THE EMPIRE'S FUTURE

Waikato Independent, Volume XXVIII, Issue 2924, 17 April 1928, Page 6

THE EMPIRE'S FUTURE

RATIONALISATION OF INDUSTRY. WHAT IT WILL MEAN. (By A. li. Tomlinson). The future of Empire is a future of Empire traue. That is a truism which jiuiny far-sighted men have .striven to carry into practice in the past and which all equally far-sighted men realise to-day. '- Trade is the backbone of Km pi re arid it is essential that every thinking person in the British Commonwealth of Nations should understand the transitional period through which industry is passing to-day. Only through such understanding can we hope to progress to the ultimate ideal of the Empire as the greatest single economic unit the world has ever seen or traded with. British industry to-day is in a state <of transition-—transition from the old played-out theories of cut-throat competition and the so-called free play of Economic laws to the new era of cooperation, regulation of output to consumption, and unification on a national and Imperial basis; transition from the ir.et.hods of ruleof-thumb and muddle through to the new era of science ami (Scientific organisation—and the, outstanding feature of this process of transition is what is called "rationalisation. '' Hany people may confuse -tion with nationalisation, which is about as near the mark as confusing xftk'iency with deficiency. As a matter .01 fact," it is very difficult to give an ■ wact •.definition of rationalisation, bo-.iit-xuiti it is so many sided and manifests itself i" so many different forms and processes. A fairly comprehensive definition is: "The full application of science and scientific method to industry secured by unification of all the processes of production and distribution." '■ Cut-throat competition amongst all .the warring tribes of commerce is as ...dead as the feudal, system. The old order of things when every manufacturer was out to beat his neighbour and to hustle him into liquidation if possible, when your neighbour's profits were supposed to be your losses, Ims gone the way of the Saxon Heptarchy. "Lunatics never combine," said Mr Keynes, the famous economist, ami he further pointed out that the old beg-gar-my-neighbour policy was so devastating that every goahead and prosper-. urns'.industry spent half its time trying ifco .got fid of it. ThQ old trusts aimed at profits and high prices; the modern combine aims at service and efficiency. It is simply the logical result of the scientific outlook in business, and as such it is its

own justification and defence. It is the last word in 'scientific method and organisation and it is the finest instrument which the best business brains of the Empire can use for furthering the interests of the Empire's industries. What are the solid benefits of the combine as. a step in rationalisation? Firstly we have finance; a large-scale company, with a large reserve and vast resources can obtain its capital for extension and development at a much cheaper rate and with much greater facility than the smaller concern. Then

we have the question of raw materials; ' the big combine is in a much better ' position to secure cheaper markets and • to guard against exploitation; often it is the actual producer of its own raw materials, as when steel firms own collieries, iron-ore mills. and limestone quarries. All this makes for economy : and efficiency. Coming to actual production, we find that modern plant and equipment often demand the expenditure of millions of capital, and is constantly being superceded and calling for replacement. Only a big combine fitted for large-seal*.' . production can afford to lay down such plant and to keep it up-to-date at .the lowest possible cost. Then again, the combine can attract the finest "technical andi administrative brains to its staff and afford them ample scope ami opportunity. In modern industry the part played by research and new inventions is everincreasing, and this is one of the very strongest arguments in favour of the combine. By a pooling of brains, by an adequate financing of research and the results of research, the combine can advance whole decades ahead of its smaller competitors. It can test and utilise all the latest processes and devices, and in its own great research laboratories has a most powerful instrument of enterprise and progress. The last link in the chain is distribution, and here the combine has a very obvious pull. Indeed many modern fusions arc formed simply for the marketing and selling side, of the industry. A large-scale business is in ready touch with all the available markets; its sources of information arc fresh and up-to-date; its agencies cover world markets, and it is able to throw out its huge, efficient tentacles in any direction. In all markets it commands respect, amisecures all the economies of centra) control. Such are but a few of the benefits of amalgamation, but there are patent economies and advantages in a thousand directions. On the Labour side a big company can afford to give its work people better conditions, more security, and a generous provision of welfare and recreative activities. Indeed, many responsible Labour leaders have already given the combine its blessing. Combines are but one step in rationalisation. Another aspect is the control of world markets and the stabilisation of prices. Stabilisation is one of the crying needs of 1 industry to-day. and is constantly called for by leading economists. Unrestricted production without reference to the needs of consumption is archaic. It results simply in violent, booms and slumps with industry tossed on the gigantic waves of alternative prosperity and distress. In the transition stage of the new organisation of industry into rational

units the first essential is the unification of industries on a national basis, but this should be but a step towards rationalisation on an Imperial basis. The way has already been shown by the creation of the huge Empire chemical combine, Imperial Chemical Industries. Ltd., which has been formed with the avowed and definite intention of concentrating on Imperial trade in its own branch of industry. It is a big venture and an entirely novel one, but the British race has a genius for do-

ing things on the big scale and Britons have never shied from the word "impossible" in building their heritage up. The dangers are first the habitual apathy of the Briton on questions -if. the first importance like this, and secondly the risk that. Britain or other components of the Empire may be tempted by immediate economic benefits or by geographical contiguity into other economic units than the great Imperial one. The. United States is one great economic group. On the other side of the Atlantic we have gradually forming another economic group, the projected European Customs Union. Faced by severe competition from the United .States, the various countries and nations are being driven to sink their prejudices and animonities and merge their interests in an economic alliance. This second world grouping, the European Customs Union, has becomo almost a fetish with business men on the Continent.

Amid all these contending forces, what is to be the position of Britain? On the one hand she is being urged and cajoled to join the European complex; on the other hand is the possible policy of isolation. Either of those alternatives would mean sacrificing all that we gained and all that we bled for in the Great War.

There is only one policy for Britain and that is.the policy of Empire. Standing alone she would be swamped by the other world groups. Joining any one of them she would fatally weaken the ties of Empire and throw . away the trump card in her hand. As a component part of the British Commonwealth of Nations, however, she. could face world competition without a qualm. A few figures strikingly illustrate the position. The United States has an area of 3,000,000 square miles with a population of over 100,000,000; Europe an area of less than 4,000,000 square miles, ami a population of 420,000,000; Britain an area of 88,000 square miles and a population of less than 50,000,000.

Take the Empire as a whole, however, and we find that it has an area twice that of Europe and the United States put together, and a population greater than Europe! In raw materials and natural resources the Empire is equally predominant, oil being practically the only one in which she is at present at a disadvantage. The Empire has a huge preponderance in rubber, nickel and jute; she leads in gold and tin, and has ample supplies ,of other minerals. Her coal resources are enormous; in foodstuff's she produces 27 per cent of the world's supplies of wheat ,in rice 6(5 per cent, in cattle 53 per cent, and in sheep 51 per cent. An equally encouraging tale is told with other commodities of all kinds.

The Empire then is easily the world's greatest economic group. Nor is she behind in brains, vigour, push and technical ability to develop her resources. She has an undisputed reputation for justice, sporting spirit, and administrative ability. All that is needed is full economic co-operation. How that can be secured is for the business men and industrialists of the Empire to work out. We cannot expect those countries, like Canada and Australia, which have fostered young industries behind tariff walls to sacrifice them and be content wit'n farming in all its branches. All those problems would have to be solved by means of quotas of production and allocated markets together with an Imperial compensating pool for such industries as suffer under the new arrangement. All these devices arc familiar to anyone versed in the direction of great industries and could easily be put into Operation. Finally the whole Empire economic unit would have to be protected by tariffs, but with complete' freedom of trading within its own borders. To achieve this we must proceed by the modern road of rationalisation. From rationalisation on a national scale we- will the more easily step to rationalisation of all the industries of the Empire. This is looking far ahead, and to many it may seem a vision of impossibility. One thing is certain: To the tics already existing of Tace and sentiment must be added the soldor of trade

and the cement of economic advantage. Without them the whole structure of the British Commonwealth of Nations is imperilled; with them we can build an edifice which will stand the shock and strain of centuries and ever grow stronger and more sublime.