The Parlous State of the Cotton Trade TT is a
relief to know that our great cotton industry may yet escape the crowning disaster of a lock-out or a strike. The employers have discarded the ultimatum for longer hours and lower wages that they were recom- mended to issue and are now discussing the whole situation in a reasonable fashion with the leaders of the operatives. To all sober men outside the industry, and to many within it, nothing is more obvious than that longer hours and lower wages would not solve Lancashire's problem but would merely aggravate the difficulty. Lancashire is competing in the manufacture of coarse cloths with the cheap labour of Bombay, Osaka and Shanghai ; it cannot reduce its wage-standards to the Asiatic level, and it would be well advised not to try. Precisely similar troubles are being experienced in America. The New England mills, employing well-paid operatives and working under tolerably good factory laws, are suffering acutely from the competition of Southern mills, whose operatives work very long hours for half the New England wages and have little or no protection from the State. Some of the Northern mill-owners want to reduce their workpeople to the Southern level, but it is generally recognized by their wiser colleagues that the remedy would be worse than the disease. Lancashire assuredly will not find salvation by depressing the wages and standards of her skilled workers. They have suffered enough already by working half-time for years.
There is much truth in the operatives' retort that it is for the mill-owners to put their houses in order before asking for large concessions from their employers. Unquestionably Lancashire's troubles are partly—but not wholly—due to the " frenzied finance " of the boom years following the War, when many mills were recapitalized at grotesquely inflated amounts, as if the boom were going to last for ever. Furthermore, the traditional practice of depending upon loans and bank overdrafts for working capital, which might work well enough in prosperous times, has brought many small spinning companies near to disaster, after a long spell of bad trade. Again, the highly individualistic temper of Lancashire men has forced the spinners in particular to go on com- peting desperately with one another and cutting prices to below cost, rather than see their machinery stand idle for a time. Whereas the finishing sections of the trade by combination in one form or another have contrived to make profits, the primary producers—the spinners—have con- tinued to fight one another until all those using American cotton are in a bad way. The facts are well known to the operatives, and they ask very pertinently when and how the manufacturers propose to remedy these evils.
But the main cause of Lancashire's sorrows is to be found, not in the mistakes of either employers or employed, but in the changed conditions of the world's cotton trade. For a generation past our machine-makers have been supplying the world with the best spinning and weaving machinery, and new cotton industries have sprung up everywhere, especially in India and the Far East, which were once Lancashire's principal markets. Lancashire's competitors cannot yet vie with her in the production of finer cloths, but they can turn out the coarse stuff needed by the Orient just as well as she can and at a lower price. It is high time to realize the truth long indicated by official returns—that Lancashire has definitely lost much of this cheaper trade and cannot hope to recover it on any terms. On the other hand, there is equally good reason to believe that Lancashire's superiority in the better-class trade was never greater than now. The comparative prosperity of the fine spinners, who use Egyptian cotton, is well marked even in these bad times, and accounts for the divided counsels in the employers' organization.
The facts thus briefly stated point to the solution. The spinning industry will have sooner or later to adjust itself to the changed demand. It will have to neglect the manufacture of coarse yarns and concentrate on the production of finer qualities. Further, it will have to undergo a drastic reorganization, both financial and technical. Mr. W. Ewart Shepherd, of the District Bank, put the case plainly in an address to the British Association of Textile Managers in Manchester last Saturday, when he said that " Production has got to be reduced, and reduced production can only be economically carried out, if it is to be of long standing, by the elimina- tion of a certain number of units, and these units must be the least economic producers." That is to say, the weaker companies, whose frantic competition has brought prices lower and lower till many of them are losing money on every order they take, must disappear or be amalgamated with stronger concerns. In the finishing sections of the trade this process has been carried far, with good results. The calico-printing industry, for example, was almost bankrupt a generation ago ; it was taken in hand by some enterprising men, who formed a combine, closed the less efficient works and developed the rest, under a central management, with the result that the industry in time completely recovered. The method, on a smaller or larger scale, will have to be applied to the cotton mills, and if it is wisely conducted the industry and the nation will benefit. The alternative is to prolong the agony and let one mill after another go bankrupt, while the mad competition for orders at ruinously low prices continues and tens of thousands of skilled men and women have to work half-time and at half-pay. We have sufficient confidence in the courage and enterprise of Lancashire to believe that her leaders will choose the better way of setting the cotton industry on its feet again.
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