that no industry can succeed if those who toil in it day by day are unjustly and unfairly treated. Therefore, as measures of justice, as well as measures for the benefit of our industry, our company has undertaken to do something to take the place of the lost personal contact with workers; to do something for the betterment of their conditions; to look after them in illness as well as when they are at work; to assist in their education and knowledge of our American ideals and institutions.

In passing may I allude to a somewhat delicate subject affecting the relations of the workers and the management? I have felt distinctly that the friendly and cordial relations which ought to exist between the management and workers have at times been interfered with by the action of outsiders. It has been the habit of certain people to go about among the workers in our different mills in an attempt to excite in them a feeling that they are unjustly treated. There are two classes of people who have indulged in this practice. There are the social workers and philanthropists who act from a sincere desire to better the conditions of the worker and are really anxious to help. They are well-meaning people and there can be no doubt that in some, perhaps many, cases grievances really exist the very grievances which we are trying to remedy. Of these people I make no complaint or criticism. The purposes which they attempt to achieve are praiseworthy. But I venture to think that they might accomplish more, in co-operation with the management, than

in stirring up feeling against it. Of the other class nothing good can be said. Their motives I do not believe are unselfish, nor is what they do helpful or beneficial to the workers. Many of them are vicious and agitate merely to get the money which they can extract from the workers by way of assessments. They are busy sowing the seeds of unrest and discontent among the workers, not only of our own mills but throughout the country, in order to create and maintain a dissatisfaction with our industrial and political institutions. They are of the class called "Reds," who carry in their minds a well-defined purpose to overthrow our government and apparently propose to use the great laboring classes as a catspaw to accomplish their ends. I am glad to say that I believe that these men are losing their influence. The doctrines which they advocate are un-American; their declarations are frequently disloyal and treasonable. What they say is merely unfair and unjust denunciation. Our workers on the whole appear to be too level-headed to give them much attention. They do temporary harm, but for the most part only among those who are unfamiliar with our institutions and who do not speak our language.

But the hopeful thing in the whole matter is that little by little our workers are recognizing that our interests are mutual; that these people who declaim to them of their wrongs do not pay to them the money with which they support themselves and their families; that when it comes to real action the management is the real and the true friend, both able and

willing to put into effect in a reasonable way the things which are for the workers' interest and benefit.

The solution for the unrest and discontent which exist among workers is to be found in the removal of the causes of this unrest. When we have accomplished this, agitators will have less attention even than they do now, and it is this end that we are trying to bring about. With the solution of this problem I believe comes the solution of our problem as to the investor and as to the public. For if I can make our workers content, if I can make them believe in my fairness and my purpose to do what can be done to help them in their lives, if I can make them understand that I really want to discharge my duty to them and at the same time to hold the scale fairly as between their interests and that of the investor and the public, then as a contented and prosperous unit we go far toward accomplishing the ideal result -a fair wage to the worker, a fair return to the investor, and an honest product and a fair price to the public.

But not even here do the duties of an executive position end; nor is this quite the end of the problems of the manufacturer. There is still another duty, one which has developed considerably of late years the duty to our Government. Within the years last past the Government not only has undertaken to supervise and control the business activities of companies like ours, but has to a very large extent succeeded to the position of our stockholders. The Government is a new beneficiary for which the management holds its property in trust.

You will be a bit surprised, I think, when I tell you that for the last year for which our accounts have been made up, the American Woolen Company has paid to the Government in taxes an amount more than twice the amount of the nominal profit left remaining to the company-more than five times the amount of dividends paid to our investors. You will be surprised, I think, to learn that this payment to the Government was nearly two-thirds the total amount distributed to our workers by way of wages, although the wages paid during that year were the highest ever paid in the history of our company. From this you will see what I mean when I say that we now have a new and somewhat unusual duty to a new beneficiary.

Let me hasten to say, however, that I am not complaining of this payment as a burden of taxation. I do not so view it. I regard it rather as the grateful contribution of this company to the great causes for which we en tered the world war; a contribution. to the ideals for which we fought so successfully in foreign lands. I do not believe that this contribution, which was made in part by our workers-because in a certain way it came from their wages; and which was made in part by our investors, because in a certain way it came from their profits-is regretted by a single one of them. Personally, I do not regret it, nor do I complain of it. I rejoice in it as a privilege, that our company could make such a splendid record of contribution in the time of our country's need. It is a splendid record, and, I believe with every stockholder

and every employe of our company, I am proud of it.

Nor is this all. Do you realize what the mills of the American Woolen Company meant to the Government in the war? Do you know the fact that but for our mills-especially the great Ayer and Wood Mills at Lawrence-the task of clothing our soldiers would have been practically hopeless; that it could not have been done with anything like the

expedition and success that were necessary to place our troops in the field in time to meet the crisis? And when I think that these great mills, which were the conception of the present management, gave warmth and comfort to our soldiers who fought and died in France, it thrills my heart and brings to me a deep contentment. It is a part of our contribution to the nation's needs, and the fulfilment of a great patriotic desire.

March, 1920.

During the war Great Britain not only supplied the Entente countries with a great many goods upon credit, it also provided them with a large amount of credit with which to buy goods in the United States and in other countries. Thus at the end of the war the Continental nations were heavily in debt to Great Britain. On the other hand, Great Britain was heavily in debt to the United States, and less heavily to certain other nations. Since the armistice was concluded the financial assistance of Great Britain to the Entente nations has continued. Great Britain has supplied the Continent with a great many things for which it has not yet received payment, while on the other hand, Great Britain has needed to buy very large quantities of goods from the United States and from other na

tions for which it has been unable to pay except by credit.

If Great Britain could collect the money due to her from the Continent she could pay her way, but as she cannot collect her debts she cannot pay her way. And all the time the exchange is getting more unfavorable. In the situation that now exists it is of the first importance that everyone should realize the essential strength of Great Britain's finances. Practically throughout the war she has paid her way. The necessities of the situation however compelled her to borrow from the United States and from other countries in order to lend to France, Italy, Belgium, and other Entente countries.

Against the debt she has incurred she has corresponding assets, although these cannot be realized. It is true that during the war Great

Britain's imports largely exceeded her visible exports. But her total exports, visible and invisible, have been as great as her imports. In the current year the excess of imports over exports has shown some improve

ment.

It is true that Great Britain's net income from foreign investments has declined, mainly because Russia has not paid interest on the money lent to her. On the other hand Great Britain's income from shipping has shown immense expansion. The ratio on homeward traffic shows a rise of a long way over 700 per cent, and even when one allows for the more moderate increase in the freight rate for coal exported it is evident that the average rise in freight rates has been something like 600 per cent. Prior to the war Great Britain's income from shipping was calculated at about £120 millions, this including profit to capital, wages to the crew spent at home, stores and coal for bunkering bought in this country, depreciation, dock dues, etc. The income from all these sources has been very greatly increased. When full allowance is made for the diminution in shipping tonnage engaged in foreign business it is evident that Great Britain's income from shipping at the present time is several hundred millions, and that the difference between her visible exports and imports is approximately covered by her invisible. exports.

That the exchanges are so much against her is therefore not due to the fact that she is not able to pay her way. It arises from her inability to

obtain payment for all the goods she is selling to the Continent, while on the other hand she has to provide for the payment of the goods she is buying from the United States and elsewhere.

In the first six months of 1919 Great Britain's purchases from the United States were valued at no less than £250 millions, while exports of her own goods to the United States were valued at only £11 millions, and her exports of foreign goods to the United States were no more than £7 1-2 millions. Thus the excess of her imports over her exports to the United States was no less than £232 milions.

Prior to the war she was able to make very large purchases from America out of her income from investments and in part through her exports to other nations, which were paid for out of the large sums spent abroad by American tourists.

At the present moment, however, with the Continent's power to export exceedingly small, its income is reduced by the absence of tourists. Hence no means exist for paying the United States for the vast quantities of product the American people are selling to this country and the Continent other than by rates of securities and by credit operations.

In the past half year we have received no assistance whatever from the Continent in our task of paying the United States for the vast quantity of produce she is selling to us and through us to the other European nations. For the first six months of the year we exported to the Continent

goods worth £180 millions and received from them goods in payment to the value of only £90 millions. Indeed, including our re-exports to the Continent of £43 millions, our total sales of goods to the Continent amounted to £223 millions, and thus exceeded the goods we received in payment by no less than £133 millions. Nor was the situation rectified by large exports from the Continent or other countries to America. The exports of the Continent to all countries were extraordinarily small.

During the half year we were also entitled to receive from the Continent a substantial sum of interest on loans and also large payments in respect of services rendered by British ships. In the aggregate it is probable that we have had to grant credits to the Continent in the past six months to the extent of about £200 millions. It is this fact that has prevented us from paying for the goods we buy from the United States and other countries. and has brought about the depreciation in the sovereign in comparison with the dollar.

The question which has to be decided is this: How long can this operation be continued? How long can we go on financing the continental purchase of goods? How long can we go on obtaining the credit we need. in order to purchase the food and raw material in sufficient quantity at current high prices when we cannot collect our debts from the Continent? The problem can in some measure be rendered less difficult by an expansion of production both here and on the Continent. But it is obvious that

the Continent cannot expand its production sufficiently until the autumn of 1920. The crops available for the consumption of the Continental countries in the next twelve months have already been gathered and are exceedingly short. It is obvious that the Continent must continue to receive sufficient credit to enable it to overcome the danger of starvation. Any hope of the Continent expanding its productions in the immediate future lies in industry rather than in agriculture. But here again the situation cannot be redressed without the aid of additional credit. The Continent needs to import a very large quantity of raw material in order to get its industries re-started and to pay its way in some degree, and unless it obtains the raw material it usually secures from abroad its factories will be closed and there will be no greater quantity of goods available for export in payment for food and raw material than hitherto. It is clear therefore that the Continent must continue to be supplied with credit for the purchase of raw material. It is true that the Continent can appreciably expand its own supplies of raw materials, as indicated by Mr. Hoover, and this should be effected with the least possible delay. But even when this has been accomplished, the power of the Continent to export will be comparatively small in relation to the great quantities of goods it needs to import at high prices.

Some uneasiness has been expressed lest the Continental nations should get advantages from the great depreciation in their currencies in