THE RAPID RISE OF JAPAN’S COTTON TEXTILE INDUSTRY.

Star (Christchurch), Volume LXVI, Issue 20509, 10 January 1935, Page 8

THE RAPID RISE OF JAPAN’S COTTON TEXTILE INDUSTRY.

To-day’s Special Article

The Concentration of Business In Hands of a Few Combines.

By

Curtis Vinson

Japan's ascendancy in the cotton textile world has not come about as a result of fortuitous circumstances, luck or accident.

It is true that certain conditions for which the empire’s in J dustry itself is not responsible have aided the advance materially, among them the nearness of Japan to Far Eastern and other markets and the depreciation of the yen. Japanese cotton merchants and spinners naturally have made the most of such conditions. But the basic causes of Osaka’s challenge to Manchester go deeper than that.

'J'HESE FUNDAMENTAL FACTORS are found in the organisation of the industry, its sound financial condition, its unity and its abilitv to meet competition in world markets. They reflect in a telling way the high degree of efficiency the Japanese have attained in industry and commerce. And further progress is indicated in the programme outlined by merchants and spinners interviewed by this writer and as observed generally in the mills visited. New machinery is being installed, mechanical operation simplified in the interest of lower production costs, trade alignments strengthened. There is probably no industry in Japan more thoroughly organised than the cotton textile industry. Of the 69 spinning and weaving companies in the empire, 61 are members of the Japan Cotton Spinners’ Association, and about 98 per cent of the output of the entire industry is represented in the production of these member mills. The spinners’ association has absolute control of production, which is kept well in line with anticipated demand. Financially, the industry is sound. For some time the practice of setting aside large cash reserves against emergency has been followed. These cash reserves to-day for the entire industry aggregate about 65 per cent of the total paid-up capital, being 255,000.000 yen, against paid-up capital of 403,000,000 yen. Despite this formidable transfer of profit to cash reserves, the average dividend rate remains high. During 1933 it was about 11 per cent for association members. Large Units in Control. A significant feature of the Japanese industry is the concentration of business in the hands of a few large combines. Nine of the larger companies operate 148 of the 268 mills, and 5,250,000 of the 8,600,000 ring spindles in Japan. . Equally powerful concerns import the raw cotton and act as distributing agents for the output of the mills. Three of these great raw cotton buying companies, the Oriental Cotton Trading Co., the Japan Cotton Trading Co., and the Gosho Merchants Co., import 70 per cent or more of the raw cotton consumed in Japan and handle more than 50 per cent of the mill output. Close co-operation exists between the mills and the merchants. They build together. The merchants maintain branches in all parts of the world, not only to buy raw cotton but to dispose of the manufactured products. They pass on to the mills in low prices a portion of the benefits of their speculations in the raw cotton markets. The mills in turn assist in the marketing of their products. They send representatives to foreign markets to study fashions and to anticipate what goods will be most in demand. The merchants share the benefits of this market research. In addition, there is an interlocking of

interests between the mills, the merchants and other major business enterprises, such as banks, shipping companies and the like. Ruling interests in the mills and cotton companies are -in instances the guiding interests in banks and other businesses. All of which makes for advantages in service and cost production. In the operation of the mills themselves, an impressive co-ordination of effort is found. A Japanese mill as a rule is engaged in all manufacturing processes, spinning. weaving, finishing, printing and even packing. The well-defined division of labour found in the industry in some countries does not exist in Japan. This concentration of manufacturing processes under one roof or management is given emphasis by the tendency of Japanese cotton mills in recent years to add silk spinning, artificial silk manufacture, wool spinning and the like to their activities. Plants are Modernised. Highly important in the recent advance of the industry has been the programme of rationalisation, which means in the simplest terms increased efficiency. Confronted, on the outbreak of the depression, with disturbing conditions, particularly in 1930, Japanese mill owners set about the readjustment of their industry. They sought to reduce the cost of production through increased mechanical efficiency, improvement of technique and elimination of waste. Old machinery was replaced with new and better equipment. Through mechanical simplification, spinning and weaving processes were shortened in some instances and labour costs reduced. As an illustration, whereas formerly 200 girl operatives were required to handle 10,000 spindles, 70 to SO girls can now handle • that number. The Toyoda automatic loom, a Japanese invention perfected in 1926, has done much to increase efficiency. One operative can handle 50 to 60 of these looms, as compared with six ordinary looms. All told, there are about 21,000 automatic looms in Japanese mills. . Another important factor is the ability of the Japanese to blend fibres so as to obtain a quality product. Labour conditions in Japanese mills are unusually favourable. Young girls, most of them from the rural sections, make up SO per cent or more of the operatives, while female workers account ior about 90 per cent of the total. The report of the Japan Cotton Spinners’ Association for May, 1934, showed a total of 178,400 operatives in the spinning and weaving sections. Of these, approximately 155,000 were female workers. The rate of pay, in the light of Western standards, is low, the average being about one yen a day for girl operatives. But wages are relative, and the pay of the Japanese mill girl permits her to live decently and to save more than half of her income.