Aug, 2.
Over last weekend Mr, Ramsay MacDonald suggested to the British cotton industry that its house must be putin order. Apparently he made no eonstructtive proposals, but he certainly' put his finger on one weak point when he mentioned that certain sections of the industry should not be worked more in restraint, than in the promotion of, trad as has apparently been the case hitherto, It is more than probable that in his mind was the fact that while the spinners and weavers of Lancashire have been in a deplorable condition, for some years past, the other elements in the industry responsible for the work necessary before the article comes into the hands of the consumer have been making substantial profits. In other words while the mills have generally been losing money, the bleachers, finishers and dyers have been doing a perfectly good business, and times at the expense of thes mills. We know in China that certain Lancashire cloths have been more or less forced out of the market because the three categories mentioned have not been prepared to reduce their costs to an economic level. In the palmier days they had been jin the habit of charging so much for the finishing of an article, and when competition from other sources arrived, meaning severe cuts in prices, they ignored the warning they got that if the trade were to continue they must help in meeting conditions by reducing their costs. On occasions, when they finally realized that they had made a mistake in not reducing their charges in their own interests, the particular trade had vanished. Mr. Ramsay Mac. Donald is accordingly right in his statement complaining that there is action actually in restraint of trade. Dividends, [we suppose, must be maintained, land these companies are not to Ibe expected to cut their charges voluntarily simply to help other people, but it is apparently established that cases have oclourred. where a very short. sighted policy has been pursued to their own detriment.
Mr. MacDonald, however, does not point the way to a better, state of affairs, One can image me that the formation of al huge manufacturing and selling organization somewhat on the lines of the British-American Tobacco Company might ultimo lately prove the salvation of the Lancashire cotton trade, but, were such brought into being! Inow the harm it would operate to @ number- of concerns would probably nullify the immediate] xain. Perhaps Mr. MacDonald thas in mind nationalization, un-_ less his suggested "long, strong. }pull, all together," can somehow, made to materialize. There fare, however, certain points which we see out here which fare not: unimportant as regards Lancashire's cotton trade. One calculation is that about half-a-dozen firms control forty per cent. of the British piece goods trade here, and the balance is being scrambled for by a very Jarge number of other firms or representatives. The evil resulting from this: is that, as business people sent out here must do business, they do it Jwithout adequate or even any margins, cut their prices to the lowest, and, it is to be feere deal with people whose finance and trading standing is decidedly uncertain The result is not good in a market where competition is not confined to Lancashire firms but is intensified by the presence of representatives lof Japanese manufacturers and actually of goods manufac tured in China under Japanese auspices. It is probably not too much to say that the advantages we have in the quality of the goods manufac-{tured in Lancashire are in case thrown away on account of the number of people competing against each other, for when prices go against the Chinese dealer of no standing, the mar= ket does not benefit by the presence of what is practically unwanted cargo, In fairness to the representatives of British firms here, most lof whom show decided enterprise, it must be remembered that their possibilities of competing with Japanese are necessarily limited. The Japanese will always have this advantage that, working in a country akin to theirs, they can establish [shops for the sale of their goods in small towns where the business would not support a European salesman, and Japanesq, peddlers can work outlying vil-Inges. This is obviously impossible for the British merchant, who has of necessity to make his Chinese dealer in the Treaty Ports the medium through which he reaches similar markets, There is a belief, also, that a certain amount of cooperation among Japanese firms in regard to sales has been brought about in a manner }which has not been achieved by others, this in the nature of trade information, probably a black list of undesirable dealers, lout not very much more, In the state of affairs at present prevailing it is not too easy to see how this could be worked in other circles. But we have to face the fact that with the advantages the Japanese have—ability to send small dealers into the country to sell their wares, lower freight rates for their cargo, and, of the first importance, cheaper rates for finishing a cloth once it has left the factory—it is necessary that a better organization should be evolved in the English cotton trade. We have not attempt-to deal with the Home end this problem, but a weakness apparent out here has been me leated. It is by no means a new one, but it is one of those matters which may well be considered if Mr. Ramsay Mac-Donald succeeds in persuading Lancashire to adopt a comprehensive scheme for putting her house in order.
Text read from the printed page and cleaned; old type leaves the occasional error.