about the loss of a large part of our great export trade. The fear of the Lancashire men seems scarcely justified in the light of the facts given in the foregoing pages, for I have shown, by means of unimpeachable expert evidence, that the price of the output of the American cotton industries is, as the Official Report puts it, in the case of plain goods in no case much above the English mill price, while in the majority of cases it is lower.' I have also shown by means of unimpeachable evidence that the American cotton industry pays about 40 per cent. more for buildings and machinery, and from 50 per cent. to 100 per cent. more for wages than does the British cotton industry. Now, I do not think that the most passionate, the most narrow-minded, or the most reckless defender of Free Trade is prepared to assert that Tariff Reform will raise the cost of buildings and machinery in Lancashire by 40 per cent., and that it will raise British cotton wages by from 50 to 100 per cent. But let us assume for argu'ment's sake that Tariff Reform would have this twofold effect. Would it then 'destroy' the British cotton industry or, at least, the British export trade in cottons? If the American cotton industry can produce cotton goods partly at about the same price as England, and partly at lower prices than England, although it pays about 40 per cent. more for buildings and machinery and from 50 to 100 per cent. more for wages than the English cotton industry, it is perfectly clear that Tariff Reform will not destroy the British export trade in cottons by raising the price of cotton goods, even if it should increase the cost of our buildings and machinery by 40 per cent. and the wages of our cotton operatives by from 50 to 100 per cent., provided the British cotton industry was run on American lines. To put the matter in other words, one might say that if we made our cotton goods in accordance with American methods we could afford to pay 40 per cent. more for buildings and machinery, and from 50 to 100 per cent. more for wages, without being compelled to raise the prices of cotton goods to the consumer. However, Tariff Reform would not only not destroy our cotton industry, but would greatly benefit it. The present outlook for the Lancashire cotton industry is uncertain and distinctly disquieting. India and China are Lancashire's best customers. The Japanese cotton industry consumes considerably more than one million bales of cotton per year, and works with extremely cheap labour. It is very rapidly expanding, and, according to the reports of our consuls in China, it is rapidly ousting the Lancashire cotton industry from the Chinese market. The Japanese have lately begun to encroach upon our Indian market as well. As very few people are aware how wonderfully the Japanese cotton industry has progressed, and how seriously it is threatening the British cotton industry in neutral markets, especially in the markets of the Far East, I would give a few figures which should be of great interest not only to British cotton men but to all who have the prosperity of British manufacturing industries at heart. In 1877 the Japanese Government placed orders in England for machinery sufficient to start several small experimental cotton spinning mills in different parts of the country. In 1882 the first joint-stock cotton spinning mill was organised at Osaka, with a mill equipment of but 10,500 spindles. Since then the development has been rapid. By 1890 there were 277,895 spindles in the country. In 1900 there were 1,320,988 spindles; and in 1911, according to the statistical handbook of the Japanese Cotton Spinners' Association, there were 2,099,764 spindles. British cotton spinners and weavers speak more often of the cotton industries of Austria-Hungary, Belgium, and Switzerland, than of those of Japan. Yet the Japanese cotton industry alone consumes as much cotton as these three highly developed European countries combined. The United States Census Bulletin 113 supplies the following figures: Twenty years ago the Japanese had practically no cotton industry, and ten years ago they had practically no export trade in cotton manufactures. Since then Japan has become one of the most important cotton-manufacturing countries in the world. She has practically a monopoly of the Japanese home market, and her exports have increased in a truly startling manner, as is shown above. Japan's importance as an exporter of cotton yarns will appear from the following figures, which are taken from the American Tariff Board Report: Exports of Cotton Yarns in Order of their Importance in 1910 In the exportation of cotton yarn, Japan, which but a few years ago had no cotton industry, occupies now the third place among the nations of the world. In 1894 she exported 955,530 yen of cotton yarn, and in 1910 she exported 45,346,964 yen of cotton yarn. To which countries does Japan export her cotton goods? That question is answered as follows by the official statistics of Japan: China used to buy her cotton yarn from Great Britain and India. Since 1894 Japan's yarn exports to China have grown fifty-fold, and to-day Japan has in yarn practically the monopoly of the Chinese market. Mr. Alfred B. Shepperson, the great American authority, wrote in his book, Cotton Facts, with which every cotton manufacturer is familiar: For the lower kinds of yarn (say up to twenty) the Japanese mills practically control their own and the Chinese markets against the competition of England and India, and will continue to do so. I think Japan's exports of cotton manufactures will continue to increase. Her mills, so far, have manufactured chiefly the lower grades of yarns and goods, but there is no reason why they should not successfully compete with Europe in the manufacture of better descriptions. As the Japanese mills are usually run during twenty-two hours every day, and as there are two sets of operatives working eleven hours per day for daily wages which range from sixpence to a shilling for grown-up persons, Japan's competition in the Far Eastern markets is bound to become extremely menacing to Great Britain as soon as the Japanese cotton manufacturers have succeeded in extending their industries in accordance with their wishes. How severely the British cotton industry is already pressed by Japan in the Far Eastern markets, and especially in China, Manchuria, and Korea, which lie nearest to the shores of Japan, is apparent from the reports of the British Consuls. The latest Report from Korea, published in 1911, states: The main feature revealed by a study of the figures is the headway made in 1910 by Japanese, as compared with British, goods. Thus the total imports of coarse sheeting and grey shirtings increased by £93,000 entirely accounted for by Japanese imports-while British goods declined slightly. In the Consular Report for 1910 on Newchang we read: My predecessor called attention in his report for 1909 to the pressure of Japanese competition, and the returns for 1910 bear eloquent testimony to the pertinency of his remarks. While Japanese articles have increased in almost every line, those of British and American origin have been imported in reduced quantities and values. Thus we have Japanese grey shirtings, 14,501 pieces, in place of 9700 pieces in 1909 and 1800 in 1908, while American shirtings have fallen from 153,331 to 137,005 pieces, though at an advanced price, and British from 112,370 to 85,850 pieces. Japanese sheetings were 151,400 pieces in 1908, 185,585 pieces in 1909, and 244,544 pieces in 1910; American sheetings were 601,541 pieces in 1909, but only 325,590 pieces in 1910. British sheetings were 26,115 pieces in 1909 and 11,350 pieces in 1910. In drills a similar phenomenon is observable. Many similar reports from British Consuls might be quoted which show that the Japanese cotton manufacturers are ousting the British from the Chinese markets. What is the reason of Japan's success? The answer is supplied by Mr. H. H. Fox, the Acting Commercial Attaché to His Majesty's Legation at Pekin. He wrote in his Report on China for the year 1910: The two outstanding features in the trade of cotton piece goods in 1910 are the serious shrinkage in the imports of British and American plain fabrics, largely due to the high prices prevailing for American cotton and the increased import of Japanese cotton goods, which could be laid down in China at prices ranging from 25 per cent. to 40 per cent. less than Manchester goods. The decline is most marked in the case of British shirtings, which decreased by some 2,000,000 pieces, white sheetings 2,000,000 pieces, and American sheetings and drills 2,400,000 pieces, a total decline in plain staples of 6,000,000 pieces. Continuing, the Consul gives a table showing that between 1909 and 1910 the importation of British cottons into China decreased by 4,180,322 pieces, whilst the importation of Japanese cotton goods into China has, during the same period, increased by 993,666 pieces. If the Japanese can, as the Commercial Attaché reports, lay down their piece goods in China'at prices ranging from 25 per cent. to 40 per cent. less than Manchester goods,' British competition is, of course, quite useless and futile. It is merely a question of time when Japan will have the monopoly of the Chinese market not only in cotton yarn but also in cotton cloth. So far, Japan has concentrated her efforts upon manufacturing for the home market and exporting goods to China, Korea, and Manchuria, which are nearest to her shores. Hitherto, she has sent only a few things to India, but in India also her sales are increasing at an ominous rate, as has been shown in the foregoing. In 1903 she sent cotton towels to India to the value of 18,167 yen. In 1910 she had increased these exports to 349,345 yen. Japan's exports of cotton underclothing to India have increased from 455,758 yen in 1903 to 4,390,491 yen in 1910. British India is the most important foreign market of the British cotton industry. If Japan can lay down her cottons in China ‘at prices ranging from 25 per cent. to 40 per cent. less than Manchester goods,' and thus make British competition hopeless and futile, she can presumably also sell her cottons at prices ranging from 25 per cent. to 40 per cent. less than Manchester goods in India. Under free competition it is only a question of time when Japan will have a monopoly of the Indian market similar to that which she is creating for herself in the Chinese markets. At present the Japanese cotton industry is expanding so rapidly that it seems likely that Japan will swamp India with her cottons before long. Lancashire has lost the Japanese market. It will probably lose the Chinese market within a few years, and it will eventually lose the Indian market as well unless the Indian market is reserved to Lancashire under a system of Imperial preferences. That is its only hope. Lancashire can compensate itself for the probable loss of the Chinese market by preferential arrangements for her cottons not only with India but with all the other British dominions and colonies, which, with their rapidly growing population, are bound to be ever more valuable customers. Tariff Reform would benefit Lancashire not only in the foreign markets but also, and most particularly, in the British home market. It is obvious that Tariff Reform, by raising British wages, will greatly increase the purchasing power of the British population, and with it the demand for cotton goods. The enormous and scarcely suspected possibilities of the British home market as a consumer of cotton goods can most clearly be expressed in two lines as follows: Home trade in cottons in United States in 1909 120,000,000 20,000,000 |