Cheap food offset by low wages. markets with a nation maintaining the system of free imports. Does your experience confirm or contradict that doctrine? A. It confirms it to a certain extent only. I mentioned before that the capacities of production of foreign nations are increasing and they are more able to export their goods also. Q. In spite of their protective system? A. Yes, in spite of their protective system. Q. Which we have been assured would forever prevent their doing so; but in spite of that assertion I understand you to say that they are competing with us now more successfully every year in neutral markets? A. Quite so; that is the case. It is a common assertion of free traders that protected industries are weak and sickly. By preserving their home market under protection Continental nations, with their cheap labor, have a decided advantage over England. Their manufacturers have a large market secured to them and manufacture a surplus for foreign trade. Their surplus meets English goods in neutral markets. If they paid higher wages than are paid in England it would so enhance the cost of their goods that they would fail in the struggle. The manufacturers who pay the lowest wages, other things being equal, will control neutral markets. This is the reason why Germany and France, although protectionist countries, must pay low wages, so long as they depend on foreign trade. The United States must enter foreign markets on the same terms. The witness now proceeds to confirm what has already been pointed out, that the Manchester manufacturers sacrificed the agriculturists for the purpose of furnishing the artisans. with cheaper food, that wages might be kept down. This was the economic effect of such policy as understood by the advocates of free trade. Mr. Gladstone recognized the insufficiency of the principle of cheap food to elevate the masses of the people when he said: "One of the fallacies which was employed on the hustings was the cry of cheap bread. That cry of cheap bread, considered by itself, means nothing that is necessary or beneficial to the laboring classes.’’1 The witness further said: Q. It has been maintained, as you are aware, that England has an advantage in cheapness of production over those countries, by reason of her system of free imports of food? A. Yes. Q. Germany, you are quite aware, has now taxed food for some six years; has there been any effect apparent during that six years in the weakening of the competitive force of the German manufacturers in consequence? A. I think not. German competition is certainly stronger against us than it was six years ago. Q. Is it not the fact that the only way in which free imports of food enable the manufacturers of one nation to beat the manufacturers of another is by the population living more cheaply, and working for lower wages? A. Of course that seems to be natural; it could not operate in any other way than that. If cheap food did cheapen production of manufactories, the only way in which it could operate in that way would be by reducing the price of labor. (By Professor Bonamy Price.) Q. Under protection, may wages rise? A. Of course they have more chance to rise. Q. Do low prices generally make low wages? A. As a rule. 1 Hansard, Vol. 61, p. 273. Those who have read the writings of Professor Price will appreciate how he must have felt when he received the above answers. The experience of business men overthrow the fine-spun theories of the free trade professors in every instance. Joshua Rawlinson, secretary of the North and Northeast Lancashire Reduction Cotton Spinners' Association, which is a federation of the Employers' of wages. Association of Blackburn, Preston and Burnley; also director of three limited liability companies having cotton mills in Burnley, was examined, and said: Q. What do you consider to be the present condition of the cotton trade; do you call it prosperous or the reverse? A. It has been very much depressed; in fact, the present depression may be said to have commenced in the year of 1876. The year of 1877 was worse than 1876, and 1878 was worse than either of them. The effect of the depression in those years was to reduce the price of labor. In June of that year, the wages in both the spinning and weaving departments were reduced 10 per cent, after a strike of nine weeks' duration, which extended from Preston to Burnley, Blackburn, Accrington and intervening districts. In April, 1879, a further reduction of 5 per cent was made. In December, 1883, a reduction of 5 per cent was again made in the weaving department, and this caused another strike in Blackburn, Darwen and Padiham, which lasted nine weeks. The weavers in the Preston and Burnley districts accepted the reduction. At the present time the wages paid in North and Northeast Lancashire are, therefore, 10 per cent below the level of 1878. In the course of that reduction there had been two prolonged strikes. In the town of Burnley there are 1400 looms and 53,400 spindles standing idle at the present time; that is relating to machinery solely, and there are empty mills and sheds in the town capable of holding 5869 looms and 126,000 spindles, which only need equipping with machinery to be set to work. In the Blackburn district, I am informed, that there are 6700 looms and 186,000 spindles standing idle, and that mills have been burnt down, or pulled down, and not rebuilt within the last few years, capable of holding 330,000 spindles. Q. What effect does this have upon the rents obtained upon mills and sheds? A. The rents obtainable for mills and sheds have fallen very greatly during the last two years. Spinning mills in Blackburn cannot be let at any price, and I am informed that a fireproof spinning mill, containing 18,000 spindles, will be let rent free, if the tenant will pay rates and taxes, and keep the building and machinery in repair.1 Q. What do you consider to be the cause of this depression? A. They are very Causes of numerous. In fact, there are a combination of causes. The fall in prices has greatly depression. injured the cotton trade, because it is so largely dependent upon the export trade for its prosperity. Of cotton productions four-fifths are sent abroad, and hence, the smaller return made for foreign products has had a great effect in lessening the buying power of our customers abroad, because they have got such a small return for the raw materials they have sent us, that their buying power is very much lessened. Q. Do you attribute the depression, to any extent, to the increase in the cotton machinery abroad? A. Yes, I think that a very great cause of depression is the extension of cotton machinery in Europe, America and India. Many of our former customers now manufacture their own goods. The higher wages and the shorter hours of this country do undoubtedly tend to give our competitors a great advantage over us. I think that the shortened hours and higher wages have made our labor more productive in proportion to the time spent upon it; at the same time, it (the productive capacity) is increasing in other countries by the improvements of their machinery; hence, were they 1 Second Rep., Part I., p. 203. Sign of decay in British cotton manufac tures. to pay lower wages and work longer hours, they are bound to have some advantage over us. Within forty years from the time when the cotton manufacturers of Manchester asked for the repeal of all protective regulations, and invited foreign rivals to a contest under free trade, we find many of the most experienced and able among them pleading for a return to protection. Conditions have changed. In 1846 they were practically without rivals. By 1886, under the fostering care of protective tariffs, the best markets in the world were being supplied by domestic producers, with facilities for production so extensive that a portion of the surplus was selling in England. It is a significant fact that in order to meet such aggressions, to hold their home market, and to prevent a much larger loss than they had already suffered, from taking place in neutral markets, the wages of English cotton spinners and weavers have not only been reduced, but the profits of employers have sunk so low that the business has ceased to yield a fair return or to invite the investment of capital. The palmy days of the cotton industries are over. The great profits which were made through. the monopoly of markets have disappeared. They have been subjected at last to that "struggle for existence," that "survival of the fittest" to which agriculture, the silk and many other industries were subjected immediately after the introduction of free trade. When the situation is fully understood it is an easy matter to explain the vigorous action of their sympathetic free trade friends in the United States. Free trade in the United States would surrender the valuable market of 70,000,000 of people in America to foreigners that their trade may be restored and their declining fortunes revived. During the last twenty years the English cotton manufacturers have looked forward to an event of this character as the great source of relief from their condition. The official statistics of the British Government disclose a condition of imports and exports which is certainly not encouraging. The imports of fully manufactured cotton goods for home consumption in 1860 were $3,098,035. By 1875 they had increased to $5,400,290, and in 1890, to $9,838,495. While this amount seems small when compared with the large production in their own mills, yet it deprives British labor and capital of a market to that extent, which might be held under a moderate protective duty. If these goods which are being purchased were being made in England, it would certainly set in motion the idle machinery which the witnesses have described, and give employment to many laborers who are working on short time. While imports have been increasing the exports of their domestic productions have declined from $307,558,500 in 1872-3-4, to $297,641,943, or 3.3 per cent in 1890-1-2. The exports of domestic yarn during the same period declined from $78,517,151 to $55,353,343. Notwithstanding this decline the United Kingdom is still the greatest cotton manufacturing country. on the globe. Yet the indications are that it has already reached its highest point. Its progress has not only been arrested, but it is tending toward decay. The growth of the cotton industry. throughout the world shows that there is no prospect of British manufacturers regaining their lost markets in Europe and the United States. The annual consumption of raw cotton in Great Britain, the Continent of Europe, and the United States respectively, from 1841 to 1889, as shown by Thomas Ellerson's annual circular, was as follows: AVERAGE PER ANNUM IN MILLIONS OF POUNDS. 1841-45 1851-55 1856-60 1861-65 1866-70 1871-75 1876-80 1881-85 1886-89 Comparative increase of British consumption of raw cotton. Great Britain (increased) from 1841-45 to 1886-89, 189.1 per cent. The following very complete analysis of the cotton trade of Great Britain is taken from the Fair Trade Journal, Vol. vi, pages 189-90, January 23, 1891. THE COTTON TRADE. A STATISTICAL ANALYSIS OF THE BOARD OF TRADE RETURNS. of cotton trade. I take the following figures for the last twenty years, 1870-89, from my Analysis compiled table of each year, taken separately and balanced to the yard and pound: The total quantities of cotton manufactured goods exported from the United Kingdom to the foreign countries in millions of yards. |