LANCASHIRE’S COTTON

Greymouth Evening Star, 1 September 1934, Page 10

LANCASHIRE’S COTTON

FIGHT BACK TO BETTER TIMES. “A hundred years represents only a slice —if the most important slice — of the history of the Lancashire cotton industry. If we take the usual date and assume that Lancashire began to manufacture cotton gopds about 1600, we can say that up to 20 years ago that history was one bf continuous expansion,” wrote a correspondent in the “Manchester Guardian Commercial” recently. But although the rise of the cotton industry has called forth more panegyrics than, perhaps, any other great industry, its history is none the less rich in material for the student of industrial pessimism. Lancashire has always been productive in Jeremiahs. Everything that is said to-day about trade depression has been said a hundred times in the past, and with equal certainty that the end of all things was at hand.

Cotton in 1834 filled a place in world economy it does not now occupy. Cot ton goods were nearly one-half of British exports; cotton was the (bird largest industry in the country (after agriculture and building); cotton was the only industry that approached complete factory organisation. If the problems of cotv on supply were much the same as those of today those of exports were vastly diiferent. The potentialities of the industry were, however; only dimly apprehended in 1834. Fea ’s of foreign rivalry were strong. France, Switzerland, Germany, Austria, and Italy were all making a beginning in developing their domestic industries, and were imagined to be more dangerous than they were. The Manchester Chamber of Commerce in a memorial to the Treasury in 1833 was protesting that "we cannot maintain our footing in their markets unless we meet them on such terms as will prevent them from investing their capital in buildings and machinery.” The United States industry was also growing, and there was alarm at the interference of American competition in South American markets, and even in the Mediterranean.

• These "fears were never far absent. Piece-goods exports trebled between 1830 and 18.50, but even then there was headshaking whether this could last and whether Lancashire had not reached her zenith. Although confidence in the superior skill and enterprise of British manufacturers and operatives, and 'in the never failing ingenuity of British inventors and mechanics was'strong, even such an optimist' as James Mac Cull MacCiiilocii was moved to say in 1854 that “tlie abuses’ even of such ’ a business must ’be" cautiously dealt with lest in eradicating'them we shake or disorder the whole fabric.” What he was thinking Of was the eradication of the abuse of child labour! On. such slender threads was British industrial supremacy supposed to hang.

ENORMOUS EXPANSION. But 1850 was soon surpassed. In the next ten years piece-goods exports doubled again, and. in spite of the setback of the cotton famine and the depression of the seventies had risen by a further 60 per cent, of the consumption of cotton goods in India, was supplying 58 per cent, in 1880. In the interval there had also been something like a second mechanical revolution. Between 1885 and 1914 the number

of spindles in Great Britain increased by 43 per cent.—from 41,300,000 to 59,300,000 —and of that increase nearly three-fourths'took place between 1905 and 1914. At the same time there was a large increase in the number of looms, which in the nine years before the war rose from 652,166 to 805,452, bu.t right up to the war it was hard to say with confidence—though there were many to say it—that the turningpoint had come. Yarn exports had fallen to below the volume of the ’eighties, but piece-goods exports had been rising to new “records.” With exports of 7,0.75,000,000 yards in 1913, the cotton trade reached its zenith. Even had there been no war in 1914 Lancashire would have had a difficult struggle to maintain securely this enormous volume of trade—7o per cent, of the world’s export of cotton goods—for in the 12 years before 1914 the Lancashire industry had expanded roughly by a quarter. The expansion in exports was, in the main, in the East and in the cheaper finished goods. It was on this bulk trade in cheap standardised goods that the depression made itself felt most acutely. The war tipped the balance against Lancashire, and the forces that it loosest have done the rest. The interruption of trade during hostilities gave Japan time to establish herself in the- East, gave the United States play in South American markets, and gave a stimulus to the growth of cotton industries countries which hitherto had been content to rely mainly on Lancashire. The immediate post-war years were no more favourable. Lancashire’s costs were'kept up'; the age of high tariffs and nationalist feelings set in; disturban'ces in China and political events iii India worked against Lancashire goods; cotton (like coal) suffered from the economic consequences of Mr Churchill and the premature return to the gold standard; the rise of rayon and of the fashion for knitted goods brought formidable rivals' and substitutes; and, more general, Lancashire’s customers among the producers of the great peasant agricultural countries of the world suffered from reduced purchasing power. Yet at the same time the cotton industry everywhere was heading for a crisis of over-production and surplus capacity. Lancashire contributed little to ...the- -increase from 142,000,000 to 165,000,000, which took place in the world’s spindleage between 1913 and 1928, but it intensified the competition against her.

HI’GH HOPES FOR THE FUTURE. The rejsul.t was that Lancashire lost, even in the years before the world slump set in in 1930, most of the gains of the great decade before the war. India, China and the Near and Middle East took 61 per cent, of her exports before the war; they accounted for 77 per cent, of the loss up to 1928. The position was better maintained in Europe, in the Dominion markets, and in West Africa. The total piece-goods export, which had been 6,483,000,000 yards in 1909-13, became 3,968,000,000 in 1928 (the best of the last six years) and 2,116,000,000 in 1933. The intensity of the slump can be judged by the collapse of exports to India and China in 1933 to less than a third ■ of the 1928 figures, and •of those to "the rest of the Far East t.o a quarter. The present volume of export trade is less than a third of what it was just before the war. Production as a whole has fallen by 60 per cent.

The black picture of the last few years hardly justifies more-than the

hope that if Lancashire can find steady ■work for 70 per cent.’ of her pre-war plant she .will be doing evtremely well" Many would' put the figure much lower even as an object to be aimed at and .allowing for a great deal of automatic recovery when the slump ends. By a painful process of elimination Lancashire is adjusting her capacity to reduced demand. Nor, in the lojg run, need we regret that slowly the balance is being struck. What ever hopes may be cherished for the future of the industry, and in spit of everything they may be put pretty high, the great gains of the early years of the century must be written off.