The Cotton Crisis.

Timaru Herald, Volume XIIC, Issue 13644, 11 July 1908, Page 3 (Supplement)

The Cotton Crisis.

WHY WORKERS' SUFFER.

(By a Special Correspondent.) , After several years of "abounding, and almost unexampled prosperity Lancanshire is once again harassed by the anxieties arising out of its peculiarly fluctuating commerce. The boom is over, the demand has. been outstriped by the supply, and it is now proposed to reduce tlie output by diminishing the working time of the mills. This is a drastic remedy for a disease which, has to some , extent been created by the eagerness of capitalists and speculators to make money, and its effects are felt with special severity' by the operatives, who must sacrifice a part- of their earnings so that capital may cut its losses. An. enormous, amount of wealth lias been accumulated by the Lancashire-cotton industry in the last three years. Dividends have leapt up to giddy heights, fortunes have been made on every hand; the county is rich beyond computation. And yet we are about to see, in sharp ironic contrast, tlie poor compelled to suffer for the hard-ships-of unemployment- and privation, in order 1 to "re'store' the balance of an industry, so .prosperous that more flhaii twenty millions of fresh capital has been invested in its development since 1905. Tlie cotton industry is peculiarly subject to these . rapid alternations of inflation and depression. AVhen the prolonged period of adversity came to a close three years ago, and the boom which inevitably followed was well marked, ♦ there began a reckless speculative rush to build new mills. The temptation laid before tlie qublic was well-nigh irresistible, for in 1906 the- average dividend of the limited companies worked out at just under 17 per cent. Last year the return was even more satisfactory arid in some cases mills have been paying as much as 30 and.. 40, per cariying sums to'' re-, serve. Though the average return over a long period/of years preceding this season of rich harvest had been little more than 3 and 3| per cent., the belief that this new-found prosperity would be pro-, longed gav : e support to the confidence which prevailed SPECULATIVE MILL-BUILDING.

New mills began to spring up in every d : rection. During 1906 no fewer than forty-eight spinning mills, with 4,750,000 spindles, began work, and last year fortyfive more, with 4.000,0C0 spindles, came into operation, while at least 80,000 new looms were laid down. On the whole, at loast ten million new spindles have been added to the already vast equipment of 46.000,000 spindles engaged in /producing cotton yarn in Lancashire.

A great part of .this extension was entered upon' not so much to meet the increased -demand as to enable promoters to take advantage of the boom in -investment. Large sums of money were made out of some of..the floatations, and it was the financial rather than the productive as-; pect of the situation which in too many cases appealed to those who initiated the companies. This is. another phase of the headlong speculation .which/is too often associated with the cotton industry. Tlie moment the demand began to decline it vi-a* evident: that a crisis must follow. With an inflated productive capacity ; far in excess of normal demand it was evident that in the fierce scramble for business margins must fade away, many mills mustbe rendered idle, and thousands of hands thrown out of employment. That is virtually what lias happened. The recent artifical development of production was largely due to the cupidity, of company promotrs, architects, builders, engineers, and machine makers, who saw the prospects of making substantial gains bv the multiplication of mills. "And, as the capital was forthcoming, the business went on ( merrily. For once, in a way, Lancashire lost its head; the penalty has to be paid, and the operatives are to be asked to pay a laree part of it. THE LOSS IN WAGES.

Of course, the Lancashire trade is not the only branch of the world-wide textile industry which is suffering just jiow. For ■several monthsy past, the ' condition of the' industry in the - United States has been very -unhealthy. The crisis in the autumn accelerated the trouble ,and "now- many mills are shut down,' 150,000 operatives have suffered reduction ' of waaes, and a 10 per "cent. , reduction was enforced at- the- beginning\.of. this month. Tn other textile manufacturing countries there -js also depression. But- in Lancashire over the development of vtheindustrv, •engineered by financial manipulators without.recrard to the real economic' necessities of the trade, has greatly complicated tlia situation.

' When tlie: position became critical in -1904, ; chiefly owing to the short crop which gave most favourable opportunities for gambling in raw cotton, employers and operatives « agreed to .meet' the diffi-* pultv by reducing the weeklyworking hours from 55£ to 40. This drastic course 110 doubt averted a crash in the industry, but it entailed severe privation on the workpeople. VMr.* Macara,: president of the -employers' federation, estimated • that this reduction entailed a loss of £IIO,OOO a week in wages.' .The operatives, he said, "are idle when they • would be working,and men,' women, and children feel. the. pinch keenly, but they have borne their sufferings - with - . commendoble ' fortitude. The cotton operatives' officials estimate that the stoppage brought about last summer by the insufficiency of the crop involved.'a loss of £2,000,000 in wages'alone, and that amount cannot be taken from the households of honest and industrious weekly wage-earners without - causing miseryto thousands." But; the la.s to the. work

people, in. allied. and: dependant trades was also estimated at £2,000,000, and, adding a similar sum. for. the deprivation of profits to the employers,.-it is-seen that such a • stoppage in a single season 'cost £6,000,000.

MORE SHpRT TIME. That was to . combat and break down organised speculation in . the raw material. At the beginning of 1904 Mr. Shackleton assured the federated employers that the: operatives could: not' go-.'.on< for .ever sacrificing:. their - savings anl - enduring pri-:

vation in order to meet these recurring emergencies. Now there is a renewed demand for organised short time, and the crisis which has/caused it has been aggravated by rash speculation in mill building, and by, the exploitation of the industry for the benefit of a few. The. spinners of American cotton have resolved to propcse a stoppage of all mills during the whole of Whit week, and on Mondays and Saturdays in the four weeks following. A ballot will have to be taken and the matter is still in abeyance; but'the leaders cannot be indifferent to the strong feeling of indignation which is manifest in regard to this proposal. The heaviest part of the "burden will fall upon the workers, who have no share in creatine the cause. It is urged in many quarters that it is monstrous to allow individuals whose chief object, is not to manufacture cotton, but to make profits out. of manufacturing cotton mills and limited companies, to over-inflate the industry, and then, when the inevitable consisnuiences of' their 1 own recklessness overtakes them to. call u.T>on the organised employers to limit, the labour because of the increased number of spindles. For fifteen vears the operatives have worked. in almost complete harmony with the employers, and in that period have made many, sacrifices to assist the industry, But it is difficult to believe that they will quietly, submit at the present moment to an: organised attempt ia sayings for the purpose of replenishing the pockets of a few heedless