m e e t i n g s of t h e
C o u n c i l . I t w a s f o r t h i s r e a s o n t h a t a p a n e l of r e p r e s e n t a t i v e s
w a s f o r m e d w h o a r e a l s o a v a i l a b l e for i n f o r m a l c o n s u l t a t i o n s .
I n i t s c o m p a r a t i v e l y s h o r t life t h e C o u n c i l h a s t a k e n a c t i o n i n
d i r e c t i o n s w h i c h i t is h o p e d w i l l h a v e b e n e f i c i a l r e s u l t s t o t h e
e x p o r t t r a d e of t h e c o u n t r y .
T h e k e y - n o t e of t h e C o u n c i l s
policy is t o e n c o u r a g e specific i n d u s t r i e s t o t a k e a c t i o n on behalf
of t h e i n d u s t r y a s a w h o l e : i n o t h e r w o r d s , e v e n if t h e S t a t e d o e s
g i v e s o m e m e a s u r e of a s s i s t a n c e t h a t i n d u s t r y s h o u l d h e l p itself.
I n conformity w i t h t h a t policy, after discussing w i t h L o r d
d ' A b e r n o n a n d m e m b e r s of h i s M i s s i o n t h e m o s t l i k e l y l i n e s of
d e v e l o p m e n t in S o u t h A m e r i c a , t h e Council m e t various t r a d e s
and discussed with t h e m steps that might reasonably be expected
to increase export t r a d e .
Discussions are taking place with the agricultural machinery
a n d t h e e l e c t r i c a l i n d u s t r i e s w h i c h i t is h o p e d w i l l l e a d t o a n
a t t a c k on t h e S o u t h American m a r k e t s .
P a r t i c u l a r r e f e r e n c e m a y b e m a d e t o t h e v i s i t of t h e M a s t e r
C u t l e r of Sheffield t o S o u t h A m e r i c a . T h i s v i s i t w a s a r r a n g e d
a s a r e s u l t of r e p r e s e n t a t i o n s m a d e b y t h e D e v e l o p m e n t C o u n c i l
as t o t h e s t e p s w h i c h should b e t a k e n to c a p t u r e further t r a d e —
t r a d e b a d l y n e e d e d b y Sheffield—in t h e S o u t h A m e r i c a n m a r k e t s .
T h e M a s t e r C u t l e r is a t p r e s e n t i n S o u t h A m e r i c a u n d e r t a k i n g a n
i n v e s t i g a t i o n of m a r k e t c o n d i t i o n s a n d t r a d e p o s s i b i l i t i e s i n t h e
p r i n c i p a l m a r k e t s of t h a t c o n t i n e n t .
Sheffield h a s c o n t r i b u t e d
t h e m a j o r p r o p o r t i o n of t h e e x p e n s e s i n v o l v e d , H i s M a j e s t y ' s
G o v e r n m e n t expressing their willingness to c o n t r i b u t e t o w a r d s
t h e c o s t t o a m a x i m u m of £750.
T r a d e investigations in overseas m a r k e t s b y e x p e r t s a p p o i n t e d
b y specific t r a d e s r e c e i v e e v e r y e n c o u r a g e m e n t f r o m t h e C o u n c i l .
T h e D e v e l o p m e n t C o u n c i l feel t h a t , a s a first s t e p t o w a r d s
c l o s e r c o - o p e r a t i o n a t h o m e , i t is d e s i r a b l e for t h e u n i t s in a t r a d e
t o g e t t o g e t h e r in s t u d y i n g a n overseas m a r k e t a n d t h e r e b y
realise t h e m e a s u r e s t h a t are necessary to enable British i n d u s t r y
to c o m p e t e successfully w i t h foreign c o m p e t i t i o n .
I t is n o w
p o s s i b l e t o a n n o u n c e — t h o u g h n o t for p u b l i c a t i o n — t h a t
the
F e d e r a t e d A s s o c i a t i o n s of B o o t a n d S h o e M a n u f a c t u r e r s , a f t e r
discussion w i t h t h e Council, h a v e agreed t o u n d e r t a k e
an
i n v e s t i g a t i o n in N o r w a y , S w e d e n , D e n m a r k , F i n l a n d a n d t h e
Netherlands.
Similar discussions h a v e been arranged w i t h t h e N a t i o n a l
A s s o c i a t i o n of S c o t t i s h W o o l l e n M a n u f a c t u r e r s , ( t h e U . S . A .
market) a n d the Scottish Hosiery and Knitwear Manufacturers
Association.
9 5 . Missions.—Another
field
w h e r e i t is c o n s i d e r e d t h a t p r a c t i ­
c a l h e l p m a y b e g i v e n t o e x p o r t t r a d e is b y t h e s e n d i n g of p o w e r f u l
economic missions from this c o u n t r y to visit other selected
c o u n t r i e s . A t p r e s e n t t h e r e is s u c h a m i s s i o n in S o u t h Africa a n d
a n o t h e r v e r y i m p o r t a n t e c o n o m i c m i s s i o n is o n i t s w a y t o J a p a n
a n d C h i n a . I n a d d i t i o n t o t h e e c o n o m i c m i s s i o n p r o p e r , t h e r e is a
specially a p p o i n t e d C o t t o n Sub-Mission which was organised after
t h e D e v e l o p m e n t Council h a d discussed t h e m a t t e r with t h e
J o i n t C o m m i t t e e of C o t t o n T r a d e O r g a n i s a t i o n s . I t is s i g n i f i c a n t
t h a t the c o t t o n industry, t h r o u g h the cotton trade fund, agreed t o
m a k e a g r a n t of £ 6 , 0 0 0 t o w a r d s t h e c o s t of t h e M i s s i o n .
96. In a n o t h e r direction encouragement
effort in i n d u s t r y h a s b e e n successful.
of c o - o r d i n a t i o n
of
T h e G o v e r n m e n t , h a v i n g d e c i d e d t o e x p e n d a s u m of £ 3 0 , 0 0 0 o n
official p a r t i c i p a t i o n i n t h e B r i t i s h E m p i r e T r a d e E x h i b i t i o n t o b e
held in B u e n o s Aires n e x t year, are giving the Exhibition t h e
fullest possible assistance w i t h a view t o securing t h a t British
i n d u s t r y a s a w h o l e is a d e q u a t e l y r e p r e s e n t e d , a n d e f f o r t s h a v e
b e e n m a d e t o secure collective exhibits. F o r instance, a proportion
of t h e s u m of £ 3 0 , 0 0 0 h a s b e e n e a r m a r k e d t o m e e t t h e c o s t of t h e
d e s p a t c h t o B u e n o s A i r e s d u r i n g t h e E x h i b i t i o n of t h e a i r c r a f t
c a r r i e r H . M . S . " E a g l e , " c a r r y i n g a full c o m p l e m e n t of a i r c r a f t
( i n c l u d i n g m a n y of t h e l a t e s t t y p e s of m a c h i n e s ) . T h e G o v e r n m e n t
P a v i l i o n w i l l i n c l u d e , i n a d d i t i o n t o a n official A e r o n a u t i c a l
E x h i b i t , a s e r i e s of e x h i b i t s p r e s e n t e d b y s o m e of t h e l e a d i n g
B r i t i s h a i r c r a f t firms, w h o h a v e b e e n p e r m i t t e d t o t a k e s p a c e i n
t h a t building.
T h u s e n c o u r a g e d , t h e B r i t i s h a i r c r a f t i n d u s t r y as a whole h a s
d e c i d e d t o e x p e n d a s u m of £ 2 5 , 0 0 0 t o m e e t t h e c o s t of f l y i n g
d e m o n s t r a t i o n s i n B u e n o s A i r e s t h r o u g h o u t t h e p e r i o d of t h e
E x h i b i t i o n — t h e first of t h e i r k i n d t o b e o r g a n i s e d b y t h i s c o u n t r y .
P a r t i c i p a t i o n b y t h e G o v e r n m e n t in t h e E x h i b i t i o n h a s l e d t o
t h e c o - o r d i n a t e d e f f o r t s of t h e B r i t i s h a i r c r a f t i n d u s t r y o n a n
u n p r e c e d e n t l y l a r g e s c a l e . I n a d d i t i o n t o t h e p a r t i c i p a t i o n of t h e
British electrical i n d u s t r y (referred to elsewhere in this M e m o r a n ­
d u m ) t h e r e w i l l b e c o m p o s i t e e x h i b i t s b y t h e S o c i e t y of M o t o r
M a n u f a c t u r e r s a n d T r a d e r s , t h e British Cycle a n d Motor Cycle
M a n u f a c t u r e r s a n d T r a d e r s Union, t h e Goldsmiths' a n d Silver­
s m i t h s ' C o m p a n y , t h e B i r m i n g h a m Jewellers' a n d t h e Silver­
smiths' Association.
PART III.
Agriculture.
T h e m o s t p r o m i n e n t f e a t u r e of t h e L i b e r a l p r o p o s a l s i s l a n d (Note b y
Minister
s e t t l e m e n t , w i t h t h e e s t a b l i s h m e n t of " f a m i l y f a r m s " o n a
v e r y l a r g e s c a l e a s t h e e s s e n t i a l p a r t of t h e s c h e m e . O b s e r v a t i o n s £ ^ ' f
"
o n t h i s p r o p o s a l a r e s u b m i t t e d a s S e c t i o n 2 of t h i s s t a t e m e n t ,
w h i c h i s p r e c e d e d ( i n S e c t i o n I) b y g e n e r a l c o m m e n t s o n t h e
L i b e r a l s u r v e y of t h e e c o n o m i c p o s i t i o n of a g r i c u l t u r e a n d o n t h e
s u g g e s t e d r e c o n d i t i o n i n g of l a n d . S u b s e q u e n t s e c t i o n s d e a l w i t h
the remaining proposals m a d e in t h e Liberal M e m o r a n d u m ,
in so far a s t h e y c o n c e r n a g r i c u l t u r e .
t l l e
r i c u l
u r
SECTION 1.—INTRODUCTION.
1. T h e p r o p o s a l s s e t f o r t h i n t h e L i b e r a l M e m o r a n d u m , s o
far a s t h e y r e l a t e t o a g r i c u l t u r a l l a n d , a r e f o u n d e d o n t h e a r g u m e n t
t h a t a g r i c u l t u r e i s l a n g u i s h i n g o n a c c o u n t of h i g h c o s t s , c o u p l e d
w i t h t h e i m p o v e r i s h m e n t of l a n d l o r d s a n d t e n a n t s a n d c o n s e q u e n t
d e c a y of e q u i p m e n t a n d d e t e r i o r a t i o n of t h e s o i l . I t i s s u g g e s t e d
t h a t " t h e r e c o n s t r u c t i o n of a g r i c u l t u r e . . . offers a r e m e d y f o r
t h e u n e m p l o y m e n t p r o b l e m w h i c h is u n i q u e . " I t is f u r t h e r a r g u e d
t h a t a s t h i s r e c o n s t r u c t i o n i s i n t h e n a t u r e of t h e c a s e b e y o n d
t h e c a p a c i t y of l a n d o w n e r s i n g e n e r a l , i t m u s t b e u n d e r t a k e n b y ,
a n d a t t h e e x p e n s e of, t h e S t a t e , t h e r e c o n d i t i o n i n g a n d r e - e q u i p ­
m e n t of t h e l a n d b e i n g t r e a t e d a s c a p i t a l o u t l a y , w i t h a v i e w t o
t h e land b e i n g l e t for f a m i l y o r o t h e r f a r m i n g t o t e n a n t s , w h o will
c o n f o r m t o m o d e r n m e t h o d s of p r o d u c t i o n a n d m a r k e t i n g .
2 . T h e L i b e r a l M e m o r a n d u m t a k e s f a r t o o g l o o m y a v i e w of
t h e c o n d i t i o n of a g r i c u l t u r e i n t h i s c o u n t r y a s c o m p a r e d w i t h
o t h e r c o u n t r i e s . I t u n d e r r a t e s i t s efficiency a n d o v e r r a t e s t h e
d e g r e e t o w h i c h i t h a s d e c l i n e d . A l a r g e p a r t of t h e s u b s e q u e n t
proposals p u t forward for agriculture a r e built u p u p o n t h e
a s s u m p t i o n t h a t i t is r e l a t i v e l y inefficient i n c o m p a r i s o n w i t h
o t h e r c o u n t r i e s . T h i s p o i n t of v i e w a p p e a r s i n m a n y p l a c e s i n
t h e M e m o r a n d u m . F o r e x a m p l e , i t is s t a t e d t h a t a g r i c u l t u r e h a s
r e a c h e d " a c o n d i t i o n of c r i s i s . " A g a i n , " i t h a s b e e n a l l o w e d t o
b e c o m e so r u n d o w n t h a t it is idle t o i m a g i n e t h a t i t could b e
r e s t o r e d t o p r o s p e r i t y , still less t o t h e p o s i t i o n it s h o u l d o c c u p y
i n t h e n a t i o n a l e c o n o m y , w i t h o u t t h e i n v e s t m e n t i n i t of v e r y
l a r g e a m o u n t s of c a p i t a l . " " D u r i n g t h e l a s t d e c a d e o r s o o v e r a
l a r g e p a r t of E n g l a n d a n d W a l e s t h e g e n e r a l c o n d i t i o n , b o t h of t h e
land a n d its equipment, h a s deplorably declined."
" M u c h of i t
has been persistently under-cultivated.
These conditions n o w
almost come t o be regarded as normal, so t h a t even when the
m a r k e t i n g a n d l a b o u r c o s t d i f f i c u l t i e s of f a r m i n g t o w h i c h w e h a v e
referred a r e r e m o v e d , t h e l a n d will h a v e t o b e r e c o n d i t i o n e d
before it c a n recover its n o r m a l p r o d u c t i v i t y . "
3. A g a i n , t h e M e m o r a n d u m suggests i n m o r e t h a n o n e place
t h a t t h e d e c l i n e of B r i t i s h a g r i c u l t u r e i s d u e t o t h e i n c r e a s i n g
efficiency of a g r i c u l t u r a l t e c h n i q u e i n f o r e i g n c o u n t r i e s a n d
inefficiency a t h o m e .
F o r e x a m p l e , " t h e t h i r d c a u s e of t h e d e c l i n e
i n a g r i c u l t u r e h a s b e e n t h e i n e l a s t i c a n d o u t of d a t e n a t u r e of i t s
organisation."
" T h e f u n d a m e n t a l c a u s e of t h e d i f f i c u l t i e s of
B r i t i s h a g r i c u l t u r e h a s b e e n t h e b r i n g i n g i n t o p r o d u c t i o n of l a n d s
of t h e N e w W o r l d , a n d t h e i n t r o d u c t i o n of n e w a n d m o r e efficient
m e t h o d s of f a r m i n g a n d t r a n s p o r t a t i o n i n o t h e r p a r t s of t h e
world."
4. I t i s t h e r e f o r e w o r t h y of r e m a r k t h a t d u r i n g r e c e n t y e a r s
w h e n B r i t i s h a g r i c u l t u r e h a s b e e n suffering from falling prices,
(1848C)
G2
t h o s e o v e r s e a s c o u n t r i e s w h o s e i n c r e a s i n g t e c h n i c a l efficiency is
. a l l e g e d a s t h e c a u s e of o u r t r o u b l e , h a v e s u f f e r e d e q u a l l y w i t h ,
if n o t m o r e s e v e r e l y t h a n , G r e a t B r i t a i n .
5 . T h e M e m o r a n d u m s t a t e s i n s e v e r a l p l a c e s t h a t w h a t is
n e c e s s a r y f o r B r i t i s h a g r i c u l t u r e is a c o n t i n u o u s c h a n g e
and
b r i n g i n g u p t o d a t e of i t s t e c h n i q u e .
F o r example : " The only
w a y in w h i c h a n a t i o n c a n m a i n t a i n a n d i n c r e a s e i t s p r o s p e r i t y
a n d k e e p a l l i t s c i t i z e n s e m p l o y e d is t h a t i t s h o u l d c o n t i n u o u s l y
i m p r o v e t h e t e c h n i q u e a n d o r g a n i s a t i o n of i t s e s t a b l i s h e d
i n d u s t r i e s , so t h a t t h e y a r e g i v i n g e v e r b e t t e r v a l u e t o t h e
public."
A g a i n , " I t is o b v i o u s t h a t B r i t i s h a g r i c u l t u r e c a n o n l y
k e e p i t s p l a c e if i t a l s o c o n t i n u o u s l y a d a p t s itself t o t h e e v e r
c h a n g i n g i n v e n t i o n s a n d m a r k e t c o n d i t i o n s of t h e m o d e r n w o r l d . "
6. T h i s i m p l i e d c r i t i c i s m i s n o t b o r n e o u t b y t h e f a c t s , f o r
i t is o n l y b y c o n t i n u o u s a d j u s t m e n t s a n d c h a n g e s i n f a r m i n g
p r a c t i c e t h a t B r i t i s h a g r i c u l t u r e , in a time of exceptional
economic
difficulty,
h a s a c h i e v e d t h e r e m a r k a b l e r e s u l t , n o t e d in t h e
M e m o r a n d u m , of i n c r e a s i n g t h e t o t a l v o l u m e of a g r i c u l t u r a l
p r o d u c t i o n since 1908. B e t w e e n 1908 a n d 1929 t h e r e h a s b e e n
a d e c l i n e of a b o u t 2 J m i l l i o n a c r e s i n t h e a r e a u n d e r c r o p s a n d
grass, so t h a t over this period British agriculture h a s contrived,
b y i m p r o v i n g i t s t e c h n i q u e , m a t e r i a l l y t o r a i s e t h e v o l u m e of
output per acre.
7. T h i s is n o t t o s a y t h a t its t e c h n i q u e c a n n o t a n d s h o u l d
n o t b e f u r t h e r i m p r o v e d , o r t h a t it h a s p r o g r e s s e d sufficiently
fast in recent years, b u t a fair a n d just j u d g m e n t on this question
i s e s s e n t i a l t o a p r o p e r a p p r e c i a t i o n of t h e p r e s e n t s i t u a t i o n .
T h a t equipment has depreciated a n d land has been allowed to
d e t e r i o r a t e i n t h e d i f f i c u l t e c o n o m i c c i r c u m s t a n c e s of t h e p a s t
few y e a r s c a n n o t , u n f o r t u n a t e l y , b e d e n i e d , b u t t h e facts d o n o t
j u s t i f y t h e e x t r e m e v i e w s w h i c h c h a r a c t e r i s e s o m u c h of t h e
Memorandum.
S.-After calling a t t e n t i o n to t h e need for c o n t i n u o u s i m p r o v e ­
m e n t i n t e c h n i c a l m e t h o d s a n d t h e n e c e s s i t y for r e - e q u i p m e n t ,
a n d a f t e r a t t r i b u t i n g o u r t r o u b l e p a r t l y t o t h e l o w e r i n g of c o s t of
p r o d u c t i o n in c o m p e t i n g countries, t h e M e m o r a n d u m proceeds t o
i t s m a i n t e c h n i c a l r e m e d y , w h i c h is t h e c r e a t i o n o n a v e r y
e x t e n s i v e s c a l e of f a m i l y f a r m s . T h i s is t h e
fundamental
r e c o m m e n d a t i o n of t h e M e m o r a n d u m . . T h e s e f a m i l y f a r m s a r e
t o a v e r a g e 3 0 a c r e s i n e x t e n t , a n d it is c o n t e m p l a t e d t h a t h i r e d
labour would not be employed.
9. S u c h family farms, a l t h o u g h p r e s e n t i n g m a n y a t t r a c t i o n s
a n d a f f o r d i n g m a n y a d v a n t a g e s f r o m t h e s o c i a l a s p e c t a r e , if
r e g a r d e d s o l e l y f r o m t h e e c o n o m i c p o i n t of v i e w , t e c h n i c a l l y
i n e f f i c i e n t , e x c e p t i n t h e c a s e of s p e c i a l i s e d a n d l i m i t e d l i n e s of
p r o d u c t i o n , on carefully selected land.
T h i s t e c h n i c a l inefficiency
m a y be o v e r c o m e p a r t l y or wholly b y t h e small holder and his
f a m i l y w o r k i n g l o n g e r , o r for a l o w e r e c o n o m i c r e w a r d t h a n t h e y
would on a larger holding, thereby enabling t h e m to withstand
( a s t h e y h a v e d o n e ) t h e t e s t of l o w p r i c e s b e t t e r t h a n t h e l a r g e r
f a r m e r e m p l o y i n g h i r e d l a b o u r a t a p r i c e fixed b y S t a t u t e , b u t
there can be no d o u b t t h a t from an economic viewpoint such
h o l d i n g s a r e , o n t e c h n i c a l g r o u n d s , r e l a t i v e l y inefficient.
The
M e m o r a n d u m says " The evidence seems to be overwhelming that
w h e r e t h e o c c u p i e r is a m a n o r w o m a n of r e a s o n a b l e e n e r g y a n d
m a n a g i n g c a p a c i t y i t is a s e a s y t o m a k e a g o o d l i v i n g o n a s m a l l
h o l d i n g a s o n a n y o t h e r t y p e ' of f a r m . "
On the contrary, the
w e i g h t of t h e e v i d e n c e b a s e d o n s y s t e m a t i c a n d c o n t i n u o u s
e c o n o m i c r e s e a r c h a n d a p p l i e d g e n e r a l l y , is c o n c l u s i v e t h a t , a s t h e
a v e r a g e s i z e of h o l d i n g s is d i m i n i s h e d b e l o w a c e r t a i n n u m b e r of
a c r e s , i t b e c o m e s p r o g r e s s i v e l y m o r e difficult for t h e h o l d e r s t o m a k e
a good living.
A l t h o u g h the p r o d u c t i v i t y per acre increases as
t h e s i z e of h o l d i n g s d i m i n i s h e s , t h e p r o d u c t i v i t y p e r m a n d e c r e a s e s .
F u r t h e r m o r e , research h a s s h o w n n o t only t h a t profits per acre
e a r n e d b y t h e h o l d e r d e c r e a s e g e n e r a l l y a s t h e s i z e of t h e h o l d i n g
is d i m i n i s h e d f r o m , s a y 2 0 0 a c r e s , b u t t h e c o s t of l a b o u r p e r a c r e
i n c r e a s e s ; efficiency of h o r s e l a b o u r o n t h e f a r m d i m i n i s h e s ;
t h e efficiency of m a c h i n e r y d i m i n i s h e s ; a n d t h e efficiency of
c a p i t a l f o r b u i l d i n g s d i m i n i s h e s . If, t h e r e f o r e , t h e l o w e r i n g
of t h e c o s t s of p r o d u c t i o n i n a g r i c u l t u r e is t h e g e n e r a l o b j e c t i v e
t o which agricultural policy should be aimed, as t h e M e m o r a n d u m
r i g h t l y s u g g e s t s , t h e s u b - d i v i s i o n of l a r g e r f a r m s a n d t h e i r
c o n v e r s i o n i n t o 100,000 family f a r m s as p r o p o s e d in t h e L i b e r a l
M e m o r a n d u m would contribute nothing towards this objective.
10. I t is s t a t e d in t h e M e m o r a n d u m t h a t " w h e r e c a p a c i t y
(of t h e i n d i v i d u a l ) is a b o v e t h e a v e r a g e , s m a l l h o l d i n g s h a v e
p r o d u c e d s m a l l f o r t u n e s or opened the way to larger scale
farming."
T h e f a m i l y f a r m e r , i t is t r u e , m a i n t a i n s h i s p o s i t i o n , b u t
frequently
a s t h e r e s u l t of u n e c o n o m i c e x p e n d i t u r e of l a b o u r , b o t h b y
himself a n d b y h i s wife a n d c h i l d r e n .
Sir D a n i e l H a l l a n d o t h e r
a u t h o r i t i e s h a v e p o i n t e d o u t t h a t t h e e n c o u r a g e m e n t of s m a l l
h o l d i n g s o r f a m i l y f a r m s is a s o c i a l , n o t a n a g r i c u l t u r a l , p o l i c y .
T h e a i m of a n a g r i c u l t u r a l p o l i c y w o u l d p r e s u m a b l y b e t o m a k e
a g r i c u l t u r e m o r e efficient, w h i c h r e a l l y i n v o l v e s a r e d u c t i o n i n t h e
a m o u n t of h u m a n effort r e q u i r e d p e r u n i t of f o o d p r o d u c e d .
A
p o l i c y a i m i n g a t t h e c r e a t i o n of a l a r g e n u m b e r of f a m i l y f a r m s d o e s
n o t , in fact, t e n d t o d e v e l o p m e n t on t h e s e lines. T h e e x p e r i e n c e
of D e n m a r k is o f t e n u s e d i n s u p p o r t of a s m a l l h o l d i n g s p o l i c y i n
t h i s c o u n t r y , b u t t h e c o m p a r i s o n is a t b e s t s u p e r f i c i a l .
M r . C. S.
O r w i n , i n h i s r e c e n t b o o k , " T h e F u t u r e of F a r m i n g , " s a y s t h a t
" t o s u g g e s t t h a t D e n m a r k ' s a c h i e v e m e n t m a y s e r v e as a m o d e l
f o r t h e f u t u r e d e v e l o p m e n t of E n g l i s h f a r m i n g is t o w o n d e r w h y
t h e efficiency of t h e c a m e l t r a i n s of t h e d e s e r t h a s n e v e r b e e n
r e a l i s e d b y t h e d i r e c t o r s of E n g l i s h r a i l w a y s . "
1 1 . T h e r e is a m p l e r o o m i n t h i s c o u n t r y for h o l d i n g s of a l l
s i z e s , b u t i t i s o b v i o u s if t h e i n d u s t r y ' is t o a t t r a c t a n d r e t a i n t h e
most enterprising business-men, there m u s t be some development
of t h e l a r g e s c a l e f a r m , w i t h i t s p o s s i b i l i t i e s of m o r e e c o n o m i c u s e
of m a n p o w e r .
T o c o n t e m p l a t e s u c h a g r e a t e x t e n s i o n of t h a t
p a r t of t h e a g r i c u l t u r a l c o m m u n i t y w h i c h c o n s i s t s of p e a s a n t
farmers employing no labour other than t h a t provided b y the
f a m i l y , is t o a n t i c i p a t e a s u b s t a n t i a l l o w e r i n g i n t h e s t a n d a r d of
life, o f t e n b e l o w t h a t of t h e h i r e d l a b o u r e r , a s h a s b e e n s h o w n t o
b e t h e case in o t h e r countries.
1 2 . I t h a s b e e n r i g h t l y o b s e r v e d t h a t t h e s a v i n g s of w a g e
c o s t s on a f a m i l y f a r m s h o u l d n o t o b s c u r e t h e f a c t t h a t d u r i n g
l e a n y e a r s t h e n e t i n c o m e d e r i v e d f r o m i t is l e s s , i n m a n y c a s e s ,
t h a n t h e c o m b i n e d e a r n i n g s of t h e t e n a n t a n d h i s f a m i l y r e c k o n e d
a t t h e m i n i m u m w a g e r a t e s . T i i e a s s u r a n c e of e m p l o y m e n t a n d
s u b s i s t e n c e is a s u b s t a n t i a l set-off ; m o r e o v e r , t h e r e a r e , w i t h o u t
a d o u b t , a n u m b e r of p e r s o n s w h o d e f i n i t e l y p r e f e r t h e a m e n i t i e s
a n d a t t r a c t i o n s of t h e l i t e of t h e s m a l l - h o l d e r , w i t h a l l i t s a n x i e t i e s
and its l o n g h o u r s , t o t h e less responsible w o r k a n d limited h o u r s
of t h e w a g e e a r n e r . I t is a n o p e n q u e s t i o n , h o w e v e r , w h e t h e r t h e
i n t r o d u c t i o n w i t h i n s u c h a l i m i t e d t i m e of 1 0 0 , 0 0 0 f a m i l i e s t o t h e
c o n d i t i o n s of t h e s m a l l - h o l d e r ' s life w o u l d b e a t t e n d e d b y h a p p y
r e s u l t s , o r b e r e g a r d e d b y t h e m a f t e r t h e n o v e l t y of t h e c h a n g e
h a d w o r n off, a s a n i m p r o v e m e n t i n t h e i r l o t .
This would apply
m o r e especially to t h e u r b a n t r a i n e e s , from w h o s e r a n k s it is
r e c o g n i s e d t h a t t h e g r e a t m a j o r i t y of t h e 1 0 0 , 0 0 0 f a m i l i e s
w o u l d of n e c e s s i t y h a v e t o b e r e c r u i t e d .
1 3 . T h e s o c i a l a s p e c t of t h e s m a l l h o l d i n g is a n e n t i r e l y
different m a t t e r .
T h e r e w i l l , i t i s h o p e d , a l w a y s b e a n u m b e r of
w o u l d - b e small-holders p r e p a r e d t o settle on tire l a n d in this
country.
T h e State has recognised its d u t y to encourage t h e m
a n d t o p r o v i d e facilities for t h e m , t h e r e b y s e t t l i n g m o r e p e o p l e
o n t h e l a n d a n d e s t a b l i s h i n g t h e n e c e s s a r y s o c i a l l a d d e r for t h e
a g r i c u l t u r a l w o r k e r a n d a f f o r d i n g f a c i l i t i e s for s u b s e q u e n t d e v e l o p ­
m e n t i n t o b i g g e r a g r i c u l t u r a l b u s i n e s s . T h i s f o r m s p a r t of t h e
p o l i c y of t h e p r e s e n t G o v e r n m e n t a n d t h e L i b e r a l M e m o r a n d u m
i s r i g h t i n a d v o c a t i n g s o m e e x t e n s i o n of t h a t p o l i c y f r o m t h e
s o c i a l p o i n t of v i e w .
B u t t h e crucial p o i n t in r e g a r d t o t h e policy
of s m a l l h o l d i n g s a s a m e a n s of i n c r e a s i n g e m p l o y m e n t d e p e n d s
i n t h e f i r s t i n s t a n c e o n a c a r e f u l s e l e c t i o n of t h e a r e a s w h e r e l a n d
i s c a p a b l e of i n t e n s i v e p r o d u c t i o n .
I t is o n l y o n s u c h l a n d o r
u p o n s u b - m a r g i n a l l a n d t h a t t h e p o s s i b i l i t y of i n c r e a s i n g a g r i ­
c u l t u r a l e m p l o y m e n t is a t all s u b s t a n t i a l .
In t h e latter case,
although there m a y be m a n y exceptions, the land has generally
b e c o m e s u b - m a r g i n a l b e c a u s e i t is i n t r i n s i c a l l y i n f e r i o r a n d e v e n
if r e s t o r e d t o i t s o r i g i n a l c o n d i t i o n w o u l d i n t h o s e c i r c u m s t a n c e s
b e h a r d l y l i k e l y t o b e c a p a b l e of s u p p o r t i n g s m a l l - h o l d e r s .
There
are other areas which have never been brought into production
a n d w h i c h a r e c a p a b l e of i m p r o v e m e n t , b u t a s a w h o l e t h e s e
afford b u t little scope for t h e a v e r a g e family f a r m e r or small­
holder.
1 4 . T h e r e - c o n d i t i o n i n g of l a n d n o t r e q u i r e d f o r f a m i l y f a r m s
and the proposal to lend money to private landlords and tenants
for t h i s p u r p o s e m a y b e t a k e n t o b e s u b s i d i a r y a n d t o b e p u t
f o r w a r d a s a n i l l u s t r a t i o n of t h e e x t e n t t o w h i c h , i n t h e o p i n i o n
of t h e c o m p i l e r s of t h e M e m o r a n d u m , m e n a n d m o n e y c o u l d b e
u s e f u l l y e m p l o y e d o n w o r k of t h i s k i n d w i t h a d v a n t a g e t o t h e
agricultural industry.
A p a r t f r o m d r a i n a g e , t h e s c o p e of t h e
p r o p o s a l s is n o t defined a n d t h e n u m b e r s t o b e e m p l o y e d a r e
not stated.
I n r e g a r d t h e r e t o it s h o u l d b e o b s e r v e d t h a t , while
n e g l e c t of f a r m e q u i p m e n t a n d d e t e r i o r a t i o n of t h e l a n d h a s
certainly resulted from t h e economic conditions which govern
t h e i n d u s t r y a n d t h e i m p o v e r i s h m e n t of l a n d o w n e r s a n d t e n a n t s ,
it should n o t b e a s s u m e d t h a t e x p e n d i t u r e on r e - e q u i p m e n t a n d
re-conditioning w o u l d necessarily b e justified so long as t h e r o o t
c a u s e s of d e p r e s s i o n r e m a i n .
O n l y in so far a s i m p r o v e m e n t a n d
r e - e q u i p m e n t would yield a direct r e t u r n c o m m e n s u r a t e with its
c o s t w o u l d o u t l a y b e j u s t i f i e d f r o m t h e p o i n t of v i e w of i n d i v i d u a l
o w n e r s . F o r s u c h cases credit facilities are a l r e a d y available.
Indirect benefits which m a y accrue to the c o m m u n i t y from
i n c r e a s e d a g r i c u l t u r a l p r o d u c t i o n o r t h e p r o v i s i o n of e m p l o y m e n t
i n c o n s e q u e n c e of s u c h e x p e n d i t u r e , a l t h o u g h n o t c a p a b l e o f
precise m e a s u r e m e n t , are factors which cannot be ignored.
SECTION 2.—THE FAMILY FARM SCHEME.
15. T h e L i b e r a l p r o g r a m m e is s e t f o r t h s u c c i n c t l y
M e m o r a n d u m , a n d m a y b e s u m m a r i s e d a s follows :—
in
the
(i) T h e S t a t e i s t o a c q u i r e : —
(a) l a n d f o r t h e p u r p o s e of p r o v i d i n g f a m i l y f a r m s ;
(b) a n y l a n d t h a t n e e d s d r a i n i n g , s o i l i m p r o v e m e n t o r
r e c l a m a t i o n in o r d e r t o e n a b l e it t o p r o d u c e efficiently ;
(c) a n y l a n d s u i t a b l e f o r a f f o r e s t a t i o n ;
(d) a n y l a n d w h e r e t h e t e n a n t
wishes to modernise the equipment
a n d has not the necessary capital.
or
on
owner-occupier
a p p r o v e d lines
T h e l a n d is t o b e a c q u i r e d e i t h e r i n l i e u of d e a t h d u t i e s ,
o r i n c o n s i d e r a t i o n of a n a n n u i t y e q u a l t o t h e n e t r e n t , o r b y
p u r c h a s e in t h e o p e n m a r k e t .
(ii) T h e S t a t e h a v i n g a c q u i r e d t h e l a n d is t o a s s u m e " t h e
r e s p o n s i b i l i t y for r e c o n d i t i o n i n g a n d e q u i p p i n g it w i t h
b u i l d i n g s s u i t a b l e t o e n a b l e t h e o c c u p i e r to p r o d u c e efficiently
for t h e d o m e s t i c m a r k e t . "
(iii) S u p p l e m e n t a r y t o t h e a b o v e , t h e S t a t e i s t o b e
e m p o w e r e d t o m a k e c a p i t a l a d v a n c e s for a p p r o v e d s c h e m e s
through
agricultural credit
organisations
to
landlords,
t e n a n t s or owner-occupiers w h o wish to modernise their
e q u i p m e n t , o r t o e q u i p f o r , t h e p u r p o s e of n e w m e t h o d s of
farming.
jO
fj i 0
9
16. A s a p r e l i m i n a r y s t e p a n e x p e r t s u r v e y is t o b e m a d e t o
d e t e r m i n e t h e a m o u n t a n d s i t u a t i o n of a g r i c u l t u r a l l a n d t h a t n e e d s
r e c o n d i t i o n i n g , a n d a n e s t i m a t e of t h e c o s t .
17. I t is c o n t e m p l a t e d (i) t h a t 1 0 0 , 0 0 0 f a m i l y f a r m s ,
i.e.,
s e l f - s u p p o r t i n g f a r m s w h e r e h i r e d l a b o u r is n o t n e c e s s a r y , r a n g i n g
from t h r e e a c r e s t o 100 a c r e s in e x t e n t , s h o u l d b e p r o v i d e d b y t h e
S t a t e a s a f i r s t i n s t a l m e n t , p o s s i b l y w i t h i n t h r e e t o five y e a r s ,
directly increasing the net population on the land b y 200,000 t o
3 0 0 , 0 0 0 ; (ii) t h a t a s t h e r e s u l t of t h e w o r k of y e a r s , 5 0 0 , 0 0 0
additional w o r k e r s (presumably including t h e 100,000 family
f a r m e r s m e n t i o n e d a b o v e ) w o u l d find e m p l o y m e n t i n a g r i c u l t u r e
a n d its ancillary occupations, involving a n increase in t h e r u r a l
p o p u l a t i o n of 2 , 0 0 0 , 0 0 0 p e r s o n s ; a n d (iii) w o r k w o u l d b e p r o v i d e d
d u r i n g t h e p r o g r e s s of t h e s c h e m e for 1 5 0 , 0 0 0 w o r k e r s p e r a n n u m
in p u t t i n g u p houses a n d buildings (40,000 t o 50,000), d r a i n i n g
a n d r e c o n d i t i o n i n g l a n d (100,000) ; while a n o t h e r 20,000 w o u l d b e
u n d e r g o i n g t r a i n i n g p r e p a r a t o r y t o s e t t l e m e n t or s u b s e q u e n t l y
for e n t r y i n t o r u r a l o c c u p a t i o n s . F r o m t h e figures g i v e n i n t h e
Liberal M e m o r a n d u m , it appears to b e contemplated t h a t the
150,000 e m p l o y e d would include t h o s e in t r a i n i n g as family
farmers : b u t 20,000 trainees are presumably again included as
those established, or to b e established, on family farms.
1 8 . W h e n c o n t e m p l a t i n g t h e e x t e n t t o w h i c h t h e l a n d offers
a r e m e d y f o r u n e m p l o y m e n t , i t is of s o m e i m p o r t a n c e t o r e m e m b e r
that
(a) d e p r e s s i o n i n a g r i c u l t u r e h a s a t l e a s t c o n t r i b u t e d t o
t h e fall i n t h e l a s t n i n e y e a r s of 1 4 0 , 0 0 0 i n t h e n u m b e r of a l l
c l a s s e s of w o r k e r s e n g a g e d i n t h e i n d u s t r y i n G r e a t B r i t a i n ,
t h a t t h e fall i n t h o s e n u m b e r s l a s t y e a r w a s 3 2 , 0 0 0 , a n d t h a t
i t is still c o n t i n u i n g ;
(b) T h e a r e a u n d e r c u l t i v a t i o n h a s d e c i u i e d e a c h y e a r
s i n c e 1 9 2 0 , a n d is s t i l l d e c l i n i n g , a n d t h e n u m b e r of l i v e s t o c k
o n f a r m s i s a l s o d e c l i n i n g w i t h t h e e x c e p t i o n of s h e e p , w h i c h
increased last year b y nearly 300,000 after declining during
t h e t w o p r e c e d i n g y e a r s b y n e a r l y 1,000,000.
(c) W h i l e n e g l e c t of e q u i p m e n t h a s c e r t a i n l y r e s u l t e d
f r o m t h i s d e p r e s s i o n , i t s c a u s e is v e r y l a r g e l y d u e t o t h e f a c t
t h a t in m a n y cases prices realizable b y producers are n o t
c o m m e n s u r a t e w i t h t h e c o s t of p r o d u c t i o n .
O n l y in so far
as i m p r o v e d e q u i p m e n t w o u l d b e reflected in a r e d u c t i o n in
c o s t s of p r o d u c t i o n w o u l d t h i s r o o t c a u s e b e a f f e c t e d .
(d) T h e s u b - d i v i s i o n of f a r m s is n o t i n i t s e l f l i k e l y t o r e d u c e
c o s t s of p r o d u c t i o n .
19. T h e M e m o r a n d u m r e c o m m e n d s t h a t a n e x p e r t s u r v e y
s h o u l d b e m a d e b y t h e M i n i s t e r of A g r i c u l t u r e t o d e t e r m i n e t h e
a m o u n t a n d s i t u a t i o n of a g r i c u l t u r a l l a n d w h i c h n e e d s r e c o n d i t i o n ­
i n g , a n d a n e s t i m a t e of t h e c o s t of p u t t i n g i t i n t o g o o d c o n d i t i o n ,
a n d of t h e a m o u n t of e m p l o y m e n t w h i c h c o u l d b e g i v e n i n
t h e i m m e d i a t e f u t u r e i n t h e p r o c e s s . T h i s p r o p o s a l i s p a r t of t h e
p o l i c y s e t o u t i n S e c t i o n V I I I of t h e M e m o r a n d u m .
T h e p l a n for
c a r r y i n g o u t a s u r v e y does n o t s e e m t o call for a n y special
c o m m e n t , except t h a t such a survey m u s t necessarily take time.
E v e n if t h e n e c e s s a r y staff h a s b e e n r e c r u i t e d , q u a l i f i e d t o c r i t i c i s e
farming operations, conversant with agricultural development
a n d c o m p e t e n t t o f o r m a d e f i n i t e o p i n i o n u p o n t h e b e s t w a y of
s u b - d i v i d i n g o r r e - e q u i p p i n g o r r e - c o n d i t i o n i n g f a r m s , it is h a r d l y
likely t h a t on an average m u c h m o r e t h a n , say, one farm w h e r e
s u c h r e c o n d i t i o n i n g is n e c e s s a r y c o u l d b e s u r v e y e d , c o n s i d e r e d
a n d r e p o r t e d u p o n b y such a n e x p e r t w o r k i n g t o defined s t a n d a r d s
in less t h a n o n e d a y , a n d t h e s e r e p o r t s w o u l d all r e q u i r e c o n s i d e r a ­
t i o n a n d a c t i o n a f t e r w a r d s . If t h e p o l i c y of a c q u i r i n g l a n d w h i c h
n e e d s d r a i n i n g , soil i m p r o v e m e n t , l a n d e q u i p m e n t or r e c l a m a t i o n
were adopted, some such survey would, however, undoubtedly be
n e c e s s a r y . I t is s t a t e d in t h e M e m o r a n d u m t h a t t h e r e a r e 4 7 6 , 0 0 0
r
a c r e s of w a t e r l o g g e d l a n d r e a d y f o r d r a i n a g e i m m e d i a t e l y , w i t h o u t
w a i t i n g for a r t e r i a l d r a i n a g e . T h i s is o b v i o u s l y a reference t o
t h e s t a t e m e n t o n p a g e 2 2 of t h e R e p o r t of t h e R o y a l C o m m i s s i o n
on L a n d D r a i n a g e ( C m d . 2 9 9 3 ) , b u t it is q u i t e i n a c c u r a t e t o a s s u m e
t h a t s c h e m e s f o r a r t e r i a l d r a i n a g e w o u l d n o t first b e n e c e s s a r y i n
r e s p e c t of l a r g e p a r t s of t h i s a r e a .
20. W h e n c o n s i d e r i n g t h e p r o p o s a l t o establish 100,000 family
f a r m s , it s e e m s d e s i r a b l e , a t t h e o u t s e t , t o r e v i e w briefly t h e
h i s t o r y of s m a l l h o l d i n g s l e g i s l a t i o n a n d a d m i n i s t r a t i o n i n
E n g l a n d a n d W a l e s s i n c e 1 9 0 8 , w h e n t h e first A c t d e a l i n g effect­
ively with the subject c a m e into operation.
2 1 . It is necessary, however, t o a p p r e c i a t e a n d t o b e a r in
m i n d t h e difference b e t w e e n a " family f a r m " a n d a small
h o l d i n g . T h e s t a t u t o r y d e f i n i t i o n of a s m a l l h o l d i n g i s a h o l d i n g
e x c e e d i n g 1 a c r e , a n d e i t h e r n o t e x c e e d i n g 5 0 a c r e s , o r if e x c e e d i n g
5 0 a c r e s , t h e n n o t e x c e e d i n g a n a n n u a l v a l u e f o r p u r p o s e s of
i n c o m e t a x of £ 1 0 0 . A s m a l l h o l d i n g m a y o r m a y n o t b e self­
s u p p o r t i n g a n d m a y or m a y n o t afford facilities for t h e e m p l o y m e n t
of h i r e d l a b o u r . A f a m i l y f a r m i s t o a v e r a g e 3 0 a c r e s i n e x t e n t ,
b e s e l f - s u p p o r t i n g a n d w o u l d n o t afford facilities for t h e e m p l o y ­
m e n t of h i r e d l a b o u r .
22. D u r i n g t h e 22 years t h a t h a v e elapsed, since t h e passing
of t h e first S m a l l H o l d i n g s A c t , t h e r e h a v e b e e n t h r e e s t a g e s i n
S m a l l H o l d i n g a d m i n i s t r a t i o n , m a r k e d , i t is t r u e , b y a difference
in m e t h o d a n d circumstances, but, on the whole, governed b y the
s a m e guiding principle. Throughout, the actual administration
h a s u p t i l l n o w b e e n i n t h e h a n d s of C o u n t y C o u n c i l s , e x c e p t t h a t
t h e M i n i s t r y exercised p o w e r u n d e r t h e Small H o l d i n g s Colonies
A c t s , 1 9 1 6 - 1 9 1 8 , t o p r o v i d e a l i m i t e d n u m b e r of f a r m s e t t l e m e n t s .
2 3 . T h e small H o l d i n g s a n d A l l o t m e n t s A c t , 1908, w a s p a s s e d
in order t o satisfy t h e " land h u n g e r " which w a s believed to
e x i s t a n d t o p r o v i d e easier access t o t h e l a n d for t h o s e possessing
t h e n e c e s s a r y skill a n d c a p i t a l . I n o t h e r w o r d s , it w a s i n t e n d e d
t o p r o v i d e a l a d d e r b y m e a n s of w h i c h a g r i c u l t u r a l w o r k e r s w h o
h a d s a v e d m o n e y c o u l d a t t a i n a p o s i t i o n of i n d e p e n d e n c e for w h i c h
the opportunity was otherwise practically non-existent.
The
A c t p r e s u m e d t h e e x i s t e n c e of a w i d e s p r e a d d e m a n d f o r s m a l l
holdings b y s u c h p e r s o n s a n d this a s s u m p t i o n p r o v e d to b e well
founded.
B e t w e e n 1 9 0 8 a n d t h e o u t b r e a k of t h e W a r , s o m e
1 4 , 0 0 0 s m a l l h o l d i n g s c o v e r i n g a n a r e a of 1 9 5 , 0 0 0 a c r e s w e r e
p r o v i d e d , w i t h p r a c t i c a l l y n o r e s u l t a n t loss a n d v e r y few failures.
T h e holdings r a n g e d from one a c r e t o 50 acres with a n a v e r a g e
of 14 a c r e s , a n d 7 0 p e r c e n t , of t h e m w e r e b a r e l a n d h o l d i n g s ,
t h a t is w i t h o u t e q u i p m e n t of a n y k i n d . *
2 4 . T u e L a n d S e t t l e m e n t (Facilities) A c t , 1919, w a s p a s s e d in
order to implement promises m a d e to ex-Service men.
Under
t h i s A c t s o m e 1 6 , 0 0 0 h o l d i n g s w e r e c r e a t e d o n a n a r e a of 2 5 6 , 0 0 0
a c r e s . T h e a v e r a g e a r e a w a s 16 a c r e s a n d 5 4 p e r c e n t , of t h e
holdings were bare land holdings. Owing to high prices a n d high
r a t e s of i n t e r e s t , t h e p r o v i s i o n of t h e s e h o l d i n g s e n t a i l e d h e a v y
losses, w h i c h w e r e , a n d still a r e , b o r n e entirely b y t h e S t a t e .
T h e t e s t of m e a n s a n d e x p e r i e n c e w a s t o s o m e e x t e n t r e l a x e d t o
m e e t p o s t - W a r conditions, a n d as a result there was a proportion
of f a i l u r e s , t h o u g h p r o b a b l y n o t m o r e t h a n 15 p e r c e n t .
A
s p r i n k l i n g of t r a i n e e s — m o s t l y d i s a b l e d m e n — w e r e p r o v i d e d w i t h
h o l d i n g s b u t t h e g r e a t m a j o r i t y of t h o s e s e l e c t e d f o r h o l d i n g s h a d
previous experience a n d some capital which could be supplemented
i n a p p r o v e d c a s e s by l o a n s o n a 5 0 / 5 0 b a s i s . T h e L a n d S e t t l e m e n t
S c h e m e w a s definitely b r o u g h t t o a n e n d in 1926, b u t w a s p r a c t i ­
c a l l y c l o s e d d o w n s o m e y e a r s e a r l i e r a s a r e s u l t of t h e G e d d e s
economies.
* Note.—The
reference in t h e M e m o r a n d u m t o t h e e s t a b l i s h m e n t of
nearly 15,000 family f a r m s u n d e r t h e Act of 1908 is erroneous. E v e n if
e v e r y o n e of t h e equipped holdings were self supporting, t h e total n u m b e r
would only a m o u n t t o a b o u t 4,000.
25. T h e S m a l l H o l d i n g s a n d A l l o t m e n t s A c t , 1926, w a s p a s s e d
i n o r d e r t o e n a b l e t h e p r o v i s i o n of s m a l l h o l d i n g s o n m o r e n o r m a l
lines t o be r e s u m e d , b u t "with this difference a s c o m p a r e d w i t h t h e
pre-war h o l d i n g s - n a m e l y , t h a t in practically every instance a n d
m o r e e s p e c i a l l y i n t h e c a s e of e q u i p p e d h o l d i n g s a n a n n u a l l o s s
i s n o w i n c u r r e d of w h i c h t h e S t a t e b e a r s 7 5 p e r c e n t , a n d t h e
C o u n t y Council p r o v i d i n g t h e h o l d i n g s , 2 5 p e r cent. T h i s loss
is d u e t o t h e i n c r e a s e d c o s t of n e w w o r k a n d m a i n t e n a n c e u n d e r
p o s t - w a r c o n d i t i o n s c o u p l e d w i t h t h e h i g h e r r a t e of i n t e r e s t o n
l o a n s (5 p e r c e n t , a s c o m p a r e d w i t h 3-£- p e r c e n t , b e f o r e t h e w a r ) .
These factors increase t h e a n n u a l outgoings incurred in relation
t o t h e h o l d i n g s t o a n e x t e n t w h i c h is n o t reflected in t h e " F u l l
f a i r r e n t " c h a r g e d t o t h e t e n a n t s . U n d e r t h e 1926 A c t , p r o v i s i o n
h a s b e e n m a d e for t h e a c q u i s i t i o n of a p p r o x i m a t e l y 1 7 , 0 0 0 a c r e s
d i v i d e d i n t o 6 0 0 h o l d i n g s w i t h a n a v e r a g e a r e a of n e a r l y 2 9 a c r e s .
T h e a g g r e g a t e a n n u a l loss deficiency—i.e., t h e a m o u n t b y w h i c h
l o a n c h a r g e s e x c e e d full f a i r r e n t — i s a b o u t £ 1 8 , 0 0 0 . T h e p r o p o r t i o n
of b a r e l a n d h o l d i n g s i s a b o u t 3 6 p e r c e n t . , w h i c h i s c o n s i d e r a b l y
l e s s t h a n t h e p r o p o r t i o n u n d e r p r e v i o u s s c h e m e s . T h e r a t e of
interest on loans advanced b y the Public Works Loan Commis­
sioners for s m a l l h o l d i n g s h a s q u i t e r e c e n t l y b e e n r e d u c e d from
5 p e r c e n t , t o 4 £ p e r c e n t . , b u t t h i s r e d u c t i o n is t o o slight t o h a v e
a n y a p p r e c i a b l e effect.
26. T h r o u g h o u t t h e past 22 years t h e object h a s been to
provide small holdings in response to a n expressed demand from,
in t h e m a i n , persons qualified b y p r e v i o u s experience on t h e l a n d
a n d possessing the necessary m e a n s t o ensure a reasonable
l i k e l i h o o d of s u c c e s s .
T h e y are n o t necessarily self-supporting
a n d a l a r g e n u m b e r of t h e m a r e i n f a c t p a r t - t i m e h o l d i n g s .
On
the other hand, m a n y small holders employ hired workers. There
has never been a n y suggestion t h a t self-supporting small holdings
s h o u l d b e p r o v i d e d b e c a u s e t h e y a r e t h e i d e a l t y p e of h o l d i n g ,
viewed from a purely economic s t a n d p o i n t , or t h a t small holders
should e m p l o y n o h i r e d l a b o u r . I t is possible, t h o u g h i n c a p a b l e
of p r o o f , t h a t t h e c a p i t a l o u t l a y i n c u r r e d i n p r o v i d i n g t h e 3 0 , 0 0 0
or so h o l d i n g s c r e a t e d u n d e r S t a t u t e since 1908, a n d t h e w o r k i n g
capital a n d labour utilised in cultivating them, could h a v e been
a p p l i e d b y d i f f e r e n t m e t h o d s , t o a l a r g e r a r e a of l a n d , a n d s e c u r e d
a l a r g e r g r o s s o r n e t r e t u r n . B u t t h e p r o m o t i o n of s m a l l h o l d i n g s
has never proceeded b y reference t o a n y such consideration.
It
h a s r e s t e d o n t h e a x i o m s (i) t h a t i t is d e s i r a b l e o n g r o u n d s of
social a n d n a t i o n a l well-being t h a t t h e r e s h o u l d b e a l a r g e r n u m b e r
of p e r s o n s s e t t l e d o n t h e l a n d ; a n d (ii) t h a t so l o n g a s t h e r e i s a
g e n u i n e d e m a n d for e i t h e r p a r t - t i m e or w h o l e - t i m e s m a l l h o l d i n g s
b y persons who are likely to succeed, such holdings should be pro­
v i d e d if o n l y a s a s t e p p i n g s t o n e w h e r e b y t h o s e w h o a r e s u c c e s s f u l
m a y rise to larger holdings as t h e i r experience a n d their capital
increase.
27. In this connexion i m p o r t a n c e a t t a c h e s to the fact recorded
in t h e L i b e r a l M e m o r a n d u m " t h a t t h e successful s m a l l h o l d e r
t e n d s t o i n c r e a s e h i s h o l d i n g u n t i l i t p a s s e s o u t of t h e c a t e g o r y . "
2 8 . If t h e p r o v i s i o n of s m a l l h o l d i n g s in t h e p a s t h a s n o t b e e n
based on a n y assumption t h a t t h e y are—economically—the ideal
u n i t of c u l t i v a t i o n , s t i l l l e s s h a s i t b e e n f o u n d e d o n a n y t h e o r y
t h a t s m a l l h o l d i n g s a f f o r d e d a r e a d y m e a n s of l i v e l i h o o d f o r
r e d u n d a n t w o r k e r s in i n d u s t r y .
T h e p r o b l e m h a s u p till n o w
a l w a y s b e e n l o o k e d a t o b j e c t i v e l y , a s o n e of s a t i s f y i n g a c o n c r e t e
d e m a n d f o r s m a l l h o l d i n g s of v a r y i n g t y p e s b y p e r s o n s l i k e l y t o
succeed in c u l t i v a t i n g t h e m .
2 9 . B y t h e o b s e r v a n c e of t h i s p r a c t i c a l p r i n c i p l e a n d b y
e x e r c i s i n g g r e a t c a r e b o t h i n t h e c h o i c e of s u i t a b l e l a n d a n d i n t h e
s e l e c t i o n of q u a l i f i e d a p p l i c a n t s , s m a l l h o l d i n g s p r o v i d e d u n d e r
t h e S m a l l H o l d i n g s A c t s h a v e b e e n , in t h e m a i n , a m a r k e d success,
for, as h a s a l r e a d y been p o i n t e d o u t , small holders h a v e , in fact,
g e n e r a l l y f a c e d u p t o a n d w i t h s t o o d t h e t e s t of l o w p r i c e s b e t t e r
(1848C)
H
t h a n l a r g e r f a r m e r s , a n d t h e p r o v i s i o n of t h e s e , s m a l l h o l d i n g s h a s
b e e n a c c o m p a n i e d b y a s u b s t a n t i a l increase in t h e resident p o p u l a ­
t i o n o n t h e l a n d . I t is t h e i n t e n t i o n of t h e p r e s e n t G o v e r n m e n t ,
n o t o n l y t o c o n t i n u e t h e s a m e policy, b u t t o c a r r y it a s t a g e further,
a n d i n t h e l i g h t of p a s t e x p e r i e n c e t o o p e n u p a f u r t h e r field for
e x p e r i m e n t , b y carefully selecting u n e m p l o y e d industrial workers
w i t h p r e v i o u s e x p e r i e n c e of t h e l a n d a n d p r o v i d i n g t h e m w i t h t h e
necessary working capital as well as w i t h t h e land.
T h i s is
a d m i t t e d l y a n e w v e n t u r e , b u t t h e a d m i n i s t r a t i o n of s u c h a s c h e m e
must be governed b y the same practical considerations, particularly
a s t o c h o i c e of l a n d a n d s e l e c t i o n of s e t t l e r , a s i n t h e p a s t , if
consequences are to be avoided which would be disastrous t o the
settlers and to the whole scheme.
30. W h a t bearing have these observations on t h e proposals
w h i c h a r e b e i n g e x a m i n e d ? I n t h e first p l a c e , t h e f i g u r e s g i v e n
a b o v e s h o w t h a t d u r i n g 1 6 e f f e c t i v e y e a r s of a d m i n i s t r a t i o n
(i,e., e x c l u d i n g t h e W a r y e a r s a n d t h e y e a r s 1 9 2 4 - 2 5 ) , t h e r e s u l t
of t h e e f f o r t s of a l l t h e C o u n t y C o u n c i l s a n d C o u n c i l s of C o u n t y
B o r o u g h s in E n g l a n d a n d Wales, s t i m u l a t e d b y t h e Ministry, and
reinforced as regards the L a n d Settlement Scheme b y strong
p a t r i o t i c s e n t i m e n t , h a s been to provide a p p r o x i m a t e l y , 30,000
h o l d i n g s o n a n a r e a of 4 6 0 , 0 0 0 a c r e s , c o n s i d e r a b l y m o r e t h a n
h a l f of t h e h o l d i n g s b e i n g b a r e l a n d h o l d i n g s . B y c o m p a r i s o n ,
t h e r e f o r e , t h e e s t a b l i s h m e n t i n five y e a r s o n a n a r e a of 3 , 0 0 0 , 0 0 0
a c r e s of 1 0 0 , 0 0 0 f a m i l y f a r m s , a l l p r o v i d e d w i t h e q u i p m e n t , a n d
self-supporting, would be a colossal task.
3 1 . F i g u r e s are q u o t e d in t h e m e m o r a n d u m w i t h t h e i n t e n t i o n
of s h o w i n g t h a t if all C o u n t y C o u n c i l s h a d a d m i n i s t e r e d t h e S m a l l
Holdings Acts as vigorously as the four Counties mentioned, the
n u m b e r of s m a l l h o l d i n g s c r e a t e d u n d e r t h e A c t s w o u l d b e o v e r
5 7 , 0 0 0 m o r e t h a n t h e a c t u a l n u m b e r t o - d a y , t h e i n f e r e n c e is d r a w n
t h a t a l a r g e e x p a n s i o n of s m a l l h o l d i n g s w o u l d b e p o s s i b l e if t h e
m o r e b a c k w a r d counties showed the s a m e energy as those w h o h a v e
b e e n m o s t a c t i v e . T h e r e i s , of c o u r s e , m u c h t r u t h i n t h i s , b u t t h e
figure q u o t e d a b o v e , a l t h o u g h o n l y g i v e n " a s a b r o a d i n d i c a t i o n "
is g r e a t l y e x a g g e r a t e d a s a r e s u l t of o v e r l o o k i n g t w o i m p o r t a n t
f a c t o r s : t h u s , i n t h r e e of t h e C o u n t i e s m e n t i o n e d ( C a m b r i d g e ,
t h e I s l e of E l y a n d N o r f o l k ) , t h e a v e r a g e s i z e of t h e h o l d i n g s
p r o v i d e d is o n l y a b o u t h a l f t h a t of t h e h o l d i n g s i n t h e r e s t of t h e
country.
I n t h e I s l e of E l y p a r t i c u l a r l y , v e r y l a r g e n u m b e r s of
h o l d i n g s a r e l i t t l e m o r e t h a n a l l o t m e n t s . If a c c o u n t is t a k e n of
t h e s e differences w h e n m a k i n g a c o m p a r i s o n w i t h a c t i v i t i e s in t h e
r e s t of t h e C o u n t r y t h e figure of 5 7 , 0 0 0 w o u l d b e r e d u c e d t o
a b o u t 26,000.
32. This, however, would be on the assumption t h a t other
c i r c u m s t a n c e s a r e c o m p a r a b l e , w h i c h is f a r f r o m b e i n g t h e c a s e .
T h e C o u n t i e s m e n t i o n e d c o n t a i n l a r g e a r e a s of l a n d i n p r o p o r t i o n
t o t h e t o a l a r e a of t h e C o u n t y w h i c h a r e v e r y s u i t a b l e for s m a l l
h o l d i n g s ; a l a r g e a r e a of f e n l a n d i s i n c l u d e d w h i c h is p a r t i c u l a r l y
a d a p t e d for t h e use t o w h i c h it h a s been p u t , viz., for t h e division
i n t o c o m p a r a t i v e l y s m a l l p l o t s for m a r k e t g a r d e n c u l t i v a t i o n .
Several o t h e r Counties, on the o t h e r h a n d , contain b u t little l a n d
t h a t is s u i t a b l e f o r t h e p u r p o s e of s m a l l h o l d i n g s p r o p o r t i o n a t e t o
t h e t o t a l a r e a of t h e C o u n t y .
N o a d m i n i s t r a t i v e a c t i v i t y will
r e m e d y this physical fact.
33. B u t t h e difference b e t w e e n t h e family f a r m p r o p o s a l s a n d
t h e G o v e r n m e n t p r o g r a m m e is in a n y e v e n t s o m e t h i n g m o r e t h a n
a d i f f e r e n c e of d e g r e e . R e f e r e n c e h a s b e e n m a d e i n p a r a g r a p h 2 6
to the practical considerations t h a t have hitherto guided small
h o l d i n g s a d m i n i s t r a t i o n , v i z . , t o fit t h e r i g h t m a n t o t h e r i g h t l a n d
u n d e r conditions which are likely t o ensure success. Such con­
s i d e r a t i o n s w o u l d a l m o s t i n e v i t a b l y b e s w e p t a s i d e in t h e p r o c e s s
of a t t e m p t i n g t o c a r r y o u t a p r o g r a m m e o n t h e s c a l e t h a t is s u g ­
gested. O n e h a s t o a s s u m e t h a t it w o u l d be possible t o set u p the
n e c e s s a r y a d m i n i s t r a t i v e m a c h i n e r y , c e n t r a l a n d local, for c o p i n g
w i t h s u c h a t a s k ( a n ad hoc d e p a r t m e n t c o m p a r a b l e , p r e s u m a b l y ,
t o t h e F o o d P r o d u c t i o n D e p a r t m e n t , is c o n t e m p l a t e d ) .
But
l e a v i n g aside this p o i n t , t h e a t t e m p t t o w o r k o u t so a m b i t i o u s a
p r o g r a m m e in such a limited time would be a t t e n d e d with t h e
d a n g e r t h a t l a r g e n u m b e r s of i l l - q u a l i f i e d p e r s o n s w o u l d b e p l a c e d
on unsuitable land, with consequences which sooner or later would
p r o v e disastrous ; a n d further t h a t in m a n y instances well
qualified persons, b o t h employers a n d e m p l o y e d , would b e
displaced from land which suits t h e m .
3 4 . O n p a g e 4 4 of t h e M e m o r a n d u m , t h e r e is a q u o t a t i o n f r o m
p a r a g r a p h 2 4 3 of t h e F i n a l R e p o r t of t h e A g r i c u l t u r a l T r i b u n a l
of I n v e s t i g a t i o n , 1 9 2 4 ( C m d . 2 1 4 5 ) i n s u p p o r t of f a m i l y f a r m s .
T h e s u c c e e d i n g p a r a g r a p h of t h a t R e p o r t , h o w e v e r , o p e n s w i t h
t h e w o r d s " T h e d e v e l o p m e n t of t h e s m a l l f a r m p o l i c y i n G r e a t
B r i t a i n m u s t b e of s t e a d y a n d c a r e f u l g r o w t h , b u t i t offers a
p o l i c y f u n d a m e n t a l i n c h a r a c t e r w h i c h f o r a l o n g p e r i o d is d e s t i n e d
t o h a v e far-reaching economic a n d social effects."
3 5 . T h e w i s d o m of p r o c e e d i n g w i t h c a u t i o n , o n w h i c h e m p h a s i s
w a s t h u s l a i d b y t h e T r i b u n a l , is h a r d l y c o n s i s t e n t w i t h t h e p r o p o s a l
t h a t 1 0 0 , 0 0 0 f a m i l y f a r m s s h o u l d b e e s t a b l i s h e d a t t h e r a t e of
2 0 , 0 0 0 p e r y e a r . T o c o n v e r t s o l a r g e a p r o p o r t i o n of t h e c u l t i v a t e d
l a n d of t h i s c o u n t r y , p r e s u m a b l y n o w o c c u p i e d i n l a r g e r u n i t s a n d
employing m u c h hired labour*, into family farms, would be a
m o m e n t o u s s t e p which as a condition precedent d e m a n d s v e r y
c a r e f u l e x a m i n a t i o n . C a u t i o n is p a r t i c u l a r l y d e m a n d e d b e c a u s e t h e
s u b d i v i s i o n a n d r e - e q u i p m e n t of t h e s e f a r m s w o u l d e i t h e r s t e r e o ­
t y p e t h e m f o r a l o n g e r o r s h o r t e r p e r i o d , o r w o u l d , if t h e p o l i c y
f a i l e d , i n v o l v e t h e s a c r i f i c e of m a n y m i l l i o n s of p o u n d s s p e n t o n
e q u i p m e n t , a s w e l l a s t h e d i s p l a c e m e n t of l a r g e n u m b e r s of e x i s t i n g
farmers and workers.
3 6 . R e f e r e n c e i s m a d e o n p a g e 4 3 of t h e L i b e r a l M e m o r a n d u m
t o t h e i n c r e a s e d n u m b e r of w o r k e r s r e s u l t i n g f r o m t h e c r e a t i o n
of s m a l l h o l d i n g s ; t h i s is i n c o n t e s t a b l e a s t h e figures t h e r e
q u o t e d f r o m t h e N a i r n e R e p o r t s h o w . T h e M i n i s t r y itself h a s
e v i d e n c e t h a t b y c a r e f u l s e l e c t i o n i t is p o s s i b l e t o i n c r e a s e f r o m
t w o - t o f o u r - f o l d t h e p o p u l a t i o n resident
o n p a r t i c u l a r a r e a s of
l a n d a s t h e r e s u l t of d i v i s i o n i n t o s m a l l h o l d i n g s . T h u s , o n
3 5 e s t a t e s developed b y C o u n t y Councils in E n g l a n d a n d W a l e s
o n a t o t a l a r e a of 1 6 , 0 0 0 a c r e s t h e r e s i d e n t p o p u l a t i o n w a s i n c r e a s e d
f r o m 1,048 t o 2 , 2 9 8 . S i m i l a r l y , o n t h r e e e s t a t e s d e v e l o p e d b y t h e
M i n i s t r y t h e r e s i d e n t p o p u l a t i o n r o s e f r o m 4 9 0 t o 1,227. I n t h e
c a s e of a f u r t h e r 1 3 C o u n c i l s c h e m e s i t w a s a s c e r t a i n e d t h a t t h e
n u m b e r of p e r s o n s employed
on t h e land prior t o its conversion
into small holdings was 80 and after conversion 313. N o such
r e s u l t c o u l d , h o w e v e r , b e a n t i c i p a t e d u n d e r a s c h e m e of t h e
d i m e n s i o n s p r o p o s e d , w h e r e 3 , 0 0 0 , 0 0 0 a c r e s of l a n d w o u l d h a v e
t o b e a c q u i r e d , s u b - d i v i d e d , r e - e q u i p p e d a n d r e l e t w i t h i n five
y e a r s . M o r e o v e r it is t o b e o b s e r v e d t h a t t h e l a r g e r t h e f a m i l y
f a r m t h e l e s s s c o p e t h e r e w o u l d b e for t h o s e s t r i k i n g i n c r e a s e s i n
resident p o p u l a t i o n a n d e m p l o y m e n t w h i c h often a c c o m p a n y t h e
c o n v e r s i o n of s p e c i a l l y s e l e c t e d s m a l l e r a r e a s t o i n t e n s i v e f o r m s
of c u l t i v a t i o n .
Q u e s t i o n s arising in c o n n e c t i o n w i t h d i s p l a c e d
population u n d e r the proposed scheme are discussed in p a r a ­
graph 38.
3 7 . I t is o b v i o u s l y t h e i n t e n t i o n u n d e r t h e L i b e r a l s c h e m e t o
a v o i d , a s f a r a s p r a c t i c a b l e , t h e d i s t u r b a n c e of e x i s t i n g f a m i l y
farmers a n d p r e s u m a b l y the scheme would necessarily involve
t h e d i s p o s s e s s i o n of m a n y f a r m e r s , i n c l u d i n g p e r h a p s s m a l l
holders, who employ labour, and b y limiting area and equipment,
t o discourage t h e n e w family farmers from employing labour as
p a r t of " t h e t r u e r e m e d y f o r t h e h i g h e r h o u r l y w a g e c o s t s
* The Liberal memorandum gives an average labour cost of about / 3 0 0
a year on farms over 50 acres, and describes this charge as " a formidable
element in agricultural costs."
r e s u l t i n g f r o m t h e s o u n d n a t i o n a l p o l i c y of r e q u i r i n g a r e a s o n a b l e
m i n i m u m a g r i c u l t u r a l w a g e , " for t h e f a m i l y f a r m e r " n e v e r
e n t e r s t h e c o m p e t i t i v e l a b o u r m a r k e t , for, e m p l o y i n g n o h i r e d
l a b o u r , good or b a d t i m e s a r e reflected in t h e personal s t a n d a r d
of l i v i n g a n d s a v i n g s of h i m s e l f a n d h i s f a m i l y , a n d n o t i n t o t a l
unemployment."
T h e family farmer system " eliminates hired
labour costs."
3 8 . W h e r e i s t o b e f o u n d t h i s first i n s t a l m e n t of 3 , 0 0 0 , 0 0 0 a c r e s
— a p p r o a c h i n g 5,000 s q u a r e miles ? I t is t o b e " g o o d a v e r a g e
l a n d , " m u c h of i t " w o u l d b e m a d e s u i t a b l e a f t e r r e c o n d i t i o n i n g , "
a n d " m u c h of i t w o u l d b e d e r i v e d f r o m b r e a k i n g u p f a r m s w h i c h
are badly farmed or are too large to be economic with present wage
r a t e s a n d p r i c e s . " T h e t o t a l a r e a u n d e r c r o p s a n d g r a s s in G r e a t
B r i t a i n is 3 0 , 0 0 0 , 0 0 0 a c r e s , d i v i d e d i n t o 4 7 5 , 0 0 0 h o l d i n g s a b o v e
1 a c r e (average a b o u t 6 3 acres) a n d p r o v i d i n g e m p l o y m e n t for
856,000 regular and casual hired workers.
According to the
c e n s u s of p r o d u c t i o n c a r r i e d o u t b y t h e M i n i s t r y i n 1 9 2 5 , t h e
a v e r a g e n u m b e r of h i r e d w o r k e r s p e r 1,000 a c r e s of c r o p s a n d g r a s s
on holdings u p to 50 acres ranged from 4 3 - 3 to 3 0 - 8 , while on
h o l d i n g s a b o v e 5 0 a c r e s t h e r a n g e w a s f r o m 2 9 - 9 t o 2 7 - 2 . Of t h e
t o t a l n u m b e r cf h o l d i n g s i n G r e a t B r i t a i n , 9 4 - 4 5 4 e x c e e d 1 0 0 a c r e s ,
a n d only 14,684 (roughly 3 p e r cent.) exceed 300 acres. " L a r g e
h o l d i n g s " a r e s t a t e d in t h e M e m o r a n d u m t o r e p r e s e n t 2 2 - 9 p e r
c e n t , of t h e t o t a l a r e a in G r e a t B r i t a i n . T h i s c o r r e s p o n d s t o t h e
a r e a covered b y holdings o v e r 300 acres, viz., a b o u t 7.000,000 acres
( a v e r a g e 4 6 0 a c r e s p e r h o l d i n g ) . If t h e 3 , 0 0 0 , 0 0 0 a c r e s r e q u i r e d
are taken from the area covered b y these larger holdings a n d are
a f a i r s a m p l e of t h e w h o l e 7 , 0 0 0 , 0 0 0 a c r e s , a b o u t 6 , 3 0 0 f a r m e r s
w o u l d b e d i s p l a c e d [i.e., t h r e e - s e v e n t h s of 1 4 , 6 8 4 ) , t o g e t h e r w i t h
8 2 , 0 0 0 w o r k e r s (i.e., a v e r a g e of 2 7 - 5 p e r 1,000 a c r e s , o r 1 3 p e r
holding).
O n this basis the total n u m b e r displaced would be
8 8 , 0 0 0 . If, h o w e v e r , i t w e r e f o u n d n e c e s s a r y t o d r a w u p o n t h e
l a r g e r a r e a c o v e r e d b y h o l d i n g s of 5 0 a c r e s o r m o r e , t h e p o s i t i o n
w o u l d be as follows, again a s s u m i n g t h e p a r t acquired w e r e t y p i c a l
of t h e w h o l e : — I n G r e a t B r i t a i n t h e r e a r e 1 6 7 , 0 0 0 o c c u p i e r s of
h o l d i n g s of 5 0 a c r e s o r m o r e , a n d t h e a r e a of t h e s e h o l d i n g s is
a p p r o x i m a t e l y 2 5 , 7 0 0 , 0 0 0 a c r e s ( a v e r a g e 154 a c r e s p e r h o l d i n g ) .
T h e a v e r a g e n u m b e r of e m p l o y e e s p e r 1,000 a c r e s o n h o l d i n g s in
t h i s c a t e g o r y i s 2 8 (or 4 - 3 p e r h o l d i n g ) . T o t a k e 3 , 0 0 0 , 0 0 0 a c r e s
t y p i c a l of t h i s l a r g e a r e a w o u l d d i s p l a c e 2 0 , 0 0 0 f a r m e r s a n d 8 6 , 0 0 0
w o r k e r s . O n this basis 106,000 agriculturists, including in m o s t
cases w h o l e families, w o u l d b e d i s t u r b e d a n d 100,000 family
f a r m e r s , l a r g e l y d r a w n f r o m t h e r a n k s of u r b a n u n e m p l o y e d , b u t
i n c l u d i n g a l s o s o m e of t h o s e w h o w o u l d b e d i s t u r b e d , p u t in t h e i r
stead.
I t is t r u e t h a t a g r e a t p r o p o r t i o n of t h e f a m d y f a r m e r s w o u l d ,
of n e c e s s i t y , b e s e l e c t e d f r o m t h o s e h a v i n g d e p e n d e n t s w h o w o u l d
a s s i s t o n t h e h o l d i n g . O n l y t h u s c o u l d t h e e l i m i n a t i o n of h i r e d
labour be achieved.
B u t m a k i n g e v e r y a l l o w a n c e for t h i s , t h e
extent to which existing farmers and workers and their dependents
w o u l d b e d i s p l a c e d is o b v i o u s l y a n i m p o r t a n t i t e m o n t h e d e b i t
s i d e of t h e s e p r o p o s a l s a n d i s o n e t o w h i c h v e r y l i t t l e c o n s i d e r a t i o n
is g i v e n i n t h e L i b e r a l M e m o r a n d u m , a l t h o u g h it is c o n t e m p l a t e d
t h a t p a r t of t h e a r e a t o b e a c q u i r e d w o u l d b e d r a w n f r o m l a n d
w h i c h r e q u i r e s r e c o n d i t i o n i n g , w h e r e t h e scope for p r o v i d i n g
e m p l o y m e n t m a y b e i n c r e a s e d a s t h e r e s u l t of r e c o n d i t i o n i n g .
A s p o i n t e d o u t a b o v e ( p a r a . 3 6 ) , b y t h e c a r e f u l s e l e c t i o n of s u i t a b l e
a r e a s of l a n d t h e r u r a l p o p u l a t i o n m a y b e i n c r e a s e d s u b s t a n t i a l l y
b y s u b - d i v i s i o n i n t o s m a l l e r u n i t s ; b u t t h e e x t e n t of a n d t h e t i m e
a l l o w e d f o r t h e c a r r y i n g o u t of t h e s c h e m e a d u m b r a t e d i n t h e
L i b e r a l M e m o r a n d u m a r e b y n o m e a n s conducive t o careful
selection.
" 3 9 . E v e n if o n e w e r e p r e p a r e d t o c o n t e m p l a t e s u c h a n
u p h e a v a l it m u s t b e r e m e m b e r e d t h a t n o t a l l l a n d i s s u i t a b l e
for family s e t t l e m e n t . T h e r e a r e m a n y factors t o be considered
before a f a r m c a n b e a d j u d g e d t o b e s u i t a b l e for s m a l l h o l d i n g s ,
a n d f a i l u r e t o r e c o g n i s e t h i s f a c t w o u l d i m p e r i l a n y s c h e m e of
land settlement.
F o r e x a m p l e , t h e d o w n l a n d s of B e r k s h i r e
o r t h e h e a v y c l a y s of E s s e x a r e n o t l i k e l y t o p r o v i d e a l a r g e
9
Q -S
60i
n u m b e r of s u c h f a m i l y f a r m s .
Other factors which require
s e r i o u s c o n s i d e r a t i o n , u n l e s s m u c h m o n e y is t o b e w a s t e d , a r e
t h e facilities w h i c h a f a r m p r e s e n t s for sub-division a n d re­
e q u i p m e n t , t h e p r o x i m i t y t o m a r k e t s , a n d t h e p r o s p e c t of t h e i r
d e v e l o p m e n t , t h e m e a n s of a c c e s s , e t c . , e t c .
4 0 . I t w o u l d b e i m p o s s i b l e t o a c q u i r e 3 , 0 0 0 , 0 0 0 a c r e s of
s u c h l a n d in t h i s c o u n t r y w i t h v a c a n t possession, o r e v e n t h e
6 0 0 , 0 0 0 a c r e s r e q u i r e d f o r t h e first 2 0 , 0 0 0 h o l d i n g s . I t w o u l d i n
m a n y cases b e necessary either t o serve notices to quit, which
m a y defer t h e d a t e for v a c a n t possession for as m u c h as 2 y e a r s ,
w i t h a l i a b i l i t y t o p a y c o m p e n s a t i o n for d i s t u r b a n c e s a s well a s
t h e t e n a n t r i g h t c l a i m of t h e d i s p o s s e s s e d o c c u p i e r . T h e a l t e r n a ­
tive would be to extinguish the occupiers' interest compulsorily,
w h i c h m i g h t i n v o l v e r e s p o n s i b i l i t y for f u r t h e r c o m p e n s a t i o n
f o r g r o w i n g c r o p s a n d l o s s o n t h e f o r c e d s a l e of s t o c k . F u r t h e r m o r e
i t w o u l d b e n e c e s s a r y t o c o n t e m p l a t e t h e p r o v i s i o n of a c c o m m o ­
d a t i o n e l s e w h e r e for d i s p l a c e d p o p u l a t i o n o n w h i c h s u b j e c t t h e
L i b e r a l M e m o r a n d u m is s i l e n t .
4 1 . I t is p r o p o s e d t o a c q u i r e l a n d s u b j e c t t o a n a n n u a l
rent-charge.
If t h e c a p i t a l v a l u e of t h e c h a r g e t o b e c r e a t e d i s
t o b e e q u i v a l e n t t o t h e c a p i t a l v a l u e of t h e l a n d , t h e r e is n o
obvious a d v a n t a g e t o t h e State apart from the saving in capital
o u t l a y . If, h o w e v e r , t h e c a p i t a l v a l u e of t h e c h a r g e i s t o b e l e s s
t h a n t h e c a p i t a l m a r k e t v a l u e of t h e l a n d , i t is c l e a r t h a t a c q u i s i ­
t i o n w o u l d i n v o l v e s o m e m e a s u r e of c o n f i s c a t i o n .
In this
c o n n e c t i o n , i t is of i m p o r t a n c e t o r e m e m b e r t h a t o n l y t h o s e
o w n e r s w o u l d b e p e n a l i s e d w h o s e l a n d is s e l e c t e d f o r a c q u i s i t i o n .
4 2 . T h e t a s k of s e l e c t i n g a n d r e m o v i n g 1 0 0 , 0 0 0 f a m i l i e s a n d
training those w h o did not possess t h e necessary experience
(in a l l p r o b a b i l i t y t h e g r e a t m a j o r i t y ) w o u l d o b v i o u s l y b e o n e
of c o n s i d e r a b l e m a g n i t u d e .
Family farmers are to be recruited
from—
(a) C o m p e t e n t f a r m w o r k e r s a n d f a r m e r s ' s o n s .
(b) A U o t m e n t h o l d e r s .
(c) T r a i n e e s ( u r b a n u n e m p l o y e d ) .
T h e t r a i n e e s ( i n c l u d i n g s o m e of t h e a l l o t m e n t h o l d e r s ) m i g h t
p e r h a p s b e e x p e c t e d t o c o n s t i t u t e s a y 7 5 p e r c e n t , of t h e p r o ­
s p e c t i v e s e t t l e r s , i.e.,
15,000 a year.
This would require the
e s t a b l i s h m e n t of a l a r g e n u m b e r of t r a i n i n g c e n t r e s w i t h t h e
r e q u i s i t e e q u i p m e n t a n d staff. I n t h e c a s e of s o m e a t l e a s t of
t h e u n t r a i n e d s e t t l e r s , t r a i n i n g w o u l d a l s o b e n e c e s s a r y for
o t h e r m e m b e r s of t h e i r f a m i l i e s .
T h i s is a difficult p r o b l e m ,
o w i n g t o t h e i m p o s s i b i l i t y of t h e w i f e l e a v i n g h e r f a m i l y f o r a
p e r i o d of t r a i n i n g , b u t i t is of s o m e i m p o r t a n c e i n c o n s i d e r i n g
a n y s c h e m e f o r t h e r a p i d e s t a b l i s h m e n t of f a m i l y f a r m s o n a n y
s u c h scale a n d in a n y such time as t h a t c o n t e m p l a t e d in t h e
L i b e r a l M e m o r a n d u m . I t w o u l d also be necessary in a n y event
t o c o n t e m p l a t e t h a t s o m e of t h e t r a i n e e s w i l l f a i l t o q u a l i f y f o r
family farms, thereby increasing the n u m b e r for w h o m training
a n d t r a i n i n g a c c o m m o d a t i o n will h a v e to be p r o v i d e d .
4 3 . T h e e x e c u t i o n of t h e L i b e r a l p r o p o s a l s a s
regards
a g r i c u l t u r e in a n y t h i n g like t h e p e r i o d s u g g e s t e d , m e a n s r e a l l y
a n agricultural dictatorship, endowed with very large funds,
free f r o m t h e e x i s t i n g r e s t r i c t i o n s in s u c h m a t t e r s as c o m p u l s o r y
a c q u i s i t i o n of l a n d , d e t a i l e d P a r l i a m e n t a r y a p p r o v a l of e s t i m a t e s ,
e t c . I t is a t l e a s t d o u b t f u l h o w f a r P a r l i a m e n t o r t h e c o u n t r y
w o u l d s t a n d s u c h a p r o p o s a l in a t i m e of p e a c e
4 4 . A n a t t e m p t is m a d e i n A p p e n d i x I I t o s u m m a r i s e t h e
financial
a s p e c t s of t h e L i b e r a l p r o p o s a l s . I t m u s t b e e x p l a i n e d ,
h o w e v e r , t h a t t h e m a n n e r in w h i c h t h e v a r i o u s d a t a in t h e
Liberal M e m o r a n d u m are scattered about, t h e d o c u m e n t , the lack
of p r e c i s i o n a n d t h e a b s e n c e of a n y c o n v e n i e n t s u m m a r y m a k e i t
d i f f i c u l t t o c h e c k t h e r e s u l t a n t e s t i m a t e s of c o s t .
In the
M e m o r a n d u m t h e c a p i t a l c o s t of t h e e n t i r e a g r i c u l t u r a l p r o g r a m m e
is p u t a t f r o m £ 2 5 , 0 0 0 , 0 0 0 t o £ 4 0 , 0 0 0 , 0 0 0 a y e a r o v e r a p e r i o d of
5 y e a r s . F r o m t h i s i t is c o n c l u d e d t h a t t h e c a p i t a l s u m t o b e
m a d e available would " probably exceed £100,000,000."
This
figure b e a r s n o o b v i o u s r e l a t i o n t o t h e y e a r l y figures, t h e t o t a l
of w h i c h , o n a r i s i n g s c a l e o v e r t h e 5 y e a r s , w o u l d b e m o r e l i k e
£170,000,000.
E v e n this
figure,
h o w e v e r , is g r e a t l y u n d e r ­
estimated.
I t is s h o w n in t h e A p p e n d i x , b y such d a t a a s a r e
to b e f o u n d in t h e L i b e r a l M e m o r a n d u m a n d b y a d d i n g n e c e s s a r y
i t e m s of e x p e n d i t u r e f o r w h i c h n o p r o v i s i o n is t h e r e m a d e , t h a t
t h e capital o u t l a y m i g h t be a n y t h i n g u p to £315,000,000.
S i m i l a r l y a s r e g a r d s t h e a n n u a l c o s t of t h e s c h e m e .
T h i s is
p u t i n t h e L i b e r a l M e m o r a n d u m a t £ 6 , 0 0 0 , 0 0 0 , of w h i c h £ 3 , 0 0 0 , 0 0 0
r e p r e s e n t s l o s s o n t h e f a m i l y f a r m s , r e - c o n d i l i o n i n g of l a n d a n d
r e - e q u i p m e n t , a n d t h e o t h e r £ 3 , 0 0 0 , 0 0 0 t h e c o s t of a i d i n g
t r a n s p o r t , a d v e r t i s i n g a n d m a r k e t i n g British g r o w n food-stuffs
( b o t h t e m p o r a r y ) a n d t h e n e t loss on t h e training centres.
The
M i n i s t r y ' s e s t i m a t e , a g a i n b a s e d o n t h e M e m o r a n d u m , of a n n u a l
c o s t is a p p r o x i m a t e l y £ 9 , 0 0 0 , 0 0 0 , a n d is s e t o u t i n d e t a i l i n t h e
Appendix.
4 5 . T h e u l t i m a t e c o m b i n e d effect o n e m p l o y m e n t of t h e
v a r i o u s p r o p o s a l s is e s t i m a t e d i n t h e L i b e r a l M e m o r a n d u m t o b e
a n i n c r e a s e of 5 0 0 , 0 0 0 i n t h e n u m b e r of p e r s o n s e m p l o y e d in
agriculture and ancillary industries.
I t is f u r t h e r c o n t e m p l a t e d
t h a t in t h e m e a n t i m e e m p l o y m e n t w o u l d b e found for a f u r t h e r
1 5 0 , 0 0 0 m e n t o b e e m p l o y e d f o r five y e a r s o n p r e p a r a t o r y w o r k .
A p a r t from t h e 100,000 family farmers and t h e 150,000 m e n to
be employed (temporarily) on re-equipment and re-conditioning,
i n r e s p e c t of w h i c h t h e r e is s o m e a t t e m p t t o g i v e p a r t i c u l a r s , t h e
e s t i m a t e d a d d i t i o n t o t h e n u m b e r s e m p l o y e d is e n t i r e l y c o n j e c t u r a l ,
a n d n o d a t a a r e g i v e n i n s u p p o r t of t h e figures. T h e n u m b e r is
o b v i o u s l y s u b j e c t to a c o n s i d e r a b l e d e d u c t i o n (not referred t o in
t h e M e m o r a n d u m ) i n r e s p e c t of w o r k e r s d i s p l a c e d e l s e w h e r e ,
e.g., a s t h e r e s u l t of r e d u c t i o n of i m p o r t s . A g a i n s t t h e 1 0 0 , 0 0 0
f a m i l y f a r m e r s ( a n d t h e i r w o r k i n g d e p e n d e n t s ) m u s t b e offset
t h e farmers a n d farm workers displaced from the 3,000,000 acres
c o n v e r t e d t o f a m i l y f a r m s (see p a r a . 3 8 ) .
SECTION 3.—CREDIT FACILITIES.
46. I n t h e L i b e r a l M e m o r a n d u m i t is s t a t e d t h a t t h e f a r m e r
h a s n o a c c e s s t o e a s y a g r i c u l t u r a l c r e d i t , a n d " is u t t e r l y u n a b l e
t o undertake t h a t continuous capital outlay which in agriculture,
a s i n o t h e r i n d u s t r i e s , is n e c e s s a r y if h i s m e t h o d s of p r o d u c t i o n
a r e t o e n a b l e h i m t o h o l d h i s o w n in t h e British food m a r k e t . "
A g r i c u l t u r a l l o n g t e r m c r e d i t i n G r e a t B r i t a i n is c h e a p i n
comparison with m a n y overseas and European countries, and
i s r e a d i l y a c c e s s i b l e . T h e r a t e of i n t e r e s t c h a r g e d b y
the
Agricultural Mortgage Corporation on long t e r m loans, and loans
u n d e r t h e L a n d s I m p r o v e m e n t A c t s , is f a r l o w e r t h a n i n m a n y
c e n t r a l a n d e a s t e r n E u r o p e a n c o u n t r i e s , l o w e r t h a n in s o m e S t a t e s
i n t h e U n i t e d S t a t e s , a n d l o w e r t h a n in s o m e o t h e r c o u n t r i e s ,
e v e n w h e n t h e c r e d i t s y s t e m i n v o l v e s s o m e m e a s u r e of s u b s i d y b y
the State.
47. I n r e g a r d t o accessibility t o credit, this for a f a r m e r , as
for a n y o t h e r b o r r o w e r , d e p e n d s u l t i m a t e l y o n t h e s e c u r i t y h e
h a s t o offer.
I n this c o u n t r y , f a r m e r s h a v e access t o t h e m a i n
s o u r c e of s h o r t t e r m c r e d i t , n a m e l y , t h a t p r o v i d e d b y t h e b a n k s ,
on t h e s a m e t e r m s as a n y other individual borrowers.
The
p u r p o s e of t h e A g r i c u l t u r a l C r e d i t s A c t of 1 9 2 8 , w h i c h c o m e s
i n t o f u l l o p e r a t i o n o n 1 s t J a n u a r y n e x t , is t o i n c r e a s e t h e
a c c e s s i b i l i t y of b a n k c r e d i t t o t h e o r d i n a r y f a r m e r b y m o b i l i s i n g ,
a s f a r a s p o s s i b l e , h i s f a r m i n g a s s e t s f o r t h e p u r p o s e of b o r r o w i n g
from the banks.
T h e d i f f i c u l t y w h i c h n o w r e m a i n s is n o t s o m u c h
t h e i n a c c e s s i b i l i t y o r t h e c o s t of c r e d i t , a s t h a t t h e f a r m e r ' s c r e d i t
r e s o u r c e s a r e e i t h e r l a r g e l y e x h a u s t e d , a s is p r o b a b l y t h e c a s e i n
p a r t of t h e d i s t r e s s e d a r a b l e d i s t r i c t s , o r t h a t t h e y h a v e n o t
l e a r n e d t o m a k e full u s e of t h e f a c i l i t i e s of t h e A g r i c u l t u r a l
C r e d i t s A c t . S p e c i a l c r e d i t f a c i l i t i e s w i l l of c o u r s e b e r e q u i r e d f o r
the unemployed settled on the land under the G o v e r n m e n t s
p r o p o s a l s , a n d P a r l i a m e n t will b e a s k e d t o m a k e t h e n e c e s s a r y
provision.
SECTION 4.-MARKETING.
48. A c t u a l figures a s t o t h e p r o p o r t i o n of t h e c o n s u m e r s
p r i c e r e c e i v e d b y t h e f a r m e r m u s t of n e c e s s i t y b e h y p o t h e t i c a l ,
for t h e d i s t r i b u t i v e m a r g i n v a r i e s w i d e l y from p r o d u c t t o p r o d u c t ,
from season t o season, from place t o place a n d frequently from
s h o p t o s h o p . I t is p r o b a b l y sufficient t o e n d o r s e t h e L i n l i t h g o w
C o m m i t t e e ' s f i n d i n g (in i t s F i n a l R e p o r t ) t h a t " t h e c o s t s of
d i s t r i b u t i o n are far t o o g r e a t for society p e r m a n e n t l y t o c o n s e n t
t o b e a r . " W i t h t h e p r e s e n t s l u m p in c o m m o d i t y prices, distribu­
t i v e c o s t s a r e , of c o u r s e , a p r o p o r t i o n a t e l y g r e a t e r b u r d e n t h a n
i n 1924, w h e n t h e L i n l i t h g o w C o m m i t t e e r e p o r t e d .
49. In r e g a r d t o t h e M a r k e t i n g Bill, t h e s u g g e s t i o n t h a t t h e
initiative in drafting schemes a n d s u b m i t t i n g t h e m to producers
should be e n t r u s t e d t o s o m e s t a t u t o r y a u t h o r i t y , h a s m u c h t o
r e c o m m e n d i t . A t t h e s a m e t i m e , t h o u g h i t is t r u e t h a t " t h e
n o r m a l f a r m e r is a p r o d u c e r a n d n o t a d i s t r i b u t o r , " i t is p r o b a b l y
t r u e t h a t a g r e a t e r p r o p o r t i o n of f a r m e r s i n t h i s c o u n t r y a r e a l s o
d i s t r i b u t o r s t h a n in a n y o t h e r c o u n t r y in t h e world. T h e d i m e n ­
s i o n s of t h e p r o d u c e r - r e t a i l e r e l e m e n t , f o r e x a m p l e , n e e d n o
emphasis.
50. I t w o u l d be w r o n g t o overlook t h e evidence a l r e a d y
e x i s t i n g a s t o t h e a b i l i t y of o u r p r o d u c e r s t o o r g a n i s e t h e m s e l v e s
for m a r k e t i n g or t o p r o d u c e or consider s c h e m e s w i t h t h a t e n d i n
view, a n d i t c a n b e t a k e n for g r a n t e d t h a t w h e n t h e M a r k e t i n g
B i l l is p a s s e d , t h e r e w i l l b e n o s h o r t a g e of s c h e m e s f o r f a r m e r s t o
consider.
I n p r a c t i c e , t h e M i n i s t r y w i l l , of c o u r s e , t a k e a
prominent p a r t in educating farming opinion on the need a n d
a d v a n t a g e s of o r g a n i s a t i o n .
On this last point, the present G o v e r n m e n t has added to
t h e M a r k e t s D i v i s i o n of t h e M i n i s t r y a n O r g a n i s a t i o n B r a n c h
f o r t h e s p e c i a l s t u d y of p r o b l e m s of m a r k e t i n g o r g a n i s a t i o n , f o r
t h e p u b l i s h i n g of a n e w s e r i e s of O r a n g e B o o k s d e v o t e d e x c l u s i v e l y
t o t h a t s u b j e c t , f o r t h e p r a c t i c a l d e m o n s t r a t i o n of f e a t u r e s of
m a r k e t i n g o r g a n i s a t i o n a n d f o r t h e f o r m u l a t i o n of o r g a n i s a t i o n
schemes.
This w o r k matches the Ministry's work on the standard­
isation side, j u s t as the G o v e r n m e n t s M a r k e t i n g Bill is c o m p l e ­
mentary t o the Agricultural Produce (Grading and Marking)
A c t of t h e l a t e G o v e r n m e n t .
51. T h e Minister can hardly propose a n d canvas his own
s c h e m e s b e c a u s e , i n effect, t h i s w o u l d p u t h i m i n t h e p o s i t i o n ,
u n d e r t h e B i l l , of j u d g e a n d a d v o c a t e of h i s o w n c a u s e . A s t a t u t o r y
C o m m i s s i o n s e t u p for t h e p u r p o s e , a s s u g g e s t e d in t h e L i b e r a l
proposals, would not h a v e this disadvantage, b u t it would
c e r t a i n l y n e e d t o u s e t h e M i n i s t e r s e x p e r t s t a f f for t h e f o r m u l a ­
t i o n of s c h e m e s , a n d if t h e C o m m i s s i o n i s t o b e a s e p a r a t e b o d y ,
t h e r e is n o r e a s o n t o t h i n k t h i s w o u l d w o r k w e l l i n p r a c t i c e .
5 2 . If a n i m m e d i a t e l y a c t i v e p o l i c y i s d e s i r e d , t h e B i l l m i g h t
b e a m e n d e d t o require t h e Minister to set u p , u n d e r his o w n
D e p a r t m e n t a l aegis, a P r e p a r a t o r y C o m m i t t e e as regards a n y
p r o d u c t i n r e s p e c t of w h i c h , i n t h e M i n i s t e r s v i e w , t h e r e i s a
d e m a n d f o r o r g a n i s e d m a r k e t i n g o n t h e p a r t of p r o d u c e r s a n d n o
s c h e m e r e g u l a t i n g t h e m a r k e t i n g of t h a t p r o d u c t h a s b e e n s u b ­
mitted under the Act.
The committee to be charged with the
d u t y of p r e p a r i n g a d r a f t s c h e m e f o r t h a t p r o d u c t a n d t h e M i n i s t e r
to be required to take adequate steps to bring the committee's
s c h e m e t o t h e n o t i c e of t h e f a n n e r s c o n c e r n e d . T h a t i s , i n effect,
all t h a t t h e L i b e r a l M e m o r a n d u m a s k s for, a n d t h i s q u e s t i o n
of i n i t i a t i v e i n s u c h m a t t e r s is b e i n g f u r t h e r e x p l o r e d i n t h e
Department.
SECTION 5.—THE QUOTA PLAN.
53. T h e r e are replies t o t h e p o i n t s raised in t h e Liberal
M e m o r a n d u m o n t h e Q u o t a P l a n , b u t i n v i e w of t h e p r e s e n t
p o s i t i o n of t h i s p r o p o s a l i t is n o t i n t e n d e d t o d e a l w i t h t h e m a t t e r
further in this M e m o r a n d u m .
SECTION 6.-INCREASING THE CONSUMPTION OF BRITISH
FOODS.
5 4 . T h e L i b e r a l M e m o r a n d u m i s r i g h t (vide S e c t i o n X I I ) .
F a r t o o little a t t e n t i o n h a s b e e n g i v e n , in p a s t y e a r s , t o t h e
p o s s i b i l i t y of i n c r e a s i n g t h e c o n s u m p t i o n of h o m e - g r o w n p r o d u c e
a n d yet it w o u l d b e w r o n g t o a s s u m e t h a t only a little h a s b e e n
a t t e m p t e d a n d o n l y a little is b e i n g d o n e .
5 5 . I t is i m p o r t a n t t o k e e p c l e a r l y i n m i n d t h e t h r e e m a i n
t y p e s of p u b l i c i t y i n t h i s p a r t i c u l a r field.
T h e r e is first t h e
c r e a t i o n of a f a v o u r a b l e a t m o s p h e r e - o f a d i s p o s i t i o n o n t h e p a r t
of t h e p u b l i c t o g i v e a p r e f e r e n c e t o h o m e - p r o d u c e .
" Back­
g r o u n d " w o r k of t h i s t y p e a f f e c t i n g h o m e - p r o d u c e i n t h e m a s s
h a s b e e n carried o u t for t h e last four y e a r s b y t h e E m p i r e
M a r k e t i n g B o a r d w h i c h , in its a p p e a l t o c o n s u m e r s , p u t s h o m e
p r o d u c e first.
5 6 . T h e s e c o n d k i n d of p u b l i c i t y i s " f o r e g r o u n d " p u b l i c i t y
of t h e " E a t M o r e o r " D r i n k M o r e " k i n d . T h e L i b e r a l M e m o ­
r a n d u m g i v e s m i l k a s a n d l u s t r a t i o n of t h e p o s s i b i l i t i e s i n t h i s
direction.
T h e pioducers concerned should, however, organise
o n c o m m o d i t y l i n e s t o d o t h i s k i n d of t h i n g f o r t h e m s e l v e s , a n d
t h e G o v e r n m e n t s M a r k e t i n g Bill p r o v i d e s t h e m e a n s .
5 7 . T h e t h i r d k i n d of p u b l i c i t y — " M a r k " p u b l i c i t y — i s a l s o
of t h e " f o r e g r o u n d " t y p e . E x p e r i e n c e i n t h e m a r k e t i n g of h o m e
p r o d u c e s h o w s t h a t , for o p t i m u m sales results, t h e r e m u s t b e a
g u a r a n t e e b o t h of o r i g i n a n d q u a l i t y . T h e f o r m e r , b y itself, is
n o t enough. T h e latter implies standardisation.
T h e two can
b e s t b e e x p r e s s e d t h r o u g h a m a r k . T h i s is t h e raison d'etre of t h e
National Mark schemes under the Agricultural Produce (Grading
a n d M a r k i n g ) A c t , 1 9 2 8 . T h e l i b e r a l M e m o r a n d u m s u g g e s t s , for
e x a m p l e , t h a t it should b e possible t o recreate a d e m a n d for t h e
a l l B r i t i s h loaf ; b u t t o d o t h i s , it is n e c e s s a r y t o g u a r a n t e e t h e
o r i g i n of t h e f l o u r a n d — m o s t i m p o r t a n t — i t s i n t r i n s i c q u a l i t y .
T h e N a t i o n a l M a r k flour s c h e m e — n o w s c a r c e l y a y e a r o l d — i s a n
a t t e m p t to do this.
5 8 . T h e G o v e r n m e n t h a s m a d e a s p e c i a l g r a n t of £ 5 5 , 0 0 0 t h i s
financial y e a r for p u b l i c i t y for N a t i o n a l M a r k p r o d u c e . A h m a r k
p r o d u c t s b e n e f i t e q u a l l y b e c a u s e a c o m m o n m a r k is u s e d ; t h e
m a x i m u m effect i s t h u s o b t a i n e d a t t h e m i n i m u m of c o s t . F u r t h e r ,
b y s t i m u l a t i n g d e m a n d for N a t i o n a l M a r k p r o d u c e , t h e a g r i ­
c u l t u r a l i n d u s t r y is e n c o u r a g e d t o p e r s e v e r e w i t h t h e v a r i o u s
s t a n d a r d i s a t i o n s c h e m e s , w i t h t h e r e s u l t s t h a t s h m d d b e of
incalculable benefit t o agriculture a n d to t h e nation.
5 9 . T h e L i b e r a l M e m o r a n d u m r e c o g n i s e s t h a t if p u b l i c i t y i s
t o b e effective, t h e f a r m e r m u s t p r o d u c e a n d m a r k e t p r o p e r l y .
I t m a y be inferred, therefore, t h a t M a r k p u b l i c i t y is a p p r o v e d a s
being t h e only n on-wasteful " foreground " publicity t h a t t h e
State can properly support. The Liberal Memorandum apparently
c o n t e m p l a t e s m o r e e x p e n d i t u r e o n p u b l i c i t y t h a n is t h e c a s e a t
p r e s e n t a n d t h e c r e a t i o n of a s p e c i a l B o a r d , l i k e t h e E m p i r e
M a r k e t i n g B o a r d , t o u n d e r t a k e t h e t a s k . ( S e e a l s o S e c t i o n X V of
the Liberal proposals).
It m a y or m a y not be necessary to
p r o v i d e m o r e m o n e y for M a r k p u b l i c i t y in f u t u r e y e a r s : t h i s c a n
o n l y b e d e t e r m i n e d i n t h e l i g h t of t h e e x p e r i e n c e n o w b e i n g g a i n e d
w i t h t h e first y e a r ' s V o t e .
I t is desirable, h o w e v e r , t o b e a r in
m i n d t h a t t h e i n d u s t r y should, sooner or later, m a k e some
c o n t r i b u t i o n t o M a r k p u b l i c i t y a n d i t is t o b e h o p e d t h a t , w h e n t h e
M a r k e t i n g Bill is p a s s e d , c o m m o d i t y m a r k e t i n g s c h e m e s will
c o m e i n t o b e i n g i n w h i c h d u e p r o v i s i o n is m a d e for p u b l i c i t y
s e r v i c e s . T h e M i n i s t r y of A g r i c u l t u r e i s d i r e c t l y a d m i n i s t e r i n g
t h e p r e s e n t g r a n t for M a r k p u b l i c i t y ; t h e D e p a r t m e n t s m e t h o d s
h a v e m e t w i t h g e n e r a l a p p r o v a l a n d if o n l y b e c a u s e t h e officers
i n t h e m a r k e t s d i v i s i o n of t h e M i n i s t r y w h o a r e e n g a g e d in
standardisation a n d publicity work respectively m u s t maintain
t h e closest c o n t a c t in practice, it would be d i s a d v a n t a g e o u s to
set u p a s e p a r a t e B o a r d for publicity p u r p o s e s .
SECTION 7.—RAIL TRANSPORT.
6 0 . A c c o r d i n g t o t h e L i b e r a l M e m o r a n d u m ( p . 4 6 ) , o n e of t h e
f o u n d a t i o n s u p o n w h i c h a n a g r i c u l t u r a l r e v i v a l m u s t rest is the
i m p r o v e m e n t a n d c h e a p e n i n g of " t h e c o l l e c t i o n a n d t r a n s p o r t a ­
t i o n of d o m e s t i c f a r m p r o d u c e s o t h a t B r i t i s h a g r i c u l t u r e will
h a v e t h a t n a t u r a l a d v a n t a g e a s a g a i n s t t h e foreign p r o d u c e in
t h e h o m e m a r k e t w h i c h g e o g r a p h y p r e s c r i b e s i n s t e a d of b e i n g ,
as at present, at a disadvantage."
The Liberal Memorandum
suggests t h a t the State should negotiate with railway a n d port
a u t h o r i t i e s r e d u c e d preferential i n l a n d r a t e s for B r i t i s h f a r m
p r o d u c e , t h e cost t o b e m e t b y increased r a t e s on foreign p r o d u c e
a n d , if n e c e s s a r y , b y a s u b s i d y .
6 1 . T h e M i n i s t e r of T r a n s p o r t i s t h e M i n i s t e r p r i m a r i l y
c o n c e r n e d w i t h r a i l w a y r a t e s a n d facilities. T h e following brief
n o t e s i n d i c a t e t h e p r e s e n t p o s i t i o n so far a s a g r i c u l t u r e is c o n c e r n e d .
6 2 . T h e " s t a n d a r d " o r n o r m a l r a t e s for t h e c o n v e y a n c e of
g o o d s , i n c l u d i n g a g r i c u l t u r a l p r o d u c e , b y rail, a r e fixed b y t h e
R a i l w a y R a t e s T r i b u n a l , set u p u n d e r t h e R a i l w a y s Act, 1921.
T h e r a t e s n o w i n o p e r a t i o n w e r e fixed r e c e n t l y , a f t e r h e a r i n g s
extending over a lengthy period, and t h e y came into operation
a s from 1st J a n u a r y , 1928. A p p e a l s a g a i n s t " s t a n d a r d " r a t e s
m a y be heard by the Tribunal.
6 3 . O n a c c o u n t of t h e i r r e l a t i v e l y l o w v a l u e , m a n y a g r i c u l t u r a l
products such as m a n u r e s and grain, h a v e always been carried at
v e r y l o w r a t e s r e l a t i v e t o t h o s e for h i g h e r g r a d e traffics. T h e
a v e r a g e r e c e i p t s of t h e r a i l w a y c o m p a n i e s p e r t o n - m i l e for g r a i n ,
b e e t , p o t a t o e s , o i l c a k e a n d m a n u r e s a r e i n t h e n e i g h b o u r h o o d of
h a l f of t h o s e i n r e s p e c t of h a r d w a r e , c o t t o n a n d a r t i f i c i a l s i l k .
T h e r a i l w a y c o m p a n i e s h a v e p o w e r t o fix " e x c e p t i o n a l " r a t e s
for traffics w i t h o u t reference t o t h e T r i b u n a l , p r o v i d e d t h a t t h e s e
rates are m o r e t h a n 5 per cent, a n d not m o r e t h a n 40 per cent,
below the " s t a n d a r d " rates. " Exceptional rates " h a v e been
g r a n t e d in v e r y l a r g e n u m b e r s for a g r i c u l t u r a l traffics;
the
n u m b e r g r a n t e d i n 1 9 2 9 w a s c o n s i d e r a b l y i n e x c e s s of t h o s e
g r a n t e d in 1928.
6 4 . U n d e r S e c t i o n 2 7 of t h e R a i l w a y a n d C a n a l T r a f f i c A c t ,
1888, t h e r a i l w a y companies a r e p r o h i b i t e d from m a k i n g a n y
d i f f e r e n t i a t i o n i n t h e r a t e s f o r t h e c a r r i a g e of h o m e a n d f o r e i g n
m e r c h a n d i s e i n r e s p e c t of t h e s a m e o r s i m i l a r s e r v i c e s . T h e r e a r e
of c o u r s e r a t e s i n o p e r a t i o n u n d e r w h i c h f o r e i g n p r o d u c e , b e i n g
offered i n large q u a n t i t i e s or u n d e r c o n d i t i o n s specially facilitating
h a n d l i n g a n d loading, is c o n v e y e d on b e t t e r t e r m s t h a n t h e h o m e
g r o w e r c a n o b t a i n for s m a l l q u a n t i t i e s .
6 5 . I t will b e seen t h a t t o c a r r y o u t Mr. L l o y d George's p r o p o s a l
f o r p r e f e r e n t i a l r a t e s w o u l d r e q u i r e a n a m e n d m e n t of t h e e x i s t i n g
law, w h i c h w o u l d certainly b e c o n t e n t i o u s a n d m i g h t also raise
i n t e r n a t i o n a l q u e s t i o n s . T h e r e is r o o m f o r c o n s i d e r a b l e d o u b t
whether the British Government m a y not be precluded b y existing
c o n v e n t i o n s , t o w h i c h G r e a t B r i t a i n is a p a r t y , f r o m d i s c r i m i n a t i n g
b e t w e e n h o m e a n d f o r e i g n p r o d u c t s i n t h e m a t t e r of r a i l w a y r a t e s .
6 6 . T h e r e i s f u r t h e r t h e q u e s t i o n of t h e effect of a n y r e d u c t i o n
of r a t e s u p o n r a i l w a y r e v e n u e s . T h e b a s i s of t h e r a t e s n o w i n f o r c e
i s fixed u n d e r t h e p r o v i s i o n s of t h e R a i l w a y s A c t , 1 9 2 1 , so t h a t t h e
c o m p a n i e s s h o u l d b e able t o o b t a i n , so far as p r a c t i c a b l e , a s t a n d a r d
r e v e n u e . I t m i g h t b e a r g u e d t h a t t h e i n c r e a s e i n traffic r e s u l t i n g
f r o m a r e d u c t i o n of r a t e s w o u l d b e s u c h a s t o l e a v e t h e a m o u n t of
revenue unaffected.
P a s t experience does n o t s u p p o r t this view.
U n d e r t h e L o c a l G o v e r n m e n t A c t , 1929, t h e r a i l w a y c o m p a n i e s
a r e r e l i e v e d f r o m t h e p a y m e n t of p a r t of t h e i r r a t e s o n c o n d i t i o n
t h a t t h e m o n e y s a v e d is u s e d i n t h e r e d u c t i o n of t h e r a i l w a y
freight c h a r g e s for c e r t a i n s e l e c t e d traffics, i n c l u d i n g t h e following
a g r i c u l t u r a l t r a f f i c s : — ( 1 ) m a n u r e s of m o s t k i n d s ; (2) a n u m b e r of
f e e d i n g s t u f f s f o r a n i m a l s a n d p o u l t r y ; (3) p o t a t o e s ( e x c e p t n e w
p o t a t o e s ) ; (4) m i l k ; (5) l i v e s t o c k . T h e t o t a l a m o u n t of r e b a t e
m a d e a v a i l a b l e f o r t h e s e c l a s s e s of traffic is s o m e £ 7 0 0 , 0 0 0 a y e a r ,
w h i c h i n 1 9 2 9 r e p r e s e n t e d a n a v e r a g e r e b a t e of 9 - 4 p e r c e n t , o n
t h e g r o s s c h a r g e s for t h e s e traffics, o r a b o u t Id. o n s e v e n g a l l o n s of
m i l k a n d I s . 2d. p e r t o n o n o t h e r c o m m o d i t i e s .
Notwithstanding
t h e s e s u b s t a n t i a l r e b a t e s , t h e r a i l r o a d traffic of t h e s e c l a s s e s of
g o o d s , e x c e p t p o t a t o e s , w a s a p p r e c i a b l y less in 1929 t h a n in 1928.
I t c a n n o t b e e x p e c t e d t h a t a r e d u c t i o n in r a i l w a y r a t e s will h a v e
a n y l a r g e i m m e d i a t e effect i n i n c r e a s i n g traffic, t h o u g h s o m e
e x p a n s i o n m i g h t f o l l o w in t i m e .
67. I t w o u l d therefore be n e c e s s a r y to m a k e u p in s o m e o t h e r
w a y t o r a i l w a y c o m p a n i e s f o r t h e l o s s of r e v e n u e w h i c h m u s t b e
e x p e c t e d t o follow from a r e d u c t i o n in r a t e s for h o m e a g r i c u l t u r a l
products. T h e possible m e t h o d s a p p e a r to b e —
(a) i n c r e a s e d r a t e s for i m p o r t e d a g r i c u l t u r a l p r o d u c e ;
(b) i n c r e a s e d r a t e s
goods;
(c) a s u b s i d y .
on some
c l a s s e s of
non-agricultural
6 8 . A s r e g a r d s (a) t h e i n t e r n a t i o n a l d i f f i c u l t i e s of d i s c r i m i n a ­
tion have been indicated above.
I t m u s t also be remembered
t h a t t h e r e is g r e a t p r a c t i c a l d i f f i c u l t y i n d i s t i n g u i s h i n g b e t w e e n
h o m e a n d f o r e i g n p r o d u c e i n t h e c a s e of t h e c a r r i a g e w i t h i n t h e
c o u n t r y ' of s o m e a g r i c u l t u r a l c o m m o d i t i e s .
A s r e g a r d s (b) it i s o b v i o u s t h a t t h e r e w i l l b e t h e s t r o n g e s t
o p p o s i t i o n t o a n i n c r e a s e in r a t e s o n o t h e r g o o d s for t h e benefit
of a g r i c u l t u r e .
Such a change could only tend to drive more
of s u c h g o o d s o n t o t h e r o a d , a n d t h e b u r d e n w o u l d t e n d t o fall
o n t h e p r o d u c t s of t h e d e p r e s s e d i n d u s t r i e s w h i c h a r e l e a s t a b l e t o
s u p p o r t it.
T h e p r o p o s a l for a S t a t e s u b s i d y r a i s e s i m p o r t a n t q u e s t i o n s
of p r i n c i p l e . A p a r t f r o m t h e s e , i n a n y s c h e m e of t h i s k i n d t h e
c l a i m of o t h e r f o r m s of t r a n s p o r t , s u c h a s c o a s t w i s e s h i p p i n g
c o m p e t i n g w i t h railways, could n o t be overlooked, a n d t h e r e still
r e m a i n t h e i n t e r n a t i o n a l d i f f i c u l t i e s of r a t e d i s c r i m i n a t i o n b e t w e e n
i m p o r t e d a n d h o m e - g r o w n c o m m o d i t i e s of t h e s a m e d e s c r i p t i o n .
6 9 . I t m a y b e a s k e d w h e t h e r it is n o t p o s s i b l e t o i n c r e a s e t h e
a m o u n t of r e b a t e s u n d e r t h e L o c a l G o v e r n m e n t A c t , 1 9 2 9 . T h i s
c o u l d o n l y b e d o n e if t h e b a s i s of t h a t A c t w e r e r e v i s e d , a n d t h e
a d d i t i o n a l r e b a t e w o u l d h a v e t o b e e i t h e r a t t h e e x p e n s e of t h e
o t h e r r e b a t e d t r a f f i c s ( c e r t a i n c l a s s e s of c o a l , i r o n , e t c . ) o r a t t h e
e x p e n s e of t h e T r e a s u r y . I t w o u l d n o t b e p r a c t i c a b l e t o t h r o w
t h e c o s t u p o n t h e l o c a l a u t h o r i t i e s of t h e c o u n t r y b y i n c r e a s i n g
t h e p r e s e n t 7 5 p e r c e n t , relief f r o m r a t e s , f r o m w h i c h t h e r e b a t e
f u n d is d e r i v e d .
70. I t m u s t also b e b o r n e in m i n d t h a t w h e r e railway charges
a r e n o t p a i d d i r e c t l y b y t h e f a r m e r , a p a r t of a n y a p p a r e n t g a i n
b y r e d u c e d r a t e s m u s t a l m o s t i n e v i t a b l y find i t s w a y , f o r a t i m e
a t a l l e v e n t s , i n t o t h e p o c k e t s of d i s t r i b u t o r s , o r a t l e a s t b e l o s t
s i g h t of a m o n g p r i c e f l u c t u a t i o n s d u e t o a n o t h e r c a u s e .
7 1 . T h e p r o p e r s o l u t i o n of t h e m a t t e r i s , a s w a s r e c o m m e n d e d
b y t h e L i n l i t h g o w C o m m i t t e e , t o b e f o u n d i n t h e b u l k i n g of t r a f f i c ,
which secures lower charges a n d can already be utilised b y all
traders.
SECTION 8.—ROAD TRANSPORT.
7 2 . T h e q u e s t i o n of r u r a l r o a d s i n r e l a t i o n t o a g r i c u l t u r e h a s
b e e n d e a l t w i t h i n t h e M e m o r a n d u m b y t h e M i n i s t e r of T r a n s p o r t ,
with which I a m in agreement.
SECTION 9.-DOCKS AND HARBOURS.
7 3 . T h e L i b e r a l M e m o r a n d n m d o e s n o t s u g g e s t t h a t t h e finan­
cial assistance from t h e G o v e r n m e n t for t h e c o n s t r u c t i o n a n d
i m p r o v e m e n t of d o c k s a n d h a r b o u r s is i n a d e q u a t e ; o n t h e
c o n t r a r y , t h e M e m o r a n d u m p o i n t s o u t t h a t g r a n t s for t h e s c h e m e s
r e f e r r e d t o c o u l d b e m a d e u n d e r P a r t I I of t h e D e v e l o p m e n t
( L o a n G u a r a n t e e s a n d G r a n t s ) A c t , 1 9 2 9 . A s a m a t t e r of f a c t ,
t h e r e is a m p l e a d m i n i s t r a t i v e m a c h i n e r y f o r a s s i s t i n g s c h e m e s f o r
t h e c o n s t r u c t i o n o r i m p r o v e m e n t of d o c k s a n d h a r b o u r s . W h e r e
the docks and harbours are controlled b y public utility under­
t a k i n g s t r a d i n g for profit, assistance m a y be o b t a i n e d u n d e r P a r t I
of t h e D e v e l o p m e n t A c t , 1 9 2 9 , a n d w h e r e t h e d o c k s a n d h a r b o u r s
are controlled b y the local authorities or s t a t u t o r y bodies not
t r a d i n g f o r p r o f i t , p u b l i c a s s i s t a n c e is a v a i l a b l e u n d e r P a r t I I of
the Act.
74.
In
addition,
advances
may
be
m a d e from
the
Development
Fund
under
the
Development
and
Road
Improvement
F u n d s A c t , 1 9 0 9 , i n a i d of t h e c o n s t r u c t i o n
a n d i m p r o v e m e n t of h a r b o u r s u s e d m a i n l y b y t h e fishing i n d u s t r y
a n d c o n t r o l l e d b y b o d i e s n o t t r a d i n g for profit.
Save in quite
exceptional circumstances in connection with advances from the
D e v e l o p m e n t F u n d , i n a l l c a s e s s o m e l o c a l c o n t r i b u t i o n is r e q u i r e d .
U n d e r t h e D e v e l o p m e n t A c t , 1929, r e g u l a t i o n s h a v e been m a d e
w h i c h l a y d o w n t h e a m o u n t of l o c a l c o n t r i b u t i o n w h i c h w i l l b e
required.
T h e Development Commissioners, however, have no
definite r u l e s b u t c o n s i d e r e a c h case on i t s m e r i t s . I n all cases t h e
i n i t i a t i v e r e s t s w i t h t h e l o c a l i t y c o n c e r n e d , a n d if t h e a m o u n t of
w o r k p u t i n h a n d u p t o t h e p r e s e n t is n o t c o n s i d e r e d t o h a v e b e e n
s u f f i c i e n t , t h e o n l y m e t h o d of a c c e l e r a t i n g t h e p a c e s e e m s t o b e ,
either to urge the local authorities to m a k e applications, or t o
i n c r e a s e t h e p r o p o r t i o n of t h e G o v e r n m e n t c o n t r i b u t i o n .
It is
n o t c o n s i d e r e d t h a t e i t h e r c o u r s e is d e s i r a b l e i n t h e c a s e of
fishery
harbours.
T h e Development F u n d grants are m a d e on a very
g e n e r o u s b a s i s a l r e a d y , a n d t h e s t i m u l a t i o n of f u r t h e r a p p l i c a t i o n s
w o u l d o n l y l e a d t o t h e s u b m i s s i o n of s c h e m e s w h i c h c o u l d n o t
be justified a n d w h i c h w o u l d h a v e t o be rejected.
75. T h e Liberal M e m o r a n d u m does n o t suggest t h a t Govern­
m e n t a s s i s t a n c e u n d e r t h e D e v e l o p m e n t A c t is n o t g e n e r o u s
e n o u g h . I t i s t o b e i n f e r r e d t h a t t h e a u t h o r s of t h e M e m o r a n d u m
will o n l y s u p p o r t s c h e m e s w h i c h a r e e c o n o m i c a l l y s o u n d .
Pre­
s u m a b l y , t h i s e x p r e s s i o n is n o t t o b e t a k e n t o o literally, since
e c o n o m i c a l l y s o u n d s c h e m e s , i.e., s c h e m e s w h i c h w o u l d y i e l d a n
a d e q u a t e r e t u r n on t h e capital outlay, would not require
financial
a s s i s t a n c e f r o m t h e G o v e r n m e n t . T h e a u t h o r s of t h e M e m o r a n ­
d u m do, however, presumably m e a n t h a t there should be some
r e t u r n a t a n y r a t e on t h e capital e x p e n d i t u r e , a n d a d e q u a t e local
c o n t r i b u t i o n is p r o b a b l y t h e b e s t t e s t of t h i s .
7 6 . T h e R e p o r t of t h e P o r t F a c i l i t i e s C o m m i t t e e , r e f e r r e d t o
in t h e M e m o r a n d u m , r e c o m m e n d e d t h a t a n e w tidal dock should
be constructed at Great Yarmouth. The Great Yarmouth Port
a n d H a v e n C o m m i s s i o n e r s m a d e a n a p p l i c a t i o n for a g r a n t from
t h e D e v e l o p m e n t F u n d t o c o v e r t h e w h o l e c o s t of c o n s t r u c t i n g
such a basin, e s t i m a t e d a t £192,000. T h e Commissioners did n o t
a n t i c i p a t e a n y i n c r e a s e of r e v e n u e a s a r e s u l t of t h e c o n s t r u c t i o n
of t h i s d o c k , a n d t h e y s t a t e d t h a t t h e y w e r e u n a b l e t o c o n t r i b u t e
a n y of t h e c a p i t a l c o s t t h e m s e l v e s a s t h e y w o u l d h a v e t o b e a r t h e
h e a v y c h a r g e s of m a i n t e n a n c e .
T h e y were informed that the
D e v e l o p m e n t Commissioners were not prepared to r e c o m m e n d
a s s i s t a n c e t o t h i s s c h e m e i n t h e a b s e n c e of a s u b s t a n t i a l l o c a l
c o n t r i b u t i o n t o w a r d s t h e capital cost.
7 7 . S o f a r a s fishery h a r b o u r s a n d d o c k s a r e c o n c e r n e d ,
c e r t a i n i m p r o v e m e n t s h a v e r e c e n t l y b e e n carried o u t a t Milford
H a v e n w i t h t h e a s s i s t a n c e of a g r a n t u n d e r P a r t I of t h e
D e v e l o p m e n t A c t . T h e g r a n t t a k e s t h e f o r m of i n t e r e s t a t t h e
r a t e of 5 p e r c e n t , f o r 6 y e a r s o n c a p i t a l e x p e n d i t u r e w i t h i n a
m a x i m u m of £ 1 4 , 7 6 2 i n r e s p e c t of t h e e x t e n s i o n of c o a l s t o r a g e
s i d i n g s , t h e e r e c t i o n of a n a d d i t i o n a l c o a l t i p a n d a n e x t e n s i o n
of t h e t r a w l m a r k e t .
78. O n t h e 2 2 n d April, 1929, a g r a n t from t h e U n e m p l o y m e n t
G r a n t s C o m m i t t e e w a s s a n c t i o n e d f o r t h e c o n s t r u c t i o n of a n e w
fish d o c k a t G r i r n s b y .
T h e g r a n t a m o u n t s t o 5 0 p e r c e n t , of t h e
i n t e r e s t o n a p p r o v e d e x p e n d i t u r e o u t of l o a n s r a i s e d t o m e e t t h e
c o s t , n o t e x c e e d i n g £ 1 , 2 5 0 , 0 0 0 t h e g r a n t t o b e p a y a b l e f o r 15 y e a r s
o r for t h e p e r i o d of t h e l o a n , w h i c h e v e r is t h e less.
T h e first
s o d i n c o n n e c t i o n w i t h t h i s w o r k is l i k e l y t o b e t u r n e d t h i s m o n t h .
7 9 . S o f a r a s t h e s m a l l e r fishery h a r b o u r s in E n g l a n d a n d
Wales are concerned, at the present time works are proceeding
a t P o r t Isaac, Staithes, Bridlington a n d Poole with assistance
from the Development Fund.
A t P o r t I s a a c a g r a n t of £ 1 3 , 3 0 0
a n d a l o a n of £ 1 1 , 3 0 0 h a v e b e e n s a n c t i o n e d , a n d a n a p p l i c a t i o n
f o r a f u r t h e r g r a n t is u n d e r c o n s i d e r a t i o n , i n a i d of w o r k s e s t i m a t e d
to cost a b o u t £35,000 altogether.
A t Staithes the Development
(1848C)
1
2
F u n d g r a n t a m o u n t s t o £30,750 a n d t h e local contribution to
£2,000. At Biidlington a Development F u n d grant' (amounting
t o t w o - t h i r d s of t h e c o s t ) u p t o a m a x i m u m of £ 7 , 0 0 0 h a s b e e n
approved.
A t P o o l e a D e v e l o p m e n t F u n d g r a n t of £ 1 , 0 0 0 i n
a i d of t h e c o n s t r u c t i o n of a b r e a k w a t e r e s t i m a t e d t o c o s t £ 2 , 8 0 0
has been approved.
80. T h e D e v e l o p m e n t Commissioners h a v e n o w u n d e r con­
s i d e r a t i o n a n a p p l i c a t i o n f o r a s s i s t a n c e f o r s c h e m e s for n e w b r e a k ­
waters estimated to cost £25,000 at Seahouses a n d £45,000 at
S t . I v e s . A g r a n t of £ 6 2 0 h a s a l s o b e e n a p p r o v e d f o r m i n o r
i m p r o v e m e n t s a t M o u s e h o l e , C o r n w a l l , a n d a g r a n t of £ 1 5 0 for
minor improvements at Portloe.
8 1 . A g e n e r a l r e v i e w of t h e p o s i t i o n of t h e s m a l l f i s h e r y
h a r b o u r s i n G r e a t B r i t a i n is u n d e r c o n s i d e r a t i o n b y t h e F i s h e r i e s
C o m m i t t e e of t h e E c o n o m i c A d v i s o r y C o u n c i l .
SECTION 10.—FISHERY HARBOURS IN SCOTLAND.
(Note b y t h e
8 2 . F o r t h e d e v e l o p m e n t , i m p r o v e m e n t a n d r e p a i r of f i s h e r y
of h a r b o u r s i n S c o t l a n d a s s i s t a n c e is a v a i l a b l e f r o m t h e D e v e l o p m e n t
S t a t e for
F u n d e s t a b l i s h e d u n d e r t h e D e v e l o p m e n t , e t c . , F u n d s A c t , 1909,
Scotland.)
t h e P i e r s or Q u a y s F u n d e s t a b l i s h e d u n d e r a n A c t d a t e d 1824
a n d a d m i n i s t e r e d b y t h e F i s h e r y B o a r d for S c o t l a n d , a n d t h e
D e v e l o p m e n t ( L o a n G u a r a n t e e s a n d G r a n t s ) Act, 1929.
l^etary
8 3 . T o m e e t a g r i c u l t u r a l a n d fishery r e q u i r e m e n t s i n G r e a t
Britain t h e D e v e l o p m e n t F u n d w a s a u g m e n t e d b y a special
g r a n t of £ 5 0 0 , 0 0 0 , a n d i n a d d i t i o n t o t h e a d v a n c e s m a d e d i r e c t l y
f r o m t h e F u n d ( a s s o a u g m e n t e d ) a s p e c i a l p r o v i s i o n of £ 3 9 , 0 0 0
( r e c o v e r a b l e f r o m t h a t F u n d t o t h e e x t e n t of £ 3 7 , 0 0 0 ) w a s p l a c e d
o n t h e F i s h e r y B o a r d ' s V o t e for 1 9 3 0 - 3 1 t o e n a b l e g r a n t s t o b e
m a d e f o r t h e r e c o n d i t i o n i n g a n d s p e c i a l r e p a i r a n d d r e d g i n g of
S c o t t i s h fishery h a r b o u r s , w h i l e t h e a n n u a l g r a n t t o t h e P i e r s
o r O u a y s F u n d h a s b e e n r e s t o r e d t o i t s s t a t u t o r y m a x i m u m of
£3,000.
8 4 . S i n c e t h e G o v e r n m e n t t o o k office i n J u n e , 1 9 2 9 , a d v a n c e s
f r o m o n e o r o t h e r of t h e s o u r c e s m e n t i o n e d i n t h e p r e c e d i n g
p a r a g r a p h a m o u n t i n g in all t o £189,538 h a v e b e e n s a n c t i o n e d
t o w a r d s t h e c o s t of s c h e m e s of h a r b o u r i m p r o v e m e n t o r s p e c i a l
repairs estimated to cost £272,000.
Of t h e t o t a l a d v a n c e s
sanctioned £141,695 weie grants a n d £47,S43 loans.
8 5 . F u r t h e r s c h e m e s a t a t o t a l e s t i m a t e d c o s t of £ 2 0 0 , 0 0 0
a r e a t p r e s e n t u n d e r c o n s i d e r a t i o n ; s o m e of t h e s e m a y n o t o n
e x a m i n a t i o n b e found to be justifiable economically, a n d in others
t h e a b s e n c e of a d u l y c o n s t i t u t e d h a r b o u r a u t h o r i t y m a y d e l a y
a c t i o n , b u t a c o n t i n u a n c e of t h e p o l i c y f o l l o w e d s i n c e J u n e , 1 9 2 9 ,
s h o u l d r e s u l t i n a l l fishery h a r b o u r s w h i c h fall w i t h i n t h e s c o p e
of t h e a b o v e - m e n t i o n e d f u n d s a n d a r e n e c e s s a r y f o r t h e s u c c e s s f u l
p r o s e c u t i o n of t h e fisheries b e i n g p l a c e d i n a c o n d i t i o n t o fulfil
their functions satisfactorily.
8 6 . A t S t o r n o w a y a s c h e m e of i m p r o v e m e n t s
including
d r e d g i n g e s t i m a t e d t o c o s t £ 4 2 , 0 0 0 is b e i n g u n d e r t a k e n b y t h e
H a r b o u r A u t h o r i t y , b u t a s t h e a u t h o r i t y c a n g i v e sufficient
s e c u r i t y for a l o a n from t h e P u b l i c W o r k s L o a n B o a r d n o g r a n t
from the above funds has been found to be necessary.
87. T h e foregoing r e m a r k s refer specially t o h a r b o u r s which
a r e m a i n l y f o r fishery p u r p o s e s a n d a r e u s e d b y t h e h e r r i n g a n d
s m a l l l i n i n g fleets.
T h e t r a w l i n g i n d u s t r y is b a s e d o n g e n e r a l
commercial
ports—Aberdeen,
Leith
(including
Newhaven),
Granton and Dundee.
It may, however, be mentioned that
s u b s t a n t i a l i m p r o v e m e n t s c o v e r i n g t h e facilities for
fishing
v e s s e l s a r e b e i n g c a r r i e d o u t a t A b e r d e e n b y m e a n s of a s s i s t a n c e
u n d e r t h e A c t of 1 9 2 9 m e n t i o n e d i n t h e first p a r a g r a p h of
this note.
8 8 . A t Lerwick H a r b o u r , t w o s c h e m e s e s t i m a t e d t o c o s t
£29,800 a n d £16,500 respectively h a v e been proposed, but the
fishery
i n t e r e s t in t h e s e s c h e m e s i s s u b s i d i a r y a n d t h e c a s e is
p r i m a f a c i e o n e f o r u t i l i s a t i o n of t h e A c t of 1 9 2 9 .
8 9 . A s r e g a r d s t h e e m p l o y m e n t v a l u e of t h e s c h e m e s f o r
i m p r o v e m e n t o r r e c o n d i t i o n i n g of f i s h e r y h a r b o u r s t o w h i c h
I h a v e r e f e r r e d , i t i s e s t i m a t e d t h a t a p p r o x i m a t e l y £ 6 of c o s t
r e p r e s e n t s t h e d i r e c t e m p l o y m e n t o n t h e s i t e of o n e m a n p e r
week.
I n d i r e c t e m p l o y m e n t , i n t h e p r e p a r a t i o n of m a t e r i a l s ,
etc., has also to be t a k e n into account.
SECTION 11.-AGRICULTURAL PROPOSALS IN RELATION
TO SCOTLAND.
90. T h e Liberal proposals c o n t e m p l a t e —
(Note b y the
(a) t h e r e v i v a l of a g r i c u l t u r e ;
State^fo?
(b) t h e p r o v i s i o n of e m p l o y m e n t t h r o u g h t h e r e v i v a l of Scotland.)
agriculture.
0
W i t h r e g a r d t o t h e r e v i v a l of a g r i c u l t u r e , t h e f i r s t s e c t i o n s
of t h e R e p o r t p r e s e n t a c o m p r e h e n s i v e s t a t e m e n t w h i c h i n s o m e
r e s p e c t i s d e s c r i p t i v e of t h e p r e s e n t c o n d i t i o n of B r i t i s h a g r i c u l t u r e .
T o o m u c h e m p h a s i s , h o w e v e r , i s l a i d u p o n t h e d e c l i n e of t h e
industry. It c a n n o t b e asserted t h a t in Scotland t h e conditions
a r e so u n s a t i s f a c t o r y . I t is t r u e t h a t , o n t h e w h o l e , 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 i s i n f e r i o r t o t h a t of s o m e o t h e r c o u n t r i e s ,
a n d t h a t i n s o m e p a r t s of t h e c o u n t r y f a r m e r s h a v e i n s u f f i c i e n t
c a p i t a l a n d p o o r e q u i p m e n t , b u t i n t h e a c t u a l c u l t i v a t i o n of t h e
s o i l a n d t h e m a n a g e m e n t of s t o c k , c o m p a r i s o n w i t h c o n t i n e n t a l
m e t h o d s is n o t u n f a v o u r a b l e t o B r i t i s h .
F a r m i n g is c h i e f l y
u n s a t i s f a c t o r y , i n t h a t full a d v a n t a g e i s n o t t a k e n of r e c e n t
a d v a n c e s i n k n o w l e d g e a n d s y s t e m s of f a r m i n g h a v e n o t b e e n
a l t e r e d t o m e e t m o d e r n c o n d i t i o n s . U p till r e c e n t l y a g r i c u l t u r e
in Scotland a n y h o w h a s at least held its own over b y far t h e larger
p a r t of t h e c o u n t r y .
T h e c o n c l u s i o n of t h e L i b e r a l p r o p o s a l s
t h a t t h e i n t e n s i v e p r o d u c t i o n of a n i m a l p r o d u c t s s h o u l d b e t h e
m a i n d e v e l o p m e n t of B r i t i s h a g r i c u l t u r e , i s s h o w n t o b e s o u n d
b y t h e S c o t t i s h e x p e r i e n c e of t h e l a s t t h i r t y y e a r s .
9 1 . I t is s u g g e s t e d i n t h e L i b e r a l p r o p o s a l s t h a t t h e b a s i s u p o n
w h i c h a n a g r i c u l t u r a l r e v i v a l m u s t r e s t is f i v e f o l d —
(1) T h e S t a t e s h o u l d a s s u m e t h e r e s p o n s i b i l i t y of t h e
l a n d l o r d i n c a p i t a l i s i n g a n d r e - e q u i p p i n g c e r t a i n p o r t i o n s of
British agriculture.
T h i s r e - e q u i p m e n t b y s o m e m e a n s i s n e c e s s a r y if l a r g e
n u m b e r s of f a r m e r s a r e t o b e a b l e t o c o m p e t e w i t h o v e r s e a s
products.
(2) T h e c o l l e c t i o n a n d t r a n s p o r t a t i o n of f a r m
should be improved and cheapened.
T h i s is h i g h l y d e s i r a b l e , e v e n t h o u g h it s h o u l d
a subsidy to t h e railways in some cases.
produce
involve
(3) M a r k e t i n g s h o u l d b e o r g a n i s e d .
T h i s is p r o v i d e d f o r i n t h e M a r k e t i n g B i l l n o w p u b l i s h e d .
(4) T h e c o n s u m p t i o n of f o o d s t u f f s of B r i t i s h o r i g i n s h o u l d
b e e x p a n d e d b y m e t h o d s of s a l e s m a n s h i p a n d a d v e r t i s e m e n t .
T h e r e is g r e a t r o o m f o r s u c h a c t i v i t y .
If, f o r e x a m p l e ,
the Scots consumed as m u c h milk per head as the Swedes,
t h e r e w o u l d n o t b e sufficient l a n d in S c o t l a n d t o g r a z e a n d
f e e d t h e d a i r y c o w s r e q u i r e d u n d e r p r e s e n t c o n d i t i o n s of
management.
T h e a b o v e p r o p o s a l s , if p u t i n t o o p e r a t i o n i n c o m b i n a t i o n
with
the research
and
education
now going on,
would
e v e n t u a l l y go far t o revive existing agriculture a n d secure
its m o d i f i c a t i o n so t h a t it could c o m p e t e w i t h foreign a n d
overseas producers.
The methods by which these suggestions
s h o u l d t a k e effect c a n n o t , h o w e v e r , b e d e a l t w i t h f u l l y i n
this note.
(5) T h e m a i n p o i n t , h o w e v e r , of t h e L i b e r a l p r o p o s a l s is
to develop t h e family farm s y s t e m b y creating 100,000 family
f a r m s a s a first i n s t a l m e n t of a n a t i o n a l p o l i c y .
F r o m the Scottish standpoint this would m e a n provision
f o r 2 0 , 0 0 0 f a m i l i e s i n five y e a r s . T h e D e p a r t m e n t of A g r i c u l ­
t u r e h a s b e e n c a r r y i n g o u t t h i s p o l i c y f o r t h e p r o v i s i o n of
f a m i l y f a r m s s i n c e 1 9 1 1 , a n d h a s m a n y y e a r s e x p e r i e n c e of
such work.
S u r v e y s h a v e b e e n m a d e of l a n d s u i t a b l e f o r s m a l l
holdings in e v e r y county.
O t h e r s u r v e y s h a v e b e e n m a d e of
l a n d s u i t a b l e for r e c l a m a t i o n o r reconditioning.
T h e r a p i d e x p a n s i o n of t h e s y s t e m i s , h o w e v e r , a s e r i o u s
matter.
I n t h e e x p e r i e n c e of - t h e D e p a r t m e n t of A g r i c u l t u r e i t
would not be possible to settle m o r e t h a n 600 to 700 families—
s a y 3,000 to 4,000 individuals—per a n n u m w i t h o u t incurring
h e a v y c o m p e n s a t i o n c h a r g e s for b r e a k i n g l e a s e s a n d p r o v i d i n g
f o r a l a r g e i n c r e a s e i n a d m i n i s t r a t i v e a n d t e c h n i c a l staff.
I t is
p r o p o s e d , h o w e v e r , t h a t 5,000 families should b e settled in each
of f o u r of five y e a r s .
T h e a r e a of l a n d r e q u i r e d f o r s u c h a s c h e m e c a n n o t b e
closely e s t i m a t e d , b u t it c o u l d n o t b e less t h a n from half a
million to a million acres. T o convert existing farms to such
a n e x t e n t w o u l d m e a n t h e d i s l o c a t i o n of f r o m o n e - e i g h t h t o
o n e - f i f t h of t h e l a n d n o w u n d e r c r o p s a n d g r a s s , b u t s u c h
complete conversion need not be assumed as there are large
a r e a s of S c o t l a n d c a p a b l e of r e c l a m a t i o n a n d r e c o n d i t i o n i n g
w h i c h w o u l d p r o v i d e n e w l a n d for family f a r m s .
In the
e v e n t of t h e a d o p t i o n of t h e f a m i l y f a r m p o l i c y t h e r e c l a m a ­
t i o n of l a n d h a s t h e a d v a n t a g e t h a t i t d i s p l a c e s t h e m i n i m u m
n u m b e r of e x i s t i n g o c c u p i e r s , i t p r o v i d e s g r e a t e r s c o p e f o r
e m p l o y m e n t of l a b o u r i n d r a i n i n g , f e n c i n g , r o a d m a k i n g , e t c . ,
t h a n w h e n e x i s t i n g f a r m l a n d i s c o n v e r t e d , a n d finally, i t a d d s
a p e r m a n e n t tangible asset t o t h e S t a t e .
From the standpoint
of u n e m p l o y m e n t a n d t h e
a d v a n t a g e of m a i n t a i n i n g a l a r g e r r u r a l p o p u l a t i o n
d e s i r a b l e t o m a k e s u c h a n effort a s is p r o p o s e d .
social
it is
I n S c o t l a n d , w h e r e l o n g leases a r e c u s t o m a r y , it does n o t
seem feasible t o create family f a r m s as speedily as
the
M e m o r a n d u m suggests.
T h e r a p i d c r e a t i o n of f a m i l y f a r m s
w o u l d i n v o l v e t h e u s e of c o m p u l s o r y p o w e r s for t h e a c q u i s i ­
t i o n of l a n d o n a l a r g e s c a l e , t h e b r e a k i n g of l e a s e s , w i t h
corresponding compensation, a n d greatly increased adminis­
trative expenses.
On t h e other h a n d , reclamation works interfere with no
e x i s t i n g i n d u s t r y a n d in so far as t h e y relieve t h e U n e m p l o y m e n t
F u n d t h e y r e d u c e t h e n e t c o s t t o t h e S t a t e of t h e l a n d w h i c h t h e y
i m p r o v e , a n d families would b e retained in this c o u n t r y as
p r o d u c t i v e u n i t s a t less c o s t t h a n t h e y c o u l d b e s e t t l e d o n s i m i l a r
l a n d as p o t e n t i a l c o m p e t i t o r s in C a n a d a a n d A u s t r a l i a .
U n d e r t h e p r o p o s a l s of t h e A g r i c u l t u r a l L a n d ( U t i l i s a t i o n )
Bill s u b s t a n t i a l financial p r o v i s i o n will b e a u t h o r i s e d for t h e
r e c l a m a t i o n of l a n d i n S c o t l a n d .
T h e r e c l a m a t i o n of t h i s l a n d
w i l l e n a b l e g r o u p s of f a m i l y f a r m s t o b e c r e a t e d .
In connexion
w i t h this policy, I h a v e reason t o believe t h a t a Canadian donor
will p r o v i d e a fully e q u i p p e d d e m o n s t r a t i o n f a r m o n a t least one
a r e a in c o n t e m p l a t i o n .
9 3 . I n g e n e r a l , a n d s o far a s S c o t l a n d is c o n c e r n e d , I a m in
a g r e e m e n t w i t h t h e p o l i c y for t h e r e v i v a l of a g r i c u l t u r e a n d t h e
c r e a t i o n of f a m i l y f a r m s d e s c r i b e d i n t h e M e m o r a n d u m , s u b j e c t
t o c o n s i d e r a t i o n of t h e d e t a i l s a n d of t h e p r o v i s i o n of w a y s
and means.
PART IV.
Emergency Works of Development.
SECTION 1.—ROADS AND BRIDGES.
1. M r . L l o y d G e o r g e o b s e r v e s t h a t t h e r e is s u b s t a n t i a l (Note b y the
c o i n c i d e n c e b e t w e e n t h e p r o p o s a l s of t h e p r e s e n t G o v e r n m e n t Minister of
w i t h r e g a r d t o r o a d s a n d b r i d g e s a n d t h o s e o u t l i n e d in t h e L i b e r a l
p a m p h l e t of 1 9 2 9 . I t m a y b e r e c a l l e d t h a t t h e t o t a l h i g h w a y
e x p e n d i t u r e of G r e a t B r i t a i n ( i n c l u d i n g e x p e n d i t u r e o u t of l o a n s
b u t e x c l u d i n g l o a n c h a r g e s ) is i n t h e n e i g h b o u r h o o d of £ 5 8 m i l l i o n s
a year. Apart from the heavy annual expenditure incurred upon
t h e m a i n t e n a n c e of c l a s s i f i e d r o a d s a n d b r i d g e s ( e s t i m a t e d a t o v e r
£ 2 0 m i l l i o n s i n 1 9 2 9 - 3 0 ) a n d o n t h e m a i n t e n a n c e of u n c l a s s i f i e d
rural r o a d s (costing a b o u t £ 8 millions a year), t h e position in r e g a r d
t o m a j o r i m p r o v e m e n t s n o t i n c l u d e d i n a n y of t h e a b o v e
e x p e n d i t u r e m a y b e r e s t a t e d as follows :—
r
£
First, there was o u t s t a n d i n g at t h e 30th September,
1 9 3 0 , i n r e s p e c t of i m p r o v e m e n t s c h e m e s i n h a n d
or a p p r o v e d p r i o r t o t h a t d a t e a n d n o t included
in t h e T r u n k R o a d , five-years or a n n u a l p r o ­
g r a m m e s hereinafter referred to, e x p e n d i t u r e on
schemes amounting approximately to ..
..
15,000,000
(This a g g r e g a t e figure includes all u n c o m p l e t e d w o r k s
u n d e r old p r o g r a m m e s , as well as s o m e i m p o r t a n t
individual schemes such as t h e Mersey T u n n e l a n d
the East Lancashire Road authorised b y previous
Governments.)
N e x t , t h e r e is t h e T r u n k R o a d P r o g r a m m e , r e p r e s e n t ­
ing entirely n e w work initiated b y t h e present
G o v e r n m e n t a n d r e c e n t l y r a i s e d t o a t o t a l of . .
T h e n , t h e r e is t h e F i v e Y e a r s ' P r o g r a m m e of m a j o r
i m p r o v e m e n t s o n classified r o a d s ( a n d b r i d g e s ) . .
( I t is n o t p o s s i b l e t o s a y h o w m u c h of t h i s w o u l d h a v e
been covered b y a n y annual allocations t h a t
might otherwise have been authorised from year
to year.)
Special L o n d o n S c h e m e s , e x c l u d i n g C h a r i n g Cross
B r i d g e r e p r e s e n t a t o t a l of
(This i n c l u d e s £ 5 , 9 0 0 , 0 0 0 for t h e V i c t o r i a D o c k R o a d ,
Waterloo, L a m b e t h and H a m p t o n Court Bridges
and the N e w Chertsey R o a d authorised b y the
l a t e G o v e r n m e n t , a n d £6,400,000 for t h e D a r t f o r d Purfleet Tunnel, t h e E l e p h a n t a n d Castle Scheme,
Chelsea a n d P u t n e y Bridges a n d V a u x h a l l Cross
authorised by the present Government.)
T o t h i s m u s t b e a d d e d t h e r e c e n t a p p r o v a l of a s e c t i o n
of t h e W e s t e r n E x i t ( C r o m w e l l R o a d S c h e m e ) ,
t h e t o t a l c o s t of w h i c h is e s t i m a t e d a t . .
..
21,000,000
27,500,000
12,300,000
2,400,000
Mr. Lloyd George states (page 105) that the total expenditure con­
templated in the present Governments Five Year Programme includes
£23,200,000 for improvement works already in hand on all kinds of roads.
I t should be explained that the £23,200,000 represents the estimate of
outstanding liabilities of the Road Fund and local authorities in respect of
all works uncompleted at 31st March, 1930 ; it also includes some balances
outstanding in respect of work which had been finished by that date
although the account had not yet been settled.
Mr. Lloyd George also refers to the figure of £20,000,000 mentioned in
the House of Commons in May, 1930, as the maximum amount which it
had been suggested might be spent on additional works if 100 per cent,
grants were to be made. Since that figure was given, however, the total
of the Trunk Road and Five Year Programmes has been increased by
£9,500,000. The £20,000,000 estimate was based on a " probability " of
100 per cent, grants, but some part of it may be absorbed in the £9,500,000
which has been added to the Trunk Road Programmes on a basis of grants
of less than 100 per cent.
PART IV.
Emergency Works of Development.
SECTION 1.—ROADS AND BRIDGES.
1. M r . L l o y d G e o r g e o b s e r v e s t h a t t h e r e i s s u b s t a n t i a l (Note b y the
c o i n c i d e n c e b e t w e e n t h e p r o p o s a l s of t h e p r e s e n t G o v e r n m e n t Minister of
w i t h r e g a r d t o r o a d s a n d bridges a n d those outlined in t h e Liberal
p a m p h l e t of 1 9 2 9 . I t m a y b e r e c a l l e d t h a t t h e t o t a l h i g h w a y
e x p e n d i t u r e of G r e a t B r i t a i n ( i n c l u d i n g e x p e n d i t u r e o u t of l o a n s
b u t e x c l u d i n g l o a n c h a r g e s ) i s i n t h e n e i g h b o u r h o o d of £ 5 8 m i l l i o n s
a year. A p a r t from the h e a v y a n n u a l expenditure incurred upon
t h e m a i n t e n a n c e of classified r o a d s a n d b r i d g e s ( e s t i m a t e d a t o v e r
£ 2 0 m i l l i o n s i n 1 9 2 9 - 3 0 ) a n d o n t h e m a i n t e n a n c e of u n c l a s s i f i e d
r u r a l r o a d s ( c o s t i n g a b o u t £8 m i l l i o n s a y e a r ) , t h e p o s i t i o n i n r e g a r d
t o m a j o r i m p r o v e m e n t s n o t i n c l u d e d i n a n y of t h e a b o v e
e x p e n d i t u r e m a y b e r e s t a t e d a s follows :—
r
£
First, there was outstanding at the 30th September,
1 9 3 0 , i n r e s p e c t of i m p r o v e m e n t s c h e m e s i n h a n d
or approved prior to that date a n d not included
in t h e T r u n k R o a d , five-years or a n n u a l p r o ­
g r a m m e s hereinafter referred to, expenditure on
schemes amounting approximately to ..
..
15,000,000
( T h i s a g g r e g a t e figure i n c l u d e s a l l u n c o m p l e t e d w o r k s
u n d e r old p r o g r a m m e s , as well as some i m p o r t a n t
individual schemes such as t h e Mersey T u n n e l a n d
the East Lancashire Road authorised by previous
Governments.)
N e x t , t h e r e is t h e T r u n k R o a d P r o g r a m m e , r e p r e s e n t ­
ing entirely n e w work initiated b y the present
G o v e r n m e n t a n d r e c e n t l y r a i s e d t o a t o t a l of . .
T h e n , t h e r e is t h e F i v e Y e a r s ' P r o g r a m m e of m a j o r
i m p r o v e m e n t s on classified r o a d s ( a n d b r i d g e s ) . .
( I t i s n o t p o s s i b l e t o s a y h o w m u c h of t h i s w o u l d h a v e
been covered b y a n y a n n u a l allocations t h a t
might otherwise h a v e been authorised from year
to year.)
Special L o n d o n Schemes, excluding Charing Cross
B r i d g e r e p r e s e n t a t o t a l of
( T h i s i n c l u d e s £ 5 , 9 0 0 , 0 0 0 for t h e V i c t o r i a D o c k R o a d ,
Waterloo, L a m b e t h and H a m p t o n Court Bridges
and the New Chertsey R o a d authorised by the
l a t e G o v e r n m e n t , a n d £ 6 , 4 0 0 , 0 0 0 for t h e D a r t f o r d Purfleet Tunnel, the E l e p h a n t a n d Castle Scheme,
Chelsea a n d P u t n e y Bridges a n d V a u x h a l l Cross
authorised b y the present Government.)
T o t h i s m u s t b e a d d e d t h e r e c e n t a p p r o v a l of a s e c t i o n
of t h e W e s t e r n E x i t ( C r o m w e l l R o a d S c h e m e ) ,
t h e t o t a l c o s t of w h i c h i s e s t i m a t e d a t . .
..
21,000,000
27,500,000
12,300,000
2,400,000
Mr. Lloyd George states (page 105) that the total expenditure con­
templated in the present Governments Five Year Programme includes
£23,200,000 for improvement works already in hand on all kinds of roads.
It should be explained that the £23,200,000 represents the estimate of
outstanding liabilities of the Road Fund and local authorities in respect of
all works uncompleted at 31st March, 1930 ; it also includes some balances
outstanding in respect of work which had been finished by that date
although the account had not yet been settled.
Mr. Lloyd George also refers to the figure of £20,000,000 mentioned in
the House of Commons in May, 1930, as the maximum amount which it
had been suggested might be spent on additional works if 100 per cent,
grants were t o be made. Since that figure was given, however, the total
of the Trunk Road and Five Year Programmes has been increased by
£9,500,000. The £20,000,000 estimate was based on a " probability " of
100 per cent, grants, but some part of it may be absorbed in the £9,500,000
which has been added to the Trunk Road Programmes on a basis of grants
of less than 100 per cent.
I n a d d i t i o n , a n n u a l p r o v i s i o n s a r e b e i n g m a d e for
f u r t h e r i m p r o v e m e n t s so as t o allow for a t o t a l
a n n u a l e x p e n d i t u r e u p o n classified r o a d s
..
a n d u p o n unclassified r o a d s
..
..
..
Finally, the Unemployment Grants Committee has
during t h e last year authorised an expenditure
u p o n unclassified r o a d s ( m a i n l y in u r b a n areas)
of s o m e
£
4,000,000
2,000,000
6,000,000
Since A u g u s t , 1929, a n d u p t o 3 0 t h S e p t e m b e r , 1930, r o a d
schemes under the Trunk
Road Programme, Five
Years'
P r o g r a m m e a n d A n n u a l P r o g r a m m e h a v e b e e n a p p r o v e d for
commencement
t o a n a m o u n t r e p r e s e n t i n g a t o t a l e x p e n d i t u r e of
£23 millions.
I n a d d i t i o n , f u r t h e r s c h e m e s h a v e b e e n a p p r o v e d in
principle
d u r i n g t h e s a m e p e r i o d r e p r e s e n t i n g a n e x p e n d i t u r e of £ 2 5
m i l l i o n s , m a k i n g i n a l l £ 4 8 m i l l i o n s . T h e figures i n c l u d e s c h e m e s
approved b y the present Government but covered by the
allocation for i m p r o v e m e n t s m a d e in t h e original R o a d F u n d
B u d g e t for 1 9 2 9 - 3 0 b y t h e l a t e G o v e r n m e n t .
Scale of Expenditure.
2 . W h i l e i t is b r o a d l y c o r r e c t t o s t a t e t h a t t h e t o t a l e x ­
p e n d i t u r e s e n v i s a g e d i n t h e P r o g r a m m e s of t h e G o v e r n m e n t a n d
of M r . L l o y d G e o r g e a r e of t h e s a m e o r d e r of m a g n i t u d e , i t m u s t
b e r e m a r k e d t h a t M r . L l o y d G e o r g e ' s figures of s u g g e s t e d t o t a l
e x p e n d i t u r e w h i c h r e p r o d u c e t h o s e of t h e 1 9 2 9 p a m p h l e t a p p e a r
u n w a r r a n t a b l y h i g h in c o m p a r i s o n w i t h t h e G o v e r n m e n t P r o ­
gramme.
F o r e x a m p l e , for T r u n k R o a d s he a s s u m e s a general
w i d t h of m e t a l l e d c a r r i a g e - w a y of 3 0 f e e t t h r o u g h o u t E n g l a n d
a n d W a l e s a n d 2 0 feet in S c o t l a n d .
While we should approve
s u c h d i m e n s i o n s f o r t h e m o r e h e a v i l y t r a f f i c k e d s e c t i o n s of t h e
r o a d s , their i m m e d i a t e a d o p t i o n on this wholesale scale would be
unjustifiable a n d extravagant.
I n m a n y p a r t s of t h e o p e n
c o u n t r y a w i d t h of 2 0 f e e t is f u l l y a d e q u a t e f o r p r e s e n t n e e d s ,
a n d w h o l e s a l e w i d e n i n g s of c a r r i a g e - w a y s t o 3 0 f e e t w o u l d a d d
g r e a t l y t o t h e c o s t of f u t u r e m a i n t e n a n c e , a n d b e w i d e l y
c o n d e m n e d b y local a n d public opinion as e x t r a v a g a n t .
They
w o u l d g r e a t l y e n h a n c e c a p i t a l cost, especially in t h e b u i l t - u p areas.
I t is a g r e e d t h a t w h e r e l a n d is p u r c h a s e d for n e w r o a d s , t h e p u r ­
c h a s e d w i d t h of l a n d s h o u l d a l l o w f o r a w i d t h of 6 0 f e e t b e t w e e n
fences.
3. Reference m a y also be m a d e t o the later p a r a g r a p h s
this note, as regards rural roads a n d w e a k bridges.
of
Suggested Compression of Government Programme.
4 . T h e c h i e f d i f f e r e n c e b e t w e e n t h e p r o p o s a l s of Mr. L l o y d
G e o r g e a n d t h o s e of t h e G o v e r n m e n t is i n r e s p e c t of t h e r a t e
a t which w o r k s c a n be p u t i n h a n d a n d c o m p l e t e d a n d in r e g a r d
t o t h e a m o u n t of l a b o u r t o b e a f f o r d e d .
Mr. L l o y d G e o r g e a s s u m e s
a p r e l i m i n a r y p e r i o d of f o u r m o n t h s a n d g e n e r a l c o m p l e t i o n of
his p r o g r a m m e in t w o years.
5. Mr. L l o y d G e o r g e is u n d e r s t o o d t o h a v e b e e n g r e a t l y
influenced b y a s t a t e m e n t t h a t surface levels could be t a k e n in
flat c o u n t r y a t t h e r a t e of a m i l e a d a y .
This, however, cannot
b e t a k e n a s i n d i c a t i v e i n a n y w a y of t h e a v e r a g e t i m e n e c e s s a r y
f o r s u r v e y ( o f t e n i n v o l v i n g d e t a i l e d e x a m i n a t i o n of a n u m b e r
of a l t e r n a t i v e r o u t e s ) a n d f o r t e c h n i c a l w o r k of p r e p a r i n g w o r k i n g
plans.
6. Mr. L l o y d G e o r g e is c o r r e c t i n p o i n t i n g o u t t h a t h i g h w a y
a u t h o r i t i e s h a v e h e s i t a t e d t o i n c r e a s e t h e i r staffs t o d e a l w i t h
e x t r a pressure. . B u t t h e Ministry h a s u r g e d this course u p o n
t h e m , a n d t h e salaries are a d m i t t e d for g r a n t .
The appointment
of c o n s u l t i n g e n g i n e e r s ( w h o s e fees a l s o r a n k for g r a n t ) h a s b e e n
strongly a d v o c a t e d b y the Ministry, a n d some authorities are
n o w s h o w i n g g r e a t e r willingness t o follow t h i s a d v i c e .
7. R e p r e s e n t a t i o n s h a v e , h o w e v e r , a l r e a d y b e e n m a d e t o t h e
M i n i s t r y b y r e s p o n s i b l e p a r t i e s , t h a t difficulties a r e b e i n g e x ­
p e r i e n c e d i n r e c r u i t i n g s u f f i c i e n t e x p e r t staff t o d e a l e v e n w i t h t h e
p r e s e n t i n s t a l m e n t s of t h e G o v e r n m e n t s p r o g r a m m e , a n d M r .
Lloyd George's suggested speeding u p would necessarily magnify
t h e s e difficulties.
8. Mr. L l o y d G e o r g e s u g g e s t s ( p . 65) t h a t a l l t h e n e c e s s a r y
s u r v e y p r e l i m i n a r i e s h a v e b e e n c o m p l e t e d for t h e T r u n k a n d F i v e
Years' Programmes. While every pressure has been exerted
u p o n Local Authorities, t h e y h a v e in m a n y cases n o t y e t found
it possible t o c o m p l e t e s u r v e y s for m a j o r w o r k s in t h e s e
programmes.
9. Mr. L l o y d George a p p a r e n t l y p r o p o s e s
( p . 64)
that
highway authorities should at once occupy any necessary land,
i n c l u d i n g l a n d s a d j o i n i n g r a i l w a y b r i d g e s , a n d l e a v e q u e s t i o n s of
c o m p e n s a t i o n t o b e s e t t l e d a f t e r t h e w o r k is d o n e .
If l o c a l
a u t h o r i t i e s - w h o a t p r e s e n t often h e s i t a t e t o offend i m p o r t a n t
owners b y using compulsory purchase powers—were willing to
a d o p t i t , s u c h a p r o c e d u r e c o u l d n o t fail t o s w e l l v e r y s e v e r e l y
t h e c o m p e n s a t i o n e l e m e n t i n t h e c o s t of w o r k s .
10. T h e r e c e n t P u b l i c W o r k s F a c i l i t i e s A c t i s d e s i g n e d t o
e x p e d i t e t h e p r e l i m i n a r y n e g o t i a t i o n s , b u t i t is c l e a r t h a t p u b l i c
opinion in this c o u n t r y would not tolerate unrestricted inter­
f e r e n c e b y h i g h w a y a u t h o r i t i e s w i t h t h e r i g h t s of o t h e r p a r t i e s ,
w h o are i n fact in m a n y cases t h e m s e l v e s s t a t u t o r y bodies.
11. T h e G o v e r n m e n t h a s t a k e n a l l p o s s i b l e s t e p s t o f a c i l i t a t e
p r o c e d u r e a n d t o u r g e u p o n l o c a l a u t h o r i t i e s t h e n e e d of e n e r g e t i c
a c t i o n i n t h e m a t t e r of p r e l i m i n a r y s t a g e s of w o r k s , b u t a t t h e
e n d of S e p t e m b e r , 1 9 3 0 , l o c a l a u t h o r i t i e s h a d n o t y e t b e e n a b l e
t o p r o d u c e t h e n e c e s s a r y d e t a i l s t o a d m i t of g r a n t a p p r o v a l b e i n g
m a d e i n r e s p e c t of s o m e £ 1 9 m i l l i o n of s c h e m e s u n d e r t h e T r u n k
R o a d a n d F i v e Y e a r P r o g r a m m e s , for w h i c h a p p r o v a l h a d b e e n
given in principle.
12. M r . L l o y d G e o r g e ' s s u g g e s t e d d r a s t i c c o m p r e s s i o n of t h e
a c t u a l p e r i o d of e x e c u t i o n of t h e w o r k s w o u l d p r e s e n t e q u a l l y
serious difficulties.
T h e r e w o u l d b e g r a v e d i s l o c a t i o n of r o a d
traffic if t h e r e c o n s t r u c t i o n w o r k p r o c e e d i n g a t a n y t i m e u n d e r t h e
present programmes were multiplied many times over ; a n d both
r o a d a n d r a i l t r a n s p o r t of v i t a l i m p o r t a n c e t o e v e r y f o r m of
i n d u s t r y ( i n c l u d i n g t h a t of r o a d - m a k i n g i t s e l f ) w o u l d b e g r e a t l y
i m p e d e d if a n u m b e r of s u c c e s s i v e b r i d g e s o n a n y o n e r o u t e w e r e
under construction at the same time.
13. T h e r e m a r k s a b o v e w i t h r e g a r d t o t h e l i m i t e d s u p p l y of
t e c h n i c a l staff f o r p r e p a r a t i o n of p l a n s a p p l y w i t h y e t g r e a t e r
force t o t h e e x p e r i e n c e d staffs t h a t w o u l d b e r e q u i r e d for t h e
a d e q u a t e s u p e r v i s i o n of t h e w o r k s t h e m s e l v e s .
14. W h i l e w e a r e u r g i n g a n d a s s i s t i n g h i g h w a y a u t h o r i t i e s t o
p r e s s f o r w a r d t h e e x e c u t i o n of w o r k w i t h e n e r g y a n d e x p e d i t i o n ,
there are limits to the extent to which they can be persuaded or
i n d u c e d t o a c c e l e r a t e t h e i r p a c e . I t c a n n o t i n t h e first p l a c e b e
o v e r l o o k e d t h a t t h e r e i s a l a r g e b o d y of p u b l i c o p i n i o n , b o t h i n
the local g o v e r n m e n t world a n d elsewhere, which questions t h e
j u s t i f i c a t i o n , f r o m t h e s t a n d p o i n t of n a t i o n a l e c o n o m i c s , of t h e
r a t e a t w h i c h l a r g e s c h e m e s of d r a s t i c r e c o n s t r u c t i o n of r o a d s a r e
already being p u t in h a n d .
I t m a y fairly be r e p r e s e n t e d t h a t
u n r e a s o n a b l e a n t i c i p a t i o n s of f u t u r e n e e d s n o t m e r e l y l o c k u p
c a p i t a l , b u t a l s o i n v o l v e a n u n n e c e s s a r y a n n u a l b u r d e n of u p k e e p
during the anticipation period.
1 5 . M r . L l o y d G e o r g e r e m i n d e d t h e H o u s e of C o m m o n s o n
18th J u n e , 1 9 3 0 (Official R e p o r t c o l . 4 4 0 ) t h a t - " t h e m e r e
e x p e n d i t u r e of m o n e y u p o n t h i n g s w h i c h a r e n o t i n t h e m s e l v e s
p r o d u c t i v e will n o t m e r e l y n o t solve t h e p r o b l e m b u t will
aggravate the problem.
T h e w h o l e t e s t of t h e e x p e n d i t u r e of
m o n e y is w h e t h e r y o u a r e g o i n g t o s p e n d i t u p o n s o m e t h i n g w h i c h
is going t o fructify . . .
I do not w a n t to consider even roads
f r o m t h e p o i n t of v i e w m e r e l y of u n e m p l o y m e n t . I s i m p l y w a n t
t o c o n s i d e r t h e m f r o m t h e d o m i n a n t p r i n c i p l e of w h e t h e r a r o a d
i s g o i n g t o b e h e l p f u l for t h e d e v e l o p m e n t of a g r i c u l t u r e a n d of
i n d u s t r y a n d of m a r k e t i n g .
If i t i s n o t , if i t i s m e r e l y for t h e
p u r p o s e of e n a b l i n g p l e a s u r e t r i p s t o b e r u n a n d p l e a s u r e m o t o r i s t s
t o b e satisfied, for m y p a r t I w o u l d r u l e it o u t a t o n c e . T h e o n l y
r e a l t e s t t h e r e i s w h e t h e r i t i s r e p r o d u c t i v e f r o m a t r a d e p o i n t of
v i e w , a n d if i t i s n o t , t h e n I s h o u l d c e r t a i n l y d e p r e c a t e t h e
e x p e n d i t u r e of m i l l i o n s of m o n e y o n r o a d s ; . . . I h o p e i t w i l l b e
c o n s i d e r e d r a t h e r f r o m t h e p o i n t of v i e w of, t o u s e t h e p h r a s e of
t h e P r i m e Minister, which I t h i n k is a good p h r a s e , w h a t a r e t h e
r e c o n d i t i o n i n g n e e d s of t h e c o u n t r y . "
16. A s Mr. L l o y d G e o r g e recognises c e r t a i n local a u t h o r i t i e s
are unwilling and even object at the present time to impose
g r e a t e r b u r d e n s u p o n t h e r a t e p a y e r s , a n d ( p . 65) h e m a k e s
c o n c r e t e p r o p o s a l s for f u r t h e r financial i n d u c e m e n t s t o local
authorities, which h a v e been carefully considered.
T h e induce­
m e n t s suggested, w i t h regard t o future a n d also t o existing
s c h e m e s , a r e a special b o n u s for w o r k s c o m p l e t e d w i t h i n a n
a b b r e v i a t e d t i m e l i m i t ; a n d t h e g r a n t of l o a n s f r e e of i n t e r e s t
for w o r k s c o m p l e t e d w i t h i n t w o years.
1 7 . T h e first of t h e s e e x p e d i e n t s i n v o l v e s s o m e m e a s u r e of
" s p e c u l a t i o n " o n t h e p a r t of t h e l o c a l a u t h o r i t y ; b u t o w i n g
t o i t s c o n s t i t u t i o n a l p o s i t i o n a l o c a l a u t h o r i t y is i n a w h o l l y
different position from a n " industrial firm." T h e whole experi­
e n c e of t h e M i n i s t r y i s t h a t l o c a l a u t h o r i t i e s d i s l i k e p u t t i n g
w o r k s i n h a n d e x c e p t o n t h e f i r m b a s i s of a d e f i n i t e g r a n t , a n d
i n s p i t e of t h e f u l l e s t c o n s i d e r a t i o n g i v e n t o t h e q u e s t i o n , i t h a s
n e v e r b e e n p o s s i b l e t o e n f o r c e definite d a t e s for c o m m e n c e m e n t
o r c o m p l e t i o n of r o a d s c h e m e s , w i t h l i a b i l i t y t o g r a n t r e d u c t i o n
i n c a s e of f a i l u r e . A m o n g o t h e r f a c t o r s , s p e c i a l m e n t i o n m a y b e
m a d e of t h e i n t e r - d e p e n d e n c e of a u t h o r i t i e s a n d of t h e d i f f i c u l t y
of o b t a i n i n g p o s s e s s i o n of o r a c c e s s t o l a n d .
T h e a b s e n c e of
firm d a t e s f o r " n o r m a l c o m p l e t i o n " w o u l d m a k e i t difficult
t o fix a d a t e s h o w i n g s u f f i c i e n t a c c e l e r a t i o n t o m e r i t a b o n u s ,
a n d e v e n if t h i s c o u l d b e d o n e , t h e M i n i s t r y w o u l d b e f a c e d w i t h
a p p e a l s for c o n c e s s i o n s in e v e r y case w h e r e t h e a c c e l e r a t i o n d a t e
w a s o v e r s t e p p e d b y r e a s o n of a l l e g e d force majeure.
W h e r e new
roads are constructed on m a d e ground or high b a n k s , requiring
t i m e for c o n s o l i d a t i o n , it w o u l d b e injudicious t o set a p r e m i u m
on acceleration.
1 8 . A s t o t h e m e a s u r e of a d d i t i o n a l " i n d u c e m e n t " w h i c h
c o u l d b e o f f e r e d , i t m u s t b e r e c a l l e d t h a t t h e p r o p o r t i o n of t h e
t o t a l c o s t of t r u n k r o a d o r five y e a r s ' s c h e m e s , n o w b o r n e b y t h e
l o c a l a u t h o r i t y , is o f t e n o n l y s o m e 15 t o 2 5 p e r c e n t . ­
1 9 . A s t o l o a n s f r e e of i n t e r e s t , I h a v e o n m o r e t h a n o n e
occasion considered this possibility, a n d have taken informal
s t e p s t o a s c e r t a i n w h e t h e r p r o p o s a l s of t h i s c h a r a c t e r w o u l d b e
l i k e l y t o l e a d t o a n y s u b s t a n t i a l i n c r e a s e of a c t i v i t y o n t h e p a r t
of h i g h w a y a u t h o r i t i e s .
My information tends to show t h a t
w h i l e a n offer of t h i s k i n d m i g h t a p p e a l t o a f e w a u t h o r i t i e s ,
there would be no general response.
Many authorities are
looking forward with misgiving to t h e higher interest charges
w h i c h t h e y w i l l h a v e t o b e a r d u r i n g t h e l a t e r y e a r s of l o a n s u n d e r
schemes aided b y the U n e m p l o y m e n t Grants Committee. I have,
however, already b r o u g h t before t h e T r e a s u r y t h e suggestion
t h a t t h e l o a n f r e e of i n t e r e s t f o r a l i m i t e d p e r i o d m i g h t b e of
p r a c t i c a l v a l u e i n t h o s e c a s e s in w h i c h a n a u t h o r i t y h a s a c c e p t e d
a p r o g r a m m e of w o r k t o b e c a r r i e d o u t b y i n s t a l m e n t s . S u c h a n
a u t h o r i t y m i g h t b e p e r s u a d e d t o p u t t h e l a t e r i n s t a l m e n t s of i t s
p r o g r a m m e i n h a n d a t o n c e , o n t h e b a s i s of a f r e e l o a n , w h i c h
w o u l d p u t i t i n t h e s a m e p o s i t i o n , f r o m t h e s t a n d p o i n t of l o c a l
r a t e s , a s if i t h a d c a r r i e d o u t t h e w o r k a t t h e d a t e o r i g i n a l l y
arranged.
Employment Aspect of Liberal Proposals.
20. Mr. L l o y d George adheres to his previous e s t i m a t e t h a t
e x p e n d i t u r e of £ 1 , 0 0 0 , 0 0 0 w i l l p r o v i d e 5 , 0 0 0 m a n - y e a r s of w o r k .
T h e e s t i m a t e a l w a y s u s e d for R o a d F u n d p u r p o s e s is t h a t e a c h
£ 1 m i l l i o n r e p r e s e n t s 2 , 0 0 0 direct l a b o u r w i t h a b o u t a c o r r e s p o n d i n g
a m o u n t of indirect l a b o u r ; a n d r e c e n t e x p e r i e n c e t e n d s t o c o n f i r m
t h e a c c u r a c y of t h e f i g u r e of 2 , 0 0 0 . I t i s i n t e r e s t i n g t o n o t e t h a t
i n t h e c a s e of a l a r g e s c h e m e n o w i n p r o g r e s s , t h e E a s t L a n c a s h i r e
R o a d of £ 3 , 0 0 0 , 0 0 0 , w h i c h is b e i n g p r e s s e d o n a s v i g o r o u s l y a s
p o s s i b l e , t h e c o n s u l t i n g e n g i n e e r s d o n o t a n t i c i p a t e t h a t it w i l l b e
p o s s i b l e t o e m p l o y m o r e t h a n 1,000 m e n a t a n y o n e t i m e o n t h e
s i t e of t h e w o r k s .
New Arterial Roads.
2 1 . P a r t i c u l a r p r o p o s a l s of M r . L l o y d G e o r g e r e f e r t o s u g g e s t e d
n e w a r t e r i a l r o a d s , unclassified (rural) r o a d s , a n d w e a k b r i d g e s .
22. The T r u n k R o a d a n d Five-Years' P r o g r a m m e s contain
m a n y proposals based on precisely t h e considerations set out
i n M r . L l o y d G e o r g e ' s M e m o r a n d u m ; b u t t h e c o n s t r u c t i o n of
e n t i r e l y n e w r o a d s o n 100 p e r c e n t , g r a n t b a s i s c o n t e m p l a t e d
b y Mr. R e e s Jeffreys would not m e r e l y involve t h e supersession
of e x i s t i n g h i g h w a y a u t h o r i t i e s i n t h e a r e a s c o n c e r n e d , w i t h
t h e c r e a t i o n of a d u p l i c a t e o r g a n i s a t i o n u n d e r t h e c e n t r a l g o v e r n ­
m e n t , b u t it w o u l d also lead to the g r a v e s t dissatisfaction on the
p a r t of l o c a l a u t h o r i t i e s w h o h a v e a l r e a d y b e e n p e r s u a d e d t o
e m b a r k o n s c h e m e s of m a g n i t u d e ( i n c l u d i n g i m p o r t a n t n e w
h i g h w a y s a n d b y - p a s s e s ) o n t h e b a s i s of s o m e s u b s t a n t i a l c o n ­
tribution from local funds.
2 3 . A s t o t h e p r o p o s e d r o u t e s t h e m s e l v e s , it m u s t b e r e m e m ­
b e r e d t h a t w h o l e s a l e d u p l i c a t i o n of m a n y m i l e s of e x i s t i n g r o u t e s
w h i c h h a v e b e e n r e c e n t l y b r o u g h t u p t o a h i g h s t a n d a r d of
c o n s t r u c t i o n c o u l d n o t b e j u s t i f i e d b y a n y p r o b a b l e i n c r e a s e of
traffic, e v e n if w e a r e t o p r e s u m e a d e l i b e r a t e p o l i c y of r e m o v i n g
h e a v y traffic f r o m t h e r a d w a y s .
24. To t a k e the suggested London-Southampton R o a d as an
example, the Great West Road extension and the Bagshot
B y - P a s s are a l r e a d y in use, a n d large B y - P a s s schemes are in h a n d
for B a s i n g s t o k e a n d W i n c h e s t e r , a p a r t f r o m o t h e r w i d e n i n g a n d
bridge works.
I t i s difficult t o c o n c e i v e t h a t t h e s u g g e s t e d
a d d i t i o n a l r o a d w o u l d b e s o " r e p r o d u c t i v e f r o m a t r a d e p o i n t of
v i e w " — w h e t h e r o r n o t i t r e s u l t e d i n d i v e r t i n g h e a v y traffic
from the railway or developing H a m p s h i r e industrially—as t o
justify in a n y w a y t h e e x p e n d i t u r e involved.
I n fact, however,
t h e c o n s t r u c t i o n of a n e n t i r e l y n e w r o a d b e t w e e n L o n d o n a n d
S o u t h a m p t o n f o r h e a v y , f a s t m o v i n g t r a f f i c c o u l d n o t fail t o
d i v e r t traffic f r o m t h e S o u t h e r n R a i l w a y a n d t h u s l e a v e u n p r o ­
ductive heavy capital expenditure which cannot be turned to
o t h e r u s e s . I t is often s u g g e s t e d t h a t n o e c o n o m i c d a m a g e
w o u l d b e d o n e if s u c h a p o s i t i o n o c c u r r e d , b e c a u s e t h e c o u n t r y
b e n e f i t e d b y t h e d e v e l o p m e n t of r a i l w a y s a t t h e e x p e n s e of
canals a n d the stage coach. This view overlooks some material
d i f f e r e n c e s i n t h e c i r c u m s t a n c e s . T h e d e v e l o p m e n t of t h e r a i l w a y s
w a s t h e c o m p e t i t i v e effort of p r i v a t e e n t e r p r i s e . T h e d e v e l o p m e n t
of t h e r o a d s h a s b e e n i n p a r t b r o u g h t a b o u t b y e x p e n d i t u r e o u t
of l o c a l t a x a t i o n i n t h e f o r m of r a t e s a n d i t h a s b e e n a c c e l e r a t e d
a s a r e s u l t of p u b l i c a c t i o n s i n c e t h e w a r for t h e p u r p o s e of
providing employment.
N o new development m u s t be t h w a r t e d
b y t h e e x i s t e n c e of v e s t e d i n t e r e s t s , b u t a s M i n i s t e r of T r a n s p o r t
I a m bound to have regard to t h e proper a n d economical
u t i l i s a t i o n of a l l a v a i l a b l e m e a n s of t r a n s p o r t . W e m u s t r e l y u p o n
t h e r a i l w a y s for a l o n g t i m e t o c o m e t o m o v e t h e h e a v y b a s i c
t r a f f i c s o n w h i c h o u r i n d u s t r i e s d e p e n d , b u t if, d i s r e g a r d i n g a n y
a t t e m p t t o s e c u r e a p r o p e r d i s t r i b u t i o n of f u n c t i o n s , w e w e r e
d e l i b e r a t e l y t o a i m a t t h e t r a n s f e r of t r a f f i c f r o m t h e r a i l t o t h e
r o a d s i m p l y b e c a u s e w e w a n t t o u s e t h e c o n s t r u c t i o n of r o a d s a s
r e l i e f w o r k s , t h e b u r d e n of m e e t i n g r a i l e x p e n d i t u r e m u s t fall
i n c r e a s i n g l y u p o n t h e h e a v y traffics s u c h a s c o a l , i r o n ore, i r o n ,
s t e e l , e t c . , o r i n v o l v e t h e w o r s e n i n g of r a i l w a y w o r k e r s ' c o n d i t i o n s .
Unclassified Roads.
2 5 . I n t h e 1929 p a m p h l e t
the £30
U n c l a s s i f i e d ) R o a d s ( p . 112) r e p r e s e n t e d
million
" p a t c h , t a r s p r a y a n d grit " (twice) 55,000
m i l e s of " s c h e d u l e d " r o a d s .
Other improvements . .
..
..
..
for
Rural
£ million.
21
9
£30
I n v i e w of t h e c r i t i c i s m n o w m a d e t h a t " t h e a c t i o n a t p r e s e n t
c o n t e m p l a t e d u n d e r t h e G o v e r n m e n t s c h e m e s consists m a i n l y in
d o i n g s o m e t h i n g t o t h e i r s u r f a c e " i t is r e l e v a n t t o n o t e t h a t
m o r e t h a n t w o - t h i r d s of t h e o r i g i n a l £ 3 0 m i l l i o n p r o p o s a l w a s
for surfacing, w h i c h , it m u s t b e r e m a r k e d , is m a i n t e n a n c e
w o r k excluded from t h e G o v e r n m e n t s reconstruction p r o g r a m m e
a s a r e s u l t of t h e L o c a l G o v e r n m e n t A c t , 1 9 2 9 , w h i c h s u b s t i t u t e s
" b l o c k g r a n t s " for t h e g r a n t s h i t h e r t o m a d e f o r t h i s c l a s s of
work.
M o r e o v e r , t h e figure of £ 2 1 , 0 0 0 , 0 0 0 f o r 5 5 , 0 0 0 m i l e s
a p p e a r s t o b e b a s e d o n t h e a s s u m p t i o n of a n a v e r a g e m a i n t e n a n c e
c o s t f o r t h e s e u n c l a s s i f i e d " s c h e d u l e d " r o a d s of £ 3 7 5 p e r m i l e ;
b u t t h i s i s t h e a v e r a g e figure for t h e c o m p a r a t i v e l y h e a v i l y
t r a f f i c k e d C l a s s I I r o a d s , of w h i c h t h e w i d t h i s g r e a t e r a n d m a n y
of w h i c h a r e i n u r b a n a r e a s .
2 6 . I t i s a g r e e d t h a t a l a r g e m i l e a g e of t h e u n c l a s s i f i e d r o a d s
i n r u r a l a r e a s i s c a p a b l e of i m p r o v e m e n t i n w i d t h , g r a d i e n t a n d
a l i g n m e n t , a n d t h a t t h e s t a n d a r d of m a i n t e n a n c e i s , i n c e r t a i n
a r e a s , b e l o w w h a t i t s h o u l d b e . T h e t r a n s f e r of t h e s e r o a d s t o
t h e C o u n t y C o u n c i l s a s f r o m 1st A p r i l l a s t , s h o u l d r e s u l t i n a
m a r k e d i m p r o v e m e n t i n t h e s e r e s p e c t s . G r a n t s of 5 0 p e r c e n t ,
a r e m a d e available for i m p r o v e m e n t w o r k s — w h e t h e r t o line or
s u r f a c e — a n d p r o v i s i o n h a s b e e n m a d e for £ 1 , 0 0 0 , 0 0 0 g r a n t u n d e r
t h a t h e a d d u r i n g t h e c u r r e n t financial y e a r .
2 7 . U n l e s s t h e w h o l e s y s t e m of c l a s s i f i c a t i o n (a s y s t e m u n i v e r s ­
a l i y c o m m e n d e d ) is t o g o b y t h e b o a r d , a s e n s e of p r o p o r t i o n m u s t
b e o b s e r v e d i n d e a l i n g w i t h e x p e n d i t u r e o n t h e v a r i o u s c l a s s e s of
r o a d s . If t h e p r i m a r y c o n s i d e r a t i o n i s t o find relief w o r k o n r o a d s
i n a g r i c u l t u r a l a r e a s , t h e n n o d o u b t a g o o d d e a l of w o r k o n t h e s e
unclassified r o a d s m i g h t b e p u t in h a n d .
If, h o w e v e r , traffic
c o n s i d e r a t i o n s a r e s u c h t h a t a large e x p e n d i t u r e for i m p r o v e m e n t
a n d u p k e e p is justified o n a p a r t i c u l a r r o u t e , t h e n t h a t r o u t e
s h o u l d b e c l a s s i f i e d a n d d e a l t w i t h a s s u c h i n p u r s u a n c e of t h e
Ministry's consistent policy.
T h e r e is n o j u s t i f i c a t i o n for a n
i n i t i a l e x p e n d i t u r e of £ 2 1 , 0 0 0 , 0 0 0 ; t h e t a r r i n g of a n a d d i t i o n a l
5 0 , 0 0 0 m i l e s of r o a d s ( m a n y of t h e m of i n s i g n i f i c a n t v a l u e ) t w i c e
i n o n e y e a r is e i t h e r i m p o s s i b l e , o r w o u l d r e s u l t in s u c h a n i n c r e a s e
i n t h e p r i c e of t a r a n d o t h e r s u r f a c i n g p r e p a r a t i o n s a s w o u l d
s e r i o u s l y a f f e c t t h e e c o n o m i c s of r o a d m a i n t e n a n c e . T h e i n d i s c r i ­
m i n a t e t a r r i n g of a l l l a n e s i n d a i r y i n g a n d c a t t l e r e a r i n g c o u n t i e s
w o u l d n o t b e w e l c o m e d ; in t h e s e d i s t r i c t s f o o t h o l d is p r e f e r r e d t o
s m o o t h n e s s . C o m p l a i n t s a r e f r e q u e n t t h a t t h e i n t e r e s t s of f a r m e r s
a r e s u b o r d i n a t e d t o t h e i n t e r e s t s of m o t o r i s t s a n d t h a t m a n y of
t h e r o a d s of t h e c o u n t r y a r e i m p a s s a b l e b y h o r s e t r a n s p o r t a n d
stock.
2 8 . I t m u s t b e r e m e m b e r e d t h a t t h e traffic o n a v e r y l a r g e
p r o p o r t i o n of t h e s e c o u n t r y l a n e s a n d r o a d s i s v e r y l i g h t a n d t h a t
* t h e y a r e a d e q u a t e for all r e a s o n a b l e n e e d s . I a m s y m p a t h e t i c
t o t h e p o l i c y of i m p r o v i n g r u r a l r o a d s w i t h a v i e w t o a s s i s t i n g
agriculture a n d h a v e a l w a y s been r e a d y t o deal specially with
r o a d s w h i c h c a r r y a h e a v y a g r i c u l t u r a l t r a f f i c , e.g., t i m b e r , o r b e e t .
B u t in general haulage loads from t h e farm are light a n d t o a large
e x t e n t t h e y are still h o r s e - d r a w n , a n d t h e indiscriminate provision
of t a r r e d s u r f a c e s w o u l d p r o b a b l y b e a d e f i n i t e d i s s e r v i c e t o
agriculture.
2 9 . T h e M i n i s t r y of A g r i c u l t u r e a d v i s e s t h a t i t is a m a t t e r of
considerable d o u b t w h e t h e r a n y schemes w h i c h m a y , in t h e
f u t u r e , b e p u t i n t o effect u n d e r t h e A g r i c u l t u r a l M a r k e t i n g B i l l
w i l l h a v e a n y a p p r e c i a b l e effect o n t h e v o l u m e o r n a t u r e of
a g r i c u l t u r a l traffic o n r u r a l r o a d s . I t i s n o t u n l i k e l y t h a t o r g a n i s a ­
t i o n w o u l d l e a d , a s , for e x a m p l e , i n t h e m i l k t r a d e , t o a n i n c r e a s e d
u s e of t h e m a i n r o a d s b y h e a v y traffic w h i c h w o u l d c o l l e c t f r o m
r o a d s i d e d u m p s or p a c k i n g s t a t i o n s o n classified r o a d s a s t h e y
frequently do n o w . Lorries should n o t t r a v e l a mile or two u p
a c o u n t r y lane t o collect b u t t e r a n d eggs from a n individual farm.
3 0 . I t is difficult t o find e c o n o m i c j u s t i f i c a t i o n for f a c i l i t a t i n g
t h e r u n n i n g of c h a r a b a n c s o v e r a l l r u r a l r o a d s a s M r . L l o y d
George seems to contemplate.
T h e M i n i s t r y of A g r i c u l t u r e a n d
Fisheries reports that there h a s been some complaint recently
b y f a r m e r s of t h e i n c r e a s i n g u s e of s e c o n d - c l a s s r o a d s b y l a r g e
m o t o r coaches.
I n E n g l a n d a n d W a l e s t h e r e is a l r e a d y m o r e
t h a n h a l f a m i l e of classified
r o a d t o e v e r y s q u a r e m i l e of
t e r r i t o r y , b u t classification is b e i n g s t e a d i l y p u r s u e d , a n d t h e
M i n i s t r y ' s p o l i c y is t o g i v e Class I I s t a t u s , a f t e r r e c o n s t r u c t i o n ,
t o r u r a l r o a d s o n w h i c h t h e r e is r e g u l a r a n d h e a v y traffic.
A local
a u t h o r i t y b e n e f i t s m a t e r i a l l y if a n u n c l a s s i f i e d r o a d is r a i s e d
t o Class I I s t a t u s , since it h e n c e f o r w a r d e a r n s a 50 p e r cent, g r a n t
f o r m a i n t e n a n c e i n s t e a d of t h a t e x p e n d i t u r e b e i n g c o v e r e d b y t h e
b l o c k g r a n t , a n d I a m r e a d y t o c o n s i d e r a p p l i c a t i o n s in r e s p e c t
of s c h e m e s for b r i n g i n g u p t o c l a s s i f i c a t i o n s t a n d a r d a n y r u r a l
r o a d s o n w h i c h a r e g u l a r h e a v y t r a f f i c is d e v e l o p i n g .
Weak Bridges.
3 1 . M r . L l o y d G e o r g e g i v e s a figure of £ 3 7 m i l l i o n f o r r e c o n ­
s t r u c t i o n of w e a k a n d d a n g e r o u s b r i d g e s . T h e 1 9 2 9 p a m p h l e t
s u g g e s t e d t h a t £ 1 0 m i l l i o n b e s p e n t i n t h e first y e a r a n d £ 2 7 m i l l i o n
in t h e second year, t h e expenditure t o be b o r n e primarily b y t h e
S t a t e . T h e M i n i s t r y a g r e e s t h a t a h e a v y p r o g r a m m e of r e c o n ­
s t r u c t i n g w e a k b r i d g e s is o n e of t h e m o s t f r u i t f u l d i r e c t i o n s i n
which money could be spent. T h e Ministry h a s lost no oppor­
t u n i t y of u r g i n g t h i s p o l i c y u p o n a l l l o c a l a u t h o r i t i e s w i t h s t r o n g
e m p h a s i s d u r i n g t h e p a s t 12 m o n t h s .
G r a n t s of 7 5 p e r c e n t ,
are available.
The response has been disappointing, although
m a n y authorities are now submitting substantial programmes,
a n d r e c e n t l e g i s l a t i o n ( P u b l i c W o r k s F a c i l i t i e s A c t , 1930) w i l l
h e l p t o o v e r c o m e t h e d i f f i c u l t i e s of o b t a i n i n g e a s e m e n t s a c r o s s
railways and canals.
3 2 . M r . L l o y d G e o r g e a p p a r e n t l y m i s r e a d s p a g e 5 0 of t h e
R o a d F u n d R e p o r t of 1 9 2 8 - 2 9 , i n s t a t i n g t h a t 1 3 5 b r i d g e s w e r e
d e a l t w i t h i n t h a t y e a r ; t h e t o t a l n u m b e r ( a s s h o w n o n p a g e 17)
of t h e R e p o r t w a s 4 0 8 .
N o r m a l l y , a b o u t 4 0 0 b r i d g e s of a l l
dimensions are reconstructed annually with assistance from t h e
R o a d F u n d , a n d i t i s a c o n d i t i o n of g r a n t t h a t e a c h b r i d g e s h o u l d
b e c a p a b l e of b e a r i n g t h e M i n i s t r y ' s s t a n d a r d l o a d . D u r i n g t h e
n e x t five y e a r s t h e n u m b e r d e a l t w i t h a n n u a l l y w i l l b e m a t e i i a l l y
i n c r e a s e d , b y r e a s o n of t h e T r u n k R o a d a n d F i v e Y e a r s '
P r o g r a m m e s . W e a k b r i d g e s i n t h o s e s e c t i o n s of T r u n k R o a d s w h i c h
a r e d e a l t w i t h w i l l b e r e c o n s t r u c t e d a s p a r t of t h e w o r k , w h i l s t
the Ministry's Divisional R o a d Engineers are using their best
e f f o r t s t o i n d u c e l o c a l a u t h o r i t i e s t o t a k e w i d e r a d v a n t a g e of t h e
t e r m s offered.
S p e c i a l r e p r e s e n t a t i o n s w e r e m a d e o n b e h a l f of
t h e Minister t o local authorities in t h e B l a c k C o u n t r y to direct
t h e i r e n e r g i e s t o t h i s m a t t e r , a n d i t i s u n d e r s t o o d t h a t m a n y of
t h e s e local a u t h o r i t i e s h a v e g i v e n i n s t r u c t i o n s for s c h e m e s t o b e
prepared.
3 3 . T h e n u m b e r of b r i d g e s d e m a n d i n g r a d i c a l r e c o n s t r u c t i o n
in t h e n e a r f u t u r e should, h o w e v e r , n o t b e exaggerated ; s o m e
of t h e r o a d s o n w h i c h t h e s e b r i d g e s e x i s t c a r r y l i t t l e traffic, a n d
it would be a n e x t r a v a g a n t policy to say t h a t every r o a d m u s t
b e a l t e r e d t o t a k e a n y v e h i c l e s of w h a t e v e r w e i g h t . A s r e g a r d s
t h e r a t e of e x p e n d i t u r e , i t m u s t b e b o r n e i n m i n d t h a t m a n y of
t h e s e b r i d g e s p r e s e n t difficult e n g i n e e r i n g p r o b l e m s , a n d t h a t i t
is n o t p o s s i b l e t o h a v e u n d e r r e p a i r a t t h e s a m e t i m e s u c c e s s i v e
b r i d g e s o n i m p o r t a n t l i n e s of r a i l w a y , s i n c e o t h e r w i s e r a i l w a y
traffic w o u l d b e s e r i o u s l y affected.
R e g a r d m u s t also b e h a d to
t h e i n t e n s e d i s l o c a t i o n of traffic b y r o a d if a n y t h i n g a p p r o a c h i n g t h e
n u m b e r of b r i d g e s e n v i s a g e d w e r e u n d e r r e c o n s t r u c t i o n a t
the same time.
I t m a y b e a d d e d , t h a t few cases in w h i c h w e a k
bridges on t h e m i n o r roads h a v e been represented to be a serious
h i n d r a n c e t o t h e efficient h a n d l i n g of a g r i c u l t u r a l traffic h a v e
b e e n b r o u g h t t o t h e a t t e n t i o n of t h e M i n i s t r y .
Level Crossings.
34. Mr. L l o y d George m a k e s a passing reference t o t h e u r g e n t
n e e d of r e p l a c i n g l a r g e n u m b e r s of l e v e l c r o s s i n g s b y b r i d g e s .
Of s o m e 1,400 l e v e l c r o s s i n g s o n c l a s s i f i e d r o a d s , a b o u t o n e - t h i r d
a r e o n l i g h t r a i l w a y s o r p r i v a t e l i n e s ; a n d of t h e r e m a i n d e r ,
m a n y a r e i n l a r g e t o w n s o r b u i l t - u p a r e a s , w h e r e t h e c o s t of
substituting a bridge would be very h e a v y indeed, a n d the work
very protracted.
I n o t h e r cases t h e y a r e on r o a d s across which
t h e r a i l w a y traffic i s s o l i g h t t h a t t h e i n c o n v e n i e n c e t o r o a d u s e r s
b y t h e c l o s i n g of g a t e s i s a l m o s t n e g l i g i b l e .
3 5 . T h e offer m a d e i n M a r c h l a s t t o h i g h w a y a u t h o r i t i e s of
a 7 5 p e r c e n t , g r a n t t o w a r d s w o r k s a f f e c t i n g t h e e l i m i n a t i o n of
level crossings h a s , so far, e v o k e d l i t t l e r e s p o n s e , b u t i t is possible
t h a t t h i s h e s i t a t i o n is d u e , n o t t o f a i l u r e t o a p p r e c i a t e t h e n e c e s s i t y
of t a k i n g a c t i o n , b u t t o d i f f i c u l t i e s w i t h
railway
and canal
c o m p a n i e s , w h i c h will b e e a s e d b y t h e r e c e n t A c t .
Site Values.
36. I e n t i r e l y agree t h a t all possible s t e p s s h o u l d be t a k e n
t o s e c u r e t h a t s o m e p a r t of t h e c o s t of p u b l i c i m p r o v e m e n t s
s h o u l d b e m e t o u t of t h e i n c r e a s e d v a l u e of p r o p e r t i e s d u e t o
t h e i m p r o v e m e n t s . I n t h e p a r t i c u l a r c a s e of t h e N o r t h O r b i t a l
R o a d I h a v e , w i t h t h e a d v i c e of t h e Chief V a l u e r , t a k e n s t e p s
f o r t h e p u r c h a s e of s u r p l u s l a n d s w i t h a v i e w t o r e c o u p m e n t ;
a n d t h e q u e s t i o n of f r o n t a g e r s ' c o n t r i b u t i o n s i s o n e t o w h i c h
c o n s i d e r a b l e a t t e n t i o n is g i v e n b y m y D e p a r t m e n t i n e v e r y c a s e
of r o a d i m p r o v e m e n t o r r o a d c o n s t r u c t i o n . I n t h e c a s e of r o a d s
constructed or improved u n d e r certain Acts the increased value
of a d j o i n i n g l a n d s of t h e s a m e o w n e r c a n b e s e t off a g a i n s t t h e
compensation otherwise payable. This method has been exten­
sively e m p l o y e d in c o n n e c t i o n w i t h r o a d schemes in w h i c h t h e
M i n i s t r y of T r a n s p o r t is i n t e r e s t e d a n d t h e c o s t of a c q u i r i n g l a n d
f o r t h e r o a d s h a s b e e n m a t e r i a l l y r e d u c e d (in s o m e f e w c a s e s t o
nil) b y t a k i n g t h e b e n e f i t c o n f e r r e d o n t h e a d j o i n i n g l a n d s i n t o
a c c o u n t in assessing t h e p u r c h a s e price or compensation p a y a b l e .
37. The questions raised in Mr. Lloyd George's M e m o r a n d u m
a r e m a t t e r s of g e n e r a l G o v e r n m e n t p o l i c y r a t h e r t h a n t h e p a r ­
t i c u l a r c o n c e r n of m y D e p a r t m e n t , b u t I m a y m e n t i o n t h a t t h e
M i n i s t e r of T r a n s p o r t s u p p o r t e d t h e M i d d l e s e x C o u n t y C o u n c i l
when they sought P a r l i a m e n t a r y powers to enable t h e m to purchase
l a n d for r e c o u p m e n t in r o a d c o n s t r u c t i o n s c h e m e s ; I s h o u l d
look s y m p a t h e t i c a l l y on similar applications which m i g h t be p u t
forward by other Highway Authorities, a n d m y Department has
already suggested t h a t a similar express power might be conferred
on h i g h w a y authorities generally.
38. I t is n o t entirely clear h o w far Mr. L l o y d George proposes
t h a t r e c o u p m e n t s h o u l d b e o b t a i n e d b y t h e G o v e r n m e n t (or
l o c a l a u t h o r i t i e s ) t h e m s e l v e s e n t e r i n g i n t o t h e b u s i n e s s of l a n d
s p e c u l a t i o n o r h o w f a r h e c o n t e m p l a t e s a r e t u r n i n t h e f o r m of
t a x a t i o n of e n h a n c e d v a l u e s . I t m a y b e r e m e m b e r e d t h a t t h e
g r e a t e r t h e d e g r e e of a c c e l e r a t i o n i n r o a d c o n s t r u c t i o n t h e m o r e
r e m o t e is l i k e l y t o b e t h e d e v e l o p m e n t of t h e f r o n t a g e s a n d t h e
p o s s i b i l i t y of r e c o u p m e n t . N e w r o a d s i n o p e n c o u n t r y , s u c h a s
t h o s e p r o p o s e d b y M r . R e e s J e f f r e y s m a y (e.g., o w i n g t o s e v e r a n c e
of e s t a t e s ) d e p r e c i a t e r a t h e r t h a n a p p r e c i a t e t h e v a l u e of t h e
l a n d s t h r o u g h w h i c h t h e y p a s s . M o r e o v e r , it m u s t be r e m e m b e r e d
t h a t a g r e a t p a r t of t h e e x p e n d i t u r e p r o p o s e d b y M r . L l o y d
G e o r g e s u c h a s t h a t o n t h e r e c o n s t r u c t i o n of w e a k b r i d g e s a n d
t a r r i n g of r u r a l r o a d s w o u l d g i v e b u t l i t t l e o p p o r t u n i t y f o r
recoupment.
39. I n connection w i t h Mr. Lloyd George's r e m a r k s as t o t h e
p a r t i c u l a r c a s e of t h e K i n g s t o n B y - P a s s l a n d , t h e Chief V a l u e r
h a s informed m e :—
" There was no land purchased at £1,250 per acre which
was only w o r t h £300 p e r acre before t h e r o a d w a s t h o u g h t
of.
On t h e M e r t o n c o n n e c t i o n , t o w h i c h t h i s s t a t e m e n t is
specifically a p p l i e d , t h e t o t a l cost d i d n o t a v e r a g e a n y s u c h
s u m , a n d t h e t o t a l c o s t i n c l u d e d , inter alia, a h o u s e w o r t h
s o m e £ 3 , 0 0 0 , o c c u p y i n g a b o u t o n e - t h i r d of a n a c r e , a n d l a n d s
d e v o t e d t o p u b l i c p l a y i n g fields w h e r e t h e i n t e r f e r e n c e c a u s e d
b y s e v e r i n g p a r t of t h e l a n d f o r t h e c o n s t r u c t i o n of t h e r o a d
caused considerable d a m a g e . "
40. T h e l a n d s selling a t £1,800 a n d £600 a r e identified in t h e
1 9 2 9 P a m p h l e t , a n d a s t o t h e s e t h e Chief V a l u e r s t a t e s : —
" T h e b u i l d i n g sites w h i c h a r e being sold are n o t u p o n t h e
f r o n t a g e of t h e a r t e r i a l r o a d , b u t u p o n a n o t h e r e s t a t e r o a d
l a i d o u t a s p a r t of a s c h e m e of d e v e l o p m e n t b e f o r e t h e
a r t e r i a l r o a d w a s p r o j e c t e d . T h e s a l e of t h e s e p l o t s is p a r t
of t h e n o r m a l p r o c e s s of d e v e l o p m e n t of t h e e s t a t e a n d h a s
n o d i r e c t r e l a t i o n t o t n e c o n s t r u c t i o n of t h e a r t e r i a l r o a d . "
SECTION 2—REGIONAL PLANNING.
4 1 . T h e p r o p o s a l s i n t h i s s e c t i o n a s s u m e t h a t t h e r e a r e m a n y (Note b y t h e
a p p r o v e d r e g i o n a l p l a n s f o r w o r k s w h i c h c o u l d b e s t a r t e d a t a n ^^S^\
e a r l y d a t e a n d t h a t i t w o u l d b e of n a t i o n a l a d v a n t a g e if t h e
S t a t e e m b a r k e d , w i t h a special organisation, on a large scale on
t h e d e v e l o p m e n t of g a r d e n c i t i e s , s a t e l l i t e t o w n s a n d t h e l i k e .
T h e s e a s s u m p t i o n s d o n o t a c c o r d w i t h t h e r e a l i t i e s of t h e p r e s e n t
situation.
o f
4 2 . I t is well t o e x p l a i n a t t h e o u t s e t t h a t p l a n n i n g s c h e m e s
d o n o t t h e m s e l v e s p r o v i d e f o r t h e c a r r y i n g o u t of p u b l i c w o r k s .
T h e y set o u t t h e considered framework within which development,
p r i v a t e a n d p u b l i c , is t o p r o c e e d s o a s t o e n s u r e t h e b e s t i n t e r e s t s
of t h e c o m m u n i t y . A g o o d p l a n m u s t l o o k a h e a d , a t l e a s t 5 0 y e a r s .
Public works are intended to be carried out b y the Local Authorities
i n t h e o r d i n a r y c o u r s e of t h e i r d u t i e s , w h e n t h e t i m e is o p p o r t u n e
or, as a t p r e s e n t , w h e n a special e m e r g e n c y justifies a c c e l e r a t i o n .
T h u s , r o a d s (which a r e u s u a l l y t h e p r i n c i p a l p u b l i c w o r k s for
w h i c h e x p r e s s p r o v i s i o n is m a d e in s c h e m e s ) a r e c a r r i e d o u t a s
p a r t of t h e r o a d p r o g r a m m e , w i t h g r a n t s f r o m t h e M i n i s t r y of
Transport where warranted.
A g r e a t d e a l of w o r k s p e c i a l l y p u t
in h a n d for relieving u n e m p l o y m e n t h a s been d o n e a c c o r d i n g
to planning proposals.
O n e a d v a n t a g e of a d e f i n i t e p l a n i s t h a t
i t f a c i l i t a t e s a c o n s i d e r e d p r o g r a m m e of w o r k s .
4 3 . R e g i o n a l p l a n n i n g is c o m p a r a t i v e l y n e w .
Only one
regional s c h e m e h a s yet been s u b m i t t e d t o m y D e p a r t m e n t
f o r a p p r o v a l . I n a n u m b e r of c a s e s r e g i o n a l p r o p o s a l s h a v e b e e n
i n c o r p o r a t e d in t o w n (as d i s t i n c t from regional) p l a n n i n g s c h e m e s
o r in P r e l i m i n a r y S t a t e m e n t s ( o u t l i n e p r o p o s a l s p r e l i m i n a r y t o
t h e final s c h e m e , b u t e f f e c t i v e f o r c o n t r o l l i n g d e v e l o p m e n t ) a n d
i n o t h e r i n s t a n c e s w o r k s h a v e b e e n c a r r i e d o u t i n a n t i c i p a t i o n of
a s c h e m e ; b u t t h e r e is n o g r o u n d for s a y i n g t h a t 1 5 0 , 0 0 0 m e n
could b e e m p l o y e d w i t h i n a y e a r on a p p r o v e d regional p r o p o s a l s .
I t w i l l , of c o u r s e , b e a p p r e c i a t e d t h a t c a r e m u s t b e t a k e n t o
a v o i d c o u n t i n g t w i c e t h e e m p l o y m e n t c o n t r i b u t i o n of t h e c o n ­
s i d e r a b l e v o l u m e of w o r k w h i c h , a s is i n d i c a t e d a b o v e , is c a r r i e d
o u t in a c c o r d a n c e w i t h regional p l a n n i n g p r o p o s a l s , b u t a s a
p a r t of a r o a d , h o u s i n g o r o t h e r p r o g r a m m e .
4 4 . T h e w r i t e r s m a y h a v e in m i n d t h e r e p o r t s w h i c h h a v e b e e n
issued b y R e g i o n a l C o m m i t t e e s . B u t these reports a r e a d v i s o r y
o n l y ; t h e y a r e f a r f r o m c o m p l e t e d p l a n s , j u s t a s a s k e t c h is f a r
from being the completed picture ; proposals h a v e usually to be
far m o r e definite, m a n y negotiations h a v e to b e carried o u t a n d
w a y s a n d m e a n s f u l l y c o n s i d e r e d b e f o r e a final p l a n c a n b e p u t
forward.
T h e G o v e r n m e n t n o t o n l y c o n c u r i n t h e i m p o r t a n c e of r e g i o n a l
planning, b u t are actively pressing it. T h e Regional Committees
h a v e u s u a l l y b e e n i n i t i a t e d b y m y D e p a r t m e n t . M o s t of t h e m
a r e still a d v i s o r y , b u t t h e r e a r e in all 36 J o i n t C o m m i t t e e s which
a r e e x e c u t i v e , w i t h full p o w e r s t o p r e p a r e o p e r a t i v e p l a n s , a n d
e v e r y effort s h o u l d b e a n d will b e m a d e t o i n c r e a s e t h a t n u m b e r .
Garden Cities.
45.
before
served
cities.
policy
T h e G o v e r n m e n t would n o t hesitate to place proposals
P a r l i a m e n t if s a t i s f i e d t h a t t h e n a t i o n a l i n t e r e s t s w o u l d b e
b y e m b a r k i n g on a large s c h e m e for d e v e l o p i n g g a r d e n
It appears to the Government, however, that such a
c a n n o t possibly be justified a t t h e present t i m e .
4 6 . I t is n o u s e e s t a b l i s h i n g g a r d e n cities u n l e s s t h e r e is
reasonable a s s u r a n c e t h a t industries will b e a t t r a c t e d t o t h e m in
s u f f i c i e n t n u m b e r , f o r i t i s t h e e s s e n c e of a g a r d e n c i t y t h a t m o s t
of t h o s e w h o l i v e i n i t a l s o w o r k i n i t . T h e r e i s n o p r e s e n t g r o u n d
for a s s u m i n g t h a t i n d u s t r i e s c o u l d b e a t t r a c t e d in sufficient
n u m b e r t o new garden city sites, and the inducement has
b e e n r e d u c e d b y t h e d e r a t i n g p r o v i s i o n s of l a s t y e a r .
The
e x p e r i e n c e of W e l w y n i l l u s t r a t e s t h e d i f f i c u l t i e s of s e c u r i n g
t h e e s t a b l i s h m e n t of i n d u s t r i e s .
The Government
warmly
a d m i r e t h e a c h i e v e m e n t s a t L e t c h w o r t h a n d W e l w y n ( b o t h of
w h i c h , of c o u r s e , a r e a l s o p a r t l y d o r m i t o r y t o w n s ) a n d t h e y
h o p e t h a t t h e i r e x a m p l e will be copied (there are a l r e a d y s o m e
p o w e r s in t h e T o w n P l a n n i n g A c t for a i d i n g t h e e s t a b l i s h m e n t
of g a r d e n c i t i e s ) .
It has, however, t o be recognised t h a t t h e
d e v e l o p m e n t s a t t h e s e t w o g a r d e n c i t i e s i n t h e w a y of i n d u s t r y
a n d h o u s i n g u n d e r i m p r o v e d c o n d i t i o n s a r e b u t a s m a l l f r a c t i o n of
t h a t w h i c h h a s t a k e n place in r e c e n t y e a r s .
4 7 . T h e q u e s t i o n of t h e l o c a t i o n of i n d u s t r i e s h a s t o b e m u c h
m o r e t h o r o u g h l y c o n s i d e r e d b e f o r e a n y l a r g e e x t e n s i o n of g a r d e n
c i t i e s c a n b e e x p e c t e d , a n d t h a t q u e s t i o n m a y b e w o r t h y of a
special enquiry.
N o greater disservice could be rendered to the
c a u s e of g a r d e n c i t i e s a n d of r e g i o n a l p l a n n i n g , w h i c h i t i s s o
i m p o r t a n t t o foster, t h a n t o b r i n g t h e m into discredit b y u n d e r ­
taking costly developments without reasonable prospect t h a t
t h e y will b e used.
4 8 . T h e m e a s u r e i n w h i c h t h e c o s t s of e s t a b l i s h i n g a g a r d e n
c i t y o r t h e l i k e m a y b e m e t o u t of i n c r e m e n t s i n t h e v a l u e of
l a n d w i l l d e p e n d , of c o u r s e , u p o n t h e s u c c e s s of t h e v e n t u r e .
Satellite Towns.
49. I join in the desire for establishing satellite t o w n s ,
s e l f - c o n t a i n e d a n d n o t j u s t p r o l o n g a t i o n s of e x i s t i n g t o w n s ,
a n d I h o p e t h a t o n e r e s u l t of r e g i o n a l p l a n n i n g w i l l b e t o
encourage Local Authorities t o undertake such settlements.
T h e p o l i c y of t h e G o v e r n m e n t h a s b e e n t o r e l y o n L o c a l
A u t h o r i t i e s f o r t h e p u b l i c p r o v i s i o n of h o u s e s , a i d e d b y l i b e r a l
g r a n t s ; a n d t h e r e is n o c a s e f o r d e p a r t i n g f r o m t h i s p o l i c y ,
e s p e c i a l l y a t a t i m e w h e n t h e n e w H o u s i n g A c t is j u s t c o m i n g i n t o
operation, with enhanced E x c h e q u e r assistance and special
reference to slum clearance and i m p r o v e m e n t
of
housing
conditions.
50. H i t h e r t o L o c a l A u t h o r i t i e s , a c t i n g in c o n s o n a n c e w i t h t h e
v i e w s of t h e i r c o n s t i t u e n t s , h a v e u s u a l l y p l a c e d t h e i r h o u s i n g
schemes within or near to their own district and, however m u c h
one m a y regret t h a t m o r e e x p e r i m e n t h a s n o t b e e n m a d e in
satellite t o w n s , it cannot be gainsaid t h a t these schemes h a v e
p r o v i d e d excellent a c c o m m o d a t i o n w i t h general amenities far
surpassing pre-war conditions.
5 1 . T h e e s t a b l i s h m e n t of s a t e l l i t e t o w n s is n o t g e n e r a l l y a
m e a n s for r e h o u s i n g persons displaced b y s l u m clearances. These
p e r s o n s u s u a l l y c a n n o t afford t h e c o m b i n e d r e n t a n d t r a v e l l i n g
expenses (however m u c h it m i g h t be practicable t o reduce the
l a t t e r ) a n d often do n o t desire t o live far a w a y f r o m t h e i r w o r k ;
t o d o s o w o u l d b e h i g h l y i n c o n v e n i e n t f o r m a n y of t h e m u n d e r
present conditions.
I n d e e d , o n e of t h e difficulties n o w i s t h e
pressure brought to bear on Local Authorities and on m y Depart­
m e n t t o a l l o w r e h o u s i n g o n t h e c l e a r e d s i t e w h e n t h i s is n o t i n
t h e g e n e r a l i n t e r e s t , o r a l a r g e r a m o u n t of r e h o u s i n g o n t h e s i t e
t h a n s e e m s d e s i r a b l e . T h e e x t e n s i o n of p l a n n i n g p o w e r s t o a l r e a d y
developed areas, a much-needed reform which the Government
h a v e in m i n d , will help t o deal w i t h this p r o b l e m , a m o n g o t h e r s .
52. T h r e e o t h e r m a t t e r s n e e d t o b e b o r n e in m i n d — ( a ) for
p r o v i d i n g a d d i t i o n a l e m p l o y m e n t ( w h i c h is t h e m o r e i m m e d i a t e
c o n c e r n ) i t m a t t e r s l i t t l e w h e t h e r t h e h o u s i n g is p r o v i d e d o n
cleared a r e a s w i t h i n a t o w n , in g a r d e n s u b u r b s on its fringe, or
i n s a t e l l i t e t o w n s ( t h o u g h , of c o u r s e , t h e r e a r e o t h e r c o n s i d e r a t i o n s
w h i c h m a y m a k e o n e f o r m b e t t e r t h a n a n o t h e r ) ; (b) i t is l i k e l y
t h a t L o c a l A u t h o r i t i e s w i l l s l a c k e n t h e i r a c t i v i t i e s if t h e G o v e r n ­
m e n t i n t e r v e n e s w i t h s c h e m e s of i t s o w n ; a n d (c) t h e n e t r e s u l t
m i g h t w e l l b e t o r e d u c e t h e t o t a l a m o u n t of w o r k i n h a n d a t a n
e a r l y d a t e , a n d i t is n o w , a n d d u r i n g t h e c o m i n g w i n t e r , w h e n
u n e m p l o y m e n t i s s o h i g h b e c a u s e of w o r l d c o n d i t i o n s , t h a t a s
m u c h a d d i t i o n a l e m p l o y m e n t as possible should be given.
53. I t will b e a p p a r e n t from w h a t h a s b e e n a b o v e s t a f e d t h a t
n o c a s e i s s e e n f o r t h e e s t a b l i s h m e n t of s p e c i a l c e n t r a l m a c h i n e r y
in relation to these matters.
T h e r e s p o n s i b i l i t y i n r e s p e c t of
t h e m h a s been placed o n the Local Authorities, a n d it would seem
t h a t t h e s e n s i b l e C o u r s e is n o t t o i m p a i r o r c o n f u s e t h a t r e s p o n s i ­
b i l i t y b u t t o i n t e n s i f y t h e efforts w h i c h h a v e b e e n a n d a r e b e i n g
increasingly m a d e t o assist Local Authorities a n d to e x p a n d their
activities.
Site Values.
5 4 . T h e G o v e r n m e n t h e a r t i l y a g r e e t h a t p a r t of t h e c o s t of
p u b l i c i m p r o v e m e n t s s h o u l d b e m e t o u t of t h e i n c r e a s e d v a l u e
of p r o p e r t i e s d u e t o t h e i m p r o v e m e n t s .
Local Authorities already
have certain powers.
T h u s , i n t h e c a s e of a n e w r o a d , f r o n t a g e
l a n d m a y b e p u r c h a s e d a s w e U a s t h e l a n d r e q u i r e d for t h e r o a d
itself ( t h o u g h it w o u l d b e a m i s t a k e t o t h i n k t h a t it will a l w a y s
p a y t o d o t h i s ) . B e t t e r m e n t m a y b e c l a i m e d w h e r e t h e v a l u e of
p r o p e r t y is i n c r e a s e d b y t h e p r o v i s i o n s of a t o w n p l a n n i n g s c h e m e ,
b u t a t p r e s e n t only t o one-half t h e a m o u n t .
I n c r e a s e of t h i s
p r o p o r t i o n is u n d e r c o n s i d e r a t i o n i n r e l a t i o n t o t h e f o r t h c o m i n g
a m e n d i n g legislation on t o w n planning.
5 5 . I n p r a c t i c e , b e t t e r m e n t is n o t e a s y t o o b t a i n , a n d t h e
p r i n c i p a l a d v a n t a g e of t h e p r e s e n t p o w e r is a s a w e a p o n of
bargaining.
T h e G o v e r n m e n t consider t h a t there s h o u l d be m o r e
d i r e c t p o w e r s t o e n a b l e L o c a l A u t h o r i t i e s t o l e v y a f a i r p a r t of
t h e c o s t of a p u b l i c i m p r o v e m e n t on p r o p e r t i e s w h i c h c a n b e s h o w n
t o b e benefited, a n d t h e y h a v e it in m i n d in their p l a n n i n g
l e g i s l a t i o n t o i n c l u d e p r o p o s a l s for t h i s p u r p o s e — a s well as t o
e n l a r g e t h e p o w e r s of L o c a l A u t h o r i t i e s t o c o n t r o l f r o n t a g e
development.
Scottish Regional Development.
5 6 . I c o n c u r g e n e r a l l y i n t h e M i n i s t e r of H e a l t h ' s M e m o r a n d u m ( o
y the
1
o n t h e s e s u b j e c t s . S o f a r a s S c o t l a n d is c o n c e r n e d t h e M i n i s t e r f ^ f o ?
of H e a l t h ' s a r g u m e n t s a p p l y w i t h e v e n g r e a t e r f o r c e b e c a u s e : —
Scotland.)
(1) R e g i o n a l P l a n n i n g S c h e m e s i n S c o t l a n d a r e e v e n l e s s
advanced t h a n in England.
N
t e b
0 f
(2) I n S c o t l a n d t h e r e h o u s i n g of s l u m t e n a n t s is s e l d o m
u n d e r t a k e n on t h e cleared site. T h e a p p e n d e d notes deal
w i t h these t w o special points.
5 7 . R e g i o n a l p l a n n i n g i n S c o t l a n d is s t i l l i n a v e r y e a r l y s t a g e
of p r o g r e s s .
Only t w o regional planning m a p s h a v e yet been
p r e p a r e d . T h e s e a r e v e r y t e n t a t i v e in t h e i r n a t u r e , a n d , so far,
d e a l o n l y w i t h t h e q u e s t i o n of f u t u r e r o a d s a n d r o a d w i d e n i n g s .
These roads are designed to provide adequate and convenient
s y s t e m s of t h r o u g h c o m m u n i c a t i o n i n t h e a r e a s t o w h i c h t h e y
refer, a n d i t is i n t e n d e d t h a t t h e y s h o u l d b e c o n s t r u c t e d a s
o c c a s i o n a r i s e s i n t h e n o r m a l c o u r s e of d e v e l o p m e n t .
The
(1848C)
L
e s t a b l i s h m e n t of n e w c e n t r e s of p o p u l a t i o n a n d t h e a l l o c a t i o n of
d e f i n i t e a r e a s f o r d i f f e r e n t t y p e s of d e v e l o p m e n t h a s n o t y e t
b e e n considered, a n d regional schemes in Scotland could, therefore,
s u p p l y n o d a t a w h i c h w o u l d b e of u s e t o t h e s u g g e s t e d D e v e l o p m e n t
B o a r d i n c o n s i d e r i n g t h e q u e s t i o n of u n d e r t a k i n g i m m e d i a t e
w o r k s t o a s s i s t t h e g r o w t h of n e w r e s i d e n t i a l o r i n d u s t r i a l a r e a s .
5 8 . W i t h r e g a r d t o t h e effect of r e h o u s i n g s c h e m e s o n t h e
c o n g e s t e d a r e a s i n t o w n s , i t s h o u l d b e m a d e c l e a r t h a t i t is o n l y
in e x c e p t i o n a l cases t h a t displaced t e n a n t s in Scottish s l u m
clearance schemes are rehoused on t h e cleared site. These sites
are usually utilised as open spaces (thereby ventilating the area)
or for business p u r p o s e s . D i s p l a c e d t e n a n t s a r e g e n e r a l l y r e h o u s e d
a w a y from t h e s l u m a r e a s on virgin sites, laid o u t so as t o p r o v i d e
a d e q u a t e fresh air, g a r d e n s a n d open spaces. E d i n b u r g h ' s latest
r e h o u s i n g s c h e m e , f o r i n s t a n c e , i n v o l v i n g 1,600 h o u s e s , i s b e i n g
c a r r i e d o u t o n a s i t e s o m e f o u r m i l e s f r o m t h e c e n t r e of t h e c i t y .
S c o t t i s h L o c a l A u t h o r i t i e s d o n o t , as a rule, h a v e a n y difficulty
i n finding o p e n a n d h e a l t h y s i t e s w i t h i n t h e i r o w n a d m i n i s t r a t i v e
a r e a , a n d t h e y c o u l d n o t b e i n d u c e d t o b u i l d h o u s e s in n e w
c e n t r e s of p o p u l a t i o n o u t s i d e t h e i r o w n a r e a , u n l e s s v e r y
e x c e p t i o n a l financial i n d u c e m e n t w a s p r o v i d e d .
SECTION 3.-TELEPHONE DEVELOPMENT.
(Note by the
5 9 . T h e o r i g i n a l t e l e p h o n e p r o g r a m m e in t h e p a m p h l e t " W e
Postmasterc o n q u e r u n e m p l o y m e n t " a s s u m e d a n e x p a n s i o n of 3 0 0 , 0 0 0
General.)
t e l e p h o n e s p e r a n n u m f o r a p e r i o d of five y e a r s a s c o m p a r e d w i t h
t h e c u r r e n t r a t e of i n c r e a s e of 1 2 5 , 0 0 0 ; o n t h i s b a s i s i t w a s
e s t i m a t e d t h a t c a p i t a l e x p e n d i t u r e of s o m e £ 5 0 , 0 0 0 , 0 0 0 w o u l d b e
r e q u i r e d d u r i n g t h e five y e a r s o v e r a n d a b o v e t h e p r e s e n t c a p i t a l
p r o g r a m m e s (£10,000,000 a year), a n d t h a t e m p l o y m e n t would
t h e r e b y b e p r o v i d e d for 60,000 persons.
Various calculations
were included in the p a m p h l e t purporting t o show t h a t this
expenditure would be a sound investment and, indeed, would
yield a profit.
c
a
n
Expansion of Construction Programme.
6 0 . I n t h e r e v i s e d L i b e r a l p r o p o s a l s a n e t i n c r e a s e of 3 0 0 , 0 0 0
t e l e p h o n e s p e r a n n u m i s s t i l l a s s u m e d t o b e o b t a i n a b l e a n d is
relied u p o n in t h e concluding s u m m a r y t o give e m p l o y m e n t
t o t h e s a m e n u m b e r of m e n , i.e., 6 0 , 0 0 0 . N o f u r t h e r m e n t i o n
i s m a d e of t h e
finance
of t h e s c h e m e e x c e p t t h e s o m e w h a t
s i g n i f i c a n t r e m a r k ( p a g e 103) t h a t " t e l e p h o n e d e v e l o p m e n t w i l l
o v e r a s u f f i c i e n t p e r i o d b e o n a self s u p p o r t i n g b a s i s . "
6 1 . I t h a s b e e n p o i n t e d o u t b y t h e P o s t Office i n p r e v i o u s
memoranda that the telephone system supplemented by annual
p r o g r a m m e s o n t h e e x i s t i n g scale is n o t o n l y sufficient b o t h for
p r e s e n t r e q u i r e m e n t s a n d for d e v e l o p m e n t o n t h e s c a l e r e a l i s e d
i n r e c e n t y e a r s , i.e., 1 2 5 , 0 0 0 a d d i t i o n a l t e l e p h o n e s p e r a n n u m ,
b u t t h e r e is i n f a c t a s u b s t a n t i a l m a r g i n of p l a n t in situ w h i c h
w o u l d suffice t o c a r r y a c o n s i d e r a b l y l a r g e r a n n u a l i n t a k e of
n e w subscribers.
F o r e x a m p l e , if t h e a n n u a l i n c r e a s e w e r e
t o rise f r o m 125,000 t o 150,000, it w o u l d b e a t l e a s t t w o y e a r s before
a n y appreciable addition in capital e x p e n d i t u r e would b e necessary.
T h e Liberal representatives do not apparently contest this
conclusion b u t argue t h a t —
(1) b y i m p r o v e d
be brought u p from
(2) t h a t a v a s t
i m m e d i a t e l y p u t in
will b e realised.
salesmanship the a n n u a l intake could
125,000 t o 3 0 0 , 0 0 0 p e r a n n u m ;
p r o g r a m m e of c o n s t r u c t i o n s h o u l d b e
h a n d in the h o p e t h a t this expectation
6 2 . T o t a k e t h e s e c o n d p o i n t first, it i s o b v i o u s l y t h e p r i m a r y
of e v e r y t e l e p h o n e a d m i n i s t r a t i o n to p r o v i d e s u f f i c i e n t
p l a n t t o e n a b l e n e w o r d e r s to be e x e c u t e d w i t h o u t d e l a y , but it
i s . a l s o t h e i r a i m t o k e e p t h e m a r g i n of s p a r e p l a n t a s s m a l l a s
p o s s i b l e c o n s i s t e n t l y with a b i l i t y to p r o v i d e s e r v i c e .
The
duty
p r e m a t u r e c o n s t r u c t i o n of p l a n t w h i c h w o u l d r e m a i n i d l e a n d
therefore n o n - r e v e n u e earning imposes a serious b u r d e n on t h e
f i n a n c e of t h e s e r v i c e a n d m u s t u l t i m a t e l y l e a d t o i n c r e a s e d
c h a r g e s t o t h e u s e r s o r , a l t e r n a t i v e l y , t o t h e p o s t p o n e m e n t of
reductions which would otherwise b e possible.
T h e policy
p u r s u e d b y t h e P o s t Office a n d b y a l l m o d e r n t e l e p h o n e a d m i n i s ­
t r a t i o n s is t o b a s e i t s c o n s t r u c t i o n p r o g r a m m e s u p o n d e t a i l e d
s u r v e y s of e a c h i n d i v i d u a l e x c h a n g e a r e a . O n t h e b a s i s of t h e s e
s u r v e y s f o r e c a s t s of t h e p r o s p e c t i v e r e q u i r e m e n t s for s o m e
20 years ahead are prepared a n d periodically corrected, and the
p r o v i s i o n of p l a n t is r e g u l a t e d a c c o r d i n g t o t h e l o c a l r e q u i r e m e n t s
as indicated b y t h e m o s t recent forecasts.
63. No evidence has b e e n submitted in the Liberal Memoranda
o r b y L i b e r a l r e p r e s e n t a t i v e s i n s u p p o r t of t h e i r c o n t e n t i o n
t h a t a n i n c r e a s e of 3 0 0 , 0 0 0 s u b s c r i b e r s p e r a n n u m i s p r a c t i c a b l e .
I t a p p e a r s t o b e a p u r e l y c o n j e c t u r a l figure b a s e d u p o n t h e
r e a l i s e d d e v e l o p m e n t in c e r t a i n foreign c o u n t r i e s w h e r e c o n d i t i o n s
a r e in m a n y r e s p e c t s e n t i r e l y different.
No commercial under­
taking would embark upon enormous capital commitments
w i t h o u t a d e t a i l e d a n d s c i e n t i f i c e x a m i n a t i o n of t h e p o s s i b i l i t i e s
of d e v e l o p m e n t , a n d t h e r e is i n f a c t a c o n s i d e r a b l e q u a n t i t y of
d a t a in existence w h i c h indicate t h a t expansion on a n y t h i n g
a p p r o a c h i n g t h i s s c a l e is a t p r e s e n t u n o b t a i n a b l e .
6 4 . If a c o n s t r u c t i o n p r o g r a m m e of t h e m a g n i t u d e s u g g e s t e d
w e r e p u t i n h a n d a n d t h e o p t i m i s t i c f o r e c a s t s of d e m a n d f a i l e d
to materialise, the results would be disastrous.
The telephone
s e r v i c e w o u l d b e s a d d l e d w i t h c a p i t a l c h a r g e s for i n t e r e s t a n d
d e p r e c i a t i o n o n p l a n t w h i c h w o u l d b e l y i n g i d l e of s o m e £ 5 , 0 0 0 , 0 0 0
p e r a n n u m which w o u l d h a v e to b e m e t either b y t h e t a x - p a y e r or,
m o r e p r o b a b l y , b y t h e t e l e p h o n e u s e r i n t h e f o r m of a n i n c r e a s e d
t a r i f f — a c o n s e q u e n c e w h i c h w o u l d in itself t e n d t o r e s t r i c t t h e
service a n d to strangle further development.
Moreover, while
a p r o g r a m m e of t h e s e d i m e n s i o n s w o u l d o b v i o u s l y g i v e a n i m m e n s e
fillip t o i n d u s t r i e s d e p e n d i n g d i r e c t l y o r i n d i r e c t l y o n t e l e p h o n e
o r d e r s , p r o d u c t i o n c a n n o t p e r m a n e n t l y o u t r u n d e m a n d , a n d if t h e
d e m a n d f e l l s e r i o u s l y s h o r t of e x p e c t a t i o n s , c o n s t r u c t i o n w o u l d
h a v e t o b e s t o p p e d a t t h e c o n c l u s i o n of t h e five-year p e r i o d , o r
m o r e probably, before. T h e disorganisation a n d h a r d s h i p in t h e
i n d u s t r i e s a f f e c t e d c a n e a s i l y b e i m a g i n e d if a n a n n u a l e x p e n d i t u r e
of a b o u t £ 2 0 , 0 0 0 , 0 0 0 w e r e s u d d e n l y t e r m i n a t e d ; t h e G o v e r n m e n t
w o u l d b e o p e n t o t h e a c c u s a t i o n of h a v i n g i n d u c e d a s e v e r e s l u m p
i n t h e t r a i n of a n a r t i f i c i a l l y p r o d u c e d b o o m .
6 5 . A s r e g a r d s t h e p o s s i b i l i t i e s of s e c u r i n g a n i m m e d i a t e a n d
s p e c t a c u l a r e x p a n s i o n in t e l e p h o n e d e v e l o p m e n t , t h e following
facts should be b o r n e in m i n d :—
(a) I n o r d e r t o m a i n t a i n a n e t a n n u a l i n c r e a s e of 1 2 5 , 0 0 0
t e l e p h o n e s , i t is a t p r e s e n t n e c e s s a r y t o s e c u r e s o m e 2 6 5 , 0 0 0
n e w o r d e r s p e r a n n u m , i.e., 1 4 0 , 0 0 0 t e l e p h o n e s a r e f o r o n e
reason or a n o t h e r surrendered.
To maintain a net annual
i n c r e a s e of 3 0 0 , 0 0 0 t e l e p h o n e s , a b o u t 7 0 0 , 0 0 0 n e w o r d e r s p e r
a n n u m would be required.
(b) P r a c t i c a l l y a l l b u s i n e s s h o u s e s a n d m o s t
private
r e s i d e n c e s of a n y a p p r e c i a b l e s i z e a r e a l r e a d y e q u i p p e d a n d
t h e field of d e v e l o p m e n t i s t h e r e f o r e i n t h e m a i n l i m i t e d t o t h e
smaller shops a n d houses, etc.
As t h e telephone service
e x t e n d s a m o n g a l o w e r s t r a t u m of t h e p o p u l a t i o n t o w h o m i t s
v a l u e is l i m i t e d , t h e r a t i o of c e s s a t i o n s m u s t b e e x p e c t e d t o
i n c r e a s e . T h i s f a c t o r h a s i n fact a l r e a d y b e e n m a k i n g itself
felt i n r e c e n t y e a r s .
(c) D u r i n g t i m e s of i n d u s t r i a l s t a g n a t i o n t h e t e l e p h o n e i s
o f t e n o n e of t h e first i t e m s s e l e c t e d f o r r e t r e n c h m e n t , a n d i n
t h e p a s t y e a r it h a s b e e n f o u n d t h a t in a r e a s suffering m o s t
from u n e m p l o y m e n t the cessations practically balance the new
orders obtained.
T h e p r e s e n t i n d u s t r i a l d e p r e s s i o n is a
particularly unfavourable time to expect an unprecedented
increase in business, however active the canvassing organisa­
tion m a y be.
(d) T h e d e v e l o p m e n t of t h e t e l e p h o n e s e r v i c e i n f o r e i g n
countries varies widely. In N o r t h America a n d the Scandi­
navian States t h e telephone habit h a s grown m u c h faster
t h a n i n t h e r e s t of E u r o p e , b u t t h e r e a r e m a n y c o u n t r i e s , s u c h
a s F r a n c e , B e l g i u m , a n d H o l l a n d , w h e r e t h e d e v e l o p m e n t is of
slower g r o w t h t h a n in Great Britain.
E v e n in G e r m a n y ,
where the development
figures
are fairly high, t h e n e t
e x p a n s i o n i n 1 9 2 8 ( t h e l a s t y e a r f o r w h i c h figures a r e a v a i l a b l e )
w a s o n l y 135,000, while in F r a n c e it d i d n o t e x c e e d 82,000.
A p a r t f r o m t h e U n i t e d S t a t e s , t h e e x p e r i e n c e of f o r e i g n
countries gives no support to the suggestion t h a t a n e t
i n c r e a s e of 3 0 0 , 0 0 0 p e r a n n u m i n G r e a t B r i t a i n is p r a c t i c a b l e .
Sales Organisation.
66. T h e Liberal proposals obviously d e p e n d upon t h e results
of t h e m o r e e l a b o r a t e s a l e s o r g a n i s a t i o n w h i c h t h e y a d v o c a t e .
T h e P o s t Office o r g a n i s a t i o n , w h i c h i s c r i t i c i s e d a s i n a d e q u a t e ,
r e l i e s m a i n l y u p o n p e r s o n a l c a n v a s s i n g b y a b o d y of a b o u t 6 5 0
f u l l - t i m e officers d i s t r i b u t e d t h r o u g h o u t t h e l e n g t h a n d b r e a d t h
of t h e c o u n t r y . T h e e f f o r t s of t h e s e c a n v a s s e r s a r e s u p p l e m e n t e d
b y t h e e x h i b i t i o n of p o s t e r s a n d t h e d i s t r i b u t i o n of l e a f l e t s , e t c .
T h e total cost comes to about £250,000 per a n n u m , representing
a p p r o x i m a t e l y a c o s t of £ 1 f o r e a c h n e w o r d e r o b t a i n e d .
6 7 . T h e p o l i c y w h i c h t h e t e l e p h o n e s e r v i c e s h o u l d p u r s u e is
described in t h e Liberal M e m o r a n d u m as " t o persuade t h e
g r e a t e s t p o s s i b l e n u m b e r of p e r s o n s t o i n s t a l t e l e p h o n e s a n d
t o p e r s u a d e t h e m t o m a k e t h e f u l l e s t p o s s i b l e u s e of t h e m , a n d
b y a d o p t i n g t h e m o s t efficient m e t h o d s t o f a c i l i t a t e t h e s a l e
of t e l e p h o n e s b y r e n d e r i n g t h e s e r v i c e a s p e r f e c t a s p o s s i b l e a n d
s u p p l y i n g it a t t h e lowest possible r a t e . " As a b r o a d s t a t e m e n t
of p o l i c y t h i s w o u l d p r o b a b l y s e c u r e u n i v e r s a l a s s e n t . B u t t h e r e
a r e m a t e r i a l d i f f e r e n c e s b e t w e e n t h e s a l e of t e l e p h o n e s e r v i c e
a n d t h e s a l e of a n o r d i n a r y c o m m o d i t y .
T h e v e n d o r of a
c o m m o d i t y u s u a l l y derives a profit f r o m each article sold a n d ,
w h a t is still m o r e i m p o r t a n t , b y i n c r e a s i n g h i s t u r n o v e r h e c a n
c u t d o w n t h e c o s t of p r o d u c t i o n a n d , i n p a r t i c u l a r , t h e o v e r h e a d
c h a r g e s . F o r t h i s r e a s o n it p a y s h i m w e l l t o s p e n d l a r g e s u m s o n
a d v e r t i s i n g h i s w a r e s , m o r e e s p e c i a l l y w h e n h e is i n c o m p e t i t i o n
with other producers. T h e telephone service, on the other h a n d ,
i s r u n o n a b a r e m a r g i n of p r o f i t a n d , s p e a k i n g g e n e r a l l y , e x p a n s i o n
d o e s n o t c a r r y w i t h it a r e d u c t i o n in c o s t s ; in fact, t h e e x p e r i e n c e
of t h e U n i t e d S t a t e s , w h e r e d e v e l o p m e n t i s h i g h e s t , i n d i c a t e s
t h a t a s t h e s y s t e m e x t e n d s t h e c o s t of p r o v i d i n g s e r v i c e t e n d s t o
i n c r e a s e , a n d it is for t h i s r e a s o n t h a t t h e A m e r i c a n tariffs h a v e
h a d to b e raised on m o r e t h a n one occasion in recent years.
It
follows t h a t t h e a m o u n t t h a t c a n b e wisely s p e n t o n a d v e r t i s i n g
a n d s a l e s m a n s h i p is l i m i t e d a n d r e q u i r e s t o b e c l o s e l y w a t c h e d .
A d v e r t i s i n g e x p e n d i t u r e is a d i r e c t c h a r g e a g a i n s t t h e r e v e n u e
of t h e u n d e r t a k i n g a n d i s n o t r e c o v e r a b l e b y s a v i n g s i n c o s t s
a t t r i b u t a b l e to it.
6 8 . M e n t i o n i s m a d e i n t h e L i b e r a l M e m o r a n d u m of c e r t a i n
e x p e r i m e n t s of i n t e n s i v e c a n v a s s i n g w h i c h y i e l d e d a n e t r e s u l t
of 2 0 0 l i n e s o v e r t h e n o r m a l g r o w t h a t a c o s t of t h e e q u i v a l e n t
of f o u r m e n ' s w o r k f o r o n e y e a r .
The Memorandum observes
t h a t t h i s r e p r e s e n t s a n i n c r e a s e i n b u s i n e s s of 1 2 5 p e r c e n t . , b u t
i t o m i t s t o p o i n t o u t t h a t t h e c o s t of o b t a i n i n g t h e s e a d d i t i o n a l
lines would b e s o m e w h e r e a b o u t £7 p e r line, or m o r e t h a n e q u a l
t o a w h o l e y e a r ' s r e n t a l . T o o b t a i n a g r o s s i n c r e a s e of 7 0 0 , 0 0 0
telephones per a n n u m would at this rate entail an annual
e x p e n d i t u r e u p o n c a n v a s s i n g a n d p u b l i c i t y of a n
entirely
prohibitive
figure.
6 9 . T h e P o s t Office p u b l i c i t y s t a f f h a s , i n fa*ct, b e e n l a r g e l y
i n c r e a s e d in r e c e n t y e a r s a n d is n o w s o m e 5 0 p e r cent, l a r g e r t h a n
it was three years ago. At any one time the canvassers have
r e c o r d s of s o m e 5 0 0 , 0 0 0 u n s u c c e s s f u l i n t e r v i e w s u p o n t h e i r
b o o k s , a n d i t i s b e l i e v e d t h a t t h e field i s f a i r l y w e l l c o v e r e d .
But
i t is t h e r e g u l a r p r a c t i c e t o e x p e r i m e n t i n s e l e c t e d a r e a s e i t h e r b y
i n t e n s i v e c a n v a s s i n g o r b y v a r i o u s f o r m s of p u b l i c i t y a n d
a d v e r t i s e m e n t , a n d t o a d o p t for m o r e g e n e r a l a p p l i c a t i o n t h o s e
which yield t h e m o s t successful results.
O p i n i o n s m a y differ
as to t h e a m o u n t which can usefully be e x p e n d e d o n advertising,
b u t it seems certain t h a t a n y expenditure which t h e service
could carry would not produce the startling results which t h e
Liberal proposals visualise.
O n t h e o t h e r h a n d , t h e r e is n o
d o u b t m u c h t o b e s a i d f o r t h e p o l i c y of d e v o t i n g a n y s u r p l u s
w h i c h m a y b e a v a i l a b l e t o t h e r e d u c t i o n of c h a r g e s m a d e t o t h e
p u b l i c w h i c h i s c e r t a i n l y t h e m o s t p r o m i s i n g m e a n s of a t t r a c t i n g
a larger clientele.
New Public Corporation.
70. T h e Liberal P r o g r a m m e concludes with a proposal t h a t
t h e t e l e p h o n e s e r v i c e s h o u l d b e d i v o r c e d f r o m t h e P o s t Office
o r g a n i s a t i o n a n d w h i l e r e m a i n i n g , u n d e r t h e c o n t r o l of t h e P o s t ­
master General should, be given an independent position s o m e w h a t
similar to t h a t occupied b y the Central Electricity Board or t h e
B . B . C . T h e s c h e m e is n o t d e v e l o p e d i n a n y d e t a i l a n d i t i s n o t
v e r y c l e a r w h a t t h e a u t h o r s h a v e in m i n d .
I t is a p p a r e n t l y
contemplated that the Postmaster General should continue to b e
d i r e c t l y r e s p o n s i b l e for t h e r e m a i n i n g P o s t Office s e r v i c e s , b u t
t h a t as regards the telephones he would n o t encroach u p o n t h e
i n d e p e n d e n c e of w h a t e v e r b o d y w a s p l a c e d i n i m m e d i a t e c h a r g e .
I n v i e w of t h e i m p o r t a n c e of t h e t e l e p h o n e s e r v i c e i n t h e s y s t e m
of n a t i o n a l c o m m u n i c a t i o n s , i t s e e m s q u e s t i o n a b l e w h e t h e r e i t h e r
P a r l i a m e n t or t h e p u b l i c w o u l d a c q u i e s c e in its b e i n g , for p r a c t i c a l
p u r p o s e s , r e m o v e d from P a r l i a m e n t a r y control, or w o u l d forego
t h e r i g h t of v e n t i l a t i n g t h e i r g r i e v a n c e s i n t h e H o u s e of C o m m o n s .
T h e Postmaster General would either h a v e to occupy the position
of b e i n g m e r e l y t h e m o u t h p i e c e of t h e C o r p o r a t i o n r e s p o n s i b l e
f o r t h e s e r v i c e , o r if h e t o o k a n y a c t i v e p a r t i n a d m i n i s t r a t i o n , h e
w o u l d b e o p e n t o t h e c h a r g e of f e t t e r i n g t h e d i s c r e t i o n of a b o d y
which was intended to be independent.
The telephone service
e m p l o y s a l a r g e staff a n d it is e x t r e m e l y i m p r o b a b l e t h a t t h e y
w o u l d f o r e g o t h e r i g h t of a p p e a l t o t h e r e s p o n s i b l e M i n i s t e r .
7 1 . I t i s n o t c l e a r w h y t h e t e l e p h o n e s s h o u l d b e s e l e c t e d for
special t r e a t m e n t , while the postal, telegraph and other services
a d m i n i s t e r e d b y t h e D e p a r t m e n t a r e t o b e left as t h e y s t a n d .
T h e p o s t a l a n d t e l e g r a p h services p r e s e n t e q u a l l y difficult a n d
i n s o m e r e s p e c t s c o g n a t e p r o b l e m s of a d m i n i s t r a t i o n , a n d f r o m a
n a t i o n a l p o i n t of v i e w t h e y a r e of n o l e s s i m p o r t a n c e .
Moreover,
t h e p r a c t i c a l d i f f i c u l t i e s of s e p a r a t i o n w o u l d b e i m m e n s e . T o t a k e
only one e x a m p l e , t h e telegraph and telephone wires are carried
on the s a m e poles and in the same u n d e r g r o u n d cables a n d their
m a i n t e n a n c e a n d c o n s t r u c t i o n m u s t o b v i o u s l y b e i n t h e h a n d s of a
single engineering organisation.
If t h e t e l e p h o n e s e r v i c e w e r e
transferred to a n independent body, it would probably be found
i n e v i t a b l e t h a t t h e t e l e g r a p h service s h o u l d g o w i t h it. T h i s a g a i n
w o u l d i n v o l v e f u r t h e r difficulties.
The telegraph and postal
services a r e w o r k e d , in all e x c e p t t h e l a r g e s t t o w n s , to a l a r g e
e x t e n t b y a c o m m o n s t a f f ; t o c r e a t e a s e p a r a t e t e l e g r a p h staff
w o u l d e n t a i l h e a v y i n c r e a s e of c o s t ; t o m a i n t a i n a c o m p a c t
staff t h r o u g h o u t t h e c o u n t r y w o r k i n g u n d e r t w o s e p a r a t e a d m i n i s ­
trative organisations would m e a n t h a t each m a n would be serving
t w o m a s t e r s a n d t h a t one or o t h e r a d m i n i s t r a t i o n w o u l d b e
d e p r i v e d of o n e of i t s m o s t e s s e n t i a l f u n c t i o n s — t h e c o n t r o l of
i t s o w n e m p l o y e e s . F i n a l l y , e v e n if t h e s e r v i c e s w e r e a d m i n i s t r a ­
t i v e l y d i s t i n c t t h e y w o u l d n e c e s s a r d y h a v e t o function in close
c o r r e l a t i o n w i t h e a c h o t h e r a n d w o u l d h a v e p o i n t s of c o n t a c t a n d
p o s s i b l y friction all o v e r t h e c o u n t r y .
T h e only co-ordinating
a u t h o r i t y would b e t h e P o s t m a s t e r General himself, w h o s e position
vis-d-vis
the independent authority would b e , a delicate one and
whose P a r l i a m e n t a r y and political duties would, in a n y event,
l e a v e h i m i n s u f f i c i e n t t i m e t o a s s u m e t h e d u t i e s of a G e n e r a l
Manager.
SECTION 4-ELECTRICAL DEVELOPMENT.
(Note b y the
72. I n general t h e Electricity Commissioners, w h o m I have
Minister of
consulted a n d w i t h whose views I concur, agree w i t h t h e view
ranspor .) ^ ^. f
j t h a t a m o r e c o m p r e h e n s i v e a n d vigorous selling
p o l i c y b y t h e u n d e r t a k e r s is r e q u i r e d .
While there are certain
m i n o r p o i n t s in t h e M e m o r a n d u m o n which t h e Commissioners
m i g h t offer c r i t i c i s m , t h e y o n l y c o n s i d e r it n e c e s s a r y t o c a l l
a t t e n t i o n to the following m a j o r points.
n
o r w a r (
7 3 . A s t o t h e " r e c e n t a c h i e v e m e n t s of t h e C o m m i s s i o n a n d
B o a r d " it m a y be r e m a r k e d t h a t t h e original Liberal proposals
u n d e r - e s t i m a t e d t h e a m o u n t t h a t w a s actually being spent on
distribution, a s s u m i n g t h a t it w a s only a b o u t £6,000,000 per
a n n u m , a n d s u g g e s t e d a n a c c e l e r a t i o n of £ 1 2 , 0 0 0 , 0 0 0 a y e a r ,
g i v i n g a t o t a l of £ 1 8 , 0 0 0 , 0 0 0 ; w h e r e a s t h e f i g u r e f o r t h e y e a r
e n d i n g M a r c h 31st, 1929, w a s £17,000,000, a n d f r o m a n ex­
a m i n a t i o n of a b o u t h a l f t h e r e t u r n s of a u t h o r i s e d u n d e r t a k e r s
i t is r e a s o n a b l e t o a s s u m e t h a t t h e s a m e t o t a l w a s r e a c h e d f o r
t h e y e a r e n d i n g 31st March, 1930.
74. I n a circular which the Commissioners sent out at m y
r e q u e s t o n t h e 15th N o v e m b e r , 1929, t h e y e s t i m a t e d t h a t o v e r
£100,000,000 would be spent on transmission a n d distribution
s y s t e m s i n t h e n e x t 5 y e a r s , t h a t i s , a n a v e r a g e e x p e n d i t u r e of
£20,000,000 a year ; a n d a d d e d t h a t in their opinion a considerable
p e r c e n t a g e of t h i s c o u l d b e a c c e l e r a t e d s o a s t o f a l l w i t h i n t h e
next 2 years without throwing a n y unreasonable burden on the
industry.
T h e y see n o reason to alter t h e opinion expressed a
y e a r a g o a n d o n t h i s b a s i s t h e y a r e of o p i n i o n t h a t t h e i n d u s t r y
can reasonably spend at least another £3,000,000 under those
heads a n d p r o b a b l y considerably more in addition to t h e
£17,000,000 which t h e y spent last year.
Control of Retailer.
7 5 . W i t h r e g a r d t o t h e " C o n t r o l of t h e R e t a i l e r " w h i l e i t i s
t r u e t h a t t h e C o m m i s s i o n e r s h a v e in p r a c t i c e little effective
m e a n s of i n d u c i n g e s t a b l i s h e d u n d e r t a k i n g s t o e m b a r k o n a
p r o g r e s s i v e p o l i c y of c a p i t a l d e v e l o p m e n t , t h e y h a v e p o w e r s
r e q u i r i n g s o m e of t h e n e w l a r g e u n d e r t a k i n g s o p e r a t i n g o v e r
w i d e a r e a s t o s u b m i t p r o p o s a l s of d e v e l o p m e n t t o t h e m f r o m
t i m e t o t i m e a n d a n o t e of t h e p r o p o s a l s r e c e n t l y a p p r o v e d
is a p p e n d e d .
(Appendix III.)
Tariffs.
7 6 . T h e R e p o r t of t h e r e c e n t C o m m i t t e e o n T a r i f f s , a p p o i n t e d
b y t h e Commissioners, r e c o m m e n d s t h a t all s u p p l y authorities
s h o u l d h a v e p r e s s e d u p o n t h e m t h e a d v a n t a g e s of a " t w o - p a r t "
tariff.
This principle has been a d o p t e d b y the Commissioners,
who have pressed a n d are continuing to press, undertakers to
a d o p t a t a r i f f of t h i s n a t u r e w h e r e o n e i s n o t a l r e a d y i n f o r c e .
T h e C o m m i t t e e f u r t h e r r e p o r t t h a t of t h e s e v e r a l f o r m s of
t w o - p a r t tariff i n force a p a r t i c u l a r o n e s h o u l d b e r e c o m m e n d e d
for universal use. T h i s r e c o m m e n d a t i o n does not c a r r y with it
t h e u n a n i m o u s s u p p o r t of t h e p r o g r e s s i v e p a r t of t h e i n d u s t r y
a n d the Commissioners consider t h a t further technical examination
will b e necessary before t h e y c a n urge u n d e r t a k e r s t o c h a n g e
t h e t w o - p a r t tariffs a l r e a d y in e x i s t e n c e t o t h e p a r t i c u l a r s y s t e m
r e c o m m e n d e d b y the Committee. This does not, however, interfere
w i t h t h e i r g e n e r a l p o l i c y of p r e s s i n g u p o n e v e r y u n d e r t a k e r t h e
a d o p t i o n of s o m e t w o - p a r t tariff w h e r e o n e d o e s n o t e x i s t .
Assisted Wiring.
77. T h e Commissioners in their circular letter already referred
t o u r g e d t h e a d o p t i o n b y u n d e r t a k e r s of a s s i s t e d w i r i n g a n d of
e x t e n d e d f a c i l i t i e s f o r h i r e a n d h i r e p u r c h a s e of a p p a r a t u s .
T h e y h a v e a l s o s e n t c o p i e s of t h e R e p o r t of t h e C o m m i t t e e t o
every authorised undertaker.
9
0
t-J *J
78. T h e C o m m i s s i o n e r s h a v e g r e a t difficulty in m a k i n g a n y
" e s t i m a t e of t h e c a p i t a l e x p e n d i t u r e p o s s i b l e a s t h e r e s u l t of
vigorous propaganda " ; t h e y do not think a n y value can be
a t t a c h e d t o a n e s t i m a t e d e r i v e d f r o m a n a v e r a g e of £ 1 0 , 0 0 0
p e r a n n u m f o r e a c h of 6 5 0 u n d e r t a k e r s .
So far as t h e i n f o r m a t i o n
i s a v a i l a b l e i t w o u l d a p p e a r t h a t o n l y a f e w of t h e l a r g e r u n d e r ­
takers spend £10,000 a y e a r or m o r e in this m a n n e r , and, owing
t o t h e g r e a t d i f f e r e n c e i n s i z e a n d c i r c u m s t a n c e of u n d e r t a k e r s ,
t h e y d o u b t if t h i s b a s i s a f f o r d s a n y c r i t e r i o n .
If a n e s t i m a t e i s
necessary t h e y desire t o p o i n t out t h a t t h e i r statistical r e t u r n
s h o w s t h a t i n t h e y e a r e n d i n g 3 1 s t M a r c h , 1 9 2 9 , t h e n u m b e r of
" c o n n e c t i o n s " w a s i n c r e a s e d b y 3 9 4 , 0 0 0 (from 2,599,000 t o
2 , 9 9 3 , 0 0 0 ) . I t m a y b e a s s u m e d t h a t n o t m o r e t h a n 3 0 0 , 0 0 0 of
t h e s e a r e w i t h i n t h e a m b i t of p o s s i b l e h i r e p u r c h a s e s c h e m e s
f o r a p p a r a t u s . T h e p r e s e n t r a t e of i n c r e a s e ( 1 5 p e r c e n t . ) i n
c o n n e c t i o n s e a c h y e a r is so h i g h t h a t t h e m o s t v i g o r o u s c a m p a i g n
can h a r d l y be expected t o raise the a n n u a l increase b y m o r e t h a n
25 p e r cent., w hic h w o u l d require a n e x t r a 100,000 connections.
If t h e a v e r a g e e x p e n d i t u r e o n t h e s e w e r e t a k e n a t £ 1 5 , w h i c h is
p r o b a b l y t o o h i g h , t h e a d d i t i o n a l e x p e n d i t u r e w o u l d still b e o n l y a
million a n d a half (£1,500,000). W i t h o u t wishing in a n y w a y t o
d e c r y t h e i m p o r t a n c e of a s e l l i n g c a m p a i g n o r t o m i n i m i s e i t s
possible results, t h e Commissioners m u s t regard the estimate
of £ 6 , 5 0 0 , 0 0 0 p e r a n n u m a d d i t i o n a l e x p e n d i t u r e a s e x c e s s i v e .
Rural Supplies.
79. W i t h r e g a r d t o r u r a l supplies, t h e inference to b e d r a w n
f r o m t h e L i b e r a l M e m o r a n d u m i s t h a t i t is n e c e s s a r y t o w a i t
for t h e r e s u l t s of t h e e x p e r i m e n t s i n B e d f o r d , A y l e s b u r y , e t c . ,
before pressing on w i t h rural supplies. T h e Commissioners do
not concur in this view a n d are doing everything in their power
to stimulate other proposals.
I n v i e w , h o w e v e r , of t h e l e n g t h
of t i m e i n v o l v e d i n a n y n e g o t i a t i o n s t h e y w o u l d n o t a n t i c i p a t e
a n y great contribution t o e m p l o y m e n t from this source in t h e
next year.
80. T h e u n d e r t a k e r s h a v e so frequently b e e n a s k e d b y
Ministerial appeals, b o t h general a n d directed particularly to t h e
electrical industry, t o t a k e a n y steps t h e y can t o increase the use
of e l e c t r i c i t y w i t h a v i e w t o r e d u c t i o n of u n e m p l o y m e n t , t h a t t h e
C o m m i s s i o n e r s d o u b t w h e t h e r a n y f u r t h e r a p p e a l b y w a y of a
general conference w o u l d meet w i t h a n y a d e q u a t e response.
In the circular to which t h e y h a v e already referred issued b y them,
t h e Commissioners u r g e d o n a u t h o r i t i e s t h e p o i n t s m a d e in t h e
L i b e r a l p r o p o s a l s a n d h a v e s e t o u t c l e a r l y t h e financial i n d u c e m e n t s
o f f e r e d t h r o u g h t h e m a c h i n e r y of t h e D e v e l o p m e n t A c t , 1 9 2 9 .
I w i l l t a k e a n y o c c a s i o n t h a t offers of p e r s o n a l l y a d d r e s s i n g
undertakers as to these p o i n t s ; a n d the Commissioners assure
m e t h a t t h e y will t h e m s e l v e s t a k e e v e r y o p p o r t u n i t y in t h e i r
n u m e r o u s conferences with individual undertakers, or in a n y
m e e t i n g s or conferences w h i c h are a d d r e s s e d b y t h e Commissioners,
to press the same policy.
I t m u s t be recalled t h a t t h e Minister
and the Commissioners are not directly managing the industry
and can only urge undertakers ; b u t the Commissioners have
evidence t h a t the appeals which I have m a d e from time to time
in v a r i o u s speeches h a v e h a d considerable practical results a n d t h e y
suggest t h a t I should take, as I intend t o do, a n y further oppor­
t u n i t y t h a t offers t o e x h o r t t h e u n d e r t a k e r s t o i n c r e a s e t h e i r
selling activities. T h e y believe t h a t t h i s m e t h o d will in fact
produce greater practical results t h a n a special conference.
SECTION 5.—DOCKS AND HARBOURS.
jj"*^ v £'
0
ebyt
8 1 . T h e r e is n o d i f f e r e n c e of v i e w b e t w e e n t h e G o v e r n m e n t
t
a n d M r . L l o y d G e o r g e a s t o t h e i m p o r t a n c e of i m p r o v e m e n t of T r a n s p o r t )
d o c k s a n d h a r b o u r s . S i n c e t a k i n g office, t h e G o v e r n m e n t h a v e
g i v e n p r o o f of t h e i r c o n c e r n i n t h i s m a t t e r , b y a p p r o v i n g g r a n t s
u n d e r t h e D e v e l o p m e n t A c t , 1929, t o w a r d s dock schemes involving
e x p e n d i t u r e of w e l l o v e r £ 1 0 m i l l i o n s , a n d t h e offer of a s s i s t a n c e
u n d e r t h a t Act still r e m a i n s open.
"a
8 2 . T h e f u l l e s t c o n s i d e r a t i o n h a s b e e n g i v e n o n b e h a l f of t h e
G o v e r n m e n t t o t h e r e p o r t of t h e P o r t F a c i l i t i e s C o m m i t t e e , a n d
t h e M i n i s t e r of T r a n s p o r t h a s t a k e n s t e p s t o s e c u r e t h a t t h e
r e c o m m e n d a t i o n s of t h e P o r t F a c i l i t i e s C o m m i t t e e ' s R e p o r t h a v e
b e e n b r o u g h t b e f o r e t h e n o t i c e of a l l t h e d o c k a u t h o r i t i e s c o n c e r n e d ,
w i t h full i n f o r m a t i o n a s t o t h e a s s i s t a n c e w h i c h c a n b e o f f e r e d b y
the Government under the Development Act.
8 3 . I n c o n n e c t i o n w i t h d o c k s c h e m e s g e n e r a l l y , i t is i m p o r t a n t
t o b e a r i n m i n d t h a t l o c a l i n t e r e s t s a t a l m o s t e v e r y p o r t of a n y
c o n s e q u e n c e a r e w o n t t o u r g e t h e d e s i r a b i l i t y of a l a r g e d o c k
s c h e m e w h i c h w o u l d a t t r a c t g r e a t e r traffic, o c e a n - g o i n g or c o a s t ­
w i s e . I t i s , h o w e v e r , n o t p o s s i b l e t o find e c o n o m i c j u s t i f i c a t i o n
f r o m t h e n a t i o n a l s t a n d p o i n t for l a r g e e x p e n d i t u r e o n t h e
p r o v i s i o n of f a c i l i t i e s a t o n e p o r t , if t h e r e s u l t i s m e r e l y t o b e t h e
d i v e r s i o n of t r a d e f r o m a n o t h e r c o m p e t i t i v e p o r t w h i c h c a n n o w
h a n d l e a d e q u a t e l y t h e e x i s t i n g a n d p o t e n t i a l traffic. I t m a y b e
remarked that Labour interests at Liverpool have m a d e repre­
sentations t h a t substantial Government assistance to other docks
might h a v e grave reactions upon Liverpool.
8 4 . T h e r a i l w a y g r o u p s c r e a t e d b y t h e R a i l w a y s A c t of 1 9 2 1 ,
in several cases found t h e y h a d to t a k e over docks which, u n d e r a
s y s t e m of u n r e s t r i c t e d c o m p e t i t i o n , p r o v i d e d i n c e r t a i n a r e a s a n
a g g r e g a t e a c c o m m o d a t i o n i n e x c e s s of a n y p o s s i b l e traffic d e m a n d s
t h a t c o u l d b e foreseen ; a n d it is o b v i o u s l y s o u n d p o l i c y t o c o n ­
c e n t r a t e e f f o r t u p o n t h e i m p r o v e m e n t of f a c i l i t i e s a t t h e p o i n t s
m o s t f a v o u r a b l e g e o g r a p h i c a l l y f o r p a r t i c u l a r c l a s s e s of t r a f f i c .
85. Mr. L l o y d George cites certain m a j o r schemes on which
t h e P o r t F a c i l i t i e s C o m m i t t e e ' s R e p o r t of 1 9 2 9 l a i d s t r e s s : —
New Dock at Middlesbrough.-—The
Ministry has been in
c o m m u n i c a t i o n w i t h t h e C h a m b e r of S h i p p i n g a n d t h e
Railway Company with regard to this important matter, a n d
a l t e r n a t i v e s c h e m e s for a n e w d o c k o r f o r d e e p w a t e r b e r t h s
a r e u n d e r d i s c u s s i o n b e t w e e n r e p r e s e n t a t i v e s of t h e R a i l w a y
C o m p a n y a n d a C o m m i t t e e of S h i p o w n e r s .
Two other
s t a t u t o r y authorities besides the Railway C o m p a n y are
concerned.
Improvement
of Approaches
to London
Docks.—The
e x p e n d i t u r e of o v e r £ \ \ m i l l i o n s a n c t i o n e d b y t h e l a t e
G o v e r n m e n t o n t h e Victoria D o c k R o a d h a s b e e n p u t in h a n d ,
a n d n e a r l y 1,000 m e n a r e a t w o r k — m a i n l y o n t h e r e - h o u s i n g
schemes which are an essential preliminary to the road work
proper, a n d m u s t inevitably be t a k e n in successive s t a g e s
A t t h e i n s t a n c e of t h e M i n i s t e r of T r a n s p o r t , t h e L o n d o n
C o u n t y C o u n c i l a r e n o w e x a m i n i n g a n u m b e r of o t h e r
s c h e m e s f o r i m p r o v e m e n t of r o a d a c c e s s t o t h e L o n d o n
Docks.
Completion
of King
George Dock,
Hull,
and
Necessary
Equipment.—The
London and North Eastern
Railway
C o m p a n y h a v e proposed a scheme costing over £ \ \ million,
a n d t h e G o v e r n m e n t h a v e m a d e a p r o v i s i o n a l offer of
s u b s t a n t i a l a s s i s t a n c e , b u t i n t h e i r p r e s e n t financial p o s i t i o n ,
t h e C o m p a n y are likely to give priority-to other major w o r k s
which they deem more urgent.
West Hartlepool
New Dock.—The
Ministry can trace no
representations with regard to this scheme, other t h a n those
in the Port Facilities R e p o r t , which states t h a t " local
o p i n i o n i s s t r o n g l y i n f a v o u r of t h e c o n s t r u c t i o n of a n e w
deep w a t e r dock on the Slake site." T h e docks belong to
the London a n d North Eastern Railway, who as noted
above, presumably give a higher priority to other m o r e
urgent schemes.
86. As regards the smaller ports, the Government, after
f u r t h e r c o n s u l t a t i o n w i t h t h e C h a m b e r of S h i p p i n g , a u t h o r i s e d
i n S e p t e m b e r , 1 9 3 0 , a s p e c i a l l y f a v o u r a b l e r a t e of g r a n t ( o v e r
40 p e r c e n t . ) for s c h e m e s a t s m a l l p o r t s likely t o assist in t h e
d e v e l o p m e n t of a g r i c u l t u r e . N o f o r m a l a p p l i c a t i o n h a s y e t b e e n
m a d e b y a n y a u t h o r i t y , e x c e p t t h a t a r e q u e s t for g r a n t a t t h e
h i g h e r r a t e h a s b e e n m a d e i n r e s p e c t of a s c h e m e a l r e a d y s u b m i t t e d
f o r g r a n t a t t h e n o r m a l r a t e . D e t a i l e d e x a m i n a t i o n of a n u m b e r
of p a r t i c u l a r c a s e s of d e s e r v i n g s m a l l p o r t s a d d u c e d b y t h e
C h a m b e r of S h i p p i n g l e a v e s d o u b t a s t o h o w f a r t h e s e m i n o r
a u t h o r i t i e s will b e able to p r o d u c e s c h e m e s .
8 7 . I t i s a c o n d i t i o n of a p p r o v a l o f s c h e m e s a s s i s t e d u n d e r
this special a r r a n g e m e n t t h a t w o r k s h o u l d be p u t in h a n d b y
t h e 1st J a n u a r y , 1 9 3 1 , b u t r e p r e s e n t a t i o n s h a v e j u s t b e e n
received from the Shipowners' Parliamentary Committee a n d the
Dock a n d H a r b o u r Authorities' Association t h a t the time limit
w i l l p r e v e n t a u t h o r i t i e s f r o m t a k i n g a d v a n t a g e of t h e t e r m s
offered. T h i s t h r o w s a n i n t e r e s t i n g l i g h t u p o n t h e p r a c t i c a b i l i t y
of s e c u r i n g i m m e d i a t e e m p l o 3 ' m e n t i n c o n n e c t i o n w i t h s c h e m e s
of t h i s k i n d , b u t i t w i l l p r o b a b l y b e n e c e s s a r y t o c o n s i d e r a n
e x t e n s i o n of t h e t i m e .
88. Mr. L l o y d George observes t h a t " w i t h such
financial
a s s i s t a n c e " (i.e., g r a n t s u n d e r t h e D e v e l o p m e n t A c t , 1929) " i t
w o u l d b e p o s s i b l e t o p u t i n h a n d a c o n s i d e r a b l e n u m b e r of
i m p o r t a n t . d e v e l o p m e n t works in seaport t o w n s . " T h e present
G o v e r n m e n t h a v e , i n f a c t , o f f e r e d g r a n t s i n r e s p e c t of s c h e m e s
r e p r e s e n t i n g o v e r £ 1 3 m i l l i o n s of e x p e n d i t u r e .
As regards
£1-1 m i l l i o n s of t h i s t o t a l , t h e d o c k a u t h o r i t i e s c o n c e r n e d h a v e n o t
y e t f o u n d t h e m s e l v e s a b l e t o a c c e p t t h e G o v e r n m e n t offers, w h d e
i n t h e c a s e of a n o t h e r £ 1 1 m i l l i o n s f o r t h e S w a n s e a a n d P o r t T a l b o t
d o c k e x t e n s i o n s t h e R a i l w a y C o m p a n y h a s felt itself c o m p e l l e d t o
suspend the schemes, after their approval b y the Government.
T h e r e r e m a i n s , h o w e v e r , t h e c o n s i d e r a b l e v o l u m e of w o r k r e p r e ­
sented b y the schemes substantively approved by the present
G o v e r n m e n t , m o s t l y o n t h e b a s i s of g r a n t s e q u i v a l e n t t o a l i t t l e
o v e r 3 0 p e r c e n t , of t h e t o t a l c o s t : —
R a i l w a y o w n e d d o c k s ( u n d e r P a r t I of
the Development Act)
..
..
Municipal a n d public trust docks (under
P a r t II)
£2,300,000
4,900,000
£7,200,000
89. I t m u s t b e r e m e m b e r e d t h a t d u r i n g t h e y e a r s 1920 t o
1 9 2 9 s c h e m e s of d o c k i m p r o v e m e n t a n d c o n s t r u c t i o n w e r e
a s s i s t e d t h r o u g h t h e m a c h i n e r y of t h e U n e m p l o y m e n t G r a n t s
C o m m i t t e e t o a t o t a l a m o u n t of o v e r £ 1 3 m i l l i o n ( i n c l u d i n g a n
e x p e n d i t u r e of o v e r £ 3 m i l l i o n i n t h e P o r t of L o n d o n ) , w h i l e
schemes amounting to £1J mdlion were covered by guarantees
u n d e r t h e T r a d e Facilities Acts.
9 0 . S u b j e c t t o w h a t h a s b e e n s a i d a b o v e a s t o t h e d a n g e r of
encouraging Port Authorities into merely competitive expenditure
o n s c h e m e s w h i c h wUl n o t e a r n a n a d e q u a t e r e t u r n u p o n t h e
c a p i t a l s u m , i t c a n b e a g r e e d t h a t t h e g r e a t e r efficiency of o u r
p o r t s m a y b e of m a t e r i a l a s s i s t a n c e t o t r a d e . T h e r e i s n o d o u b t
t h a t f o r m o d e r n i s a t i o n of e q u i p m e n t , a n d p a r t i c u l a r l y l o a d i n g
a n d u n l o a d i n g a p p l i a n c e s , e x p e n d i t u r e of t h i s k i n d i s w i t h i n
t h e s c o p e of t h e D e v e l o p m e n t A c t . T h e M i n i s t r y of T r a n s p o r t
i s i n c l o s e t o u c h w i t h t h e C h a m b e r of S h i p p i n g a n d t h e P o r t
A u t h o r i t i e s , a n d t h e r e i s n o o b s t a c l e t o t h e f o r m u l a t i o n of a n y
suitable schemes which the responsible Dock Authorities are
prepared to put forward.
PART V.
Labour Supply.
Innister of
Labour.)
C
*'
l
p r a c t i c a b i l i t y of c a r r y i n g o u t t h e
L i b e r a l p r o g r a m m e o n t h e scale s u g g e s t e d a n d w i t h i n t h e period
s u g g e s t e d is d e a l t w i t h b y t h e D e p a r t m e n t s m o r e d i r e c t l y c o n ­
cerned, b u t I should like t o m e n t i o n one or two points connected
w i t h t h e q u e s t i o n of l a b o u r s u p p l y .
T
h
e
(
u
e
s
t
i
o
n
a
s
t
o
t
h
e
2 . T h e a d d i t i o n a l n u m b e r f o r w h o m a t t h e e n d of 12 m o n t h s
e m p l o y m e n t is t o b e f o u n d is e s t i m a t e d t o e x c e e d 700,000, t h e
g r e a t m a j o r i t y of w h o m w o u l d b e m e n . I a s s u m e f o r t h e m o m e n t
t h a t t h i s i s a r e a l figure, a n d t h a t it i s " a d d i t i o n a l " i n t h e s e n s e
t h a t t h e p r o p o s a l s w i l l n o t t h r o w o t h e r s o u t of w o r k . W h a t k i n d
of l a b o u r w i l l b e r e q u i r e d for t h e w o r k t o b e p r o v i d e d ? T h e figure
i s c o m p o s e d of m e n t o b e e n g a g e d o n m a k i n g o r r e c o n d i t i o n i n g
r o a d s a n d bridges (350,000), o n h o u s i n g a n d regional d e v e l o p m e n t
(150,000), on establishing family farms a n d o t h e r reconditioning,
i n c l u d i n g t r a i n e e s (150,000), a n d o n electrical a n d t e l e p h o n e
d e v e l o p m e n t a n d t h e c u l t i v a t i o n of f a m i l y f a r m s . T h e e s t i m a t e
includes m e n employed on producing materials. It appears that
w o r k r e q u i r i n g s o m e t h i n g of t h e o r d e r of 5 0 0 , 0 0 0 m e n o u t of t h e
t o t a l i s of t h e n a t u r e of " p i c k a n d s h o v e l " w o r k .
Can this
n u m b e r of t h i s k i n d of m e n b e f o u n d o u t of a l i v e r e g i s t e r of
2,200,000 ? If t h e y e x i s t , c a n t h e y b e p u t t o w o r k in t h e p l a c e s
where they are required ?
3 . A l a r g e p r o p o r t i o n of t h e t o t a l of 2 , 2 0 0 , 0 0 0 a r e o b v i o u s l y
u n s u i t a b l e . H a l f a million a r e w o m e n a n d 100,000 are juveniles.
Of t h e 1 0 0 , 0 0 0 m e n c l a s s i f i e d a s " n o r m a l l y i n c a s u a l e m p l o y m e n t "
a n d t h e 400,000 m e n " temporarily stopped " some w o u l d b e
u n s u i t a b l e a n d in a n y case only a small proportion could be m a d e
available, without dislocating the industries in which they are
i n t e r m i t t e n t l y e m p l o y e d . T h e r e m a i n i n g 1,100,000 m e n , t h o u g h
at t h e m o m e n t " wholly u n e m p l o y e d " include a t least a q u a r t e r
w h o are merely passing from one job to another a n d registering
in t h e process or are obtaining e m p l o y m e n t in their ordinary
o c c u p a t i o n w i t h sufficient r e g u l a r i t y t o m a k e t h e m u n w i l l i n g t o
go on to emergency a n d temporary work. A considerable n u m b e r
m o r e , t h o u g h t h e y h a v e b e e n u n e m p l o y e d for a l o n g e r p e r i o d , h a v e
s u f f i c i e n t e x p e c t a t i o n of r e - e n g a g e m e n t t o b e u n w i l l i n g t o c o n s i d e r
w o r k s u c h a s r o a d - w o r k o r l a n d - w o r k . I t i s c l e a r t h a t t h e field f o r
t h e s e l e c t i o n of h a l f a m i l l i o n m e n of t h e s t a m i n a a n d t e m p e r a m e n t
r e q u i r e d w o u l d l e a v e l i t t l e m a r g i n f o r t h e e l i m i n a t i o n of t h e u n f i t .
Y e t experience h a s s h o w n t h a t a s u b s t a n t i a l p r o p o r t i o n a r e unfit,
i n p h y s i q u e o r t e m p e r a m e n t , f o r t h i s k i n d of w o r k .
There have
b e e n s i g n i f i c a n t c o m p l a i n t s r e c e n t l y of t h e q u a l i t y of t h e l a b o u r
on w h i c h r o a d c o n t r a c t o r s h a v e been compelled t o rely.
4 . T h e r e a r e , f u r t h e r , t h e l i m i t i n g f a c t o r s of i n c o n v e n i e n t
g e o g r a p h i c a l d i s t r i b u t i o n a n d of f a m i l y t i e s . Of t h e m e n w h o a r e
on p a p e r available, a large p r o p o r t i o n will be r e q u i r e d t o w o r k
a w a y f r o m t h e i r h o m e s . T h e d i s t r i c t r a t e s f o r t h i s k i n d of w o r k
a r e n o t as a r u l e sufficient t o e n a b l e a m a n t o m a i n t a i n himself
in lodgings a n d his family at h o m e , especially during t h e winter,
w h e n w o r k is l i a b l e t o b e i n t e r r u p t e d b y w e a t h e r . A n y s y s t e m
of a l l o w a n c e s i s o b j e c t i o n a b l e i n p r i n c i p l e , v e r y e x p e n s i v e , difficult
t o w o r k in p r a c t i c e , a n d h a s d a n g e r o u s r e a c t i o n s . T h e r e is n o
d o u b t t h a t t h e s e f a c t o r s w i l l s e r i o u s l y r e s t r i c t t h e a v a i l a b i l i t y of
l a b o u r w h i c h w o u l d b e s u i t a b l e f o r t h e k i n d of w o r k t o b e d o n e if
i t w e r e w i t h i n r e a c h of t h e m e n ' s h o m e s . I n o r d e r t o c a r r y o u t
t h e p r o g r a m m e large n u m b e r s would h a v e t o be moved, and this
would be impossible w i t h o u t either special p a y m e n t s or substantial
i crease in wage rates.
5. T h i s l a s t c o n s i d e r a t i o n l e a d s m e t o a n o t h e r g e n e r a l p o i n t .
O t h e r D e p a r t m e n t s w i l l , n o d o u b t , d e a l w i t h t h e effect of t h e
p r o p o s a l s o n t h e c o s t of m a t e r i a l s , a n d , i n d e e d , t h e p o s s i b i l i t y
of p r o v i d i n g m a t e r i a l s f o r a p r o g r a m m e c o m p r e s s e d w i t h i n t h i s
period, e x c e p t b y s t i m u l a t i n g productive c a p a c i t y far b e y o n d
w h a t w o u l d b e r e q u i r e d a t t h e e n d of t h e p e r i o d .
As regards
w a g e s , a f o r c e d e x p a n s i o n of p r o d u c t i o n o n t h e s c a l e c o n t e m p l a t e d
w o u l d s e t i n m o t i o n a s e r i e s of i n f l u e n c e s w h i c h c o u l d h a r d l y fail
t o increase cash wages ( t h o u g h n o t their real value) in t h e
o c c u p a t i o n s affected.
S u c h a r e s u l t is w h o l l y i n c o n s i s t e n t w i t h
t h e i t e m p l a c e d i n t h e f o r e f r o n t of t h e p r o g r a m m e t h a t " c o s t s of
production m u s t be reduced."
I t will b e hopeless t o e x h o r t
e m p l o y e r s a n d t r a d e u n i o n s t o r e d u c e c o s t s if t h e a c t i o n of t h e
G o v e r n m e n t is d r i v i n g c o s t s u p .
6. T h e c u m u l a t i v e effect of a l l t h e s e c o n s i d e r a t i o n s f o r c e s m e
t o the conclusion t h a t the acceleration and concentration, which
a r e t h e essential difference b e t w e e n t h e L i b e r a l p r o g r a m m e a n d
o u r p r o g r a m m e , a r e i m p r a c t i c a b l e f r o m t h e p o i n t of v i e w of
labour supply.
7. O n e o t h e r c o m m e n t — s t i l l o n t h e a s s u m p t i o n t h a t 700,000
i s a r e a l figure. M o s t of t h e m w i l l b e e m p l o y e d o n t e m p o r a r y
w o r k . W h a t i s t o h a p p e n t o t h e m a t t h e e n d of t h e t w o y e a r s ,
e s p e c i a l l y a s t h e p r o g r a m m e , e.g., o n r o a d s , w i l l h a v e e x h a u s t e d
t o a g r e a t e x t e n t t h e r o a d r e q u i r e m e n t s of t h e c o u n t r y f o r a
c o n s i d e r a b l e t i m e ? If a n y t h i n g l i k e t h i s n u m b e r w e r e t o b e
e m p l o y e d , we should be m e r e l y p r e p a r i n g for u l t i m a t e disaster
unless t h e p l a n s m a d e careful provision for a g r a d u a l transfer
back into industry.
PART VI.
Finance of the Liberal Proposals.
jNotebythe
o^the
Exchequer.)
6 1 1 0 1
\ j
c o n s i d e r i n g t h e financial i m p l i c a t i o n s of t h e r e n e w e d
P P
l
gigantic S t a t e loan I t h i n k i t best t o begin from r o o t
p r i n c i p l e s . T h e r u l e g o v e r n i n g l e g i t i m a t e b o r r o w i n g for S t a t e
d e v e l o p m e n t w o r k s is well recognised. W h e r e t h e S t a t e d i r e c t l y
u n d e r t a k e s c a p i t a l d e v e l o p m e n t s of a p r o d u c t i v e n a t u r e c a p a b l e
of y i e l d i n g a m o n e y r e t u r n w h i c h w i l l m e e t t h e i n t e r e s t a n d s i n k i n g
f u n d on t h e r e q u i s i t e c a p i t a l l o a n , t h e S t a t e is justified in b o r r o w i n g
t h e c a p i t a l , a n d i t n o r m a l l y d o e s s o . T e l e p h o n e c a p i t a l is a g o o d
e x a m p l e . T h i s c a p i t a l is p r o d u c t i v e a n d r e p a y s itself w i t h i n t h e
l i f e t i m e of t h e p l a n t a n d e q u i p m e n t w h i c h t h e c a p i t a l c r e a t e s .
S i n c e t h e t e r m i n a t i o n of t h e w a r , s o m e £ 1 0 0 m i l l i o n — a l a r g e s u m
to invest in a n y single industrial e n t e r p r i s e — h a s been raised on
l o a n for t h i s p u r p o s e , £ 4 8 m i l l i o n s h a v i n g b e e n r a i s e d in t h e l a s t
four years. Similarly postal a n d telegraph capital which at one
t i m e u n d e r a n old p r a c t i c e w a s m e t f r o m r e v e n u e , is n o w r a i s e d
b y l o a n . I t is t h e s a m e w i t h p u b l i c c o r p o r a t i o n s s e t u p u n d e r t h e
asgis of t h e S t a t e t o c a r r y o u t u n d e r t a k i n g s of a p u b l i c c h a r a c t e r .
T h e Electricity Commission, e n g a g e d u n d e r s t a t u t e in a v a s t
s c h e m e for t h e i m p r o v e m e n t of t h e e l e c t r i c a l s e r v i c e of t h e
c o u n t r y , possesses a n d exercises t h e p o w e r t o b o r r o w t h e capital
i t r e q u i r e s f o r r e m u n e r a t i v e c a p i t a l w o r k s , a n d for a l a r g e p a r t
of t h i s c a p i t a l t h e g u a r a n t e e of t h e E x c h e q u e r is s t a t u t o r i l y
available.
Similarly t h e British Broadcasting Corporation h a s
b o r r o w i n g p o w e r s for r e m u n e r a t i v e w o r k s , a n d t h e l i k e p o w e r s
will q u i t e c e r t a i n l y b e conferred u p o n t h e p u b l i c a u t h o r i t y
p r o j e c t e d b y t h e p r e s e n t G o v e r n m e n t for t h e p u b l i c m a n a g e m e n t
of t h e t r a f f i c of L o n d o n .
n
r
o
o
s
a
l
o
r
a
2. Q u i t e different c o n s i d e r a t i o n s a r i s e i n r e g a r d t o w o r k s
w h i c h , t h o u g h of a c a p i t a l o r d u r a b l e n a t u r e , d o n o t p r o v i d e a n y
r e t u r n o u t of w h i c h i n t e r e s t c h a r g e s o r s i n k i n g f u n d c a n b e m e t .
I n t h e c a s e of l o c a l a u t h o r i t i e s w i t h t h e i r l i m i t e d field of
financial
operations, with their changing population a n d their inelastic
field of r e v e n u e , i t is o b v i o u s t h a t l a r g e c u r r e n t e x p e n d i t u r e o n
such objects as sewerage works, road construction,
public
buildings would n o t only seriously derange their a n n u a l
finances,
b u t m i g h t place a n unfair b u r d e n on present ratepayers in respect
of s e r v i c e s t h e b e n e f i t of w h i c h w i l l b e s h a r e d b y f u t u r e r a t e p a y e r s .
P a r l i a m e n t h a s t h e r e f o r e a U o w e d a p r a c t i c e of b o r r o w i n g f o r s u c h
works to develop.
3 . B u t t h e p o s i t i o n of t h e S t a t e i s f a r d i f f e r e n t . N o t o n l y i s i t
n o r m a l l y a b l e t o finance e x t e n s i v e c a p i t a l w o r k s w i t h o u t i n ­
c o n v e n i e n t v a r i a t i o n s of t a x a t i o n b u t s u c h w o r k s a s a r e n o t of a
r e v e n u e p r o d u c i n g c h a r a c t e r g i v e l i t t l e p r o s p e c t of a c t u a l b e n e f i t
to future taxpayers.
F u r t h e r m o r e o v e r t h e w i d e field of S t a t e
a c t i v i t i e s t h e n e e d f o r n e w w o r k s of a c a p i t a l c h a r a c t e r i s
practically continuous.
T h e i n h e r e n t u n s o u n d n e s s of S t a t e
b o r r o w i n g for s u c h p u r p o s e s h a s b e e n p r o g r e s s i v e l y r e c o g n i s e d .
T h e classic e x a m p l e s a r e t h e b o r r o w i n g s b y p r e - w a r C o n s e r v a t i v e
G o v e r n m e n t s for n a v a l w o r k s a n d public buildings. M a n y w o r k s
of u n p r o d u c t i v e c h a r a c t e r m a y n o d o u b t b e n e c e s s a r y b u t t h e y
a r e n o t r e m u n e r a t i v e ; t h e y confer n o direct a n d obvious benefit,
a n d m o r e a n d m o r e of t h e m a r e c o n t i n u a l l y r e q u i r e d a s s o c i e t y
p r o g r e s s e s . If t h e r e f o r e t h e i r c o s t i s b o r r o w e d i n a n y y e a r , t h e
b u r d e n of t h a t y e a r ' s l i a b i l i t y i s c a s t u p o n p o s t e r i t y n o t w i t h ­
standing t h a t posterity m u s t either shoulder or similarly pass on
t o a s t i l l l a t e r g e n e r a t i o n t h e c o s t of t h e s i m i l a r e q u i p m e n t i t
r e q u i r e s . F o r t h i s r e a s o n t h e p r a c t i c e of S t a t e b o r r o w i n g f o r
p u b l i c w o r k s of t h i s c h a r a c t e r w a s u n i v e r s a l l y c o n d e m n e d a n d
has never been revived.
4. A g o o d e x a m p l e is f o u n d i n e x p e n d i t u r e u p o n
the
c o n s t r u c t i o n of n e w r o a d s . T h e r e i s a l r e a d y m o r e t h a n a r i s k
of r o a d s b e i n g b u i l t f o r w h i c h t h e r e i s l i t t l e o r n o traffic j u s t i f i ­
c a t i o n or w h i c h m a y o n l y f u r t h e r c r i p p l e t h e r a i l w a y s .
But
h o w e v e r useful new roads m a y be a n d h o w e v e r m u c h t h e y m a y
i m p r o v e t h e e q u i p m e n t of t h e c o u n t r y — a s s u m i n g t h a t t h e y d o
so—they produce to t h e authorities who construct t h e m no
m o n e y r e t u r n o u t of w h i c h t o m e e t t h e i n t e r e s t a n d s i n k i n g f u n d
on a n y loan.
A n d as societ)' develops a n d communities arise
in n e w places, n e w roads, which c a n n o t now be usefully projected
w i l l in t h e f u t u r e c o m e t o b e r e q u i r e d . H o w e v e r v a r i a b l e m a y
b e t h e n e e d for c a p i t a l e x p e n d i t u r e o n roads considered from
t h e a s p e c t of a s i n g l e l o c a l i t y , t h e n a t i o n a s a w h o l e is l i k e l y t o
r e q u i r e h e a v y a n n u a l e x p e n d i t u r e of t h i s c h a r a c t e r f o r a n i n d e f i n i t e
period. O n this g r o u n d t h e practice h i t h e r t o i n v a r i a b l y followed
of m e e t i n g t h e c o n t r i b u t i o n s of t h e R o a d F u n d t o w a r d s c a p i t a l
w o r k s of c o n s t r u c t i o n o r i m p r o v e m e n t of r o a d s a n d b r i d g e s o u t
of t h e a n n u a l r e v e n u e of t h e F u n d i s i n k e e p i n g w i t h t h e s o u n d
principles w h i c h n o w g o v e r n n a t i o n a l finance.
5, T h e G o v e r n m e n t , in its o t h e r d e v e l o p m e n t p r o g r a m m e s
a l s o , h a s s o f a r f o l l o w e d a s y s t e m w h i c h a v o i d s a n y q u e s t i o n of
a G o v e r n m e n t l o a n . I t h a s a d o p t e d t h e a l t e r n a t i v e of t h e a n n u a l
State grant.
T h e s c h e m e s in progress a n d p r o j e c t e d h a v e t h e
c o m m o n feature—and the c o m m o n merit—that they are almost
w i t h o u t e x c e p t i o n financed b y l o a n s w h i c h a r e n o t S t a t e l o a n s .
The development schemes undertaken b y railways and other
p u b l i c u t i l i t y c o m p a n i e s u n d e r P a r t I of t h e H o m e D e v e l o p m e n t
A c t a r e financed b y c a p i t a l r a i s e d o r r e s e r v e s p o s s e s s e d b y t h o s e
undertakings.
T h e s c h e m e s u n d e r t a k e n b y local authorities
t h r o u g h t h e a g e n c y of t h e S t . D a v i d ' s C o m m i t t e e — s c h e m e s
w h i c h , it m u s t b e f e a r e d , t e n d a s t i m e goes o n a n d p r o g r a m m e s
i n c r e a s e t o h a v e less a n d less e c o n o m i c g r o u n d a n d m o r e a n d
m o r e t o r e s e m b l e r e l i e f w o r k s — a r e financed b y l o a n s r a i s e d b y
a n d o n t h e c r e d i t of t h e l o c a l a u t h o r i t i e s c o n c e r n e d o r b y c a p i t a l
s u p p l i e d i n t h e c a s e of t h e s m a l l e r a u t h o r i t i e s b y t h e P u b l i c
W o r k s L o a n B o a r d . T h e p a r t of t h e S t a t e i s t o m a k e a n a n n u a l
contribution towards t h e interest a n d sinking fund on the loans.
T h e s e c o n t r i b u t i o n s a r e o f t e n a l a r g e p r o p o r t i o n of t h e
total
annual cost; they enable the m o n e y to be readily raised a n d
enable t h e local a u t h o r i t y or other u n d e r t a k i n g to b e a r t h e b a l a n c e
of t h e a n n u a l c h a r g e s f o r t h e l o a n . T h e s y s t e m a v o i d s t h e d e t r i ­
m e n t to G o v e r n m e n t credit which direct State borrowing would
entail. I t avoids also all t h e o b l o q u y a n d criticism which direct
G o v e r n m e n t i n t e r v e n t i o n i n d e v e l o p m e n t w o r k is l i a b l e s o
quickly to arouse. Those annual grants from the State, being
annual contributions towards interest and sinking fund, represent
a continuing State liability which m a y be estimated, at any rate
i n t h e e a r l y y e a r s a f t e r s c h e m e s a r e in full o p e r a t i o n , a t s o m e
£ 5 , 0 0 0 , 0 0 0 p e r a n n u m o n a c a p i t a l e x p e n d i t u r e of £ 1 0 0 , 0 0 0 , 0 0 0 .
6. A v a s t c a p i t a l e x p e n d i t u r e o n h o u s i n g h a s b e e n s e c u r e d i n
recent years in a similar w a y , t h e capital h a v i n g b e e n raised b y
local authorities (with assistance in the smaller cases from t h e
Public W o r k s Loan Board) or private contractors, a n d the action
of t h e S t a t e h a v i n g b e e n l i m i t e d t o t h e g r a n t o u t of R e v e n u e of
e i t h e r a n a n n u a l or a l u m p s u m s u b s i d y sufficient t o r e n d e r t h e
e n t e r p r i s e a t t r a c t i v e t o those u n d e r t a k i n g it.
7 . W i t h t h e a i d of t h e S t a t e g r a n t s t h e c a p i t a l f o r t h e e n t e r p r i s e
a b o v e a l l u d e d t o is r e a d i l y o b t a i n e d b y t h o s e w h o s e e k i t — f a r
m o r e r e a d i l y t h a n i t w o u l d b e b y t h e S t a t e w h i c h is c u m b e r e d w i t h
t h e v a s t l i a b i l i t i e s of t h e w a r .
8. E v e n so, this qualification m u s t b e m a d e . A l t h o u g h t h e
c a p i t a l i s r e a d i l y o b t a i n e d , it m u s t n o t b e s u p p o s e d t h a t i t s b u r d e n
i s e a s i l y b o r n e . T h e i n d e b t e d n e s s of l o c a l a u t h o r i t i e s h a s b e e n
s w i f t l y r i s i n g , a s i s s h o w n b y t h e f o l l o w i n g figures, w h i c h g o u p t o
1928 : ­
1913.
1924.
1928.
£m.
£m.
£m.
Housing Debt
..
12
219
383
Highways Debt
..
. . 6 2
80
96
A g g r e g a t e D e b t of a l l k i n d s . .
563
865
1,121
T o - d a y t h e figures w i l l b e h i g h e r s t i l l , a n d t h e r e a r e i n d i c a t i o n s
t h a t local authorities are alarmed a t the situation.
Similarly, t h e S t a t e h a s h e a v y continuing subsidies t o m e e t
o u t of r e v e n u e . N e x t y e a r , f o r i n s t a n c e , w e s h a l l h a v e t o b e a r
t h e following :—
£m.
Housing Subsidy
14-6
P a r t I of t h e D e v e l o p m e n t A c t . .
0-4
P a r t I I of t h e D e v e l o p m e n t A c t
3-7
Colonial D e v e l o p m e n t F u n d
1-0
Other similar items
1-1
T h e s e c h a r g e s will c o n t i n u e for m a n y y e a r s . I n t h e e a r l y f u t u r e
t h e y will n o t m e r e l y c o n t i n u e b u t increase, especially u n d e r t h e
Development Act.
9 . T h e s u g g e s t i o n of a g r e a t S t a t e l o a n f o r p u r p o s e s u n p r o d u c ­
t i v e o r o n l y p a r t i a l l y p r o d u c t i v e is c o m p l e t e l y o u t of a c c o r d w i t h a l l
n o r m a l c a n o n s of
finance.
I t h a s t o be justified exclusively as a n
e m e r g e n c y m e a s u r e i n a p e r i o d of c r i s i s . A c a s e for i t w o u l d a r i s e
o n l y if t h e S t a t e h a d g o o d e c o n o m i c g r o u n d s for u n d e r t a k i n g b y
its o w n a g e n c y from its o w n resources d e v e l o p m e n t works
a d d i t i o n a l t o t h o s e w h i c h i t is n o w p r o m o t i n g a n d e x p e c t s t o
p r o m o t e t h r o u g h t h e a g e n c y of l o c a l a u t h o r i t i e s a n d o t h e r s .
10. T h e L i b e r a l c a s e for s u c h a l o a n n e e d s , t h e r e f o r e , v e r y
t h o r o u g h e x a m i n a t i o n , b u t t h e i l l u m i n a t i n g n o t e s of m y c o l l e a g u e s
dispense m e from a n y n e c e s s i t y myself t o e x a m i n e it.
1 1 . If I w e r e d e a l i n g w i t h a p r o g r a m m e w h i c h w a s n o t m e r e l y
p u t f o r w a r d w i t h a skilful a n d persuasive p e n b u t one w h i c h w o u l d
s t a n d t h e c o o l e x a m i n a t i o n of p r a c t i c a l m e n a n d e m e r g e a s a
b u s i n e s s p r o p o s i t i o n , a n d if t h e p r o g r a m m e w e r e r e a s o n a b l e i n
a m o u n t o r s p r e a d o v e r a r e a s o n a b l e t i m e , I s h o u l d feel n o s e r i o u s
apprehension a b o u t t h e G o v e r n m e n t s ability t o raise t h e m o n e y
u p o n loan.
E v e n if t h e p r o g r a m m e w e r e u n p r o d u c t i v e , s t i l l , if
i t w e r e s o u n d , I w o u l d b e p r e p a r e d t o j u s t i f y t h e r a i s i n g of a l o a n
b y a p p e a l i n g t o t h e c h a r a c t e r of t h e p r e s e n t e m e r g e n c y . I s h o u l d
postulate only t h a t such a loan ought to be repaid over a com­
p a r a t i v e l y s h o r t p e r i o d of y e a r s . If s u c h a s c h e m e g a v e e m p l o y ­
m e n t to m e n who would otherwise be unemployed, savings to t h e
U n e m p l o y m e n t F u n d w o u l d r e s u l t ; t h e y m i g h t offset s o m e
2 0 p e r c e n t , of t h e c o r r e s p o n d i n g p o r t i o n of t h e l o a n . S o f a r a s i n
a d d i t i o n t h e w o r k i n d i r e c t l y i n c r e a s e d t h e p r o s p e r i t y of t h e
c o m m u n i t y , t h e benefit t o t h e c o m m u n i t y w o u l d be reflected in
s o m e a d v a n t a g e t o t h e r e v e n u e of t h e S t a t e .
12. A l l t h i s m a y r e a d i l y b e c o n c e d e d . I t h a s s o m e t i m e s b e e n
crudely said t h a t a view o b t a i n s in t h e T r e a s u r y t h a t a n y m o n e y
b o r r o w e d b y t h e S t a t e a u t o m a t i c a l l y c a n c e l s a n o t h e r l o a n of
equal a m o u n t to enterprise, a n d that any m a n employed by the
S t a t e d e p r i v e s a n o t h e r of p r i v a t e w o r k . T h i s is a m i s r e p r e s e n ­
t a t i o n . B u t it i s n e c e s s a r y a l s o t o s a y , t h a t i n t h e e c o n o m i c s of
G o v e r n m e n t borrowing there are regions which are disputed a n d
o n l y p a r t i a l l y ' e x p l o r e d , a n d t h e a u t h o r s of t h e L i b e r a l P l a n h a v e
n o r i g h t t o a s s u m e t h a t , e v e n if t h e i r s c h e m e s w e r e s o u n d i n
c o n c e p t i o n a n d r e a s o n a b l e i n s i z e , t h e r e w o u l d b e n o off-sets f r o m
t h e g r o s s e m p l o y m e n t t h a t it w o u l d c r e a t e .
1 3 . If I p a s s f r o m s o u n d s c h e m e s t o t h e s c h e m e s of t h e L i b e r a l
p a m p h l e t I find m y s e l f i n a d i f f e r e n t a t m o s p h e r e . I c a n n o t f o r
my p a r t a g r e e t h a t t h e p r o p o s e d e x p e n d i t u r e o n t h e s c a l e w h i c h
i s a s s u m e d is s o u n d o r u s e f u l , o r t h a t i t c a n b e j u s t i f i e d o n a n y
r e a s o n a b l e g r o u n d of e c o n o m i c s .
A n d the emergency powers
which are p o s t u l a t e d would n o t be easily tolerated b y t h e public.
14. I n t h e first p l a c e , t h e c o s t of l o n g - t e r m m o n e y r e m a i n s
h i g h t h o u g h i t is falling. I t is n o t p l e a s a n t t o go t o t h e C a p i t a l
M a r k e t f o r v a s t s u m s i n t h e s e c o n d i t i o n s . I t is e v e n less p l e a s a n t
t o c o n t e m p l a t e t h a t o n e ' s a c t i o n in so g o i n g will t e n d t o force t h e
c o s t of l o n g - t e r m m o n e y u p a g a i n , b o t h a g a i n s t t h e S t a t e a n d
a g a i n s t b o r r o w e r s of a l l k i n d s . A m o n g t h e t h i n g s m o s t n e e d e d
i n p r e s e n t c o n d i t i o n s is a s u b s t a n t i a l r e d u c t i o n i n l o n g - t e r m
m o n e y r a t e s , — i n d e e d t h e Liberal M e m o r a n d u m s a y s so !
How
a G o v e r n m e n t L o a n of t h e k i n d p r o p o s e d c a n c o n d u c e t o t h a t
e n d , i t i s difficult t o c o n c e i v e .
15. F u r t h e r t h e S t a t e w h e n it g o e s t o t h e c a p i t a l m a r k e t is
not i m m u n e from the rules which govern t h e private undertaker.
If i t d e s i r e s t o r a i s e m o n e y f o r n e w e n t e r p r i s e , c e r t a i n l y if i t d e s i r e s
t o r a i s e i t i n v a s t q u a n t i t i e s o n r e a s o n a b l e t e r m s , it m u s t h a v e a n
acceptable proposition.
T h e analysis t o which the Liberal
S c h e m e h a s been subjected shows t h a t , w h e n its implications w e r e
p u b h c l y u n d e r s t o o d , it w o u l d b e p u b l i c l y d i s t r u s t e d as e x t r a v a g a n t
a n d wasteful. N o r w o u l d it escape notice, t h a t this v a s t extension
of d i r e c t G o v e r n m e n t a c t i v i t y p r e c e d e d b y a n e m e r g e n c y s e s s i o n
would involve interference with p r i v a t e rights a n d the exercise
of o p p r e s s i v e b u r e a u c r a t i c p o w e r s . T h e a u t h o r s of t h e p a m p h l e t
claim t h a t the loan would be acceptable to the City and t h e y
i n s t a n c e t h e s u c c e s s of t h e r e c e n t i s s u e of 4 p e r c e n t . B o n d s .
T h i s i n s t a n c e is n o t i n p o i n t , f o r t h e i s s u e w a s m a i n l y f o r c o n v e r ­
sion p u r p o s e s , an o b j e c t , a p p r o v e d a n d well u n d e r s t o o d ; it w a s
also a t r a n s a c t i o n in s h o r t m o n e y a n d n o t in t h e long t e r m m a r k e t .
F o r t h e r e a s o n t h a t I h a v e g i v e n , v i z . : t h a t t h e s c h e m e is u n s o u n d ,
I j u d g e it t o b e v e r y u n l i k e l y t h a t t h e m o n e y c o u l d b e o b t a i n e d
s a v e w i t h g r e a t difficulty a t v e r y h i g h r a t e s , a n d w i t h t h e serious
effect of i n c r e a s i n g t h e g e n e r a l r a t e of i n t e r e s t a t t r a c t e d b y l o n g ­
t e r m l o a n s , a r a t e w h i c h f o r t h e g e n e r a l g o o d of t h e c o m m u n i t y
urgently needs to come down.
1 6 . E v e n if i t b e s u p p o s e d t h a t m o n e y c o u l d b e r a i s e d o n t h e
scale a n d for the p u r p o s e s w h i c h t h e Liberal Plan assumes, it
m u s t s t i l l h a v e a s e r i o u s e f f e c t u p o n t h e f i n a n c i a l o r g a n i s a t i o n of
the country.
T h e s i z e of t h e p l a n a n d i t s l o p s i d e d n e s s d e f e a t
its financial object.
T h e M i n i s t e r of L a b o u r i n h e r M e m o r a n d u m
h a s m e n t i o n e d t h e p r o b a b l e e f f e c t s of t h e s c h e m e — i f i t c o u l d b e
p u t i n e f f e c t i v e o p e r a t i o n — i n f o r c i n g u p c o s t s of p r o d u c t i o n i n
particular industries and accentuating the maladjustments from
w h i c h w e n o w suffer a n d Mr. L l o y d G e o r g e ' s r e c o r d b o t h i n
m u n i t i o n s m a n u f a c t u r e a n d in other spheres reinforces h e r
conclusion.
T h e r e i s a v e r y d e f i n i t e p o s s i b i l i t y of f o r e i g n i n v e s t ­
m e n t b e i n g increased, e v e n seriously increased u n d e r t h e influence
of s u c h a l o a n , t h o u g h i t i s a n a s s u m p t i o n of t h e L i b e r a l P l a n t h a t
it w o u l d b e d e c r e a s e d .
N o r can we ignore the probability t h a t
t h e g e n e r a l r e c e p t i o n of p r o p o s a l s s o i l l - c o n s i d e r e d w o u l d a d d
t o t h e depression in the h e a v y trades a n d the textile trade which
are suffering m o s t , a n d w h i c h t h e proposals would benefit least.
I t would d a m p d o w n projects for extension and reorganisation
i n a r e a s of i n d u s t r y w h e r e t h e y a r e m o s t r e q u i r e d .
Even apart
f r o m t h e L i b e r a l o v e r - e s t i m a t e of t h e n u m b e r of p e r s o n s t o w h o m
employment could be given b y their scheme, an over-estimate
w h i c h h a s b e e n d e a l t w i t h e l s e w h e r e , i t is p a t e n t t h a t t h e r e
w o u l d b e g r a v e e f f e c t s a r i s i n g f r o m r e p e r c u s s i o n s of t h e s c h e m e
u p o n t h e c o m m u n i t y a t large.
In time the turn in the trade
d e p r e s s i o n will c o m e .
T h e c o u n t r y , l e f t t o itself, w i h t h e n
b e r e a d y t o r e c u p e r a t e f r o m e x i s t i n g t r o u b l e s a n d i n d u s t r y will
d e m a n d c a p i t a l o n c e m o r e for i t s o w n r e g e n e r a t i o n .
In those
c o n d i t i o n s t h e c o n t i n u i n g d e m a n d f o r c a p i t a l for t h e s e s c h e m e s —
s c h e m e s w h i c h o n c e i n s t i t u t e d c a n n o t b e d r o p p e d a n d left d e r e l i c t
a t a m o m e n t s notice—would h a v e its worst results.
1 7 . T h e s e o b s e r v a t i o n s h a v e b e e n d i r e c t e d t o t h e first t h r e e
s e c t i o n s of t h a t c h a p t e r of t h e M e m o r a n d u m w h i c h d e a l s w i t h
finance.
T h e f o u r t h s e c t i o n p r o d u c e s a l o t of f i g u r e s t o s h o w
t h a t the schemes will be so p r o d u c t i v e as to meet the interest a n d
sinking fund u p o n the loan.
Of t h e s e f i g u r e s I a m p r o f o u n d l y
sceptical.
I shall not w a s t e t i m e in examining t h e m in detail
b e c a u s e t h e r o o t e v i l of t h e p r o p o s a l l i e s i n t h e r a i s i n g a n d
t h e s q u a n d e r i n g of t h e l o a n , n o t i n t h e p r e c i s e m e a s u r e of i t s
subsequent burden.
18. I p r e f e r t o r e m i n d m y c o l l e a g u e s of t h e s i n g u l a r c o n ­
tradictions which the p l a n involves.
W e are to m a k e more roads
t o c u t o u t t h e r a i l w a y s . W e a r e t o m o v e -a g r e a t i n d i g e n o u s
p o p u l a t i o n off t h e l a n d i n o r d e r t o p u t a n o t h e r a l i e n p o p u l a t i o n
u p o n i t . W e a r e t o i n c r e a s e t h e s t a n d a r d of life b u t in o u r v a s t
c o m m u n i t y of s m a l l h o l d i n g s w e s h o u l d i n e v i t a b l y l o w e r i t .
W e are t o r e d u c e e x p e n d i t u r e a n d to a d d t o it, to reduce t h e b u r d e n
of t h e d e b t a n d t o i n c r e a s e i t .
B y conference we a r e to see t o t h e
l o w e r i n g of t h e c o s t s of p r o d u c t i o n a n d b y a n o u t p o u r i n g of m o n e y
w e a r e t o p u t u p t h e p r i c e of g o o d s .
I shall look for a m o r e reason­
able a n d consistent plan before asking t h e British public t o saddle
itself w i t h a n e w a n d g i g a n t i c l i a b i l i t y .
THE MELLON INSTITUTE OF INDUSTRIAL RESEARCH.
T h e I n d u s t r i a l Fellowship System was first presented t o t h e public b y
D r . R. K. D u n c a n , of t h e University of K a n s a s , in a n article entitled
" T e m p o r a r y I n d u s t r i a l Fellowships " (North American Review, May, 1909).
I n 1911 D r . D u n c a n was a p p o i n t e d to t h e University of P i t t s b u r g h to
i n a u g u r a t e t h e s y s t e m in t h e D e p a r t m e n t of Industrial" Research, a n d t h e
w o r k i n g of t h e Fellowships began in a t e m p o r a l v building erected a t a
cost of a b o u t $10,000. I n March, 1913, Messrs, A. W . & R . B . Mellon
established t h e s y s t e m on a p e r m a n e n t basis t h r o u g h t h e gift of over half
a million dollars. W h i l e t h e I n s t i t u t e is an integral p a r t of t h e University
of P i t t s b u r g h a n d works in close accord w i t h it, it possesses a n endowment
of its own and is u n d e r its own m a n a g e m e n t . The industrial research of
t h e I n s t i t u t e is organized on a c o n t r a c t basis, t h e p r o b l e m being set b y
a person, firm or association interested in its solution, t h e scientific worker
being found a n d engaged b y t h e I n s t i t u t e , a n d an I n d u s t r i a l Fellowship
being assigned for a period of a t least one y e a r . E a c h holder of a n I n d u s t r i a l
Fellowship is given, for t h e time being, t h e b r o a d e s t facilities for accom­
plishing a definite piece of research, and all results o b t a i n e d b y him belong
exclusively t o t h e f o u n d e r (donor) of the Fellowship. Only one investigation
is carried o u t on a p a r t i c u l a r subject a t a n y one time, and hence t h e r e is
n o duplication of t h e research activities of t h e Fellowships in operation.
T h e donor, on his p a r t , provides a foundation s u m t h a t is a d e q u a t e to cover
t h e a n n u a l cost of m a i n t e n a n c e of t h e I n d u s t r i a l Fellowship, comprising
o p e r a t i n g charges, t h e purchase of all necessary special a p p a r a t u s or other
e q u i p m e n t , a n d t h e s a l a r y of t h e research m a n o r m e n selected to
w o r k on t h e p a r t i c u l a r problem, t h e solution of which is of concern
t o t h e d o n o r s . This s u m of m o n e y is a p p r o x i m a t e l y $5,000 for each
research m a n needed o n t h e Fellowship. T h e I n s t i t u t e is primarily
a n industrial e x p e r i m e n t station, b u t t h e n a t u r e of its investigational
p r o c e d u r e enables b r o a d training of y o u n g scientists in research methods
a n d in special subjects of technology. I t also recognises the need of
f u n d a m e n t a l scientific research a s a b a c k g r o u n d a n d source of stimulus for
industrial research. I t h a s funds t h a t a r e devoted t o t h e prosecution of
investigations n o t suggested b y industry, b u t planned within the I n s t i t u t e
a n d directed t o w a r d s t h e s t u d y of more f u n d a m e n t a l problems t h a n those
u s u a l l y investigated for direct industrial purposes.
I n 192S, 53 Fellowships were being sustained b y as m a n y different
companies, largely chemical m a n u f a c t u r e r s , while twelve m o r e Fellowships,
representing a b o u t 23 p e r cent, of the t o t a l research of t h e I n s t i t u t e , were
being s u p p o r t e d b y t r a d e associations. T h e researches carried o u t on
behalf of t h e associations generally e x t e n d over several years ; t h e
investigations s u p p o r t e d b y t h e L a u n d r y o w n e r s ' N a t i o n a l Association, for
e x a m p l e , h a v e been in progress since 1915, a n d those on behalf of t h e
American Refractories I n s t i t u t e since 1917. T h e R e s e a r c h Associate P l a n
of t h e B u r e a u of S t a n d a r d s a n d o t h e r G o v e r n m e n t B u r e a u x , t h o u g h i t
differs in m e t h o d of a d m i n i s t r a t i o n , provides similar research facilities for
i n d u s t r y a n d possesses t h e s a m e a d v a n t a g e s a n d d i s a d v a n t a g e s .
FINANCE OF THE LIBERAL AGRICULTURAL PROPOSALS.
The two pivotal figures on which the estimates of cost are founded,
are (a) the 100,000 family farms, and (b) the 150,000 men to be employed
for five years, as to 50,000 on the equipment of the family farms and as t o
100,000 on the general programme of re-equipment and re-conditioning.
Some of the latter work would, however, be carried out on land to be
acquired for family farms.
Using the figures in the Liberal Memorandum the following results
are reached :—
(1) Capital Expenditure.
The family farm programme involves the acquisition of 3,000,000 acres
of land which it is estimated can be obtained on the basis of a net rental
of 205. to 40s. per acre.
£
Taking the mean figure of 30s. per acre and capitalising a t
5 per cent, we get
90,000,000
(This figure would be reduced b y the amount represented
b y purchasing for annuities such land as could be so
acquired. Acquisition in discharge of Death Duties would
be equivalent to purchase for cash).
The cost of new equipment talcing an average of the figures
for houses and buildings m a y be put at £750 per holding.
This work is expected to afford employment to 40-50,000
men and this figure implies that all the family farms will
be newly equipped. Total cost
..
..
..
..
75,000,000
The remaining 100,000 men are presumably to be employed
on the general programme of re-conditioning and re­
equipment. At 5,000* men per £1,000,000 spent, this
represents £20,000,000 a year, or in five years
..
. . 100,000,000
(N.B.—Not all the land reconditioned would be used as
family farms and some of the expense would be recover­
able.)
Making a total for these three items of
265,000,000
This total of £265,000,000 is, as previously stated, an estimate derived
from the data in the Liberal Memorandum itself. U p t o this point it
exaggerates the cost of the scheme for at least two reasons, viz. :—
(1) If any considerable part of the 3,000,000 acres to be acquired
for family farms is to consist of land that is re-conditioned, an average
price of £30 an acre prior to re-conditioning is probably too high.
(2) The whole of the 100,000 family farms would not require to be
newly equipped. There would already be available farm-houses,
cottages and buildings on the original farms.
On the other hand, if the employment figure is to be maintained at
150,000 per annum, 50,000 of whom are t o be engaged on work of
re-equipment and 100,000 on re-conditioning, then the total expenditure
involved under these two headings must be £175,000,000.
B u t the above-mentioned items do not represent the entire capital
cost of the scheme. There would have to be added the following :—Compensation to be paid to displaced tenants for disturbance.
This might be anything from £2,000,000 to £5,000,000. Mean
figure
Costs of acquisition of land, say 2 per cent, on £90,000,000
(though, as previously stated, this last figure m a y be an
over-estimate)
Cost of providing and equipping training farms for 15,000
trainees (75 per cent, of the total settlers for each year) at
£50 per place
(N.B.—Nothing is included for accommodation required
for trainees for other forms of rural employment or for the
training of members of the family intended to assist on the
farms (see paragraph 42 of this Memorandum.)
Tenants' capital presumably to be provided on loan at an
average of £20 per acre for, say, 75 per cent, of the settlers.
This is, if anything, an under-estimate of the proportion who
would require the loan of capital
..
..
..
..
(Note.—If this money were advanced b y the banks
under Government guarantee, the State would only stand
the losses which, on the basis of past experience, might
amount to £20,000,000.)
Total of these supplementary items
..
Making with the three main items a total of
£
3,500,000
1,800,000
750,000
45,000,000
..
..
. . £51,050,000
..
..
£316,050,000
* If this calculation be based on 4,000 men per £1,000,000 spent, the
estimate would be increased by £25,000,000.
This figure does not include provision for (a) any expense involved in
providing temporary housing for the 150,000 workers t o be employed
in building and re-conditioning ; and (6) the cost of migration or any
expense which m a y be involved in providing new accommodation for those
displaced by the family farmers.
(2) ANNUAL
COST.
(a) Rent or interest on purchase money for land at, say,
30s. per acre
(6) Interest on compensation money . .
..
..
..
(c) Interest on cost of equipment at 5 per cent, in perpetuity,
i.c, assuming unlimited life
..
..
..
..
(rf) Maintenance, management, loss of rent, outgoings and
contingencies, say . .
..
..
..
..
..
£
4,500,000
175,000
3,750,000
1,500,000
9,925,000
(e) Less gross rents of family farms (Rent 30/. per acre, plus
return on equipment, etc.) say
..
..
..
..
(Note.—Items
(a), (c) and (e) may be over-estimates
for the reasons given in Statement (1)—Capital
Expenditure. The net figure of £3,100,000, however,
would probably not be greatly affected thereby, and any
reduction might be offset by an increase in item (/) for
the reason indicated in Statement 1.)
(/) Interest on one half of the £100,000,000 spent on re­
conditioning
(g) Interest on capital outlay on Training Farms (£750,000)
a n d c o s t o f acquisition of land £1,S00,000)
..
..
(h) Interest on amount of loans is assumed to be paid by
settlers, but some concession in this respect would be
necessary at least for the first year or two, and some
losses must be anticipated . .
..
..
..
..
(i) Costof training,say, 15,000 men annuallyfor 5 years at, say,
£3 per man per week for 9 months. This £3 is the
figure supplied by t h e Ministry of Labour, and includes
all running costs, but no allowances for the trainees or
their dependents
(This figure would not include the training of depend­
ents or other workers.)
(j) Provision for family allowances during the period of
training, and for maintenance for a period after training
was completed. If this can be estimated at £100 per
man, it would cost, annually for 5 years. .
..
..
(This figure might be reduced if provision were made
for the training of dependents.)
Total
6,825,000
2,500,000
127,500
—
1,SOO,000
1,500,000
£9,027,500
To this total of approximately £9,000,000 must be added any allowance
in respect of interest on the advances to settlers—see (h) above. It includes
nothing for assisting transport, or advertising and marketing British
grown foodstuffs. The figures of £6,000,000 in the Liberal Memorandum
includes £3,000,000 for these two kens together with net losses on training
centres. Considering that the annual losses on training centres alone
are shown b y the above figures (items (i) and (j) ) to be over £3,000,000,
it is clear that the estimate of annual cost on the Liberal Memorandum is
very inadequate.
The estimate of £9,000,000, plus whatever is spent on advertising and
marketing, must, however, be reduced b y any amount by which item (/)
may overlap with items (a) and (c)—a point on which the Memorandum
is not clear.
Items (i) and (j) would disappear on completion of the five years'
training programme covered by this expenditure.
The above estimate does not include any costs of Headquarters'
administration.
SCHEMES FOR THE ESTABLISHMENT OF SUPPLIES OF ELECTRICITY
IN RURAL AND COMPOSITE AREAS RECENTLY APPROVED
AND/OR PUT IN HAND ; AND SCHEMES AT PRESENT UNDER
CONSIDERATION OR IN COURSE OF PREPARATION.
(i) The County of London Electricity Supply Company, Limited, in
respect of the County of Essex, involving capital expenditure of £240,000
apart from expenditure on low tension distributing mains. The scheme
was approved in April, 1929.
(ii) The group of Kent Power Companies in respect of the County of
Kent, involving capital expenditure of the order of £300,000 on transmission
and distribution works. This scheme was submitted voluntarily.
(iii) The East Anglian Electric Supply Company, Limited, in respect of
parts of the Counties of Norfolk and Suffolk, involving capital expenditure
of not less than £500,000. The Commissioners' approval of this scheme
was given in May, 1930.
(iv) The Wcssex Electricity Company in respect of North Oxfordshire,
involving capital expenditure of the order of £100,000 apart from expcndi­
ture on low tension distributing mains. The Order approving this scheme
was made in September, 1929.
This Company arc also about to submit to the Electricity Commissioners
a further comprehensive scheme for a large area in South-West England.
(v) The Shropshire, Worcestershire and Staffordshire Electric Power
Company, in respect of parts of Shropshire, involving capital expenditure
of the order of £70,000 on the distribution system alone. The Com­
missioners' approvals were given in August and December, 1929.
This Company have also recently submitted a further scheme for other
parts of their Distribution Area in Shropshire.
(vi) The Bedfordshire, Cambridgeshire and Huntingdonshire Electricity
Company, in respect of parts of these counties. These proposals were
approved in July, 1930.
(vii) The West Midlands Joint Electricity Authority, in respect of part
of Shropshire, involving capital expenditure of the order of £300,000,
including £137,000 on low tension distribution. The Commissioners expect
to be in a position to approve these proposals within a few weeks.
(viii) The Cleveland and Durham County Electric Power Company, in
respect of parts of the Counties of Durham and Yorks (North and East
Ridings), involving capital expenditure of the order of £115,000 on trans­
mission and distribution works. I t is anticipated that these proposals will
be approved within a few weeks.
(ix) The North-West Midlands Joint Electricity Authority are actively
engaged in preparing a scheme of development.
(x) The North Wales Power Company are investigating the possibilities
of further development in their rural area.