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CHAPTER XXV. A SUMMARY OF THE SITUATION AND SOME ECONOMIC CONCLUSIONS
Eighty years ago Great Britain held the monopoly of the world in the engineering and metallurgical industries. But after the war of 1870 and the growth in Europe of the national spirit, Germany, France, Belgium and Switzerland determined to become industrial countries, and to set up, so to speak, in business for themselves. The United States, too, until that period mainly occupied with agricultural development, was being gradually converted into a nation of manufacturers. Establishing technical schools in every branch of science, and commanding sufficient capital — a great deal of which was freely loaned them from this country — to lay down new and scientifically-designed plants, the United States and many European countries began to produce for themselves. British manufacturers, under the influence of their past successes, and possessed of a money-making but obsolescent or even obsolete plant, continued to turn a deaf ear to the claims of science and industrial reform. Finding themselves unable, at length, to meet successfully the increasing competition set up by these new installations, they saw the profits of their iron and steel works rapidly falling away. But instead of facing the new situation, they endeavoured to maintain their profits by selling plant and machinery to countries abroad, thereby furnishing these with the means of still further competition. The pressure became acute in the later seventies, when at last the great metallurgical firms resolutely confronted their difficulties and took measures to overcome them. After a period of almost hopeless depression, money was found and a certain degree of trained skill for reconstruction and for the provision of improved plants, without unduly adding to capital account.
The Joint Stock Companies Act of 1862 was the medium of the fresh capitalisation of these industries. The older Limited Liability Acts had not a very widespread application. The large accumulated savings of the cotton, shipping and other trades demanded, however, new outlets for investment. Important groups of Lancashire and Yorkshire capitalists found what they wanted in the establishments of old private firms who wished to withdraw from their businesses. In Middlesbrough, Newcastle, Manchester, Leeds, Derbyshire and South Wales great companies were established, which are still typical of the industries they are engaged in, whilst their capital has increased tenfold. Thousands of companies were subsequently "floated," so that to-day a vast proportion of the capital in our industries is held in small amounts by the general public. In 1862 the paid-up capital of limited companies in this country was £51,098,120; in 1870 it had increased to £928,529,243, and in 1925 to £4,470,366,797, held by 95,055 companies.
In considering the state of affairs thus briefly mentioned it is just to a preceding generation of Englishmen to bear in mind that in certain branches of engineering we have always held a leading position in competition with the rest of the world. In the construction of locomotives, for instance, and in machine-making and shipbuilding we have never, so far as technical excellence goes, been in any serious danger from competition abroad. Building ships of iron and steel came as a new industry about the period under reference, and in again laying out our shipyards to meet the change we started in as good a position as any possible rival could hope for. Only after the creation of the German mercantile marine, and during the years immediately before the War, did we encounter any ship-building competition at all, and this scarcely touched our home market.
The changes springing up during the past twenty years in regard to works reconstruction and the supersession of obsolescent plants received a sudden and powerful impetus from the outbreak of war. A feverish development took place in every industrial centre adapted to the turning out of munitions of war, ships, guns, shell, locomotives, rails, transport vehicles and numberless other adjuncts to military operations. At the same time, owing to the almost boundless expenditure of the British as well as other Governments during the hostilities, all plants in the engineering industries were expanded to meet the urgent requirements of the Army and Navy. A great number of firms in this country, and doubtless in others, are now left with installations of a first-class type far in excess of the normal requirements of a nation at peace. The consequence is that establishment and other overhead charges are now greater than their trade can bear, and these charges, many of which consist of interest on borrowed money, cannot be reduced, but form a serious and permanent proportion of the cost of production.
Over-capitalisation, due in part at least to these extensions, and the difficulty of reducing share capital, will result not merely in contracted profits, but possibly in a loss of vital energy in the works themselves. Money cannot always be found, either out of revenue or by fresh issues, to replace defective plant. If it should be found, it is probably borrowed, and so constitutes permanent indebtedness, instead of appearing in the accounts as a revenue charge. Even so-called reserves, earned out of profits, are, in accordance with what a former generation regarded as a sound rule of company finance, buried in the plant and fixed property of the undertaking, and are therefore unavailable as liquid cash for current finance over a series of bad years. The financial reconstruction of some of our highly capitalised companies which has been recently effected, and which has been referred to in preceding pages, is a striking illustration of such a situation.
Our mining and metallurgical industries have been supported mainly by capital found in the localities in which they are carried on. Little is known outside those areas of the smaller individual firms, but in the case of public companies the names are to be found in the share lists of the Glasgow, Newcastle, Sheffield, Manchester, Birmingham and Cardiff Stock Exchanges. The moneyed world of London is not, however, greatly interested in their existence. These shares are, with a few important exceptions, unquoted on the active list of the London Stock Exchange. Yet many of these great industrial firms have offered, and still continue to offer, as fine an opportunity for the investment of capital and energy as can be found in any part of the world. High profits in many cases are earned in normal times by these undertakings, which, nevertheless, are not favoured by the ordinary investor.
In any review of our industrial situation one fact stands out clearly and expresses itself with an almost sinister emphasis; that is, our absolute dependence on export trade for (1) the import of foodstuffs and the maintenance of the working classes, and (2) the preservation of the capital value which has been invested in our basic and allied industries. The great productive plants of this country have been designed to supply, not merely the home market, but also a large foreign and colonial trade. As regards the latter, we have till lately been subjected to little or no injurious competition in important departments of industry.
In machinery, shipbuilding and first-class railway material we have been supreme. It would be difficult to point to any year in which our engine works were idle because of orders having gone abroad. If occasionally British, Indian or Colonial railways purchased material from other countries, it was because our own works were so crowded with orders that we could not undertake the business. Since the War, however, a different state of things has prevailed. Belgium, Germany and Czecho-Slovakia work longer hours than our own. Their wages also are on a lower scale. It is obvious under such circumstances that our chances of successful competition in what are termed "neutral markets" are, for the present at least, seriously impaired. These countries will, no doubt, in time gradually put their labour on a better footing, which would, of course, mean raising their cost of production and reducing their competition with British industry.
Excessive cost of production is our greatest obstacle to export trade, and this is chiefly attributable to the high demands of labour. Wages during the War were forced up to an abnormal height. Great numbers of skilled men were drafted into the military forces, and the rate of wages among those who remained at home, particularly in the collieries, mounted to heights that now seem almost grotesque. Many colliers' homes had £20 or £30 a week and more to spend. What is called the "standard of living" was run up to an artificial and extravagant height. This has been at the root of the trouble in our recent labour disputes, more especially in the mining industry, where men have never been content to face again the economic value of their wages, or been brought to realise that their inflated wages during the War were the product of an abnormal period which can never recur.
The labour situation, too, reacts disastrously on our export trade. The trade unions, which, before the start of this century, performed a great and useful work in improving the status and welfare of the working man, have, through the abstention of the steady, industrious and experienced members from the union "Lodge" meetings at which leaders are elected, fallen under the sway of political socialism. So far from appointing leaders competent to understand commercial conditions and the trend of markets, and able and willing to confer with employers who do understand these things, their activities (or rather their immovable resistance to modifications which existing economic considerations render essential if trade and employment are to be maintained) are largely directed from quarters whose avowed aim is to acquire, by a process really amounting to confiscation, the productive value of every undertaking. This, in the political jargon of the day, is called "nationalisation." Preparatory to this ultimate step the trade unionist, under the instructions of his leaders, embarks on senseless strikes for uneconomic wages, based on that empty if attractive phrase, "the standard of living."
It must be the wish of everyone to see the standard of living improving from year to year, but the standard of living can only be regulated by the economic results of the industry that produces the wages, and these wages must necessarily be the measure of the standard attainable. It is idle to suppose that by fixing a certain standard of living one can compel an industry to provide the ways and means to secure it. Wages, after all, are simply part of the price, and the chief part, which a buyer in the open market is prepared to give for a manufactured article. The miner or railwayman who holds up the country by a strike can care little for the standard of living or well-being of workers in other trades, while the buyer in the open world market has, on the other hand, no regard for any standard of living except his own, no matter what it may be.
The labour situation is dominated largely by the railwaymen, the dockers and the coal miners, who, through their unions, are perhaps chiefly responsible for what it is to-day. The men themselves are probably unconscious of the pernicious stranglehold which excessive wages and short hours of work often exert upon British commerce. Nor do they realise that the recurrence of disputes and even short strikes affect the minds of customers abroad to whom punctual deliveries are of importance, and who consequently place their orders in countries where labour conditions are stable. Wages paid to railwaymen before the War were undoubtedly too low, and their working hours were too long. Public opinion supported Parliament when it intervened and improved the men's position. But the Railways Act of 1921, which grouped the different railway companies, and stabilised wages and conditions of service on bases which might be justified at the time, but not at the present moment, has saddled the country with a burden which it is scarcely possible for the railway companies to sustain. The Railways Act has reduced to eight hours the working time of the young unskilled man at a rural station where he has usually very little to do, and has provided him at the same time with a wage which is higher than many skilled artisans can obtain at the present time. An engine-driver or a signalman — a person of great experience, skill and responsibility — deserves full and generous remuneration; but to place those of the rank and file, who are not so useful as an agricultural labourer at 30s. a week, in the position of a skilled mechanic, and with higher pay, is a step which cannot be justified.
At the present day the extra charge upon railway revenues imposed by the shorter day (involving the employment of many more men) and by the increase in wages and salaries, is much heavier than is commonly realised. In 1913 this expenditure was £47,000,000. In 1921 it amounted to £149,000,000, whilst in 1925 it was £120,000,000).  All this falls on net revenue. The loss entailed by these concessions to the railway rank and file has been partly met by a great increase in railway rates and fares, the burden of which falls on the public and on the "unsheltered trades." In spite of this, the net revenue of railway lines is still heavily depleted, as the Companies' Reports show, and large calls have been made on the earnings of past years (held in reserves) in order to give the stockholders some fair return on their investment. High railway rates, too, render the cost of transport of coal, coke, pig iron and manufactured steel (already unequally distributed in different parts of the country) heavy even for our home trade. But this cost, which is increased by the high wage of the docker — an unskilled labourer getting is a week, or double the wage of a skilled engineer — is an intolerable burden on our exports, which have to compete with goods carried at cheap railway and canal rates on the Continent direct to the consumer.
Great Britain was, until after the War, practically free from competition in regard to coal. It is not probable that, except in times of labour disturbances such as the year 1926 has seen, coal could be sent here from abroad at a profit. Our own export trade in coal has, however, become seriously hampered by high costs due to artificial restrictions at home, such as statutory and Government regulations, including the compilation of elaborate statistics, by heavy railway rates from pit to port of shipment, the loss of working hours due to strikes, and the burden of excessive local taxation. There is also the indifference of the average miner to the wider interests of other trades, to which he has ordinarily no regard so long as he is able to earn just as much as, and no more, than he may wish to spend. 
Attempts have been made in connection with the industry to charge those at the head of our great mines with inflating the costs of management by neglecting obvious means of cheapening production by adopting more efficient methods. Though there may possibly be cases of small mines and small works where, through lack of capital, of means to secure the most competent managers, or other causes, backward conditions may prevail, such charges are without foundation when applied to a wider circle. Such insinuations were brushed aside as baseless by the recently-appointed Royal Commission, which heard evidence on the point, and, in any case, they can have no possible application to the great firms referred to in these chapters.
In shipbuilding we have not so far been sensibly affected by foreign competition, except by the seizure of German vessels and their sale to our shipowners at the end of the War. The effect of this has been to deprive our shipyards of orders. But in ship-repair work the high cost of labour at home, with the unreasonable conditions imposed by trade union practice, have driven British tonnage to Rotterdam, Antwerp and the Elbe, where repairs are less costly and more rapidly carried out than they are in this country. British work has been handicapped by the "demarcation" rule of our trade unions, who insist that in the execution of repairs, whether on ships or any other jobs, each workman should be rigidly confined to his own particular trade. Cases are on record where a dispute such as that between a plumber and a mechanic, as to who should fix a pipe, has held up the work on a ship for weeks. The builder is powerless to intervene. The effect of this rule is that where six different trades are needed for the repair of a ship, then six different sets of workmen must be employed on the work, however small the total job may be. In foreign yards a single gang of skilled men will work together on a contract and complete it at a cost to the ship-owner of half the money and half the time it would cost him in this country, A Joint Inquiry, however, set up in May 1925 by the Shipbuilding Employers' Federation and the Shipyards Trades Unions, recently reported in favour of the relaxation of many of these harassing restrictions, and an agreement to that effect was ratified in 1926. The unions connected with shipbuilding are led by men of wider knowledge than those who lead the Miners' Federation, and there is reason to hope that such leaders as those of the iron workers, the boiler-makers and the shipyard workers will join hands with the employers, and consider from time to time how far their united action can maintain or restore trade.
Thousands of skilled marine engineers from our shipyards have, owing to want of orders for new tonnage, become motor-omnibus drivers and chauffeurs, at wages higher than they could earn in their original trades, with the advantage, moreover, of a reasonable certainty of continuous employment. At the same time, the influx of apprentices has been checked. The result is that whilst we are losing the skilled men at the top, there are not enough young men coming forward to take their places. If there should at any time come a rush of orders for ships and engines, it is difficult to see where the yards could find the labour that would justify them in contracting at fixed prices for new tonnage. A similar state of things prevails in engineering, where large numbers of skilled hands have left the shops and emigrated to the Colonies or the United States, or have taken up other employment.
Until not many years ago managers of engineering and metallurgical establishments were trained by "rule of thumb." They succeeded, so long as no scientific competition existed, in earning handsome profits for their sleeping partners or shareholders, in an easy-going way. No attempt was made to keep down costs. Fuel was abundant and cheap. The price of iron and steel stood at what appears to us an enormous figure. To be an iron-master or a ship-builder when first ships were built of iron, was to be, in the public eye, something approaching a millionaire. Today, however, it is generally recognised that without well-trained expert officials capable of appreciating, and alive to the importance of, the latest developments affecting their industry, no undertaking can expect to keep in the front profit-earning rank. It is not too much to say that a really first-class man, with the training of a gentleman at the back of scientific and commercial attainments, can command almost his own terms for vacant posts. Salaries are paid to managers and other officials far beyond anything that can be earned by way of fixed emoluments in any profession except in a few of our higher judicial posts. There never was a time when, having regard to the development of modern science and the demand of the world for highly finished materials, more scope was afforded for educated skill and enterprise. The difficulty is to find this, and it is to be regretted that young men of real talent do not try to make a career for themselves in industry, instead of overcrowding the professions of medicine, teaching and the Bar.
The scientific spirit in these days is a vital factor of manufacturing success. Its importance cannot be exaggerated. It is not too much to say that in the research laboratory lies the source of prosperity in the future to labour and capital alike. Research secures the means of reducing costs and increasing output, but it goes far beyond this. Any day some laboratory discovery may bring forth revolutionary changes in the methods of industrial production, and reveal new avenues for the employment of capital and labour, conferring lasting benefits not only on those directly concerned, but on the whole community.
In this country we have long hung in the rear of the application of science to industry. The relations between the two have often been marked by a degree of mutual depreciation, if not actual contempt, which has isolated each from the other and kept them apart. The idea that pure science must necessarily be contaminated by any association with commercial uses has until recently been an honoured tradition amongst its most illustrious professors; whilst the manufacturer — the "practical" man strong in his conviction of the unassailable superiority of the "rule-of-thumb" methods handed down by his predecessors, regarded any intrusion of science on his province with mingled incredulity and aversion.
We have seen this disposition changed, and scientific research is now regarded with respect by even the most conservative of our industrial leaders. It is well that this should be so, for England is as fertile in ideas as any other country, though, as we have seen in the past, sometimes less ready to put them to a practical application. We know how a number of our scientific discoveries, neglected here, have been seized upon by our rivals in other countries, who have therefore left us behind. It is essential, then, that research should be vigorously prosecuted. It is the best prophylactic against unemployment. Our trade has grown up by such research as we have been able, in an amateur way, to accomplish in the past, and our future depends upon it. A closer touch with pure science is now, for instance, demanded in electricity, more than in any other field of industry. How is this to be achieved? Not in a small laboratory. Research on a large and costly scale has now become the business of the State, which ought, of course, to receive the widest practical help from leaders of industry, who themselves have, at their own expense, already done fine work in this direction. It would not be expedient, however, to leave this important field to individual money-makers in the world of business. The new technical Universities of Manchester, Leeds, Sheffield, Birmingham, Bristol and Nottingham, as well as the older Universities such as Cambridge, Glasgow and Edinburgh, are zealously pursuing scientific investigation on the practical side.
The Department of Scientific and Industrial Research has, since its establishment in 1915, been presided over by Sir William McCormick, LL.D., assisted by a Board of Technical Advisers and "Assessors." There are, besides, co-ordinating Boards, under the heads of Chemistry, Engineering, Electricity, Physics, etc., for the interchange of information between the various Government technical departments. The net cost of the Department last year was 4492,000.
The researches carried on by the National Physical Laboratory at Teddington and the Fuel Research Board at East Greenwich under the above-mentioned Department, are closely associated with the basic industries referred to in this volume. That they have accomplished valuable work cannot be denied, but whether they are as yet sufficiently well equipped and organised to produce all the nation has a right to expect of them, is another question. Those who are interested in what is being done by the Scientific and Industrial Research Department can gather details from the annual, but rather belated, Reports it presents to Parliament, the last of which appeared in May 1927. These may assist them to judge how far useful work is being carried on; but the real test of efficiency must be a comparison with what is being done in the same direction by France, Germany and the United States.
We have allowed Germany to take the lead in the fixation of atmospheric nitrogen by a process which has cheapened all nitrate fertilisers to such a degree that sulphate of ammonia, formerly one of the most remunerative by-products of our coke ovens, has fallen in value from £14 to £7 a ton. A private firm (Brunner, Mond and Co) has installed a vast plant at Billingham on the River Tees for the production of nitrates from the air, but we have not yet been made acquainted with any success on the part of our State researchers in approaching this important branch of applied chemistry.
The Fuel Research Board has for the last ten years carried on experiments on the low-temperature carbonisation of coal on a large scale at its works in East Greenwich, but no definite advance has so far been announced towards anything giving a prospect of an economic future. So far the Board has contented itself by declaring that the average consumption of fuel in this country for the manufacture of a ton of steel is greatly in excess of the best existing practice. Here again a private firm — Brunner, Mond and Co — has acquired the German patents for the hydrogenation of coal, by treating it with hydrogen gas under enormous pressure and with great heat — a process which, completely destroying the coal, should turn it into hydrocarbons of great value.
The importance of this problem now before the Fuel Research Board cannot be over-estimated. It is asserted, and is probably true, that during the next twenty years the world supply of mineral oil will be gradually exhausted, and that the petrol, heavy oil and other hydrocarbons on which the internal-combustion engine is dependent must then be obtained by the distillation of coal. There is no difficulty in the production of benzole, with its derivatives, in the ordinary coke oven as a by-product. But the conversion of coal into mineral oil, either by destructive distillation or leaving a smokeless fuel for household consumption, though many gallant and costly attempts have been made by private syndicates to effect this transformation, has not, in this country, so far resulted in anything which can be accepted as resting on a commercial basis. This is experimental work which a private firm ought not to be expected to carry out, and it lay with the Fuel Research Department to bring it to a successful consummation. But Germany was ahead of us, and her discoveries, though of course even these are not yet commercially proved, are now to be exploited by a British firm. The £40,000,000 a year we now send to foreign countries for mineral oil will probably amount to 660,000,000 during the next twenty years. This money could be kept at home, and a huge British industry ancillary to coal-mining could be created, if a successful method of coal distillation could be found. Both France and Germany, with the cordial support of their Governments, are in the meantime exploring assiduously in the same direction, and there can be no doubt that chemistry and coal must work together in intimate association if we are to maintain our collieries in their full efficiency, and with our own coal our industrial future.
In electrical research, too, national aid is necessary, and must be afforded. In the near future we may be using pressures of many hundreds of thousands of volts. No private individual or firm could be expected to undertake an electrical problem such as this, involving not only great expense, but more nicety and accuracy of calculation than any other branch of applied science. But when principles have been established and practical deductions assured, the manufacturer will enter the field and the worker will be assured of more employment at better wages. The same considerations rule in other fields, and it is to be regretted the tendency of Parliament is now rather towards reducing Government grants than increasing them for institutions like those referred to. A few years ago this country demanded a two-power standard for the Navy that protected its commerce and its shores. To-day Continental Governments are lavishly supporting by money and brain-power technical research. So far from our having a two-power standard in this battle of scientific investigation in which rival nations are arming themselves against us, we cannot boast of even a One-Power efficiency. It would pay this country to finance the National Physical Laboratory and the Department of which the Fuel Research Board is part, if they are competent for their tasks, on a generous scale, and thereby keep Great Britain in the van of progress, rather than go on levying heavy poor rates and expending possibly far greater sums in distributing doles and other subsidies to unemployment, while France and Germany attain supremacy in trade.
The relations between employers — that is to say, shareholders — and employed have recently been a subject for public comment, and it has been declared that they are antagonistic. There has been much talk of a golden age, when the employer was on terms of personal friendship with all his men. That may have been in the days when collieries were not much larger than brickyards, and when forges and foundries were carried on upon a Lilliputian scale. But in spite of those friendly relations, labour conditions then were infinitely worse than they are now. The workman had no laws for his protection, either in the mine or in the workshop; no high wages, no pensions, no provision for sickness, no education, no good home, no rational enjoyment and no possibility of saving out of his earnings. His employer was probably in many cases a man of his own social class, without any of the altruistic perceptions prevalent to-day. Now the workman is educated, well clothed and fed, generally comfortably housed, provided with weekly payment in case of sickness, assured of full compensation in case of partial or permanent disablement, occupying well-ventilated and well- warmed workshops, and, in the case of collieries, with every safety appliance that skill and expenditure can devise.
This has only been made possible by the creation of large industrial manufacturing units employing hundreds, and sometimes thousands, of workers, presided over by men of high technical attainments, whose duties, however, are such that they cannot be in personal touch with all the men employed. Comparing the two situations, is it likely that the workman of to-day would willingly go back to the conditions under which his grandfather lived and toiled for a pittance, even if he was "hail fellow well met" with his employer? Doubtless under the existing conditions of great limited companies there is, in the mind of many a worker, the feeling that he cannot hope to improve his position by starting in business for himself. This may be more difficult now than in the days of Samuel Smiles, but, on the other hand, employees can rise by skill and other qualifications to positions of responsibility, carrying salaries which would probably pay them much better than to risk what little saved capital they may possess in an independent business unsuited for competition with undertakings of large resources.
It is, however, to be recognised that, so far, the worker has not any security for continuity of employment during periods of trade depression, and this leads him to restrain his energies and restrict output through fear that, should production overtake demand, he may be thrown out of work. The consequence is a material addition to manufacturing costs, and the suggestion has been made that through a more comprehensive scheme of unemployment pay, the difficulty might be overcome. The success of any such scheme, however, would be doubtful, and it would, moreover, involve a risk of unsound finance. In any case, whilst wages remain at their present uneconomic level, Parliament, as well as industrial establishments, will be reluctant to contemplate further expenditure in this direction. It must be borne in mind that in times of trade contraction the capitalist employer refrains from distributing in dividends all the profits his trading accounts may show. He devotes, instead, any available surplus to the installation of machinery that will reduce manufacturing costs, or he reserves it for use as working capital until the demand is resumed for his productions. In this way, by strengthening the position of his business and maintaining employment, he helps the worker.
The thoughtful and intelligent workman will understand that his real interest is bound up with the development of our national industries, which he ought to regard as a splendid inheritance handed down to him by those who went before. These, and especially export trade, are mainly dependent on the cost of labour, the first charge upon all industries, on which wholesale prices are necessarily based. If these prices continue to be in excess of those of our competitors, we shall be in danger of losing our foreign markets, on which the prosperity of the country wholly depends. To preserve these markets, and with them regular employment, a reduction of manufacturing cost is necessary, and in this the worker must be prepared to play his part. Even though his income may at first slightly fall, he will, in the long run, be the gainer, for the cost of all commodities will be lessened, and, with this, his household and other living expenses. A renewed trade prosperity, too, must bring in its train the high wages always associated with good times.
Last year our national export trade showed a serious decline, from which we have not yet recovered; and this, in some quarters not favourably disposed toward this country, has been hailed as a symptom of decay in British industry and the approaching end of our commercial supremacy. There is no real basis for any such assumption. It is true we have a problem before us, "a problem," as H.R.H. the Prince of Wales has recently said, "which may look simple, but which has many complexities — the great problem of how to get more and more British goods into the markets of the world."
The problem is capable of a solution, which may serve at the same time for an answer to the query in the preface as to how far the capital invested in our basic industries may be considered a good national asset. The answer, in my judgment is the following:
We have industrial resources of the first order; fuel, ores, works, plant and machinery of the latest design, unrivalled shipping, with metallurgical skill derived from generations of experience, and inherited by intelligent workers headed by men of enterprise and administrative power. We are famed for our products, which are universally recognised to be second to none in the markets of the world. These markets have not yet recovered from the effects of the War, but recover they will. Their increasing purchasing power will stimulate international commerce. What we must do for the restoration of our trade and for the assurance of a prosperous future is to meet the requirements of foreign countries in design, in quality and in price. We must have a fuller appreciation by our Government of the value of exhaustive research; we must cut down our manufacturing costs to such a point as will enable us to control the markets at home and abroad in which we trade; and we must have an intelligent and at the some time economical sales organisation in foreign countries. If, by the willing co-operation of the worker and employer, these ends be achieved, our industries will revert to their full vitality.