SIR,—There are two features in the present economic situation which prompt me to direct the attention of business men to the need, as well as the possibility, of a higher degree of co-operation between the industrial and financial sections of our community. The two features I refer to are, first, a relative decline in trade activity, especially in certain foreign countries, which is bringing about a reduction in prices and profits, and also a growing keenness of competition ; secondly, the promise of a new flood of capital emissions upon our cosmopolitan money market, many of which will be for development and productive purposes all over the world. The step I desire to suggest is that we should adopt here the policy now carried out on the Continent, in pursuance of which a condition is imposed upon those who borrow capital for foreign and colonial use, ensuring that as much as possible of the new credit should be worked out by purchasing from home producers any manufactured goods immediately required.

I am aware, of course, that any suggestion for the assistance of British manufacturers will appear, in the eyes of many people, to be inherently vicious. Others will deny its practicability; but I submit that such a step would be highly beneficial to the nation, and I believe its attainment, so far as the mere machinery is concerned, would not be difficult. No one will deny, I think, that the foundation of all business is industry; nor will anyone dispute that a nation is entitled, in addition to safeguarding its existing industrial interests, actively to further them in every way possible.

Yet, at the present time, owing to this policy of stipulation as practised on the French and German money markets, British manufacturers are not merely defeated in competition for many contracts: they are prevented from tendering at all. And, as we have no corresponding methods here, valuable opportunities of securing and extending our markets are being neglected. Further, the industrialists of Great Britain, in both their individual and corporate capacities, find that their profits are being seriously impaired by that extraordinary depreciation in the values of their securities which is due solely to the insensate abuse of our credit facilities for granting new loans. If for no other than these two reasons, therefore, I deem it only fair that the financial world should extend some compensating aid to Englishmen engaged in industry. We have in London the greatest loan market of the world, and, to manufacturers, it is an exasperating anomaly that large prospective customers pass their very doorsteps on their way to raise the capital wherewith to make purchases, and pass them again on their way back to place their contracts elsewhere.

Now, the mental condition of a man desiring to borrow money becomes quite different when he has succeeded in making terms with the lender. In his former state he is much more amenable to those great influences in favour of British goods which financiers could exert if they only would. I am not one who argues habitually that any practice which is foreign is therefore superior; but it does seem to me that the admitted success of German and French methods in this particular direction cannot be disregarded as evidence in favour of our adopting it ourselves. Moreover, this policy could not offend the most susceptible conscience in fiscal matters.

It is no doubt true that the large sums of money we lend do, somehow and at some time, work out in various kinds of trade and services—mostly the latter; but those who are content to leave the matter there overlook two highly important considerations : I mean the margin of profit and anxiety on the score of dependable output. Our present method is "to worry through somehow." We are ill-organised as a people; and in regard to the broad national aspects of our commercial policy, the three great divisions of the business world —industrial, mercantile, and financial—pay little regard for one another's interests.

The advantages of the course I suggest would be reciprocal. Industrialists could bring the whole of their foreign agencies and influences to the aid of financiers. Almost daily I, myself, have to decline all sorts of propositions brought to my notice from all parts of the globe, because, if I passed them on to financial connections, the result would only be some new issue of capital unaccompanied by the required stipulations on behalf of home manufacturers.

The committee of the Stock Exchange could start tentatively in the right way by making the grant of an official quotation conditional, to some extent, upon certain safeguards being afforded for industrial interests. Pure reason, of course, points to the President of the Board of Trade and the Chancellor of the Exchequer as the proper persons to exercise the great influence that attaches to their high offices for the purpose of bringing the various interests together for common good. But. I am almost tempted to say that these two offices are regarded as political rewards for skill in Parliamentary debate, and that the holders are seldom men who possess large views on national business policy. I can only follow the example of the present Chancellor of the Exchequer, and ask boldly for a new Minister to achieve the purpose I have in view—a Minister of Commerce. Imagine what might be done in this, and in many other ways, by such a Minister, aided by a strong advisory board, and independent of party changes and exigencies!

With apologies for trespassing upon your courtesy at such length, I am, yours faithfully,


Saltley, Birmingham, January 31st, 1914.
(The Economist, 7 February 1914, page 293)

In the year 1902 Frank Dudley Docker (1862-1941) merged five rolling stock companies — Lancaster Railway Carriage & Wagon, Oldbury Railway Carriage & Wagon, Ashbury Railway Carriage & Iron Co. (Manchester), Brown Marshall (Saltley) and Metropolitan Railway Carriage & Wagon Co. into the Metropolitan Amalgamated Railway Carriage and Wagon Company. Brown Marshall's works were closed in 1908. Oldbury and Saltley works were rebuilt after 1902. The Lancaster factory was closed from 1909 until requisitioned as Caton Torpedo Works in 1915. The whole business was purchased by Vickers in 1919. (Dictionary of Business Biography, vol. 2, 128-35) Mr. Docker seemed unaware of the fact that commodity exports balance capital exports in a balance of payments, that £s lent abroad bounced back in payment for British exports.

* * *


SIR,—The interesting letter of Mr F. D. Docker in your last week's number raises an issue which has been uppermost in the minds of leading manufacturers for years. If the London Stock Exchange, the leading bankers in London, and representatives of the principal manufacturers would take this matter up and appoint an influential deputation to wait on the President of the Board of Trade to ask for the appointment of a Minister of Commerce, then we might at last get what is an urgent necessity for the manufacturing industries of this country.—I am, yours truly,


Glasgow, February 11th, 1914.
(The Economist, 14 February 1914, page 352)

* * *

The next writer got it right, especially in his last paragraph in which he points to the real issue, which is protection of one British exporter at the expense of another.


SIR,—The arguments on the above subject put forward by Mr Docker in your issue of February 7th (and supported by another correspondent in the Economist of February 14th) should not be allowed to pass unchallenged. Briefly, your correspondent urges that Great Britain should imitate the policy sometimes pursued on the Continent, by which "a condition is imposed upon those who borrow capital for foreign and colonial use, ensuring that as much as possible of the new credit should be worked out by purchasing from home producers any manufactured goods immediately required." Apparently this practice is a result of the close relation which exists on the Continent between banks and industry. The banks, when negotiating loans, naturally desire to benefit companies whose shares they hold, even though some sacrifice is entailed in regard to the financial terms of the loan. In Great Britain banks and financial houses have, generally speaking, no motive for attempting to benefit particular industrial concerns, because they do not hold industrial shares. Consequently they endeavour, when negotiating loans, to obtain the best possible commissions for themselves and the highest yield for the investor. If a scheme were introduced by which foreign borrowers were compelled to purchase part of the capital goods in Great 'Britain, this position of independence now occupied by British financial institutions might be endangered, because a stronger inducement would be offered to them to take part in domestic industries which would receive the orders.

But, further, the policy advocated by your correspondents would clearly necessitate a sacrifice by someone in the interests of certain British manufacturers, whenever it became more expensive to order the capital goods from British manufacturers than from foreign producers. In order to get the same quantity of goods at the higher price, borrowers would have to borrow more money, but the terms which they could offer would not be raised correspondingly. Possibly they might be squeezed to some extent, but the probability is that lenders would also have to accept a considerably lower return than they would otherwise have obtained. The result would be a bounty on the production of certain kinds of goods for export, the bounty being paid, possibly, in part, by the foreign borrower, but probably in a large measure by the lender. In so far as the burden fell on the borrower, he would try in future to borrow elsewhere; and in so far as the burden fell on the lender, he, in turn, would try to lend elsewhere. The effect would be a serious blow to the supremacy of the London money market. During periods of acute depression such a bounty might conceivably do more good than harm, assuming that it could be instituted when trade was seriously depressed, and removed when trade again improved. At the present time, however, there is no evidence that such a temporary bounty would be desirable. The evidence points the other way. Do we not read in the Morning Post of the orders for railway materials that are being placed abroad, simply because British locomotive and rolling-stock firms are so full up at present that they cannot undertake to deliver the goods for many months? There is as yet no marked depression , in British industry, and where there is depression, it does not appear to be due to orders being diverted to foreign firms. Industry is more active in this country than abroad.

As a permanent policy, Mr Docker's scheme suffers from defects similar to those involved in Protection. It would bolster up certain industries producing capital goods for export, at the expense of lenders and of the general trade of the country. Mr Docker's glib remark, therefore, that his policy "could not offend the most susceptible conscience in fiscal matters," seems to be no more than a subtle attempt to distract attention from his endeavour to smuggle in Protection through a back door.—I am, yours, &c.,

C. K. H.

London, February 25th, 1914.
(The Economist, 25 February 1914, page 535)

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In the following letter, Follett Arthur Holt (1865-1944) seems to support F. Dudley Docker until one realises that he would have ironically stacked the proposed Ministry of Commerce with foreign importers adverse to Mr. Docker's private interest, so foreign that they would be drawn from outside the Empire, e.g. from among the Anglo-Argentines. At the time, Mr. Holt was a director of the Cordoba Central Railway and chairman of the Entre Rios Railways and the Argentine Eastern Land Company. He had worked in the Argentine since 1889.


SIR,—Attracted by Mr Docker's interesting letter published by you on the 7th ult., I have had some figures taken from the records of an English company owning a South American railway in order to see how far, in a case which may be taken to some extent as typical, money raised in this country passes into the hands of our trade competitors. As the figures may be of some general interest, I venture to give them. The net sum raised in London during the past eight years for the development of the undertaking to which I refer amounted to £3,700,000. The value of stores and materials purchased during the same period was £1,700,000. Of this amount £1,360,000, or 80 per cent., was expended in Great Britain and £340,000, or 20 per cent., abroad, mainly in the United States of America and the Continent. I need hardly say that those responsible for placing the orders abroad did so with no particular, pleasure, and only because the interests of their shareholders seemed to demand it; and there the matter ended as far as the company was concerned. The sum in itself, relating as it does to a comparatively small company, is not of any great importance; but to it must be added the millions expended by other and larger concerns which slip in the same way through the fingers of British trade, to the permanent loss of our manufacturers, of our workmen, and of our tax-gatherers. As Mr Docker puts it, we are ill-organised as a people; in this case organisation must start from the top, and a sound step, I believe, would be the appointment he advocates of a Minister of Commerce, charged, let us hope, with a special mission to look after our foreign trade, upon which so much of our future as the dominant race depends. It would doubtless occur to such a Minister, as an item in his programme, to ask all English companies to make a return to his department of orders placed abroad, and the reasons given would enable him in time to locate weak links between demand and home supply, and to apply correctives for the benefit of the nation at large. No such return is at present called for, no records are kept, and no lessons learnt. As another item in his programme, he would probably take charge of and shake up our Consular service, and furthermore it might occur to him to make some use of a store of good material now from a national point of view run to waste. I refer to our countrymen who, by that instinct peculiar to our race, and surrounded by foreign competition, have made place and power for themselves in the many countries of the world outside of our own colonies and our own dependencies, and who return ripe in knowledge and experience to live in the old country. The elect of these with an intimate knowledge and still in daily touch with the far corners of the earth, as many of them are, might be formed into advisory trade committees by our progressive Minister, who would then, indeed, be on the pulse of the world's markets. Has any other country an unused asset of this nature at hand?

I venture to think that a good business man untrammelled with purely party politics would find readily as Minister of Commerce a fruitful field for patriotic effort, and Mr Docker, who has successfully organised a great undertaking in the Midlands, will earn national laurels if he can persuade the political gentlemen who run our country to his view.—Your obedient servant,


The Athenæum, Pall Mall,
March 4th, 1914.
(The Economist, 7 March 1914, pages 599-600)

Follett Holt maintained his opinion, as in the following:

"One of our national assets, unfortunately unused for national purposes in pre-war days, is the experience and knowledge of foreign countries of the men who have, after long residence abroad, returned to control the home affairs of the businesses or public enterprises with which they have been connected. From these I recommend that a small (unpaid) Council be selected each year to act with each Controller at the Department of Overseas Trade in all matters of importance concerning our interests." The Mission Chief, however, took exception to this recommendation.
(British Diplomatic and Commercial Mission to South America, 1918, Report by Follett Holt, M.Inst. C.E., the Commercial Member of the Mission, with Preliminary Note by the Rt. Hon. Maurice de Bunsen, G.C.M.G., G.C.V.O., C.B., HM Stationery Office, May 1919, pages 3, 8-9.)