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.