Business: Willkie on British Business

Wendell L. Willkie waited until he was back in Manhattan last week to give his answer to a question topmost in the mind of many a U. S. businessman: Is war socializing British industry? In his ten days in England, Willkie had talked with hundreds of businessmen—from a dart-playing bricklayer named Albert Phillips to William Edward Rootes, “the British Alfred Sloan,” President of The Society of Motor Manufacturers & Traders. He had visited 50 factories (in London. Coventry. Birmingham, Liverpool, Manchester, Oldham, Sheffield, Nottingham, etc.). From the evidence so gathered, ex-Businessman Willkie said:

“British industry socialized? Certainly not—neither during the war nor after it—in my judgment. . . . The wealth of the old aristocracy—the income of the dukes and the duchesses living off estates—will be a thing of the past when the war is over. And the fruits of the industrial system will be better distributed, through public housing projects, higher wages, social laws and the like—as they should be. But industry will remain privately owned and capitalistic.”

The British Government, said Mr. Willkie. has done four things to increase war production: 1) It has gone directly into the munitions business, building and staffing its own arsenals. 2) It has built “shadow plants”—new war plants in the shadow of existing private plants. The British Treasury supplies the money and the private company supplies the management for a small fee. 3) For new war-order plants that can be readily converted to peacetime use after the war, the Government finances the plant itself, the businessman furnishes the machinery and working capital. He earns about 5% on his investment. 4) Plenty of Government orders are let on straight contracts to existing companies. On these the profit is also limited to around 5%.

Result of this flexible system: it gives the individual businessman leeway to do his best individual work. Said Mr. Willkie: “The enterprise fella can enterprise. You ought to see the way Rootes goes after his job. Most of them are thinking, ‘If we can outperform the Government arsenals, we can convert them into private factories after the war and there won’t be any nonsense about whether private enterprise will survive or not.’ So they’re working their shirts off. Of course they also have the motive of patriotism, but the big thing is their natural business instincts are brought into play.”

The quickest route to socialism, says Willkie, is loose fiscal policy, which wrecks private enterprise whether the citizenry wants it wrecked or not. On that score the British are taxing themselves far more cruelly than is the U. S., are paying-as-they-go for as much of war’s cost (currently around one-third) as they can.

Mr. Willkie on labor and leadership:

“The way Bevin, the Trades Union Congress and all British labor are working with British business is wonderful. In every business meeting I attended there were labormen present and active on the think level. Some labormen say the truce is only for the duration, that after the war business and labor will be fighting again. . . . But two things brought about this present cooperation:1) Hitler—when bombs started raining down, everyone got fighting mad, got together; 2) Britain’s wartime leaders. Whatever Churchill’s past mistakes, today he is the perfect rallying post. The cabinet is cohesive. And the King—duty sticks out all over him. He mixed a Scotch & soda for me himself.”

Other evidence that enterprise was still alive in Britain last week: > It carried one firm too far. Hispano-Britannic Co., West End wholesale house, was fined £1,250 under the Limitations of Supplies Order, for exceeding its sales quota of perfume, hosiery, fancy goods. >The London, the Associated and the Provincial Brokers’ Stock Exchanges took voluntary action to reduce overhead. The kickback which banks and clerks had been getting from brokers as a finder’s fee for new customers was cut from 50 to 33⅔% the broker’s commission. In the case of other finders or “attaches” it was cut to 25%. The Exchanges also ruled that all “attaches” must have a City office under Exchange control. This meant that many a West End playboy who had drummed up business at club and race track would have to go to work. > Land sharks were swishing through bombed areas, buying up blitzed property at cut rates in the expectation of resale during postwar reconstruction. Last month Lord John Charles Walsham Reith, Minister of Works and Buildings, complained to the House of Lords about this speculation, called the problem “urgent.” The size of the splash (whole blocks were bought at a time) made him think the sharks were big—maybe banks and insurance companies.

Lord Reith appointed a committee to study the speculation problem. He also has larger plans—much like those once dreamt by Sir Christopher Wren after the Great Fire of 1666. The Reith dream of postwar reconstruction has wide popular support, includes 1) decentralization of industry, 2) rebuilding of crowded cities, 3) a network of national roads, 4) the use of all land for the communities’ benefit. But the fate of Wren’s plan is still fresh in the minds of a few realists—it ran afoul of legal snags. Lord Reith’s Ministry is seeking ways around the snags without uprooting the law.

Because 1,000 businessmen a day descending on Washington have become a plague to purchasing officials, the Department of Commerce officially advised order-seekers to stay home, write letters.