INTRODUCTION

WITH a statesmanlike grasp of world conditions, President Wilson said on September 2, 1916: "A new age, an age of revolutionary change, needs new purposes and new ideas. We can no longer

indulge our traditional provincialism. We are to play a leading part in the world drama whether we wish it or not. We shall lend, not borrow; act for ourselves, not imitate or follow; organize and initiate, not peep about merely to see where we may get in."

The necessity for revolutionary change in our business methods presses upon us from within and from without. Even before the war it had become evident that we need in this country improved conditions in our manufacturing and merchandising concerns, more coöperation among business men, and a closer harmony between government and business. The home market was no longer an adequate field for expansion of American business, and a number of our forward-looking men were considering the question of developing foreign trade. In the light of the experience of the last two years these conditions have been brought forcefully to the attention not only of the leading men of the business world, but of the small manufacturer and merchant and of the American

public. We are awakening to our opportunities and to the great responsibility which they bring.

From without we find that the great war in Europe has wrought there an industrial revolution. Its shock has jolted men out of old ruts of thinking and acting. It has rendered obsolete many methods of doing business. It has brought forcefully to every man and every woman in the warring nations the danger the danger to each of them and to their nation-of industrial inefficiency, reckless individual competition, and absence of coöperation. They have come to realize that their industries, even more than their armies and navies, are absolutely essential to their personal happiness and national existence.

We are in danger of forgetting that the suffering of the warring nations has rewards which in the long run may give them mastery over those nations which with self-complacency cling to ideas and methods of a passing age. We are now prosperous, but unless this period of prosperity is made a time for reorganizing the whole fabric of our business system, we shall suffer seriously in competition with European nations when they are again upon their normal business footing. Now is an opportune time for removing from American business inefficient methods and all other elements of weakness.

Forces are gathering in the industrial nations of Europe which will lead to the fiercest kind of commercial rivalry after the war. In those foreign markets dominated before the war by European coun

tries and now temporarily occupied by the United States, European business men will seek to retrieve the losses of the war. They will not yield to us without a struggle even a part of those markets. Nor will they leave our own market to our manufacturers. It is the richest of all and will present an opportunity to the European producer which he will not be slow to avail himself of. Our government can prevent unfair methods of competition, but it should not protect inefficiency nor can it relieve us from competition of nations desperate to restore their commercial power.

The nations of Europe are preparing for the commercial and industrial rivalry which will follow the clash of arms. It is said that behind the line of battle Germany has kept her industrial organization in the highest form of efficiency; that she has strengthened it by the removal of machinery from the rich industrial sections of France, Belgium, and Russia; and that she has improved it by invention and further coöperation.

Other belligerents are also increasing their industrial efficiency and coöperation. German methods are being studied in both France and England. In France the elimination of small-scale production both in agriculture and manufactures has been carried on rapidly, and while it will still remain a factor in the industrial organization of France, largescale production will after the war be of more importance than it has been in the past. England-the

champion of individual enterprise has during the war resorted to organization as a means not only of self-preservation, but of making her industry more effective in competition with other nations. Her business men have awakened to the urgent need of improving business methods. They are to-day reading more books on efficiency and scientific management than the business men of any other country. In this connection the comments in one of the recent government publications* in the United Kingdom is of interest. It says:

"We think it possible that the voluntary efforts of manufacturers in friendly union which enabled the problem of munitions to be rapidly solved may lead to a new kind of reciprocity between firms which will avoid the evils both of monopoly and of individualism. We think that as people have learnt to combine against the risks of fire or shipwreck without losing either initiative or freedom, so firms may come to look upon expenditure for research as a necessary kind of insurance. It is certain that the costs to be met will, on any adequate estimate, have to be counted not by tens of thousands nor even by hundreds of thousands.

"Quite apart from this general and fundamental point of view, team work is needed, because when we come to deal with the great industries which have an output worth many millions sterling a year and employ labour in proportionate amount, the problems to be solved are too manifold, and too complicated, to be dealt with by individual firms, or even,

*Report of the Committee of the Privy Council for Scientific and Industrial Research for the year 1915-16.

we may add, by a Government Department. The coal-winning industry, the textile industries, the steel industry, the great engineering and shipbuilding industries, the rubber industry, need research on a scale which calls for the financial and intellectual assistance of all parties concerned. When cooperation has done all that is possible in the common interest, there will still remain a mass of research work to be done by individual firms in their own interests, which will amply repay the cost and effort.

"Research will inevitably tend to bring industries into intimate relation, which are at present independent of each other, to transform what have hitherto been crafts into scientific industries, and to require co-operation not only between different firms in the same industry, but between groups of industries in a continuously widening series of interrelated trades. The forces which are at work in this direction have elsewhere found their expression in connection with the trust and the combine; but we believe, if the real nature of these forces is clearly grasped, that it will be possible to organize them for the benefit not only of the industries but of the nation as a whole."

In some of the countries of Europe, particularly Germany, government has for many years taken a more or less active interest in the industries and commerce of their people. The war has caused this governmental attitude to be adopted by countries like England where it was not looked upon with favor before the war, and to be extended in those countries where it was already regarded as desirable. We must