Industrial Publicity
This brings me to the question of publicity, which is at the root of the whole problem. We desire the principle of private enterprise to remain. The one thing that can destroy it is secrecy. We argue that the self-interest of the investor makes capital flow into those channels where economic conditions need it most. But how can the investor know where it should go when the true financial condition of great industrial companies is a matter of guesswork? Again, we rely upon our bankers to check excessive industrial fluctuations. How can they do this if they do not know the facts of production? The public should know what great combines are doing, but they do not know; and how can we expect the man in the street to be satisfied when his mind is filled with suspicions that can be neither confirmed nor removed?
It is of the utmost importance to seek for greater publicity on two main lines. The illustration of the mines suggests one—production and wage data. There are only three industries in this country—coal, steel, and ships—in which production statistics exist. I suggest that in many of our great staple industries a few simple data with regard to production should be published promptly, say every three months. The data I have in mind are the wages bill, the cost of materials, and the value of the product. It is desirable that this should be done, and I believe it can be done, for almost every great industry in the country. These three facts alone will bring the whole wages discussion down to earth.
Then on finance, I suggest that one of the first things a Liberal Government should do should be to appoint a commission to overhaul the whole of our Company Law. This is not the occasion to enter in detail into a highly technical problem. But I would call attention to the following points: There is no compulsion on any joint-stock company to publish a balance sheet. It is almost the universal practice to do so; but as it is not an obligation, the Company Law lays down no rules as to what published balance sheets must contain. Again, the difference between private and public companies must be considered; a private company which employs a great mass of capital and large numbers of work-people—a concern which may cover a whole town or district—should in the public interest be subject to the same rules as a public company. Thirdly, in view of the amalgamation of industry, the linking up of company with company, there must be reconsideration as regards publicity in the case of subsidiary companies. Finally, I think we have been wrong in assuming that a law applicable to a company with a modest little capital is suitable to regulate the publicity of a great combine controlling tens of millions of capital. Some attempt should therefore be made to differentiate between what must be told by the big and by the little concerns respectively. I am well aware of the myriad difficulties that this demand for publicity will encounter. But difficulties exist to be overcome. And they must be overcome, for of this I feel certain: that if the system of private enterprise dies, it will be because the canker of secrecy has eaten into its vitals.