ECONOMY AND TRADE.

Thames Star, Volume X, Issue 3129, 27 February 1879, Page 1

ECONOMY AND TRADE.

I The following Paper was read by Mr David Cbadwich, at the Social Setenee Congress, at Cheltenham:— \ It would be very easy in a general way Mr Chadwioh said, to answer the first part of the inquiry—as to the causes of the present depressed state of trade—by simply replying "over production." If that was the true general answer, it might be interesting to inquire into the causes which had. led to over-production in so many trajjes. The staple trades of cotton coal, irom, and steel might be taken as fair examples, deferring to the increase in the production of coal and iron and the values during the "past ten years, Mr Chad wick oon tended that the increase in the price of coal for manufacturing purposes, principally for iron-making, was caused as follows:—The coalowners could not increase their output with sufficient rapidity to meet the 'orders, and they consequently advanced the price at the renewal of every contract from 12s 6d per ton to 32s 6d in 1873. It was reduced to 9s. in 1877. Bar iron advanced from £6 10s in 1870 to £15 in 1873, and in October, 1878, is down to &5 ,105; and Cleveland pig iron, which in 1873 was selling at £5 15a, was now sold at £1 17b/ Other descriptions of iron as 1 well as steel and other metals and nearly every other production, had advanced and fallen in nearly the same proportion. South Staffordshire common pig reached £6 in 1816, fell to £2 5s in 1852, rose to £6 10a in 1872, and in October, 1878, ia £2, the lowest price for 40 years. Coal in quantity increased in four years—lß6B' to 1872—from 403 to 123 million tons; and in, value at the pits mouth from 25f ta 46 1-3 millions sterling. In five years, to 1877, the quantity increased <o 134 million .(tons, but the value at the pit was only 47 1-10 millions sterling. Iron in quantity increased in four years—lß6B to 1872—from 4,970,000 tons to 6,740,000 tons, and in value from 12 1-3 millions! sterling to 18} millions sterling. JBut in the five years to 1877 the /quantity ;decreased to 6,608,000 tons, and the value to 16 1-5 millions sterling, or a redaction in value 2 1-3 milliooa sterling. The prosperity of 1871 and 1872 had upon the cotton trade a very similar effect to that which had been shown to have been produced in the case of coal and iron. The official returns showed the total quantity of raw cotton imported exclusive of that im-ported-to^be in! 1868, 1,006,000,0001b.; in 1871, 1.410.000,00011).; in 1877, i,lßs^)6;oOt)ib.; showing in increase of 410,000,0001b. in the four years 1868 to-1871,-and a decrease of 231,000,0001b. in? the six years to 1877. Borne of the causes of the inflation of 1872 3 might be generally stated to have arisen from:—l. The increased iome and foreign demand for English products arising frpmr *he ordinary increase of population arid from the good crops generally at home.and abroad. 2. The extraordinary stimulus rgwen to, the foreign and colonial.trade by the large amount of foreign and other loans. 3. The improvements in the manufactures of iron and steel and the abundance of capital available Ike home and foreign and colonial railways ,&ui other works. 4. The demand for coal, *Jid especially for iron-making, .overtook the supply, and the increased iprice for <coal was at once extended to iron and steel, and affected cotton and etherMma.n.ufaeiures. .5. The profits of ««ery(ifade and the rate of wages in every occupation for 18 months received an extraordinary advance, following and in some-cases exceeding the advance in coal, And varying from 50 to 150 per cent. 8. The introduction of. a.-..larjgd amount of capital into trading concerns by the facilities afforded for the,establishment of jointstock companies, an<J by. the systemadopted at Oldhani and other places of building xjnd working mills by borrowing the 4#eater portion of the .capital, on loan, lib® depression in trade which ensued •aftqr .1873, and" which has increased yearly *»'!' t^xo present comparative l»araly^^ 1878, might belted to be due to—it: 3F% llii'ee ! harvests which Mr Cairdest«&*l£dhad caused a loss of 87| miUibns Bterliui. ,2. Famine in India and 8 China arid 'Wi jfyl iv I prices, and consequent, unprofitaWe trade with thpsa • countries. 8. Foreign competition, especially; by,, tbei United States, and the heavy .protective, : duties that M lu try had_put on cotton, silk, and •c> ..■ \»n. goods, and on.' iron, steel, and woolie. nufaetures 4. The almost other tnu, * the domaud fnrthe Usiited absolute loss o. . »nmoneridescriptions of States for all the co.r- *«»d»r««arpets\ and cotton and woollen g^ * *he Atnericon silks, and the entire loss ot . :""noes, and trade for rnilway rails and appiu. "«»oa for the greater portion i< ofutheo.pui descriptions of steel. 5. the diminisheu demand of India for English cotton, cloth, and yarn, and for Woollen and jute gobds I by the erection of mills in India.' 6. bperiing out of a large number of ne?ir coalpits) the erection ,o,f new and |he. extension of old iroii;works, the competition of nevr c6tton and other mills, mainly by joint : stdck and ooioperatire cdmpanies in Oldham and other townsr ""7. The fear arising from the possibility of the war between Kussia and Turkey involving England and.other European countries. 8. The yearly increasing expenditure by the Government and of the people generally in luxuries. 9. The large amounts unsafely and nnprofltably expended in loroic;n loans, and- in joint -stock com-i-anies, anil the undue Vaciliti««- afforded by banks to large mercantile firms. 10. The recurrent of that-decennial cycle of bad trade, which Professor Jevons stated had gone on for 150 years. As remedies for the gradual removal 1 of the present depression he ventured to submit the following:—L Greater economy in national and local expenditure ; greater economy in tho rtse of luxuries and in the general cost of liviDg; and a great reduction hv the enormous expenditure—estimated at 153 millions sterling- per annum —in intoxicating

liquors. 2. By reduction generally in the coat of production, by the use of improved machinery and appliances, by further economies in the cost of labour and materials, and by the stopping of the unwise proclivity for erecting new works, and for continually increasing the productive power of. old works. 3. By the removal of all restrictions to the freedom of trade and commerce in India and with our own colonies, and as far as possible, by commercial treaties or otherwise, with all foreign countries. 4. The security of peace, aB far as practicable, with all the world ; the speedy removal of the commercial excite* xnent and fear caused by the still unsettled state of the countries affected by the recent war between Russia and Turkey; and a speedy peaceful and permanent settlement, if possible, of the differences existing between India and Afghanistan. 5. The natural and gradual action of time, as iv all previous cycles of bad trade, and by cheapness and quality securing our due share in providing the implements and clothing for the annual estimated increase of 1 per cent., or 10 millions in the population of the world. 6. The stoppage or insolvency of old, weak, inefficient, or badfy managed concerns, and the operation of Darwin's rigid, but apparently inevitable law," the survival of the fittest." 7. The amendment of the law of joint-stock 'companies by placing greater restrictions and providing for full publicity on their establishment, and preventing their beginning business unless the full amount, or at least three-fourths, of the total authorized capital was subscribed, and by the compulsory appointment of a Government or other professional auditor for all joint-stock banks and other companies, corporations, and building societies, and trustees receiving or having the control of money subscribed by the public. Mr Joseph Thompson, of Manchester, considered the reduction of the expenditure in intoxicating liquors the most practicable remedy for the depression in trade.

Professor Bonamy Price expressed his strong approbation of the admirable paper of Mr Chadwick. No commercial depression was common to any nation, and its generating causes must be general also. The real cause of the calamity was overconsumption ; the destruction of more wealth than was made ; the result was a creation of poverty; fewer, thiDgs were made, and there were fewer things to exchange in trade. The discussion wts continued by Messrs Lloyd, Gillieland, Baker, Oldfield, Alsager Hill, Watheraon, Frederick Hill, Harding, White, Edwin Chadwick, C.8., George Loyd, and Bartlett.