Report on Britain

Two months ago U.S. Chamber of Commerce President Eric Johnston toured England, describing to British businessmen the attitudes and thoughts of U.S. businessmen. He preached that high postwar employment must be built upon the free trading initiative of individuals in a free economy.

Last week, Johnston's traveling companion, William Benton, vice president of the University of Chicago, told the U.S. what British businessmen are thinking. In a lively, anecdotal log in LIFE of the innocents abroad, Benton said his findings were that: 1) England has lost faith in individual initiative, has placed its hope in cartels (monopoly); 2) the State is increasingly important in the British economy.

On Monopoly. The attitude of many a cartel-minded British bigwig, Benton reported, was epitomized by Lord McGowan, chairman of the potent Imperial Chemical Industries Ltd., and a director of General Motors, who said naively: "I see no hope for collaboration between British and American business unless the U.S. repeals its Sherman antitrust act. Can we in England look forward to that?"

Told by Johnston and Benton that there was little chance of that, Lord McGowan predicted that "unrestricted competition" would bring "eventual chaos."

On Risk. Benton and Johnston found that most British businessmen not only welcomed monopoly, but also welcomed Government as a business partner, looking to it to control competition and provide security. They expected the Government to supply cash to prevent bankruptcy of large employers of labor. Benton high lighted this viewpoint with an anecdote:

"'Now, Mr. Johnston,' one of our British friends argued, 'in your country you know perfectly well that your Government wouldn't permit General Motors to go bankrupt.' "

"'In peacetime,' replied Johnston, 'we certainly would.' The entire table looked incredulous. Johnston was taken aback. He turned to me for confirmation. On my return from England, sitting next to Jesse Jones at lunch in Washington, I turned to him. 'And why not?' asked our Secretary of Commerce."

On Capital and Security. Fact-finding Mr. Benton came up with two reasons for the British liking for cartels: 1) England has never had antitrust legislation such as ours, thus cannot understand such legislation in the U.S. nor the fear of the American people of concentrated power in private hands; 2) the British view of capital is poles apart from the American.

On this second point, Benton reported: "At dinner in Liverpool, Lieut. Colonel Buckley, chairman of the Liverpool Gas Company . . . told me about Sir Sidney Jones, sitting on my right, [saying] 'Sir Sidney is a partner in a firm with only -L-50,000 capital yet it now operates over 80 ships.' His tone was that of a man who scarcely expected to be believed.

" 'When was the firm founded?' I asked.

" 'Only 80 odd years ago,' Colonel Buckley answered. Fifty thousand pounds ($250,000) 80 years ago. I thought of Eric Johnston's four companies in Spokane employing 1,700 people, and pyramided from $2,500; of my own start in business in 1929 with $5,000 . . .; of the Ford empire, built in one man's lifetime on . . . $28,000 [cash investment].

" 'Colonel Buckley,' I said, 'you British believe in capital; we believe in capitalism. . . . With us the initiative of the individual comes first; and capital . . . comes second. You put capital and security of income first. You are astonished because a large Liverpool company can develop in 80 years from -L-50,000; we would be astonished if a large Chicago company had that much capital 80 years ago or even existed at all.' "

Where is all this monopoly-and-security-mindedness driving British business? Benton reported: "British labor leaders . . . are not opposed to monopoly. In fact, they join up with business leaders to entrench monopoly. Many of them state frankly that when the time comes to nationalize industry, it will be easier for the Government to take over big business."

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