THE COTTON-STRTKF. CONTROVERSY. T HE general public are beginning to have
some materials for judging the merits of the controversy as to the ten- per-cent. reduction of wages amongst the cotton operatives.
Messrs. Whalley and Birtwistle, on the part of the Weavers' Unions of Blackburn and East Lancashire, published in Monday's Times a most able statement of their case for resisting the proposed reduction, so long as it remained the only step taken by the masters in the present crisis. To this mani- festo Mr. Rawlinson replied in Thursday's Times on behalf of the masters, in a statement not quite so well expressed as that to which it was the reply, nor quite so free from elements of temper, but still, on the whole, both vigorous and instructive.
And Messrs. Whalley and Birtwistle gave their rejoinder with great temper and ability in Friday's Times. Be- sides these statements of the main case on each side, there have been various contributions of considerable moment to the elucidation of the controversy from private hands, so that outsiders have at least something like the means of judging how the case really stands. We will summarise its elements as best we can, and thus give our impression of the rival recipes of the Employers and the Employed.
In the first place, both parties admit and even maintain that some remedy for the rapidly falling and in many places annihilated profits of the Cotton manufacture is needed, and only differ as to what that remedy should be. The operatives themselves, who, of course, have no temptation to exaggerate this side of the case, assert, that in one description of cotton goods (India shirtings) you can easily buy for 6s. 6d. what no man can produce under the cost of 7s. ld. ; that in another class (jacconets), you can buy for half-a-crown what no one can make under 2s. 8d. ; and that " a firm with only 500 looms on either of these articles is losing at the rate of £60 sterling a week." That is frankly admitted enough. But the weavers go on to say that the ten-per-cent. reduction of wages is no remedy for such losses. It would not, they say, save more than a fourth of the loss, and even that fourth the Em- ployers would not gain by the reduction of wages alone, for they would have to sacrifice it, in the destructive competition for a market, to the consumer. The weavers maintain that the real mischief is an enormous over-supply, and that the proper remedy is, in part, short time, in part a reduction of wages, to which they are quite ready to consent so long as short time lasts. In general, they appear willing to take a five-per-cent. reduction of wages with a reduction of time to five days in the week, or a ten-per-cent. reduction with a reduction of time to four days, on condition, however, that when full time is resumed, full wages shall be resumed too. Their central idea is that the main mischief is over-supply, as compared with the greatly diminished existing demand,—a demand curtailed by many causes, especially the famines in China and India, and the losses of capital by foreign loans in England,—but that whatever case there is for a reduction of wages while the rate of profit is so bad, there is the same case, or even a stronger case, for the reduction of supply, since the chief reason of the loss of profit is, in their opinion, markets greatly overstocked relatively to the power of the consumer. On the other hand, the employers deny this. They point to facts indicating that part of the loss of profit is due to the successful competition of other manufacturers, working either at a lower cost of production, or under protective tariffs, or both ; and they maintain that considering, first, that all short- time working necessarily raises the cost of production, since all their fixed expenses, such as that of rent and interest on fixed capital, remain the same, while the returns are diminished ; and next, that the proposal of the operatives excludes any idea of a diminished cost of production at all, since it insists on a return to full wages as soon as the return to full work takes place, the remedy proposed is a futile one. One of the correspondents of Thursday's Times, " A Merchant," goes so far as to say that the American cotton goods imported into the English market have not been sold here at a loss at all, or at all events not at any greater loss than our own recent cotton exports have been sold at ; and he declares that " the rate of wages now paid for weaving at Fall River or in Rhode Island, taking into account the reduction submitted to this month without a strike, is fully twenty-five per cent. less than that paid in Lancashire." We conclude that "A Merchant" is speaking here rather of money-wages than of real wages. In Rhode Island at the present time twenty-five per cent. less money-wages than in Lancashire would mean, we conclude, nothing like the same reduction on the real means of living ; but even allowing for this, the statement is one which, if true, has a most important bearing on the issue. The statement, however, is denied entirely by the weavers. And yet what seems to show that the masters are not quite mistaken in supposing that the successful competition of other fields of production is one main cause of the present reduction of profit in the Eng- lish cotton factories is this,—that while of the American cotton crop of 1871, the mills of Great Britain are said to have taken decidedly over one-half ; of the greatly-increased American cotton crop of 1876 the mills of Great Britain took very considerably less than a half,—the surplus having been manufactured either in America or in some other competing field of manufacture. Now, as the American protective system had been at work long before 1871, and we are not aware that any other State has increased its protective duties since then, this implies that either the United States or some other field of manufacture has gained upon us through some other cause than the protective tariff. Of course, if the American manu- factures could not be sold in this country, except at a great loss, any gain off their part might be due solely to the gradually produced effect of the protective tariff of the United States. But if " A Merchant " is right in asserting that the American cotton goods have been sold without loss, or without any greater loss than our own exported goods, in this country, then clearly it is partly owing to genuine American advantages in the competition, that the loss of profit in the English manu- facture is due. Messrs. Whalley and Birtwistle certainly do not dwell sufficiently on this side of the case even in their rejoinder. On the whole, it seems to be very clear,—first, that the temporary mischief is owing to the continuance of an unabated supply to a market of which the demanding power has fallen off greatly,—in China and India through famines, in Europe through the great losses on bad foreign loans ; and next, that there may be a certain element of more permanent mischief due to the successful competition of other fields of industry,— no doubt in general protected industries,—with England.
Now, so far as the first causes are concerned, we must say that the weavers' remedy for them,—short hours, accompanied by a temporary reduction of wages so long as these short hours last,—seems the right one, and, indeed, much better than the masters' remedy of diminished wages without any reduction of the supply at all. The short supply would involve a diminished demand for raw cotton, and hence a diminished price for raw cotton, as well as tending to increase the price of goods of which the supply was thus diminished. And though it is quite true that the outlay in rent and fixed capital would be greater in proportion with short work than with full work, yet the fall in the price of raw cotton would, to some extent, com- pensate this outlay. At all events, with such enormous sources of disturbance as great famines in the East, and a great loss of capital in Europe, a diminution of supply seems a reasonable and natural step to take ; nor can we quite understand how the employers of labour can expect to work full time at pre- sent—even with a reduction in the rate of wages—without greatly delaying the return to something like equality between the demand and the supply. On the other hand, we must say that we think the weavers obviously wrong in assuming, as they do assume, that when- ever a return to full time may be warranted, a return to the recent rate of wages must necessarily be also warranted. We see that this impression goes so deep with some of them, that in some places the hands have refused an offer of their own terms,—a ten-per-cent. reduction of wages, concur- rently with reducing the days of labour to four in the week,—because the employers would not promise to return to full wages whenever they might deem it right and safe to return to full time. Now, it seems pretty clear to us, —even apart from the assumption of the disputed facts as to the American competition,—that with an impoverished world of consumers, impoverished not only in Europe, but in the East, it might well happen that the demand would recover its elasticity at an unchanged or somewhat reduced cost of production, before it could recover its elasticity at an increased cost of production. By their own admission the weavers con- cede that at the late rates of wages, considerably higher prices than the present are needed to give the manufacturers any profit at all. Consequently, if the late rate of wages is to be restored whenever full time is resumed, it must be either at a renewed loss to the manufacturer, or at an advance of price on recent prices to the consumer. The weavers concede that the manufacturers cannot be expected to work without a profit, hence they cannot desire the former alternative. But they cannot hope for the latter till the consumers are themselves again as prosperous as they were before the recent famines in the East, and the recent loss of capital in the West. Before that time arrives, however, the demand at the recent price, or a somewhat reduced price, might clearly be sufficient to justify full-time work. And it seems arbitrary and unreasonable to insist that the English manufacturer must work short time not only till the demand at recent prices is as keen as formerly, but till it becomes as keen as formerly at prices above those of the last year. Without any assumption of doubtful facts, it stands to reason that the manufacturer may be able to work full time without over- supplying the market, at a ten-per-cent. lower rate of wages, when he could not do the same without over-supplying the market with wages ten per cent. higher. But the case is still stronger if, as some of our informants assert, the American manufacturers are really supplying the market, with profit or even without loss to themselves, at a price below that at which the English can manufacture the same article,—if it be true, in short, that American weavers are working at 25 per cent. lower (money) wages than the English weavers. If that be so, then part of the reason why the demand has fallen off, is that other countries are manufacturing at a lower cost than we are, and it is obviously possible that we might recover that portion of the demand which they have wrested from us, if we could reduce by any means in our power the cost of production to what it is in those other fields of industry. And even if the facts on which this argument rests, be somewhat doubtful, their very doubtfulness should render the operative weavers unwilling to pledge the employers to an engagement which can only be sound on the assumption that there are no such facts at all, that the
alleged facts are all moonshine. On the whole, then, we hold the view taken of the crisis by the opera- tive weavers to be the wiser and sounder of the two,—but that they make a very serious mistake in wish- ing to pledge the employers to return to the old rate of wages as soon as they return to full hours of work. The latter course may very well be justified before the former course could possibly be justified ; and if it be so, it is a blunder, no less in the interests of the weavers themselves than in that of their employers, to insist on making the one course conditional upon the other.
Previous page
