312. The alternative, of a minimum rate, is open to the objections first, that it would not allow sufficient elasticity as between districts; second, that it would not give the labourers that interest in the industry which they ought to have, and which, on a Trade Board, extends beyond the mere fixation of wagerates; third, that organised industrial bargaining and discussion are an important training ground, in which the ablest workpeople may take their first steps toward leadership; lastly, that in the present state of organisation of farmers and labourers, organised movements for reduction of the minimum would be easier than movements for its maintenance or increase. 313. The measures suggested, even if all of them are carried out, may not stop an exodus from the land which is due largely to social causes. The experience of foreign countries, in which there are highly developed manufacturing cities, shows this. Food supply can be obtained only while agriculturists are willing to live under conditions of comparative isolation. Some relief can be obtained by the extension into rural districts of other forms of occupation, and the faster rate of growth of the administrative rural districts in recent years has been largely due to this. But in sparse districts the land alone does not enable a sufficient variety of life, and of supplementary work in its slack seasons. We have had evidence of support given, especially in Germany, to local industries in agricultural areas, aided by a special system of technical schools, in order to create variety of work. In this country, grants are given to the Rural Industries Intelligence Bureau, and to other forms of the rural community movement; they amount at present to some 8,000l. But more can be done, and there are two lines of policy whereby the tendencies to an uneconomic loss of population can be met. 314. One of these is the definite adoption of a continuous afforestation policy, partly because such a policy requires public direction, partly because the area of cultivated land is declining as a whole. In some districts, afforestation can be dovetailed with agriculture, and can support the small holders. In these districts it can also, as its subsidiary industries grow, act as a spear-head of some social advantages, such as the telephone, and electric lighting and power. It has not, on its own account, the capacity of creating a large permanent increase in employment on the land; but it has considerable capacity of maintaining agricultural employment in sparse districts. 315. The other line is that of offering some inducement to industries not highly capitalised to settle in sparse districts. There have been policies for "Congested Districts," and it is now a question of a policy for sparse districts. It is important to the maintenance of agriculture that variety of occupations should exist beside it, partly because of supplementary employment, partly on social grounds. The administrative difficulties of any plan for retaining small industries in rural districts, or attracting them there, are great, and the only proposal which seems at present tenable is to give, in defined or scheduled areas, some relief from rates, possibly even the benefit of the Agricultural Rating Act. The definition of industrial establishments for this purpose might depend on either a maximum number of persons employed, or alternatively, a maximum rateable value. There is a precedent for rating relief of this kind under Section 5 (1 (c)) of the Light Railways Act, 1896. 316. The experience of European countries with a national economy similar to our own-such as France, Germany, and Belgium-shows the difficulty of maintaining agricultural employment under the conditions, even where strong measures of protection are added on to a system of high organisation. Their agriculture is still so comparatively large that the strain of modern industrial expansion is likely in the near future to have a greater proportional effect on it than on ours. Before the war, there were signs that British agriculture was becoming more stable in terms of employment. But if we accept the estimate that arable land may fall in ten years to 12 million acres, from its present level of 14 million, the agricultural industry may then decline to a million men, instead of the present figure of 14 millions. It can be more fully organised, increase its technical efficiency, give fuller opportunity to the labourer, and be financially prosperous. It may nevertheless reach the position indicated, because of the nature of our national economy and our international exchanges. Is the mere possibility of a decline to a million men and between 30 and 40 per cent. of arable land already so serious that the gradient should be lessened now at the cost of a battleship per annum? Or is a home agriculture of this size and form, in relation to our shipping and colonial assets, an adequate basis to work from? If no present urgency is pressed on the Government by its military advisers, then alternatively either 12 million acres of arable, or a million men, over 15, employed, should be taken by agreement of parties as a definite occasion for consideration of the defence problem involved. In saying this regard is given to the fact that the basis of 1914 did work successfully, and with a margin for assistance to our allies, in a war of a magnitude without precedent, in which our greatest military menace was destroyed. If this suggestion is adopted, consideration of the defence question will take place when the international future is more clear, national finance less strained, and the post-war settlement more complete. I have the honour to be, Sir, D. H. MACGREGOR. D. B. TOYE, Secretary. PART II. MEMORANDA BY MEMBERS OF THE TRIBUNAL. MEMORANDUM I. CONSIDERATIONS OF NATIONAL DEFENCE. By SIR WILLIAM ASHLEY. 1. In earlier times the victory of one people over another meant that the conquered people were dispossessed of their individual or tribal property, or even of their personal liberty. Everyone therefore had a direct personal economic interest in defence; self-interest and the interest of the national group to which the individual belonged were identical. But under the circumstances in which civilised countries have long found themselves, the position is different. In the event of the victory of one people over another, the individual citizens in the vanquished state will not lose their personal liberty, and they are not likely to suffer a direct confiscation of their property. They may, indeed, be liable to heavier taxation; and they may be subjected to what they regard as damage of a non-material kind. But speaking broadly, their rights of property " will be respected. It is even possible that conquest by another nation, whether it results in annexation or simply in external control, may be for the pecuniary advantage of some or all of the citizens of the vanquished country. Defence and "Opulence" are no longer necessarily, for the individual, coincident objects. 66 66 2. This becomes more manifest with the development alike of the art and of the cost of war. To provide for defence, it has become necessary that the individual, either by submitting himself to military service or by contributing from his means to the maintenance and equipment of others, or by both, should undergo risk and labour and sacrifice to which his immediate pecuniary interest would not lead him. The belief on which the older political economy rested, that the good of each community is best secured by leaving every individual free to pursue his individual material interest, becomes untenable, as Adam Smith long ago realised, in the matter of national defence. "A private citizen, who, in time of profound peace, and without any particular encouragement from the public, should spend the greater part of his time in military exercises, might, no doubt, both improve himself very much in them, and amuse himself very well; but he certainly would not promote his own interest. It is the wisdom of the State only which can render it for his interest to give up the greater part of his time to this peculiar occupation; and States have not always had this wisdom, even when their circumstances had become such that the preservation of their existence required that they should have it." This is a particular statement of a general principle. For, inasmuch as all State action for the purpose of defence involves some check upon the operation of individual interest, no measure designed for this purpose can be ruled out as violating the general principle of self-interest; it * Wealth of Nations, Bk. V, ch. i. can only be criticised from the point of view of its expediency relative to other proposed measures seeking the same end. The only valid general grounds of objection to measures of defence as such, would seem to be of two kinds. There may be a conviction that defence will never be called for; that war is either already a thing of the past, or that its causes are sure to be removed before any future war will arise. Or there may be a conviction that, though attack continues possible or even probable, resistance is either morally wrong, or inexpedient in the general interests of humanity. Evidently it does not lie within the scope of this Memorandum to express any opinion on such ultimate questions. It will be enough for the present purpose to start from what is certainly at present the general belief in this country that defence is not unlikely to be called for, for all the period within the scope of practical politics; and that resistance, if it should be called for, will be justified. That is, that we shall continue to accept Adam Smith's principle that "Defence is of much more importance than Opulence.”* 3. We may now apply these considerations to the case of food. In the Parliamentary Debates of a century ago, the argument on one side that this country should aim at rendering itself "completely free from the aid of foreign nations "† and able to subsist on its own produce," was naturally met on the other side by pointing to the blessings of international division of labour. "It is one of the wise dispensations of Providence to give to different parts of the world different advantages, probably with the great moral purpose of bringing human beings together for the mutual relief of their wants." It apparently did not for a long time occur to any statesman or economist of eminence actually to deny that to become greatly dependent on foreign supplies would be a legitimate reason for concern. Porter, the statistician of the Ricardian school, in his famous book on The Progress of the Nation, written in 1836, expressed himself strongly in the very opposite sense :— "In every country the condition of its agriculture must be a subject of the very first importance. An inconsiderable state or colony may, it is true, without much danger or inconvenience, exist under circumstances which oblige it to be habitually dependent upon the soil of other countries for the food of its inhabitants, but a very little inquiry, and a very simple calculation would suffice to convince us that this can never be the case with a numerous people."§ The fact is that, as things then were, the contingency of any large dependence upon foreign supplies was so remote that it did not seem necessary seriously to consider it. Porter's contemporary, Joseph Hume, was about the same time alleging," in proof that the quantity of corn imported is small in comparison * Wealth of Nations. Bk. IV, ch. 2. † Debate of 1813; abstracted in Smart, Economic Annals of the XIXth Century, p. 381; cf. debate of 1804, ib. p. 95. Debate of 1820; abstracted in Page, Commerce and Industry. i., p. 55. § Vol. I, p. 143, (in original edition). These opening words of the chapter on Agriculture reappear in the edition of 1847: they are omitted in the edition by F. W. Hirst (1912). It is right to add that, in a later place in the edition of 1836 (p. 181), Porter, while expressing the confident belief that "the soil of these islands will continue to yield the largest proportion of the food of the inhabitants for a much longer period than twenty years," goes on to argue that, when that has ceased to be the case, the requisite food will be obtained by foreign trade. Either in irony or from caution he adds that whether it would then be proper or possible for the legislature to protect the native agriculturist, or "what the amount of that protection, if any, should be, are questions the discussion of which does not fall within the intention of this work." This last sentence was omitted by Porter in 1847. to our consumption," that "between the years 1795 and 1815, when the ports were virtually open, the import of corn was only equal to 5 per cent., or one-twentieth of our consumption."* "The universal belief of the time -as Professor Nicholson has ob. served in his judicial History of the Corn Laws-" was that the country would always grow the larger part of its own grain." As he says: "the idea prevailed down to the repeal of the Corn Laws that in effect every country must in the main depend on its own food supplies and that there was no fear of its independence on this ground being seriously threatened."† 4. The situation was already very different at the date of the American Civil War, some 20 years later. It was, perhaps, the suspension of the supplies from America of the raw materials of the great Lancashire cotton manufacture which first re-awakened attention to the consequences of international division of labour when it affected primary products; but it was also realised that the case for alarm was strengthened by the situation which had by that time come about with respect to food. Cobden gave forcible expression to the reflections which the situation suggested: : "One-third of the inhabitants of these islands subsist on imported food. No other country contains half as many people as the United Kingdom dependent for subsistence on the produce of foreign lands. "I can imagine a combination of events, not more improbable than the blockade of the cotton region of the United States by sea and land would have appeared to be three years ago, by which we may be cut off from all commercial intercourse with other countries on which we are largely dependent for raw materials and food."+ "I certainly doubt the prudence of a great body of industrious people allowing themselves to continually live in dependence upon foreign Powers for the supply of food and raw material, knowing that a system of warfare exists by which, at any moment, they are liable to have the raw material or the food withdrawn from them."§ "Free Trade means only the division of labour by which the productive powers of the whole earth are brought into mutual cooperation. If this scheme of universal dependence is to be liable to sudden dislocation, whenever two Governments choose to go to war, it converts a manufacturing industry such as ours into a lottery, in which the lives and futures of multitudes of men are at stake."|| The dangers which Cobden had chiefly in mind were evidently those which might arise to this country as a neutral from a war between two other powers. But the danger might well be far greater if we were ourselves belligerents. The remedy Cobden advocated was the modification of the rules of international law, so as to exempt all private property from capture at sea, and to limit contraband to arms and ammunition. And he seems to have conceived it possible that these principles should be so firmly established as to safeguard our own provision of food, even in the event to him, apparently, improbable that we should ourselves be involved in hostilities. The extent of the reliance which this country can now place on international law will be considered later. * Speech of 1833 in Hirst's collection, Free Trade and the Manchester School, (1903). † J. S. Nicholson, The History of the English Corn Laws (1904), pp. 46, 126. Letter to Henry Ashworth, in Political Writings, ed. Mallet, pp. 217-220. § Speech of October, 29th, 1862, in Speeches, p. 470. Letter to Ashworth. |