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reduction in the number of men available ; hence, unless the remainder are more effectively employed, together with a much larger proportion of women than heretofore, we shall not be able to maintain our position. Germany will also be suffering from a dearth of men to an even greater extent than is likely to be the case with us, but she will strive hard to surpass us by employing more women and by using all her great powers of education and organisation to increase her industrial efficiency. We must also remember that the United States is making and will make a strong bid for the trade Germany has lost during the war, and that, while her factories have been to a certain extent converted for the purpose of supplying the belligerents with war materials, her industrial army has remained intact.
Industrial operations in every country consist of production, transport, and marketing, whether the goods are for home consumption or for export. The raising of coal and the growing of crops and live-stock must of course be included under this head. As regards production, the goods produced must be at least equally attractive in quality and price with those offered by other countries, otherwise they cannot be sold. These features imply equal industrial efficiency with nations whose workers are paid similar wages for an equal output, and in which similar natural advantages exist in the form of minerals and favourable climatic conditions. Transport is dependent upon productive efficiency, both as regards the means employed, such as railways and ships, and the wages paid to labour for given results, while natural advantages again affect the cost. Although we may produce attractive goods and transport them efficiently, they will not compete successfully with the products of other nations unless our methods of selling them are equally effective.
Now, German goods were extensively sold in this country before the war, while in foreign markets German trade, although not so large as our own, was extending more rapidly. Moreover, as regards production and transport, the advantages of one side over the other, if any, were with the British manufacturer. The competition existing between America and this country also showed similar features in spite of the high wages paid
in the United States. Our failure to compete successfully with Germany and America, though enjoying at least equal advantages, is a sure sign that our methods for the production, transport and marketing of certain goods were not so efficient as those of our competitors. It therefore behoves us to consider very carefully where our industrial efficiency can be improved and what is being done by our foreign rivals in this direction.
These matters can best be discussed in the sections enumerated below, which are given as nearly as possible in the order of their importance; that is to say, we have failed in the past more signally in the directions dealt with under the earlier headings.
(1) Cooperation within each Industry.
Cooperation within each Industry.—Many of us will remember the attack made upon our tobacco industry by an American combination some years ago, and the way in which this attack was met and repulsed. British tobacco manufacturers, when working together, were then able to oust the enemy, whereas singly they must inevitably have been beaten. Foreign competition has now reached a stage at which we can no longer afford to ignore the advantages of cooperation. Among these advantages may be mentioned the following:
(a) Orders can be so apportioned to the various factories that each may make the type, size and quantity of goods best suited to its capabilities. Instead, for instance, of a dozen factories each making twelve different sizes of some complex machine, one size only can be made in each factory, thereby greatly reducing the cost of production.
(b) Materials can be bought in huge quantities and distributed where required, thus effecting large reductions in prices and the cost of handling when compared with the present system. Another advantage of dealing in materials on a large scale is that they can be inspected and tested before despatch by high-class experts-a plan which is too costly with small consignments. Again,
partly manufactured materials can be standardised for all factories, thereby greatly reducing the cost when compared with the variety of patterns at present demanded.
(c) Experimental and research work can be continually carried on in a central laboratory at a very small cost to each firm, while all new designs, inventions and discoveries are passed round for the benefit of the industry as a whole.
(d) The best expert advice, when required, can be obtained for all firms instead of the second-rate assistance with which the smaller concerns now have to con. tent themselves.
(e) The methods followed in all factories being uniform, their control will be much simplified and the cost thereof reduced.
(f) A large amount of overlapping in selling organisation can be done away with, thereby effecting a great reduction in expenditure on advertising, catalogues, travelling and showrooms. Hand in hand with this saving will go the elimination of enormous numbers of unproductive workers at present employed in these directions, whose efforts can eventually be utilised to increase the country's productive power. Consider, for example, the many travellers who are scouring the country for orders and competing with each other. Every business firm is deluged with these gentry, often to such an extent that the principals refuse to see them excepting on one day in the week and then only by appointment. Nine-tenths of this travelling is necessitated by competition, which will be done away with when full cooperation becomes an accomplished fact. At first sight, travelling agents who carry with them samples of their goods appear to be justified, as the customer must see patterns of what he is going to buy. Under the present system he sees the samples of different makers at different times, and he often makes selections only to be shown better goods a few days later. What the customer wants is to study every make in a certain line side by side, so that he can compare qualities and prices to the best advantage. This requirement clearly indicates cooperative industrial showrooms in numerous centres, where all makes of goods can be displayed and classified.
Admittedly there would be great difficulty in applying these principles to goods subject to quickly changing fashions, such as women's clothing, but for all other products the cooperative showroom system should prove
vast improvement upon existing methods. These showrooms would display the products in each industry, such as textile goods, component parts for cycles and motor-cars, machinery for flour-milling, and, in fact, every type of product required for trade purposes. So far it has been assumed that separate showrooms would be devoted to each industry, and that they would be maintained by the central cooperative authorities as an alternative to sending travellers all over the country. The natural outcome of such a system would be the assembly of all the showrooms at each centre in the form of a permanent exhibition, which should prove of great educational advantage to the general public, in addition to its function of affording facilities for the inspection of all products by trade buyers.
It must be clearly understood that these exhibitions are not suggested as intended for selling direct to the public, who are already catered for by stores and other distributing agencies. Their function is to form the connecting link between the manufacturer and the distributor, and to enable the latter to see different makers' products side by side, which he is now unable to do. These exhibitions should also be of great assistance to manufacturers by enabling them to study the products of their competitors, thereby benefiting each industry as a whole.
Combinations of firms for the purpose of cheapening production in the ways mentioned above are much more common in Germany and America than in this country, while the lower wages paid to German workmen, as compared with the demands of British trades unions, give the German combinations a very strong position. If this feature were the only important item in the cost of production, Germany could manufacture at lower prices than is possible for us. Wages, however, cannot be considered alone without reference to output, and this is where the British workman easily surpasses his German competitor. Again, in many cases raw materials are less costly in this country than in Germany. All things considered, it should be quite possible for British
manufacturers, when fully cooperating, to produce better and cheaper goods than their German rivals. It may also be predicted that sooner or later German workmen will insist on having higher wages; and their demands may even reach the British level in a few years' time.
The Marketing of the Goods.—There is not the slightest doubt that, when the war began, both Germany and the United States were ahead of this country in selling organisation, more particularly outside of their own borders. The cooperation in each industry, already referred to as obtaining in those countries, enabled their manufacturers to spend far more money upon extending their foreign trade than was possible for British firms working separately in this direction. Combinations of German undertakings established branch houses in England under British names, in which either Englishmen were employed or Germans well versed in the English language and English customs. These branch houses maintained large stocks, and they sent out representatives who were experts in the goods they attempted to sell. Take, for instance, the German trade in electrical apparatus, which flourished amazingly in this country until war was declared. German electrical firms under British names did an immense business, and they maintained staffs of expert electrical engineers who were always willing to advise prospective clients free of charge. Moreover, their prices were lower and the terms of payment easier than any offered by home manufacturers. These features proved so effective that electrical apparatus was installed in some cases where mechanical appliances would have given better results. Again, their catalogues were printed in English with prices in £ s. d. and British weights and measurements.
German firms also have always appreciated the value of the press in countries where they are attempting to do business. Not only do they advertise freely in popular and trade journals, but they lose no opportunity of obtaining notices in the editorial columns. Publicity in the form of effective advertisements and well-written press notices is not sufficiently understood by British manufacturers. It is true that a limited number of firms entrust this work to experienced men ; and greatly enhanced sales have invariably followed this practice.