SHALL WE LOSE OUR MARKETS?

Evening Star, Issue 17700, 29 June 1921, Page 3

SHALL WE LOSE OUR MARKETS?

AVAR AND TRADE.

THE LESSON OF THE 'SEVENTIES. The effect of the Franco-German_ War on commerce in Britain, with particular reference to the shipping industry, is the subject of an interesting interview with Sir F. N. Henderson, chairman of Messrs D. and W. Henderson and Co., Ltd., shipbuilders, Glasgow, which appeared in ‘ Shipbuilding and Shipping Record.’ The trend of business which followed that war is shown to afford an instructive analogy to the condition of things at the present time. . The events leading up to the FrancoGerman War (said Sir Ferederick Hender son) had an unsettling effect on European business, but once the issues had been decided this country entered on a period of almost unprecedented prosperity. Between 1870 and 1873 business steadily improved, the wages, the cost of living and prices followed one another in a mad competitive rush just as they have done during the last six years. "Tho earnings of : tho workers increased by 40 per cent., 50 i per cent., and 60 per cent. Coal rose until ] it was 40s a ton in London—a high price ' for those times—and in the mining districts colliers were able to earn as much as £1 per day. Labor became restive, wages increased, and output decreased. Tho increase in wages and materials increased tho cost of building ships. Those, yon must remember, were iron ships; steel ships did not come in until about fourteen years after. The result was that even at the end of 1872 we find firms 011 tho Clyde complaining that the increase in wages and materials had greatly enhanced tho cost of building ships, and one nearly completed then was cited as an example as costing £I3OXOO, compared with £31,000 for a similar ship a short time before. j THE DEPRESSION OF 1874-80. 1 Just as during the last few years the price of bunker coal rose to almost prohibitive figures, so in 1873 shipowners were complaining that owing to the high cost of bunkers “ all their profits were - going up the ships’ funnels.’ Tho year 1874" opened with trade apparently just as brisk as in the preceding year, but a slump sot in with great suddenness, and prices fell rapidly. Pig-iron dropped from 117 s 6d to 87s 6d, rails from £lO 10s to £7. North Staffs Crown iron from £l2 to £9 ss, and plates from £ls until eventually they touched £5. Coal, ’however, continued at a relatively high level, greatly hampering trade. The effect of tho slump was pretty much the same then as now. Tho freights ruling were not sufficient to make vessels a commercial proposition owing to the high building costs. Wages and commodities had to bow to the inevitable economic laws. Wheat, which had risen from 46s 2d in i 1859 to 64s 2d in 1373, realised only 46s Id at the end of the 1874 harvest. Wages : dropped until they were within 15 per cent, of the rates paid in 1868 and 1869, while numerous strikes and lock-outs throughout resulted in tho loss of some good foreign markets. If you look at the trade figures of that period you will see that the' curve of prosperity, when it did reach its peak, drooped very suddenly, and it continued to fall until about 1880, and to a point much below the normal period before the Franco-German War. The curve of., prosperity during the last six years has had a much higher peak. Is is falling very rapidly now. and it seems to mo that if left to the chance of economic laws the curve will drop relatively even faster than during the slump of 1874, and if unchecked .will lend to terrible suffering and untold misery. It will mean passing through industrial depression worse than at any time preceding 1914, and for a longer period than the spell of years subsequent to 1875. THE SOLUTION. The country will avoid getting into depths of despair as during the industrial crisis of 1874 to 1830 if the lessons of that period are realised in time. The slump con ba checked by employers and workmen avoiding the industrial disturbances which proved so disastrous then. Tn shipbuilding this is the more necessary. In those days we know nothing of German competition, nor were we menaced from the United States, Holland, Italy, and Japan. To-day if there are going to bo industrial upheavals the recovery of our industry may ho permanently and disastrously prejudiced, Tho only solution is to reduce all costs to a level which will permit all orders already placed to be completed, or oven to a level which will encourage shipowners, British or foreign, to place orders for more tonnage and to send their ships for repairs to British yards instead of to the Continent. Employers will need to accept a fall in profits, or even an abandonment of profits as in the seventies, and if workmen will at the same time accept the lesson of that period and agree to a fall in wages rather than fight for the shadow of the better times (therefore losing even the lessened substance), some check may be applied almost immediately to the complete depression which will otherwise swamp the country.