Let us first examine the relationship between Capital and the Administrative Staff. In the Administrative Staff, I include every one from the managing director down to the gate-keeper. They are the brains and mechanism of the organization and management, the connecting link between Capital and Labour. The success of an employer’s business is dependent on their tact, judgment, and power of governing men, but Capital has not yet risen to that conception. It has not conceded to the Administrative Staff a status commensurate with their enormous private and public responsibilities, nor, except at the very top, adequate financial recognition. The art of managing men so as to get the best out of them and secure their cordial co-operation, is generally considered by Capital to be a customary by-product of technical ability. In truth, it is a special qualification requiring its own special training, exceptional attributes of mind and temperament, and particular fibres of character, of the possession of which technical ability is no criterion whatsoever. If industry is to progress, Capital must elevate its conception of the duties of the Administrative Staff and recognize that administration, even in its lowest branches, is work as skilled as that of an expert craftsman. Capital and the Manual Workers We must next scrutinize the basic industrial relationship between Capital and the Manual Workers. Permeating it, we find, as the result of the causes already mentioned, seething discontent and active antagonism—not cordiality—not mutual confidence, but unreasoning distrust. We see on both sides black suspicion twisting the motive behind every action, and the task is to create contentment among the workers, and enlist their hearty co-operation with employers in the process of production. The Manual Workers _inter se_ The Manual Workers are far from being a happy family. In this country all work in every industry is allocated by tradition or Trade Union agreement to this trade or that trade as its sacrosanct preserve. Woe betide an unskilled man who invades the industrial territory of a tradesman! These rigid lines of demarcation of work are the cause of untold industrial friction and operate most detrimentally to prevent an employer introducing modern methods or installing time- and labour-saving appliances. There is no greater need in industry than for a peace-treaty between the warring Trade Unions under which this system of dividing work into so many water-tight compartments will be modified. The Administrative Staff and the Manual Workers