OUTLOOK FOR TRADE

Dominion, Volume 16, Issue 89, 11 January 1923, Page 4

OUTLOOK FOR TRADE

THE “BOOM YEAR” & TO-DAY A CONTRAST The trade outlook was discussed by Mr. W. Clare Lees, president qf the Manchester Chamber of Commerce, in an address which he gave to the Insurance Institute of Manchester, states the “Guardian.” ' . Tracing the. course of trade during tho last four years, Mr. Ciare Lees said he had always maintained that the year 1920 was a boom year ot values, not of production,' and it was important to bear this in mind, because we were at present im-roaching the volume of the 1920 trade, Uiough, of course, the values would t.c on a much lower level. The volume of our total export trade in all classes of commodities as compared with LHo was only 72.8 per cent, in the ins nine months of 1920; it fell to 46.1 pci cent, in the corresponding period ot last year, and it had recovered during the first nine months of this year to 66.2 per cent. But it was quite obvious that when we did reach the IJ-U standard of production—and in the cotton trade it would probably be reached this year—that volume «as not going to give us good trade or adequate profits. We should jcqun . a much greater demand than that to pub us right. Dealing particularly with the cotton trade, Mr. Clare Lees said that in 1913 wfi exported 7075 million yards ot cotton piece goods; in 1919 3aoo million yards, and in 1920, in the nO called boom year, 4400 million yards. Thus in that period of pressing and high prices we produced icss than w per 'cent, of our pre-war production. And if advanced the pre-war pi eduction bv 1000 million yards, wgirh the reduction in hours would reduce the output bv. it still meant that in K’2o we only produced 70 per cent. of V a , we might have done. In 19-1, uluch would always remain the most disastrous year in the history of fine cotton trade, we only exported 2900 million yards, whilst in the first nine months of this year we had exported oi er 3000 million yards, so that- ny the e of the vear we should be within measurable distance of the 1920 figures.

The Raw Material Danger. He stated the case in this wav to show what a long journey we had to go before we reached full production. The result of it all was that so far as the weaving section of the trade was concerned our 1922 output would bo about 70 per cent..of the possible maximum, after allowing for a loss ot production amounting to 1000 million yards owing to the reduction in hours. We saw, then, from this review, that in 1920 the world over-reached itselt in «. financial sense: prices were so high, our customers ordered and had delivered to them goods of a value two-and-a-haK times as great as in 1913 and received 30 per cent. less in quantity for that enhanced value. There was no surplus of goods. It was inability to pav. not inability to consume that brought things to a climax. There was a good deal of that IJ2O stuff not paid for yet, and a good deal that never, would be. . From the value point of view it was interesting to note that, assuming the export of cotton piece goods was approximately the same in volume ill; 1922 it was in 1920, we should require les# than one-half the amount of money in payment for it as compered with that year. It seqmed evident, therefore, that we should sell as many packages of cotton goods in the next twelve months as the world could afford to pay for. Consumption was definitely limited by the lack of ability" to pay. In that connection the shortage of raw material which was in sight was a serious factor; it means high prices and a smaller production and' under-employment. Last year the world consumed 21 million halos of cotton, and only produced 15 millions. It might be said that wo should be able to get as much as we wanted provided we were prepared to pay for it, but he ventured to suggest that after the experiences of 1919 and 1920 merchants would be slow to stock very high-priced goods, and equally reluctant to accept orders for them from foreign buyers who so recently, in many cases, repudiated their high-priced orders when the fall in values took place. He viewed, therefore,' an era of very high prices of raw cotton as the most serious menace which-threatened our trade.

A Slower Rato of Progress. After referring to such adverse factors in the storm of last year as falling prices, the general slump in buying, and the liquidation of Government stores, Mr. Clare Lees said that this year none of them had been evident to anything like the same degree, and the markets of the world had come to the conclusion that the period of slump was over, and were prepared to trade so far as they were financially able. The result of this tendency in the right direction had been that our export trade had increased in volume to .66 per cent, of that of 1913, as against the 46 per cent, of 1921. Another point to remember was that, owing to the reduction in working hours a lower figure than that of 1913 would indicate full time, though that was not so in all cases. The steel trade, for instance, had increased its capacity to 50 per cent, more than pre-war. As to the future, was this improyeinent going to continue? If it did, and in the same ratio, our troubles would be in sight of an ending. He did not think it reasonable to expect the same acceleration of improvement as that experienced in the last- nine months. Twelve months ago we were in the very depths of tire depression. The rebound of recovery must be helped, in the first place, by the fact that the pendulum lia'd swung too far in the opposite direction. Wo had not got that factor in front of us in tho coming year; wo were on the upward swing already.: further progress would be slower. Again, who would be so hold as to suggest that the European exchanges would be established during the next twelve months, and if thev were not, how were our overseas cus-tomors-fo dispose of their surplus products which wo could not buy ? And. if they did not dispose of them, how could they increase their trade with us with Hie rapidity that wo desired ? In our own country one of tho p-rcat obstacles to our export trade fiom the point of view of volume, which was really what mattered from an omnlo" - mont. view, had boon tho fact that the relative values of tho foodstuffs and raw materials imported were so much lower than the values of our mamifacured articles, which we sent to thorn in exchange, which .resulted in t’’"' r buying less in Qiifint-ity from us. Jhe figures, however, wore now drawing nearer -together, and he looked to those relative values drawing still closer together. That was an important and favourable tendency. Ap*"”- ’T' duction in taxation had hnrdl” mad'. ftself felt vet, but it would do. and by increasing the amount of mnnev available for investment at homo and abroad, would stimulate trade and provide employment.