THE MARK OF
3RITISH—|— STEEL
—
: a
eee ra——
«V hat 1s Wrong
with
‘he British
Iron and Steel
Industry
)
ii
ii
A STATEMENT OF POLICY
INVOLVING
PRIVATE ENTERPRISE, THE WORKERS
AND
THE NATION
PRICE
TWOPENINZGCLE
\tsch
ae aly
AE)
= Uh ft 2,
2, 15
2, 3
Gui
[22]
m
o
QO
Introduction
The public interest displayed with regard to the Statement
on the Iron and Steel Industry submitted to representative
conferences on May 16th last by the Executive Council of
the Iron and Steel Trades Confederation, has justified its
issue in pamphlet form as a means to a wider circulation.
The Statement and Resolution were adopted by the
Conferences and the proposals received the support of
overwhelming majorities at public meetings subsequently
held in important industrial centres throughout the country.
The Statement expresses the point of view of the workers
with regard to the position of a great basic industry and
their conception of its place and importance in the national
economic life.
It is the point of view of those who are not without pride
in their craft or calling, who believe in the potentialities of
an industry in which they have invested their lives and the
wellbeing of those dependent upon them, and who claim
that their ability to think, their skill and experience, and
their capacity for service should be accorded a true measurement
of value and of status in any scheme of industrial
organisation and development.
The Statement is not a political treatise, designed to
provide a battle cry for opposing political parties. So far
as it calls for the intervention of Parliament it is in the
sense only that Parliament is an expression of the will of
the people, whose interests it is to see that an industry which
in the wider sphere has played so important a part in the
advancement of civilisation shall in due measure make
its contribution to national progress and the common
welfare.
The question raised on the front page of this pamphlet
is one of the utmost significance, not merely to the shareholders
of the multifarious units which comprise this
important.industry, but to the nation as a whole, and in
what follows the workers through their organisation offer
constructive criticism of the direction and control by private
enterprise of an industry so essential to the national economy.
They assert, in effect, that private enterprise must justify;
its claims by actual achievement, rather than by the traditions
of nineteenth century individualism or by criticising
the workers’ proposals on the assumption that leadership,
technical knowledge, inventive genius and the skill and experience
of labour cannot be as effectively and as successfully
applied if the ownership and control of the industry is
vested in the whole nation, than in a part only. That view
has been expressed in its most definite form by the National
Federation of Iron & Steel Manufacturers when they
state— any form of organisation partaking of the nature
of nationalisation must inevitably destroy the competitive
power of the industry in world markets and thus involve it
in complete collapse, rendering its continued existence only
possible by subsidy from the taxpayers.”
SN
(
:
t
[2
;
|
A
0
<
© £
m +=©
QO
~~
<<
N~
m
~
Q
~—
oo
oN
oy
«0
Ly:
DN
QQ
oo
<
2 2
ks
Ls
5.3
~—
ea.
| ©
i
§ ©
12
Ie]
at
uy
m
oS
oN
m
oN
fy
ok
o-5
-
Mm ¢
51
Such a conception of industry in relation to the public
interests obscures the wider vision which sees that the
needs of the twentieth century call for a conscious planning
and regulation of the national economic life as an essential
part of an international economic policy, based upon a
recognition of the increasing interdependence of nations
and the necessity of replacing wasteful competition and
selfish antagonism in commercial relations by the greatest
measure of co-operation and agreement. By no other means
can the peoples of the different countries benefit from the
enormous powers of wealth production which exist to-day,
the grave problem of unemployment be solved, and peace
and amity between nations secured. For, as the World
Economic Conference declared in 1927—* economic conflicts
and divergence of economic interest are perhaps the
most serious and the most permanent of all the dangers
which are likely to threaten the peace of the world. No
machinery for the settlement of international disputes
can be relied upon to maintain peace if the economic policies
of the world so develop as to create not only deep divergences
of economic interest between different masses of the world’s
population, but a sense of intolerable injury and injustice.”
It is in that spirit the organised workers in the iron and
steel industry submit their statement and proposals fer
examination bv the British public.
THE IRON & STEEL TRADES CONFEDERATION,
SwinToN HOUSE,
824 Gray’s INN Roap,
Loxpon, W.C.1
May, 1981.
The Iron and Steel Trades
Confederation
STATEMENT BY THE EXECUTIVE COUNCIL OF
THE CONFEDERATION WITH REGARD TO THE
SITUATION IN THE IRON AND STEEL INDUS-TRY
TO BE PRESENTED AT A SERIES OF
AREA CONFERENCES OF LOCAL BRANCH
OFFICERS TO BE HELD AT GLASGOW, NEW-CASTLE-ON-TYNE,
SHEFFIELD, CREWE, AND CAR-DIFF
ON SATURDAY, MAY 16, 1931.
The Conferences of official representatives of branches
of the organisation which are being held to-day at important
industrial centres throughout the country have
been called to consider the situation in the iron and steel
industry. That is a matter which has been ever present
with the workpeople over the past ten years. They have
had the painful experience of continually decreasing wages
and an ever-increasing volume of unemployment and underemployment.
The ‘economic blizzard,” as it is termed,
that since 1929 has swept over the countries of the world
which are embraced within Western civilisation has gravely
accentuated the position, and now even those branches of
the industry which have managed to maintain a fair degree
of trade and employment are involved in a depression
which jn its magnitude and extent is unprecedented in
modern history. That condition will pass, but in passing
it will still leave unsolved the problem arising from the
fact that the British iron and steel industry is faced with
a crisis in its affairs which, unless it can be tackled with
the necessary resolution, vision and capacity by those
who are in a position to control its destiny, the industry
will fail to make that contribution to the economic progress
of this country and the welfare of the people it >is
capable of doing. Such a failure, unnecessary as it is,
would be a discredit to British industrial leadership and
political statesmanship.
It is necessary to assert this dual responsibility, because,
as we shall show, the problem is not one which, in the circumstances
in which the industry is placed, can be solved
by industrial action alone, and for the reason that some
of the main causes for the present situation are outside
its control.
There is, however, no justification for the attitude of
defeatism which—judging from the statements made by
many of those who, through company meetings and
throuch the Press and other channels, express the mind
(5°
of capitalist interests—would seem to pervade the industry
at the present time. For we have no hesitation in asserting
that no great industry in this country is more. €ertile
in resources and none more potential in its possibilities
for healthy expansion.
Raw materials in abundance are still available; the
skill, experience and general capacity of the workpeople
are, at the lowest estimate, equal to those of any other
nation; the genius of our engineers, research workers and
inventors is unquestioned and the industry has certain
natural advantages which do not apply to the same extent
in the countries of its competitors. The world demand
for the products of the industry advances from decade to
decade in ever-increasing volume and in variety of uses.
The scientific discoveries and inventions of the present
century have created entirely new fields of endeavour in
economic production and in consumption of iron and steel.
Moreover, the opening up of the continents of Africa and
Asia now proceeding on the lines of Western civilisation,
the rebuilding of our great cities, and the new requirements
of vast populations provide scope for our metallurgical
industries never contemplated less than half a century ago.
Nor can we disregard in this connection the immense
advantage to be derived from a bold scheme of national
distribution of electrical energy such as is now before the
country.
There remains to be added one factor vital to success,
namely, the right quality of industrial leadership and
organisation. In that connection the Balfour Committee
on Industry and Trade in its Survey of Metal Industries
makes the following interesting comment :—
“The ability of the British iron and steel industry
to retain its place as one of the leading iron and steel
ndustries of the world will be conditioned by many
‘actors ; but, perhaps, above all, by its power to enlist
men of inventive genius, as well as men of outstanding
capacity as organisers. . . . It is for the industry to
make sure that it possesses men of the necessary
calibre who will be able to reassert in the future the
position of the British industry as a leader among
the iron and steel industries of the world.”
We are convinced that the problem is not that the
mndustry is lacking in resources of leadership and organising
ability, but that it is one of means or method whereby
that quality can be mobilised and given authority to act.
Reviewing the situation over the post-war period and
as it stands to-day, we feel justified in arriving at the conclusion
that this great basic industry is in danger of its
resources being wasted and its potentialities lost by a combination
of adverse forces represented by political expediency
on the one hand and on the other the incapacity
of multifarious interests steeped in a nineteenth-century
‘ndividualism and outlook to evolve a sufficient decree of
( 6
co-operation and endeavour to secure the greatest common
good of the industry and its rightful position in the
national economic Life.
The question is one of supreme importance to the workpeople.
Directly, they have more at stake than any other
interest involved. In a major degree the many thousands
of workpeople’ with the acquired skill and experience of
the best part of a lifetime of service to the industry have
thus invested therein the asset upon the use of which depends
their economic conditions and their ability to carry
aut their obligations to their homes and to society as selfrespecting
citizens, and they cannot be oblivious to a
situation the consequences of which so vitally concern
them.
There have been many views expressed and reasons
given for the problems of the British iron and steel inlustry,
and various remedies proposed for their solution.
An examination of cause and remedy in relation to each
other is necessary in order to arrive at any well-considered
2onclusions.
We were the pioneers in iron and steel production, and
up to the latter part of the past century this country held
premier position in that respect. Moreover, it was largely
the discoveries of our research workers and the genius of
our inventors which made possible the enormous development
of the metallurgical industries, while the experience
of British skilled workmen, engineers and organisers was
used to enable other countries, previously our customers,
now our competitors, to establish the industry within
their borders ‘and to utilise for their own needs their
hitherto undeveloped resources. These countries, however,
had no old traditions and methods to shake off, and
by the end of the century they had so developed their industries,
particularly the United States and Germany,
that with a world production of steel of over 271 million
tons, the United States produced nearly 10} million tons,
Germany 5% million tons, while Great Britain came third
with nearlv 5 million tons.
During the first twelve years of the present century
British production remained practically stationary, but
in 1913, the year before the War, we attained our record
production of raw steel of 7,660,000 tons. By this time,
however, the United States had reached 81.300.000 tons
and Germany 17.320.000 tons.
While the progress of other iron and steel producing
countries was inevitable, the rate of that progress as compared
with this country was undoubtgdly due to their
greater readiness to adapt themselves to new developments
and new needs, their greater sense of the value of organisation,
and their recognition of the importance of their
home market as a basis of industrial policy.
( =~
In 1929 the total world production of raw steel reached
over 118,000,000 tons, of which the U.S.A. produced
56,480,000 tons, Germany 15,990,000 tons, and Great
Britain 9.640.000 tons.
The estimated pre-war producing capacity of Great
Britain was 8 million tons per annum. The present producing.
capacity is estimated as approximately equal to
12 million tons of raw steel.
The table given hereunder shows the extent of Great
Britain’s participation in world production as compared
with 1918.
The final column gives the average yearly production
yver a seven-vears’® period from 1928 to 19929 inclusive.
WORLD PRODUCTION OF STEEL INGOT
AND CASTINGS
(Millions of Tons)
1918
1999 |
1998 |
Gt. Britain ..
Germany ..
France ..
Belgium .
Luxemburg ..
Russia -
Other European
Countries ..
U.S.A. “
Australia, India
and Canada
Japan & China
Total | 7515 | 76-93 | 107-92
8:52
14-29
9-85
8-84
2.58
4-09
9-58
51-54 |
|
2-11
2.12
Approx.
Average
1923-9
1920
9-64
15-99
9:55
4-07
2.66
4-76
10-59
7-85
12-38
779
3-21
2-13
2:66
7.08
56:48
4707
2:43
2.95
1-79
1-71
118-30 | 94-47
Complete figures for 1980 are not available, but the effect
of the world slump is seen in the fact that British production
dropped to 7,300,000 tons, Germany to 11,360,000 tons,
and the U.S.A. to 89,650,000 tons. It may be noted that
French production only dropped by 290,000 tons, and that
that country took third place with a production of 9.260.000
Fons.
A significant fact disclosed in the above figures is the
manner in which Germany, under considerable disabilities,
has re-established her position as the second iron and steel
producing country in the world.
(
R
VTECH
i i =
IN <
Wy ry. ere
= Bibliothey 2
It is interesting also to note that of the total products: 3 ‘
of 1929 the producing countries found absorption ‘in th Y 5 /
own home markets for about 88 per cent. of that produc * Kiel x
tion. As regards the British market, while there are no “<
axact figures of iron and steel consumption available, the
following table sufficiently indicates its importance in relation
to our production of raw steel :—
HOME CONSUMPTION OF IRON & STEEL
(Millions of Tons.)
Production of steel ingots
and castings
* Imports of iron and
steel CO ..
Total .. 2s
* Less exports of iron
and steel .. Lo.
Home consumption
1018
7:66
2.01 |
9-67 |
3-84 |
E.Qo |
1927
1928
1920
1980
9:10 |
88.59
9:85
~.80
3.80
2.78
2.67 |
2.60
12-90
11-80
12-82 | 9-90
3-86 | 8.81
3.83 | 2.84
0:04! 749! 8.491 7.06
* Excluding pig iron and ferro-alloys.
We have previously indicated that some of the main
causes of the present situation in the iron and steel industry
were outside its control. These have arisen from
the War and the financial policy of this country.
The industry played a vital part in the conduct of that
campaign, but it left an aftermath of difficulties which,
while they have been considerably modified. have not yet
disappeared.
During the War the entire activities of the industry
were directed to meeting the needs of the country, and in
the last three years of that period the most intense effort
was made to increase productive capacity, with the result
that, as already disclosed, British capacity for production
of raw steel was increased by 50 per cent. There would
have . been a development of productivity had the War
not have taken place, but the extent of this would have
borne a truer relation to the normal increase in demand
tor iron and steel.
As it was, the termination of the War and the cessation
of Government requirements threw the industry back
on its own resources with an enormous increase in productive
capacity, while its normal trade relations had
f
J)
practically disappeared. After about twelve months’ interval
of inflated trade, the industry, in 1920-21, dropped
into the inevitable slump, which was gravely accentuated
by two national stoppages in the coal-mining industry
within a period of six months. During the years that have
since elapsed, in which the industry has been struggling
to find an outlet for its products, prices, as regards a
considerable percentage of those products, have dropped to
a level even below cost of production, wages have followed
suit, and abnormal conditions of unemployment and
ander-employment have prevailed.
The unemployment position is indicated in the following
table, which covers a period of six years ending December,
1930, excluding 1926, which was abnormal owing to the
mining dispute.
COMPARISON OF UNEMPLOYMENT IN THE IRON AND
STEEL INDUSTRY WITH GENERAL UNEMPLOYMENT
(Yearly Average percentages)
Pig Iron Trade ..
Steel Melting, Iron
Puddling Furnaces,
Rolling Mills, etc...
General Unemplovmen?
1924
1925
1927
1928
1929
1980.
14-8
19-7
14-6
16-5
12:1 |
28.9
211 | 24:5 128 | 21.2 | 19-8 | 84-1
0A 11.0 a.” "10.9 ! 10.8
16-8
Concurrently, the rapid return to the gold standard and
the stabilisation of British currency, while the countries
of our competitors adopted a policy of inflation, was a
serious handicap in competition to an industry in a country
placed in open competition, not merely in its export
trade. but also in its home market.
At the same time, transport charges and the cost of
other commodities to the industry, and the cost of living
to its workpeople, have been altogether out of proportion
to the prices at which it has been compelled to sell its
products, and for the past ten years it may be said that
the industry, as regards the heavy sections In particular,
has suffered exploitation by other trades and sections of
the community. This will readily be seen from the following
figures, which give the yearly average price index
for iron and steel as compared with the average of all
commodities, including iron and steel, in relation to 1918,
as compiled by the Board of Trade; also a similar comparison
between the Ministry of Labour Cost-of-Living
{ 10)
Index and the principal Wages Sliding Scale of the Heavy
Steel Trades :—
Year
1913
1922
1923
1924,
1925
1926 |
1927
1928 |
1929 |
1930
Iron and
Steel
100
136-8
147-2
142-9
125-9
123-5
120-0
“9.0
4D
Prices
All Commodities
100
158-8
158-9
166-2
159-7
148-1
141-4
140-4
186-5
119-9
Sliding
Scale
Percentage
100
129-5
117-1
121-6
119-0
106-8"
106-4
108-1
108-1
108-1
Cost-of-Living
Index
100*
1825
178-7
174-7
1755
172-2
167-5
165-2
164-0
157-7
Tul.
It is frequently asserted—and this has been a feature
of discussions concerning it in political circles—that the industry
is altogether ‘out-of-date in its plant, technique,
methods and organisation. Such sweeping generalities of
condemnation are not justified by the facts, but may too
readily be made an excuse for the failure of Parliament to
recognise its share of responsibility with regard to the
position of a great basic industry.
We would not charge the present Prime Minister with
any disregard of that aspect of the case, but he can hardly
have been well served by his advisers before making so
unqualified a statement with regard to the industry which
was reported in his speech at Northampton in March last.
So far as any systematic organisation of the industry
and its resources is concerned, we do not question
the indictment, but in other respects there is ample
evidence to show that considerable advance has been
made in technique ~ and mechanieal equipment as
regards steel-producing furnaces and different classes
of rolling mill plant. In this matter the conclusion
of the delegation which visited the Continent
last year is justified when they state that on comparison
they found that ‘“‘the modernity and equipment of certain
units of plant was equal to, and in some cases superior to,
the iron and steel plants which had been seen on the
Continent.”” Moreover, developments in other directions
have taken place under the auspices of the National
Federation of Iron and Steel Manufacturers, such as
the British Steel Export Association to develop the
export market, the Britisb Steelwork Association to
expand the use of steel in tne home market, particularly
that used for structural purposes, and the establishment of
(11
an Iron and Steel Industrial Research Council, acting in
conjunction with the Government Department of Scientific
and Industrial Research, designed to effect economy in
the use of fuel and secure by research the fullest technical
improvement in iron and steel production.
The question that arisés, however—and this is without
doubt the crux of the whole position that now presents
‘tself—is whether these developments and the isolated
sfforts of individual firms to keep their plant up-to-date
are sufficient to enable the industry to re-establish its
position when compared with the progress made by its
:ompetitors in other countries. We submit that all past
experience goes to show that nothing short of a national
planning and conscious control of the industry will meet
the situation.
Such a policy, no doubt, requires a higher standard of
industrial leadership than one of uneconomic, cut-throat
competition with its accompaniment of reducing wages
and degrading of labour conditions, but in the long run
it will produce more healthy, stable and efficient industry.
Some form of national control could be justified if only
to protect the more progressive units against the selfish
individualism and short-sighted policy of others, but it has
much wider implications, national and international in
character and importance. .
While the analogy may not be complete in every respect,
the example of the German iron and steel industry is a
striking demonstration of the value of organisation and
the co-ordination of interests, even under private enterprise,
in enabling a basic industry, despite extraordinary financial,
political and economic difficulties, to rehabilitate itself as
the second greatest producer in the world.
It is customary when comparing Great Britain with
Germany and other Continental countries, to emphasise
the difference in wages and hours of labour. We do not
seek to disguise the~ competitive effect of unorganised
abour in such countries as Belgium, France and Poland.
Even so, the test of lajour conditions upon price is not
she rates of wages, but the labour cost per unit of proiuction,
under comparable conditions of efficiency, and,
ap to the present, no comparative figures under that head
have been produced.
In any case, so far as Germany is concerned, we venture
to assert that when the British iron and steel industry
has been placed in an equal degree of efficient organisation
and control, it need have no fear of Germany as a competitor
in a fair field and po favour. At the same time,
the British producer will be in a more satisfactory position
to bargain for international trade with his foreign
competitors than is now the case.
As a fact, organisation has been impressed upon the
industry from one authority or another for over a quarter
(12
of a century. The first Committee of Inquiry set up in
1916 to consider the position of the iron and steel industry
after the War urged the necessity for a complete reorgansation
of the industry from the point of obtaining its
raw materials to the sale and distribution of its finished
products.
The Balfour Committee on Industry and Trade, while
less definite so far as specific recommendations were concerned,
and while recognising the financial aspect of the
problem in an insecure home market, clearly indicated by
zomparisons with other countries the lines of future development.
The reporti of the Committee set up by the present
Government has not had official publication, but sufficient
s known through unofficial sources to make it clear that
the unanimous conclusion was that national organisation
of the entire industry upon a regional basis, in combination
with financial adjustments, were regarded as a
fundamental condition of sound and progressive development.
Organisation of the industry on a national footing, and
for national purposes, was effected during the War by the
State, but it is one thing to organise for war purposes
and quite another to organise with the objective of developing
peaceful trade and. commerce. While the need is
no Jess imperative the recognition of a common interest
to secure the objective is lacking.
It is true there have been certain crude attempts at
what has been termed ‘rationalisation,’ but without any
evidence of a proper conception of its meaning or of the
objective to be attained. There have been amalgamations
of financial interests without, in most cases, the necessary
financial adjustments. Labour has been rationalised, but
not financial commitments.
The result has so far been to increase unemployment
and to’ accentuate problems of national.importance. We
recognise that in the process of adjusting an unorganised
ndustry, displacement of labour must occur, but this
would be taken into account and, as far as possible, provided
for in any conscious planning of the industry with
the national interests in view. A grave defect of the present
haphazard methods is that no regard appears to be
paid to the waste arising from labour displacement, for
which private enterprise, as such, is not concerned to make
provision. Yet it is surely of some importance that in
any well-conceived scheme of industrial reconstruction
and development the skill, experience and general morale
of the labour power of an industry should be as far as
possible kept intact.
In view of the much greater productivity of labour employed
in relation to modern technique and machinery,
(13)
it 1s inevitable that reductions in hours will prove one of
the principal means of absorbing displaced labour if a
grave and chronic unemployment problem is to be avoided.
These considerations, however, have no real place in the
spasmodic and unrelated methods of private enterprise,
but assume national planning, organisation and control for
their practical application.
This may be seen, for example, in the Tinplate Trade—a
trade which in certain important directions, such as international
arrangements and the regulation of its production,
has shown some appreciation of the value of organised effort
and co-ordination of policy. Yet in the absence of any
authoritative control we have the spectacle of additional
mills being erected while the trade was operating twenty
per cent. below its productive capacity and in other
respects a minority of producers threatening the whole
stability of the trade by a refusal to co-operate with their
fellow-producers for the common interest.
But there is another aspect of the “‘rationalising”*
methods private! enterprise promotes, namely, the disregard
of social obligations in respect of the effect
upon local communities by the closing of works without
any pre-considered arrangements as to the disposal of the
labour displaced. In the tinplate trade the workpeople
have themselves by voluntary effort sought to mitigate
the results of that lack of foresight by the adoption of a
six-hour shift. -
The fundamental changes in world conditions make
changes in direction and control of important industries
and services imperative, but there appears to be little
evidence: that these will evolve within the iron and steel
industry to a sufficient extent to meet the needs of the
1uture.
In the circumstances it is clear that the time has come
when possible alternatives have to be considered. The
failure of the efforts made through existing machinery
places a responsibility upon the Government, for, as the
Confederation submitted to the Baldwin Government in
1928, “no Government, whatever its political complexion,
can justifiably ignore conditions which bear upon the wel
fare and stability of a great basic industry.”
When considering the situation of the iron and steel
industry and its future position in our industria] system,
the question of the bearing of the Free Trade policy of
this country upon the problem inevitably arises. It has
proved a highly controversial question, but nevertheless
it is one that must be faced.
Our view in this matter accords with that expressed by
Edgard Milhaud in his Annals of Collective Economy,
(14)
when indicating the lines of progress for dealing with
economic problems he states :—
“It will be no longer a question of free trade pure
and simple, which frequently conveys the impression
of the launching of a war by a country which is best
armed, most ready, and has therefore a decisive advantage
over certain other countries. Nor will it be
a matter of strait-laced mean ego-centric nationalist
protection, which in its turn means a fighting policy,
the struggle of the weak against the strong.
Both the old free trade policy and the old protectionist
policy should be superseded by a policy which
represents a collective and rational safeguarding of all
legitimate interests.’’
“But bodies representing an industrial undertaking,
be it in a national or in an international framework,
cannot be considered by themselves as adequate
elements of organisations
All these organised interests should be co-ordinated.
In combination they should be made to serve a higher
end, first the organisation of the national economic
life, and next the organisation of the international
economic life.”
In this matter we agree in one respect with what we
understand to be implied in the Prime Minister’s speech
at Northampton, namely, that if the attitude of those who
control the industry is one calling .upon the Government
to apply tariffs, while leaving the industry entirely to its
own devices, that is not a policy which’ a Government
could adopt. Moreover, those who require the protection
of the State. must be subject to its jurisdiction.
On the other hand, if the industry is to be charged with
the responsibility for its financial and organic reconstruetion,
and to make itself a stable and progressive part of
the national economic life, it may with justification require
that the State shall afford it reasonable security against the
disability of aggressive forms of competition and which
are not consistent with healthy commercial relations or
fair industrial conditions. In a publicly owned undertaking,
such a claim would be indisputable.
If, however, the State is to afford protection to private
enterprise in the conduct of its business, then the State
must be satisfied in the first instance that those who seek
that protection are without question carrying out their
own obligations in the policy they adopt and pay due
regard to the effect of that policy upon the national interete.
To demand the protection of Parliament on the one
hand and to protest against State interference on the other,
is to ask for a blank cheque. It is often those who claim
(15)
protection of their interests by the State who are the most
vociferous in demanding the complete freedom of private
enterprise.
Even so, the State cannot in the shaping of a
national policy disregard the economic importance of
the enterprises coming within its purview. One of the
evils of to-day is the misdirection of capital and credit to
wasteful purposes or in directions which have little or ne
economic or social value. It is the duty of the State to adjust
these anomalies. Further, while insistent demands are
made for the Governmient to guarantee credit to Russia and
other countries to construct and expand their industries,
the possibilities of a similar policy at home appear to be
overlooked.
It is not without some significance that there.is not an
iron and steel industry in the world that is not accorded
some form or degree of security in its home market. This,
however, may be provided in more than one way, and
undoubtedly the best method of obtaining fair trading
conditions and security is by international agreements,,
and these can be combined with due protection for labour
and safeguards for the consumer.
Where, however, countries refuse reasonable agreement,
as an alternative to uneconomic competition, other alternatives
to control the situation must be applied.
If therefore the attitude of British iron and steel manutacturers
is that all that is necessary to remove the difficulties
of the industry is to impose protective tariffs, we
cannot subscribe to that view. Such a short-cut method
of solving a complicated problem has the appearance of a
gambler’s throw and one which would, in our judgment,
make the industry the by-play of political factions and
intrigue and provide ‘a shelter for inefficiency and incompetence
to the ultimate detriment of the more progressive
elements.
That, however, does not prevent through national
machinery a proper regulation and control of international
trade, or the formulation of international agreements.
A well-organised and efficient industry would in itself
provide a strong and authoritative medium of adjustment
of competitive conditions and for securing such agreements.
The present tendency is for these to be formulated without
public knowledge or due regard for public interest.
Realising the need for such regulation, we proposed to
the Government in a letter addressed to the President of
the Board of Trade in August last the following :—
“That in connection with a scheme of national
organisation, the Government shall set up an Imports
and Exports Board, whose duty it shall be to negotiate
with foreign producers with regard to intertrading
relations, and which Board shall be authorised
to regulate, restrict or prohibit imports if the nature
of the competition and other circumstances justify
( 16)
that course, and to fix, if necessary, the prices of iron
and steel in the home market.”
We hold no brief for any particular form of machinery,
but a properly constituted body as part of a nationally
planned scheme of organisation and vested with the necessary
authority would give the industry the security of
fair competitive arrangements, with due regard to the
interests of both the producers (including labour) and the
consumers. In view of its authority and the bargaining
power it would possess, the results of its efforts would be
rather in obtaining agreements than in the direction of
prohibition as proposed in the above resolution. Moreover,
part of the difficulty is the extent to which the industry
on its distribution side is in the hands of merchants and
middlemen.
On the general principles to be applied in the economic
relations between countries we support those laid down by
the World Economic Conference of 1927, and we would
urge the British Government to follow up the efforts already
made by the President of the Board of Trade, Mr. Graham,
to induce the Governments of other countries, in common
with that of Great Britain, to implement the approval
given by them to the World Economic Conference recommendations
through the official declarations of their representatives
at Geneva in 1928 and to co-operate with any
Government "in that direction, as being an international
policy designed to promote the common welfare of the
people and the peace of the world.
On the other hand, we regard as consistent with, and,
in its broad aspects, essential to, a policy of sincere effort
in that direction, a definitely constructive policy in relation
to the national economic life by organising and stimulating
its industrial activities, and in that connection
securing it against those unfair and aggressive forms of
competition ‘made possible only by the exploitation of
labour and a degradation of healthy commerce and efficient
industry.
This principle has had to be recognised by the Labour
Government in its treatment of the Coal Industry. The
regulation of output and prices as a part of industrial
organisation are but devices to counter the effects of cutthroat
competition, to secure an economic price for the
coal owner and fair wages and working hours for the mineworker,
This is justified by the fact that as the Coal Industry
is essential to the economic and social life of the
nation, it must be secured from that exploitation which
uncontrolled and unregulated competition has produced.
This question is one which has agitated the minds of
our members on different occasions since the War, and
resolutions in various forms have reached the Executive
from branches and Divisional Committee meetings. The
feeling was acute in the earlier post-war years at the time
when currency inflation was at its height in the countries
(17)
of our competitors and where in addition wages were depressed
to the minimum and in certain cases legislative
provisions governing the hours of labour were abrogated.
At the same time, the pressure of unemployment upon
our members was increasing, and having regard to the
nature of the competition with which the industry was
faced, the Executive Council discussed the situation at
their meeting in November, 1925, and decided that it could
only be met by prohibition, and consequently addressed a
resolution to the then Prime Minister on the matter.
Simultaneously a communication was addressed to fortyeight
Members of Parliament representing constituencies
where iron and steel production was carried on, from
which the following is extracted :—
“I beg to direct your attention to the following resolution
passed by the Executive of the above organisation.
which has been forwarded to the Prime Minister —
‘That this Executive directs the attention of the
Prime Minister to the parlous condition of the Iron
and Steel Industry of this country, and to the adverse
competitive factors operating against it which are
outside its control, and urges the Government to take
immediate steps to prohibit the importation of iron
and steel from countries where wages rates and hours
of labour are below British standards.’
“In connection with the above, I have to point out that
with the exception of unskilled and certain semi-skilled
grades, wages in the principal branches of the industry
are—in comparison with pre-war rates—lower than in any
other important industry in the country. This is due to
the fact that wages are governed by the selling price of
the commodities produced, with the consequence that in
the heavy steel trades, for example, wages stand at 211 per
cent. over pre-war as against an increased cost of living
of 76 per cent. This has been necessary to compete with
the prices of Continental competitors where wages—
despite the principle laid down in the Washington Hours
Convention—are made up by extended hours of labour.
“Among other factors against this country are the difference
in the treatment of War debts, inflated exchanges and
indirect subsidies in respect of exported material.
“Despite the wages reductions referred to, the percentage
of unemployment—after allowing for those who during the
past four years have permanently left the industry—
ranges from 22 per cent. to 25 per cent., a condition of
things without parallel throughout its history. Yet it may
be taken as a fairly reliable estimate that if the steel now
being imported under unfair competitive conditions was
produced in this country, it would find employment—
direct or indirect—for over 100,000 workmen. This is
{13%
based on the imports of finished and semi-finished steel for
the nine months ending September, 1925, which substantially
exceeded the imports for the whole of 1924.
“Quite apart from the physical and moral advantages of
placing workpeople in employment, a saving of anything
from £3,000,000 to £4,000,000 in Unemployment Benefit
would acerue.?’
It should be stated the principle embodied in the above
resolution was regarded as consistent with the conclusion of
the Committee on Sweated Imports and International Standards
set up by the Labour Party, whose report was subsequently
issued and which adopted prohibition of imports
when these were produced under unfair conditions as recognised
by national conventions and with what is the
basis of the Fair Wages Clause established by Parliament.
Moreover, under our immigration laws the importation
of labour, if not prohibited, is very stringently regulated.
Trade showed signs of improvement at the end of 1925,
but in the following year the industry was brought to a
complete standstill by the national lock-out in the mining
industry, and 1927 was a time of recovery from that
stoppage.
Meanwhile the effect of the importation of foreign bars
in the South Wales Steel Trade resulted in representations
from our South Wales branches, and the question was
raised again as to prohibition and also whether our Tinplate
members should not refuse to work foreign bars, but
the Executive Council did not favour the latter course.
As, however, no action of a concrete character seemed
likely to evolve from the Committee on Industry and
Trade, the Council again discussed the situation, and it
was decided to ask the Government to set up a Committee
of Inquiry into the Industry. Having ascertained from
the Parliamentary Labour Party that they would support
the proposal—if necessary, in the House of Commons—a
letter was addressed to Mr. Baldwin in which the Executive
Council proposed that the purpose of the Committee
should be “to make a full and impartial inquiry into the
industry and to ascertain as far as possible all the facts
with regard to its present position, with special reference
to the nature of the competition in the home market, and
to make such recommendations whether as regards action
by the industry itself or legislative action as, in the comsidered
judgment of the appointed body, the circumstances
require, due regard being paid to all legitimate interests.
In particular, the appointed body shall have regard
to :—
(a) Whether the organisation of the industry, its technical
and mechanical equipment, and its financial
policy is such as to enable it—other things being
(19)
equal—to justify its position in the economic life
of the country and in world trade.
What handicaps, if any, exist with regard to raw
materials, transport, and in the marketing of its
products.
Factors of competition arising from trade restrictions
and barriers on the part of its competitors.
Factors of competition arising from lower standards
of wages, hours and labour conditions in competing
countries, including non-observance of International
Labour Conventions.
Factors of competition arising from subsidies, direct
or indirect, or other similar measures in competing
countries in relation to their exports of iron and
steel.
The cost of unemployment, not only in actual expenditure
for the maintenance of the unemployed,
but in the waste of skill and loss of morale, and the
possibilities of the capitalised value of this and its
equivalent being applied productively as a part of
an organised scheme of dealing with the industry.”
Having failed to induce Mr. Baldwin to set up a special
[nquiry and as a General Election was pending, and the
Labour Party had pledged itself to set up a Committee
both for the iron and steel industry and the cotton textile
trades, the matter could not be carried further for the
time being.
Subsequent events as to the setting up a Committee
of Inquiry by the Labour Government, before which the
Confederation gave evidence, are known to you. While
the Report did not receive official publication, sufficient
is known through foreign sources to enable us to state
that the two essential factors referred to in this statement,
namely, national organisation and foreign competition,
formed an essential part of the Committee’s conclusions.
At the same time, as the result of consultations between
the Central Banks and the Government, the Bankers’
Industrial Development Company was set up, the purpose
of which it is understood is to secure the organisation and
financing of important industries under approved schemes.
The results of its efforts are not much in evidence so far as
the iron and steel industry is concerned, and it is alleged
that what has resulted from the formation of the B.I.D.
is a form of cartelisation of finances of a restrictive
character. It is public knowledge, however, that a national
scheme of organisation and development has been formulated,
and that the iron and steel manufacturers are urging
the institution of tariffs, and that this the Government are
unable to accede to. It is clear, therefore, that an impasse
has been reached and that an alternative must be found
not only in the interests of the workpeople, but in the
national interests.
[
20)
There is a growing opinion that the only alternative to
leaving the situation as it is, is to introduce legislation
to bring the industry under public control and to place its
direction and development in the hands of a public corporation.
This is likely to meet with the strongest opposition
by the supporters of private interests, but public
opinion must be informed and the issue judged from the
standpoint of the importance of a great basic industry to
the economic welfare and progress of our country.
In any case Parliament is committed to take steps with
regard to the industry by the resolution adopted by the
House of Commons on November 5, 1930, and which was
as follows :(—
“That this House views with grave apprehension the
present condition of the iron and steel industry and
urges the Government to take immediate steps to stem
the continuous decline in the activities of this industry
with its resultant increase in unemployment.”’
We are submitting resolutions for discussion ag to the
policy to be adopted by the Confederation.
“Tre Executive COUNCIL.
—
RESOLUTION.
{. This Conference of representatives of workpeople
engaged in the various branches of the iron and steel industry
and having a stake therein second to that of no other interest,
view with grave eoncern the failure to secure such a conscious
planning and organisation of the industry as the present
situation demands for its future suceess as a progressive
force in the economie life of the country.
2 We assert that there is no justification for the defeatist
attitude which appears to prevail amongst those who are
in control of the industry, but that, on the contrary, its
potentialities are such as to inspire the greatest confidence
in its future, if the necessary measures are taken without
delay to organise its productive resources and the sale and
distribution of its produets, and to secure adjustment of its
relations with its competitors by a sufficiently authoritative
and representative body being established capable of speaking
for the industry as a whole.
3. We are of opinion that, taking the long view, this
would not be secured by any crude expedient of Tariff imposition
which has no regard to the necessity for financial
adjustment and organisation, nor to the extent to which
the industry enters into the requirements of other important
trades. On the other hand, we assert that in any scheme of
pfficient national organisation of the industry, it is essential
for its healthy development that provision shall be made
for obtaining reasonable security in its home market by the
proper control and regulation of those forms of uneconomie
sompetition which prevail.
4, In view of the urgency of the situation and having
regard to the national welfare, as it now appears that the
gonflicting interests of private enterprise make impossible
the necessary action with regard to the industry, we call
upon Parliament to give the Government legislative
authority to bring the indusiry within the control of a publie
utility eorporation, and to secure the mobilisation of the
best organising ability, technical knowledge and experience
for the effective organisation of the industry on the following
lines *—
(a)
(bh)
(¢)
The application of a national scheme of planning of
the industry in all its main branches in well-defined
regions of organisation with Managerial Boards
responsible for the operation of the indusiry in their
respective regions,
A Central Board for the general supervision of the
regional organisations, but allowing such local autonomy
as will secure the fullest degree of initiative
to produce the best results consistent with a sound
national policy.
Among other things, the Central Board would arrange
for an adequate supply and distribution of ores and
(22)
other -raw materials, the co-ordination of research
work, the distribution of orders and the marketing
of the finished products.
(d)
(e)
The Central Board would act for the industry as a
whole in formulating agreements with other countries
in regard to inter-trading relations, and would have
authority to regulate, restrict .or prohibit imports
if the nature of the competition and other eircumstances
justified that course, and to fix prices of iron
and steel in the home market, with due regard to the
necessity of stimulating the activities of important
using trades.
Regional Joint Conciliation Boards to be set up to
deal with Wages and Conditions of Labour that are
local in character and a National Joint Conciliation
Roard to deal with those of a national character.
5. In the application of a scheme of national organisation
and with a view to conserving the skill and experience of
labour in the industry, where a works is permanently closed
down and where by adjustments in working hours or other
suitable means employment cannot immediately be found
for the workpeople displaced, compensatory payment shall
he made to them pending their being taken into employment,
Further, suitable provision shall be made for the transfer of
such labour to other places where developments are carried
out under the national scheme, the Ministry of Labour
and other departments concerned to assist in facilitating the
transfer where necessary by advaneing railway fares and
removal eosts and in the provision of houses, ete.
6. Meanwhile, the Government should give the fullest
possible encouragement and assistance fo such schemes and
developments as are already contemplated by progressive
firms or groups of firms in the industry, provided these can
be fitted into a national scheme of organisation, and to
secure that the progressive efforts in question are not frustrated
by. reason of the failure to secure the immediate adoption of
tha national scheme.
7. Finally we call upon the British Government ‘to
strenuously renew its efforts to secure the adoption of the
recommendations of the World Economic Conference of 1927,
and to co-operate with any other Government in that direction,
such an international policy being designed to promote the
seonomie and social welfare of the people and world peace.
RESOLUTION SUBMITTED TO AND ADOPTED AT PUBLIC
MEETINGS HELD IN THE WEST OF SCOTLAND,
MIDDLESBROUGH, - SHEFFIELD, WEDNESBURY,
WARRINGTON AND BRiToN FERRY (SOUTH
WaLES) DURING THE WEEK-END,
Mav 16—18. 1931.
“That this meeting regards the serious position of the
ron and steel industry as a matter of fundamental national
importance. The extent to which it enters into the economic
life of the country, the communities which have developed
around its activities, the large number of workpeople
dependent upon its progress and stability, and its position
in relation to our export trade, make it imperative in the
national interests that immediate steps should be taken
to secure the necessary conscious planning, organised control
and the financial means for its rehabilitation and progressive
development.
As it now appears that the attainment of these essential
conditions and objectives is being prevented by the obstacles
arising from the conflicting interests of private enterprise,
we commend the proposals of the Iron and Steel Trades
Confederation to Parliament as the only practical alternative
means of dealing with the situation.’
NOTE,—The above resolution is being submitted to a further
series of public meetings arranged in important industrial
eentres throughout the country.
THE LONDON CALEDONIAN PRESS LID., 74 Swinton St. Gray's Ini Rd.. WC. 1 warild