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HIS DOCUMENT IS THE PROPERTY OP HIS BRITANNIC MAJESTY'S GOVERNMENT.)

fl 5 C R E T . O.P. 88(53). COPY NO. //-

C A B I N E T .

REORGANISATION OP THE IRON AND STEEL INDUSTRY.

Memorandum by the Chancellor of the Exchequer1.

My colleagues will remember that when in April 1932 duties were imposed on iron and steel on the recommendation of the Import Duties Advisory Committee, I reported to the Cabinet that- one of the intentions of the Committee in recommending the duties was to stimulate reorganisation in the industry. Sir George May and his colleagues have been actively pursuing this object and a National Committee of representatives of the Iron and Steel Industry has now submitted a scheme under which reorganisation can take place. I circulate herewith the papers which I have received from Sir George May on the subject. I should propose, if the Cabinet approves, to reply to him in the following terms which I have agreed with the President of the Board of Trade.

"Dear Sir George May, I have to thank you for your letter of the

27th March covering various documents concerning the draft scheme for the future reorganisation of the Iron and Steel Industry together with your own Memorandum on the same subject.

I have now carefully considered these documents and after consultation with my colleagues I desire to make the following observations upon them.

From the outset the.Government have made clear their view that an efficient and prosperous iron and steel industry is essential to this country, and that the duties imposed on foreign imports were

i n t e n d e d t o p r o v i d e o p p o r t u n i t y f o r t h e r e o r g a n i s a t i o n w h i c h w a s n e c e s s a r y f o r t h i s p u r p o s e . F r o m t h e b e g i n n i n g a l s o t h e y h a v e e x p r e s s e d t h e o p i n i o n t h a t t h o s e e n g a g e d i n t h e i n d u s t r y w e r e b e s t q u a l i f i e d t o f o r m u l a t e a s a t i s f a c t o r y s c h e m e o r s c h e m e s , a n d r e c o g n i s i n g a l l t h e d i f f i c u l t i e s w h i c h h a d t o b e o v e r c o m e t h e y h a v e b e e n r e a d y t o a f f o r d r e a s o n a b l e t i m e f o r o r d e r l y a n d c a r e f u l p l a n n i n g s o l o n g a s t h e y c o u l d b e s a t i s f i e d t h a t p r o p e r p r o g r e s s w a s b e i n g m a d e .

A c c o r d i n g l y I w e l c o m e t h e e v i d e n c e now a f f o r d e d t h a t w o r k o n r e o r g a n i s a t i o n h a s b e e n s t e a d i l y p r o c e e d i n g a n d I r e g a r d t h e p r e s e n t p r o p o s a l s a s c o n s t i t u t i n g a r e a l s t e p f o r w a r dt h e r e q u i r e d d i r e c t i o n .

i n

Y o u w i l l h o w e v e r r e c o g n i s e t h a t o n l y t h e f i r s t s t a g e h a s b e e n r e a c h e d a n d t h a t m u c h r e m a i n s t o b e d o n e b e f o r e t h e i n d u s t r y c a n b e s a i d t o b e p r o p e r l y e q u i p p e d a n d o r g a n i s e d .

I t r u s t , t h e r e f o r e , t h a t t h e i n d u s t r y a s a w h o l e a n d a l l s e c t i o n s t h e r e o f w i l l p r e s s o n w i t h t h e w o r k w h i c h t h e y h a v e s o w e l l b e g u n . I u n d e r ­s t a n d t h a t o p i n i o n In t h e i n d u s t r y i s s t i l l o v e r ­w h e l m i n g l y a g a i n s t i n v o k i n g c o m p u l s o r y p o w e r s , a n d I h o p e t h a t t h e i n d u s t r y w i l l b e a b l e t o b r i n g a b o u t a p r o p e r m e a s u r e o f r e o r g a n i s a t i o n o n a v o l u n t a r y b a s i s .

W h i l e t h e G o v e r n m e n t m u s t n e c e s s a r i l y r e s e r v e c o m p l e t e d i s c r e t i o n a s t o t h e p r e c i s e a c t i o n , l e g i s l a t i v e o r o t h e r w i s e , t h e y may d e e m i t e x p e d i e n t t o t a k e i n a n y c i r c u m s t a n c e s w h i c h m a y a r i s e , I d e s i r e t o a s s u r e y o u a n d t h e m t h a t , s o l o n g a s t h e G o v e r n m e n t i s s a t i s f i e d o f t h e d e t e r m i n a t i o n o f t h e i n d u s t r y t o s e t i t s h o u s e i n o r d e r , t h e y w i l l b e r e a d y t o g i v e s u c h s u p p o r t t o i t s e f f o r t s a s m a y f r o m t i m e t o t i m e a p p e a r n e c e s s a r y t o e n a b l e t h i s g r e a t e n t e r p r i s e t o b e b r o u g h t t o a s u c c e s s f u l c o n c l u s i o n .

I s h a l l b e g l a d i f y o u w i l l k e e p me i n f o r m e d o f t h e p r o g r e s s m a d e . , "

( I n i t i a l l e d ) N . C .

' r e a s u r y C h a m b e r s , S . W. 1 .

5 1 s t M a r c h , 1 9 3 5 .

SCHEDULE OF ENCLOSURES.

(I) Letter from Sir George May to the Chancellor of the Exchequer

(II) Memorandum by the Chairman of the Import Duties Advisory Committee

(Ill) Letter from the Chairman of the National Committee for the Iron and Steel Industry to the Chairman, Import Duties Advisory Committee

(IV) Scheme for the Reorganisation of the Iron and Steel Industry

(V) Minutes of Meeting of the National Committee for the Iron and Steel Industry

(VI) Resume of Events from June 3rd, 1932, in connection with the National Committee for the Iron and Steel Industry.

Date. March' 27th,

1933.

March 24th, 1933.

March 13th, 1935.

Llarch 14 th, 19 i

March 10th, 1933.

March 10th, 1953.

ENCLOSURE I .

I m p o r t D u t i e s A d v i s o r y C o m m i t t e e ,

C a x t o n H o u s e ( W e s t B l o c k )

T o t h i l l S t r e e t ,

S . W. 1 .

2 7 t h M a r c h , 1 9 3 5 .

D e a r C h a n c e l l o r ,

R e o r g a n i s a t i o n o f t h e I r o n a n d S t e e l I n d u s t r y .

We h a v e now r e c e i v e d f r o m t h e N a t i o n a l C o i r m i i t t e e

o f t h e I r o n a n d S t e e l I n d u s t r y , a p p o i n t e d i n J u n e l a s t ,

a d r a f t s c h e m e f o r t h e f u t u r e o r g a n i s a t i o n o f t h e

i n d u s t r y . I e n c l o s e h e r e w i t h c o p i e s o f : ­

( i ) T h e l e t t e r f r o m t h e C h a i r m a n o f t h e N a t i o n a l C o m m i t t e e s u b m i t t i n g t h e s c h e m e .

( i i ) T h e s c h e m e i t s e l f , w i t h c o v e r i n g m e m o r a n d u m .

( i i i ) T h e M i n u t e s o f t h e m e e t i n g o f t h e N a t i o n a l C o m m i t t e e h e l d o n l o t h M a r c h , 1933, a t w h i c h t h e s c h e m e w a s a p p r o v e d i n g e n e r a l o u t l i n e b y 26 v o t e s t o 6 .

I a l s o s u b m i t a m e m o r a n d u m o n t h e w h o l e p o s i t i o n

f o r t h e c o n s i d e r a t i o n o f t h e G o v e r n m e n t , a n d w o u l d v e n t u r e

t o i n v i t e s p e c i a l a t t e n t i o n t o t h e l a s t t h r e e p a r a g r a p h s

t h e r e o f .

Y o u r s s i n c e r e l y ,

( S i g n e d ) G . E . MAY.

R t . H o n . N e v i l l e C h a m b e r l a i n , M . P . , C h a n c e l l o r of t h e E x c h e q u e r ,

H . M . T r e a s u r y , W h i t e h a l l , S . S / . 1 .

ENCLOSURE II,. - 2 1 1

THE REORGANISATION OF TiiTi: IRON AND STEEL INDUSTRY.

MEMORANDUM 3Y THE CHAIRMAN OF THE IMPORT DUTIES ADVISORY COMMITTEE.

It is now 10 months since the Import Duties Advisory-Commit tee were invited by the Chancellor of the Exchequer to endeavour to carry through a reorganisation of the Iron and Steel Industry in connection with the grant of protection and matters have at last reached a stage at which it is possible to report progress.

Before receiving that invitation the Committee had already given some consideration to the economic position of the industry. In their first report they expressed the view that this industry could not be dealt with on the broad lines adopted in that report in the case of other industries; a prosperous iron and steel industry was regarded as essential alike to the economic progress of the country and to the national security and we recommended an exceptional level of protection as a temporary measure pending the preparation of a permanent scheme for placing the industry again on a sound foot ing.

In view of the great complexity of the problem - the so called iron and steel industry being in fact a collection of ten or a dozen industries closely inter-twined with each other ­we early came to the conclusion that it would be very much better from every point of view if the industry could be induced to undertake its own reorganisation rather than that a scheme should be imposed upon it against its opposition by external authority. We have throughout striven to this end and still remain of this opinion.

We began by calling a conference fully representative of the producers of iron and steel and suggested the appointment of a series of committees to work out a scheme. We ourselves

- 5 ­

n o m i n a t e d a n a t i o n a l c o m m i t t e e f o r t h i s p u r p o s e a n d t h i s

c o m m i t t e e i n t u r n a p p o i n t e d a s m a l l e r e x e c u t i v e c o m m i t t e e ,

f o u r r e g i o n a l c o m m i t t e e s a n d f o u r s u b - c o m m i t t e e s f o r w r o u g h t

i r o n , s t e e l c a s t i n g s , f o r g i n g s a n d s p e c i a l s t e e l s r e s p e c t i v e l y .

A t t h a t c o n f e r e n c e v/e m a d e i t c l e a r t h a t p r o v i d e d t h e i n d u s t r y

w a s p r e p a r e d t o c a r r y t h r o u g h a s a t i s f a c t o r y s c h e m e o f

r e o r g a n i s a t i o n i t w a s o u r i n t e n t i o n t o r e c o m m e n d " s u c h a

m e a s u r e o f p r o t e c t i o n a s w a s n e c e s s a r y t o m a k e t h a t s c h e m e

e f f e c t i v e " .

T h e d i s c u s s i o n s t h u s i n i t i a t e d u n d o u b t e d l y l e d t o

a m o r e h o p e f u l o u t l o o k i n t h e i n d u s t r y a n d t e n d e d t o d e v e l o p

a s p i r i t o f c o - o p e r a t i o n , b u t a c t u a l p r o g r e s s i n t h e

p r e p a r a t i o n o f a s c h e m e o f r e o r g a n i s a t i o n w a s v e r y s l o w a n d i n

S e p t e m b e r we d e c i d e d t h a t we m u s t t a k e d e f i n i t e a c t i o n t o h e l p

m a t t e r s f o r w a r d . We a c c o r d i n g l y a r r a n g e d a s e r i e s o f m e e t i n g s

w i t h t h e i n d i v i d u a l m e m b e r s o f t h e E x e c u t i v e C o m m i t t e e a n d

d i s c u s s e d t h e p o s i t i o n f r a n k l y w i t h t h e m . T h e y a l l a d m i t t e d

t h e l a c k o f p r o g r e s s a n d i n t h e c o u r s e o f d i s c u s s i o n we g a t h e r e d

t h a t t h e t r u e e x p l a n a t i o n w a s t h a t t h e i n d u s t r y w a s s t r o n g l y

o n t h e d e f e n s i v e a g a i n s t c u r r e n t i d e a s t h a t r e o r g a n i s a t i o n

s i m p l y m e a n t e x t e n s i v e c o m p u l s o r y a m a l g a m a t i o n s a n d t h a t i t w a s

a c c o r d i n g l y d e v o t i n g i t s e n e r g i e s t o t r y i n g t o b u i l d u p a

s t r u c t u r e o f p r i c e a n d s a l e a g r e e m e n t s o n t h e s h i f t i n g s a n d s

o f e x i s t i n g t r a d e a s s o c i a t i o n s .

We e x p r e s s e d t h e v i e w t h a t t h e p r o b l e m w a s f a r t o o

i n t r i c a t e f o r a n y s i m p l e s o l u t i o n a n d t h a t i n a n y c a s e we h e l d

n o b r i e f f o r a n y p a r t i c u l a r l i n e o f a p o r o a c h . We w e r e s t i l l

a n x i o u s t h a t t h e s o l u t i o n s h o u l d b e o n e f o r w h i c h t h e y a c c e p t e d

r e s p o n s i b i l i t y b u t we o f f e r e d t o l e n d t h e m t h e s e r v i c e s o f

S i r A l f r e d H u r s t i n a c o n s u l t a t i v e c a p a c i t y i f t h e y s o d e s i r e d .

T h e r e s u l t s o f t h e s e p e r s o n a l d i s c u s s i o n s w e r e s e e n i n a m e e t i n g

o f t h e E x e c u t i v e C o m m i t t e e o n t h e 1 0 t h O c t o b e r w h i c h I a t t e n d e d w h e n

t h e C o m m i t t e e g a v e me a u n a n i m o u s a s s u r a n c e t h a t t h e y w o u l d p r o c e e d

- 6 ­

f o r t h w i t h t o p r e p a r e a s c h e m e a n d t h e y s u b s e q u e n t l y i n v i t e d

S i r A l f r e d H u r s t t o a s s i s t t h e m . A p a r t f r o m a n y a s s i s t a n c e t h a t

S i r A l f r e d H u r s t m a y h a v e b e e n a b l e t o r e n d e r i n t h e c o u r s e o f

s u b s e q u e n t p r o c e e d i n g s h i s c o - o p e r a t i o n w i t h t h e i n d u s t r y h a s

b e e n i n v a l u a b l e i n g i v i n g t h e A d v i s o r y C o m m i t t e e f u l l e r

k n o w l e d g e o f t h e f o r c e s , p e r s o n a l i t i e s , o p i n i o n s , e t c . , a t w o r k

i n t h e i n d u s t r y . N o t o n l y h a s h e a t t e n d e d n u m e r o u s m e e t i n g s

o f t h e C o m m i t t e e s r e f e r r e d t o a b o v e b u t s e v e r a l t r a d e

A s s o c i a t i o n s i n t h e i n d u s t r y h a v e a l s o b e e n g l a d t o a v a i l

t h e m s e l v e s o f h i s h e l p .

T h e o u t c o m e o f t h e p r o c e e d i n g s o f t h e p a s t f i v e

m o n t h s i s s e e n i n t h e e n c l o s e d l e t t e r f r o m t h e C h a i r m a n o f t h e

N a t i o n a l C o m m i t t e e s u b m i t t i n g a s c h e m e f o r t h e f u t u r e

o r g a n i s a t i o n o f t h e i n d u s t r y w i t h c o v e r i n g m e m o r a n d u m . A c o p y

o f t h e m i n u t e s o f t h e m e e t i n g o f t h e N a t i o n a l C o m m i t t e e a t

w h i c h t h e s c h e m e w a s a c c e p t e d i n g e n e r a l o u t l i n e i s a l s o

a p p e n d e d . I n v i e w o f t h e n a t u r e o f t h e s c h e m e t h e p e r s o n n e l

o f t h i s C o m m i t t e e h a d b e e n e x t e n d e d f o r t h i s m e e t i n g t o i n c l u d e

r e p r e s e n t a t i v e s o f t h e c o n s u m i n g i n t e r e s t s a f f e c t e d b y t h e

s c h e m e .

As s t a t e d i n M r . M i t c h e l l ' s l e t t e r t h e r e s o l u t i o n

o f a p p r o v a l w a s c a r r i e d b y 2 6 v o t e s t o 6 , a n d o f t h e s i x

d i s s e n t i e n t s t h r e e a r e m a k e r s o f f o u n d r y i r o n , who d i d n o t

o b j e c t t o t h e s c h e m e p e r s e , b u t c o n s i d e r e d t h a t t h e i r i n t e r e s t s

w e r e n o t s u f f i c i e n t l y i d e n t i f i e d w i t h t h o s e o f o t h e r p r o d u c e r s

o f i r o n a n d s t e e l t o m a k e i t d e s i r a b l e t h a t t h e y s h o u l d

p a r t i c i p a t e i n t h e s c h e m e . T h i s v i e w w a s r a i s e d u n e x p e c t e d l y

a t t h e f i n a l m e e t i n g , a n d t h e r e i s s o m e p r o s p e c t t h a t i t may b e

c o n s i d e r a b l y m o d i f i e d a s a r e s u l t o f f u r t h e r d i s c u s s i o n . Of t h e

o t h e r d i s s e n t i e n t s , t h e o n l y s t e e l p r o d u c e r i s M r . W a i t e r G r a y

o f t h e S t e e l C o m p a n y o f S c o t l a n d - a f i r m r e s p o n s i b l e i n 1 9 2 9

for only 2.5 per cent, of the total output of steel; the others being Mr. A.K. McCosh of Sir William Baird and Company who produce only pig iron, and Mr. C.E. Lloyd of Messrs. II. Hingley and Sons who are chiefly concerned with wrought iron. Mr. Lloyd1s opposition was based in the main on the absence of provision in the scheme for compulsory powers. There were two absentees from the meeting who had net sent word of their attitude, one of whom v/as Sir John Beale of British (Guest, Keen and Baldwins) Iron and Steel Company, with an output in 1929 of about 5 per cent, of the total. Sir J oan Beale had opposed the scheme at earlier meetings as being premature, but was not present or represented at the final meeting.

It is stated in "che covering memorandum that the scheme "may perhaps more correctly be described as a scheme for establishing the machinery whereby a reorganisation cf the industry may be effected rather than as a scheme of reorganisation itself". If by reorganisation is meant the actual alteration of the present distribution of production among the several units, the amalgamation of units, the improvement of this plant and the elimination of that, the control of prices, the pooling of effort in research, purchasing, marketing, etc., this statement is undoubtedly true, but progress in these several directions is bound to be slow without a strong central drive and adequate machinery through which it can operate. So much effort has been exerted in the past and - in the absence af effective machinery to support it - with so little permanent result that it has seemed advisable now to concentrate on the machinery.

It will be seen that the machinery contemplated in the scheme is of a comprehensive character, far more

comprehensive than anything which the industry has previously had in mind. Bearing in mind the strong individualistic tendencies hitherto prevalent in the industry, the keen internal rivalry that has existed in recent years, and the recurrent failures to secure any enduring basis of co-ooeration it is, we think, a notable achievement to have secured for it, even in general outline, so large a measure of support.

The questions for immediate consideration are two:­(l) Is it designed to operate in the right directions? (2) Will it operate effectively?

The needs of the industry in regard to reorganisation are many sided. Owing probably to comparisons with the enormous units operating in America and on the Continent the attention of reformers, especially those outside the industry, has been concentrated in recent years on extensive physical amalgamations almost to the exclusion of other aspects of the problem. This tendency is strongly marked in the admirable report on the industry prepared by Mr. Bruce Gardner in 1930. But it was recognised in that report that amalgamations, even if carried out to the fullest extent there envisaged, would need to be supplemented by an effective central organisation with extensive functions and considerable powers and also by special schemes dealing with particular sections of trie industry. The authors of the present plan do not dissent from the view that a large measure of consolidation of production in the more efficient units, with the elimination of redundant plant, will be necessary, but they hold that physical amalgamation is not the only means to this end. The iron and steel industry of this country is not quite of the same mass production character as that of its rivals: it is far more varied and specialised, and care must be taken that in striving after

the advantages 01 ' mass production we do not impair our exceptional position as specialists. If the right kind of amalgamations are to be secured the process must be one of growth rather than of forcible imposition from above, and must inevitably, therefore, take time. Meanwhile, the needs of the industry for avoiding uneconomic competition, for concentrating production on the more efficient units, for setting up a central control that will make sectional control effective, for providing a national organisation capable of conducting negotiations with other industries and interests at home and competitors abroad, - all these needs and others are urgent. Put in a nutshell, whereas Mr. Gardner's report begins with amalgamation and relegates other action to a

secondary position, this scheme reverses the order, trusting that the processes set in operation under the scheme will lead inter alia to such amalgamatiens as are found by experience to be desirable.

In considering ho v.7 far these purposes are likely to be attained it is important to remember that the scheme is framed oh a voluntary basis. The only measure of compulsion contemplated is such as can be applied by the industry itself to its own members without statutory powers. For this to be1

effective the proposed Corporation must obviously command the support - indeed the whole-hearted support - of the great majority of producers of pig iron and ingot steel, and the several Associations, while loyally supporting the Corporation., must themselves enjoy similar backing from their own members. Opinion in the industry is still overwhelmingly against invoking compulsory powers from any external authority for this purpose, though tho contrary view is gaining ground: indeed, the change of outlook in the last six months in regard

to reorganisation generally is remarkable. The present scheme woulo. have had little chance of acceptance in September last.

-Even no.v, some of the support accorded to it is rather half-hearted, and many qualifications on points of detail ­some of which may later prove to be points of substance - are covered by the words "general outline" in the resolution of approval; nevertheless, we are confident that support and indeed enthusiasm will steadily develop with the progress of negotiations, and we attach such importance to the industry tackling its own reorganisation that wc are anxious to give it the fullest opportunity therefor.

But there is no gainsaying the fact that the rate of progress will be greatly affected by the Government1s attitude to the scheme. If the industry can be given clearly to understand that the statement that a prosperous iron and steel industry is vital to this country is no empty platitude, that if the industry fails to put its own house in order the alternative of Government action will be resolutely faced, but that if on the other hand the industry presses on with, its scheme it can rely on Government backing either to deal with a recalcitrant minority or to support it against the most determined onslaught by a re-formed Continental steel cartel, then there is every prospect that the present apathetic acquiescence in some quarters, and even the small amount of opposition, will be won over to active support, and that the need for Government intervention will never arise.

As a Committee, therefore, we recommend the scheme to the favourable consideration of the Government. Subject to any direction^ or assurances which the Government may feel able to give, we should propose in replying to the National Committee to say that we regard the scheme as a satisfactory beginning in the development of an effective organisation;

that it represents, of course, little more at present than an outline of proposed machinery and of the objects to be aimed at; and that the energy and singlemindedxiess with which that machinery is det up and applied and those objects are pursued must determine the Committee's attitude in regard to protective measures in future. The Committee would propose to maintain their present intimate relations with the industry and do all in their power to assist the progress of the scheme.

The scheme has already received a considerable amount of unauthorised publicity, and it is desirable that it should be published officially at an early date. On receiving the Government's decision we propose to reply to the National Committee forthwith, and to issue that reply together with Mr. Mitchell'3 letter and enclosures to the Press . Public opinion can play a useful part in keeping the industry steadfastly along the path which it has now planned for itself.

(Signed) G.E. MAY.

24th March, 1955.

ENCLOSURE III,

NATIONAL COMMITTEE FOR THE IRON & STEEL INDUSTRY.

Caxton House, Tothill Street,

Westminster, S.W.I. 13th March, 1933.

Sir George May, Bt., Chairman, Import Duties Advisory Committee, Caxton House, Tothill Street, S.W.I. Dear Sir,

In our first Report to you, dated 29th September, we stated that "the industry has devised an organisation which is progressively working towards the national solution of its many problems", but pointed out that progress was handicapped by the then tentative nature of the protective duties which were subject to review every three months. This on the one hand encouraged the con­tinued consumption of foreign material and the maintenance of low price levels by competing countries in their deter­mination to retain their market in this country, and on the other hand, the same uncertainty handicapped the prospective expenditure of additional capital.

After receipt of this Report you were good enough to attend a meeting of the National Executive Committee on October 10th at which the difficulties of the problem were frankly discussed: the Committee then gave you a definite assurance that they would press on with the preparation of a scheme. This assurance enabled yon to recommend to the Lords Commissioners of His Majesty's Treasury that the duties should be continued for a further period of not less than two years from the 26th October, 1932 "subject to satisfactory progress being made in the preparation of the scheme of Reorganisation and in putting the approved scheme into force", and in due course the Treasury made an Order giving effect to this recommendation.

I have now to report that after you had left the meeting of October 10th Sir William Larke and I were re­quested by the Committee forthwith to prepare a Memorandum on the future course of procedure and were authorised to consult Sir Alfred Hurst who had been good enough to offer to assist the Committee, and I would like to say here how much we have valued the assistance we have received from Sir Alfred Hurst which,has been most useful and very ungrudgingly given. In the preparation of the scheme we have also been helped by discussions with the Chairmen of the four Regional Committees.

A Memorandum suggesting in broad outline a scheme of reorganisation was first submitted to the National Executive Committee on the 27th October .1932 and, after amendment in the course of further discussions, was sub­mitted to the National Committee on November 16th, 1932. The National Executive Committee, after considering it,

p a s s e d t h e f o l l o w i n g r e s o l u t i o n ' n e m i n e c o n t r a d i c e n t e ' : ­

" T h a t t h e s t r u c t u r e o f t h e s c h e m e h e a c c e p t e d i n p r i n c i p l e a n d t h a t t h e S u b - C o m m i t t e e r e s p o n s i b l e f o r i t s p r e p a r a t i o n b e r e q u e s t e d t o d r a f t t h i s s c h e m e i n g r e a t e r d e t a i l f o r t h e c o n s i d e r a t i o n o f t h e E x e c u t i v e C o m m i t t e e i n t h e f i r s t i n s t a n c e , a n d o n a p p r o v a l b y t h e m , t h e s c h e m e t o b e s u b m i t t e d t o t h i s C o m m i t t e e f o r a p p r o v a l o r a m e n d m e n t b e f o r e f u r t h e r a c t i o n i s t a k e n . "

F o l l o w i n g t h i s r e s o l u t i o n f u r t h e r c o n s i d e r a t i o n w a s g i v e n t o t h e m a t t e r b y t h e S u b - C o m m i t t e e a n d b y t h e E x e c u t i v e C o m m i t t e e a n d t h e s c h e m e w h i c h I now e n c l o s e w a s r e c o m m e n d e d t o t h e N a t i o n a l C o m m i t t e e b y a r e s o l u t i o n p a s s e b y t h e N a t i o n a l E x e c u t i v e C o m m i t t e e a t i t s m e e t i n g h e l d o n F e b r u a r y 2 2 n d i n t h e f o l l o w i n g t e r m s : ­

" T h a t t h i s s c h e m e b e r e f e r r e d t o t h e N a t i o n a l C o m m i t t e e a n d r e c o m m e n d e d f o r a c c e p t a n c e b y t h e m a s p r o v i d i n g m a c h i n e r y w h e r e b y t h e p r o g r e s s i v e o r g a n i s a t i o n o f t h e i n d u s t r y may b e a c h i e v e d . "

T h e s c h e m e w a s t h e r e u p o n c i r c u l a t e d t o t h e t h i r t y f o u r m e m b e r s o f t h e N a t i o n a l C o m m i t t e e a n d a s p e c i a l m e e t i n g o f t h e C o m m i t t e e w a s c o n v e n e d o n t h e 1 0 t h M a r c h . A t t h a t m e e t i n g a f t e r f u l l d i s c u s s i o n t h e f o l l o w i n g r e s o l u t i o n w a s m o v e d a n d c a r r i e d b y t w e n t y - s i x v o t e s t o s i x :

" T h i s N a t i o n a l C o m m i t t e e a c c e p t s t h e M e m o r a n d u m d a t e d F e b r u a r y 2 2 n d a n d t h e g e n e r a l o u t l i n e o f t h e s c h e m e r e f e r r e d t o t h e r e i n , a n d d i r e c t s t h a t i t b e f o r w a r d e d f o r t h w i t h t o t h e I m p o r t D u t i e s A d v i s o r y C o m m i t t e e , t o g e t h e r v / i t h a s t a t e m e n t o f t h e m e a s u r e o f s u p p o r t a c c o r d e d t o i t b y t h i s C o m m i t t e e , t h i s a c t i o n b e i n g i n f u l f i l m e n t o f t h e u n d e r t a k i n g g i v e n b y t h e N a t i o n a l E x e c u t i v e C o m m i t t e e o n O c t o b e r 1 0 t h l a s t t o t h e C h a i r m a n o f t h e I m p o r t D u t i e s A d v i s o r y C o m m i t t e e . "

Of t h e s i x d i s s e n t i e n t s , t h r e e a r e m a k e r s o f f o u n d r y p i g i r o n who i t i s u n d e r s t o o d d i d n o t o b j e c t t o t h e s c h e m e p e r s e b u t c o n s i d e r e d t h a t t h e i r i n t e r e s t s w e r e n o t s u f f i c i e n t l y i d e n t i f i e d w i t h t h o s e o f t h e o t h e r p r o d u c e r s o f i r o n a n d s t e e l t o m a k e i t d e s i r a b l e t h a t t h e y s h o u l d p a r t i c i p a t e i n t h e s c h e m e . O f t h e o t h e r d i s s e n t i e n t s , o n e w a s a m a n u f a c t u r e r o f p i g i r o n , o n e a w r o u g h t i r o n m a k e r a r id t h e o t h e r a s t e e l m a k e r .

We t r u s t t h a t t h e A d v i s o r y C o m m i t t e e w i l l a g r e e t h a t t h e e n c l o s e d s c h e m e s h o u l d , s u b j e c t t o t h e m a i n t e n a n c e c f p r o t e c t i v e d u t i e s a t a n e f f e c t i v e l e v e l , p r o v i d e s a t i s ­f a c t o r i l y f o r t h e p r o g r e s s i v e r e o r g a n i s a t i o n o f t h e i n d u s t r y - a r e o r g a n i s a t i o n w h i c h s h o u l d e n a b l e i t a g a i n t o t a k e i t s r i g h t f u l p l a c e i n t h e n a t i o n a l e c o n o m y , a n d i n s o d o i n g t o m a k e a n i n c r e a s e d c o n t r i b u t i o n t o n a t i o n a l e m p l o y ­m e n t .

Y o u r s f a i t h f u l l y ,

( S g d . ) CHARLES MITCHELL.

ENCLOSURE I V .

Strictly Private and Confidential.

14th March, 1933.

The Reorganisation of the Iron and Steel Industry.

I. MEMORANDUM.

1. At the meet ing of representatives of the Iron and Steel Industry with the Import Duties Advisory Committee on the 3rd June, 1932, an undertaking w a s given on behalf of the industry in return for the grant of protection t o prepare a scheme of reorganisation. The assurance then given was categoricafly renewed b y the Execut ive Committee of the National Committee of the industry on the 10th October. The scheme appended hereto has been prepared in accordance with the resolution of the National Committee at their meeting o n the 16th November, 1932. In arriving at that resolution the National Committee recognised that the problems of the industry were far too complex and m a n y sided to admit of any simple or immediate solution. The scheme now presented may perhaps more correctly be described as a scheme for establishing the machinery whereby a reorganisation of the industry m a y be carried out rather than as a scheme of reorganisation itself and its ult imate success will entirely depend upon the vigour and singlc-mindedness with which that machinery is used. It has purposely been drawn on broad lines and with an elastic structure, so as to be readily adaptable t o the constant ly changing conditions of trade and industry.

2. The case for a reorganisation of the British Iron and Steel Industry arises partly from the general world situation in regard t o production and consumption and partly from features peculiar to itself. In few industries did the War period result in so large an expansion of world productive capacity as in the Iron a n d Steel I n d u s t r y : in few has the post-war period seen so marked a development of economic nationalism. On the other hand, there has in the last three years been a great falling off in the world demand for iron and steel, a n d the prospects of an early return to the level of 1929 are not encouraging. Under such conditions it seems probable that the orderly progress of the industry can only be secured by the regulation of production in relation to demand both by international agreements a n d also, even within the protection of tariff walls , by applying some degree of control t o the individual producers of each country. The attached scheme aims first, therefore, at sett ing u p an organisation in this country which will h a v e the power to negotiate such arrange­ments w i t h producers abroad, and will be in a position t o apply the necessary degree of control at home to the benefit both of the industry and of the nation generally.

3. B u t in regard t o t h e British Iron a n d Steel Industry mere regulation of production in relation to demand will not alone suffice t o place it in a posit ion to p lay its proper part in the national economy. The Iron and Steel Industry of this country reached matur i ty in the days of individualism and the continuance of free access to foreign supplies of raw and semi-manufactured materials has resulted in its retaining much of i t s complex individualistic organisation long after its competitors in other countries have become highly rationalised. Such a s i tuation might be tolerable in years of pros­perity, but under conditions of surplus production the existence of m a n y small, out-of-date, or inefficient plants has handicapped others in keeping abreast of their competitors abroad. A consider­able amount of leeway both in equipment and in organisation has, therefore, to be made u p in various sections of the industry before i t s condition can b e considered to be thoroughly sound.

4. If foreign analogies are to be trusted, further consolidation of the industry both by w a y of horizontal groupings and vertical amalgamations will be found desirable, but this process is necessarily difficult and lengthy and it is impossible to trust t o this course for an immediate, or even ult imately a complete, solution of present difficulties. "\Miile leaving full scope for such consolidation, therefore, the scheme proceeds t o seek a solution b y co-operative action under which the interests of the industry are safeguarded to the m a x i m u m possible extent , while it is evolving an organisation adequate t o present day needs.

5. For this purpose i t is proposed t o adapt and improve on the existing machinery of Trade Associations and the National Federation of Iron and Steel Manufacturers, grouping the Associations, which arc a t present mainly price maintenance bodies, into a smaller number of effective instruments for the control of production in the several m a m divisions of the industry, and giving a new central organisation the power, which the Federation n o w lacks, to support and co-ordinate the activities of the Associations and to give effect to the will of the industry in matters of general policy extending beyond the sphere of any one Association. I t is proposed to mark this considerable development beyond the existing powers and functions of the Federation b y constituting the new organisation " The Iron and Steel Corporation of Great Britain."

6. It is believed that national interests, no less than those of the industry itself, can best be served if this matter of reorganisation is taken in hand by the industry rather than by external authority and the scheme has been framed on this basis. I t is hoped that the scheme m a y be made effective without statutory power, but it must be recognised that this depends on its acceptance ult imately b y the bulk of the industry. Assuming that at the outset all substantial producers of pig iron and ingot steel and a good majority of the manufacturers of secondary products join the proposed Corporation, it would be able to exert pressure on any opposing section by suitable rebate schemes. These might provide on the one hand for preferential prices for supplies to members of the Corpora­tion and on the other bind purchasers b y means of special rebates to take only products of the Cor­poration. Should, however, the minority of the indust iy standing out against the scheme prove to be substantial , it would probably become necessary to seek statutory powers.

7. An important question arises at the outset as to what is t o - b e regarded as the Iron and Steel Industry for the purpose of the scheme. The ramifications of the industry extend into every phase of the national life and if the tariff on imported iron and steel is to be maintained at an effective -level, the Government and Parliament will need to be assured that the interests of consumers of steel are properly safeguarded. For this purpose it is essential that the Corporation, to which it is proposed to entrust considerable powers, should contain a considerable representation of the con­suming interests. This does not mean that all users of steel should be so represented, including such substantial industries as shipbuilding, the railways or the motor car industry. Indeed, this would give an unnecessarily cumbrous structure besides introducing excessive diversity of interest. Perhaps the most convenient principle to follow would be t o include all the main activities which are commonly associated with the manufacture of iron and steel. The application of this principle results in a reasonable balance of interest in the Corporation and at the same time brings within its purview most of the difficulties arising from the competit ion of fully integrated plants with secondary pro­ducers purchasing semi-finished steel as their raw matei ial .

S. The wide range of interests so brought together in the Corporation necessarily involves a strict l imitation of its powers of interference wi th the affairs of separate Associations and still more wi th the interests of individual producers. The general conception underlying the scheme is that the respective Associations should be the responsible agents for securing the efficient working of each section of the industry, being each autonomous in its own sphere, and that the functions of the Corporation should be generally of a st imulating and co-ordinating character. In the former capacity it would bring to the assistance of each Association the stimulus of the general opinion of the organised industry, backed by the co-operation of other Associations, as and when required, and by the powerful instrument of a central fund collected by a levy on the national production of pig iron and ingot steel. As a co-ordinating body it would use its influence to secure that mutually consistent policies were followed by the several Associations, it would adjust differences between them, and in collaboration with them would take part in negotiations with outside interests. The Corpora­tion acting alone would have n o power of interference with the rights of any individual producer.

9 . Probably one of the most important act ivit ies of the Corporation would be that of guiding and moulding the evolution of the present fifty or so existing associations of very varying character and effectiveness into the smaller number of powerful production Associations envisaged under the scheme. I t is desirable that the number of associations should be kept as small as possible, con­sistently with reasonable homogeneity of interest (i) in order to increase their importance ; (ii) to facilitate a policy of interchange in production ; and (iii) to secure greater compactness and efficiency in the general organisation. There is no reason w h y one Association should not comprise a number of sections each dealing with a homogeneous group of products and co-ordinated by the main Associa­tion. This would undoubtedly be necessary in the case of the very comprehensive Association proposed for the tmspecialised section of the steel industry. In order that this difficult process of forming the new association m a y be carried through within a reasonable period and without much waste of effort, it is proposed to constitute the Corporation at the outset, though it must then of course be on a somewhat provisional basis. The representation of any Association on the Council of the Coiporation would naturally come up for revision as each was formally approved.

10. This does not imply that the Corporation would be established during the initial period alongside the Federation. Such a course would only lead to duplication and confusion. The Cor­poration is intended to be the lineal descendant of the Federation, absorbing, as and when constituted, all the existing functions and organisation of that body. The change over could not, however, in any event be made until the existing members of the Federation had decided by the necessary two-thirds majority vote , required under its constitution, on its dissolution.

II. SCHEME OF FUTURE ORGANISATION.

I. General Organisation. The British Iron and Steel Industry shall be organised on the basis of a number of approved Associations, each dealing with a group of similar products, and a central body co-ordinating Associations and incorporated either under Royal Charter or under the Companies Act, called the Iron and Steel Corporation of Great Britain.

2. Membership. All producers of iron and steel in the United Kingdom, and all firms in the United Kingdom substantially engaged in the,manufacture of products-of any of the classes named in 6 (d) below, shall be entit led to become ordinary members of their appropriate Associations and of the Corporation and all necessary steps shall be taken to secure as soon as possible that the Corporation includes all such producers of iron and steel and that the respective Associations include all firms substantially engaged in each section of the industry. With this end in view all members of the Corporation shall automatical ly become members of the Associations dealing with their respective products when const i tuted and approved.

3 . Functions. The Corporation shall be empowered

(a) to provide services of an advisory character for the assistance of its members and Associations, e.g., statistics, trade intelligence as to home and foreign markets and transport facilities, research of all kinds, propaganda and guidance on employment , financial, technical, transport, legal and other questions ;

(b) to promote the formation of approved Associations on the lines set out below and to exercise such measure of supervision over them in matters of general policy and matters affecting more than one Association as is necessary to secure the orderly progress of the indus try ;

(c) by agreement with approved Associations to provide, or assist in the provision of, services of general benefit to their members, such as secretarial services, central purchasing, common marketing, research, etc. ;

(d) to assist approved Associations in any measures calculated to promote the efficient organisation of their respective sections of the industry including : (i) the promotion of desirable amalgamations of existing undertakings and extensions

and improvement of p lant as and when required ; (ii) the prevention of unnecessary duplication of plant whether by existing members

of the association or b y other producers.

(e) to co-operate with approved Associations in promoting the export trade in iron and steel ;

( / ) to adjust matters in dispute between Associations and to decide any question referred to it under the rules of any Associat ion;

(g) to act on behalf of the industry generally—in collaboration, where appropriate, with representatives of any Associations specially concerned—in all negotiations and other proceedings with outside interests, e.g., other industries, transport authorities, the Government, Parliament, foreign Governments, foreign industries, etc.

4. Management of the Corporation. The Corporation shall operate through an Annual General Meeting, a Council, an Execut ive Committee and four Regional Committees, together with national Advisory Committees for Wages, Transport, Research and other matters as may be found necessary.

5. Annual General Meeting. An Annual General Meeting, which all members of the Corporation will be entitled to attend, shall be called by the Execut ive Committee. The meeting shall receive an annual report and statement of accounts from the Council and give such/i irections as may be necessary from time to t ime in regard to the general scope of the act ivit ies of the Corporation.

b . Constitution of Council. The Council of the Corporation shall be constituted as follows :

(rt) a whole t ime permanent chairman to be appointed by the members of the Council selected under (c) and (d) ;

(b) the Chairman of the British Iron and Steel Export Association (Clause 14) ; (c) nine representatives of the four Regional Committees, i.e., the Chairman and one nominee

of each Committee (two from the Midlands). These nine to be all producers of pig iron or ingot s t ee l ;

(d) one member specially representative of each of the following ten sections of the industry, being nominated by the appropriate Associations as and when formed and in the mean­t ime b y existing Associations covering the products in question :

Wrought Iron Special Steels Steel Castings Forgings Re-rolled Products Sheets T in Plates Tubes Wire Fabricated Steelwork. The Council shall appoint a Secretary who shall also be Secretary of the Execut ive

Committee.

7. Meetings, etc., of Council. The Council shall meet a t least once a quarter and all elected members shall hold office for three years and be eligible for re-election.

8. Executive Committee. The ordinary administration of the Corporation, subject to the general authority of the Council, shall be in the hands of an Execut ive Committee of eight, as follows :

(a) The Chairman of the Corporation acting as Chairman of the Committee. (6) The Chairman of the British Iron and Steel Export Association. (c) The four Chairmen of the Regional Committees. (d) Two other members elected by the ten representatives in G (d) above , one to retire every

two years but to be eligible for re-election.

9. Regional Committees. A Regional Committee, representative of interests comprised in the Corporation shall be const i tuted for each of the four regions, to be elected b3' members of the Cor­poration in the respective regions. In order to secure the establishment of authoritative Committees at the earliest possible moment after the inception of the scheme, the first election shall be made by existing members of the Federation in the respective regions. One-third of the members shall retire every two years, but to be eligible for re-election.

10. Functions of the Regional Committees. The Regional Committees shall exercise such powers and duties as m a y from t ime to t ime be delegated to them by the Council of the Corporation.

11 . Income of the Corporation. The income of the Corporation shall be derived in two w a y s :

(a) by an annual l evy per ton, payable by producers of pig iron and ingot steel under legal agreement for a term of not less than ten years : such agreement shall provide a maxi­m u m rate of levy for each class of product within which l imits the Council may levy such a proportion as m a y from t ime to t ime prove necessary;

(b) b y a levy on all members of the Corporation who do not produce pig iron or ingot steel not exceeding 5 / - per £100 wages paid per a n n u m or by such other methods as m a y be approved.

12. Associations. With a view to the avoidance of wasteful competit ion and the concentration of production in the more efficient units , the industry shall be organised into a number of production Associations each comprising the manufacturers of a group of products. The existing Associations shall be combined, as soon as m a y be, into the following Associations to be approved under Clause 13 b e l o w :

1. P ig Iron and Ferro Alloys. 2. Blooms, slabs, billets, plates, angles, sections, joists, sheet and t in plate bars, rails

and re-rolled products such as rods, bars, hoop and strip. 3 . Wrought Iron in all forms. 4. Special Steels in all forms. 5. Steel Castings. 6. Forgings. 7. Sheets. 8. Tinplates. 9. Tubes.

10. Wire. 11 . Fabricated Steelwork.

13. Constitution of Associations. As a condition of approval by the Corporation the constitu­tion of each Association shall contain provisions, to the satisfaction of the Council of the Corporation—

(a) for ensuring its permanence and comprehensiveness ; (b) for preventing wasteful competit ion among i ts members while reasonably safeguarding

the interests of the members of other associations in the Corporation ; (c) for securing the progressive concentration of production in the more efficient plants ; (d) for eliminating redundant and inefficient plants b y agreement wi th proprietors on pay­

ment of suitable compensat ion; (e) for affording assistance, where necessary, to the export trade ; ( / ) for submitt ing for the concurrence of the Council of the Corporation decisions on general

policy, agreements, and other matters affecting other sections of the industry.

14. British Iron and Steel Export Association. All Associations approved under Clause 13 shall be eligible for membership of a British Iron and Steel Export Association or Company, the constitution of which shall comply wi th the provisions of Clause 13 (a) (J) (e) and (/) above.

AS A P P R O V E D B Y N A T I O N A L COMMITTEE

10th March, 1933.

W.J.L.

ENCLOSURE V

P r i v a t e & C o n f i d e n t i a l .

MINUTES OF THE MEETING OF THE NATIONAL COMMITTEE FOR THE IRON AND STEEL INDUSTRY HELD AT CAXTON HOUSE ON FRIDAY,

1 0 t h MARCH, 1933 AT 1 0 . 3 0 A.M.

PRESENT: Mr. C. M i t c h e l l ( In t he C h a i r ) , Major J .M. Bevan, Mr. Fred C lemen t s , Mr. John C r a i g , C . 3 . E . , Mr. J . Davison , Mr. E . J . Fox, Mr. E . J . George , Mr . A . J . G r a n t , Mr. A. Gray, Mr. W.G. Gray, Mr. J . H a l l i d a y , Mr. A. H i b b e r t , C a p t . R . S . H i l t o n , Mr. J . E . Jame s , Mr. C.W. K a y s e r , Mr. C .E . L loyd , Mr. W.R. L y s a g h t , Mr. A.C. Macdiarmid , Mr. A.K. McCorh, Mr. A.N. McQuis tan , C o l . J . 3 . N e i l s o n , C a p t . A.H. Read, Mr. F . J . Rees , Mr. Fred Smi th , S i r T. K a r r i s Spence r , Mr. H.G. S t o b a r t , Mr. R . F . Summers ( r e p r e s e n t i n g Mr. H. Summers), Mr. D.N. Tu rne r , Mr. E.A. W i l l s o n , S i r C h a r l e s Wr igh t , B t 0 , C .B.

Also Mr. G.S.McLay, S i r A l f r e d H u r s t , K . B . E . , C.B. Pre s e n t S i r W i l l i a m Larke . K.B.E. ( S e c r e t a r y ) ,

Mr. M.S. B i r k e t t , O.B.E. ( A s s t . S e c r e t a r y ) , Mr. W.G. Tubman.

A p o l o g i e s f o r i n a b i l i t y t o be p r e s e n t vrere i n t i m a t e d from S i r John B e a l e , S i r W i l l i a m F i r t h and Mr. G.H. J o h n s o n .

I S . MINUTES. The M i n u t e s of t h e Mee t ing h e l d on November 1 6 t h , 1932, were conf i rmed and s i g n e d .

The Chairman e x t e n d e d the h e a r t y welcome of t h e Committee t o the new members r e c e n t l y a p p o i n t e d by the Impor t D u t i e s Adv i so ry Committee who were p r e s e n t f o r the f i r s t t i m e .

1 9 . SCHEME OF ORGANISATION DATED 22nd FEBRUARY. Before a s k i n g f o r o b s e r v a t i o n s on the scheme of o r g a n i s a t i o n d a t e d 22nd F e b r u a r y , which had been c i r c u l a t e d , Mr. M i t c h e l l gave a b r i e f r ev iew of t h e e v e n t s l e a d i n g up to the p r e s e n t p o s i t i o n , Th is resume i s c i r c u l a t e d w i th t h e s e M i n u t e s .

S ince the scheme was c i r c u l a t e d the Committee r e s ­p o n s i b l e f o r the scheme d e s i r e d to i n t r o d u c e two s l i g h t m o d i f i c a t i o n s which he would ask S i r A l f red H u r s t t o e x p l a i n . S i r A l f r e d H u r s t s a i d t h a t the f i r s t m o d i f i c a t i o n d e a l t w i th the q u e s t i o n of membersh ip . I t was e s s e n t i a l t h a t t h e scheme should have t h e b a c k i n g of a l l i n d i v i d u a l p r o d u c e r s of i r o n and s t e e l b u t i t was n o t e s s e n t i a l t h a t a l l consumers should be members of t h e C o r p o r a t i o n a s w e l l as of t h e i r r e s p e c t i v e A s s o c i a t i o n s in t h e i r i n d i v i d u a l c a p a c i t i e s . I t was t h e r e ­fo re p r o p o s e d t o modify c l a u s e I I d e a l i n g w i t h membership so t h a t the l i n e s 7 and 8 a t p r e s e n t r e a d i n g b o t h C o r p o r a t i o n and A s s o c i a t i o n s i n c l u d e as f a r a s p o s s i b l e a l l f i rms s u b s t a n t i a l l y ongaged i n the i n d u s t r y " should r e a d " t o s e c u r e t h a t t he C o r p o r a t i o n i n c l u d e s a l l such p r o ­duce 's of i r o n and s t e e l a s soon as p o s s i b l e and t h a t tho r e s p u c t i v e a s s o c i a t i o n s i n c l u d e a l l f i rms , s u b s t a n t i a l l y en ­gaged i n each s e c t i o n of tho i n d u s t r y " . L inos 1 1 t o 15 of c l a u s e I I commencing " v i c e v e r s a " down t o "10 y e a r s " should be o m i t t e d .

The second m o d i f i c a t i o n was i n c l a u s e XI d e a l i n g w i t h income; t h e o p i n i o n had been e x p r e s s e d t h a t t h i s c l a u s e was no t s u f f i c i e n t l y e l a s t i c and t h a t c o n s i d e r a t i o n might show t h a t i t was n o t n e c e s s a r y f o r a l l s e c t i o n s of t he i n d u s t r y to c o n t r i b u t e the same amount p e r t on to t h e l evy which was to g ive t he d r i v i n g power t o t h e . C o r p o r a t i o n . I t had t h e r e f o r e been proposed t h a t c l a u s e x r a s h o u l d be mod i f i ed to r e a d a s f o l l o w s :

by an a n n u a l l e v y p e r ton p a y a b l e by p r o d u c e r s of p i g i r o n and i n g o t s t e e l under l e g a l agreement fo r a term of n o t l e s s t han t en y e a r s . Such agreement s h a l l p r o v i d e a maximum r a t e of l e v y f o r each c l a s s o f p r o d u c t w i t h i n which l i m i t s the Counc i l may l e v y such a p r o p o r t i o n a s may from time t o t ime prove n e c e s s a r y " .

This l e v y to be on the home p r o d u c t i o n of i n g o t s t e e l and of p i g i r o n where no t c o n v e r t e d i n t o s t e e l .

PIr. S t o b a r t a sked w h e t h e r i t was e s s e n t i a l t h a t t he l e v y c o n t e m p l a t e d under Clause XI(b) shou ld be based on wages and i t was ag reed t h a t some o t h e r b a s i s might be ag reed f o r c e r t a i n s e c t i o n s of t h i s i n d u s t r y , and i t was t h e r e f o r e a g r e e d to add t o c l a u s e Xl (b) " o r by such o t h e r method as may be approved" .

C a p t . H i l t o n asked whe the r t he a l t e r a t i o n s s u g g e s t e d by the Reg iona l Commit tees had been c o n s i d e r e d , b u t Mr. M i t c h e l l e x p l a i n e d t h a t the m a t t e r had n o t been r e f e r r e d t o R e g i o n a l Committees f o r d e t a i l e d c o n s i d e r a t i o n a t t h i s s t a g e B Cop ies of t h e scheme had only been s e n t so t h a t the Reg iona l Committees cou ld d i s c u s s t h e scheme w i t h t h e i r c h a i r m e n . I f t h e Mid lands Reg iona l Committee wished any major p o i n t of p r i n c i p l e d i s c u s s e d he would be g l a d i f C a p t . H i l t o n would b r i n g i t f o r w a r d . Cap t . H i l t o n sa id t h a t t h e r e was some doubt i n the minds of t he Midlands R e g i o n a l Committee whe the r membership of t he e x p o r t a s s o c i a t i o n was compulsory under t h e scheme or n o t ; i t was p o i n t e d ou t t h a t by c l a u s e XIV a l l the a s s o c i a t i o n s were e l i g i b l e f o r membership of the B r i t i s h I r o n and S t e e l E x p o r t A s s o c i a t i o n o r Company b u t t h a t i t was no t compulsory on any a s s o c i a t i o n to j o i n . C a p t . H i l t o n sa id t h a t most of t he o t h e r p o i n t s were no t m a t t e r s of p r i n c i p l e and i f i t was u n d e r ­s tood t h a t f u l l c o n s i d e r a t i o n would be g iven to them a t a l a t e r s t a g e he would n o t r a i s e them on t h i s o c c a s i o n . The chai rman s t a t e d t h a t i t was q u i t e unde r s tood t h a t t h e door was n o t c l o s e d t o s u b s e q u e n t m o d i f i c a t i o n of d e t a i l s of t h e scheme. He hoped t h a t the Committee would conf ine i t s e l f t o c o n s i d e r a t i o n of t h e g e n e r a l o u t l i n e of t h e scheme.

Mr. Fox s t a t e d t h a t t h e makers of foundry and f o r g o p i g i r o n d e s i r e d to be e x c l u d e d from t h e scheme. The scheme was p r i m a r i l y one f o r t h e s t e e l i n d u s t r y and i n no way concerned the makers of fo rgo and foundry p i g i r o n . Yi/hatever t h e y ( t h e foundry and fo rge makers) d id could n e i t h e r he lp nor i n j u r e t h e s t e e l i n d u s t r y and i f the foundry p i g i r o n makers c o n t r i b u t e d t o a l e v y towards t he o p e r a t i o n of the scheme they were in f a c t c o n t r i b u t i n g towards t h e i r c o m p e t i t o r s . One of t he p r imary f u n c t i o n s of the C o r p o r a t i o n would be p ropaganda on b e h a l f o f the heavy s t e e l i n d u s t r y , and wh i l e a n x i o u s t o s u p p o r t any scheme f o r t h e r e - o r g a n i s a t i o n of t h e i n d u s t r y ho f e l t t h e y cou ld h a r d l y bo e x p e c t e d to c o n t r i b u t e t owards propaganda on t h e i r c o m p e t i t o r s ' b e h a l f . Ho p o i n t e d o u t t h a t t h e p i g i r o n i n d u s t r y was now o r g a n i s e d t o p r a c t i c a l l y 100 pe r oent in a

n a t i o n a l o r g a n i s a t i o n . As f a r a s he p e r s o n a l l y was con­c e r n e d he had no need f o r any t a r i f f p r o t e c t i o n f o r p i g i r o n .

Mr. Turne r s u p p o r t e d Mr. Fox' v iews and s t a t e d t h a t the m a t t e r had been r a i s e d a t t h e m e e t i n g of the Mid lands Reg iona l Committee and had the sympathy of t h a t Commit tee . I t appea red t o him t h a t t h e scheme had been p r e p a r e d fo r t h e s t e e l t r a d e and t h a t foundry p i g i r o n makers had n o t h i n g wha t eve r t o do w i t h t he s t e e l t r a d e . I f t h e scheme were p u t b e f o r e t he p i g i r o n a s s o c i a t i o n s he was q u i t e s u r e t h e y would r e f u s e to j o i n the p roposed C o r p o r a t i o n .

Mr. George p o i n t e d o u t t h a t i t was p o s s i b l e fo r o t h e r p r o d u c e r s of p i g i r o n t o i n t e r f e r e w i t h t he c l a s s of p i g i r o n t o which Mr. Fox r e f e r r e d and t h a t h i s i n t e r e s t s would be b e t t e r s a f e g u a r d e d by becoming a member of t h e C o r p o r a t i o n .

t Mr. Mc-^uistan p o i n t e d ou t t h a t some f u m a c o s p r o ­

duced a l t e r n a t i v e l y foundry and b a s i c and f o r f ound ry i r o n t o be c o n t r a c t e d ou t o f t ho scheme would make i t v e r y com­p l i c a t e d .

C a p t . H i l t o n t hough t t h a t when the words " i r o n and s t e e l " were used most members t h o u g h t of t h e i r o n which was t o be e v e n t u a l l y c o n v e r t e d i n t o s t e e l and ho a g r e e d t h a t the foundry t r a d e had no c o n n e c t i o n , a s a t r a d e , w i t h the s t e e l t r a d e and t h a t the scheme migh t be compl i ca t ed by b r i n g i n g i n makers of foundry and f o r g e p i g i r o n .

S i r V/i l l iam Larkc s u g g e s t e d t h a t i t would bo open t o t h e foundry makers t o j o i n as a n a s s o c i a t i o n w i t h o u t b e i n g r e q u i r e d t o j o i n i n d i v i d u a l l y and Mr. Tu rne r s t a t e d t h a t i f the q u e s t i o n of j o i n i n g was a l l owed t o remain v o l u n t a r y i t would p r o b a b l y meet t h e c a s e .

Mr. George p o i n t e d c u t t h a t t h e r e was no e lement of compuls ion i n t h e scheme wha teve r and no f i rm o r a s s o c i a ­t i o n was compel led t o j o i n .

S i r A l f r e d H u r s t s t a t e d t h a t t h e p o i n t s j u s t r a i s e d by Mr. Fox and o t h e r s were t h e r e a s o n f o r a l t e r i n g t h e c l a u s e d e a l i n g w i t h t h e b a s i s of l e v y so t h a t where the tonnage b a s i s was i n e q u i t a b l e , o r where i t was ag reed the s e r v i c e s of the C o r p o r a t i o n were n o t so v a l u a b l e t o a c e r t a i n s e c t i o n a s t o o t h e r s , the b a s i s o r r a t e of l e v y might bo m o d i f i e d . The f a c t t h a t foundry p i g i r o n makers were i n f a c t members of the F e d e r a t i o n s u g g e s t e d t h a t t hey found some of the s e r v i c e s wor th whi le and the c o n n e c t i o n between the foundry i r o n i n d u s t r y and t h e s t o o l i n d u s t r y was h a r d l y a s remote as s u g g e s t e d by Mr. T u r n e r . I t was ve ry u n d e s i r a b l e t h a t t ho found ry makers shou ld bo c u t off from t h e C o r p o r a t i o n a l ­t o g e t h e r b u t membership of t h e C o r p o r a t i o n migh t be l e f t v o l u n t a r y .

Mr. Turne r p o i n t e d ou t t h a t on t he wholo i t would be b e t t o r to l e a v e tho foundry makors o u t of the scheme. Hb d i d n o t see why tho p o l i c y of the foundry i r o n t r a d e should come under the r e v i e w of a committee dominated by s t e e l p r o d u c e r s ; r a t h e r t h a n the foundry i r o n i n d u s t r y should be t a x e d f o r t he b e n e f i t of the s t o e l i n d u s t r y he would be w i l l i n g to see the d u t i e s t aken o f f p i g i r o n .

Mr. George emphas ised t h a t t h e r e was n o t h i n g i n t h e scheme t o compel the found ry makers t o j o i n b u t he d e p r e c a t e d making p r o v i s i o n i n t h e scheme f o r any s p e c i f i c e x c l u s i o n s .

Mr. T u r n e r asked t h a t h i s p r o t e s t a g a i n s t t h e i n c l u s i o n of the foundry t r a d e i n t h e scheme be r e g i s t e r e d .

Mr. Lysagh t asked whe the r i t was p roposed to form the A s s o c i a t i o n s b e f o r e the C o r p o r a t i o n and S i r A l f red Hur s t r e p l i e d t h a t the C o r p o r a t i o n must come f i r s t s i n c e i t would be looked t o t o g i v e powerfu l a id towards p e r f e c t i n g t h e e x i s t i n g a s s o c i a t i o n s and forming new o n e s .

Mr. McCosh s t a t e d t h a t t h e scheme under c o n s i d e r a t i o n was n o t a scheme f o r r e - o r g a n i s a t i o n b u t f o r t he s e t t i n g up of a f u r t h e r body to comple te a scheme and c a r ̂ i t o u t . I n h i s view the e l e m e n t of compuls ion was i n h e r e n t i n t h e scheme: i t was no use i g n o r i n g the f a c t t h a t t h e i n t e r e s t s of v a r i o u s s e c t i o n s were d i v e r g e n t and i t a p p e a r e d t o him t h a t t he scheme p r o p o s e d t o p u t a l l t he v a r i o u s s e c t i o n s under the domina t i on of t h e heavy s t e e l i n d u s t r y . The scheme could never work w i t h o u t g o o d w i l l and i t was a b s o l u t e l y n e c e s s a r y t h a t e ach s e c t i o n should f o o l t h a t i t was g e t t i n g a f a i r d e a l . I n h i s o p i n i o n we were a t t e m p t i n g t o go t oo f a s t and i t would have been f a r b e t t e r t h a t t h e scheme shou ld have been b u i l t up from the R e g i o n a l Committees and the A s s o c i a t i o n s . T h i s would have g iven con f idence t h a t t h e scheme would o p e r a t e f a i r l y a s between t h e v a r i o u s a r e a s and s e c t i o n s conce rned : he would be o b l i g e d t o oppose the scheme.

Major H i b b e r t s t a t e d t h a t in o r d e r t o be s u c c e s s f u l the scheme must have 100 p e r c e n t s u p p o r t from a l l t he a s s o c i a t i o n s . I n h i s o p i n i o n i t was l o a d e d a g a i n s t t h e p i g i r o n m a n u f a c t u r e r s . He ag reed t h a t i t would have been b e t t e r fo r t h e C o r p o r a t i o n t o have b u i l t up from t h e a s s o c i a t i o n s .

S i r A l f r e d H u r s t r e p l i e d t h a t a l l a s s o c i a t i o n s r e ­q u i r e d b a c k i n g up from o t h e r a s s o c i a t i o n s . Many of the a s s o c i a t i o n s were a t p r e s e n t i n e f f e c t i v e and i t was a b s o l u t e l y e s s e n t i a l to have some c o - o r d i n a t i n g and d r i v i n g f o r c e .

Mr. C. Lloyd complained t h a t t h e scheme avo ided a l l the t h o r n y q u e s t i o n s and d id n o t g i v e a l l t h e h e l p which S i r A l f red H u r s t c la imed f o r i t . The o n l y h e l p which the C o r p o r a t i o n could g ive t o t h e a s s o c i a t i o n s was by mora l s u a s i o n . Was anyone going t o bo p r e v e n t e d from e x t e n d i n g h i s p l a n t o r anyone p r e v e n t e d from s e t t i n g up a new p l a n t mere ly by m o r a l s u a s i o n . I t might be s a i d t h a t c o n t r o l cou ld be o b t a i n e d by w i t h h o l d i n g s u p p l i e s or by s e c u r i n g the a d h e r e n c e of consumers t o members of the C o r p o r a t i o n by means of a r e b a t e scheme bu t he c a l l e d t h i s i n t r i g u e . The scheme was not . d e m o c r a t i c ; i t was imposed from above and he sympa th i sed w i t h the s u g g e s t i o n of Mr. McCosh t h a t i t be r e ­m i t t e d t o t h e a s s o c i a t i o n s and R e g i o n a l Committees f o r t h e i r v i e w s . I n h i s o p i n i o n an e l emen t of compuls ion was e s s e n t i a l and compulsory powers c o u l d be o b t a i n e d from tho Government a s t hey a l r e a d y e x i s t e d i n tho c o a l t r a d e , t h e y were abou t t o be a p p l i e d i n t r a n s p o r t , and tho c o t t o n i n d u s t r y had been o f f e r e d them.

S i r Al f red Hur s t asked whether i n d u s t r y r e a l l y wanted t o ask the Government t o impose c o n t r o l from w i t h o u t . He thought t h a t t h e consensus of o p i n i o n was a g a i n s t i t and

t h e scheme had t r i e d t o t a k e a n o t h e r l i n e of a p p r o a c h . I t looked to t h e t r a d e t o p r o v i d e i t s own p.*wer to c a r r y ou t i t s own scheme and by means of i t s c o n t r o l of s u p p l i e s and sys tem of r e b a t e s t o consumers i t cou ld c e r t a i n l y c o n t r o l w a s t e f u l c o m p e t i t i o n . He a g r e e d t h a t t h e o n l y a l t e r n a t i v e t o the i n d u s t r y c a r r y i n g ou t i t s own scheme was t o a p p l y t o t h e Government f o r compulsory p o w e r s . He reminded the Committee t h a t t h e r e p o r t o f the Impor t D u t i e s Adv i so ry Committee had a g r e e d t h a t "a p r o s p e r o u s i r o n and s t e e l i n d u s t r y i s e s s e n t i a l . " He asked " I s i t p r o s p e r o u s ? " Having d e c l a r e d t h a t an e f f i c i e n t and p r o s p e r o u s i r o n and s t e e l i n d u s t r y was e s s e n t i a l t o the c o u n t r y p e o p l e o u t s i d e t h e i n d u s t r y were o b l i g e d t o s ee t h a t t h e c o u n t r y p o s s e s s e d such an i n d u s t r y and would endeavour to s e c u r e i t i f t h e i n d u s t r y , i n i t s own i n t e r e s t s , did no t o r g a n i s e i t s e l f t o s e c u r e i t .

I n o r d e r t o t e s t t h e f e e l i n g of t h e m e e t i n g , L'Ir. George t h e n p roposed t h e f o l l o w i n g r e s o l u t i o n : ­

" T h i s N a t i o n a l Committee a c c e p t s t he Memorandum d a t e d F e b r u a r y 22nd and the Scheme r e f e r r e d t o t h e r e i n , and d i r e c t s t h a t i t be forwarded f o r t h ­w i t h t o t h e Impor t D u t i e s A d v i s o r y Commit tee , t o ­g e t h e r w i t h a s t a t e m e n t of t he measure of s u p p o r t a cco rded t o i t by t h i s Commit tee , t h i s a c t i o n b e i n g i n f u l f i l m e n t of t h e u n d e r t a k i n g g i v e n by t h e E x e c u t i v e Committee on Oc tober 1 0 t h l a s t t o t h e Chairman of t h e Impor t Du t i e s Advisory Commi t t ee . "

Mr. George s t a t e d t h a t t he commit tee had worked f o r s e v e r a l months on t h e scheme and most of them f e l t t h a t t h e y d id not want c o m p u l s i o n . The r e - o r g a n i s a t i o n of t h e t r a d e cou ld o n l y be b r o u g h t abou t by one of two methods , t h a t i s , e i t h e r v o l u n t a r i l y or c o m p u l s o r i l y . He d i d n o t s ee how the Committee cou ld go t o P a r l i a m e n t f o r compulsory powers f o r t h i s would n e c e s s a r i l y i n v o l v e t h e a c t i v e p a r t i c i p a t i o n of l a b o u r i n t he i n d u s t r y and p o s s i b l y t h e s t a t u t o r y f i x i n g of w a g e s . The scheme i n c l u d e d t h e l e a s t p o s s i b l e e lement of compuls ion and i n h i s o p i n i o n was t h e l e a s t t h a t could be put up t o a Government depa r tmen t and he t hough t t h e Committee would do w e l l t o a c c e p t i t . I t was hoped t h a t t h e C o r p o r a t i o n would b r i n g t h e a s s o c i a t i o n s i n t o e f f e c t i v e o p e r a t i o n and be power­f u l .enough t o p r e v e n t t h e e v a s i o n which had been c h a r a c t e r i s ­t i c of many e x i s t i n g a s s o c i a t i o n s .

C a p t . H i l t o n s u p p o r t e d Mr. George and s t a t e d t h a t t o r e f e r t h e " m a t t e r back a t t h i s s t a g e would be a r e t r o g r a d e s t e p . The p a s t twe lve months had been a t e s t i n g t ime i n t h e h i s t o r y of t h e a s s o c i a t i o n s and i t must be a g r e e d t h a t t h e e x p e r i e n c e had no t been s a t i s f a c t o r y ; he was s u r e t h a t i f t h e scheme were i n o p e r a t i o n a l l a s s o c i a t i o n s would be a s s i s t e d .

Mr. Lysagh t a sked i f the a s s o c i a t i o n s had had an o p p o r t u n i t y of d i s c u s s i n g t h e scheme and t h e chairman r e p l i e d

-Gnat i t had no t been r e f e r r e d t o the a s s o c i a t i o n s a l t h o u g h many members of a s s o c i a t i o n s had had an o p p o r t u n i t y of s t u d y i n g t h e scheme i n t h e i r i n d i v i d u a l c a p a c i t i e s .

Gapt . Read s t a t e d t h a t a t a m e e t i n g of t h e R e - R o l l e r s N a t i o n a l Committee h e l d t h e p r e v i o u s day t h e scheme was approved i n p r i n c i p l e but t h e Committee wished t o r e s e r v e t h e r i g h t t o s u g g e s t m o d i f i c a t i o n s i n v a r i o u s d i r e c t i o n s a t a l a t e r d a t e . A commit tee of t h e R e - R o l l e r s , i n con junc t ion wi th t h e S t e e l Makers , had d r a f t e d a scheme f o r c o - o p e r a t i o n i n t h e c o n t r o l of p r i c e s of s e m i - f i n i s h e d and f i n i s h e d m a t e r i a l but t h e y f e l t t h a t p r o g r e s s in t h i s m a t t e r was p a i n f u l l y slow and hoped t h a t t h e a d o p t i o n of t h e scheme now b e ing c o n s i d e r e d would f a c i l i t a t e a r r a n g e m e n t s of this kind. At p r e s e n t t h e r e - r o l l e r s f e l t t h a t t h e y w e r e a t t h e mercy of t h e s t e e l makers and t h e f a c t c o u l d not be i g n o r e d t h a t many of them f e l t t h e y were n o t h a v i n g a f a i r d e a l . I t was p o i n t e d out f o r i n s t a n c e t h a t s t e e l make r s l e f t t o o little m a r g i n between t h e p r i c e of b i l l e t and t h e p r i c e of t h e f i n i s h e d m a t e r i a l and many compla in t s had been r e c e i v e d t h a t t h e steel makers were u n d e r c u t t i n g t h e r e ­r o l l e r s . He hoped that t h e present scheme would be a c c e p t e d and t h a t i t would a s s i s t i n t h e formation of a s s o c i a t i o n s such a s t h e r e - r o l l e r s d e s i r e d but if much f u r t h e r d e l a y o c c u r r e d i n c o n c l u d i n g t h e arrangements at -present u n d e r n e g o t i a t i o n be tween t h e steel makers and re - - ?o l l e r s he f e a r e d that the r e - r o l l e r s would have t o reconsider t h e i r a t t i t u d e .

Mr. I T a l l i d a y , as a r e p r e s e n t a t i v e of t h e f a b r i c a t e d s t e e l i n d u s t r y , r e c o g n i s e d the need that each a s s o c i a t i o n had f o r h e l p from a central corporation. The position i n some of them was so c o m p l i c a t e d and d i f f i c u l t that it was i m p o s s i b l e t o go on unless some such scheme as that outlined were put i n t o e f f e c t . He t hough t t h a t more weight should be given t o t h e c o n s t r u c t i o n a l steel makers in the representation. Ho also t h o u g h t t h e r e should be d i r e c t representation of constructional e n g i n e e r s on t h e R e g i o n a l Committees and that on tho Executive Committee t h e r e s h o u l d be a t l e a s t four members vepresenting consumers . As f a r ­as the f a b r i c a t i n g industry :;as concerned little headway would be made without the h e l p and force given In t h e scheme and he gave i t h i s support.

Sir Harris Spencer wished to help i n the r e o r g a n i s a t i o n as f a r as was c o m p a t i b l e with tho interests of t h e consumers and reminded the Committee that L'.ir George May had s a i d t h a t t h e i n t e r e s t s of the consumers v&a&h ho looked a f t e r : up t o t h e p r e s e n t he had soon little s i g n s oi this. P r i c e s had r i s e n t o t h e detriment of tho export traae and while the scheme seemed well conceived, and the authors tfora to be thanked and c o n g r a t ­ulatod on a good ptooo of work, ho must ask what t h e s t e e l i n d u s t r y was going t o do to as s:\Su consumers i n t h o e x p o r t t r a d e . Tho logical way to resist wan b y means of a drawback and i f i t was suggested that tho same end could be ach i eved by s u b s i d i e s t h r o u g h a general fund hi could not agree. Impor ted steel was not being replaced by homo produced s t e e l and t h e

-e f f e c t of tho tariff., had boon to i-horeic.se p r i c e s . Tho most i m p o r t a n t f u n c t i o n mentioned i n clause X l l l was t h a t d o a l i n g w i t h the p r e v e n t i o n of wasteful compotit:' on and h e was p r e p a r e d t o a s s i s t i n t h o r e o r g a n i s a t i o n or the a s s o c i a t i o n s w i t h which ho was connec t ed as noon as i t wen clear that t h i s f u n o t i o n of t h o C o r p o r a t i o n was to bo v i g o r o u s l y proceeded w i t h .

Mr, Prank Rocs thought chat in s p i t o of t h o r e s o l u t i o n which had boon pas sed by the SOutli T/alos R e g i o n a l Committee a fow days ago South -Talcs members could suppor t Mr. G e o r g e ' s .

r e s o l u t i o n i f i t wore s l i g h t l y m o d i f i e d and ho hoped Mr, George would ag ree t o modify i t s l i g h t l y so t h a t South Wales cou ld a c c e p t i t .

S i r W i l l i a m L a r k e , a s a j o i n t a u t h o r of t h e scheme, thought t h a t i t c o u l d not be f a r out when i t was c r i t i c i s e d by Mr. Lloyd on t h e one hand f o r n o t go ing f a r enough and by Mr. McCosh on t h e o t h e r a s going t o o f a r . He reminded t h e commit tee t h a t a s a spokesman f o r t h e i n d u s t r y i n i n t e r v i e w s w i t h t h e Government and o t h e r s h e had a l w a y s r e p u d i a t e d t h e s u g g e s t i o n t h a t i t would be n e c e s s a r y t o o r g a n i s e t h o i n d u s t r y on some such l i n e s a s t h a t of t h e E l e c t r i c i t y Board o r t h e B r i t i s h B r o a d c a s t i n g Company. He had a lways m a i n t a i n e d t h a t t h e i r o n and s t e e l makers were c a p a b l e of managing t h e i r own a f f a i r s . A l l would a g r e e t h a t a p r o s p e r o u s and e f f i c i e n t i n d u s t r y was a f s i n e qua non* f o r t h e n a t i o n and t h e problem of p u t t i n g t h e i n d u s t r y on t h a t b a s i s was now one of u r g e n c y . The r e c e n t n e g o t i a t i o n s of t h e C o n t i n e n t t o renew t h e I n t e r n a t i o n a l S t e e l C a r t e l was an a d d i t i o n a l g round of u r g e n c y . Every one of o\rc c o m p e t i t o r s now had a n a t i o n a l o r g a n i s a t i o n in a f a i r way t o becoming e f f e c t i v e . The C a r t e l i n t e n d e d t o c o n c e n t r a t e i t s a t t e n t i o n on t h e e x p o r t t r a d e . T h i s would d o u b t l e s s soon i n v o l v e o r g a n i s e d c o m p e t i t i o n a g a i n s t t h i s c o u n t r y i n a l l m a r k e t s of t h e world and i f t h e C a r t e l succeeded i n i t s e f f o r t s t h e p o s i t i o n of t h e i n d u s t r y i n t h i s c o u n t r y would be e x c e e d i n g l y d i f f i c u l t . We c o u l d n o t meet o r g a n i s e d c o m p e t i t i o n on t h e b a s i s of i n d i v i d u a l u n i t s . F u l l c o n s i d e r a t i o n had been g i v e n t o t h e s u g g e s t i o n t h a t t h e now C o r p o r a t i o n shou ld b e b u i l t up from t h e t r a d e a s s o c i a t i o n s and w i t h r e g i o n a l r e p r e s e n t a t i o n bu t a s t h e q u e s t i o n was s t u d i e d i t became c l e a r e r t h a t i t was e s s e n t i a l t o p r o v i d e a c e n t r e from which i t would be p o s s i b l e t o h e l p each of t h e a s s o c i a t i o n s t o t i g h t e n up i t s o r g a n i s a t i o n and t o a f f o r d m u t u a l s u p p o r t f o r each o t h e r . He hoped t h e scheme would f a c i l i t a t e t h e comple t e o r g a n i s a t i o n i n expo r t m a r k e t s . He t h o u g h t t h a t t h e e x p o r t s i d e of t h e i n d u s t r y shou ld be so o r g a n i s e d t h a t a l l p r o d u c t s c o u l d be e f f e c t i v e l y r e p r e s e n t e d i n a l l t h e m a r k e t s of t h e w o r l d . I f t h e p r e s e n t scheme were n o t a c c e p t e d t h e o n l y a l t e r n a t i v e , a s f a r a s he c o u l d s e e , was t h a t t h e Government would s e t up a n o t h e r Committee which would be f a r l e s s sympa the t i c t o t h e i n d u s t r y and might r e p o r t i n f a v o u r of t h e f o r m a t i o n of t h e o r g a n i s a t i o n of t h e i n d u s t r y a s a u t i l i t y u n d e r t a k i n g and t h e p o s i t i o n of t h e i n d u s t r y would be r e n d e r e d h o p e l e s s .

The r e s o l u t i o n of t h o South Wales R e g i o n a l Committee was t h e n r e a d t o t h e m e e t i n g bu t i t was p o i n t e d out t h a t t h e scheme had o n l y been r e f e r r e d t o R e g i o n a l Commit tees f o r i n f o r m a t i o n and comment.

S i r A l f r e d Hur s t s t a t e d t h a t he had been a s s o c i a t e d wi th t h e work of t h e commit tee f o r t h e p a s t f i v e months and had v e r y much enjoyed t h e c o n t a c t s h e had e s t a b l i s h e d and t h e f r i e n d s h i p s h e had made. He had found t h e work v e r y i n t e r e s t i n g and had been r e c e i v e d s y m p a t h e t i c a l l y i n a l l q u a r t e r s . He had a ' s u s p i c i o n , however , t h a t amongst t h o s e he had n o t met p e r s o n a l l y , t h e r e was a f e e l i n g t h a t he was t h e nominee of t h e Government on t h e Committee and t h a t he was a c t i n g u n d e r Government i n s t r u c t i o n s . Ho wished t o d i s p e l any such i l l u s i o n and t o s t a t e c a t e g o r i c a l l y t h a t he had r e c e i v e d no i n s t r u c t i o n s from S i r George May, t h e P r e s i d e n t of t h e Board of T r a d e , o r anyone e l s e in a u t h o r i t y . The on ly h i n t ho had r e c e i v e d was one from the C h a n c e l l o r o f t h e Exchequer t h a t i t would be i n a d v i s a b l e f o r him t o t a k e t h e c h a i r a t any m e e t i n g s of t ho i n d u s t r y a s t h i s might e a s i l y bo m i s i n t e r p r e t e d a s Government i n t e r f e r e n c e . Ho had c e r t a i n l y been omphatio i n e x p r e s s i n g h i s c o n v i c t i o n s because t h e y were genu ine c o n v i o t i o n s . Ho agrood t h a t i t was a b s o l u t e l y e s s e n t i a l

t h a t t h e C o r p o r a t i o n shou ld h a v e an i n d e p e n d e n t cha i rman . From h i s r e a d i n g of t h e p o s i t i o n i t seemed p r o b a b l e t h a t t h o m a j o r i t y of t h e commit tee would a c c e p t t h e scheme. I f so ho hoped t h a t t hoy would make t h e v o t e unanimous f o r i t would bo most u n f o r t u n a t e i f i t should have t o be a d m i t t e d t h a t t h e scheme came from a d i v i d e d i n d u s t r y . He would t h e r e f o r e sugges t t h a t i f on a f i r s t v o t e t h e r e was a m a j o r i t y i n f avour of t h e scheme t h e commit tee would c o n s i d e r t h e a d v i s a b i l i t y of t a k i n g a f u r t h e r v o t e on which t h e suppor t c o u l d d o made unan imous . He was no t e x a g g e r a t i n g when ho s a i d t h a t many i n d u s t r i e s were l o o k i n g t o t h e i r o n and s t o o l i n d u s t r y t o g ive a l e a d and t h a t t h e i r c o m p e t i t o r s on t h e C o n t i n e n t were watch ing deve lopments p e r h a p s w i t h a c e r t a i n amount of c y n i c i s m b u t c e r t a i n l y wi th some m e a s u r e of a n x i e t y l o s t t h o B r i t i s h i n d u s t r y should r i s e t o t h i s g r o a t o p p o r t u n i t y . Pie s i n c e r e l y hoped i t would.

Mr. F rank Hoos s t a t e d t h a t w i t h s l i g h t m o d i f i c a t i o n h e t h o u g h t i t would bo p o s s i b l e f o r him t o s u p p o r t t h e schema and a f t e r some d i s c u s s i o n Mr. C-eorge a c c e p t e d t h e s u g g e s t i o n t o i n c o r p o r a t e i n h i s r e s o l u t i o n t h e words " t h e g e n e r a l o u t l i n e of t h o scheme. 5 '

Mr. A.';".. McCosh s t a t e d t h a t i t was no use i g n o r i n g t h e f a c t t h a t t h o i n d u s t r y was d i v i d e d about t h e scheme and l i t t l e good would be done by a t t e m p t i n g t o f i n d a more o r l e s s inocuous fo rmu la on which a l l c o u l d a g r e e .

C o l o n e l N e i l son a sked w i t h whom t h e po\mr of making t h e l e v y r e s t e d and t h e r e p l y was t h a t t h e l e v y would bo f i x e d by agreement among t h e p r o d u c e r s : h e could no t suppor t t h e . r e s o l u t i o n w i t h o u t r e s e r v a t i o n r e g a r d i n g t h e l e v y , Mr. C-eorge s t a t e d t h a t t h o i n c l u s i o n of t h e words " g e n e r a l o u t l i n e 1 1 i n t h e r e s o l u t i o n covered Co lone l N e i l s o n ' s r e s e r v a t i o n .

Mr. C r a i g a s k e d what was t h e a l t e r n a t i v e of t h o s e who were not i n f a v o u r of t h e scheme: presumably t h e a l t e r n a t i v e was t o a p p l y f o r s t a t u t o r y powers . I f t h a t were t h e case would n o t one of t h e members opposed t o t h e scheme p u t t h i s a l t e r n a t i v e i n t h e form of an amendment.

Mr. A."I. McCosh d e c l i n e d t o put an amendment i n t h i s form b u t p o i n t e d out t h a t i n any Government scheme t h e r e would a t l e a s t be s a f e g u a r d s f o r t h e r i g h t s of m i n o r i t i e s which were no t p r o v i d e d f o r i n t h o p r e s e n t scheme.

Mr. Kayse r r e f e r r e d t o t h e q u e s t i o n of l e v y and s t a t e d t h a t a l e v y b a s e d on wages would o p e r a t e i n e q u i t a b l y i n t ho s p e c i a l s t e e l t r a d e and w h i l e s u p p o r t i n g t h e scheme i n p r i n c i p l e he must r e s e r v e t h e r i g h t of t h e members of t h e s p e c i a l q u a l i t y s t o o l i n d u s t r y t o sugges t v a r i a t i o n s in t h e b a s i s of l e v y . F u r t h e r , he t h o u g h t t h e p e r i o d of t e n y e a r s s u g g e s t e d was t o o long and would l i k e f u r t h e r c o n s i d e r a t i o n g iven t o t h i s p o i n t . The cha i rman a g a i n confirmed t h a t ample o p p o r t u n i t y would bo g i v e n s u b s e q u e n t l y f o r f u r t h e r c o n s i d e r a t i o n of t h e s e p o i n t s . He was concerned a t t h e moment t o o b t a i n a c c e p t a n c e of t h e p r i n c i p l e s of t h e scheme.

Mr. G o o r g o ' s r e s o l u t i o n amended a s f o l l o w s :

"Th i s N a t i o n a l Commit t o e a c c e p t s t h e Memorandum d a t e d F e b r u a r y 2End and t h e g e n e r a l o u t l i n e of the scheme r e f e r r e d t o t h e r e i n , and d i r e c t s t h a t i t be fo rwarded f o r t h w i t h t o the Impor t D u t i e s A d v i s o r y Commit tee , t o g e t h e r w i t h a s t a t e m e n t of t h e measure of s u p p o r t a cco rded t o i t by t h i s Commit tee , t h i s a c t i o n b e i n g i n f u l f i l m e n t of t h e u n d e r t a k i n g g i v e n by t h e E x e c u t i v e Committee on Oc tobe r 1 0 t h l a s t t o t h e Chairman of t h e Import D u t i e s Adv i so ry Commi t t ee . "

was t h e n a g a i n r e e d to t h e m e e t i n g and c a r r i e d by t w e n t y - f i v e v o t e s t o f i v e d i s s e n t i e n t s , b e i n g M e s s r s . E . J . Fox, W. Gray, C. E . L l o y d , A. K. McCosh and D. N. T u r n e r . M e s s r s . Fox and Turne r i n t i m a t e d t h a t t h e i r o p p o s i t i o n was o n l v d i r e c t e d to s e c u r e the" e x c l u s i o n of t h e foundry p i g i r o n i n d u s t r y . They d i d no t o b j e c t t o the proposed scheme a s one f o r t h e r e o r g a n i ­s a t i o n of t h e s t e e l i n d u s t r y . The Chairman s t a t e d t h a t he had messages from S i r Wi l l i am F i r t h s u p p o r t i n g the scheme and from Mr. G. H. Johnson oppos ing i t .

2 0 . CIRCULATION OF THE SCHEME. The Committee a u t h o r i s e d t h e c i r c u l a t i o n of t he scheme t o members of t h o s e a s s o c i a t i o n s who, i t was hoped , would form t h e membership of t h e Corpo ra ­t i o n . The scheme h a v i n g been a c c e p t e d by t h e Committee would a t t h i s s t a g e be s en t fo r i n f o r m a t i o n o n l y . I t shou ld con­t i n u e t o be t r e a t e d a s c o n f i d e n t i a l and n o t f o r p u b l i c a t i o n . The scheme, a s m o d i f i e d , shou ld f o r t h w i t h be s u b m i t t e d t o t h e Impor t D u t i e s Adv i so ry Committee and when t h e i r v iews on t h e scheme had been o b t a i n e d a f u r t h e r m e e t i n g of t h e Committee would be c a l l e d t o c o n s i d e r them.

E N C L O S U R E V I

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G I V E N BY M R . C H A S . M I T C H E L L , C H A I R M A N , A T A M E E T I N G O F THE

N A T I O N A L C O M M I T T E E ON F R I D A Y , MARCH 1 0 t h , 1 9 5 5 .

The d e l i b e r a t i o n s of t h i s Committee have now r e a c h e d the c o n c l u s i o n of a d e f i n i t e s t a g e , and i t may be we l l t o r e ­mind the members, and p a r t i c u l a r l y those who have on ly r e ­c e n t l y been a p p o i n t e d t o t h i s Committee - (whose appo in tmen t we welcome as r e p r e s e n t i n g i n a l a r g e deg ree t he consuming t r a d e s , w i t h whom we must e s t a b l i s h t h e c l o s e s t c o - o p e r a t i o n in our m u t u a l i n t e r e s t s ) - of t he g e n e s i s of the Committee and the Scheme which i s s u b m i t t e d for your c o n s i d e r a t i o n t h i s morn ing .

On 3rd J u n e 1932, a m e e t i n g of r e p r e s e n t a t i v e s of the i r o n and s t e e l i n d u s t r y was c a l l e d by S i r George May, a s Chairman of the Impor t D u t i e s A d v i s o r y Commit tee , and a t t h a t mee t ing S i r George May announced tho i n t e n t i o n of t h a t Committee to a p p o i n t a commit tee of the i n d u s t r y to c o n s i d e r what form of o r g a n i s a t i o n could be a p p l i e d t o t h e i n d u s t r y v/hich vrould implement t h e p romise s which had been made on b e ­h a l f of tho i n d u s t r y by i t s l e a d e r s a t v a r i o u s t i m e s t o M i n i s t e r s and r e p r e s e n t a t i v e Commit tees of t h e Cab ine t and the v a r i o u s Government Committees t h a t have been a p p o i n t e d t o c o n s i d e r t h e problems of t h e i n d u s t r y .

The q u e s t i o n h a s sometimes been asked why c o n d i t i o n s should be a t t a c h e d to tho g r a n t i n g of p r o t e c t i o n which was n e c e s s a r y t o s e c u r e t h e s u r v i v a l of t h e i n d u s t r y ; b u t p r o ­t e c t i o n cou ld on ly be g r a n t e d w i t h tho c o n s e n t of P a r l i a m e n t endo r sed by p u b l i c o p i n i o n , and s i n c e t h i s was a b a s i c i n d u s t r y on which i t may be b r o a d l y s t a t e d t h a t a l l o t h e r i n d u s t r i e s u l t i m a t e l y depend, and c o n s e q u e n t l y a l a r g e p r o p o r t i o n of ou r e x p o r t t r a d e , and s i n c e i t a l s o a f f e c t s m a t e r i a l l y t h e i n t e r ­e s t s of the i n d i v i d u a l consumer i n t he home m a r k e t , i t was r e c o g n i s e d t h a t t h e i n d u s t r y must be in a p o s i t i o n to g ive a s s u r a n c e s t h a t t he a p p l i c a t i o n of p r o t e c t i o n would r e s u l t i n n a t i o n a l a d v a n t a g e .

",Vhile t h i s N a t i o n a l Committee was i n f a c t a p p o i n t e d by the Impor t D u t i e s Adv i so ry Committee i n d i s c h a r g e of i t s r e s ­p o n s i b i l i t y t o c o n s i d e r t h e p u b l i c i n t e r e s t i n any adv ice i t might t e n d e r t o H i s M a j e s t y ' s Government, i t w i l l be a g r e e d t h a t had the i n d u s t r y a p p o i n t e d the Committee i t must have been c o n s t i t u t e d of the same p e r s o n n e l .

On 7 th June 1932, fou r days a f t e r appo in tmen t , t h e N a t i o n a l Committee mot , and e l e c t e d an E x e c u t i v e Committee and four R e g i o n a l Commit toes . Terms of Re fe r ence were approved by the N a t i o n a l Committee on 20 th J u l y .

On 28 th September , a Repor t was p r e s e n t e d t o t h i s Committee and approved t o be forwarded t o t he Impor t D u t i e s Adv i so ry Commit tee , and t h i s R e p o r t , i t w i l l bo remembered, was p r e s e n t e d a s a supplement t o t he Repor t of t h e Import D u t i e s

9 0 0 Ay tJ O

A d v i s o r y Committee t o the T r e a s u r y recommending t h a t t h e D u t i e s on i r o n and s t e e l p r o d u c t s s h o u l d be ex tended f o r a pe r iod of two y e a r s as from October 2 6 t h .

On Oc tobe r 1 0 t h , a t a m e e t i n g of the N a t i o n a l Exe­c u t i v e Committee, S i r George May was p r e s e n t , when i t was p o i n t e d out t o him t h a t the C o n t i n e n t was s t i l l s e n d i n g s t e e l i n t o t h i s m a r k e t , t he ch i e f r e a s o n f o r which was t h e u n c e r t a i n t y as t o the p e r i o d f o r which the D u t i e s would be a p p l i e d .

S i r George May urged the i n d u s t r y to make some p r o ­p o s a l s on a Scheme embodying n a t i o n a l o r g a n i s a t i o n , bu t he was d e s i r o u s t h a t t h e i n d u s t r y should propound i t s own Scheme; and w h i l e r e c o g n i s i n g t o the f u l l t h e d i f f i c u l t i e s of t h e Com­m i t t e e , he asked fo r an a s s u r a n c e t h a t t h e N a t i o n a l Committee would i m m e d i a t e l y take s t e p s t o d e v i s e such a scheme. On t h i s same d a t e (Oc tobe r 10th) the Committee unan imous ly gave S i r George May an a s s u r a n c e t h a t t h e y would p r o c e e d w i t h t he p r e ­p a r a t i o n of such a scheme w i t h o u t d e l a y .

I was a sked , w i th S i r W i l l i a m L a r k e , to p r e p a r e a s h o r t Memorandum s k e t c h i n g the o u t l i n e of such a scheme. I t was s u g g e s t e d t h a t S i r A l f r e d H u r s t should be c o n s u l t e d , as he was w i l l i n g t o lend any a s s i s t a n c e he might be a b l e to r e n d e r i n o r d e r t h a t the Impor t D u t i e s A d v i s o r y Committee might be f u l l y aware of b o t h the d i f f i c u l t i e s and t h e p r o g r e s s t h a t was b e i n g made by t h e Commit tee .

On November 16th a Memorandum, which had p r e v i o u s l y been adop ted by t h e E x e c u t i v e Committee w i t h o u t d i s s e n t , was s u b m i t t e d t o t h i s N a t i o n a l Committee and adop ted i n the f o l l o w ­i n g t e r m s : "That the s t r u c t u r e o f t h e Scheme *e a c c e p t e d i n p r i n c i p l e and t h a t the Sub-Committee r e s p o n s i b l e f o r i t s p r e ­p a r a t i o n be r e q u e s t e d to d r a f t t h i s Scheme in g r e a t e r d e t a i l f o r t he c o n s i d e r a t i o n of the E x e c u t i v e Committee i n t h e f i r s t i n s t a n c e , and on a p p r o v a l by them t h e Scheme to be submi t t ed t o t h e N a t i o n a l Committee f o r a p p r o v a l or amendment b e f o r e f u r t h e r a c t i o n i s t a k e n " .

Without r e f e r r i n g i n d e t a i l t o t h e i n t e r m e d i a t e s t a g e s , the Scheme a s now s u b m i t t e d t o you was s u b m i t t e d t o the E x e c u t i v e Committee on F e b r u a r y 1 s t , a f t e r which amendments were embodied as a r e s u l t of the d i s c u s s i o n , and a t a f u r t h e r m e e t i n g on F e b r u a r y 22nd, when i t was r e f e r r e d t o t h i s Commit tee , w i t h t h r e e d i s s e n t i e n t s , i n the f o l l o w i n g t e r m s : "That t h i s Scheme be r e f e r r e d t o the N a t i o n a l Commit tee , and recommended f o r a c c e p t a n c e by them, as p r o v i d i n g mach inery whereby t h e p r o g r e s s i v e o r g a n i s a t i o n of the i n d u s t r y may be a c h i e v e d . "

I would omphasisG the t e rms of t h a t R e s o l u t i o n a s b e i n g a t e r s e b u t v e r y adequa te d e s c r i p t i o n of t h e Scheme which you a r e now asked t o c o n s i d e r . I t does n o t i n any way embody a p r i n c i p l e of c o n t r o l imposed from above on any s e c t i o n or i n d i v i d u a l of tho i n d u s t r y , bu t i t i s d e s i g n e d t o p r o v i d e an o r g a n i s a t i o n w i t h i n which , by p r o g r e s s i v e e v o l u t i o n , unde r t h e c o n d i t i o n s o b t a i n i n g , an ever - i n c r e a s i n g degree of o r g a n i s e d c o n t r o l ove r the o p e r a t i o n s of t h e i n d u s t r y may be e x e r c i s e d by those engaged in and r e s p o n s i b l e fo r i t . I t i s on those g rounds t h a t the Schorao i s commended to you f o r , if p o s s i b l e , your unanimous a d o p t i o n , e i t h e r in i t s p r e s e n t o r some ag reed amended form.

The impor t ance of u n a n i m i t y i n a m a t t e r of t h i s k ind canno t be e x a g g e r a t e d , s i n c e t o r e n d e r any such Scheme e f f e c ­t i v e i t i s e s s e n t i a l t o have not only a g e n e r a l a c c e p t a n c e of i t s p r i n c i p l e s b u t a w i l l i n g n e s s t o app roach a l l d i f f i c u l t i e s i n c o n n e c t i o n w i t h i t s r e a l i s a t i o n wi th a d e t e r m i n a t i o n t o overcome them and r e n d e r t he scheme s u c c e s s f u l .

So f a r , no a l t e r n a t i v e has been s u g g e s t e d t o a Scheme cf t h i s c h a r a c t e r , which now embodies t h e g r e a t e s t common mea­s u r e of c o n s t r u c t i v e c r i t i c i s m which would r e t a i n t h e p r i n c i p l e s which were unanimous ly a c c e p t e d i n the f i r s t i n s t a n c e a s t h e b a s i s f o r t h e Scheme. While we - l e a s t of a l l the Sub-Commit­t e e who were r e s p o n s i b l e f o r t h e o r i g i n a l d r a f t - cou ld l a y no c l a im t o h a v i n g p r o v i d e d f o r e v e r y p o s s i b l e c o n t i n g e n c y t h a t might a r i s e , or f o r p e r f e c t i o n i n t h e Scheme i t s e l f , a s p r a c t i ­c a l men we must r e a l i s e t h a t i n our own o r g a n i s a t i o n s and i n t h e d e c i s i o n s we d a i l y t a k e , i t i s i m p o s s i b l e f o r u s t o do more than e x e r c i s e our judgment on the c o n d i t i o n s under which we a r e work ing t o t he b e s t of our a b i l i t y and t o a c c e p t t he r i s k i n ­v o l v e d . But i n t h e c a s e of t h i s Scheme b e f o r e you t h e r i s k has been r educed to a minimmj s i n c e what you a r e asked t o do i s t o p r o v i d e a C e n t r a l O r g a n i s a t i o n round which t h e o r g a n i s a t i o n of t h e i n d u s t r y can p r o g r e s s i v e l y p r o c e e d by s e c t i o n s , each s e c t i o n r e t a i n i n g a lmos t comple te autonomy, a s indeed does each i n d i v i d u a l works , e x c e p t t h a t i t i s a sked t o conform to a n a t i o n a l p o l i c y i n r e g a r d t o p r o d u c t i o n and s a l e s . But t h i s p o l i c y w i l l be d e v i s e d by y o u r s e l v e s , and i s nn ly an e x t e n s i o n of what has been common p r a c t i c e i n many s e c t i o n s of t h e i n d u s ­t r y f o r many y e a r s ; e x c e p t t h a t I s h o u l d p o i n t out t h a t a s s o ­c i a t i o n s must be more e f f e c t i v e and c e r t a i n l y more s t a b l e t h a n t h e y have been i n r e c e n t t i m e s , which i m p l i e s t h a t ag reemen t s

t o c o - o p e r a t e i n t h e s e v e r a l s p h e r e s of our a c t i v i t y must b e f o r a s u b s t a n t i a l p e r i o d of t i m e , t o p r e v e n t t he d i s t u r b a n c e which t h e e x i s t e n c e of a g r e e m e n t s f o r s h o r t p e r i o d s i n e v i t a b l y i n t r o d u c e s , s i n c e t h e y a r e no sooner s i g n e d t h a n d i s c u s s i o n s a r i s e a s t o t h e i r m o d i f i c a t i o n or e x t e n s i o n .

On t h e s u b j e c t of a m a l g a m a t i o n s , which many of u s b e l i e v e t o be i n t h e b e s t i n t e r e s t s of t h e i n d u s t r y a s a whole where economic advan t age can be d e m o n s t r a t e d a s a r e s u l t , i t i s c l a imed t h a t t h i s Scheme p r o v i d e s c o n d i t i o n s i n which atnal­gamat ions w i l l be f a c i l i t a t e d wherever c o n d i t i o n s r e n d e r them d e s i r a b l e . I n t h e ca se of p l a n t which by the n a t u r a l e v o ­l u t i o n of new p r o c e s s e s or commercial c o m p e t i t i o n may become r e d u n d a n t , or a t a r e l a t i v e d i s a d v a n t a g e , t h e Scheme p r o v i d e s t h e means whereby t h e i n d u s t r y cou ld d e a l , by compensa t ion , p u r c h a s e o r o t h e r w i s e , w i t h any such c o n d i t i o n t h a t might a r i s e i n any p o r t or s e c t i o n of t h e i n d u s t r y , a lways on t h e u n d e r s t a n d i n g t h a t t h e s e movements a r e w i t h t h e consen t of t h e p a r t i e s i n t e r e s t e d or c o n c e r n e d . I n d e e d , t h e Scheme h a s bean d e v i s e d t o s e c u r e t o the i n d u s t r y i n d e f i n i t e l y f o r t he f u t u r e t h e comple te c o n t r o l of i t s own p o l i c y and d e s t i n i e s .

The a l t e r n a t i v e i s i n e v i t a b l y t h e i n t r o d u c t i o n of e x t e r n a l i n t e r f e r e n c e and a g r e a t e r or l e s s measure of e x t e r ­n a l c o n t r o l , such a s has a l r e a d y been e x p e r i e n c e d i n t h e c o a l i n d u s t r y , and which you w i l l n o t e h a s been v o i c e d i n c o n n e c t i o n w i t h t h i s i n d u s t r y . This i n d u s t r y i s e s s e n t i a l to our n a t i o n a l i n d u s t r i a l economy, and n* Government, w h a t e v e r i t s p o l i t i c a l complexion , can a f f o r d to a l low i t t* l a n g u i s h to a p o i n t where

i t c e a s e s t o s a t i s f y a d e q u a t e l y o u r n a t i o n a l n e e d s . Only t h i s l a s t week t h e Deputy Chairman of t h e Labour P a r t y s t a t e d t h a t i f r e t u r n e d t o power t h e y would o r g a n i s e t h e i r o n and s t e e l i n d u s t r y on n a t i o n a l l i n e s .

The p r e s e n t Government a r e d e s i r o u s of a v o i d i n g any e x t e r n a l i n t e r f e r e n c e and have u rged t h e i n d u s t r y t o r e n d e r even t h e s u g g e s t i o n of i t u n n e c e s s a r y by d e m o n s t r a t i n g i t s c a p a c i t y t o manage i t s own a f f a i r s and o r g a n i s e i t s e l f on a n a t i o n a l b a s i s so as t o s t r e n g t h e n i t s c o m p e t i t i v e power i n t h e expo r t m a r k e t s of t h e world and t o s e c u r e t o t h e home consumer, i n t h e words of S i r George May, : , ' t he r i g h t m a t e r i a l a t t h e r i g h t p r i c e . "

I t h e r e f o r e u r g e t h e unanimous a c c e p t a n c e of t h i s scheme, w i t h a l l t h e shortcomings which i t may p o s s e s s , s i n c e i t p r o ­v i d e s t h e means , by p r o g r e s s i v e deve lopment , f o r e n s u r i n g t o t h e i n d u s t r y a form of o r g a n i s a t i o n which , as I b e l i e v e , w i l l s t r e n g t h e n i t s c o m p e t i t i v e power i n r e l a t i o n t o t h e r e s t of t h e w o r l d , and a s u b s t a n t i a l improvement i n i t s p r e s e n t economic p o s i t i o n i n t h e n e a r f u t u r e and a r e t u r n t o comple te p r o s p e r i t y when g e n e r a l w o r l d c o n d i t i o n s p e r m i t .

The a l t e r n a t i v e i s a c o n t i n u a n c e of p r e s e n t c o n d i t i o n s , t e n d i n g t owards f i n a n c i a l c o l l a p s e and c e r t a i n l y t o a c o n d i t i o n which no Government would t o l e r a t e w i t h o u t making an a t t e m p t ' t o s a v e t h e s i t u a t i o n . T h i s would i n v o l v e f a r g r e a t e r d i f f i ­c u l t i e s on t h e p a r t of t h o s e r e s p o n s i b l e f o r t h e d i r e c t i o n and c o n t r o l of t h e i n d u s t r y t h a n any m e a s u r e s which i t i s now p roposed t h e y s h o u l d t a k o a t t h e i r own u n f e t t e r e d d i s c r e t i o n .

Time h a s p r e s e n t e d t h e o p p o r t u n i t y . Are we g o i n g t o s i e z e i t or a l low i t t o go by d e f a u l t ? I am c o n f i d e n t t h a t t h e r e i s no -one o u t s i d e t h e i n d u s t r y who i s so competent t o c o n t r o l and d i r e c t i t s d e s t i n i e s a s t h o s e who have been r e s p o n s i b l e f o r i t s p r o g r e s s and condxict h e r e t o f o r e , and I t h e r e f o r e commend t h i s scheme t o you f o r your unanimous a p p r o v a l , i n o r d e r t h a t we may r e s t o r e c o n f i d e n c e w i t h i n and w i t h o u t t h e i n d u s t r y i n i t s f u t u r e , and p o s s i b l y s e t an example t o o t h e r ­i n d u s t r i e s which w i l l s t i m u l a t e i n d u s t r i a l r e c o v e r y t h r o u g h o u t t h i s c o u n t r y t o o u r own l a s t i n g b e n e f i t .