STANDARDS OF LIVING.

New Zealand Herald, Volume LXII, Issue 19125, 17 September 1925, Page 11

STANDARDS OF LIVING.

EASTERN COMPETITION. EFFECT ON BRITISH TRADE. V"v , v - : ' v ; ■■ ■■ No. IT. BT J. B. CONIttJFFE, Professor of Economics. Canterbury College The first effect of the export of machinery from Britain referred to in the last article, which will naturally be felt most by Britain as the Power which most depends upon world-wide trade, is heavy competition from local industry in her overseas markets. I quote the words of Mr. C. C. Batchelder, an acknowledged authority upon Eastern trade and conditions and recently United States Trade Commissioner in India. Formerly Britain supplied the cotton cloth with which the Indian masses were clothed, but. the Indians saw that the business was extremely profitable, and now the masses are clothed with the product of Indian factories and bandlooms, which use Indian raw cotton, while the British mills consume , American cotton. The increased demand for imported cotton cloth caused unemployment, in the cotton mills of Britain. As the earnings of the operatives were greatly lessened, the demand for goods made in England and elsewhere, as well as for foodstuffs, was considerably diminished. Further, Indian cotton yarn exported to China replaced that formerly sent from Great Britain, while Indian cloth was substituted in the Red Sea trade for that, which England had formerly supplied, and Japanese cloth made from Indian cotton replaced British goods in China and other places in the Orient. The final blow came when the one hundred and nineteen mills of China began to manufacture the cotton cloth which had formerly cccne from the Lancashire mills The idle operatives had to be supported by unemployment doles, the cost of which had to be borne by industry in general, and some employers figure that the expense of social welfare legislation is 20 per cent, of the cost of the goods they export. In any case these expenses, added to high taxation and the restrictions upon output imposed by the labour unions, havo raised costs of production to such an extent that Great Britain is often unable to compete," Mr. Batchelder, continuing, hints at a •further probability. "For the present, the tremendous demand of Japan, India and China will absorb the local production, but the goods of those countries are already going- to Ocaanica, Mtlaysia and Africa and may before long rotten .South America. We can almost foresee the tune when they. will be sold in Europe and America, if not prevented by high protective tariffs." TariGs and Competition. No further words are needod to point out the seriousness of tJhi3 situation for Great Britain. Local manufacturing industries catering for a domestic market in such countries as Australia and Now Zealand will of course demand further protection through the tariff, and unless the burden thus imposed upon the primary industries which must compete unaided in the competitive markets of the world proves too great the demand will probably be conceded. The raising of higher, tariff barriers is strictly comparable with immigration exclusion as a method of fightiDg the battle of standards, and, up to a point, it is likely to shelter the industries -which can vbe protected in a home market. The United States, with a high tariff wall round ite huge r domestic market and a growing sulrplus ; df capital for ifivbst&ent. l abroad ban afford to contemplate these i changes with equanimity, but Great . Britain which has no important shel- ■ fcered domestic markets and in any case i stands or falls by the prosperity of ite . great exporting industries (which cani not be protected) is in Very different , case, and the prosperity of Australia and New Zealand is bound up with that of the Motherland. Even m sheltered industries tariffs can only 'be a negative • means of putting off the threatened comi petition. Higher Standards in the East, The alternative to shrinking withjn ouruelves and erecting Chinese walls of exclyn- • ion to avoid contact with other peoples who have lower economic standards and different ways of life is to work toward measures which will raise their economic standards and bring mutual understanding. As the industrialisation of the East goes on there will be set in fores natural reactions which will automatically make for higher standards. The effect of herding the agricultural labourers of China into factories, of breaking the ties, of family and village life, of «trade unionism and mass education, ■ will, unless it is sidetracked into destructive class warfare, be, as it was in Britain in the nineteenth century, to raise economic and social standards. But China and the other Eastern countries will need all the generosity and the experience and goodwill of the West if they are not to suffer the same distress- . sag accompaniments of industrial change as characterised early nineteenth century : England There is always a strong inclination to stand upon legal rights and to ; make special pleading for existing condn ■ tion*. but it was just such lack of imagination and generosity that made Burkjj 1 plead that great empires and little - minds go ill together.'; As labour con- > ditions in Shanghai give rise to rioting and disorder it may be as well to ponder the words with which Mr. Batchelder concluded an impressive address . unou ! " the far-reaching effects of the industrialisation of the Far East. "If we do not take advantage of «er ■ m.%nv opportunities of helping intelligently our brethren of the Orient and of giving them the benefit of our experience and of personal service along economic li«5S, as well as tho.se of religion, education and sanitation, wc shall certainly suffer. Every one of us has a direct, selfish, pereonal interest in the well-being of the toiling masses of. Japan, India ana. leading to a. generous attitude toward China's national demands* and hearty co-operation with all such agencies as the International .Labour Office, which seek to bring pressure to bear for better labour conditions in backward countries, are, after all, the surest way to protect our own standards and institutions. Even the strongest walla break down in time, and the best way in the long run to keep up the level ot comfort on our sido of the wali 'is to do everything possible to raise the level on the other.