paid by both firms. Nevertheless, one business is run on sound lines and secures an annual profit, while the other venture does not make money and pays no dividend to its shareholders. It is obvious that the actual work of the operatives has nothing whatever to do with the results attained by the respective businesses. How can any profit-sharing be indulged in when this state of things obtains in almost every town of the country? It must be borne in mind that while the workman is quite ready to take a share of the profits he cannot bear any share of the losses and would decline to do so. It would appear, therefore, that the only way in which a workman can participate in the ultimate profits of his industry is by becoming a shareholder of the company for which he works. It is undoubtedly sound policy to give him every opportunity for becoming a shareholder and being financially interested in the concern. Let him come in on the ground floor, and save him from the fluctuations of the Stock Exchange; let the firm advance him the money to take up his shares at a low rate of interest, and give him time to repay by instalments, for only by being a shareholder can the workman gratify what is a perfectly legitimate aspiration and become a participator in the profits of his trade.

It must be borne in mind that the working man is able to save considerable sums of money, and can, without difficulty, become a shareholder in the undertaking that employs him. At the last annual meeting of the Birmingham Small Arms Co., Ltd., Mr. Edward Manville, the Deputy-Chairman, drew attention to the savings of the employees of the Small Arms Company and the Daimler Company in the following terms, as reported in the Birmingham Daily Post of October 10, 1918:

They amounted, he said, to no less a sum than half a million pounds, and that had been accumulated in two years. It showed, he thought, that the workpeople were being adequately paid if they were able to save so large a sum beyond the necessary cost of living. When they considered that these savings were only those of a section of the employees-others invested in ways not known to the directors, or perhaps not at all—it was obvious that the amount paid in excess of what might be termed the necessary living wage was very considerable. It was interesting to note that this half-million represented almost as much as had been paid in the last two years in the way of dividends to shareholders. That was a matter of great gratification to the directors, because, as they had been told that day and in previous years, the Board took the greatest possible interest in the welfare of those whom the company employed. He thought all shareholders would agree that every encouragement and facility possible should be given to the employees by the company to earn such an amount as would enable them to live healthily and yet be able to save.

At the commencement of this paper it was pointed out that the aspirations of the workpeople and the relations between employers and employed are only parts of a great question. They must be viewed in their proper perspective with the other sections of the industrial problem. While goodwill and confidence lie at the root of the relations of masters and workpeople, the achievement of the legitimate desires of the men can only be accomplished by the success of matters over which the men can have no control. The development of our resources at home and abroad is necessary before the employers and employed can reap their full reward. The shackles of State interference must be withdrawn, and finance and commerce must be left free to work out their own destiny. That finance and commerce must go hand in hand is a truism, for the groundwork of successful industry is sound finance. Up to the war British finance had been too conservative, and had not afforded the assistance necessary for adequate trading. Our German rivals realized this, and pursued methods which provided for the expansion of their commerce while ensuring its control. Their industry was organized so that the money was forthcoming for every legitimate trader, while the work was allotted in such a way that the shops were busy and the prices maintained. There was no question of making a levy on capital, nor did the State interfere in the conduct of industry, but everything was done to foster and help trade. It is a pity that there is not a greater knowledge of the way in which German trade has been built up during the past forty years. It would then be realized how the forces of good organization, sound finance, experienced management, bold enterprise, and good workmanship are interallied and mutually dependent, and that the reward of any one cannot be obtained without the co-operation of all, and that the withdrawal or defect of one must inevitably lead to the collapse of the whole structure. That success and prosperity were achieved is a fact, and that they were the result of all forces working together is equally true. It is nevertheless certain that this success could never have been attained if industry had been hampered by the State, and it was rendered possible by the sagacious policy of fostering and helping trade pursued by the German people.

F. DUDLEY DOCKER

THE SAFETY OF THE NATION

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IN our wars with the French our insular statesmen had not yet heard of the League of Nations, but still busied themselves chiefly upon the interest and security of their own country. This barbarous policy may or may not have suited the world but suited England so well that she was left without a rival in commerce and industry. Our lot was especially prosperous in Germany. Danzig, Bremen, and Hamburg swarmed with English merchants, who conducted the main part of the trade of those ports. Frankfort was a depot of English manufactures, and there was a quarter in Berlin which was called Petty Manchester. The German kings and princes were more or less under the influence of the British Government. Hanover has been called by Treitschke the "British bridge-head," and even Prussia usually concealed her ambitions under a cloak of subservience. In 1817 Frederick William III declared that the free import of foreign manufactures should be the basis of the legislation of the Prussian State for all future time. The main interest of Prussia, it should be explained, was at that time the export of corn, timber, pitch, turpentine, hemp, flax, and other raw materials to England. Her grain trade was chiefly governed by our Corn Laws, which admitted Prussian corn only when our own harvest came short of our requirements. Thus Prussian agriculture led a precarious existence, depending as it did upon a system of English sluice-gates, which were sometimes lowered and sometimes raised. Prussia's position in the timber trade was little better, for we gave a preference to our Canadian timber, and as for Prussian shipping it was kept in a humble and subordinate place by our Navigation Laws.

We have an admirable picture of the situation of Prussia at that time in the writings of Mr. William Jacob, who was sent to Northern Europe by the British Government in 1819 and again in 1826 to report upon the corn trade. Mr. Jacob noted the desperate poverty of the country, the "deadness of all business," the absence of steam-power, the primitive state of the iron industry, and the inferiority, not only of Prussian manufactures, but of Prussian agriculture. Their implements of

husbandry, even their ploughs, were chiefly of wood, for they could produce or afford but very little iron; they broke up the clods with wooden mallets; four-fifths of the inhabitants lived on the land, and depended on what they could get for their surplus corn; they lived in miserable dwellings, mainly upon potatoes and rye; they were listless and slovenly, an earthen pot their most valuable article of furniture, and their clothing of the poorest. There were a few manufactories supported by Government bounty, which, however, could only produce a coarse blue cloth. . . calculated for negro clothing."

The extent of Prussia [says Mr. Jacob] is greater than that of Great Britain, its population only one-sixth less, and yet the surplus productions are not more than one-twentieth of ours, and probably the domestic consumption of the various commodities produced from the soil and the labour of men does not amount to more than one-third of what is consumed in this island.

Prussia changed her raw materials for English manufactures, the balance of trade being overwhelmingly in our favour. The manufactures of South Germany, chiefly in Saxony, which being far from the sea had a measure of natural protection, were more advanced; but taking Germany all in all, it was an agricultural country which bought the manufactures of England. The trade was conducted by English merchants in English ships, and the policy of the German States was the benevolent care of English statesmen.

In 1822 our Consul at Danzig, Mr. Alexander Gibson, our Vice-Consul at Königsberg, Mr. Tuke, and our Vice-Consul at Memel, Mr. Fowler, wrote letters which testify to a little disturbance in the tranquillity of these happy relations. The Prussian Government had raised the charges upon British ships, and had made reciprocal arrangements with Holland, Denmark, and America. Not only were the harbour dues raised on British ships, but the coasting trade was to be confined to Prussian vessels. Our Consuls feared that if these new laws were enforced, British trade, then supreme in those parts, might be driven out, and a Prussian shipping established.

Mr. Huskisson, who was then President of the Board of Trade, expostulated with the Prussian Minister; but the Prussian Minister, who had evidently taken the measure of Mr. Huskisson, replied that Prussia had only imitated England in her port and tonnage duties; "but it is the intention of my Government to imitate you still more closely by imposing discriminating duties on our goods imported by your ships." Mr. Huskisson capitulated and thereby made a great and calamitous change in British policy he substituted the governing principle of gain for the governing principle of national security. He came to an agreement with Prussia which practically abolished our Navigation Laws.

On May 12, 1826, he gave the House of Commons an account of these negotiations. It was true, he said, that England had established her security, her defence, and her commerce upon these laws; but her wealth and her security were now firmly established. In these circumstances was it wise to enter into

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a conflict with poor and unmanufacturing countries"? Was it not better to keep Prussia an agricultural country by wise concessions? "It may possibly be a wise policy to divert countries from that system [manufactures] rather than to goad them on, or even leave them a pretext for going into it." After all, there was nothing to fear:

If we look at the present question, as connected with our maritime struggle, I contend that there can be little or no danger from the arrangements which I have now described. The States to which these arrangements extend, from their situation, and from many other circumstances, never can become formidable as maritime Powers. They never can dispute with us the ascendancy on the ocean, nor have they any interest in assisting others to obtain that ascendancy. Their commercial interests and regard to their own security must alike incline them to our side.

Thus Prussia, as well as the Hanseatic towns of Hamburg, Bremen, and Lübeck, three independent States, were given again the prospect of that "limitless horizon" of sea-power which they had once enjoyed.

Now why did Huskisson surrender the Navigation Laws in this manner? One reason, no doubt, was that he was an old woman. He had not the natural courage and British grit to face such a conflict. "Would this country," he asked the House of Commons pitifully, "have the firmness and fortitude necessary to go through with it?" Strange confession, is it not? There in 1826 stood a British statesman, making the first of many surrenders from which this terrible war has inevitably followed, and he doubtfully asks himself the question, which is now being answered, "Would this country have the firmness and fortitude necessary to go through with it?"

Huskisson surrendered the security of our Navigation Laws to preserve the wealth drawn from our German trade. The exchange of security for wealth seemed at that time an excellent bargain. Does it seem so good a bargain now? English shipowners protested, but protested in vain. The Baltic having at that time of wooden ships all the materials of shipbuildingtimber, pitch, turpentine, hemp, and flax-Prussia went ahead, and by 1839, according to Clouston's Letters from Germany, had become the carrier of nearly all her bulky produce to British shores. By 1846 Prussian hopes had grown so high that the author of Unser Gegenwort und Zukunft (Our Present and Future), published in Leipzig in that year, made bold to argue that if Germany had only sufficient harbours of war (Kriegshafen) she might become "the first naval Power in Europe." Therefore