YH 01014 DOCUMEt'V^ DEPT. '^siuaA DEPARTMENTAL COMMITTEE ON THE TEXTILE TRADES. RE PORT OF THE DEPARTMENTAL COMMITTEE APPOINTED BY THE BOARD OF TRADE TO CONSIDER THE POSITION OF THE TEXTILE TRADES AFTER THK WAR. Presented to Parlinmcnt bv Command of His tT?aje$tv. LONDON: PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE. To be purchased through any Bookseller or directly from H.M. STATIONERY OFFICE at the following addresses: Impeeial House, Kingswat, London, 'VV.C.2, and 28, Abingdon Stkeet, London, S-TV.!; 37, Peteu Street, Manciiestee : 1. St. Andrew's Crescent, Cardiff; 23, Forth Street, Edinbcrgh; or from E. PONSONBY. Ltd., 116, Grafton Street, Dublin. 1918. [Cd. 9070. J Price Is. ^d. Net. GOVERNMENT PUBLICATIONS (with the undermentioned exceptions) can be purchased in the manner indicated on the first page of this wrapper. Bydrographical Publications of the Admiralty are sold by J. D. Potter, Ho, Minories, London, E. 1. Patent Office Publications are sold at the Patent Office. 25. 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Price 2d., post free 3d. Yorkshire Trades. Clothing Teades, Leeds and Huddbesfield. Leeds. — Wholesale Tailoring-; Ladies' Costume Making (Wholesale); Men's Bespoke Tailoring; Ladies' Tailoring; Dressmaking; Millinery; Boot and Shoe Trade; Laundry Work (Factory). Huddersfield. — Wholesale Tailoring. (1915.) Price 2d., post free Sd. London Trades. Clothing Teades. Paet I. — GiELS. Introduction; Distribution of the Dress Trades; General Account of the Trades; Artificial Flower Making ; Boot and Shoe Making ; Cap Making ; Corset Making ; Dress Making ; Embroidery ; Millinery; Silk Hat Making; Tailoring; Umbrella Making; Wholesale Clothing Trades; Wig Making. (1915.) Price 2d., post free 3d. Paet II. — Boys. Introduction; Distribution of the Dress Trades; Boot and Shoe Making; Silk Hat Making; Stick and Umbrella Making; Tailoring; Wig Making. (1915.) Price 2d., post free Sd. Bristol Trades for Boys and Girls. 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Abstract Tables showing Summary of Imports; Summary of British, Irish, Foreign and Colonial Expoi-ts; Classification of the above Tables ; Total Value of the Import and Export Trade of the United Kingdom ; Total Imports of Articles of Foreign and Colonial Merchandise ; Total Exports of the United Kingdom ; Foreign and Colonial Exports ; Gold and Silver Coin and Bullion, Total Value of Imports and Exports. Detailed Statements of Imports from specified countries, Free and subject to Duty, and of Dutiable Articles entered for Home Consumption. Detailed Statement of Exports of Produce and Manufactures of the United Kingdom; and of Foreign and Colonial Merchandise, Free and subject to Duty on Importation. Gold and Silver Coin and Bullion, Imports from and Exports to each Country. Index. [Cd. 8632] of Session 1917-18. Price 6^., post free 6.?. Id. Vol. II. — Abstract and Detailed Tables relating to Imports from aud Exports to each Country, and the ■Quantities (where recorded) and Value of Principal and Other Articles retained in the United Kingdom; similar Tables of Imports and Exports at each Port or Place; Amount of Customs Revenue received at each Port or Collection ; Details of the Transhipments imder Bond of certain Articles ; Account of the Quantities of Articles liable to Customs Duty remaining in Bond ; Details of the Transhipments of Free Goods on Through Bills of Lading. [Cd. 8714] of Session 1917-18. Price 4*. Qd., post free b-i. Id. EAST INDIA TRADE. Tables relating to the Teade of Beitish India with the British Empire and Foreign Countries, 1911-12 to 1915-16. Total Trade Value; Private Merchandise; Government Stores; Trad© with Principal Countries: Treasure; Imports and Exports; Provinces and Ports; Customs Duty; Shipping; Land Trade. Appendices : — Customs Tariff; Trade of Aden. Index. [Cd. 8910] of Session 1917-18. Price U. 9d., post free 2s. 2d. REVIEW OP THE TRADE OP INDIA IN 1915-16. Part I. of the Report reviews the General Characteristics of the year, with special refei-ence to: — Direction of Foreign Commerce; Chief Imports and Exports; Customs Revenue; Shipping and Freights; Frontier, Coasting and Inland Trade; Summary and Conclusion. With coloured charts. Part II. consists of tables giving more detailed information on the trade referred to in the Rejwrt in Pai-t I. [Cd. 8564] of Session 1917-18. Price 2s., post free 2.i. Sd. ^x ^ '3r^^-• 13>o^^^ '^ ■\rv\-dQ. , DEPARTMENTAL COMMITTEE ON THE TEXTILE TRADES. REPORT OF THE DEPARTMENTAL COMMITTEE APPOINTED BY THE BOARD OF TRADE TO CONSIDEK THE POSITION OF THE TEXTILE TRADES I AFTER THE W.A.R. Presented to Pariidment bv Command of His majesty. LONDON: PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE. To be purchased through any Bookseller or directly from H.M. STATIONERY" OFFICE at the following addresses: Imperial House, Kingsway, London, W.C.2, and 28, Abingdon Street, London, S.W.I; 37, Peter Street, Manchester: 1, St. Andrew's Crescent, Cardiff; 23, Forth Street, Edinburgh; or from E. PONSONBY, Ltd., 116, Grafton Street, Dublin. 1918. [Cd. 9070. J Pr/W \s. M. Xet. TABLE OF CONTENTS. f^-r ^■^ K^\' .0^^^ .t^** Minntos of Ai)])ointniont Introduction Setrtion 1. '1' ox tile Haw Materials : — 1. — Cotton II.— Wool III.- Flax IV.— Jnte V.-Silk and Silk Waste „ 2. The Cotton Industry „ 3. The Woollen and Worsted Industry including Carpets „ 4. The Silk Industry ,, 5. The Linen Industry C>. The .Inte Industry ..'. ,, 7. The Lace and Embroidery Industries „ 8. The Hosiery and Fabric Glove Industries ... „ 9. " Key " Industries in the Textile Trades. Synthetic Dy Needles „ 10. Subjects common to ail the Textile Industries : — Plant and Machinery General Organisation Trade Associations Efficiency of Management •Efficiency of Labour ■ ':;■ Art .apd Tecliaifia] Education Scientific and Technical Research Mai-keting Financial Facilities Transport ... The Metric System „ 11. The State and Industry „ 12. Summary of RccomnKMidatioiis PAGE. and Knitting 6 21 30 34 40 45 62 76 84 89 94 101 107 111 112 113 113 114 115 . 116 117 lis 118 1 19 120 125 MINUTES OF APPOINTMENT. At the Council Chamber, Whitehall. Thi« Twenty-seventh day of Ajiril, 191G. Present : The Right Honourable Walter Rdnctman, M.P. The Board of Trade are pleased to appoint the following- gentlemen, namely : — *Mr. Henry Birchenough, C.M.G. {Chairman), tSir Frank Forbes Adam, C.I.E., Mr. James Beattie, Mr. Thomas Craig-Brown, Mr. Edward Brockleluirst Fielden, Mr. James William Hill, +Mr. Albert Holden Illingworth, M.P., Mr. Joseph Henry Kaye, Mr. Edward Henry Langdon, Mr. John Wanklyn McConnel, Mr. Henry Norman Rae, Sir Frederick Henry Smith, Bart., Mr. Theodore Cooke Taylor, M.P., Right Honble. Robert Thompson, M.P., and Mr. Frank Warner to be a Committee to consider the position of the Textile Trades after the War with especial relation to International Competition, and to report what measures, if any, are necessary or desirable in order to safeguard that position. The Board are further pleased to appoint Mr. Thos. M. Ainseough to be Secretary to the Committee. (Signed) WALTER RUNCIMAN. At the Council Chamber, Whitehall. This Fourth day of August, 1916. Present : The Right Honourable Walter Runctman, M.P. Read this Board's Minute of 2~tli April, 191G, ajipointing a Committee to considei- the position of the Textile Trades after the War with especial relation to International Competition, and to report what measures, if any, are necessary or desirable in order to safeguard that position. The Board of Trade are pleased to apjioiut Mr. Charles Thomas Smitli to be an additional member of the Committee. (Signed) WALTER RUNCIMAN. * Now Sir Henry Birchenough, K.C.M.G. t Now Sir Frank Forbes Adam, Bart., CLE. J Mow the Right Hon. Albert H. Illingworth, M.P., His Majesty's Postmaster-fTeneral. Mr. Illingworth resigned upon taking up his appointment in December. lylli. (9978—14.) \Vt. 4927— 48. 5nOO. 6/l.S. D & S. Q. 4. 390028 INTRODUCTION. To the ItiGHT Hon. Sih ALnEUT H. Stanley, M.P., Prpsident of the Board of Trade. Sir, We have the limioiir to refer to yoiir predecessor's minute of the 2Ttli April. 1916, by virtue of which we were api^ointed a Committee " to consider the position of the Textile Trades after the War with especial relation to International Competition, and to report what measures, if any, are necessary or desirable in order to safeguard that position."' These terms of reference are very wide, and we have exercised a free hand in determining both the methods and the limits of our investigations. Our object has been to obtain accurate information as to the actual and relative position of the British textile industries; to study the business organisation and methods of our competitors and the causes of such success as they have obtained : and in the light of these investigations to consider the methods which might be adopted in order to safeguard our present position, to develop still further our elements of strength, and to eliminate as far as possible the causes of our weakness. The methods by which oiir information has been obtained include: — (1) Exhibits of statistics carefully prepared from official sources. (2) Oral evidence from witnesses representing the different trades. (3) Replies to questionnaires circulated to firms and individuals. Statistics relating to each branch of the textile trades have been prepared, and such of these tables as are necessary to illuminate the text will be found in this Eeport. In the case of imports and exports the figures are classified for convenience under the following heads : — Dominions and Dependencies. Allied Countries. Neutral Countries. Enemy Countries. In the course of the inquiry 203 witnesses have given evidence before us. The following table shows the number of witnesses, grouped under the subjects upon which they have been examined : — Raw Materials ... ... ... ... ... ■■• •.• 22 The Cotton Trade 53 The Woollen and Worsted Trade 39 The Carpet Trade ... 5 The Flannel Trade 2 The Hat Trade 2 The Silk Trade ' 20 The Linen Trade ... ... ... ... ... ■■■ •■• 10 The Jute Trade G The Hosiery and Fabric Glove Trades ... ... ... ... 23 The Lace and Embroidery Trades ... ... ... ... 17 Miscellaneous ... ... ... ... ... ... ... 4 Total 203 With so large a number of witnesses it was found in practice that there was a good deal of repetition and duplication of almost identical evidence, but we felt we had not only to satisfy ourselves that we had secured a genuine representation of the views of each industry, but had also to satisfy each industry that it had been afforded full opportunities for stating its case tothe Oimmittee. In addition, written replies to the Committee's questionnaires have been received from some 100 firms in the cotton trade, GO firms in the silk trade, and about twenty lunises engaged in the jute trade. This latter method of securing information was not continued in the enquiry into the remaining industries, as the replies received were extremely meagre, and it was decided that much more useful evidence could be obtained by the hearing of a greater number of expert witnesses. In view of the diversity of the various textile industries, we have arranged our Report in the following manner: — *». In Section 1 will be lound a statement of the conditions obtaining with ivg;iid to the sujiply of textile raw mateia'als. Sections 2-8 are devoted to a separate consideration of tiie special conditions and needs of each of the textile industries, namely : — Cotton. Wuullen and Worsted — including Carpets. Silk. Linen. Jute. Lace and Embroidery. Hosiery and Fabric Gloves. Our object in each of these sectional reports has been to give a correct pictiire of the extent of the indiistry, the area of its operations, and its peculiar conditions and requirements as represented to us by those engaged in the industry, omitting in each case those subjects which are common to the whole group of textile trades. Section 9 has reference to the two principal essential or " Key" industries connected with the textile trades, with regard to which this country was previous to the war wholly or mainly dependent upon foreign countries for its supplies, viz., synthetic dyes and hosiery needles. Although the textile industries differ from each other in so many important ways that it is necessary to deal with them separately, they are sufficiently similar in other ways to have many points in common. In these circumstances, and in order to avoid repetition, the subjects common to them all are grouped together in Section 10. In Section 11 we have dealt with a group of suggestions which involve questions of public policy, and imply either legislation or administrative action on the i)art of the State. We refer to the various methods of State assistance to Trade and Industry. Uur recommendations are sujumarised in the final Section. 9978 . A 3 SECTION l.-TEXTTLE RAW MATERIALS. ^ote. — The reports embodied iii this Section were written and were forwarded to the President of the Board of Trade during the autumn of 1916. At that time the United States of America had not joined the Allies, and therefore the references to the United States are based on her position as a neutral country. L-COTTON. THE GENERAL POSITION. The evidence we have taken clearly reveals the fact that during recent years there has been a distinct tendency of the world's demand for raw cotton to exceed the supply, and that con- sumption has, in fact, been limited by the available supply. Accurate statistics of the world's prodiu'tiou and consumption of cottou are extremely difficult to obtain, owing to the fact that reliable information is not available with regard to the Russian and Chinese crops, and that serious attempts to compile statistics of the world's consumption have only been made within recent years. The most careful attempt to strike an approximate balance of the world's supply and demand is probably that made by Professor Todd in his recent book, " The World's Cotton Crops." Inasmuch as Professor Todd's figures are practically the only reliable ones which are available, and are regarded by the trade as being approximately accurate, they have been included in the Appendix to this Report. It will be noted that the world's production of cottou advanced from approximately 20 million bales of 500 lbs. each in the season 1904-5 to 27 million bales during the season 1913-14. (Appendix, Table 1.) The world's consumption during this period has fiilly kept pace with the increase in the crops. (Appendix, Table 2.) The mean average prices of American, Indian, and Egyptian cotton advanced from 5'66 pence per lb. in 1904-5 to 7"52 pence per lb. in 191-3-14. This period has been marked by very violent fluctuations in price with a general tendency Tipwards. This fact leads to the conclusion that there has lately been a deficiency in the world's annual crop as compared with possible consumption, and we believe this deficiency will tend to increase unless special efforts are made to stim\ilate production. SOURCES OF SUPPLY. In 1912-13, an average pre-war season, the world's supplies of raw cotton were drawn from the following sources : — " The World's Cotton Crops," Todd. Pages 395-6. Bales of 500 lbs. (OOO's omitted). U.S..\ Iiidiii ^.V!'!- Russia Brazil Europe and Asia Minor ... Mexico Persia Peru Korea .\fri("i ( Hritisli aiul Foreign Posse.ssiousj Sundries China Bales. 14,121t 4,;!% I, .507 uu 178 lf)4 VA& 100 85 67 ',17 22,11:J n,'j3i : 2(!,()44 Percentage. 63-9 lil-9 6-8 4-1 1-.5 3-8 liiii-ii Of the wiii'ld's luoductioii of, say, 26 niillioii liales ol coltoii, it will be seen that the United States jjroduced 14 million bales, and this cleaily indicates liow largely the world is dei)endent upon the United States supply. From the commercial point of view, however, the world's dc|K'iidciirc ui)on the United States is much more complete than this. Of the quantities jiroduced in China and Russia, jjracl ically none i^ ;i\nilal>lt' lor llic I'cst of the woilil. \ large ]iroport ion of the Indian crop and much of the eomj)aratively small quantities grown in Sonih America and Mexico are retained for home consumption, with the result that the total surplus available for the spinning mills of the United States, Europe, and Japan probably does not exceed 20 million bales. Thus the United States provide approximately TO per cent, of the commercial cotton crop of the world, and are the dominant factor in the situation. The dependence of the United Kingdom upon the United States is still more complete, owing to the fact that so miich British spinning machinery is specially adapted to the spinning of cotton of the American type. The following table gives the average annual imports of raw cotton into the United Kingdom for the five years 1910 to 1914, and shows that approximately 75 per cent, of the raw material of the Lancashire spinning industry is drawn from the United States. AVEHAGE AnNTTAL IMPORTS OF OoTTON INTO THE UnITED KINGDOM. (In bales of 500 lbs.) PoR THE Five Ye.\rs 1910 to 1914. {Produced in evidence hy the Chairv^an of the British Cotton Groicing Axsociation.) United States Brazil Peru Other countries Total from foreiau uountries ... Egypt and Sudan . British India Britisli East Africa British West Africa British West Indies Other colonies Total from British Possession Total Re-exports Total Net Imports Bales. .=5,275,(100 76,000 58,000 ,S5,000 770,000 1(50,000 '20,00(1 8,000 (;,ooo 2,000 3,444,000 9(56,000 4,410,000 538,000 3,872,000 Per cent. 74-3 1-7 1-3 ■8 17-4 3-6 •5 78-1 21-9 100-0 PREDOMINANCE UE AMEiUOA AS A SUUKCE OY SUi'I'LY. As a result of the predominance of the United States as a source ot supply, the world's cotton industry is virtually dependent upon the seasonal conditions which prevail in the American cotton belt and which govern the acreage and yield from year to year. While the genera,l tendency of the Americiin supply has been to increase, the annual returns show marked variations from season to season. These variations are mainlj' responsible for the violent fluctuations in price which have lieen experienced during recent years, and are most injurious to the well-being of every brwuch of the cotton trade. At the moment when this Report is being written, a state of affairs exists in the cotton market which illustrates exactly the point with which we are dealing, and we may therefore refer to it. The American crop for tlie season 1916-17 had been estimated by the usiml authorities as likely to amount to about 12^ to 13 million bales. The market in a general way counted ui)on this quantity, and prices ruled accordingly. At the end of August, the forecast was reduced to 12 to 12|^ million bales, owing, no doubt, to the intervention of unfavourable crop conditions. As a result, the price of Jan. -Feb. Futures in Liverpool rose from 7"74 pence per lb. on June 30th to 955 pence per lb. on Sept. 5th and on Oct. 11th it stood at 10' 19 pence per lb. The latter quotation is the highest that has been recorded since the American Civil War. Another point which must not be overlooked in connection with the American crop is the steadily increasing quantity which the American mills are taking for theii' own use. Statistics of the disposal of the American crop during the past twenty years (Appendix, Table 3) reveal a striking increase in the proportion consumed by the American mills, and this advance has been accentuated since the outbreak of war. The following Table gives tlie American commercial cotton crop, and the takings and con- sumption of the American mills, in bales, during the seasons 1913-14, 1914-15, and 1915-16. 9973 A 4 The figures were kiudly supplied by the Liverpool Cottou Association. 1 'J 18- 14 rJ14-15. 1915-16. Commercial Cotton Crop ... American Mill Takings American Mill Consumption 14,882,493 5,625,000 5,634,000 l.n,108,Ull 0,047,000 5,781,000 12,938,256 6,981,000 7,052,000 The number of spindles in the United States has been increasing at a very rapid rate (Appendix, Table 4) and as these spindles are mainly engaged in spinning coarse counts of yarn, and for that reason consume a greater proportion of cottou, it may be confidently expected that the increase in the American consumption will tend to be maintained. Doubt is expressed by many judges of the possibility of America continuing largely to increase her crop, year by year. This is based on the belief that labour will not be readily available, particularly for picking, an 1 attention is also called to the spread of the boll weevil, which not only diminshes the crop but also tends to turn the attention of agriculturists to the growing of other cro])S. However this may be, and even if it proves possible to increase the American crop, the fact remains that the world's cotton supply will still be at the mercy_ of the seasonal variations of this one predominant source of supply, with the resulting fluctuations in prices. What then is the remedy for this state of aSairs ? IN OUR OPINION THE REMEDY LIES IN THE DEVELOPMENT OF COTTON- GROWING IN OTHER PARTS OF THE WORLD WHERE THE CLIMATIC CONDITIONS MAT DIFFER IN ANT PARTICULAR SEASON FROM THOSE PREVAILING ON THE AMERICAN CONTINENT. Important as, the application of this remedy is in the interests of all countries, it is parti- cularly important for the British cotton trade. It has already been pointed out that British spinning machinery is specially adapted to the spinning of cotton of the American type, and that about 75 per cent, of the raw material of the' Lancashire spinning industry is drawn from American sources. It is obviously a grave inconvenience — and indeed danger — that the greatest British textile industry should be so largely dependent for its supply of i-aw material u])on one source of supply, and that a source entirely beyond its control. The sufferings of Lancashire during the time of the cottou famine in the 'Sixties, and in a lesser degree during the various "short-time" movements in the opening years of the present century, clearly demonstrate the disastrous results of this dependence. A failure of the Arnerican crop or an attempted cornering of the market by speculators entails not only heavy financial loss to spinners and manufacturers, but also serious loss of wages and great suifering to the operatives and their families. Labour is the principal sufferer, for it is frequently possible for employers to make good their losses when prosperous times recur, but time and wages once lost by the ojieratives are gone foi- ever. WE ARE OF OPINION THAT IT IS IN THE INTERESTS. NOT ONLY OF THE LANCASHIRE COTTON INDUSTRT BUT ALSO OF TEE EMPIRE AS A WHOLE, THAT EVERT POSSIBLE EFFORT SHOULD BE MADE TO RELIEVE THE SITUATION BY THE :.I01{E EXTENDED GROAVTH OF COTTON WITHIN THE EMPIRE. In this connection we may refer to one of the questions submitted for the consideration of Lord Balfour of Burleigh's Committee ("The Committee on Commercial and Industrial.Policy "), namely : — "To what extent and by wbat means the resources of tlie Empire should and can be developed." We suggest that the liiitish I'hnpire nii^ht be and can be made practically self-sufficing witii regard to cotty the development of its own sources of supply. In giving evidence before us, the Chairman of the British Cotton Growing Association definitely aBinned that the Association, after examining the possibilities of different portions of 11 e Empire, had satished themselves that all the cotton Lancashiie requires can be grown within the iMnpirc, and ihat it is niciely a (|uesti<)n of time, org:niisation, and money fully to develop the work, whicli at the nionimt is only jusl cnici'guig Irom the cxjicrimental ^tage. This view received the endorsement of other witnesses. In particular our attention has been drawn to the following areas: — India. Egypt and the Sudan. The African Colonies ar^d Protectorates. INDIA AS A SOUECE OF SUPPLY. We consider that of possible sources of supply within Ihe Empire, India offers the best opportunity for any considerable increase in the near futiire. India presents many of the conditions Jiecessary for successful cotton ciiltivation. She has a large and industrious population, the majority of whom are agriculturists; an admirable network of railways and roads ; and most important of all— an old established cotton-growing industry with an output of from four to five million bales per annum. The evidence before us gives ground for confidence that the crop can be largely increased, provided that the measures already taken by the Indian Government to stimulate production are extended and accelerated. There are undoubtedly many ditticulties to contend with. The native is very conservative in his methods of cultivation, but this drawback might be gradually overcome by further Govern- ment supervision and by demonstration work. In most cases the staple of Indian cotton is short and the cotton itself coarse and dirty, ;ind consequently is not suited for Lancashire spindles. More rajnid improvement is at present hampered by the conditions prevailing with regard to the supply of seed for jilanting, the ginning and the marketing of the crop. During the last few years, however, successful experiments have been made in certain parts of India, viz., Madras, Central Provinces, Agra and Oudh, the Punjab, Sind, and the north of the Bombay Presidency in the cultivation of cotton of a superior type. The present annual production of one inch staple cottons is stated in a Memorandum furnished by the India Office to be between 400,000 and 500,000 bales. We are informed that the Indian Agricultural Department is making an attempt to increase this production. It is recognised that while efforts should be made in con- nection with the cultivation of exotic cottons, any large increase of output must be looked for in the utilisation of indigenous types and the general evolution from them of better varieties. Considerable difficulty has been experienced in securing for growers an adequate price for the improved types of cotton grown, owing to the fact that the Indian cultivators have not been in direct touch with the world's markets. Better stapled cotton usually gives a smaller yield, is more susceptible to variations in climatic conditions, and always requires more care and trouble both in the cultivation and in the picking. For these reasons it is almost impossible to induce the cxiltivator to grow cotton of improved types in the absence of any certainty that he will be recompensed by a higher price for his crop. It apiiears essential therefore that some permanent organisation representing both British and Indian spinners should co-operate with the Govern- ment of India in securing an adequate jirice for cotton of improved cleanliness, length, and fine- ness until such time as fair and adeqxiate prices can be obtained through the usual commercial channels. The area under cotton is normally from 20 to 25 milliou acres, and the iinnual crop is capable of expansion provided that efforts are made : — (a) To increase the yield per acre. — The present yield is very low, viz., 80 to 100 lbs. of lint per acre as compared with 200 lbs. in America and 450 lbs. in Egypt. Expert evidence suggests that the yield can be increased either by more intensive cultiva- tion or by the use of more prolific types of seed. (6) To improve the quality by the supply of better seed and by the prevention of the mixing of seed in ginneries. (c) To increase the acreage where irrigation is possible and where cotton can be grown without detrimentally reducing the growth of other crops. Two interesting Memoranda received from the India Office have fully iuiornied us of the important eiforts which are being made by the Government of India and the Provincial Govern- ments to improve both the quantity and the quality of the cotton grown. We consider that an extension of this work might with advantage be mnde along the following lines: — (a) The supply of X'ure cotton seed to all growers. (b) The develofiment of model farms, and a system of demonstration woi'k in order to improve cultivation. (c) Experimental work for the purpose of improving the types grown, and in connection with such questions as manures, times and closeness of planting, rotation of crops, &c. (d) The extension of irrigation in suitable districts. (e) An effective control of ginneries in order to prevent tljc mixing and consequent deterioration of seed. We realise, however, that it will be difficult, if not impossible, to carry out these improve- ments eft'ertively under present conditions. We therefore recommend : — (1) 'I'liai the staff of the Agricultural Department througlinni tin- cotton growing parts of India should be largely increased, and (2) That some permanent organisation representing both British and Indian Spinners should co-operate with the Government of India in securing an adequate price for cotton of improved cleanliness, length, and fineness, until such time as fair and adequate prices can be obtained through the usual commercial channels. 10 EGYPT AND THE SUDAN. The followiug taljle (taken fioni the ■" Aniiuaire Statislique ile l'E's Cotton Orot.s," by Prof. J. A. Todd, Bales of Approximately 500 pounds (OOO's omitted). i'.iii2 ii:;. i>iii;i (14 1 1904-115 IU(i5-0i;. 190i;-u7. 19U7-()8 1 1 19(18-09. 1909-lU.,r.)lll 11, 1911-12. 1912-13 1 ■ 1913-14.I1914-15. 1 Author's Calcu- Esti- lation : — mates. A merica 10,7.'')8 10,124 13,557 11,320 13,551 ' 11,582 13,829 10,651 12.132 16,043 14,129^14,610 16,.50O India 3,3fi7 3,161 .3,791 ' 3,416 4,934 3,122 3,692 4,718 3,853 3,288 4,395 i 5,201 5,O0ll Egypt 1,168 1,,302' 1,263 1,192, 1,390 1,447 i 1,1.50 1 1,000 1,515 1,485 1,507 1,537 1,300 Russia 342 477 .5361 604 1 759 1 664 698 1 686 895 875 911 1 1,015' 1.000 China 1,200 1,200 756 ; 788 806 \ 875 1,933 2,531 3,467 3,437 3,931! 4,000 4,000 Others 801 751 803 936 1,027 950 969 950 967 1,058 1,171 1,340 1,300 Total ... 17,636 17,015 20,706 18,256 22,467 18,640 22,271 20,536 22,829 26,186 26,044 27,703 29,400 Other Esti- males : — Jones 17,',»13 i 8.152 20,633 19,457 22,473 19,851 22,391 19,409 24,027 27,560 27,476 29,303 Cotton Pro- duction ... — — 18,803 15,747 19,942 16,512 19,698 16,241 18,027 21,269 20,976 22,255 — U.S. Dept. of Agriculture 17,332 17,279 21,005 18,342 22,183 18,329 23,688 26,679 22,433 25,650 27,697 — — Shepperson ... — — — — — — — 19,623 22,802 26,439 26,903 1 28,774 — TABLE 2.— THE WORLD'S CONSUMPTION OF COTTON, 1894-1914 (OOO'S OMITTED). Table from " I he World's Cotton Crops," by Prof. John A. Todd. U.S.A. Census Jones's Handltook Calculated from International Bnreaxi (Bales of 50(1 lbs. gross). (Running Bale.s). (H mining Bales). Mean of (1), (1) Mean of Meason. (1),'(2) Mill Mill Con- Domestic. Total. Mill Con- Domestic. Total. and (7). ami (5). Cousumption. sumjition. (1) (•2) (S) (•1) es) («') (7) m (9) 1894-95 13,763 _' 1899-1900 ... 1.5,177 15,700 , — — — — — 1904-05 — 17,72(i 600 18,326 — — — 18,326 17.726 190.5-06 17,879 l.S,54K 750 19,298 — — — 18,589 18,214 19(16-07 19,493 19.27(; 800 20,076 ] 9,799 806 20,605 20,058 19,523 1907' IIH 1H.H5(; 19,146 1,000 20,146 20,178 875 21,053- 20,019 19,.393 1908 09 1 9,397 19,634 1 ,200 20,834 20,454 1,933 22,387 20,873 19,828 1909-10 18,.321 1 9,335 1,200 20,535 19,787 2,531 22,318 20,391 19,148 191(1 11 19,013 2(1,515 4,181 24,696 21,1.38 3,467 24,605 22,771 20,222 1911 12 20,.587 21,2(1!) 4,181 35,390 22,689 3,437 26,126 24,034 21,495 1912-13 21,542 22,432 5,300 27,732 22,9,32 3,931 26,863 26,379 22,302 1913-14 21,223" 22.66(; 5,300 27,9i;(; 23,000 4,000 27,1)00 25,396 22,296 EaUI.Y RECOliDS.t Season. Bales. S(KS(,11. Hales. Seasi n. Bales. Season. U.ilcs. Season. Bale.s. Season. Bales. Season. Bale>. 1884-85 1885-86 188G-87 7,444 8,120 8,605 1887 88 1888-89 1889-90 8.891 9.2ti7 9,795 1890-91 1891-92 1 892-93 10,511 10,5()5 10,291 1893-94 1894-95 1895-91; 10..580 11, .543 ll,i;05 l89()-97 1897-9-1 1898-99 11,880 12,888 11,015 1899-1900 1900-1901 1901 1902 13,773 1.3,41(! 14,415 1902-03 1903-04 1904-05 14,437 14,010 I5..50(; Balt-s of 5(l() Ills, net. Latliani, Alexander & (.'o,. New York, in "Cotton," by ISurkett and Poi-. 16 TABLE 3.— UNITED STATES CROP. (OOO's omitted.) Taken from "Cotton F.wts," October, 1915— Shepperson (p. 24), and produced in evidence by the Chairman of the British Cotton Growing Association. Season. Exports to Exports to Con- U.S.A. Total commercial United Kingdom. tinent, Japan, &o. Takings by mills. crop. Average. Average. Average. Average. 1890/91 3,345 "% 2,446 2,640 1 8,674 1892 ... 3,317 2,541 2,856 - 2,607 9,018 1893 ... 2,301 \- 3,055 2,089 J- 2,545 2,375 6,664 y 8,.345 1894 ... 2,861 2,371 2,291 7,532 1895 ... 1 3,449 3,277 2,871 9,837 J 1896 ... 1 2,299 ^ 2,328 2,505 7,147 1897 ... 1 3,022 2,957 2,792 8,706 1898 ... 3,544 ;. 2,947 3,996 !> 3,334 3,465 y 3,208 11,216 y 9,549 1899 ... 3,525 3,788 3,632 11,256 1899/1900 . 2,343 3,603 3,644 . 9,422 1900/1901 . 3,050 ^ 3,488 3,547 ■ 10,339 1 1902 ... 3,041 3,601 4,083 10,768 1 1903 ... 2.849 \- 3,128 3,826 !► 3,796 3,924 y 4,010 10.674 y 11,087 1904 ... 2,577 3,455 3,935 10,002 1905 ... . 4,124 4,609 4,562 J 13,654 1906 ... 2,891 3,696 1 4,627 11,234 1907 ... . 3,750 4,614 1 5,005 13,540 1908 ... . ! 2,944 ^3,111 4,517 y 4,303 3,964 y 4,619 11,441 y 12,109 1909 ... . 3,539 4,908 1 5,243 13,817 1910... . 2,430 3,778 J 4,256 10,513 1911 ... . 3,347 4,269 1 4,301 1 12,075 1912 ... . 4,248 6,404 5,391 16,101 1913 ... . 3,604 [. 3,683 5,176 y 6,173 5,389 y 5,334 14,104 y 14,394 1914 ... . 3,419 5.447 5,503 14,552 1915 ... . 3,798 > 4,571 - 6,088 ' 15,136 .- TABLE 4.— WORLD'S ACTIVE COTTON SPINDLES, 1900 .\nd 1914. Compilation of the U.S. Bureau of the Census-Bulletin 131. Produced in evidence liy the Secretary of the International Spinners' Federation. Country. Total United States Cotton-growing States All other States Europe — United Kingdom Germany Russia ... France ... Austria-Hungary Italy Spain ... Belgium Switzerland i^weden Portugal Netherlands ... Denmark Norway Other European Countries India Japan China Brazil Canada All other Countries Active Cotton Spindles. 1914. 146,397,000 .32,107,000 12,711,000 19,396,000 56,300,000 11,550,000 9,160,000 7,410,000 4,970,0011 4,620,000 L',210.000 1,530,000 1,380,000 560,000 480,000 .500,000 90,000 65,000 200,000 6,500,000 2,7.50,000 1,000,000 1,250,000 965,000 800,00(1 1900. 105,681,000 19,472,000 4,368,000 15,104,000 45,500,000 8,000,000 7,500,000 5,500,000 3,300,000 1,940,000 2,615^000 920,000 1,550,000 360.000 230,000 300,000 40.000 35,000 1.30,000 4,945,000 1,274,000 550,000 4.50,000 550,000 .')20,0(i0 Hi TABLE 5.— DTSTRIBUTION OF INDIAN CROP. (Bales of :W2 11.S. iiett.) COMPILKIJ FROM THE IxniAN (tOVFRN'MKNT ReTOKN'S. liu-j-i'.n:;. Hales. Indian Mill consumption Local consumption Exports — Japan, China, &c. Continent Great Britain ... Total 2,09(5,000 450,000 2,r)4r,,00i) 1,189,000 885,000 72,000 4.692.000 i*er cent. 44-7 9-r, 54-3 25-3 18-9 100-0 MEMORANDU]\[ BY .Mn. J. W. MrCUNXEL. Report ox the Cotton Sui'I'i.ies ok itie British Empire after the Wai:. 1. The first thing to be .stated is that so far as can be judged at present there is no indication that the position of tlie cotton trade in regard to its raw material will be any worse after the war than it was before. Of the raw cotton used in Great Britain, fully 80 per cent, is derived from the United States ; and a further 15 per cent, from Egypt. Small quantities are also derived from India, and the British Colonies. The only other countries of supply are in South America. The cotton spinning industry of British India uses very little cotton, except what is grown in India. The small but growing industry in Canada uses mainly American cotton. It will therefore be seen that the only cluinge in the situation likely to be produced by the war, namely the formal incorporation of Egypt, and consequently of the Soudan, within the British Empire, should be, if anything, beneficial to our own cotton manufactur- ing industry. 2. It would, however, be a mistake to conclude from this that there will be no opportunity for the Britisli Government to assist the industry in regard to supplies of raw cotton. On the contrary the present time, and the time after the war, are singularly opportune for action to be taken by the Government, by which not only will the cotton industry be safeguarded and strengthened, but at the same time those portions of the Empire where cotton can be grown, may be made more pros- perous. There is in fact, an immediate opportunity afforded in cotton growing and cotton manufacturing for the organised co-operation of Great Britain and the Colonies in a common interest. 3. In order to explain how this may be, it i.s necessary to sketch very briefly the history of the cotton trade in general, and to show therebv the peculiar position in regard to it held by Great Britain on the one hand, and by America on the other. 4. Cotton spinning and manufacturing, in the modern sense of the word, is a comparatively new industry, commencing in the last twenty years of the 18th Century. Its progress in Great Britain was rapid. At the beginning of the lOtli Century the annual consumption was equal to 100,000 modern bales of oOO lbs. In 1843. for the first time, the equivalent of 1,000,000 bales was used, and in 1860 this was doubled. Then came the set back caused by th(> Amei'iean Civil War, and it was not until 1870 that the 2,000,000 figure was again reached. o. On the other hand, with regard t« America, the first exporting of cotton began in the last third of the 18th Century. In 1800. it had only reai'lied the equivalent of 42,000 bales, wliicli seems to have come mostly to this country, thus supplying about two- fifths of its requirements. By 1840, the ,\mericau crop had reached an average 'of 1,500,000 bales, of which about 1,200,000 were exported, this countrv receiving aliout 1,000,000. By 18G0 the crop hail increased so as to average over 4.000,000 bales. The i.-. land in the north of the Egyptian Delta which awaits recla- mation and Jiurilication Irom salt. .\nd it seems that it would be appropriate to the incorporation of Egvpt ill the Uritisli Empire, that a careful inquiry sbo'uld be made by the capable officials employed in the Government service in Egypt and in the Soudan, to decide on the proper allocation of the Nile waters between the two countries. Future developments could then be limited within the possibilities of the total supply of water. Apart from this special question as to the future relative development of Egypt and the Soudan, it is necessary to emphasise the principal interest attached to the cottons of the Nile Valley, which is that the control of this cotton practically controls the fine spinning of the world. It appears to be bej-ond the province of this Committee to say whether any, or if so what, use can be made of this opportunity. But it should perhaps be stated that according to the best estimate possible, the Egyptian crop was distributed before the war approximately as follows: — Bales of 750 lb. Great Britain 426,000 United States 118,000 France 94,000 Ru.s.sia 78,000 Italy (probably) 30,000 Germany and Austria (probably) ... 154,000 Other countries (probably) 70,000 970,000 The American takings have been enormously increased since the war began. The only other point necessary to notice here, is tho importance of strengthening and improving in Egypt scientific work on cotton. Not only is this required in the interests of Egypt itself, and of the fine cotton trade of this country, but also Egypt offers now that it is part of the Empire an unequalled site for the location of Imperial institutions devoted to the concentration of knowledge and to the organisation of experimental research as to the luiture and possibilities of the cotton plant and its product cotton lint. Such institu- tions could work in clase correspondence with the scientists in other cotton-growing parts of the Empire, and could maintain personal intercourse and collabora- tion with the consumers in Great Britain and (if necessary) in India. 21. India. — The history of cotton in India is the history of a tragedy. India is one of the homes of cotton. In India were grown in early days cottons so fine that they have never been replaced. Yet in modern times Indian cotton has become a by-word of reproach. Tlie cotton is generally only used for the lowest purpose, and hardly used at all in this country. India has, of course, suffered correspondingly. America grows on 37,000,000 acres, a cotton crop wortli about £150,000,000 for the lint alone, besides tlie value of the seetl. India is said to have 24,000,000 acres in cotton, and the value is perhaps £40,000,000 — .33s. per acre as compared with £4 ! While tlie cotton production has thus grown almost spontaneously in' the United States, .^nd while that country has nevertheless created a very powerful Depai-tment of Agriculture to assist the cotton and other farmers; while Egypt has developed a special cotton with excellent quality and a large production ; while Russia has found it i)nssil)le to develop cotton- growing in her not specially favourable climate until she su])plies two-thirds of her increasing reqiiire- ments; while even Mexico, Brazil, and Peru have made the study of cotton a ])art of their (Jovernment work, India under the rule of (ireat Britain has fallen into disrepute as a producer of cotton. In the last few j-ears considerable improvement has taken ]ilace. The types of cotton ordinarily grown have been improved; a beginning at least has been made in scientific work; in some districts .snuill quanti- ties of cotton suitable foi- Engli,sh mills have been grown ; and it is po.ssible that the general level of production has been slightly raised. It has oidy I)een |)ossil>le for the Committee to make the most su))er- iicial inquiry. Evidence of great value h.as been given by Mr. .Vrno S. Pearse, who has twice at least visited Iiulia otbcially as Secietary of the Interuatioiud Federation of Master- Cotton Spinners. Evidence was also given liy Professor .lobn A. Todd, ;iuthor of the " Woild's Cotton Crops.'" aiul by Professor AVilliam Hol)erts of the Indian .\gricidtural Dei)artment, but it is quite ohvions that befcue any autlicM'itative conclusions can be drawn, a much more thorough investigation is 19 required. The subject is of great impditaiice to the cotton trade of the Britisli Empire, and it may be of even greater importance to India herself. If it be true that there is nothing in the climate or soil to prevent it, every effort ought to be made to in- crease the production of Jndia, at least up to the level of Araeric_a. Other factors aie right, a large population is av-ailable, accu.stomed to agriculture, and to a certain extent to commerce. Hallways exist, and cotton when grown can he readily marketed. It is evident that no time ought to be lost in setting to work a properly qualified committee to inquire into the possibility of increasing and improving the cotton growth of India. It appears to be a matter for the Indian Government to decide whether this should be a purely departmental inquiry or whether cotton users and "scientists should be invited to co- operate. But there is no doubt that an urgent and immediate need exists for the provision of an authori- tative report by the Indian authorities on the present status of. Indian cotton-growing in all its aspects, agricultural, and commercial, scientific, social and economic. There is, however, one point that must be remem- bered, and that is the requirements of the Indian mills. The mills at present in existence in India consume probably 2,000,000 bales of cotton, or nearly half its present production. There is naturally a feel- ing in Indian manufacturing circles that the needs of Indian mills, which use almost entirely coarse cotton, should not be overlooked. It is, however, practically certain that the cotton produced in India will largely continue to be of a character suitable for Indian mills. It will require science and supervision to bring about to the desired extent the growing of cotton suitable for Lancashire. The basic condition for such a change as this is, that it shall be possible to produce the improved cotton in such quantity as to be, at least, as profitable to the grower as his present cotton is now, or can be made by improved methods of husbandry. It is probable that the Committee here recommended will be able to make many useful proposals. Various suggestions have been made to the Committee, such as Government control of ginneries, .schemes for dis- tributing good cotton seed to all growers, establish- ment of local markets, additional demonstration work by model plantations, more rapid extension of irriga- tion. This Committee has not the knowledge necessary to enable them to criticise these suggestions or to apportion their relative importance. What, however, seems certainly to be needed is the employment in the Agricultural Department generally, and particularly in the districts where cotton is grown, of a much larger number of trained .scientific men of British extrac- tion. A comparison of what is done in this way in other countries, notably in America, will show hoAV deficient is India. 22. Britixh Colnntca in Africa. — The history of cotton-growing in these Colonies is practically the his- tory of the British Cotton-Growing Association. The Association was formed in 1902. and its ex- istence is evidence of the anxiety which was even so long ago felt about the future of our cotton supply. The work of the Association has necessarily been of a pioneer character, and its resources, which have always been inadequate to the work it tried to do. are now quite insufficient .to allow of any fresh develop- ments. It must be strongly urged that without delay the work and constitution of this Association should be carefully considered, and a decision come to about its future. Mr. J. Arthur Hutton. Chairman of the Council of the Association, in the statement he kindlv made to the Committee said in regard to it: — " First, the situation is most serious and im- mediate action is necessary. " Secondly, it is impossible for the Association, with its present capital, largely to extend its operations. " Thirdly, the Government might take over tho work of the Association. " Fourthly, the Association might be reconsti- tuted as a public trust working under Govern- ment control, and the Government would assist the Association to find the necessary capital." Whether these suggestions cover the whole field of possible action or not, it seems, at anj' rate, certain that the time has come for some change in the present constitution of the Association, under which it partly works for the public benefit and partly in the hope of eventual private profit. The work of the Association has undoubtedly established the fact that cotton of a suitable character for use in Lancashire can be grown in increasing quantities in various parts of Africa, and notably in Uganda, Northern Nigeria and Nyassaland. It is, perhaps, not too much to hope that before long the same may be said of the territory known as German East Africa. But throughout these new countries the develop- ment of cotton is absolutely limited by the question of transport. The ordinary peace time cost of American cotton between plantation and a Lancashire mill is about one halfpenny per lb. Colonial cotton must be made to compete. 23. There is another matter of great importance in regard to cotton. This is, that the time has come when the growing of cotton ought to be systematically and scientifically studied. As will be seen from what has been already said, cotton-growing has gradually evolved itself, and that mainly in America. Cotton- spinning and manufacturing, on the other hand, has grown independently, and in this country now consti- tutes one of the largest of our industries. Modern science tells us that cotton can be modified, both in ways primarily concerning the grower, and also so a.s to be more useful to the user. To the grower it can be altered so as to fit in with particular limitations of climate, and so as to resist disease and escape from insect enemies. For the purposes of the user it can be made longer or shorter at will, it can be made finer or coarser, it can be strengthened. The broad principles of this science have only been discovered in the last few years. The details have yet to be worked out. The organisation needed for their prac- tical application has yet to be created. There is an opportunity for the British Empire — at once the leader in cotton manufacture and potentially capable of pre- eminence in cotton-growing — to make this science her own. This is the great answer to the question put to us, " What measures can be recommended to safe- guard the position of the cotton trade?" As regards cotton, the Government is respectfully urged to institute a special inquiry as to the best measures to be taken in order eventually to provide for growing within the Empire all the cotton it can manufacture. There are many interests concerned. There are the Governments of India and Egypt, and of the other Colonies concerned ; there are the cotton merchants ; there are the spinners and manufacturers ; there are such Institutions as the British Cotton- Growing Association and the Imperial Institute,' who have previously been concerned with cotton ; and there are the botanists and other men of science who have worked on cotton. An exhaustive inquiry is wanted, so that out of it may be evolved a permanent organisation under which cotton-growing in the Empire may be fostered. The value of the raw cotton used in the Empire must be considerably greater than £80.000,000, but even this large figure could prohahlv be exceeded by the value of the cotton grown in the Empire as a result of efficient organisation. This memorandum, as will be seen, supports the conclusions and recommendations adopted by the Com- mittee. (Signed.) John W. McConnel. 9M78 20 AmiKMiii.M To .\li:. Mi'CoNNEi.'s SiTiiAi. jri;M(ii;ANiiUM ON Raw Cotton. Siuce 1 «iote my nioiiioriimluiii 1 have been favoured with copies of two papers on the Improve- ment of Indian Cotton coiiinuinicated to the Commit- tee by the India Office. These papers, while not entirely free from con- troversy, add very much to the information available by the Committee. In my own memorandum I recog- nized fully that our information had been very imper- fect. A prima facie, case for inquiry had, however, been established, and I mainly confined myself to ask- ing the Indian Government itself to institute a full inquiry into the present status of Indian cotton in all its aspects, agricultural, commercial, scientific, social and economic. I also urged the employment of a much larger staff of trained scientific men of British extraction. The memoranda now before me show that much greater efforts have been lately made to improve cotton in India than is generally known in this country. They also show very cloaily that apart from what may be called agiicult\iral difficulties, and difficulties arising from the conservatism of the East, there are other special diffieidties of two kinds. First there are difficulties in getting better prices f(ir better cotton, especially so long as the quantities are very small. Secondly, there are diUiculties in the supposed contlict between the interests of Indian and British spinners. Both of these difficulties could, I am convinced, be minimized and perhaps could be entirely removed by personal conference between the people directly concerned. I fully concur in the recommendations of the Committee : — First, that the Staff of the Agricultural Depart- ment should be largely increased. This will help in removing the agricultural difficul- ties and those arising from the conservatism of the cultivators. Second, that some permanent organization of British and Indian spinners should co-operate with the Government of India in securing better prices for better cottons. This will lessen or remove both the special difficul- ties named above. Thirdly, I also a'>,ain strongly urge the Indian Goveriimeut to malic a full investigation for itself into the ])vesent status of cotton gi-owing in India. 91 h IVIai 1917. JOHN W. McCONNEL. 21 II.-WOOL. WOIILD'S PEODUCTION. The world's produ<^ti(.ii ol wool in 1rt'iil Eiiioiican iiicriiio-usiiig countries oi (TPiniany, Austria, Eraiue, and Uelgiuni, the letluction of supjilies of merino wool, coiipled witii tlic enormously increased takings oi tiic United States aud Japan, have resulted in a world-wide depletion of stocks aud a cnniMit level of prices fully 100 ])er cent. aboA'e pre-war averages. PROBABLE DEMAND AFTER THE WAR. It is difficnlt to estimate what will he the jjosition after the ^^'al. It is known, however, that the world's clips, and particularly the merino clips, are not likely to exceed even if they attain i)resent proportions. On the other hand, it is reasonable to exjject for some years an increased demand for many reasons, amongst which are the following: — ((/) The er cent, of the Australian and Cape merino clips. These wools, especially the Aiisti'alian, are an absolute necessity for the manufacture of the fine textiles, in the pro- duction of which Gerniany and Austria excel. It is not practicable to substitute other wools for them, as the South American meriiH)s produce fabrics which are much rougher to handle. It would be ])ossible for enemy states to purchase South American crossbied wools and use them as a substitute for New Zealand wools, but in fine merinos the British Empire possesses n virtual mmiopoly. NEED FOR THE CONTROL OF THE IMPERIAL WOOL SUPPLIES AFTER THE WAR. It has been sliow n that the ]3ritish Empiie produces 68 per cent, of the world's commercial supply of clothing wools, and that in the fine merino wools the projiortion amounts to no less than 85 pei' cent, of the exportable quantity and constitutes a i)ractical monopoly. The su))plies of tiie British Empire are, therefore, sufficient to meet the demands of herself and her Allies, and to provide a surplus. We consider that having regard to : — (a) the probable shortage for a considerable period after the AVar of the supplies of wool, and csjjecially of merino wool; and (/') the agreement concluded at the Paris Conference between the Allies to conserve for each other before all others their natural resources during the whole period of economic reconstruction, and more particularly to recognise the prior claim of such of the Allies as have suffered spoliation dining the War to the restoration of their supplies of raw material, it is imperative that steps should be taken iu consultation witii the Dominions to devise and (lut into operation iuv a time a workal)le scheme for safeguarding the sujiplies and controlling the distribution of the wool of the British Empire. SUGGESTED MK.VSURES FOR SAFEGUARDING IMPERIAL SUPPLIES OF WOOL. 1Mi(' measures now suggested refer to the jicrioil alter tlie War. Wliatt!\ei' measures it may lie found necessary to adoiit (hiring tlic War niuler the stress of the military requirements of (ireat i5ritaiii ainl lici' .Mlic-, it -immu- douiitful wliether such emergency measures could be maintained for iimir llian a Iniel period after llic niiiciusion of ])eace. At tlie outsci too iinnli stress cannol lie laid upoii (lie larl that lliis ((ucslion is essentially one for joint roii-idn al ion li\ the ( l(i\ rriiiucnts of .\uslralia. New Zeal, mil, aud South AfrU'a % ■ in consultati(JU witli II. M. Government, and can only be satisfactorily settled by a frank interchunfie of views and the adoption of a common policy. No effective action is possible without the full co-operation of all the Governments concerned. The actual measiire^ which have been sugj^ested fall under three heads: — (a) Export Duties. (b) The Control of Exports by Licence. (c) State Purchase. (a) E.rport Duties. — The imposition of export duties is a matter which rests entirely with the Dominions Governments. Those Governments could, no doubt, impose such duties, but, in view of the acute shortage of clothing wools, and particularly of merinos, the mere imposition of export duties would not necessarily have the effect either of safeguarding Imperial and Allied supplies or of preventing wool being shipped to neutral countries for enemy account. As a measure of control, therefore we do not consider an export tariff on British Empire wools likely to prove effectual. (b) The Control of Exports by Licence. — Under this system the Governments of the Dominions in consultation with H.M. Government would adopt a co-ordinated policy of shipment under licence. The export of wool to neutral countries would be restricted to the surplus available after satisfying the requirements of the British Empire and its Allies. In allocating licences for this surplus, regard would be had to the normal requirements of the various neutrals, so that a fair and equitable proportion might be secured by each. Such a scheme would have the advantage of safeguarding the supplies of Great Britain and her Allies, while it would leave to a considerable extent the free play of competition in the Colonial wool markets. It is essential, however, that this policy should be carried out under the direction of small committees of practical men. If it were found, in practice, that it failed adequately to safe- guard the requirements of British and Allied industries, and to enable H.M. Government to redeem the pledges made at the Paris Conference, then there appears to \is to be only one alter- native — and that is Government purchase. (c) State Purchase. — A scheme of State purchase, if practicable, would undoubtedly be the most effectual method of maintaining complete control of the Imperial wool supplies. State purchase, however, appears to us to present great practical difficulties, the character and complexity of which can only be determined by experience. As H.M. Government have now decided to purchase the Australian and the New Zealand as well as the British clips, they will have acquired an intimate acquaintance with these difficulties before the War is over. Stjmmaet. 1. Of the world's total production of clothing wools in 1915, the British Empire produced more than 50 per cent. Of merino or fine wools, the Empire contributed 63 per cent, and of crossbred wools 40 per cent. 2. Inasmiich us the domestic clips of the United States and most European countries are consumed in the home markets, and are far from sufficient to meet the requirements of their woollen industries, they are dejjendent for their additional supi^lies on the wool-exporting countries of the world, which may bo divided into two groups — the British Empire and South America. 3. Of the world's production for export, the British Empii-e contributed 68 per cent, and South America 32 per cent. Taking the two types of wool, we find the exportable production as follows ; — Merino. — British Empire, 85 per cent.; South America, 15 per cent. Crossbred. — British Empire, 46 per cent.; South America, 54 per cent. 4. The finer merino wools are virtually a monopoly of the British Empire, and before the War enemy countries consumed about 30 per cent, of the British sui)plies. These wools are a vital necessity for the production of the finer German and Austrian textiles, in which Germany and Austria excel. It would not be practicable to substitute South American merino wools for them, as they produce fabrics which are much rougher to handle. The British Empire, therefore, is in a position completely to control the supplies of raw material for the German fine-wool dress-goods trade. o. There has been of late years a serious decline in the production of merino wool? owing to : — (a) Serious droughts in Australia and a consequent reduction in the number of sheep. {l>) The fact that crossbred sheep are gradually supplanting merinos owing to the requirements of the frozen meat trade. (t') The gradual encroachment of arable upon pastoral laud in South America. 26 6. This shortage has beeu intensified by tlie enormous increase in the American coil- sumption of merino wool due to : — («) The placing of wool on the free list of imports into the United States of America hy the Tariff Act of 1913 ; and (h) The enhanced purchasing jwwer of the Fnited States resulting from the War. 7. The ih>crease in Coutiiieutal consumiilion during the 'War h;is beeu offset by the increase in the niilitary demand for wool. 8. The result of these factors is u world-wide depletion of wool stocks and a current level of prices fully 100 per cent, above pre-AVar averages. 9. After the War there is likely to be an increased demand due to : — (a) The demand for civilian clothes by the troops as they are disbanded. (b) The enormous demand for civilian requirements, which has been postponed diiring the War. ■ (c) The requirements of the Allies to re-stock the devastated districts and to extend their manufacturing industries. (d) The probable continuation of the United States demand due to the great prosperity of that country. (e) The urgent needs of Germany and Austria, which countries, it may be assumed, are almost entirely depleted of raw wool. 10. In view of the future shortage of wool, particularly of merino, and in order — (a) to fulfil our obligation to o\ir Allies, to which we are pledged by the Paris Conference; (h) to safeguard our own industrial requirements ; (c) to prevent the exjjort of wool to present enemy countries, there appears to be urgent need for efficient control of the Imi)erial wool supplies after the War. 11. Such control can only be exercised by H.M. Government with the con.^ent and co-operation of the wool-growing Dominions, and any scheme should be formulated in close consultation with the Dominions Governments. 12. Control might be exercised, with or without an cxjiort duty, in two ways: — (a) By a system of controlling exports by licence; or (b) By State purchase. Recommendation. We recommend that in view of the serious shortage of wools for clothing pui'poses, parti- cularly of merinos, and, in view of the predominant position of the Britisli Empire in the pro- duction of these wools, H.M. Government should lie urged to convene, at an early date, a conference of the representatives of the Governments of Australia, New Zealand and South Africa in order to formulate a workable scheme for the effective control of the distribution of all wool grown within their territories with a view to : - (a) The fulfilment of the pledges to the Allies, as laid down in the Paris Resolutions; (b) The complete safeguarding of British industrial requirements; and (c) The utilisation of the wool resources of the Empire to their fullest capacity as a means for bargaining or otherwise. We suggest that a co-ordinated policy of shijjment under licence during the period of reconstruction offers the least difficulties. Under such a scheme, exports to enemy countries would be prohibited for a period of at least one year after the conclusion of peace, and for such further period as might be found desirable, and exports to neuti-al countries would be restricted to the quality of wool available after satisfying the requirements of the British Empire and its Allies. 2t APPENDIX. The following Tables have been compiled from figures kindly supplied by Messrs. Schwartze, Buchanan & Co., and Messrs. Ualgety & Co. : — ■ TABLE 1.— WORLD'S PRODUCTION OF WOOL. l!il,x Total Production. Merino. Crossbred. Carpet Wool, &c. British Empiue. United Kingdom Australia ... New Zealand Cape Fa kland Islands Canada British India Lbs. 122,000,000 .570,000,000 197,000,000 180,000,000 4,000,000 11,000,000 60,000,000 Lbs. 484,500,000 6,000,000 180,000,000 5,500,000 Lbs. 122,000,000 85,500,000 191,000,000 4,000,000 5,500,000 Lbs. 60,000,000 1,144,000,000 676,000,000 408,000,000 60,000,000 Allies. France Russia Italy Lbs. 79,000,000 380,000,000 21,000,000 Lbs. 15,800,000 76,000,000 15,750,000 Lbs. 63,200,000 5,250,000 Lbs. 304,000,000 480,000,000 107,550,000 68,450,000 3O4,O00,(.l()O NEUTItALiS. North America Spain and Portugal South America Other Countries ... Lbs. 304.000,000 62,000,000 404,(J00,000 338,000,000 Lbs. 174,000,000 31,000,(100 73,000,000 Lbs. 130,(100,000 31,000,(300 331,000,000 Lbs. 338,000,000 1,108,000,000 278,000,000 492,00O,(JOO 338,(100,000 EiNKMY States. Germany Austria-Hungary Lbs. 25,000,000 42,000,000 Lbs. 5,000,000 8,000,000 Lbs. 20,000,000 34,000,000 Lbs. 67,000,000 13,000,000 54,000,000 — Total 2,799,000,000 1,074,550,000 1,022,450,000 702,000,000 The Wcjkld's Pkoduction op Wool in 191."j was 2,800 Million lbs. Weiuht. The Classes of wool grown can be divided into three groups, viz. : Merino Wool for clothing, crossbred for clothing, and low wool used mainly for carpets, rugs, &c. The appro.\;imate proportion" of these classes is l,()74,00ll,(m(> lb. meruio, 1,022,000.00(1 lb. crossbred, and 7(_l0,0(J0,O(JO lb. low wool. Merino. The Britislx Empire p'fbduces: — 63 per cent, of all merino wool grown. 10 ,, produced by France, Russia and Italy. 16 ,, ,, North America. 7 „ 100 per cent. South America, other countries. Crossbred. The British Empire produces : — 40 per cent, of all crossbred wool grown. 7 ,, produced by France, Russia and Italy. 12 ,, ,, North America. 32 ,, ,, South America. 9 ,, ,, other countries. 100 per cent. Loiv Wools for Carpets, dtc. The British Empire produces: — 9 per cent, of carpet wools. 40 ,, produced by Russia. 51 ), ,, other countries. 100 per cent. 2^ TABLK 2.— DISTRIBUTION OF THK BRITISH EMPIRE CLIP OF MERINO AND CROSSBRED WOOLS 1013, DISTINGUISHING AS TO SOURCES OF SIl'PLY AND KINDS OF WOOL. Adsti tAI.IA. New Ze Ai..\ND. Cai'e. LTnu'Eii Kingdom. Falkland Islands. Merino. Crossbred. Merino. Crossbred. Merino. (Crossbred. Crossbred. Lbs. Lbs. LI.S. Lbs. Lbs. Lbs. Lbs. United Kingdom ... 102,500,000 40,000,000 3,500,0(10 130,,5O(l,OO0 63,(100 (100 96.000,000 1,300,(100 France. Belgium. 214,000,000 22,5(10,000 1,000,000 15,5(I0,0(J(1 36,000,000 2,500,000 1,000,000 and Holland. (iermanv and Aus- 164,500,000 17,500,000 1,500,000 21,500,000 72,(1(.)0,000 8,000,000 1,700,000 tria. Italy and Switzer- land. Russia Norway, 6,500,000 2,(W0,000 — — — 1,0(JO,(J(10 — 5,000,000 5,0(10,00(1 and Sweden. United States 16,000,000 13,000,000 — 14,000,0(1(1 9,000,000 11,(100,000 — Japan, China, and 6,500,000 — — — — — — India. Colonial, Others ... 22,000,000 — — 7,000,00(1 — 2,000,000 — Total 537,000,000 '.15,000,(100 6,0(10,00(1 ■ 188,5(10,0(10 180,0(10,000 125,500,000 4,(100,000 TABLK 3.— DISTRIBUTION OF THE BRITISH EMPIRE CLIP OF WOOL IN 1913 DISTINGUISHING AS TO KINDS OF WOOL ONLY. j Merino. Per cent. Crossbred. Per cent. Total. Per cent. Remarks. United Kingdom... France, Belgium, and Holland. Germany and Aus- tria. Italy and Switzer- land. Russia, Norway, and Sweden. United States ... Japan, China, and India. Colonial, Others ... Lbs. 169,000,000 251,0(.)0,000 238,000,000 6,500,000 5,000,000 25,000,000 6,500,000 22,000,000 23 35 33 1 1 3 1 3 Lbs. 267,800,000 41, .500,000 48,700,000 3,000,000 5,000,000 38,000,000 9,000,000 65 10 12 1 1 9 2 Lbs. 436,800,0(10 292,50(1,000 28('), 70(1, (100 9,500,000 10,000,000 6.3,(100,000 6,500,000 31,000,000 39 26 25 l 1 :> 3 Italian Imports higher than these figures. Russian Imports higher than these figures. ( Italy iraporied additional Co- lonial Merinos rh\ Belgium Germany and Austria. \ Belgium and Germany send large quantities of Colonial scoured IMerinos and Cross- ly brcds to Russia. Total 723,000,000 100 413,000,000 100 1,136,000,000 100 A'rt/<.— The aljovu figures arc partly estimated. TABLE 4.— ARGENTINE AND URUGUAYAN SHIPMENTS, 1913. The total shipments irom the Argeiitine and Uruguay in 1913 amounted to 415,(100 bales, of whiL-h the Argentine contributed 295,000, and Uruguay 120,000. The proportion ol Merino and Crossbred wools was as follows : — Argentine Uruguay ... Shiiimeiils were niatle as follows : — ... 10 per cent. Merino, 90 per cent. Crossbro'd. ... 80 per cent. Merino, 2(.l per cent. Crossbred. Dunkirk and Havre . Antwerp Uamburg and Bremen England United States ... Italy All Other Bales 100,000 47,000 121,000 70,000 28,000 14,000 35,000 415,000 Destination. France and Belgium Germany and Aiistria United Kingdom ... United States Italy All Other .. Tc.tiil ... 29 lbs. 140,000,000 115,000,000 66,500,000 26,600,000 13,300,000 33,100,000 394,500,000 Per cent. 35 30 17 7 3 8 100 .Vo/*".— Iniismuch as it is only possible to ascertain the port to which the wool is shipped, the final destination in many cases is doubtful. The average bale is estimated at 950 lbs. TABLE 5.— THE W<)RTJ)S rRTNCIPAL FLOCKS OF SHEEP. Australia ... United Kingdom U.S.A France Germany ... Year. Number. Remarks. 1911 93 millions 1915 66 1905 29 1915 28 1910 42 1914 36 1887 22 1914 1-' 1883 14 1915 r, Estimated. The figures of the LT.K. Hocks for the past 30 years have been practically station- There are no returns for South Americn, but the numbers are gradually declinini;'. 30 III.-PLAX. N.H.—l'li,. statistics in this Section have been compiled h.y the Raw Materials Section, Contracts Department, War Office, from the figures in their possession. ■ SOUE.GES III'' SI I'lM.V. Ihe great bulk of the flax supply of the worhl is produced in Allied (-(uintries, but at piesent the Enemy (ontrols largv Hux growing areas in Belgium and Russia. Russia produces about 80 per cent, of the world's output, but a large part of Russia's production is consumed locally by the jjeasants. The annual production according- to Russian agricultural returns is 000, 000 tons. Of this the exports are not more than half and the consiimption of Russian mills is normally about 80,000 to 100,000 tons. The peasants therefoi'e retain about one-third of the crop for domestic consumption. 'I'lie figures (if production I'or manirfa'-turing purposes are approximately as follows: Russia ... France and Belgium . . . Ireland ... Holland Germany and Austria ... Total Tons. 400,000 50,000 10,000 10,000 30,000 •500,000 A good deal of the flax grown in France is i-etted in tlie Oourtrai district of Belgium and is not therefore distinguished in the above figures. In noimal times the relative values of Russian, Irish, and Courtrai Ihix are approximately (1) Courtrai flax ... (2) Irish flax (■]) Russian flax Dtitch flax is intermediate between Coiirtrai and daniasics and fine linens; the oarser qualities from Russia for heavy canvas and sailcloth. The flax plant is grown in other parts of the world, notably Canada. TTnited States of America, and Soiith America for the purpose of extracting linseed oil from the seed. Cultivation for this imrpose cannot, however, be combined with the production of fibre for industrial purposes. DISTRIBUTION OF SUPPLIES. £80 to £100 per ton. £60 per ton . £40 per ton. Irish. I'he finer flaxes are used for I'he consumption of flax in the various countries is ajjproximately Russia (for industrial purjioses) United Kingdom ... Belgium France. Germany and Austria Other countries ... Total ... Tons. 100,000 100,000 130,000 40,000 120,000 10,000 500,000 Practically all the flax supply of the world is consumed by (he countries now nt war. Enemy coiintries consume aliout 25 per cent, of the total, but pioduce oTily 5 ft) jier cent. Every consuming country is dependent to a gi'eater or less extent ujion Russia. For the requirements of the United Kingdom. Iieland contributes 10.000 tons, lielgiuni, France, and Holland about another 10,000, and Russia about 70,000 to 80,000 tons per annum. The distribution of supplies of linen yarn from Russia to the five main producing countriei" in (lie years 1!)01, 1002, i-omiiared with 1912 and 1913 was as follows: — Linen Yarn. Exports troni Itnssia to : — liHIl. l'.i()2. I'.n2. 1913. United Kingdom Fr.iiioe... I'elijium (iennany Austria Tons. :i',i,ooo 25,000 21,000 .37,000 ',1,000 Tons. 41,000 40,000 35,000 44,000 9,000 Tons. 93,000 3(!,000 71,000 80,000 27,000 Tons. (!7.00O 37,000 78,000 62,000 18,000 Total 131,000 109,000 307,000 2(52,000 Total to all couutrics 130,000 172,000 309,000 2R(!,O00 31 DISTRIBUTION OF IMPORTS AND EXPORTS OF LINEN GOODS. Some indication of the extent of the fineigu trade of the United Kingdom with other countries in manufactured linen and canvas goods is given by the following tables: — United Kingdom. — In 191-'^ ilie imports inin and exports from the United Kingdom of linen yarns and piece goods were ; — Linen Tarn. (1) From. (■:!) To Germany Belgium France ... Austria United States British Possessions ... Total to all Countries (1) Imports into U.K. 1.000's lbs. (2) Exports from U.K. 1,000'slbs. 2,131 19,000 4,077 2,134 27,863 3,827 2,301 408 49 2,195 735 16,.306 Linen Piece Goods. (1) From. (2) To ( 1) Imports into United Kingdom. £1,000. Germany Belgium France Austria-Hungary United States British Possessions ... Total to all (lountries 355 560 158 17 1 1,191 (2) Exports from United Kingdom. £1.000. 171 38 56 3,049 1,367 5,969 Linen Thread. (Exports from United Kingdom.) To 1,000's lbs. Germany Belgium France United States British Possessions ... Total to all Countries 359 33 145 363 865 2,646 £1,000. 57 4 23 54 105 ,350 Other Linen Manufacturer. (Exports from United Kingdom.) To Germany ... Belgium ... France United States Canada British Possessions Total to all Countries £1,000. 43 13 823 372 642 1.929 The only comsiderable import of linen manufactures into the United Kingdom is of cheap yai-ns from Belgium which are relatively coarser than Belfast productions. Our largest, customer for linen yarns is Germany who nsf^d to allow the finest counts to be imported free of duty. 32 In piece goofls the chief foreign market for Belfast is the Fnited States. Dunflee aiul district export wagon covers, tent canvas, waterproof covers and sailcloth all over the world, chiefly to the Argentine and British Colonies. Intermediate qualities of linen piece goods, chiefly damasks, are made in Dnrafermlinc and district for export to ihe Fnited States of America'. France. Tlie Freiicli crop of flax is normally aliout 20,000 tons. France also imixirts amounts varying from 74,000 tons in 1911 to 11,000 tons in 191.{. -., good deal of which is subse- quently exporied. The imports of yarns into France are small, but the exports are considerable, being 25,400.000 lbs. in 1913 of a value of £1,700,000. Although she does import linen maim failures, the value of these is small compared with lier exijorts which total about i;l,000,000 per annum. Belgium Belgium's imports of raw flax normally total 190,000-200.000 tons, and her exports 70,000-80,000 tons. She imports a considerable amount of yarn ("chiefly of light conuts). bnt her exports of yarn aie larger than those of any other country. POSSIBILITY OF INCREASING PRODUCTION WITHIN THE BRITISH EMPIRE. It is difficult to gauge what is likely to be the immediate prospect after the war. It appears probable that the shortage due to the scarcity of labour and the interiuption caused by military operations will continue for a limited period, and prices of Russian flax are unlikely to be much lower than their present level, especially if the probable fall in exchange is taken into account. Russian and French crops will be low. Belgian non-existent, and only Irish and Dutch pro- duclion is likely to show an increase. A continuous suii]ily of cheaj> i-aw material is essential for the prosperity of the linen trade, and any increase in the production of raw flax in the Fnited Kingdom or the British Empire will therefore be in the interests of the flax industry. (n) Home PifODrcTiox. Our attention has been drawn to the valuable work already being done by the Department of Agriculture and Technical Instruction for Ireland and the British Flax and Hemp Growers' Society to encourage scientific experiments in the cultivation of flax. The most fruitful lines of enquiry appear to be in the selection of the most siiitable seeds and choice of manures. Experiments have also been made in artificial retting, which have not hitherto been successful. Additional financial support for such research should prove a profitable investment, aud the assistance already given by the Development Commissioners might with advantage be extended. It has been repi-esented that one of the greatest hindrances to increased production i^ the shoi'tage and high cost of additional labour in the jniUing of the plant, and here there is a field for further efforts to devise satisfactory labour-saving machinery. Special encouragement might be given to inventors, and the conditions under which experiments must be made may require an amendment of the i)atent laws which would extend the interval allowed between (lie filing of a provisional specification and the final ap]ilication. This extension is occasioned l)y the short duration of the flax-ptilling season, which does not exceed two to three weeks. The result is that after a new invention has been exiierimented . with during one season, if it is desired to patent any improvement suggested h\ such experiment, there is not the opportunity of testing this improvement on the next year's crop before the complete specification must be lodged at the Patent Office. In tlie case of a patent for a fiax-iniUing machine, the time allowed between the filing of the ])rovisional s]iecifi( al ion ;iud tli;it of the comideie specification ^lioulil be extended to fifteen months. I'^inally. every asNistaiice should be given by the Goveriini<>ii( to eualde the farmers to secure the mo~t suitable kinds of seed. (7() Pi!oin'( 'iiov WITHIN THE Brittsti Empire. The possible fields for pucouratiiiig flax cultivation on a large scale are Canada and India. Interesting exiieriment^ ;iie now licini^- made in the ])rovince of Ontario, where the cost of production jjioves to be about tlic same as in Ireland. These experiments are being watched by the Canadian Department of .\griculture aud deserve every encnuiagement fiom tlie lni])erial Government. lint perlia])s the most favourable opening lies in India whei'e native labour is clieap and climatic conditions aie suitable. The Government of India has in the jiast assisted the Behar Planters' Association, and at one time it was hoped to utilise the vats formerlv used for the preparation of indigo for the retting of the flax fibre. Duiing the War the trade in natural indigo has lieen levived. but witli the renewed comjietition of synthetic indigo after peace is coiK 'uded another opiiortunity will present itself. As in the case of cotton, the (iovernment of Ii.lia might render valuable assistance by supplying the ryots with good flax seed and also by making arrangements for efficient marketing in order to insure the preservation of the identity of the material in Europe. 33 PEOPOSALS FOE SAFEGUAEDING SUPPLIES The tables oi the distribution of flax supplies clearly show that Gennauy and Austria are dependent on the Allies m normal times for three quarters of their requirements of raw flax. Eussia, Belgium and Ireland are the three princijial sources of these supplies, and these countries are consequently in a position to place a serious obstacle in the way of the immediate recovery of the German linen trade. The syndication of German linen manufacturers under Government control during the War is prejiaiiuy the way for stronger concentration of effort after the War, and it would appear that such efforts can only be successfully met by the adoption of a common policy on the part of the Allies with regard to the control of the distribution of their supplies of raw flax. SUMMAEY. 1. The Allies control more than 90 per cent, of the world's production of raw tlax. Eussia is the largest producer, but the finest qualities are grown in Courtrai, Belgium, and in the north of Ireland. 2. The largest consumers of flax for industrial purposes in normal times are Belgium, Eussia and the United Kingdom, but Germany and Austria have a considerable indiistry for the raw material of which they are largely dependent on Allied sources. 3. The largest export trade in linen yarn belongs to Belgium and in linen piece goods to the United Kingdom. Germany exports as well as imparts linen yarn, and her trade was steadily increasing prior to the War. Austria imjiorts little but has a considerable export trade in linen goods. 4. An abundant supply of cheap raw material will be required after the War, but there is a danger that scarcity and high prices may continue for some time. 5. In order to conserve the flax supplies of Allied countries for the beneft of their industries, it is necessary that they should adopt a common policy for the control of the distribution of their output of raw flax. 11 ECOMMEX UAllO.N .S . We make the following recommendations : — (1) That in order to stimulate the production of flax in Ireland, the work of the Depart- ment of Agriculture and of private bodies, such as the British Flax and Hemp Growers' Society, should be further extended, and that steps should be taken to promote and assist the undertaking of research into flax, its ctiltivation, and the preparation of the tibre for manufacture, jjarticularly in regard to an improved method of retting. (2) That the production of flax should be encouraged in Canada, India, and any other parts of the British Empire suitable for its growth. (3) That the Allied countries shoidd take joint measures to conserve for each other's use in priority to other demands the supplj' of flax. ;in7s 34 IV.-JUTE. N.B. — TliP statistics ill tliis Section have been eompiled by the Raw Materials Section, Contracts Department, War OiBce, from the fifj'ures in their possession. SOURCES OF SUPPLY. Jute is produced only in British India, its Lndtivation being confined tcj Bengal, Eastei'ti Bengal, Assam, Cooch-Beliar and Nepaul. Attempts to cultivate jute elsewhere, viz., in China. Egypt and East Africa have not been attended with success. Jute is the cheapest textile material, and owing to its cheai^ness and durability is in constant and universal use throughout the world for the man^lfacture of sacks, bags, wrapjiers and packings for all sorts of raw and manufactured articles of commerce. It is the basis of linoleum and floor-cloth, and is used in a great variety of otlier ways. Owing to its low jirice the only alternative materials for packing articles of commerce, both for domestic and expoit trade, are cotton and cases made of wood, both of which are considerably more expensive. The following figures of the acreage under jntc and llic nut-tiini of ciops foi' flie last five seasons are given by the Onvernnient of India : — Acres. Bales. 1911-191:J .".,106.422 8,2:',4,70(l 1912-191;^. 2,970,494 9.842,778 1913-1914 3,169,614 8,7r)l,77ri 1914-1915 3,358,737 10.443,924 1915-1916 ... ... 2,377.300 7.428.700 These estimates have almost invariably been conservative to the extent of about 10 jjei cent. Jute is harvested, marketed and shipped between the 1st of July and the 30th June, the first six months being the heaviest of the season. DISTRIBTTTTON OF SUPPLIES. 2,000,000 tons, and was distributed India United Kingdom France Italy Russia Belgium Germany ... .\ustria United States Other Countries In the season 1913-1914 the crop aniountcd to alxmt roughly as follows : — Tons. ... 1.100,000 300,000 120,000 50,000 • 50,000 20,000 160,000 60,000 120,000 20,000 The above table shows that more than half the jute crop is consumed in India, chiefly by the Calcutta jute mills. The next largest consumer is the United Kingdom, where the manu- facture of jute goods is almost entirely confined to Dundee and district. Germany consumes the largest quantity outside the British Empire, but as will be shown in the following section, the amount maniifactured for export in Germany is negligible. IMPORTS AND- EXPORTS OF JUTE M.VNUFACTURES. (ft) IXDIA. India is by far the most important jute manufacturing country, tlic industry in the past decade having made great strides. The exports from India in 1913-14 as compared with 1901-2 were as jollows: — (1) Giniiiii CInili. (1.000's vards.) I '.ml -()■_'. To Uiiiti'd Kingdom „ All Briti.sh Einpiru ... ,, Allies — France Italy Russia Belgium „ Enemies — Germany .\nstria-IInngary ... „ Neutrals — I'uited States Otlier Foreign Countries Total to all Countries ;Vi.l45 (iG.Ol'J 1L',I51C. 110 27;l,8U'.l i)(i,407 418,oliu I'.u:; 14. .■)ii,(;.").'i 1 1 7,75« 60 7,-J3.') 474 7.-i5,230 200,374 1,061,1.51 36 (2) Gunny Bags. (1,000's.) 1901-02. 1 1913-14. To United Kiugdoui 28,677 27,524 ,, All British Empire 94,918 135,125 „ Allies — France 661 797 Italy — 70 Russia — . — Belgium 4,637 5,091 ,, Enemies — Germany 9.806 5,364 • Austria-Hungary 682 113 „ Neutrals — United States 25.323 58,009 • Other Foreign Countries 94,100 164,190 Total to all Countries 2.30,127 308,759 (3) Jute Yam. (1,000's lbs.) • United Kingdom 5,009 29 All British Empire 5,032 30 Foreign Countries... 190 125 Total to all Countries 5,221 115 The countries produciug food aud raw materials coitsuuie a very cousideiable proportion of the total output, the United States and the countries not enumerated being- of far greater importance to India's export trade in jute than those countries now engaged in war. The importance of the jute industry to India is eviplied with stocks for months to come and that, il' ])0s>lble. the jiroductiou iil raw jute sluiulil be increased. PROPOS.M-S FOB SAFEGUARDING SUPPIJES. As raw jule is pi'oduced only within the British Empire, and as raw jiite or jute goods are indis])(M;sable to the dom(>s1ic and exiiort trade of Germany and .Vustria. effective control of jute distriliut ion may be regarded as one of the most jiowerful wea])ons to be held in reserve should the ne(;essity arise foi penalising enemy countries or enforcing favourable commercial treaties. 39 An Expokt Duty on Raw Jute. The evidence taken from representatives of the jute trade is \inanimously in favoiir of the imposition of an export tax of £5 per ton on all jxite leaving India, with a rebate of the full amount where the jute is consumed within the British Empire. Whether total or partial rebates should be granted to our Allies, witnesses suggest may be left for further consideration. The revenue from this tax, even if a rebate were granted to the Allies, would yield to the Indian Government between £'2,000,000 and £3,000,000 per annum, and- it is suggested that a portion of this revenue might be applied towards the stimulation of prod\ietion and the encouragement of im^jroved methods of cultivation. The obvious objection to an export 'duty is that it might restrict demand and prejxidice the interests of the Indian producer. It must be remembered, however, that jute is a monopoly of British India, and that no fibre can compete with it in price. The price of jute has fluctuated between £12 and £36 per ton in ordinai'y trade conditions, and during the period covered by these fluctuations consumption has rapidly increased and no successful competing fibre has been found. It would appear, therefore, that owing to the peculiar conditions attaching to jute the eifect of the proposed duty would be a negligible factor in limiting demand or in diverting it towards other fibres. The imposition of an export duty woiild appear to be the simplest way of conserving the jute resources of the British Empire for the benefit of British and Allied industries. IIationing System. If in spite of measures taken to increase production and of the imposition of an export duty there should still be a world shortage of jute (as has occurred more than once in the past), it might be desirable to adopt a system of rationing enemy and neutral countries. As soon as the official statistics revealed the probability of a serious shortage the Indian Government would impose prohibition of export except under licence. The demands of British and Allied manufacturers would be met without limit, subject to restrictions upon re-export. It would probably be possible to allow neutrals to obtain the bulk of their requirements for their own consumption, but licences to enemy countries would be restricted to the limited amount available after satisfying the rest of the world. Summary. (1) Raw jute is exclusively grown in British India and is one of the cheapest and most indispensable articles of commerce. (2) The special features of the Bengal climate and the abundance of native labour renders British India immune from attack on her monopoly of jute production. The steps taken by the Indian Government to improve the methods of cultivation should be extended. (3) About 80 per cent, of the raw material is maniifactured in the British Empire and Allied countries, 12 per cent, in enemy countries, and 8 per cent, in neutral countries. (4) Calcutta exports 60 per cent, of her production, which i)roductiou constitutes about 52^ per cent, of the world's output of jute goods. Dundee exports 40 per cent, of the output of the United Kingdom equivalent to 12o per cent, of the world's production. It is desirable to ensure the continuity of this export trade. (5) There is a prospect that for several years after the conclusion of peace there will be a shortage of raw jute compared with the maximum consumptive capacity of the world's machinery. This shortage will be particularly acute during the first few months of peace, when Riissia, Germany, and Austria will require to replenish stocks which have been practically exhausted during the war. Recommendation. We make the following recommendation : — That the attention of the Indian Government be called to the opportunity oifered by India's monopoly in the production of jute to safeguard for the British Empire and its Allies the supplies of the fibre. To this end we recommend the imposition of an export duty (£5 per ton has been suggested by expert witnesses) on shipments of raw jute from India to all destinations with a total rebate of the duty in favour of the British Empire, total or graduated rebates in favour of its Allies, and graduated rebates in favour of >uch neutral countries as may offer reciprocal concefsions. 91178 C 4 40 V.-SILK AND SILK WASTE. WORLD'S SUPPLIES. TliP world's supplies of raw silk are flrawn from three main snuroes, viz. : — (1) Tlie Far East. — China and Japan and to a very small extent India. (2) Asia Minor and the Levant. — Turkey-iu-Asia (Bronssa), Syria, Persia, and Turkestan. The Balkan States (Serhia, Bulgaria, &c.), Tiirkey-in-Europe (Adrianople), and Greece. (3) Europe. — Italy and Fi-ance with sniallei' quantities from Russia, Austria-Hungary, and Spain. Jaj)an and China in normal times supply approximately 66 per cent, of the world's production, Italy and France 19 per cent., and the remainino- countries mentioned above 15 per cent. The world's crops have advanced steadily from some 1.5 million kilos in 1892 to 27 million kilos in 1913. Almost the whole of this increase has been secured by Japan and China, the former country having surpassed the latter in each year since 1909. It is calculated that the Japanese crop is increasing at the rate of 10 per cent, per annum, and whereas 40 years ago Japan only produced some 7,000 bales of indifferent silk, she will probably export this year 150,000 bales of superlative silk of the value at current rates of approximately £30,000,000 sterling. Between 60 and 70 per cent, of the Japanese crop is exported annually to the United States. Tlie European production has remained practically stationary, and the supplies from the Levant have doiibled, but only represent a small proportion of the whole. WORLD'S CONSUMPTION. The world's demand for raw silk has kept pace with the advance in the supply, but it is a striking fact that the major portion of the increase has been absorbed by the United States, which country has increased its consumption from 2 million kilos in 1892 to 12 million kilos in 1913, and is to-day the dominant factor in the silk market. Table of World's Production aiul Consumption. The following table jn-epared by Mr. Frank Warner, and embodied in the Report of His Majesty's Commissioners tor the International Exhibiti' in enemy poxintries. As Indian waste (with ilie excejition of a small quantity froni Tvaslimir) is mixed with impurities, it is not used hy English spinners. Great Britain is. therefore, entirely dependent ou foreign coimtries for the snpply of raw material for this most imjiortant branch of its silk industry. Silk is extensively used for war purposes in the manufactiue of cartridge baj^s. balloons, porachntes and sewings for imiforms, the raw material for which is mainly silk waste. A French anthority e^iimates the quantity of silk tor Germany's war requirements at 6,000,000 kilos a year. It wonld be reasonable to assume that the war requirements of tlie British Empire are not less than those of Germany. Tlie importance of producing the necessary quantity of raw material within the Empire is therefore apparent. To secure siich a supj^ly of silk waste m the ordinary way a.s a by-product from raw silk would entail tlie establishment of sericulture on a scale comparable with that of China or Japan, the attainment of which, whilst not impossible, would not easily be reached. Much might readily be done to helji supplies by the cultivation of Eri silk — (Attac.us Ricinus, the worm of which feeds on the castor oil plant) — not only in India, but in the West Indies and other parts of the Empire where the climate is suitable. Tlie cocoon of the Eri silkworm cannot be reeled, so is used in its entirety as waste silk. The wild silks of Fganda and British and German East Africa might be similarly used, pari icularly if cultivated. Summary. (1) The world's siipply and demand for raw silk and silk waste is fairly evenly balanced, and there appears to be little likelihood of a permanent shortage of supplies. (2) The consumption of raw silk and silk waste in the Fnited States has been, and still is, increasing at a rapid rate, but the extra demand has been met by a steady advance in the .Japanese cioi)s. (3) The world's supplies of raw silk and silk waste are mainly drawn either from the countries of the Allies, viz.. Japan. Italj' and France, or from the neutral country of China. (4) A certain amount of raw silk and silk waste is prodticed in enemy countries, notably the Ottoman Dominions, Hungary and Bulgaria, but the total quantity does not, in normal times, exceed about 8 per cent, of the world's jn'oduction, and is not nearly sufficient to meet the needs of the German silk industry alone. (5) The requirements of the United Kingdou) arc supplied in the main satisfactorily, although the competition of American l)uyers for the finest qualities of filatures is being increasingly felt. (6) Inasmuch as, m normal times. appn)xinialel\ GO per cent, of the British supjilies are drawn from China, over which country we have no control, it does not appear possible to take any definite steps to safeguard our bulk supplies. (T) There is evidence to prove that sericulture within the Empire might be stimulated, and India, in iiai'ticular, is clearly indicated a^ being a promising field for such development. Ef.C'OMM I'.NUATION'. We, therefore, make Ihe following recommendation: — Although l!ie sujipiy of raw silk and silk waste keeps pace with the continually increasin"- w(uld's consumption, we recommeml ihc develoi)men1 , uufler efficient direction, of sericulture in India and its stimulalion and cncouragi'DiiMil in those parts of the Empire where climatic ami labour coinliti(nis ar(> fax nuiable. 43 APPENDIX I^XITPJ) KLNTiD(»:M. Statement showing the (^UAxrrrv and Value of the undermentioned de.scriptions of unmanufactured Silk Imported into the United Kingdom from all sources during each of the years 1909 to 1913 inclusive, distinguishing the Imports from each principal source of supply. (Extracted from the Annual Statement of the Trade of the United Kingdom, 1909 1913.) Articles and Countries whence consigned Quantities. 1909. 1910. 1911. 1912. 1 1913. Silk. Silk Kimbu, or H>id-« nf Sill- and WnUe. Germany ... Belgium France Switzerland Italy Turkey, European „ Asiatic China (exclusive of Hong Kong, Macao, and leased territories). Japan (including Formosa and Japanese leased territories in China). United States of America Other foreign Countries Cwts. .301 722 5,530 332 2,770 966 109 27,852 1.5.54 671 256 Cwts. 163 192 6,213 1,489 3,463 171 88 38,108 552 237 109 Cwts. 48 58 5,654 789 3,144 107 178 37,167 3,625 122 55 Cwts. 19 388 4,503 885 3,361 949 718 34,536 8.469 40 251 Cwts. 372 51 5,163 1,542 3,360 57 644 30,608 ^,316 16 73 Total from Foreign Countries 41,063 50,785 50,947 54,119 46,202 British India Hong Kong Other British Possessions 3,666 20,420 2,777 18,7,34 24 2.674 19,267 283 1,498 12,920 23 1,814 7,496 49 Total from British Tossessions 24,086 21,,535 22,224 14,441 9,359 ToTAr 65,149 72,320 73,171 68,560 65,561 SUl- WaMe Nolls. Belgium France Italy ^ China (exclusive of Hong Kong, Macao, and leased territories). Other Foreign Countries 74 563 1,211 675 155 - 919 884 919 16 1,882 1 ,678 1,.382 800 546 1,540 2,312 1,293 502 168 1.931 3,003 1,409 532 3,511 Total from Foreign Countries 2,678 4,620 5,946 6.200 8,455 Total from British Possessions 305 1,088 2,144 1,350 1,676 ToTAr 2,983 5,708 8,090 7,556 10,131 France Italy Turkey, European „ Asiatic China (exclusive of Hong Kong, Macao, and leased territories). Japan (including Formosa and Japanese leased territories in China). Other Counti'ies 1,528 472 152 89 ,5,583 ,502 20 1,333 536 113 162 5,458 784 13 1,485 469 102 197 7,658 768 9 1,395 509 130 320 7,737 507 6 1,736 538 116 200 4,854 933 28 Total from Foreign Countries 8,352 8,399 10,688 10,610 8,405 British India Ceylon and Depeudeucies Other British Possessions 9i;.-, 3 499 347 17 71 29 223 2 27 Total from British Possessions 968 499 364 100 252 TOTAI 1 1 9,320 8,898 11,0,52 10,710 1 8,657 44 Value. Article and Countries whence consigned. 1909. 1910, 1911, 1912, 1913. Silk. £ £ £ £ £ Sin- h'linhs, nr /fiis/.x qt' Sll/. iukI (I'./.s/r. Germany 3,496 1,269 480 301 6,066 Belgium 5,251 883 135 2,.346 1,021 France 82,962 86,716 75,393 63,316 81,682 Switzerland 3,168 7,337 8,605 13,390 19.244 Italy 40,1 6.S 54,153 .53,.o01 61,147 58,888 Turkey, European 14,083 2,878 1,778 15 774 1,053 „ Asiatic 1,302 1,.'.87 2,157 11,200 10,459 China (exclusive of Hong Kong, Macao, and 202,985 313,876 338,896 335,779 315,798 leased territories). Japan (including Formosa and Japanese leased 15,083 4,788 35,615 89,793 50,448 territories in China). United States of America 6,952 2,249 1,096 541 169 Other Foreign Countries 1,493 770 606 4,200 962 Total from Foreign Countries 376,938 476,506 518,262 597,787 545,790 British India 21,676 20,773 24,891 10,067 17,761 Hong Kong 170,906 160,116 167,720 123,548 75,975 Other British Possessions — 240 2,254 129 280 Total from British Possessions 192,582 181,129 194,865 1.33,744 94,016 Total 569,520 657,635 713,127 731, .531 639,806 Sni: Waste Noils. Belgium 496 2,682 4,414 5,537 7, '095 France 2,179 4,180 3,028 6,326 6,175 Italy 3,380 .3,794 1 ,652 1,651 1,409 China (exclusive'^of Hong Kong, Macao, and 2,345 45 1,612 511 — leased territories). Other Foreign Countries 631 6,539 4,760 7,749 13,652 Total from Foreign Countries 9,0£1 870 17,240 15,466 21,774 28,331 Total from British Possessions 4,210 8,037 3,902 8,174 TOT.M 9,901 21,450 23,503 25,676 36,5! '5 Sill; Raw. France 1.30,870 119,134 1.30,250 127,481 165,311 Italy 39,324 48,036 41,624 43,164 46,598 Turkey, European 12,261 8,879 8,340 9,892 9,479 ,. Asiatic ... 7,942 13,469 16,366 24,751 17,422 China (exclusive of Hong Kong, Macio. mid 309,672 .307,568 450,453 438,407 2S7,851 leased territories). Japan (including Formosa and Japanese leased 39,479 60,944 58,881 38,216 74,970 territories in China). Other Foreign Countries 2,176 1,252 747 499 818 Total from Foreign (Countries 541,724 559,282 706,661 682,410 602,449 British India 58,587 30,590 24,937 6,274 15,140 Ceylon and Dependencies — — 1,005 — 178 (»tlier British Possessions 190 — — 1,669 1,660 Total from Britisli I'ossessions 58,777 600,501 30,590 25,942 6,943 16,978 To'lAI, 589,872 732,603 689,353 619.427 45 SECTION 2.-THE CX)TTON INDUSTRY. The British cotton industry is the largest of the world's textile industries. The immense volume of its output, the capital invested, the number of operatives employed, and the inherent strength of its position in international trade all combine to place it in the first rank of British industries. Of the exjjorts from the United Kingdom the annual shipments of cotton yarn and fabrics easily take the first place in importance and value, and therefore peculiar importance attaches to this inquiry into the position after the war of what is perhaps the most powerful of our manufacturing industries. Before dealing with the special points to which our inquiry was directed, we consider it to be desirable to set out as clearly as possible the present position of the industry, its relative importance in world oonijietition, its home and export trade, and the highly-specialised organi- zation which is peculiar to it. By this means a general impression will be given of the extent of the industry and the area of its operations. It is somewhat difficult to assess the exact ratio between production for home use and for export. Calculations from the returns of the Census of Production and the export statistics show that of yarns some 12 per cent, in quantity and 15 per cent, in value are exported, while of piece goods more than 85 per cent, in quantity and rather less than 80 per cent, in value are exported. The smaller percentage for qiiantity than for value in the case of yarns is due to the fineness and higher value of the counts exported, and the converse in the case of piece goods is due to the greater average value of the goods retained for home consumption. It may, therefore, be estimated that about 80 per cent, of the cotton fabrics manufactured in the United Kingdom are for shipment abroad. The last ten years preceding the outbreak of war witnessed a very large expansion in the cotton indiistry. Trade was good, labour was well employed, new spindles and looms were erected in large numbers, profits were well-maintained, and the export figures steadily advanced until in 1913 they reached the enormous total of over i;l27,000,000, and represented about 30 per cent, of the exports from this country of manufactured goods, and over 24 per cent, of the total exports of the produce and manufactures of the United Kingdom. The following statement, compiled from the Board of Trade Returns, shows the value of the various kinds of cotton textiles exported from the United Kingdom to the undermentioned groups of countries during the year 1913, the last complete pre-war year : — Value Thousands i's (OOO's omitted). (Jiuups of Cuuutries. (Jutti)ii Yarn. Cuttou PieOf Cidudh. Cotton Manufac- tures other than Piece Goods. Total Cotton Textiles. Foreign Countries- European — ♦Allies Enemies Neutrals ... ...' 1,277 $5,902 3,446 1,980 !)6,234 '4,830 1,130 4,.387 1,129 13,265 1,044 9,320 Total European 10,625 13,044 3,303 26,972 Extra European — United States Central America and Mexico South America China (excluding Hong Kong) Japan Other 687 72 3411 31 41 308 1,572 934 8,324 9,476 1.051 12,787 1,465 387 1,903 165 59 868 3,724 1,393 10,567 9,672 1,151 13,963 Total Extra European 1,479 34,144 4,847 40,470 Total Foreigu Countries ... 12,104 47 188 8,150 67,442 British Possessions- Australia New Zealand Canada South Africa British India Other 61 t 289 t 2,268 284 3,391 809 1,981 1,232 34,978 8,197 1,029 276 963 807 908 686 4,481 1,085 3,233 2,039 .38,154 9,167 Total British Possessions 2,902 50,588 4,669 58,159 Total to all destinations ... 15,006 97,77i; 12,819 ' 125,601 * Roumania is not included. t Not separately recorded in the published Trade Returns of the United Kingdom. X Of yarns Gerinany took £5,141,022. Turkey, £440,227, AustriaHungary, £194,498, aud Bulgaria, £126,61U. § Of piece goods, Turkey took £4,216,881 and Germany £1,800,.552. Yaen. It will be lioticed that the markets to wliicli sani are .--iii]ipeil Jifter from those which take piece goods. The form^er are iisiially countries with an exteusive weaving' industry, bitt which have not sufficient spindles to supj)ly all their looms. The latter comprise, in the main, large semi-develoijed markets such as India, China, South America, Turkey, &c. The markets for yarn may be divided into two distinct groups (a) Those which take hue yarns ((iO"s to oUO's) spun from Sea Island, Egyptian, Peruvian, and AVest Indian cotton, and (h) Those which import the coarser counts (below (iO's) spun from American and Indian cotton. Of the former, the principal countries are Germany, the Netherlands, the United States, France, Switzerland, Austria, Italy, Russia and Sweden. The trade with Germany exceeds all others in importance and amo\iuted in value to £5,141,022 in 1913, i.e., 34 per cent, of the total exports of yarn from this country. This trade was almost exclusively in hne counts of 80's and upwards, as although Germany is gradually increasing her outijut of fine counts, her looms and knitting frames have increased in at least eeen a surplus of yarn for export. As a permanent result of the war there will probably be a considerable increase in the German fine spinning industry in order to render Geimany independent of British sources of supply. On the other hand it may be expected that there will be some compensation in the increase of lace and hosiery machines and looms in this country to manufacture articles formerly imported from Germany. During the period imnieiliately following the conclusion nf jx-ace, howevei', there should be a fairly brisk demand for yarn to meet the iujiiieiliatf reqnirenients of continental and other foreign manufacturers. Piece Goods. The markets for piece goods may be divided into five main gi'oxips : — (a) British India and countries of the Far East. . . (b) The Near East, Egypt, the Levant, and the Balkans, (r) Central and South America. {(l) The Continent and the United States. (e) African markets, East Coast, West Coast, and Morocco. (a) The first group is by far the most important as it absorbs o\er 5(i per cent, of the total exports of cloth from the United Kingdom. The principal countries with the values and percentages in relation to our total exports of piece goods taken by them in 1913 were as follows : — £ British India ... ... ... 34.978.001) ;iii|iiii.\ini:ilely 30 i)er cent, of oui' total exports. China (including Hong Kong) 11,733,000 ,, 12 ,, ,, ,, Dutch East Indies 4.014.000 ,, 4 Straits Settlements 1,820,000 ,. 2 Japan 1,051,00(1 ,. 1 Siam ". 629,000 ,, 0-6 ,, Ceylon ... 551,000 ,, 05 ,, Philippine Islands 278,000 „ 025 „ „ „ Total 55,054,000 „ 56-35 It is a feature es])ecially noticeable in Eastern markets that they are subject to exc I'litionally violeiit Huctuatioiis, due to the varying prosjjcrity of their immense populations, I'he level of earnings in these countries is very low, and ccuisequently any factor aft'ecting crops or the general prosperity of the population is immediately reflected in an increase or decrease of the imjjorts of cotton goods, which are not considered to be absolute necessities, and the demand for which can be withheld for a considerable i)eriod. 4t (b) The second group of piece-g-oods markets is much less important as regards volume of trade. It comprises the following principal countries : — £ Turkey ... ... 4,216,881 ... ... 4'25 per cent, oi uur total exports. Egypt 3,285,329 3-25 „ ,, Greece ... ... 463,456 ... ... 0'50 ,, ,, ,, ,, ,, Roumania ... 323,354 ... ... 0"30 ,, ,, ,, ,, ,, Bulgaria 128,961 0-12 „ ,, Total ... 8,417,981 842 This is a group of markets which oifers great possibilities but which has not expanded so rapidly as other outlets during the past few years, owing to the competition of Germany, France, Austria, and Italy, a competition which is greatly stimulated by geographical proximity to the market, and advantageous transport rates. The future of Turkey is regarded with very great interest by the cotton trade. Prior to the war, British goods enjoyed a fair and open field, with the result that a very large trade was done. If this market should eventually come under the Russian tariff, our trade would be seriously affected, unless special arrangements were made to safeguard it. (c) The third grouj) of piece goods markets include the States of Central and South America, the most important outlets being : — £ The Argentine Republic ... 3,103,407 320 per cent of our total exports. Brazil 1,650,992 1-70 ,, „ Chile 948,333 0-97 „ ,, Colombia 823,451 084 ,, „ Uruguay 583,449 0-59 ., ,, Mexico 401,103 040 Peru 389,117 040 „ ,, Total 7,899,852 S'lO The shiijmeuts to all markets of Central and South America during 1913 amounted to £9,356,000 or 9'3 per cent, of our total exports, and the trade with this great consuming area appears to be well maintained. (d) The Continent and the United States. — The main divisions of this large group of markets in 1913 were as follows : — £ European Allies ... ... 1,980,000 approximately 2'0 per cent, of our total exports. * ,, Enemies ... 1,889,000 ,, 1-9 ,, ,, Neutrals ... 4,830,000 ,, 4-9 ,, ,, United States 1,572,000 „ 1-6 ,, ,, Total ... ... 10,400,000 ,, 10-4 The principal outlets among the Allies in 1913 were Belgium (£744,801), France (£376,973), Italy (£287,077), Portugal (£425,551), and Ru,ssia (£139,813). The exports to enemy countries (excluding Turkey and Bulgaria) consisted almo.st entirely of goods for Germany. The exports to Austria-Hungary were negligible. It should be noted that a considerable portion of the goods shipped to Germany were probably re-exported to Russia, Austria, and other markets. The principal neutral markets before the war were Switzerland (£1,607,904), Netherlands (£1,389,200), Norway (£331,268), Sweden (£308,531), and Denmark (£303,725). Tlie prosperity of neutral markets and of the United States, since the War, has I'esulted in a greatly increased demand for piece goods, and as German competition has been largely eliminated, British shipments have grown considerably. Thus in 1916 British piece goods to the value of £1,057,027 wei-e exported to Denmark, while the shipments to the United States had advanced to £2,642,592. There appears to be little doubt that oiir normal trade with European markets can be considerably increased. (e) African Markets, East Coast, West Coast, and Morocco. — Tliis last group of markets is very important. The present value of the trade is considerable; and the prospects for develop- ment in the future appear to be particularly promising. The principal outlets in 1913 were : — £ British West Africa ... ... 2,406,468 or 2'50 per cent, of our total exports. Briti,sh East Africa 428,407 ,, 044 ,, Foreign West Africa ... 1,439,484 „ 1-50 ,, Foreign East Africa (includ- ing Madagascar) ... 364,976 ,, ()'35 ,, ,, ,, ,, ,, Morocco 757,807 ,, 0-75 ,, ,, ,, ,, Total 5,-397,142 ,,5.54 Excluding Bulgaria and Turljey. 48 During- the War the increase iii iJritish shipments, particiihirly to the French Colonies in Africa has been very marked. Supplies from France have not been obtainable and British goods have been able to secure a footing in markets which were formerly closed to them by tarift's. In 1916 the shipments to this group of markets reached a total of £6,359,545, of which Morocco alone accounted for £1,178,861. Cotton Mamtfactukks otiikh than Piece Goods. These consist in the main of lace and ])atent net, sewing thread and \ineniunerated arti(des. The exports of lace and hosiery are considered in the special sections devoted to these trades. The trade in sewing cotton, however, by reason of its value (£3,458,661 in 1913) and the fact that the world's output of the article is largely controlled by J3ritish enterprise, deserves special mention. The princijjal markets for British exports are Russia, Scandinavia, and other European countries. Central and South America, jiarticularly Brazil, and British India. The exports of home manufactured thread, however. l)y no means represent the hold which the British thread manufactureis have on the trade. The imposition of tariffs in the various consuming countries in Euroi)e and America has led British concerns to erect large factories in those countries so as to come within the taritf wall, with the result that the pro- duction of sewing cotton in the world may be said to be largely under British control. By dint of excellence in manufacture, extension of activity to almost every market in the world, and a remarkably etficient distributing oiganisation, a virtual monoijoly has been secured of the world's market, and this appears to us to be a striking instance of British industrial enterprise. [mi'cjijts of Foreign Goods. The imports of cotton textiles into the Ignited Kingdom represent in value about one- tenth of the value of the goods exported. They reached a total in 1913 of £12,250,000. The following statement compiled from the Board of Trade Returns shows the value of the various kinds of cotton waste, yarn, and tissues imported into the Fnited Kingdom from the under- mentioned groiips of countries during the year 1913: — - A'.-iluL's 'I'liDUsaiuls £'s ((ion's (iiiiittt'd). (Jouutries Foreign Countries — European — Allies Enemies ... Neutrals... Extra European — United States Japan Foreign Countries, unspecified British Possessions Total from all Destinations Yar Waste from Worlied Cotton. Piece (jroods. Maimfactures; other than Piece Goods. — 13(1 95 341 566 — — 16 27 43 '.} 3U 6 12 53 4 33 62 17 116 5(5(1 516 3,375 7,799 12,250 Total. "" 1 ~ £ £ £ £ £ 179 1.52 904 2,(J09 3,244 36',i 107 1,966 5,15H 7,600 3 64 326 235 ()28 The most noteworthy featiue of tliese returns is the fact tliat almost 66 ]ier cent, of the imports consisted of manufactures other than piece goods, namely laces, hosiery, fabric gloves, trimmings, underwear. &c., &c. These articles are dealt with under the Lace and Hosiery Sections of the Report. Attention is called to the fact that they were largely manufactured from British tine yarns. Yarns. Tlic imports 111 yarns Irom Gcrniany. valued at £;!3T.000. (•onsi>tcd ol a small (luantity of single yarns in the grey of counts mainly lower tiian ll's. (Of coimts above 17's. not a single pound of yarn in the grey state has been imported Ironi (iei'many.) Tn bleached, dyed, and printed yarns, the imports consisted partly oF yarn^ sent 1o (iermany to be put lliiough some process and then returned, and partly of German sjdnnings in low counts ol a (niality below that wliicli our spinners care to produce. .\s regards two-fold spinnings, the imjiorts of grey yarns were very slight, and, as the (H)unts were 48's/63's, it would appear that fiiey were British yarns returned after being treated. In bleached, dved, and printed two-folds, the bulk of the imports were in counts above 17's and were also jirtdiabU- British goods retuiiied after being dyed and mercei'ised. The balance of tlie imports consisted oi sewing cotton and enibi'dideiv v:inis I'nr the reliiil lran(. of was entii'cly in dyed iind printed good,^, am lor suudl quantities, .md tn (In l.irt tji.il ii tli(> total inijioits of piece good-^. Her competition I was jiossihly due to her willingness to take orders er control of llie d^esluh industry has given her 49 advantages in producing shades wliieli are not to be obtained so readily elsewhere. There has also been a considerable sale in this country of German and Belgian raised cotton goods, such as flannelettes, blankets, &c., made from "vigogne yarns." Germany also did a certain trade in cotton pile fabrics, velvets, &c. On the whole, the imports of cotton textiles were very small in comparison with the pro- duction in this country. While the imports of German dyed goods have shown a tendency to increase of late years, the trade appears to have been to some extent a "speciality" trade in goods which for one reason or another British manufacturers did not find it worth their while to make. Organisation of the Cotton Trade. We have been much impressed by the degree of localisation and of specialisation in the cotton trade and by the highly developed systenis of production and marketing, which we consider have largely contributed to the strong position of the industry. At the outset it should be noted that the British cotton industry is almost entirely localised in Lancashire and the adjoining portions of Cheshire and Yorkshire. Approximately, nine- tenths of the operatives are to be found in this area, the only considerable outside district being the neighbourhood of Glasgow with Paisley as its centre. Manchester, however, is the great distributing centre for the trade, and is, in fact, the leading textile market in the world. The reasons for this localisation of the industry are to be found in the following natural advantages : — (i) Proximity to the <^eaboard and to the Manchester Ship Canal, with facilities for the importation of the raw material and the export of the finished products. (2) A humid atmosphere peculiarly suited to the spinning of fine counts. (3) An abundance of cheap coal. (4) The presence of subsidiary industries such as engineering, which has had a dual effect : — (a) From the proximity of the textile machine shops to the mills there has resulted a remarkably close co-operation between makers and users in respect of machinery ; and (b) The presence of these works employing male labour has been a valuable adjunct to the cotton mills which einploy mainly female operatives. By this means the required proportions of male, female and juvenile labour have been obtained in the Lancashire textile centres. (5) A climate which renders indoor occupation desirable, general conditions which are not suited to agriculture, and pure water peculiarly suitable for bleaching and calico-printing processes are other factors which have largely contributed to the establishment of the cotton industry in Lancashire. The organisation of the trade may be divided into three separate and distinct sections: — Manufacturing (spinning and weaving). Finishing (bleaching, dyeing, printing). Marketing (distribution at home and abroad). Manufacturing. — The degree of specialisation in manufacturing is intense. The two operations of spinning and weaving are, in the main, separate, and are conducted in different districts. Spinning is concentrated in South Lancashire and adjoining parts of Cheshire and Yorkshire, and is sharply divided into two sections, viz., fine and coarse spinning. Fine spinning — that is the production of counts of 60's and upwards to 300's mainly from Sea Island and Egyptian cotton — is -centred in the Bolton and Manchester districts, and consists of some 15,000,000 spindles. The spinning of coarse counts (from I's to 60's), mainly from upland American and to a very small extent from Indian cotton, is localised in the Oldham, Eochdale and Stockport areas, and comprises some -35,000,000 spindles. Specialisation is carried even further, and certain firms produce only one range of counts such as say 32/40's twist, 36/52's weft, &c., &c. The spinning concerns are principally limited companies with local capital, and their managers have in very many cases risen from the ranks of the operatives. The weaving branches of the industry are situated largely in North and East Lancashire, the three principal centres being Blackburn. Burnley and Preston. Here again intense specialisation prevails. Blackburn and East Lancashire towns largely produce fabrics for the Indian market, such as shirtings, jacconets, mulls, dhooties, &c. Preston is noted for its shirtings, sheetings, longcloths, and for fancy cloths, jacquards, &c. Burnley produces printing cloths. Nelson and Colne make sateens and brocades. Radcliffe is largely engaged on weaving goods from dyed yarns, and Oldham is noted for fustians. Owing to the enormous trade in plain goods, which our hold upon the Eastern markets secures for us, manufacturers are able to standardise their cloths, so that orders are booked, for example, on such a maker's "standard 12 lbs. sheetings," &c. This standardisation has immense advantages, as it enables manufacturers to produce more even and perfect goods, and brings down the cost of production. It is in fact one of the most important elements of Lancashire's success in the Eastern trade. It is, however, only applicable to large lines of the coarser staple cloths. The fancy trade obviously presents a different problem as manufacturers must be, and are. willing to take orders for small parcels with large assortments of designs. This facility for meeting the wishes of the small buyer has been a very great asset in the South American markets, and enables the British manufacturer to contend successfully with his American rival in this class of trade. 9978 D 50 It is noteworthy that the cloth mauufacturiiig firms are usually private concerns operated by the proprietors and their sous, although of late years a number of them have been converted into private limited companies. Finishuig. — The various processes of bleaching, dyeing, printing and finishing are, in the cotton trade, conducted by specialised firms, to whom the cloth is handed by the merchants to he dyed, bleached or i)rinted as the case may be. The processes are carried out on commission, and in most cases the goods are returned to the merchant to be made up, ticketed, packed, and shipped. Owing to the pure water of certain parts of Lancashire and Cheshire, most of the bleaching and printing firms are established in those counties. Yorkshire handles a large proportion of the dyeing, but there are also several well-known firms of Lancashire dyers. Finishing is to some extent a specialised industry in Lancashire, but is also usually combined with the bleaching, dyeing and calico-printing industries. "Finish" is a very important element in ra().st bleached and dyed goods, and hence has arisen the system of bleachers' " bolt marks " and dyers' selvedge stamps, on which the goods are sold in many foreign markets. This section of the cotton industry has shown a marked tendency towards amalgamation, the bleaching, dyeing and printing trades being largely in the hands of powerful associations, including many, though not all, of the best firms in the trade. Ma I kefi» I/. —The gieat bulk of the distribiition of the British cotton trade is in the hands of Manchester merchants. A few manufacturing firms manage their own marketing, both at home and abroad, but they are exceptions, and are usually concerns which manufacture specialties that can be sold under distinctive marks. In Manchester, there is a well-defined distinction between the hjome-trade merchant and the merchant dealing with foreign orders. The latter is known as the shipper. The shipping merchant not only forms connections in the various markets of the world for distributing his yarns or goods, but he finances and conducts these goods through their various processes. Thus a China shipper with a large business in — say figured poplins — usually buys the grey cloth from a manufacturer or grey cloth agent. (Occasionally he will buy tlie yarns and send them to the manufacturer to be woven, but that is not usual.) The goods will be delivered at the shipper's warehouse, inspected, and will then be sent out to be dyed and finished on commission. They will afterwards be returned to the Manchester warehouse, will be lapped or rolled as the case may be, made up in tillots or cartoons, ticketed with the " chop " or device under which they are sold in China, packed in cases, and dispatched to' Birkenhead for shipment to the East. From the time that the first yarn or grey cloth is l>ought, up to the time that the merchant discoimts his draft against the shipment, he is responsible for the finance of the goods, and his ultimate liability extends until the draft is finally paid. It will be seen that the functions of the merchant are many and varied, and call not only for considerable foresight and acumen, but for a good deal of technical knowledge. There is considerable specialisation among the shipping merchants. Although some houses ship all kinds of cloth to all countries, the majority specialise on one particular market or group of markets. Thus the Eastern trade is usually handled by a different group of houses from those interested, for example, in the South American or Levant trade. A peculiar feature of the Manchester trade is the large number of foreign or naturalised British merchants engaged in it. This appears to be largely dixe to the fact that owing to the complete localisation of the trade in one centre, foreign distributing houses in European countries have in the past been attracted to Manchester in order to get into close touch with the market and conduct their own buying. Having established themselves for this purpose, they gradually extended their operations to f)ther markets. ^lany of the so-called foreign houses in Manchester to-day have been established in this country for three generations. The Levant and Xorth African trades are largely in the hands of natives of those countries, while the more distant markets, such as the East and South America, are mainly catered for by British houses. Apart from the highly specialised activity of the merchants, there has been a distinct tendency of recent years for the selling of yarn and grey cloth to be entrusted by spinners and manufacturers to yarn and grey cloth agents, who represent a number of mills, and are able to relieve the producer of many of his commercial functions, thus enabling liim to devote his time almost entirely to works management and purely industrial questions. Having summari.sed the general position and organisation ol the cotton trade, we now proceed to review the salient points connected with the industry which have been brought to our notice and which are relevant to the object of our enquiry. Supplies. Raw Material. Questions relating to the sources and the safeguarding of our supplies of raw cotton are dealt with in Section 1. Semi-vintiufaci ured Materials. (a) Yarn.t. — The imports of cotton yarns into this country are very small and the trade generally is independent of foreign supplies. Our attention has been called to the superioritv of the mixed cotton and wool yarns spun in Belgium and known as Vigogne yarns. These have been founcl to be peculiai'ly suitable for the weaving of raised goods such as flannelettes molletons, blankets, &c. Whereas British yarns are usually dry, the Belgian spinnings appear to contain oil, which binds the cotton and wool together. The usual mixture for such varns is 30 per cent, wool to TO jier cent, cotton. (b) D/icxIiiff.i. — The shortage of dyestuffs since the war has been acutely felt by that section of the trade which deals in coloured and printed goods. Almost complete unanimitv is 51 expressed that the dye-producing industry should be fostered by State assistance in order to render the cotton trade independent ot external sources of supply. We deal with this question more fully in Section 9. (c) Farina and Dextrine. — These starch products, which are largely used in the weaving and bleaching trade for sizing purposes, were almost entirely supplied by Germnny and Holland prior to the outbreak of war. In 1913 the total imports of farina amounted to 45,093 tons, of which 26,472 tons were obtained from Holland, and 14,666 tons from Germany. This is accounted for largely by the low prices ruling for potatoes in these countries. The average price of potatoes used in Holland for starch making was, prior to the war, 34.>;. per ton, while we are informed that the average price of distilling potatoes in Germany in 1910 was 26.s. 6fZ. per ton, and in 1902 as low as 19^. Id. per ton. Satisfactory shipments have been received from Japan since the outbreak of war. While it has been demonstrated that farina can be made in this country, it is doiibtful whether British farina could ever compete in price with the foreign product. We consider that imports from Holland and Japan might be encouraged. (d) Chloride of Magnesium. — This article, which is used by manufacturers for sizing heavy shirtings, was imported from Germany before the war, but steps appear to have been taken recently to stimulate the production in this country. (e) Ep.fom salts — manufactured from Kieserite, a German product, were largely used for bleaching purposes before the war, and the price of this article appears to have quadrupled since the imports of the product were suspended. Other semi-manufactured articles imported from abroad include French leather for picking • bands, certain lubricating oils, paper, strawboards, &c., &c. Apart from raw cotton, which is all imported from abroad, and with the one outstanding exception of dye-stuffs, it must be remarked that the cotton trade has been comparatively free from any dependence on foreign countries for its materials, stores and supplies. Pl.\nt and M.achinerv. The textile machinery used in the cotton trade is almost exclusively British. Among the few exceptions are winding, knotting and drawing-in machines and automatic looms — all of American make. Some of these — notably the Northrop loom — are now being manufactured in this country. We are satisfied that the machinery and plant used in the cotton trade are on the whole highly efficient, and that British spinners and manufacturers keep fully abreast of modern inventions, especially where new plant is laid down. In spinning, all the evidence goes to show that we are ahead of any of our competitors. In the weaving branch of the trade it has been suggested that America bestows greater care upon the processes of winding, warping, and beaming than is the practice in this country. It is probable that the relatively high cost of labour in the United States encourages closer attention to mechanical details and the more prompt scrapping of obsolete machinery than appears necessary in this country where the individual skill of the operative can always be counted upon and where the rates of wages are lower. In this connection, it is worth noting that American manufacturers make far more iise of automatic looms than British manufacturers. There are about 400,000 of such looms in the United States, as compared with 15,000 in this country. It miist, however, be remembered that these looms are specially suited to a large output of the coarser standardised cloths in which America specialises. AVhile making such standardised goods with complete success, Lancashire's strength lies in the finer makes for which the automatic loom has not so far been much used. The immense variety of the Lancashire trade necessitates the production of a wide range of non-standardised articles, in which quantities are relatively small and assortments are large. It is precisely this variety in the means of production which enables British man\i- facturers to compete with conspicuous s^^ccess in such markets as South America. Witnesses do not consider that further speeding uj) of machinery is possible in the bulk of the cotton industry. It is considered that high speeds do not make for efficiency in fine qiialities of cloth, as breakages with the resultant waste are more frequent. German and Austrian manufacturers appear to excel in machinery for the spinning of coarse yarns from waste and from short-fibred Indian cotton. They also derive great advantage from improved "raising" machinery in the production of flannelettes, blankets, &c. We notice that electric power is very little used in Lancashire for driving textile machinery. Whether this is due to the absence of large central power stations in the industrial districts or to the cheapness of coal and the relatively small part the cost of motive power plays in the total cost of production we are not prepared to say. The general opinion of witnesses seems to be that it is in the interests of the textile trades that this country sho\ild continue to be the world's centre for textile machinery manufacture, and that while the export of textile machinery to some extent causes an emigration of skilled labour to work such machinery, and also tends to reduce our exports of textiles to the country receiving it, there is no case for legislation against the export of textile machinery in normal times. Some concern is felt as to the situation immediately after the war, when very con- siderable repairs and renewals will be required. There is a general agreement among witnesses that a system of priority certificates with regard to deliveries of textile machinery should be continued for a sufficient period after the war to allow of the re-eqiiipment, not only o[ British textile factories, but also of those of our despoiled Allies. 9?78 D iJ 52 Labour Questions. The total number of cotton operatives in the United Kingflom, according to the Census of 1911, was 624,330. Of these, 237,630 were males and 386,700 were females. Males pre- dominate in the spinning processes and females in the weaving branches. Wages m the cotton trade are fairly good, those of spinners being distinctly high as compared with other industries On the whole,' family earnings are, as a rule, more than suflScieait to maintain a fair standard of comfort, as it is' common for more than one member of a family to earn good wages. Earnings generally are higher than in other competing countries with the exception of the United"^ States, but it should be noted that wages in Germany and France have tended to increase of late years, although the margin of difference is still considerable. The disparity is most marked in Eastern countries. In Japan, for instance, the average daily wages of all male operatives in 1913 was the equivalent of one shilling, while females during the same period earned only sevenpence per diem. The hours of labour worked in British cotton factories are shorter than those prevailing on the Continent, in the East, and even in the Southern States of North America, although the hours in the Northern States are approximately the same. The following statistics showing the number of hours per week worked in various countries were compiled by the International Federation of Master Cotton Spinners' and Manufacturers' Associations in March, 1913: — (a) The ITiiited Kingdom .^)-'i-.5 hours per week. (h) The Continent : — Germany ... ... ... ... 58 ,, Austria ... ... ... 63 ,, France ... ... ... ... ... 60 , , Italy 64-5 Average for the whole of the Continent, 60'46 hours jier week. (c) A merica : — Northern States ... ... ... 55 hours per week. Southern States ... ... ... ... 59 ,, Average for the United States, 56' 515 hours per week. (d) Asia: — India . . ... ... ... ... 66 hours per week. •Tapaix ... ... ... .. ... 69 per shift per week, two shifts everywhere. • Average for Asia, 67523 hours per shift per week. Note. — In Jajian, during 1913, the working days were 320, and the daily working hours numbered 19 (two shifts). The daily hours were raised in 1914 to 21. Both labour and capital are exceedingly well organised in the cotton trade, and disputes are usually adjusted by conciliation and arbitration. Something like 80-90 per cent, of the operatives are engaged on piece work, and, consequently, there is every incentive towards maximum output. The evidence, however, on the question of restriction of output is some- what inconclusive. There ajjjiear to be wide differences of opinion among employers as to the extent to which it is practised. Speaking generally, it may be said that while we received little evidence of restriction in the i^rincipal j^rocesses, there is evidence of considerable inter- ference by means of shop and trades union rules and action in the subsidiary branches, which, though minor wheels in the mechanism of a mill, are essential to the smooth running of the whole. The actual effect of those restrictions, which relate to the number of men to be employed in a particular i)rocess, the amount of work to be done, the number of apprentices who may be taught, is to reduce the maximum efficiency of the combined operations of a mill. An attempt has been made to ascertain whether the net output per operative in the United Kingdom is higher or lower than in other countries, but it has been found exceedingly difficult to secuie any precise information on the point. The prevailing impression seems to be that the output is higher than in any othei' European country, but is lower than in the United States. One expert witness stated that though the output per operative may be on a par, the output per machine in some competing countries is greater than in the United Kingdom owing to the longer working lionrs. Evidence received from a large spinning concern, which has mills in almost every European country, is to the effect that, except in siiecial ]irocesses, the iiiil|Mit per opcriitive ;i( luiiiic niid (ui the Coiil iiieiit is about tlie same. We consider that wliile, on the whole, our worki)eo]i!e still lead the world in skill and efficiency, the margin of advantage on this account at the present time is very small and may easily l)c neutralised liy tlie action of the workeis tliemselves in restricting output directly or indirectly. FlN.4NCE. (a) Industrial. — The evidence goes io j)rove that sjnnners, manufacturers, and otiiers receive adequate facilities from existing banks for the finance of the industry. Industrial finance in Lancashire is largely 'u the hands of local ])anks, which specialise on loc'ii business, understMiid tlie re(juirenien V of llieir clients, and afVord all reasonable 63 facilities. We consider that the facilities granted in the cotton industry will bear comparison with those given in any other country. (b) Commercial. — The export trade to the large overseas markets such as India, China, and the Far East, Central and Soiith America, Egypt, and Turkey is very largely financed by British banks operating in those countries. The requirements of exporters in the cotton trade appear to have been adequately met by existing financial institutions. The drafts of export houses on their clients abroad against shipments of goods are readily discounted and forwarded for collection to the agencies of the banks abroad. In addition, considerable assistance is rendered by the London accepting houses, who are usually willing to accept the drafts of approved firms on commission, discount their paper on the London market, and forward it for collection to their agents abroad. We consider that further facilities might with advantage be afforded for the promotion of trade with Russia and the near East. Extent and Character of Foreign Competition. (a) Hovie and Colonial Trade. — The wholesale trade in the home market and also the export to the self-governing Dominions such as Australia, New Zealand, Canada, and South Africa is to a great extent controlled by a few large merchant houses in Manchester, which confine their activities to the home and colonial trade. This grouping appears to have been determined by the fact that the Dominions broadly speaking take the same classes of goods as the home trade. The value of the Dominions markets in 1913 will be appreciated from the following table show- ing the values of cotton piece goods exported to them : — Australia ... Canada South Africa New Zealand Total £ 3,390,832 1,981,168 1,231,047 808,587 7,411,634 Per cent. . 3'50 of our total exports of piece goods. . 2-00 l'2o ,, ,, ,, . 0-80 •55 Foreign competition in the home and colonial trade before the war was mainly in made-up goods such as drawn thread and lace, hosiery, woven underwear, printed cushions and covers. These articles will be dealt with in the sections on lace and hosiery. The cotton piece goods imported from abroad were in the main dyed and printed goods — tapestries, molletons, flannelettes, blankets, cheap cotton trouserings, and also pile fabrics such as velvets and plushes, and of these articles the majority were imported from Germany. While this competition is not really serious in relation to the total volume of the trade, it has shown a tendency to grow of recent years, and the value of the imports from Germany in dyed and printed goods alone during the year 1912 will be seen from the following figures : — £ Into United Kingdom 896,000 ,, British South Africa 206,000 „■ Australia 69,000 We are informed that British manufacturers are sometimes beaten in respect of price in the lower qualities, sometimes in the attractiveness of the goods, but most frequently on the point of adaptability to customers' requirements. The war has given them a unique opportunity, of which they have not been slow to take advantage. Thei-e is evidence that excellent substitutes for German goods have been produced, and there seems to be no reason why a considerable portion of the trade they have captured should not be retained after the war. It must be admitted that in the past the British manufacturer has not attempted to make a great niany of the types of goods which have been imported from abroad. (b) Foreign Trade. — All the evidence we have received tends to prove that the strength of the British cotton trade, both in yarns and cloth, in the competitive markets of the world is practically unimpaired, although considerable changes are taking place in the character of the trade. In the great open markets of the East and South America, which absorb more than 70 per cent, of the export trade, British goods before the war were, on the whole, maintaining their position. It should be noted, however, that very severe competition is threatened from Japan in Eastern markets, and considerable Italian competition is experienced in certain South American countries, notably the Argentine Eepublic. In the following review of the principal markets we shall show exactly where competition is encountered. British India. The strength and magnitude of the British cotton trade with India will be realised from a study of the statistics, which show that in 1913 out of a total importation into India of cotton yarns and piece goods aggregating in value over £3,000,000 and £38,000,000 respectively, the United Kingdom supplied 85 per cent, of the yarns and 94 per cent, of the piece goods. The principal competition is that encountered from the Indian mills, which is increasing in intensity as the quality of the output improves. The goods produced are mainly unbleached yarns and shirtings made from native grown cotton. 9978 D 3 64 Germany, Austria and Italy competed in the cheaper and coarser cloths, notably cotton blankets, produced from Indian Cotton. The cheaper labour in these countries apparently enables them to put raised goods through more processes than Lancashire can afford, thereby greatly improving the finish and attractiveness of the article. The general volume of this com- petition, however, is not large. Japanese competition in India in the past has been very slight and has been confined mainly to cotton hosiery. The outbreak of war with consequent high prices and reduced output in Lancashire has given Japan her opportunity, and Japanese competition is now regarded as a serious menace, not so much on account of the volume of her actual exports to India — although these are on a commercial scale — as of the large range of goods she is showing, which includes not only yarns and grey goods, but bleached, dyed, and printed fabrics. Prices are on a very low scale — in the case of one quality of 40' s yarns as much as 25 per cent, lower than the Lancashire article. At the present time the potentiality of Japanese competition appears only to be limited by the machinery and capital available in Japan. It is uncertain whether the Japanese will be able to maintain their present position when the end of the war restores normal conditions in Great Britain, but their competition will, in any case, remain a serious menace. So far, Japanese manufacturers appear to have confined themselves to imitating existing fabrics, and have not initiated any new lines. Competition, therefore, has been limited to price. The secret of Japanese success, apart from cheap labour, appears to lie in the close co- operation of all interests concerned, viz., the Government, banks, shipping companies, merchants, and manufacturers. Japan purchases very large quantities of Indian cotton, her takings during the season 1913-14 amounting to 1,210,000 bales, of 392 lbs net. The buying in India is mainly con- ducted b\ Messrs. Mitsiii & Co. (the le;iding mercantile house in Japan, with enormous interests in the textile and other industries of the country). This firm now has its cotton buying agents all over India and is therefore in possession of the nucleus of an excellent distributing organisation for manufactured goods. Heavily subsidised steamers ply between India and Japan, and freights are maintained at a low level. The Yokohama Specie Bank and the Bank of Taiwan are established at Bombay and Calcutta, and are prepared to further the interests of their Japanese clients by providing adequate financial facilities. Japanese official commercial agents are active all over India in securing information, advertising their country's products, and assisting their nationals in every possible way. Official questionnaires have been distributed in the bazaars to dealers in British goods inviting information as to theii' special requirements, the JajDanese Government in retui'n pledging itself to see that Japanese manufacturers do their utmost to carry out the wishes and suggestions expressed. The great assets of Japan are low costs of production and distribution, solidarity of all interests for the furtherance of trade, and a highly protective system applying both to shipping and industry. Her present producing capacity, as already stated, is limited by her capital and machinery, but the war is giving her an opportunity to accumulate the former, and she relies upon British textile machinists to supply the latter. We are very much impressed with the serious character of Japanese competition in the future, and consider that in order to meet it, British capital and labour will have to combine to secure the maximum output possible both from our operatives and from our machinery, and the fullest and most efficient use of all facilities we possess for distribution, finance and transport. China. China (including Hong Kongj is surpassed only by India as a market for British piece goods. Of yarns the imports into the country in 1913 amounted to 300,000,000 lbs., valued at over £12,000,000. Of these Bombay and Japan contributed roughly 50 per cent, each, although it should be noted that Japanese spinnings are rapidly increasing at the expense of Indian. The bulk of the yarns imported are lO's, 12's, 14's, 16's and 20's. British imports of yarns were insignificant and were confined to a few qualities of dyed and mercerised goods, and of sewing cottons. In piece goods, however, British shipments to China (including Hong Kong) amoimted to over 70 per cent, of the total imports, our principal foreign competitors being Japan with 17 per cent., and the United States 8 per cent. It should be noted that in China the great bulk of the peasant population is clothed in cotton goods woven on hand looms usually from imported warps and native weft. Foreign cotton fabrics are, therefore, to some extent a luxury, and are consumed principally by the great urban populations of the mercantile and shopkeeping classes, with the result that, as the standard of living and comfort is being steadily raised, the demand for foreign goods tends towards higher qualities, and a wider range of dyed, printed and fancy woven fabrics. The principal competition exi)erienced is that from Japan. Prior to the war this was mainly eon- fined to unbleached goods, notably grey sheetings and drills, but the past three years have witnessed a considerable increase in the import of grey jeans, bleached shirtings and even fa.st black Italians and printed cloths. There is no doubt whatever that Japan is making a deter- mined eltort to increase not only her volume- but also the range of her cotton exports to China. The .Tapanese have many advantages in the market. Apart from their low cost of production, the through differential freight rntes rid Korea and .Vntuug enable them to lay down their goods in the Manchurian market at a remarkably small cost. They secure a rebate of one-third of Uie Chinese customs duly on goods entering China over the Korean land frontier. Their large merchant houses and banks afford every facility for the furtherance of business; and their intimate knowledge of the language, character, customs and requirements of the Chinese, 55 coupled with a plentiful supply of young Japanese who are prepared to travel and live in tue interior for a comparatively low salary, enable them to carry out methods of direct distribution up-country, which British merchants have not found it practicable to undertake in the past. The war is giving them an excellent opportunity of establishing new qualities and trade mark.s in China, in addition to greatly strengthening their financial and industrial organisation in Japan, and it is only reasonable to expect intensified competition in a constantly widening range of articles after the war. The present extent of the Japanese cotton spinning industry will be seen from the following statistics comi)iled by the Japan Cotton Spinners' Association and kindly provided by the International Federation of Master Cotton Spinners' and Manufacturers' Associations. The figures are lor the month of December. 1916 : — Working spindles— '..?, 754, 598 ring and 45.62T mule.— Total 2,800,225. Working days per month — 27" 7. W^orking hours per day — 22' 17 (two shifts). Average count of yarn — 21' I on rings, 26'6 on mules. Yarn produceil dnriug whole year Ring. Mule. Total. 1916 776,587,295 lbs. 5,684,792 lbs. 782,272,087 lb>. Average per day per spindle in pounds — Ring "92, mule 130. Cotton consumed in lbs. (whole year 1916) — 897,334,186. Cotton fly in lbs. (whole year 1916)— 104,013,613. Waste yarn in lbs. (whole year 1916) — 5,361,278. Coal consumed— 137,096,686 lbs. Actual horse power used — 70,961, Number of hands— Male 24,661, female 97,770— Total 122,431. Average wages per hand per day in pence — Male 12'62. female 8'5'!. Looms. — It is difficult to ascertain with accuracy the number of power looms in the country as the ofiicial statistics gro\ip all looms together. As power loom weaving is largely in the hands of the spinning companies, the following' statistics of the Japan Cotton Spinners' Association for 1914 are of interest; — Number of Companies — 15. Num'ber of power looms — 25,106. Working days per month — 26'3. Working hours per day — 1323. Operatives — Male— 3,416. Female— 21,993. Wages per day in pence- Male— 12-76. Female — 9. Production iov the year— 454,901,674 yards. Average per loom per day — 57 '4 yards. The Japanese exports to China in the past have been mainly the coarser, unbleached cloths, but great efforts are being made by Japanese bleachers to turn out white shirtings equal to the British productions, while progress is being made with dyed goods, such as sateens and brocades. There is good reason to hope that Lancashire will still retain the important and rapidly growing trade in bleached, dyed, and fancy-woven cloths where fineness of quality and finish are essential, but she may exi:)ect to see a falling-off in the shipments of the coarser qiialities of unbleached cloths, while the develoijuient of the bleaching, dyeing ;;iid printing industries in .Japan will need to be carefulh^ watched. The American piece goods trade in China consists mainly of standardised qualities of heavy weight grey sheetings, drills, jeans, and cotton flannel mostly manufactured on automatic looms in the Southern States. The American goods during the past fifteen years had largely ousted the British article from the Manchurian market, but these cloths are now being met by Japanese imports, and America's trade has seriously declined since the high-water mark reached in 1905. German and Italian competition is confined to the coarser makes of goods such as blankets, coatings, trouserings, &c., and is mainly in articles which British manufacturers do not care to make so long as they can keep their looms nccui)ied on the finer cloths. The total value of the imports is comparatively insignificant. Russian exports of cotton prints by way of the Siberian Railwaj' have seriously affected the sale of the British article of late years. By means of a most elaborate distributing organisation throughout Manchuria and Northern China, and the granting of credit to Chinese buyers, the Moscow houses have built up a very large trade in a comparatively short time. The imports of chintzes and plain cotton prints from Russia in 1913 exceeded both in quantity and value the shipments of British goods. Before leaving this important market, mention should be made of the large and growing domestic cotton industry in China. This may be considered under two heads — the old hand loom industry, and the new and increasing spinning and weaving industn- conducted in modein mills equipped with the most efficient machinery from Europe (mainly from Lancashire). ;tit78 1' 4 56 Handlooin weaving' is coiiductecl iu almost every district of (!liiiui in the homes of the peasants, and although no exact figures are available, it is estimated that the product of the native handlooms exceeds in quantity the total imports from abroad. Some idea of the magnitude of this industry may be obtained from (lie tact that in 1913 360,000,000 lbs. of foreign yarn were imported, and this yarn is usually employed for the warps only, the weft being either hand spun or else derived fi'om the Shanghai mills. The principal output is in coarse narrow-width I6 in. -18 in. shirtings which are the everyday clothing of the countryman, but of late years in many urban districts weavers have turned their attention to simple figured goods such as zephyrs, checks, and small figured styles woven from imported dyed yarns. The output of these cloths in one or two markets, notably Tientsin, has seriously checked the import of similar British goods such as striped and rliecked Maeanas, zephyrs, mercerised rep^js, &c., &c. There were in 1915 upwards of thirty modern mills in China with a total of over 1,000,000 spindles, and 4,600 power looms, moreover very considerable extensions both to spindles and looms have been and are being made. Some of the oldest and most successful of these mills are managed by Britisli companies, but the Japanese are extending rapidly with splendidly equipped modern plants, electrically driven, while Chinese companies are realising the great future before the industry in China. Shanghai is the great centre of the industry, but mills are being erected in other localities convenient for the supply of native cotton such as Hankow and Tientsin. Tlie outi)ut of the mills has been estimated at about 250,000,000 lbs. of yarn. The ship- ments into the interior of yarn and cloth produced in iShanghai alone in 1914 were as follows : — Tarn 92,000,000 lbs. Clotli— Sheetings ... ... ... ... 517,945 pieces. Drills 214,910 ,, Flaiiuel 10,890 „ A dyeing and bleaching plant has recently been erected at one of the mills. It might be expected that with this great expansion of the native industry added to the competition of Japan, a decline in the volume of British exports to the country is inevitable. We are informed, however, that the marked rise in the standard of living in China has been accompanied during recent years by a considerable expansion of the trade in better quality dyed goods, both plain and figured, and we tlierefore anticipate not so much a future shrinkage in the total trade, as a gradual change in its character. We regard as almost inevitable the gradual elimination of most British grey goods with the exception of the finest standard qualities, and expect more severe competition in the coarser qualities of white shirtings and " T " cloths; but to counterbalance tliis we look for a considerable expansion in the shipments of the finest grades of bleaclied goods, rind a greatly increased trade in dyed, printed and woven-fancy articles. Since these highly finished products are of much greater value and represent a higher labour cost than the unbleached fabrics, which are being displaced, we are of opinion that the total value of our shipments to China may not only be maintained but may tend to expand in future years, jirovided that our merchants in China, by increased activity and improved organisation for distribution, make a determined effort to secure their share in the development of the trade of the country. Centu.4l and South America. The British share of the piece goods trade of Central and South America, while not perhaps bearing so high a relative proportion to the whole as in the case of Eastern markets, nevertheless indicates that our position is being well maintained in spite of increasing competi- tion both from native industries and from foreign producers. The imjiorts of cotton jiiece goods into the Argentine iu 1913 were in the following proportions : — From the TTnited Kingdom ... ... ... ... 54 per cent. M Italy 27 „ ,, ,, Germany 8 ,, ,, In miscellaniHius cotton goods, however, Gormauy supidied (SO per ceni. of cotton socks, 35 )3er cent, of laces, and 46 jier cent, of the made-uj) cotton goods imported into the country. Native competition is felt most seriously iu Brazil, where the British trade in low grade grey and bleached goods, coloured goods, and prints has been seriously' affected by the establish- ment of factories protected by an import tariff of 40-50 per cent. In Colombia and Venezuela, comjietition of native factories is encountered in the coarser plain fabrics. Foreign comjjetition in the River I'hite is mainly met with in printed flannelettes from Germany, Italy, and Spain; in coloured drills, oxfords, '&c., from Italy; corduroys from Sjiain ; cotton blankets from Germany; dannisks and ticks from Belgium; indigo prints from Germany and Italy. Italy is our most serious ciompetitor in this market, particularly iu heavy coloured goods, in which a large industry lias been built u]) in Lombardy. The large Italian colony in the Argentine is also an asset to the traeU; of the mother country. Tlie compel it ion exi)erienco,l in other South American markets is somewhat similar in chai'acter to tlial met with in the River Plate, but the Italian infliicnce does not appear to be so strong. In the northern States of the Continent, particularly in Colombia, Ecuador and Central Anieiica, (lie influence of the United States is more ji'.aiked. and increasing competition is met with in grey domestics, drills, prints, &c. The competition' of the American manu- facturers is almost entirely the result of the standardisation of a nario>v range of qualities, piostly unbleaclied cloths and prints, and the maintenance of a consistently j-tood quality. 5t We consider that wliile a ceitain ineasiire of staiidardisation lias considerably helped our own trade in Eastern markets, which call for large lines of staple goods, there is little doubt that the elasticity of the Lancashire system has been of the greatest value in other markets, where the orders are for small quantities with large and constantly changing assortments and where the local merchant can rely on being supplied with the hundred and one details of shade, finish, make-up, ticketing and packing, which are a feature of this trade. It has been clearly shown in evidence that American cotton manufacturers are less enterprising and adaptable than the British in these respects. Thei'e is evidence that where British goods are beaten it is usually on accoimt of a com- bination of low price and superior finish and attractiveness. For these reasons, and also owing to improved processes of " raising " and a more general use of short-stapled Indian cotton, German and Italian flannelettes, blankets and similar goods compete with conspicuous success. Italy's share of the Argentine trade in coloured woven goods is probably due to the exceed- ingly low wages paid in Italy and to her possession of an important and protected home trade in those goods, which enables her to secure a large and steady output and, in some instances, to dump her surplus. Dumping is also occasionally met with from the United States and Germany. Since the outbreak of war, both flannelettes and cotton trouserings have been shipped from Great Britain to South America to take the place of goods previously supplied by Germany, Italy and Belgium. The Near East. Turkey. — -Prior to the war, Turkey occupied the third place among the most important markets for British piece goods. According to the returns of the Ottoman Government, the total imports of cotton textiles in 1913 amounted in value to £8,090,000, of which the United Kingdom contributed £4,083,000; Italy, £1,683,000; Austria-Hungary, £584,000; India, £491,000; and Germany, £325,000. It ajjpears from evidence received that very little competition is experienced from native- made goods except in coarse yarns ; but shortly before the outbreak of war, the Turkish tariff was increased witli the object of encouraging the manufacture of cotton goods in the country. Italian competition was considerable, particularly in dyed and coloured woven goods, grey cloths and yarns; Germany, Austria and Switzerland competed in dyed and printed fabrics such as flannelettes and also to some extent in yarns, cotton velvets and plushes, blankets, &c. We are informed that most of these goods could have been obtained from this country, but that British goods were beaten partly on the score of price and quality but mainly on account of the long credits given by German merchants. Austria and Italy have undoubtedly been favoured by their geographical position, while German exports have been stimulated by exceedingly low freight rates and a cheap and efficient parcel-post system to Turkey and Egypt. Long credit appears to have been a determining factor in this market. Witnesses state that the Deutsche Orient, Dresdner, and Wiener Banks and institutions dependent on them were established in the Levant and Egypt for financing and assisting enemy trade and have proved to be of great use to German and Austrian merchants. On the other hand, it is stated that British banks have preferred the discounting of the bills of German banks in London to opening branches in such places as Smyrna. Witnesses are of opinion that it would be of great benefit to British trade if British banks were to open branches in suitable centres in the Near East after the war. S(/.v;-*t. ^British trade in Egypt has held a very strong i)ositiou in the past, but increasing competition was experienced before the war in t)ie coarser end of the trade. Native competition so far is not very serious, being largely confined to the longcloths and T'cloths produced in the local factories from Indian yarns. The most serious foreign com- petition was encountered from Italy, Germany and Austria. Italy's competition in yarns is considerable, but the coarser yarn trade is now being diverted to India, and it is expected that Japanese competition may be met with in the future. In Egypt, precisely as in Turkey, the reasons for the success of our rivals is to be found in lower prices and very long credits. Both the Bauca Commerciale d'ltalia and the Deutsche Orient Bank have materially assisted Italian and German firms to secure a footing in the market. It is stated that, on the whole, British manufacturers ati'ord adequate support to merchants engaged in the trade, but there is evidence that Italian and German producers are sometimes more ready to meet the requirements of buyers with regard to small quantities and large assortments of printed and fancy goods. Our attention has been called to the need for administrative action in Egyjit to check the unsatisfactory system of make-up of certain goods in laps and folds with intent to deceive. It has been the custom for the piece goods exported from this country to be made-up for con- venience of retail sale in standard folds of a yard or a metre in length, according to the class of goods, and they were retailed by the fold. For some considerable time past, however, Egyptian dealers have instructed British shippers to reduce the length of the fold with the intention of defrauding the consumer in Egypt, who would still purchase the material from crease to crease, as though each fold were a full yard. The system has gone from bad to worse, until the Committee is informe'd that pieces of 40 yards have been made up in as many as 56 folds. Many Manchester house; refuse to lend themselves to such practices and, conse- quently, lose trade to the advantage of their less scrupulous competitors. Both the Manchester 6g Chamber of Commerce nnd the British Chamber of Commence in Egypt have taken up the matter, and we endorse the suggestion of the Manchester Chamber that the Egyptian Customs should be requested to refuse to pass through the Customs any piece-goods which are not : — • (1) stamped correctly in either yards or metres, and (2) folded correctly — iu yards if the piece is stamped in yards and in metres if the piece is stamped in metres. It is admitted that in some cases it might be necessary to make up goods in half-folds, but it is contended that these are easily distinguishable and would raise no difficulty for the Customs officers after one piece had been shown to them with explanatory remarks. DlSTKLBUTING OllG.iNISATION IN FOREIGN MaHKETS. The marketing of British cotton goods abroad is carried on iu India mainly by British, German, and native houses, in China by British and German firms, in Central and South America by British, German, Si^auish, Swiss. Italian, French, and natives of the various States, in Egypt and the Levant mainly by Armenians, Greeks and Jews. The trade in European countries is iu almost every case conducted by natives of the country. It should be noted that a large pari of the Continental business, particularly the trade with Eussia, was transacted through German firms in Hamburg aud Berlin, While we fully appreciate the advantages of widening the chanuels for the distribution of British goods, we, nevertlieless, view with concern the increasing share in the distribution of British cotton textiles iu certain markets, notably China and some parts of South America, which was being secured by Gerniau merchants before the war. It has l)eeri stated with considerable truth that, by dint of great activity and painstaking effort, by the granting of extended ciedit facilities, and by their readiness to take up and develop new styles and qualities, German merchants, established in the above-named coun- tries, have ('ontributed in no small degree to a considerable extension of British trade. We consider, however, that the war has brought into strong relief the danger of allowing any essential function in the conduct of a great national industry like the cotton industry to fall into foreign hands, and we therefore urge that every effort should be made by exporters in this country, both ou their own account and in co-operation with British meichauts abroad, to secure and retain after the war as large a proportion as possible of the business formerly handled by German distributing houses. There appears to be no reason why a nation which has so successfully solved the proble^ns of production shoiild not with equal success practise the art of distribution. Staff Questions. I'rior to the war, no difficulty appears to have been exijerienced in securing an adequately trained and educated slafi' both for the offices and warehouses in this country and for repre- sentation abroad. Manchester houses usually take boys when they leave school and train them themselves, not only for employment in their offices and warehouses at home but also with a view to their becoming representatives and travellers abroad. In the former case, boys are usually drawn from the elementary s 10-4 J J 9-5 j» 8-4 1 J 8-5 J J 51-7 fi 48-3 i i 61 9. The financial reqiiirements, both industrial and commercial, of the trade appear to have been, on the whole, adequately met by British banks and financial houses. Further banking facilities to promote trade with Russia and certain other countries where long credit is essential would, however, be of great advantage. 10. The foreign competition experienced in the cotton trade is usually met with from native industries, which are highly protected, and which compete in the coarser grades of yarns and cloth, with the result that this country is increasingly driven towards the spinning of finer counts of yarn and the manufacture of the lighter fabrics from these fine coimts. Competition in the open markets of the world is so far not very serious and is confined to heavy dyed goods, printed and raised fabrics. In these articles, Germany and Italy obtain many advantages from their use of Indian cotton and from superior "raising " and finishing processes. It should be noted that neither British manufacturers nor operatives care to make these coarse good.s when they can earn more money on the finer fabrics. The United States competes in standardised grey goods such as grey sheetings, drills and jeans, which are produced on automatic looms. 11. It appears necessary to sound a serious note of warning with regard to Japanese competition, which is becoming more threatening, and covers a constantly-widening range of articles. Japanese competition is met with increasingly not only in China but also in India, and in the minor markets of the Far East. This competition is limited at present by the avail- able amount of capital and machinery in Japan, but large funds are being accumulated by that country during the war, and extensions on a very large scale both to spinning and weaving plants are projected, and are only postponed owing to the exigencies of the war. The abnormally low level of wages in Japan; the increasing efficiency of her operatives; the extension of her activity to bleached, dyed, printed, and finished cloths; the proximity of the country to the great Eastern markets and the system of siibsidised steamers; the marketing advantages derived from her knowledge of the languages, customs, and needs of oriental countries ; the close co-operation between the Japanese Government, banks, shipping companies, merchants and manufacturers for the furtherance of foreign tra:de, all point to the fact that Japan is destined to become Lancashire's principal competitor in years to come. 12. If the export trade in the coarser yarns and cloths were to decline it seems likely that the following factors will tend to offset this possible diminution in our trade : — (a) The development of Africa. (6) The increased demand for finer goods, especially in markets such as India, China, South America. (c) The constant substitution of cotton and mixed-cotton goods for more expensive fabrics and the discovery of fresh uses for cotton goods. 13. The cotton industry as represented by a majority of employers does not desire a tariff for its own protection, nor does it favour the imposition of a general tariff owing to the fear that if the effect of a tariff were to raise the cost of production, eflSciency in competition would to that extent be handicapped. The majority of witnesses, however, approve of restrictions upon the importation of enemy goods for a limited period after the war. 62 SECTION 8 -THE WOOLLEN AND WORSTED INDUSTRY. Organisation ok the Woollen and Worsted Industry. Before dealing with the present position of the woollen, worsted and allied industries, it appears desirable to indicate briefly their main branches and geographical distribution. The industry may be considered under the following heads: — Woollen Goods. — These are goods manufactured from "carded " wools. Typical examples are serges, meltons, beavers, naps, uniform cloths, tweeds, flannels, blankets, &c. The woollen industry is centred in the West Eidiug of Yorkshire, with important branches in the West of England and parts of Scotland and Ireland. The woollen mills of Yorkshire are mainly situated in the Huddersfield. Leeds, DeWsbury, Batley and Morley districts. The border districts of Scotland are noted for tweeds, fine woollens and hosiery, and of late years the West of England has replaced to a large extent its former trade in broadcloths by the manufacture of high grade uniform cloths and specialities. The Irish mills have a reputation for tweeds and friezes, and the output of this branch of the industry has been steadily increasing_ during recent years. The blanket and flannel sections of the woollen industry are referred to a little later. Worsted Goods. — These are manufactured from " combed " as distinct from " carded " wools, and may be sub-divided into two main classes — women's dress goods and cloths for men's wear. The former are produced largely in the Bradford and Halifax districts while the manufacture of the finer qualities for men's wear is centred in Huddersfield. The distinction between these two classes of worsteds is strongly marked and, as will be apparent later, the women's dress goods section has suffered considerably more from foreign competition than any other branch of the woollen and worsted industry. On the other hand British qualities and styles in the finer cloths for men's wear are considered superior to any in the world. f^Jinddy.—The maniifacture of cheaper qualities of cloth from piilled rags blended with wool or cotton is mainly carried on in tlie Colne Valley and the Heavy Woollen Districts of the West Riding. The shoddy trade is distinct from either the woollen or worsted sections of the industry, and, in spite of the misconception which sometimes surrounds the term, there is no doubt that the development of the shoddy industry has contributed substantially to the economising of our wool resources during recent years. Mohair and Alpaca. — This industry is so closely allied to the woollen and worsted trade that for the purposes of this Report it has been regarded as forming an integral part of it. The mohair and alpaca trade is carried on principally in the Bradford district by a few large firms and has developed greatly during the last fifty years. A large percentage of the output is for export, chiefly to the Continent and South America. Blankets and Flannel. — Blankets and flannel are important branches of the woollen industry. Their manufacture is centred in the Dewsbury and Rochdale districts respectively. Blankets are also made at Witney in Oxfordshire and flannels are also produced at Dolgelly and Welshpool in Whales. Hats. — Like the alpaca and mohair industry, the hat trade is also an allied industry. Tts raw material includes both wool and fur which are used according to the quality of the hats produced. The industry is mainly carried on at Denton near Stockport and in the surrounding district. Carpets and Hosiery. — The.se are also included among the woollen and wor.sted industries, but in view of their special importance they are dealt with in separate sections of this Report. Although the woollen and worsted industries are scattered over the whole of the United Kingdom, the W'est Riding of Yorkshire may justly claim to be their principal home. Of worsted combing and spinning the Bradford di.strict enjoys a practical monopoly, while about half tlie spindles and almost three-fiiths of the looms engaged in the woollen trade are to be found in Yorkshire. Magnitude of the Industry. The woollen and worsted industry, which, among the textile trades, is only second in magnitude to the cotton industry, has made considerable progress during the present century. The few years previous to the" war witnessed a great boom in the trade and an output of unprecedented volume. In 191?. the industry contributed over £38,000,000 to the export trade of the United Kingdom. Reliable figures as to the total production of the woollen mills of the country are unobtainable. The Census of Production of 1907 estimated the gross output in that year at a value slightly over i'70,000.000, of wbich about half was exported and half retained for home consumption. 0-5 Exports. The following table, compiled from the Board of Trade Eeturns, .shows the value of wool tops, yarns, piece goods and other manufactures exported diiring 1913, in detail, distinguishing as to destination. Thousands of £'s (OOO's omitted). 1913. Groups of Countries. Tops. Tarn. Piece Goods. Other Mfrs. - Total. Foreign Countries — European — Allies Enemies ... Xeutrals £ 566 •1,309 871 £ 1,031 t5,lll 821 • £ 3,.807 12,887 '1,415 .£ 188 140 309 £ 5,092 9,447 3,416 Total European 2,746 6,963 7,609 637 17,955 Extra European — United States Central America and Mexico ... South America ... China Japan Other 27 618 35 39 49 12 46 112 1,059 138 .3,131 566 1,106 436 137 34 .301 49 50 157 1,262 172 3,481 627 1,820 740 Total Extra European 680 258 6,436 728 8,102 Total Foreign Countries 3,426 7,221 14,045 1,365 26,057 Bi'itish Posessions — Australia New Zealand ... Canada South i frica British India Other 206 20 227 21 507 39 1,758 404 2,790 399 1,083 585 937 304 1,196 538 305 270 2,922 729 4,699 937 1,413 914 Total British Possessions 226 819 7,019 3,550 11,614 Total to all Destinations 3,652 8,040 21,064 4,915 37,671 » Of Tops, Germany took £1,260,308, Austria-Hungary £48,000. t Of Yarns, Germ.any took £4,798,410, Austria-Hungary £247,825, Turkey £64,650. i Of Piece Goods, Germany took £2,007,809, Austria-Hungary £476,760, Turkey, £366,928. Tops.— The export of combed wool (tops) amounted in value in 1913 to £3,G51,T99, of which £1,260,308, or nearly 35 per cent, (mainly crossbred) went to Germany. The next largest market was Japan, which took about IT per cent, (mainly merino) of the total exports. Other important markets were Sweden, Holland and Canada. Diiring the last two years the loss of the German market has been offset to a large extent by the increased home demand — particularly for crossbred tops — in consequence of the naval and military requirements of Great Britain and her Allies. In addition, larger quantities than usual have been taken by Canada, Italy, and the Seandiuaviau countries, but most of this trade is no doubt directly attributable to the i^reseut abnormal circumstances and is not likely to be permanent. Certain foreign countries, notably Italy and .Japan, are at present installing combing plants with a view to the preparation of their own tops. Yarns. — Of the exports of yarns, 64 per cent, were taken by enemy States. The value of the takings of Germany alone amounted to £4,798.410. These yarns, chiefly worsted, mohair and alpaca, were used by Germany in the maniifacture of lighter-weight dress fabrics, velvets, and plushes, and for mixing with cotton in the production of hosiery and underwear. A considerable portion of them was subsequently returned to this country in the form of manufactiired goods. The principal Allied markets were Russia and France, the direct exports to these countries amounting to £469,977 and £290,585, respectively, in 1913. These yarns were mainly used in the manufacture of goods for domestic consumption and did not subsequently enter into competition with British piece goods. An increasing trade is being. built up with the Colonies, particularly with Canada and Australia. Efforts are, however, being made by these Dominions to establish spinning industries of their own and, unless a rapid and considerable increase in their looms takes place, it is doubtful whether the export of yarns from the United Kingdom to these countries will continue to increase. Piece Goods. — The principal markets for piece goods may be divided into five nuiiii groups : — (a) Continental countries. (h) The British Empire. (c) South America. (d) The United States. (e) The Far East, total exports £ of piece goods 2.007,809 9 1.684,188 8 756,27;5 4 495,433 2 527,181 3 476,760 2 366,928 2 335,537 2 969,108 5 7.609,217 37 64 (a) Co7)tinental Markets. — The following table shows the values of the exports of piece goods to the Continentiil markets in order of importance during the year 1913, together with their percentage in relation to the total exports of piece goods during that period: — Percentage of the £ Germany France Belgium Italy Holland Austria Turkey Russia Othei- Euro])e;)n countries Here again, as in the case of yarns, our largest single customer was Germany, but it miist be remembered that the German figures include a considerable quantity of goods, whose ultimate destination was Russia and which were only merchanted in Germany. It has been suggested by many witnesses that in case of any loss of trade with Germany, compensatory outlets might be found in Russia and Italy, especially if preferential tariff arrangements can be made with our Allies after the war. The Russian market is considered particularly promising for the higher grades of piece goods. (b) The British Empire. — The second important group of markets comprises the various British Possessions. The fignires are as follows: — Canada • ... Australia India New Zealand So\ith Africa Hong Kong Othei' British Possessions Canada was the mo.st important individual market, with Australia taking second place. British goods were assisted in both these countries by preferential rebates of diities. The trade with SoTith Africa is less considerable than might be expected. This is due to the fact that this market takes its supplies rather in the form of ready-made clothing than in piece goods. The goods shipped to Hong Kong were mainly for consumption in South China. (c) South America. — The trade with this group of markets, while not reaching so great a value as that carried on with the two previous groups, is of great importance. It is made up as follows : — Argentine Chile Brazil Uriiguay Mexico Cuba The export trade to South America is a steady business, and the British position appears to be well maintained. (d) The United States. — The shipments of piece goods to the United States in 1913 were valued at £1,059,000, or 5 per cent, of the total exports of piece goods in that year. Our trade with the United States has fluctuated consideral)ly in consequence of tariff changes. In 1890, the oxiiorts of woollen and worsted manufactures were v;i]ued at £5,148,000. Then came tlie McKiiiley tariff, and in 1891 the exports had fallen to £3,178,000. A similar reduction was again experienced in 1897 as a result of the Dingley Tariff Ad. During tlie few years pi-eceding the outbreak of war, the exports of piece goods averaged from £1,000,000 to £1,500,000, in spite of the fact that woollen and worsted cloths paid duties varying frorc 1*. 4Jf/. per lb. and 50 per cent, ad valorem to 1.?. lOcZ. per lb. and 55 per cent, ad valorem Percentage of the total exports £ of piece goods. 2.790,000 13 1,7^x8,000 8 1,083,000 5 404,000 2 399,000 2 254,000 1 331,000 2 7,019,000 33 Percentage of the total exports £ of piece goods. 1,570,958 7-5 621,032 3 384,486 2 177,461 1 101,429 •5 96,180 •5 2,951,546 14-5 65 'I'he effect of the Wilson Tariff Act of 1913, with its modifications of duties, was showing itself in increased shipments when the war broke out, although it should be noted that the removal of the import duty on raw wool entering the United States gave a stimiilus to American domestic manufactures. Partly as a result of the new Tariif Act, and partly no doubt as a result of the war and the cessation of Continental competition, the exports in 1914 to the United States advanced to £3,471,482, and, although this total was not maintained in 1915 aud 1916, the figures still show a considerable advance on the pre-war shipments. (e) The Far East. — Japan and China were the two most important Far Eastern markets, the values of the exports in 1913 being: — To Japan, £1,106,000, or 5 per cent, of the total exports of piece goods. To China, £566.000, or 3 per cent, of the total exports of piece goods. With the advance of material prosperity in these two countries, it is possible that a greater demand for woollen goods will arise, although it should be noted that Japan is making strenuous efforts to develop her own woollen industry as much as possible. Speaking generally, it may be said that the industry is not strikingly dependent on any particular group of markets for its exports of piece goods. They are shipped all over the world, and, therefore, it may reasonably be expected that loss of trade with Germany and Austria will be made up elsewhere, if proper steps are taken. Other Woollen and Worsted Manufactures. These include the various articles made of wool which do not fall within the class of piece goods, e.g., blankets, rugs, shawls, hosiery, carpets, &c. Of thesCj carpets and hosiery are dealt with in separate sections of this Report. Imports. The imports of woollen yarns and tissues into the United Kingdom amounted in value to nearly lOA millions sterling in 1913, or less than one-third the value of the total exports. The following statement compiled from the Board of Trade Eeturns shows the value of the various kinds of woollen and worsted textiles imported into this country from the under- mentioned groups of countries during the year 1913 — the last complete pre-war year. Woollen and Worsted Maxdfactures. Thousands of £'s (OOO's omitted). Yarns. Cloths. Stuffs, Flan- nels aud Delaines. All other Manufactures Total. Foreign Countries — European — Allies Enemies ... Neutrals Extra European — United States Neutrals ... Foreign Countries unspecified Briti-sh Possessions 2,951 568 13 • 1 193 167 77 ■ * 2 3,599 1,213 89 1 3 293 929 140 25 53 19 154 7,036 2,877 319 26 53 24 155 Total from all destinations ... 3,533 439 4,905 1,613 10,490 Insignificant. The above figures show that about 70 per cent, of our imports came from Allied countries. Enemy States sent us about 16 per cent, of the yarn and 26 jDer cent, of the piece goods imported. We also received from the latter nearly 58 per cent, of the total imports of manufactures other than piece goods {i.e., velvets, plushes, hosiery, &c.). Yarn. — Of the total imports of yarn nearly 84 per cent, came from Allied countries, aud practically the wboh' df tlie remainder from enemy States. The i)rincip;il ^(mrres of supply were : — £ France 1,539.589 Belgium 1,411,452 Germany 546,358 Generally speaking the yarns imported were of a different type from those spun in this country, and were mainly employed in the manufacture of dress goods and of hosiery. The continental yarns, both woollen and worsted, were single mule-spun and were considered more suitable than the British two-fold oil-spun yarns for the above i)urposp. It is important to note that these yarns were largely produced from wool grown within the British Empire. 9978 K 66 Pu'cc (Innils. — Tlie iiiiijorts of piece goods in 1913 amouuted in vahie to £5,344,000, of which Allied countries supplied £3,792,000 or about 71 per cent., and Enemy countries i'l, 380,000 or abont 26 per cent, of the total. These imports were chiefly diess o-oods for ladies' wear, produced as a nile from single-warp merino yarns. The imports from Germany consisted of dress goods, delaines, flannels, and fancy articles, such as velvets, plushes, and npholstery fabrics. Apart from dress goods the imports of woollen and worsted goods into the United Kingdom were not very considerable when compared with the total production of this country. Of cloth for mens' wear and of the heavier fabrics for women's wear very little came from abroad. Supplies. (a) Raw Mnlerials. . (li W'tiol. — A complete account of the position with regard to the present and probable future supply of raw wool will l)e found in the raw materials section ot this Eeport. The whole question is of sncli paramount importance, affecting as it does not only the s\ipplies of the British industry but also of the industries of enemy conntries. that a brief summary of the wool position appears to be desirable. The domestic clips oi ihe United States and most Euro]>ean conntries are practically all consumed in their home markets, and are far from snfficient to meet the requirements of their woollen industries. These countries are therefore dependent for their additional supplies on the wool exjjorting countries of the world, which may be divided into two groups — the British Empire and Sonth America. Of the world's estimated production for export in the season 1916- 1917, it is calculated by the Raw Materials Section of the War Office Contracts Department that on the basis of weight the British Empire contributed 68 per cent, and South America 32 per per cent. Taking the two types of wool separately, the ratios are as follows : — Merino. — British Empire, 85 per cent.; South America 15 per cent. Croiinbred. — British Empire, 46 per cent. ; Soiith America 54 per cent. ^ Tlie finer merino wools are almost a monoi)oly of the British Empire, and before the war, enemy conntries consiimed about 30 jjer cent, of the '' Colonial " fine merino clip. The finest merino wools are an absolute necessity for the production of these fine dress goods in which Germany and Austria competed with British manufacturers in the markets of the world. It would not be possible to substitute South American merino wools for them, as the latter produce fabrics which give a miich harsher feel. This strong position of o\ir Ctdonial wools is of the highest importance in view of the threatened shortage of wool for clothing purposes, particularly of merinos. Witnesses were almost unanimously in favour of some control of Imperial wool supplies. We have suggested in the Eaw Materials Section that H.M. Government should be urged to convene, at an early date, a conference of the representatives of the Governments of Australia, New Zealand and South Africa in order to formulate a workable scheme for the ett'ective control of the distribution of all wool grown within their territories with a view to : — (a) The fulfilment of the pledges to the Allies, as laid down in the Paris resolutions. (6) The complete safeguarding of British industrial requirements; and (c) The utilisation of the wool resources of the Empire to their fullest capacity as a means for bargaining or otherwise. (2) Jl/ohoir. — Before the war, the best grades of mohair were obtained fi'om Turkey, but it is hoped that by the introduction of Angora goats from Asia.Minoi' the finality of the Cape mohair will be materially improved. It is reasonable to expect that witli ade(|uate attention and encoxiragement South Africa could supply all the mohair required. (3) Alpnra, Vicuna, Camels' Hair. cxc. — These are all products of foreign countries, and their import in 1913 amounted in value to £700.000. Peru was the chief source of alpacn, while China and Russia ])roduce(l tlic liulk of tlie camels' hair imported. (b) Sciiii- iiianvfiicliiri'd M atiiiah. (1) Yarns. — -The imports of yarn iiito this conntiy aic considerable, and amounted in value in 1913 to sliglitly over 31 millions sterling. Of this amount about 96 per cent, consisted of carded woollen yarns the bulk of which came in approximately equal projiortions from France and Belgium. Germany supplied the remainder of the wooden yarns and practically the whole of the worsted yains imported. (2) Ihicslii.ffs. — In common with all othei' textile trades, the woollen and worsted industry has sufi'ered severely from the lack ot suitable dyestutt's during the war. In pre-war days this country was dependent on Germany for at least 80 jier cent, of its supplies of dyestutt's, the remaining 20 per cent, coming from Switzerland and from manufacturers in the United Kingdom. Witnesses were unaninnuisly in favour of the ado])tion of steps to foster the estab- lishment of the dye-making industi'v in tiiis country, eitlier by tariffs (u- snl)sidies in order to make \\< indejjendent of enemy sources of sujiply. It is generally believed that in time and with adequate encouragement, tlie whole of Uie dyes required by the trade can be jiroduced either in this country or in Switzerland. 67 (3) Other suhsidiary articles. — -Sinoe the war the woollen and woi'sted iudnstiy lias been h:indicaii])ed to some extent by the scarcity of various subsidiary articles, e.g., hosiery needles, bleaching' powder, sulphuric acid, caustic soda, &c. In normal times, however, with the exception of hosiery needles, ample supplies are available from Allied or Neutral sources, the present shortage being almost entirely due to munition requirements. The question of the supply of hosiery needles is dealt with in Section 9. (4) Rags. — Before the war there was a considerable importation of lags which form the raw material of the shoddy industry. This industry will become more and more imijortant if the present sliortage and high prices of wool are maintained for any length of time. The liome supplies of rags are insufficient, biit in normal times ample quantities are available from the Continent and the United States. What the position will be after the war it is impossible to forecast. Pl.\nt and M.vohinbry. Practically the whole of the plant in the woollen and worsted industry is of British invention, design and manufacture. In a few cases foreign machines are used, e.g., American winding machines and automatic looms, and Continental dyeing and finisliing machinery. The machine shops are situated as a rule in the textile manufacturing districts, and the proximity of manufacturer and machinist has been of great advantage to both. The woollen and worsted plant in xise in this country apjjears to be fairly up to date. In consequence of the shortage of labour and the employment of machine shops on munition work, it has been very difficiilt to obtain renewals and practically impossible to secure new machinery, except for naval and inilitfiry jnirposes, during the last two years and, as a result, many plants will require overhauling as soon as an opportimity presents itself. At present much of the country's woollen and worsted machinery is being run night and day. Witnesses have expressed the view that the export of textile machinery has in the past often proved detrimental to the home textile trade and has frequently been followed by the emigration of skilled labour to work the machines and sometimes by the subsequent importation into this country of the products of looms and spindles of British make. On the other hand, the machine- building industry by finding employment for large numbers of men has had the accompanying effect of providing numbers of women for textile employment. The general opinion is that in normal times there should be no interference with the ordinary course of trade in textile machinery. Immediately after the war, the sitiiation will probably be difficult, as very considerable repairs and renewals will be required both in Great Britain and in the Allied countries. To prevent undue preference of any kind it is generally considered that a system of priority certificates should be continued for a sufficient time after the war to allow of the re-equipment of the British and .Mlied textile industries before the reqiiirements of other countries are taken in hand. L.VBOUE QUF/STIONS. A return issued by the Home Office in 1907 shows the number of people employed in the woollen, worsted, 'and shoddy trades as 261,192 of whom 108,838 were males and 152,354 were females. Inchided in these figures were 8,116 children employed half-time only, and 53,265 "young persons." Moi-e men than women were engaged in woolsorting, woollen spinning and finishing processes, while in the worsted spinning and woollen and worsted weaving, women predominated. For some few years prior to the war the demand for labour in the woollen and worsted trades was slowly overtaking the sujjply, and many firms experienced considerable difficulty in obtaining all the labour they required. Speaking' generally it may be said that while we received little evidence of deliberate restriction of output in the principal processes of combing, spinning, and weaving, there is evidence of consideralile interference by means of shop and trade union rules in the subsidiary branches of the industry, e.g., fettling, warping, warp-dressing, dyeing, finishing, &c. The most serious trade union restriction, and one of the chief sources of complaint on the employers' part, is the limitation of the number of learners in the various departments, and we are informed that a marked shortage of overlookers, tuners and other operatives was already apparent before the war. The scale of wages in the woollen trade is fairly high, and compares favourably with that in competing foreign countries with the exception of the TTnited States. FiN.'UsrcE. (a) Industrial. — The testimony of the trade is to the effect that as a rule British banks have offered all the facilities necessary for financing the industry. (6) Commercial. — -The woollen export trade is financed through British banks and very little trouble is experienced either in discounting bills or in the collection of moneys from abroad. It has, however, frequently been pointed out to us that increased trade with certain markets, e.g., Russia, is hardly possible without some change in our present system to meet and counteract the financial methods adopted by German houses. 9978 Y, 2 The Extent and Ciiakactkk m- Fokeign Cohi'etition. (a) 111 the /Iiiinc Trndc. As already stated, comiietitiou in tlie home market is confined to yarns (jf a particular type and quality, to light weight dress fabrics for women's wear, and to liuing-s, velvets, upholstery plushes, and such fancy articles. In normal times there is as yet little competition from abroad ill iiu'ii's ;^<)im1s (ir ill tlic lifiivicr fabrics for women's wear. Yarns. — The following' table shows the yahie of the woollen ami worsted yarn imported into the United Kingdom during 1913: — Kind dl' Yarn. Total value of Imports. Woollen and Worsted for Weaving 3,.5.^2,(;r)(i Main Sources of Supply. Country. ' France Belgium Germany Value. £ 1,522,969 1,409,097 546,358 It will be seen that these yarns were almost entirely supplied by France, Helgiiim and Germany, which have specialised in the production of fine yarns 'from shorter, stapled wools. By means of their carbonising plants they have been able to deal successfully with the seedy and burry wools shipped to the Continent in large quantities from Australia and South America, and also to produce good yarns from noils and waste imported fiom the United Kingdom. These yarns found a ready market in this country, where they were extensively used in the manufacture of dress goods, hosiery and underwear. Some witnesses consider that in the past insufficient attention has been paid in this country either to carbonising or to nmle-spinning of combed wools. British worsted spinners have been occupied during recent years with the spinning of yarns from the longer stapled wools, and liave shown little inclination to adapt their buildings and plant to worsted mnle-spinning. It was suggested liy several witnesses tliat the imposition of a slight tariff on imported yarns would encourage spinners to incur an expenditure in tliis direction from which they might otherwise shrink. Piece (joods. — The imports of manufactured goods into the United Kingdom in the year 1913 ai'e shown in tlie following table: — - Kind of Piet« Goods. Dress Stuffs, Flannels and Delaines — Plain and Figured Printed... Other Woollen and Worsted Cloths Unenumerated — (E.xcluding Carpets and Rugs, Hosiery, Braids and Laces) ... Total Total Inii)orts Principal Sources of Supply. Country. Value. 4,7(11,1)31' 144,107 439,237 r France I Germany ( Belgium Germany ( Germany ( France 415,193 Germany r),759,5(i9 £ .3,492,979 1,063,733 103 886 139,562 164,0.35 123,405 312,798 The above table shows tliat the greater proportion of our imjiorts consisted of dress stuffs, flannels and delaines from tlie Continent. Of these France sujiplied nearly 3.1, million sterling and Germany just over one million sterling in value. Gernniny also furnished the bulk of such goods as velvets, plushes and upholstery cloths classed in the Trade Eeturus under the iieading " Unenumerated." French JJrc.ss (toocIk. — -Fr(>nch dress goods comjiete very severely with Bradford pioductions. They are of fine texture and finisli and arc manufactured in the liillc and Koubaix districts from single warp mnle-s]>iin \ains. \\liich are a s])eciality of the French sinnners. In pre-war times the manufacture of goods trom single-warp yarns was very little practised in this country, but there are indications that the position of tlie Britisli liglit weight dress goods trade was already improving before tlie outbi-eak of war. So long, however, as Paris I'emains the centre of fasliion for women's wear France will always be a serious comi:)etitor in tli(>sc goods. iVs an indication of the imj)ortance of the trade in tliese foreign dress goods, it was jiointed out to us that many merchant houses in this country liavc Iheii- sjiecial foreign dejiartments to deal with tin's biisiiH>ss. Td prevent coiiijietition between dejiartnients dl the same liouse, tlie foreign liiiycr is ol'tcn jiroliibitcd from jiiirchasiiig in (lie lionie market, whih' the honi(> dejiai't- niciil is I if(|ni'iit ly pr<'il i|(|<'(l trinii (hMlin^- iii dress o-ood^ lor Iciir t\\ i'linoacli iii^j on thr trade 69 of the foreign departiuout. In this way Jhilisli luaiiufactiirer.s art' .seriou.sly haudicapped lu selling their dress goods to either the home or the foreign department, a fact wliich was, in the past, of material assistance in promoting the extension of the trade of our foreign competitors. Attempts have been made since the war to establish British makes of single warp goods, bnt some witnesses expressed a doubt whether any real progress could be made without the assistance of a tarifi upon foreign goods. Iviyorts from Germany. — The goods imported from Germany, wliiuh amounted in value to over one million jjouuds, were largely composed of single warp dress gfiods together with a certain quantity of linings and woollen velvets, plushes and fancy articles. A large percentage of these goods were made in Alsace and the remainder in Saxony from material largely derived from the British Empire either in the form of raw wool imported direct or in the form of tops imported from Frame and Belgium. In this connection we must reiterate the importance of colonial merino wool to Germany, especially as it is iia]ii)ssible for her to leplace her sup])lies of British origin to any appreciable extent from other sources. In addition to the control of the British supplies of wool, witnesses were almost unanimous in favouring a restriction of German manufactured imports for varying periods either by way of prohibition or by tariff. A proposal frequently made was that absolute prohibition should be maintained during the period of reconstruction to be followed bv the imposition of a heavy tariff. (b) E.tport Trade. The export trade in woollens and worsteds falls naturally into two main classes — that of semi-manufactured goods, such as tops, noils, yarns, &c., and that of finished articles. Semi-vumufactuved Good-t. — The following table shows the value of the exports of tops, noils and yarns for the year lOlo, showing in detail the various countries to which they were consigned : — Country. Tops. Noils. Yarns. Worsted. Woollen. Mohair and Alpaca. Other Sorts. £ £ f £ £ £ Russia 10.3,003 338,405 196,863 6,324 261,690 Sweden 435,'J54 54,792 132,795 4,195 864 3,235 Norway 44,400 18,650 157,771 1,410 1,005 '>•; Denmark 34,130 6,628 201,816 .121 429 470 Germany 1,260,.308 541,277 2,770,675 158,706 1,543,616 .325,413 Holland 272,504 .34,008 146,755 8,179 30,635 27,239 Belgium 176,102 150,537 129,970 9,,505 74,163 — France 95,03'J 67,995 145,649 21,327 122,121 — Spain 84,593 — — — 4,;50« — Switzerland 7,731 15,089 50,777 2,751 S,197 4,242 Portugal 28,058 — — — — — Italy 162,527 24,036 — — 10,807 Austria-Hungary ' 47,879 27,338 156,499 16,983 (;(;,.ss;; — Greece Nil. 27,408 1,155 271 Nil. Turkey 58,937 3,122 — — Egypt — — 28,569 2,540 — — Japan 618,262 16,743 36,445 7,113 — — China — — — 11, ,586 — — United States of America 27,046 33,043 8,967 — 30,049 — Brazil — 4,925 — 29,230 — — Other Foreign Countries 27,817 15,116 92,573 22,724 15,275 40,862 Hong Kong * * * 8,055 1 Australia * ^ 189,681 36,843 1 New Zealand * * « 11,221 ; 1,488 (;,975 Canada 205,706 20,266 418,572 88,900 1 Other British Possessions 19,840 1,690 41,849 15,195 J Total .3,651,799 1,370,538 4,992,571 467,585 2,171,801 ■ 4(18,458 "•' Includfd ill '■ OtlitT I'l'ltish Possessions.' From the above figures it is clear that Germany was by far the largest market for British tops, noils and yarns, which she required partly for home consumption and partly for the manufacture of such goods as hosiery yarns, dress goods and woollen velvets, a considerable portion of which she exported to the United Kingdom and other markets. It is probable that after the war Germany will take steps to develop her own combing and spinning industries, provided she can obtain sufficient supplies of suitable raw wool. This fact strengthens the recommendation already made in the raw wool section of this Report that measures should be taken to safeguard British and Colonial supi)lies of wool for a period after the war for the benefit of ourselves and of our Allies. Ill view of the possil)le reduction of the German demand, it is no< unnatural that British topmakers and spinners should be anxious to find compensatory outlets for their productions. 3'.t78 E 3 70 The exports lu the past have (-ou.sisted iiiamly of crossbred tops uud yarns. Prior to the war the combing- and spinning- machinery m this country, suited to the working of crossbred wool, was more than suihcieut to meet the home requirements. In these circumstances fresh outlets must be sought either in the home market or in the markets of Allies and Neutrals. Uur attention has been drawn to the Idlluwing possilile channels : — (a) The extension of existing- industries in this country, c.ij., woollen hosiery, ladies' dress goods, ami mohair weaving, and (b) The extension of trade in the markets of our Allies, particularly in Eussia. Some temporary dislocation may be caused to certain sections of the combing and spinning industry, and our principal aim should be to replace the German market by encouraging the manufacture in this country of those types of goods whicli were formerly made in Germany from British tops and yai"ns. Piece (roods. — Tlie ex])()i-t trade in piece goods, so far as foreign competition is con- cerned, may be considered under two headings (a) Imperial trade and (b) trade with foreign countries. The former accounts for some -ii per cent, of the British exports, and the latter takes the remaining 66 per cent. (a) British exports to the principal Dominions are encouraged by preferential tariff rebates, our position is a strong- one, and the trade is well maintained in these markets. In the trade in fine woollens and worsteds for men's wear llie British article is supreme and foreig-n competition appears to be negligible, lu normal times competition is met with from France in fine dress goods, and from Germany and Austria both in the fine and in the lower quality dress goods, in linings, velvets and articles made from mixtures of cotton and wool such as blankets, rugs', shawls, &c. A considerable portion of French and German goods for the Colonies is purchased by Loudon merchant houses, and ;.hip])ed ria the United Kingdom, with the result that in the trade retuius they appear as British exports. Germany's exports direct to the markets of the British Empire other than that of the United .Kingdom in 1912 amounted to £747, 000. m- about one-tenth of the exports from the United Kingdom. (b) In most Continental countries and in the United States British trade is severely restricted by the competition of native industries protected by tariffs. British goods, with the exception of the most expensive qualities, are often practically excluded from markets on this account, and it was represented that in some cases the vexatious administration of a tariff is a greater obstacle to business than the tariff' itself. The trade with the United States has suffered most severely from the fluctuations caused by successive tariff enactments, and, before the war, was largely confined to the fine qualities of woollens and worsteds, particularly for men's wear, in which British manufacturers excel. Apart from the competition of native indxistries, British goods have, in almost all foreign markets, to meet the competition of France in fine dress goods, cashmeres, &c. ; of Germany in cheap suitings, linings, velvets, and low quality articles; and of Austria in faced cloths and velours. In tlie Argentine and Brazil, Spain and Italy compete in special lines; but in spite of this the imports of piece goods from the United Kingdom into the Argentine in 191-'5 amounted to over 60 jier cent, of the total. It will be seen tiiat French dress t>onds and (ievniaii clieap suitings, linings, &c., competed in all markets, the former largely on account of their quality and attractiveness, the latter through the low level of their prices. During the war, a considerable amount of the trade formerly done by Germany with contiguous countries — Norway. Sweden, Denmark and Russia — and with the United States, has been diverted to this cduntry. and it. is lio])ed we shall retain a considerable j^roportion after the war. Witnesses were almost unanimous in looking to Russia, as the most pi-omisiug market for an extension of British trade after the war. There is no doubt that, before the war, a portion of the piece goods shipped to Germany eventually found its way into Russia, and it is considered that if Russia could be induced to make favourable reductions in her tariff', her marlcets would offer great ]tossibilities. Italy in the past has bought largely from Germany and Austria, c//., fine uniroim cloths, and much of this trade can be diverted to the United Kingdom. Tot iff (hiesflons. — The evidence we have taken discloses diti'ereuces of opinion with regard to the imposition of duties upon foreign goods for men's wear. The jiosition of manufacturers in goods of this class is very strong both in the home and Colonial markets. In foreign markets our trade has been seriously restricted by tariffs, and lias suff'ered frequent fluctuations in conse- quence of repeated tariff! changes in certain countries, such as the McKinley and Dingle^y tariff's in the United States, the eff'ect of which was to reduce Britisli imports into tlie United States liy about 70 jier cent. In ihe case of dress goods for women's wear the position is different. As already pointed out. tliere is strong com])etiti<>n in all markets in this brand), as also in the yarns from which the cloth is woven. We received suggestions for a small duty on the inii)ortation of yaius and a higher duty upon piece goods of this class. It was asserted that spinners would not erect buildings nor provide machinery for mule spinning unless they had the securilv (jf an assured home maiket. The same arguments were iised with regard to dress piece goods. So far as Allied countries were concerned, it was urged tlia? any duties imjiosed .should be u]ioii a minimum scale and that every eiVori should be made lo conclude arrangements for nnitnal taiift' concessions, the general view being that Russia in particular offered favourable opporluiiil ies for a ccinsiderable extension of Brilisb (rade if niodifi<-atioiis of her taritT in our favour could be brought about. Witnesses were almost unanimous in a\jesfujfs. — Fast bright-coloured dyestuft's are absolutely essential to the carpet trade. As many as 100 different shades are Woven' into one Axminster carpet, and for this class of carpet alone yarns were formerly dyed about 5,000 different shades. Thus, the scarcity of dye- stuffs during the war has been a great drawback to the industry. AVitiiesses are of opinion that, given suflicient encouragement, British maniifacturers could i)roduce substantially all the colours required in the course of a year or two. Plant and Machinery. The machinery in use in the carjjet industry is oi British or American origin. The general opinion of witnesses is that British machinery is quite e(|ual to the American. The change of fashion some years ago from made-up carpets to bordered squares necessitated a wholesale scra])ping and rei)lacement of carpet machinery. The broad looms then installed were very costly and ranged in price up to £2,00(1 each. The largest looms in ordinary use in the United Kingdom are about 12 feet wide, wJiereas looms 22 feet in width are not unknown in the United States. With regard to the position after the war, witnesses are in favour of a system of priority certificates for textile machinery for some time after the war in order that the needs of BiilisJi manufaoturers may he satisfied in preference to tluise of foreign countries. Labour Que.stions. The total number of work))eople (including staff) employed in the manufacture of carpets is estimated to have been about 20,000 just before the outbreak of war. Of these about 11,000 were women. Tlie total wages ])aid amounted to al)on1 £1,500,000 per annum or £31. 000 ]ier week. H Several employers were of opuiioii that in many branches of the trade. ineUnliug the important processes of spinning and weaving, considerable restriction of output occurred. It was thought, however, that this was uot due in most cases to any organised restriction on the part of trade unions, but ratlier to tacit agreement among the workers themselves. There is evidence that the output per operative in America is very much greater than in this country, and although the wages jiaid ai'e higher, the laboiir cost per yard is very little greater. The working hours aie practically the same in both countries. > Natuhe and Extext of Fouekjn Competition. (a) In. the Home Market. — -I'rior to the war, competition in carpets in the home trade was met with from Germany, America, France, Belgium and Oriental countries. The Germans manufactured large quantities of very cheap goods — known as chenille Axminsters — which were much below the standard of carpet produced in this country. They were of poor quality, and found a certain sale both in this country and abroail owing to their low price. Belgian carpets — Axminsters and Wiltons — were occasionallj* sold in the British market at less than the home price. Frfnch competition was ])rincipally confined to good quality Brussels and Wilton carpets, which are worth T.s. a yard and u])Wards and wear well. American coni|ictition is very erratic and only occurs when over-jjroductioii takes place in the Inited States. The Indian, Persian and Turkish carpets imported arc made by baud in their country of origin. A large proi)ortion are re-exj)orted and the remainder connuand high" ju'ices and do not compete very severely with British carpets. (1)) In Foreign Morkets. — The principal markets for British carjjcts were the Colonies, Holland, the United States and South America. In Canada and Australia — both of which oifered preferential tariff rates to British goods — llip keenest competition was encountered from cheap German and Austrian carpets. These carpets were frequently made from ]>rinted warps exported from the United Kingdom to Germany and Austria. The tariffs of these countries were so high as to prohibit the import of British carpets, but I'cduced rates were granted in favour of printed warps. In the United States, France and Russia the competition of native manufacturers is increasingly felt. In the case of Russia the carpet mills are largely in British hands. Generally speaking, such competition as was encountered in foreign markets, apart from that of native manufactures, was from goods of lower ({ualities than were made in this country. It is stated that the designs of good quality carpets were frequently copied by German and Belgian manufacturers in inferioi' (jualities, and sold as being similar goods to the originals. It was very difficult to meet such unfair competition, as in many foreign countries it is practically ini]iossib]e for British manufacturers effectively to i)rotect their designs and styles. In the higher class trade British gocids bold their own in all markets. Staff Questions. Before (lie war some dithculty was experienced in securing sutKcient designers with original ideas. It is obvious that a great deal of the success in the carjiet industry depends on the originality and attractiveness of the designs produced. Before the war. a large proportion of the designs used were of British origin, although a few were purchased in France. To remedy the tendency towards stereotyped designs, it was suggested that more attention should be paid in the technical and art schools to the teaching of design, especially in those centres in which carj)ets are i)ro(luced. cr/., IlalifaN, Glasgow, and Kidderminster. Taiiikf Question.s. W'c arc informed tbal at a meeting representing ?') percent, ol the carpet nianutacturiug interests of the United Kingdom, the following ])roi)osals were adopted with regard to the policy which sbould be followed after the war towards imiiorti'd carpets : — (1) \ minimum tariff of 21) per cent, ad \abii('ni on caipets in[porte wit bin the I'hnpire of a percentage uif the minimum tariff equivalent to \\bate\ci- percentage of preference each Dominion 01' couiitiy may accoicl goods coming from the United Kingdom. (4) \ surtax of ;")() ])er cent, above the dnti('> imjjoscd under tbc maxiniuni taiifV sugg'ested above on all enemy cariie(/i. These suggestions were made mi tl e assunqil inn tlial tbc inipnrts ot raw maiciial into the United Kingdom are duty-free and tbat vi'bates are granted on re-exported goods. 76 Summary. 1. Tlie carpet industry, although small in compai-ison with other textile industries, is of considerable importance. The value of the total output of the industry is estimated at £4,500,000 per annum, of which about one-third is for export. The industry is in the hands of a comparatively small number of firms in the Kidderminster, West Eidin<^- nf Yorkshire and West of Scotland distiicts, ami in all about 20,000 workpeople are employed. 2. The imports of carpets and rugs into this country in 1913 amounted in value to £698,371, of which £405,554 was subsequently re-exported. Of the balance of £292,817 which was retained in this country a considerable proportion consisted of Oriental carpets which did not directly compete with British ])roductious. The only effective competition experienced was from France and Belgium. German chenille Axminsters were sold at very low prices, but they were usually of lower qualities than are produced in this country. The principal diificulty with which manufacturers had to contend was the occasional dumping of foreign-made carpets and the consequent breaking of prices. 3. The export trade in 1913 was valued at £1,537,000, of which 04 per cent, was with British Possessions and 36 per cent, with foreign countries. Canada and Australia were the principal markets in the Empire, and Holland, the United States, the Argentine Eepublic and Chile among foreign countries. The export trade with many foreign countries, especially with the United States, has been seriously affected by the competition of native industries protected by tariffs. 4. The oj)inion of the Cari)et Industry- with regard to tariff' questions is set out in the following proposals which were agreed to at a meeting of the combined Carpet Associations representing over 75 per cent, of the carpet manufacturers of the United Kingdom: — (a) A minimum tariff of 20 per cent, ad valorem to be levied u])on carpets coming from Allied countries. (6) A maximum tariff' of 30 per cent, ad valorem to be levied u]ion goods coming from neutral countries. (c) On the basis of the minimum tariff, a ])reference to be accorded io all States within the Empire equivalent to wliatever percentage of preference they may accord to goods coming from Great Britain. (d) A surtax of 50 per cent, over and above the duties levied iinder Ihe inaxinuini tariff to be charged upon all carjiets coming from eneiry countries. These proposals aie based upon the entry of raw materia, free of Customs duties, and it is suggested that rebates should be granted on re-exported goods. 76 SECTION 4. -THE SILK INDllSTin TJH' silk iiulustiy Ls oue oi tke oldest oi lintisli texUle luiluNtrie.-. I'lidi id the n-ifin not increased to any ajjpreciahle extent, our nianu lacturers a]ipear lo he Indding llieir own in the best (dasses of goods where design and i|Ualil\ a ic e^MMitlal leatuies and piice is not of great importance. In Ihe (dieaper arti(des, lioue\fi\ (ierniaiiy and .\ustiia were very strong coni]iet itors Ix'fore the War. Mac(desfiel(l is the centre of this industiy. wliidi i^ also canicd dii in the (llasgow district, Norwich, and ihe West Biding ol Yorkshire. (c) Mov.inint e\clu>ivelv a liiitisli pi'odnct uui , and is nia n u lact u led in the eastcin counties ol I'.uLjhind. Tlic jiri nciiial niarke't-; are France, Soutli .Vnicrica. and the C^nited States. Hiitisli niaiiu lact uieis eni]ilov a s]iecial process by wliicli tlie crepe is wateii)i'oofed and does not lose its ap])earaiHe when exposed to moisture, Tlie trade declined considcrablN w iien inourning ciejie went out (d' fashion in this country, but. in France and oilier niai-kets uliere it is from Japan since 1912 have grown steadily as the following' figures show : — lbs. rei2 40,837 1913 58,462 1914 110,928 1915 236.885 1916 240.522 Japanese compeiition is regarded by the silk-spinning industry in Yorkshire and else- where as a most serious menace. We are informed that the Japanese can sell the lower counts of these yarns in this country at less than the bare cost of production here. The labour cost in Japan is far less than that in the United Kingdom, and it is stated that on this score alone Japanese spinners have an advantage of l.s-. to l.s-. 3fZ. per lb. Although Japanese operatives ai-e not so skilled as the ]5ritish. the rapid improvement in the yarns imported shows that considerable ]U'ogress is being made. The Japanese have many advantages. They can purchase their waste very cheaply on the spot, as Japan is a silk-producing country. By treating this waste in the country of origin the transport charges are reduced. This competi- tion appears likely to increase in intensitj- after the war. A considerable extension of the industry is being made in Japan, and witnesses express the fear that unless an import duty is imposed on these yains equivalent to the difference in the cost of labour, the British spinning industry, which enijiloys one-third of the operatives in the silk trade, will be seriously threatened. Mnniifacturcd Gnotl.'s. — Imports into this country nuiy lie divided into three main classes: — (ii) High-grade plain and figured dress gnnds. ribbons and lace, and rich furniture silks mainly inipoi-fed from France. (6) Plain and figured goods for men's and women's wear, such as taffetas, satins, coat linings, tie-silks, brocades, ribbons and trimmings, of no particular merit, all heavily weighted in the dye and low in price, imported principally from Germany, Switzerland and It.aly. (f) Eastern ]iiece goods such as Shantungs, Corahs, Pongees and Japanese Habutae. With regai'd to the first class (a) the United Kingdom can scarcely claim to be a serious competitor. In ]ilain nets, hose, and crepe de Chine, British manufacturers compete to some extent, but the bulk of the finest dress and furniture silk goods come from France. This is largely due to the position of Paris as the arbiter of women's fashions for the world, and also to the quality and attractiveness of the French productions. In the highest class figiired dress goods the French really have no rivals. In men's wear, such as tie-silks, mufflers, handkerchiefs, and shirtings of the most expensive qualities, British manufacturers are ahead of their competitors both in taste and quality, but the market for these goods is small and is said to be restricted and rendered unprofitable owing to the free importation of goods in class (b), which appeal to the purchasing public on account of their apparent cheapness. Class (6) includes those goods in which competition is most severely felt in the home market. There appears to l)e no particular merit in the imported articles, and they compete on the score of price alone. In this connection it should be pointed out that the Germans have derived great advantage in competition from their very successful methods of adulterating or weighting silk with .salts of tin in the process of dyeing. Silk has a great affinity for tin silts and can easily be weighted u]) to 100 per cent. The result is that goods of heavier weight and more fullness in the hand can be produced with a much smaller expenditure of actual silk than where pure dyes are used. Fabrics nmde in this manner are far less durable and it is owing to their us(> that silk has been to some extent discredited as an article of dress, but they attract customers, who are more taken by cheapne.ss than by durability. In order to meet competition of this character British silk manufacturers were obliged to send their thrown silk to be dyed to Germany until British dyers acquired the necessary knowledge of the weighting processes. Eastern goods in Class (c) are in the main quite pure, are of good wearing quality, and are genuinely cheap. Considerable quantities are dyed and jirinted in this country and are made up into such articles as blouses, underwear, ties, &C. In dealing with competition in the lionn^ nundcet witness(>s assert llial ihe sniallness of the British silk industry is not due to the inferiority of its ])roductions. Su(di silk goods as are made in this country are said to be well made and to be generally supeiior in desig-n and colour to foreign goods with tlie exception of the French. Moreover. tlic'\ aic less adulterated and wear lietter. The success of most foreign imjioiis is due to tli(>ir relativelv low ])rice. Germany. Switzerland and Ttah li nc large silk industries, which are able to i)roduce on a large scale. .Ml of them "dump" their siirplus goods ujion the iTce and open mark(>t. of Great Britain, The Britisii silk industry, just because it is a snnill industry, has to produce on a small scale and is confined in the main to specialities, which arc always expensive to produce. The gen(>ral contention of witnesses is that it cannot becouK' a large industrv and produce on a large scale unless it h.-is some assistance iT-oni a t^iritT in it^ own jnarket. 79 (b) 111 the E.vpori Trade. The following Statement, compiled from tJie Bonrd of Trailc Returns, shows the value of the various kinds of silk manufactures exported from the United Kingdom to the under- mentioned groups of countries in the year 1913. the last complete pre-war year: — Groups of Countries. Spun Silk Yarn. Broad Stuffs. Jjace. (Jther Manufac- tures. Total. Foreign Countries : European : Thousand £ Thousand £ Thousand £ Thousand £ Thousand £ Allies 38 318 3 42 401 Enemies ... 24 134 9 62 222 Neutrals ... 9 51) 1 18 87 Total European 71 .Ml 6 122 710 l'".xtra European : United States 227 103 10 ()6 406 Central America and Mexico ... — 11 1 12 Brazil — 4 — n 15 Argentine 71 — 14 85 South America (other) — — — — China — 19 — 6 25 Japan — 14 — 2 16 Other 17 103 11 1.3 144 Total Extra European 244 325 21 113 703 Total Foreign Countries 315 836 27 235 1,413 British Possessions : Australia 17 (;5 1 77 ■ 160 New Zealand ... — 6 — 20 26 Canada 17 121 3 74 215 South Africa — 9 — 11 20 British India ... 14 62 18 94 Other 28 73 3 40 144 Total British Possessions ... 76 336 7 240 659 Total to all destinations 391 1,172 34 475 2,072 Silk ribbons GKANn TOT.M. 24 2,096 It will be noticed that of a total export trade amoTintiug in value to over £2,000,000, about 68 per cent, was taken by foreign countries and 32 per cent, by British Possessions. The United States of America are our best market for spun silk yarn, taking .£227,000 out of a total export of £391,000. For piece goods and other manufactures, France has always been our best customer, but all countries, and particularly our own Dominions and Colonies, take such goods as are British specialities — though the quantities are not large. In the principal European countries and in the United States our principal competitor is almost always the domestic industry protected by a high tariff. Practically all the silk manu- facturing countries protect their silk industries, and the scale of duties varies from a moderate one in, say, vSwitzerland, up to 60 per cent, in the United States, and 100 per cent, to 150 per cent, in the case of Russia. The United States has built up an enormous silk industry in recent years behind its tariff walls, and is now the largest purchaser of- raw silk in the world. It ife the opinion of witnesses that if our Allies, and more particularly France and Russia, could be induced to reduce their duties in our favour, a largel^^ increased trade might be done with them. Supplies. (a) Raw Materials. Raw and Waste Silk. — Between 50 per cent, and 60 per cent, of the raw and waste silk used in the United Kingdom before the war was obtained from China. Smaller quantities were supplied by France, Italy and Japan, and a negligible amount by Turkey. British manufac- turen's are therefore independent of enemy sources for their sxipplies of silk. 80 It, luis heeii .suggesleil \)\ tlic Tnide, niid in tliis suggestion we coiicur, iluil sericulture should l)p encouraged under Government sui)ervisi(]u in those jiortions of the J]nipire, particubrly in India and Africa, where conditions are suitable. Dur.ituffx. — I'rior to the outbreak of war, the silk industry was almost entirely dependent up(ni foreign sources for its supplies of dyestutfs, about 80 per cent, being derived from Germany and l-'i i)er ceiil. from Switzerland. The general opinion in the Trade is that this state of iiii^airs .should not be allowed alter the war, and that the manufacture of dyestutfs in this country should receive such Stale aid as may be necessary to render Briti.sh manufacturers independent of foreign sources of su])ply. As already stated, nnniy firms before the war sent tlieii' silk to the (.'ontinent, jiarticnlarly to Germany, to be dyed anrl weighted, and thus took advantage not only of German dyes but of German processes. It is hoped that eveiy eftori will be nnule by British dyers with the aid of State-aided research to improve their processes so 1lia1 the industry may not be behind its competitors in this very ini])ortant branch. (b) Sfivii-manufact inril Mntetiiih. Spun Silk Yarns. — It has already been pointed out that £217,280 of foreign yarns spun from waste silk were imjiorted in 1918. The princijial supplies were drawn from the Continent (Switzerland, Italy and France) and from Japan. ContineTital competition appears to be due to two main advantages : — Wages in Italy are at least 25 jier cent, lowei' than in iliis country, and the total cost of production is from Qd. to 9r/. per lb. less than that prevailing here. Italian competition is principally in two-fold weaving yaiiis and in three-cord sewings. Tlip, Schappiuf] /'/•ofc.s'.s.— This process, which consists of the fermentation of the silk to get rid of the gnm, is forbidden in this country on account of its objectionable smell and the polhitiou of the rivers. It is, however, in general use on the Continent, and enables our com- petitors to make use of lower qualities of waste, and to produce lower cjuality and lower priced yarns than the British spinners can tiirn out. A certain amount of the natural gum is left in the silk by this process. From 5 per cent, to 12 per cent, more yarn is produced than by the British method of fully discharging the gum. The silk spins better, is freer from nibs, and loses less in the gassing and cleaning. Schappe yarns are used in velvet manufacture, for which dischai'ged yarns are not suitable. For plushes, however, the fully discharged yarns are preferred. The British spinning industry appears to have survived in the face of this competition, partly because it produces the best discharged yarns for plush in the world and partly because spinners have installed warping plants and can deliver warps exactly to the recjuirements of manufacturers at short notice. As already stated, Japanese spinners have made great progress during the past ten years and have become most serious competitors in the home market for two-fold weaving yarns. They have also captured a large portion of the trade which was formerly done by British spinners in India. Plant and Machinery. It cannot be said that all liranches of the silk industry are er^uipped with any- thing like up-to-date machinery. In the Bradford district, where the material used is for the most part spun silk, the machinery leaves little to be desired, but in the centres where net silk is employed much of the plant is old-fashioned and is not well adapted to the delicate fabrics which have been in fashion during recent years. Maniifacturers are fully alive to the advantages of the most modern eciuipment, but the profits of their industrv have been so restricted and so uncertain that they have not been able to scrap old plant and to replace it with new. Even if they had been able to do so thej- would probably have had to provide them- selves from foreign sources. It is one of the consequences of tJie smallness of the British silk industry that it does not call into existence ancillary industries to provide for its wants, as the cotton and woollen industries do. Much of the success of the larger textile industries is due to the close co-operation ])etween machine makers and manufacturers. This fact has been pointed out in connection with botli the cotton and woollen trades. In the case of silk the industry does not offer a sufficient niaiket to machinists to induce them to incur large expenditure in experi- menting in models s])ecially adapted to the requirements of a very limited trade. .These remarks apply to all classes of machinery: — looms, winding and warping frames, finishing and dyeing plant. Most of the silk machinery used in this country is said to consist of variations of machinery used in the larger and coarser textile trades and not to have been designed from the first with s])ecial regard to the needs of the silk trade. We must not omit tf> m(>ntion that the finest silk fabrics arc still woven in hand looms, where machinery ])lays a comparatively small ])art and human skill is all important. Sucli looms arc generally worked by weavers in thei?' own lionies. During the last twenty years the number ol hand looms has decreased very rai)idly in this country ami at the present time the proportion of haTul looms t.o power looms is less tlian in any coiintry exce])t the Fnited States. We are informed that thei-e are less than ( thousand hand-loom weavers employed in the British sillc trade and llie industry- is tending 1o bise the charactei' nl a domestic imlustry. In Lyons there are still about lo.nOfl hainl looms used in the manufactui'e of bi-ocades and delicate silk fabrics. In certain (unii'ters of the town the buildings, which formerl\- contained, say, four hand looms, ai-e now fitted up with two ])owpr-lo(uns driven by idectric eurreiit from (lie municipal sujiply and, in spite ol' the change from hand to power, the industry remains a donu'stlc one. Lahoitk. According to llie returns of Ihe Census of Production, 111(17, liieii' were •'!(), 7](t wage- earners emiiloved in Ihe sill< imlu-^lrv. of whicli 8.80") wi.re mab's. and 21,110') weie lemales. 81 We found considerable divergence of opinion among witnesses as to the practice of restriction of output by the workers. Conditions appear to vary according to the locality of the particular branch of the industry. In industrial centres such as Macclesfield the workers are more or less subject to Trade Union rules, but in the country towns and more remote districts this is not the case. On the whole, however, the relations between capital and labour appear to be good, and there is little friction. Owing to the uncertain and intermittent character of the trade it appears to be difficult, if not impossible, to provide regular employment in mnny branches of the industry, and there is evidence that for this reason operatives have drifted into other textile industries. It must be added, however, that if steady regular work were assured, witnesses agree in thinking that the Unions would place no difficulties in the way of training fresh labour. Aet and Technical Education and Efficiency. (a) Technical Efficiency. — Whatever may have been the case in the past, silk manufacturers in this country appear at the present time to be well-grounded in the technique of their craft. It is rare to find an employer taking an active part in the conduct of his business who has not taken a course of training either at Macclesfield, Bradford or Manchester. Many have preferred to go to Lyons or Crefeld, while some have taken courses both at home and abroad. No branch of the textile trades makes larger demands upon the technical training and artistic perceptions of manufacturers than the silk ''ndustry. Silk is the most costly as well as the most beautiful of all textile fibres, and any incompetence in handling it entails very great loss. Its nature is such that only certain temperaments can handle it and then only after long training. It follows that the training of hands is more difficult and costly in the silk industry than in other branches of the textile trades. Hereditary skill is an important factor, particularly in the manipulation of fine " net " silk. If this special skill, originally introduced by foreign artisans in the 16th and 17th centuries, were entirely lost in this country, it would be most difficult, if not impossible, to re-establish it. The silk industry represents the high water mark of technical attainment among textile industries. In all countries it has been fostered and protected for this reason. The treatment of the raw material, the mounting of the looms, and the designing of the patterns all offer opportunities for finer and more beautiful work than are afforded by any other textile trade. Most of the beautiful designs, both in cotton printing and in mixed furniture goods, are taken from designs which were originally produced in silk. Silk from its very nature, the beauty of its fibre and the colours it takes, the wonderful effects of light and shade which can be obtained in the working out of designs, lends itself in a way coarser and less lustrous fibres cannot lend themselves to the production of artistic effects. It has been represented to us that it would be impossible to maintain the highest standard of technical training, knowledge and skill in other textile trades if the higher branches of the silk industry were allowed to die out in this country. This is one important reason we are told why the decline of the British silk industry is to be deplored. Witnesses suggest that the United Kingdom should maintain the silk industry for the sake of its more flourishing sisters on the ground that it represents the crown and apex of technical attainment in textiles, and that the other branches must inevitably suffer from its decay. (b) Art and Technical Education. — We are satisfied from the evidence we have received that for an industry requiring taste as well as technical skill designers cannot profitably receive instruction in the one without the other. It is useless to teach the art of designing without giving the student the opportunity to study the process of manufacture of the particular articlefor which the design is intended. Further, his training in art should go far beyond the limitations of design in the same way that his technical instruction should cover a wider field than a knowledge of the actual process of weaving or printing. The student must at least know the possibilities of machinery, its almost unlimited capacities in some directions, and its strictly limited powers in other, if he is to be an efficient designer. Similarly, the young man who is preparing to occupy a position of direction or control in a manufacturing business, where design and colour are indispensable features, should, in addition to his course in the technical school, receive in the art school an insight into the beauties of form and colour, and at least some knowledge of the principles of designing and draughting. It is therefore essential that in all textile towns of importance there should be an art school and a technical school, which if not actually under the same roof shoxild work hand in hand in the training of young people who will become manufacturers, mill managers or designers. There are, at present, art and technical schools at Macclesfield, Bradford, Leek and Coventry, which provide special instruction for silk students. At the two former the conditions are ideal, particularly at Macclesfield where the two schools are under the same roof, and most students take the art and technical course concurrently. The Macclesfield Institution has not only greatly helped the silk industry of that town, but its students are to be found in silk firms throughout the country and many hold high positions in other branches of artistic industries. The teaching at the above-mentioned technical schools is only intended to meet local require- ments, and although the Manchester School of Technologv is well equipped for instruction in silk manufacture, and like that at Bradford is able to give students the benefit of study in such additional subjects as dyeins- and spinninsr, it does not pretend to provide the complete silk course to be found at the great silk centres Lyons or Crefeld, The silk industry is in urgent need of an institution in this country, fully equipped with the most modem types of machinery, and providing oppoi-tunities for the study of silk manufacture equal in every respect to the best to be found abroad. 9H78 F 82 TRADE CONDITION'S AFTER THE WAR. Tariff Questions. The Silk Associatiou of Great Britain tiud Ireland, nijon tlie appointment of tliis Com- mittee, issued a questionnaire to 228 members of the association and its affiliated bodies in order to ascertain the oi)inions of those engaged in the industry upon tariff questions. One hundred and thirty-eight replies were received from merchants, spinners, manufacturers, and others. The ojjinion of the trade as set out in the replies received may be summarised as follows: — Raw and waste silk to be admitted free of duty. AVith regard to thrown silk and spun silk yarns coming from our Allies opinions are divided between free entry and a small dutj-. It is suggested that there should be a duty averaging 18 per cent, upon thrown silk and spun silk yarns coming from neutral countries. The tariff asked for upon jjiece goods and made-up goods is as follows : — In respect of our Allies, 15 per cent, ad valorem. lu'respect of Neutrals, 20 per cent, to 25 per cent., subject to reciprocal arrange- ments. • In respect of undyed piece goods of Chinese and Japanese manufacture, 12 per cent, to 16 per cent, ad valorem. Duties averaging 40 per cent, are asked for upon all silk manufactures coming from enemy countries. No tariff to be imposed upon goods coming from any part of the British Empire. Probable Effects of the Tariff suggested by the Industry. On Enemy Countries. — It is stated that it would not affect our supplies of raw ]n;iterials as the quantity tliey produce is negligible. Tlieir goods are not essential to the'welfare of the United Kingdom; they are heavily adulterated, and lieyond their low price possess no special merits. Substitutes are at the present time being made in France, Italy, Switzerland, and the United Kingdom, but of course under war conditions. On Allied Countries. — It is further stated that a tariff' of 15 per cent, would not disturb to any marked extent present trade, particularly with France. French goods possess a beauty, an originality, and a general excellence which command a sale in spite of tariff's. Italian goods have not this character, but the low priced labour of Italy would neutralise the duty here. Moreover, Italy would produce for ihis market such goods, formerly imported from Germany and Aiistria, as were not made in this country. In regard to Japanese piece goods, it is said there is no reason to anticipate that a duty would interfere with their importation, as their production at anything like the price is impossible in any other country. On Neutral Countries. — Switzerland is the only country that needs serious consideration. Her exports to the United Kingdom would probably be affected in a similar manner to the Italian — that is, she would lose trade to us in certain cloths, and make good in others hitherto of enemy manufacture. In the United Kim/dom. — Broadlj- it is said the effect of the proposed tariff would be to transfer to the United Kingdom the manufacture of goods imported from Germany and Austria in pre-war times without injury to Allies and but little to neutrals. The contention of witnesses is that a tariff would give the silk industry a sense of security which at i^resent it lacks ; capital would be forthcoming for the erection of mills of modern type equipped with up-to-date machinery, and trained men of more than average ability possessing a spirit of enterprise would cease to leave this country, as they have been doing for many years, to build up the large and rapidly increasing silk industry of the United States. The view is expressed that no nation can afford to lose its most refined and highly skilled trades. It should be the national aim to develop industry in the direction of finer and more beautiful work, leaving the coarser operations to less civilised countries. Most nations zealously guard and conserve their silk industry, because it sets a high standard of production which is stimu- lating and highly beneficial to all other branches of their textile industries. The artistic taste of a nation is probably more fully reflected in its silks than in any other textile. The great art period of Italy in the fifteenth, sixteenth, and seventeenth centuries has left its stamp in a marked degree on Ihe figured velvets and damasks of that time. The same may be said of the period of Louis XIV., XV., and XVI., which resulted in the production of the beautiful brocades and tapestries of France. It is not too much to claim that the fame for beautiful fabrics gained by Italy and France in these periods will live for ever, and thiougli iliat fame continue to bring trade to their doors even in times of inferior production. Summary. 1. The silk industry was introduced on a commercial scale inio England in the sixteenth and seventeenth centuries. It was protected from the earliest days until the adoption of Free Trade as the national policy, and more especially until the ratificatioTi of the Cobden Treaty with France in 1800, from which date it has with various fluctuations declined. The industry is now very small, and is insignificant compnrod wiih Ihe silk industries of France, Germany, Italy, Switzerland, and the United States. 2. According to the reluins of the Census of Produi'tion. the value of the out])ut of ihe silk industry in 1907 was estimated at between five and six million pounds .sterling, of which about 53 per ccn\. was retained for home consumption and Ihe rest exported. 3. The silk goods manufactured in ilie United Kingdom are mainly specialities, in which British manufacturers — whether on account of special processes or of superior design and 83 workmaiisliip — have been able to Ldld tlieir own against international competition. Broadly speakinp, there is no larcre staple trade in this country. British mannfactnrers are consequently everyvrhere confronted with the difhculties and expense.^ incidental to highly diversified pro- diiction on a small scale. 4. The industry in the United Kingdom is widely scattered, and is usually to he found in country towns and districts, where it finds employment under clean and healthy conditions mainly for female workers. In these circumstances an expansion of the industry would give employment to a larger number of people in these more remote localities without detaching laboiir from other branches of industry. 5. The wholesale value of silk goods consumed annually in the United Kingdom is esti- mated at £16,000,000, of which about 80 per cent, is of foreign and 20 per cent, of home manufacture. Of a total import of £15,735,000 of silk sroods of varioiis kinds in 1913 (of which nearly £2,000,000 were subsequently re-exported), oiir European Allies, principally France and Italy, supplied 48 per cent., European Neutrals, principally Switzerland, 21 per cent., and enemy countries, mainly Germany, 17 per cent. Apart from these groups the most important source of supply was Jaiian, which contributed 8 per cent. 6. Of a total export of British silk manufactures, valued at £2.096,000 in 1913, about 68 per cent, was taken by foreign countries, and 32 per cent, by British Possessions. Our principal markets were France, the United States, and Canada. 7. Between 50 per cent, and 60 per cent, of the raw and waste silk used in the United Kingdom before the war was obtained from China. Smaller quantities were supplied by France, Italy, and Japan, and a nes'ligible proportion by Tiirkey. British mamifacturers are independent of enemy sources for their siipplies of silk. It is the opinion of the trade that sericulture should be encourased imder Govei'nment supervision in those portions of the Empire, particularly in India and Africa, where conditions are suitable. 8. In the spinning processes the machinery and plant employed leaves little to be desired. but in the centres where net silk is worked much of the plant is old-fashioned and is not well adapted to the modern delicate fabrics. ^Manufacturers are fully alive to the advantao-es of modern equipment, Imt the profits of their industry have been so restricted thnt they have not been able to scrap the old plant and to replace it with new. In the case of silk, the industry does not offer a siifficient market to machinists to induce them to incur expenditure in experi- menting on models specially adapted to the reouirements of a very limited trade. During the last twenty years the number of hand looms has decreased very rapidly, and the industry is tending to lose the character of a domestic industry. 9. Of the 31,000 wage-earners employed in the silk industry, over two-thirds are females. In indiistrial centres such as Macclesfield the workers are more or less subject to Trade Union riiles, but in the country towns and more remote districts this is not the case. On the whole the relations between capital and labour appear to be good, and there is little friction. The supplj- of labour has been controlled to some extent by the Trade Unions in certain industrial centres, but this action has been caused by the uncertain and intermittent nature of the work under conditions existing before the war. 10. Whatever may have been the case in the past, silk manufacturers in this country at the present time appear to be well grounded in the techniqiie of their craft. The silk industry represents the high water mark of technical attainment and skill among textile industries. It would be difficult to maintain the highest standard of technical training, knowledge, and skill in the textile trades in the absence of a flourishing silk industry in this country. On this ground alone the United Kingdom, with its great and prosperotis textile industries, should endeavour to maintain a flourishing sil1c industry. 11. Art and technical schools are established at the princiiial silk centres, and provide special instructions for silk students. The silk Industry, however, is in urgent need of an institution, fully equipped with the most modern types of machinery, and providina- oppor- tunities for the study of silk manufacture, in all i-espects equal to the best to be found on the Continent and elsewhere. 12. From the evidence given, and from the replies received to a questionnaire issued by the Silk Association to all branches of the trade, it is clear that the silk trade is almost unanimoiislv in favour of the imposition of a tariff on imported silk manufactures. The opinion of the trade as set out in the replies received may be summarised as follows : — Raw and waste silk to be admitted free of duty. With regard to thrown silk and spun silk yarns coming from our Allies opinions are divided betweed free entry 'and a small duty. i It is suo-gested that there should |be a duty averaging 18 per cent, upon thrown silk and spun silk yarns coming from neutral countries. The tariff asked for iipon piece goods and made-up goods is as follows: — In respect of our Allies — 15 per cent, nd rnJorem. In respect of N'eutrals — 20 per cent, to 25 per cent, subject to reciprocal arrange- ments. In respect of undyed piece goods of Chinese and Japanese manufacture — 12 per cent, to 16 per cent, ad valorem. Duties averaging 40 per cent, are asked for upon all silk manufactures coming from enerav countries. No tai'iff to be imposed \ipon any goods coming from any part of the British Empire. 9978 F '-' 84 SECTION 5.-THE LINEN INDU)STKY General Position of the Industey. Flax spinning and the manufacture of linen goods is one of the oldest of the British textile industries. The industry is centred chiefly in the north of Ireland and to a les.ser extent in Scotland. Until the middle of the nineteenth century the industry was more or less of a domestic character, and very little progress had been made in the application of power to the various processes employed in the trade. The American Civil War and the consequent shortage of cotton goods gave the needed impetus to the industry, which was also further helped by the temporary removal from the field of competition of two of its principal rivals by the Franco- Prussian War. For a time the industry enjoyed great prosperity, but a reaction set in and it l)ecauie evident that the output had more than overtaken the demand. To remedy this a number of Belfast spinners bought up a few of the weaker firms about 20 years ago, but the industry still suffers from excessive internal competition. In spite of this disability, the exports of flax and linen manufactures still take third place among the textile exports of the United Kingdom. It is estimated (lint the value of the total outjnit of the trade is somewhere in the neiglibourhood of £15.000,000 per annum, of which nearly 9i millions is represented by the export trade. The capital invested in the linen trade is stated to be about 19i millions sterling. In" common with most other textile trades linen suffers from periods of depression and these are often determined by two factors — the ruling price of cotton, and the political and financial condition of the principal linen markets, i.e., the United States and the British Colon'ies. The products of the linen industry are very varied, ranging from heavy sacking and sail- cloth to yarns and laces of a gossamer delicacy. The general trend has been towards specialisa- tion and localisation, and in this way Belfast has become the centre for the fine linen industry, owing to the suitability of Irish flax for its minnfacture and to the character of the Irish climate, which enables Irisli manufacturers to produce the whitest and most beautifully finished fabrics in the world. Dunfermline has become the centre of the damask trade, and Forfarshire of the mnn'ufacture of yarns and cloths from flax of continental origin. A few of the larger concerns combine all the processes of linen manufacture from the purchase of the raw material to the marketing of the finished product, but the tendency has been for firms to limit tlieir activities to certain well defined spheres. The flax merchants deal ex- clusively in raw material, which they obtain through their own nrgnnisition or connections in Belgium. Eussia, TTollaud or Ireland, as the case may be. Such merchants supply spinners and in some instances assist therm in financing supplies. Spinners sell their flax and tow yarn to weavers. The prodiict of the weaving establishments is passed on to the bleacher, who bleaches and finishes the goods ready for the merchant for distribution at home and abroad. Supplies. . The industry is largely dependent on foreign sources for its supply of raw material, only about one-eighth of Ireland's requirements of raw flax being produced at home. The best flax comes from Belgium, which, together with Russia, furnishes the bulk of the supplies. A broad review of the flax position and of the jjossibility of increasing its production within the Empire is embodied in the Section of this Report devoted to raw materials. From this Report it will lie gathered that steps should be taken to improve the cultivation and preparation of flax in various parts of Ireland and to extend its growth for fibre purposes in Canada and India. Pl.\NT .VND M.4CHINERT. Practically tlie whole of the plant at present in use is of British origin. The following table shows the number of spindles and looms in 1915 and 1013 respectively as compared with ^5 years ago, viz : — Country. 1iv1:iim1 Eiii.'I.-iii u]ion India of Ihe jute industry of the world, those engaged in Ihe I ladc in the United Kingdmii are almost unaniniousl\- in favour of aciion being taken (o insure lha( l!ie sii]iply of raw jute alter Ihe war sliuH lie cnnsiTxcd in Ihe first insl:inc'.' for the ic(iuirenients of (irewt Hritain ami lier Allies. A committee reiiresenting both the 91 IJuudee Chamber of Commerce imd tke Loudon Jute Assix;iatiou lias dealt with this question, and it was suggested by representatives of that committee and of the trade, that an export tax of £5 per ton (say, ^d. per lb.) should be levied on all jute leaving India, with a rebate of the full amount, where the jute is consumed within the British Empire. It was further suggested that total or graduated rebates should be granted in favour of our Allies, and graduated rebates in favour of such neutral countries as may offer reciprocal concessions, the full amount of the export tax being charged upon all shipments to enemy countries. With regard to the collection of the duty, witnesses considered that the simplest plan would be to tax all jute exported from India and to grant certificates certifying payment. These certificates would form an essential part of the shipping documents. Upon arrival of the jute in the United Kingdom, the certificates would be endorsed and exchanged by the Customs Authorities for others certifying that the jute had been landed. Such '' landed warrants" would be equivalent to demand drafts on the Indian Treasury, payable in Loudon, and would be cashed by any Bank. In case of the re-export to foreign countries the requisite tax would have to be paid to the Custom House prior to shipment (b) Seini.-inuimfactured Materials. (1) Yarns. — Most jute manufacturers are also spinners and are independent of foi'eign yarns. Some French and Belgian fine yarns were purchased before the war principally for use in the manufacture of fine jute paddings. The imports were not considerable, however, and in 1913 amounted to : — French Tarns 2,531,246 lbs. valued at £44,832. Belgian Tarns 1,735,901 lbs. valued at £29,671. (2) Other essentUd inaterials. — A certain amount of aniline dyes is used in the carpet industry, but farina is practically the only material for whicli the jute trade largely depended on foreign countries. Farina is used in the dressing of yarns for weaving purposes. Plant and Machineky. The plant and machinery used in the industry is almost entirely of British origin. Spinning- machinery is largely obtained from Leeds and district and to an increasing extent from Dundee, while weaving and finishing machinery is almost entirely manufactured in Dundee. The prevailing opinion among witnesses was that British machinery is superior to that of foreign manufactui'e and that British machinery makers are fully alive to the necessity of keeping abreast of modern invention. In support of this it may be mentioned that Indian and Continental mills have been supplied with jute machineiy from this country. It is clear that considerable repairs and renewals will be required immediately after the war. Witnesses do not anticipate any unreasonable delay in this connection, unless the orders recently placed by the Calcutta mills receive prefereuce. They therefoi-e recommend tliat a system of priority certifi- cates should be continued after the war for a sufficient time to allow of the re-equipment of our own facto i-ies and those of the Dominions and of our Allies in preference to other countries. The opinion in the trade was unanimous that a further speeding-up of machinery would lead to inferior work, and was therefore not desirable. Labour Questions. As a general rule there does not appear to have been any organised restriction of output among the operatives in the jute trade. The estimated number of operatives in the trade in July, 1914, was 51,000, of whom 16,000 were males and 35,000 females. Piece work is adopted wherever possible. There is some difference of opinion in the trade as to a possible shortage of labour in Dundee after the war. The majority of firms consulted do not anticipate any siich shortage, but it was pointed out that steps ought to be taken to stimulate employment for men in the town, in order to furnish an additional siipi^ly of women for the jute industry. In this connection it is stated that the lack of suitable hoiising accommodation in Dundee is becoming very serious. Finance. The general opinion of firms consulted is to the effect that the industrial and commercial requirements of the jute trade are adequately met by existing banks and financial houses. The Extent and Character of Foreign CoiiPETiTioN. (a) Home Trade. The competition in the home trade is mainly in Continental yarns and Calcutta piece goods. The values of the imports of varus in 1913 were as follows : — £ Germany ... ... ... ... •■• ••• .-. •■• i ,210 Belgium 29,671 France ... 44,832 Other Foreign Countries ... ... ... ... ••■ 10 British India 218 81,94! 92 These imports are not very important and are mainly confined to French and Belgian fine spinnings, which are largely used as weft in the manufacture of fine paddings. Since the war France has increased her exports to this country, and in 1915 the United States sent us 922 tons of yarn. The imports of piece goods were much more considerable. The following table gives the value of jute yarn and fabrics imjiorted into the United Kingdom during the year 1913 from each of the undermentioned groups of countries, so far as the particulars are available from published returns : — Country from whence Imported. Jute Yarn. European — Allies Enemies Neutrals Extra European — India China Japan < Ither ( 'oinitries 'I'utal i; 74,508 7,210 22H Jute Manufactures (in- cluding bags and sacks but excluding cordage, ropes and twine). £ 242,294 80,01'.) 16.719 :,429,927 21,022 100,201 81.941 2,S<.10,]S2 More than 84 per cent, came from British Possessions (India) and only 16 per cent, from foreign countries, of which our Allies contributed more than half, enemy countries less than one quarter, and neutral countries about one quarter. Calcutta is the greatest competitor in piece goods for the home market. The cheapness of Calcutta Hessians has driven the superior British- made article out of the market and the Dundee trade is being forced into specialities such as linoleum cloths and specially woven and fine grade Hessians in which Calcutta has hitherto not been able to compete. Indian competition is likely to become more and more severe. We are informed that the cost of production, exclusive of raw material, is probably about £12 per ton in Calcutta as com- pared with £25 per ton in this country. The Indian mills work from 70-80 hours per week ; the labour employed is largely that of young persons ; and although more labour is required to do a given amount of work than in this country, this fact only counteracts to a very limited extent the cheajjness of Indian labour. The imports of piece goods from enemy countries are less than 3 per cent, of the total imports, and the competition of other countries is negligible as compared with that of India. (b) Foreign Trade. The following table shows the proportions of the raw jute manxifactured in various countries (1) retained for their own use, and (2) exported, in the year 1913, and gives a (dear idea of the importance of the different competitors for the world's trade. Country. Raw Jute Manufactured. Retained, per cent. Exported, per cent. Tons. India 1,100,000 40 60 United Kingdom ... 300,000 60 40 Prance 120,000 75 25 Italy 50,000 80 20 Russia 50,000 100 Belgium 20,000 ? ? Germany 100,000 90 10 Austria 00,000 90 10 United States 120,000 100 The exports of jute manufactures from the United Kingdom in 1913 were as follows :- Yarn 781,000 Piece Goods 3,066,100 Uneuumerated Manufactures ... ... ... ... 267,300 Bags and Sacks 1,224,700 £5,339,100 Yarns. — Our principal markets for yarns were Brazil, Portugal, and Canada. The exports are mainly of fine counts, and the trade was fairly well maintained during the years jireceding the outbreak of war. Very serious competition is now being met with from the native factories ill Brazil, whi(;h are capable of providing tlie bulk of the requirements of that country, and it is feared that the shiijments to this important market must tend to decrease. Piece Goods. — The United States takes ajjproximately 50 per cent, of our exports of piece goods, the other prin(;ii)al markets being Canada and the Argentine Republic. Foreign 93 countries absorb about 79 per cent, of our sbii^ments, and tbe British Empire — more particularly Canada and Australasia — take the remaining 21 per cent. The goods shipped to the United States are principally hessians, while the consignments to the Continent consist largely of specialities. In the European markets such as France, Germany, Austria, Italy, Russia, and Spain a strong home industry has been built iip behind tariif walls, with the result that British goods, with the exception of specialities, have been gradually excluded. German, and more particularly Austrian and Italian, competition is now being encountered in the markets of Eastern Europe. The extent of British, German, and Austrian competition in the markets of the world will be seen from the following figures, showing the exports of the three countries to all other markets, after dediicting the exports of j\ite manufactures of the three countries to one another : — £ Germany (1912) 92,900 Austria-Hungary (191:3) 341,785 United Kingdom (1913) 5,163,035 In the larger markets such as the United States, South America, and the Colonies, India was our jarincipal competitor. Bags and Sacks. — Ninety per cent, of the British exports of bags and sacks were sent to foreign countries, the principal markets being the Argentine Republic and Germany. It should be mentioned that in the case of Germany a drawback of the whole of the duty on these articles is granted upon their re-export. This measure has been adopted to stimulate Germany's export trade in produce. British exports to Germany consisted mainly of sugar bags. Selt-ing Conditions in Foeeign Markets. Previous to the war the distribution of British jute goods was to a large extent carried on through German merchants. The Russian trade, for instance, was largely in their hands, and so was that with Central America. This latter was largely due to the fact that Hamburg was a great produce niaiket, and siipplied the South American sources of supply with bags. Restriction on Enemy Goods. The majority of witnesses favour restrictions upon German trade after the war. Apart from this, the predominant opinion undoubtedly is that, in view of the slight competition from foreign countries met with in the home trade, the imposition of a tariff on imported jute goods is not necessary. They strongly advocate, however, the imposition of an export duty, on the raw material leaving India, accompanied by a graduated system of rebates in favour of Allies and Neutrals, which would have the effect of giving a considerable advantage to British goods in the markets of the world. Summary. 1. The jute manufacturing industry of the United Kingdom during the past thirty years appears to have remained practically stationary owing to the enormous development of the industry in India, and the growth of domestic industries protected by tariffs in the principal European countries. 2. India and the United Kingdom are the principal countries in the world with an export trade in jute goods. It is estimated that India exports 60 per cent, of her manufactures, while the United Kingdom exports 40 per cent, of hers. 3. Owing to the competition of India in the coarser fabrics and bags, and the closing of the European markets by tariffs, the trade of the Dundee mills is tending to become a speciality trade in the finer counts of yarns and in the high-grade hessians, linoleum cloths, sugar bags, etc. 4. India enjoys a world monopoly of the jiroduction of raw jute. All competing countries are entirely dependent on the Indian supply, and it is urged by the trade that an export tax of £5 per ton (equivalent to Id. per lb.) should be levied on all jute leaving India, with a rebate of the full amount where the jute is consumed within the British Empire, and a graduated system of rebates m favour of our Allies and possibly of Neutrals. 5. A certain quantity of aniline dyes is used in the carpet industry, but farina is practically the only subsidiary material for which the jute trade was largely dependent on foreign countries. 6. The plant and macliinery used in the industry is almost entirely of British origin. The prevailing oiiinion is that British machinery before the war was sujierior to that of foreign manufacture, and that British machinery manufacturers were fully alive to the necessity of keeping abreast of modern inventions. Considerable repairs and renewals will be required after the war, and witnesses consider that a system of priority certificates should be maintained after the war for a suflicient time to allow of the re-equipment of our own factories and of those of the Dominions and of our Allie; in preference to other countries. 7. As a rule there does not ajipear to have been any organised restriction of output in the jute trade. The need is felt in Dundee for additional industries employing men in order to provide an adequate supply of female labour for the jxite trade. The lack of suitable housing accommodation in the town is said to be very serious. 8. It is the general opinion of the trade that the industrial and commercial requirements (f the jute industry are adequately provided for by existing banks and financial houses. 9. Competition in the home trade is mainly from Continental yarns and Indian piecfl goods. The imports of yarns are not serious, -amounting to only £82,000 in 1913. Of the piece goods imported, India supplies about 84 per cent. The only measure of Government protection asked for is the imposition of an export duty on the raw material before it leaves India, with a graduated system of rebates in favour of the British Empire, our Allies, and Neutral countries. 94 SECTION 7.-THE LACE AND EMBROIDERY INDUSTRIES. The manufacture of lare by inenhauical means is a comparatively modern industrj- and dates only from the end of the Isth and the beginning of the 19th century. Previous to this, lace had been made by hand. It is stated that the making of pillow lace was introduced into this country by refugees from Flanders, who settled in IJedfordshire in 1626. The industry spread into various parts nf the country as a cottage or home industry and enjoyed .some prosperity. In the second half of the 18tli century attempts were made, both in England and in France, to produce lace by mechanical means, and it was by modifications of the stocking frame in use at Nottingham that tlie first successful results were obtained between 1760 and 1800. After many efforts, encouraged by gradual progress, English and French mechanics appear to bave discovered simull.iTieously the means of producing the net mesh. Upon this net or tulle, designs were afterwards embroidered liy hand. In the early years of the 19th century the first bobbin net machine was invented, and it is now generally admitted tliat the credit is due to .John Henthcoat. who patented a machine in 1808 and an improvement in 1809. Four years later, in 1814, the Leavers invented their system, which, although originally intended for the manufacture of plain nets, was, in 1834, through an adaptation of the Jacquard machine by Fergusson, made applicable to the production of fancy designs and figures. Further improvements and developments have taken place, which have brought the manufacture of machine-made lace to its present high standard. Throughout this period of mechanical progress Calai.s and its neighbourhood were, as tliey still are, the principal home of the French machine-made lace industry, and Nottingham and district the chief seat of the similar British industry. " Nottingham " lace is a type in itself, and is known all the world over. It enjoyed wide popularity and an extensive market until the invention of what is known as " Plaiien " lace, from the town in Germany where its manufacture is carried on. The machines for the manu- facture of Plauen lace were invented in Switzerland. It is said that they were first of all offered to Nottingham manufacturers and refused by them. If that is so, it was an unfortunate decision as their products have becnme the most formidable and in some respects triumphant rivals of Nottingham trade, as will lie seen in the course of this Eeport. The lace and embroidery industries may be divided roughly into five main cl.-isses, viz. : — (1) Leavers laces and nets which are used principally for dress and millinery trimmings and in the making-up trade. l)louses, skirts, fancy neckwear, &c. (2) Plain nets, cotton or silk. (3) Lace curtains. (4) Plauen laces and embroideries. (•5) Barmen trimmings. (1) Leavers Laces. The manufacture of Leavers laces is essentially the Nottingham industry, although it has been developed to some extent in various Continental countries and in America. In no foreign country except France, however, have manufacturers succeeded uji to the present in producing sufficient quantities of this lace, especially in the finer qualities, to meet their home require- ments. France is the only serious competitor in Nottingham lace; Calais produces many \^ery fine specimens, particularly of silk lace, and has practically killed the silk branch of the English lace trade. Nottingham, however, is pre-eminent so far as cotton laces are concerned, tlie only exception being the narrow Calais Valenciennes, which are imported into this country in large quantities. (2) Plain Nets. Plain nets are made of cotton or silk. Col ton nets may l)e divided into two i)rincipal classes — bobbin nets and mosquito or guipure nets. Bobbin nets form the basis for Plauen embroideries and were formerly supjilied in large quantities to Germany for the manufacture of this particular type of lace. Mosquito nets are exported in large quantities to hot climates and are mainly used as protecting screens from insects. They are made in the United KiuR-dom, in France, and in (irermany. Guipure nets are used in Switzerland and Germany in the manufacture of embroidered curtains, and until recently Great Britain sujijjlied the whole of tlio Swiss and German requirements for this class of net. Silk nets are made in Nottinghamshire, Derbyshire, Somerset, and Bevon. and embrace all kinds of tulles for millinery purposes and ordinary nets for veilings, dresses, &c. I'rance is the only other maker of silk nets and tulhvs on a large scale. 95 (3) Lace Curtains. Nottingham was originally tlie home of the lace curtain industry, but during the last 20 years successful efforts have been made to establish factories in Ayrshire, with the result that as many curtains are now produced in Scotland as in Nottingham. Most countries manu- facture sufficient lace curtains for their own requirements. Practically none are imported into the United Kingdom. (4) Emhroideries and Plauen Laces. Embroideries, i.e., trimmings produced by working designs upon a woven fabric are a characteristic product of the Continent. The principal country making them is Switzerland, but Germany has entered into competition of late years. The German specialities are Plauen lace and Barmen trimmings. Plauen laces are produced by embroidering patterns upon a groundwork of plain net, and are manufactured almost exclusively in the town which gives them their name. Attempts have lieen made to establish this important branch of the lace industry in Nottingham, but before the war little progress was made against powerful German competition. There are about 300 machines in Nottingham for producing embroideries and Plauen laces, and efforts are being made to extend the trade considerably. (5) Barmen Trimmings. These trimmings are extensively used for the decoration of ladies' dresses and underwear. At one time Nottingham laces were used for this pur})ose. but the greater durability of the Barmen trimming comnionded it to piiblic favour with the result that it has gradually replaced Nottingham lace. Extent of the Lace Industry. The figures of the Census of Production of 1907 are the only ones available which afford any indication of the value of the output of machine-made lace in the United Kingdom. According to them the gross output of the industry was valued at slightly over £6,000,000, of which £5.500,000 was represented by cotton laoe, the remainder being partly silk and partly linen lace. In that year about 80 per cent, of the total output was exported, and about 20 per cent, was retained for consumption within the United Kingdom. Exports of British Lace. The following table prepared from the Board of Trade Returns shows the principal destina- tions of our exports of cotton and silk lace for the year 1913, the last complete pre-war year: — Lace. Groups of Conntries. Silk. Cotton. Foreign Countrips : — Thousand £ Thousand £ Euro))e.an : — Allies 3 484 Enemies 2 4(19 Xeutrals Total European Extra European : — 1 395 6 1,288 T.Tnited States 10 1,281 Central America and Mexico ... — 83 Cuba — 57 Brazil — 121 Argentine — lf)0 South America (other) — 121 China — — Japan — — Other Total Extra European ... Total Foreign Countries ... British Possessions : — 11 175 21 1,998 27 3,28G Australia 1 282 New Zealand • — 45 Canada 3 286 South Africa — 49 British India ... — 70 Other Total British Possessions... Total to all destinations ... .'i 91 7 822 34 4,108 96 From these figures it will lie seen that the principal markets for British lace are the United States, the Continent, and the Overseas Dominions. Our exports consist chiefly of "Nottingham" laces of the cheaper kinds, in which we maintain our old superiority. The exports of silk lace are very small and were valued at £-34,000 in 1913. In all markets France is the only competitor of any importance in such lacos as are made on a large scale in the United Kingdom. Tlie competition of Germany in all markets is very severe, but as will be shown later it is in the Plauen type of lace, in which r4prmany has so successfully specialised. Imports of Foreign L.\ce. The following Table, prepared from the Board of Trade Returns, shows the value of the imports of lace and articles thereof into the United Kingdom from various sources during the year 1913 : — Lace and Ar icles thereof. Group of Countries. ,,,,,, ,. Of silk mixed ,,„ ,, Wliollv ot •,, ,, Of cotton. ^•,,; with other materials. 1 Of other materials. Foreign Countries : — European : — Allies ... Enemies Neutrals £ 1,144,135 1,120,305 25,495 £ .^81,240 281 103 £ 28.010 10,217 41 £ 734 093 Tot.ll European... 2,289,935 381,084 44,877 1,427 Extra European : — United States Centra! America and Mexico South America China Japan Other 540 110 2,01 Ci 2,000 871 — — Total Extra European 2fim 2,871 — — Total Foreign Countries 2,292,001 384,555 44,877 1,427 British Possessions : — Australia New Zealand Canada South Africa British India Other 222 14 „ — Total British Possessions 222 14 — — Total from all sources 2,292,823 384,509 44.877 1,427 The imports from Allied and enemy countries came almost entirely from France and Germany respectively. Cotton laces were imported in about equal quantities from these two countries, while France supplied practically the whole of our imports of silk lace. The Nature .\nd Extent of Foreign Competition. (a) 1)1 the Home Marhef. Competition in the lace trade in the liome market is very severe. Our principal competitors are France and Germany. The competition of France is practically confined to tulles from Lyons, to silk laces from Calais and Caudry, and to narrow cotton Valenciennes from Calais. French millinery tulles, silk nets and veilings are said to be much cheaper than similar British goods. In silk laces the French liave seciired the bulk of the trade chiefly through the excellence of their productions. The Germans do not comj)ete with us in our own articles. They have the ordinary Nottingham or Leavers machines in Germany, but hardly enough at jiresent to supply the whole demand of their own market, and they do not export this class of lace to any appreciable extent. Indeed, we export the finer ranges of Noltingham laces to Germany. What they have done is to strike out a line of their own and to bring out new articles, namely, Plauen lace and Barmen trimmings, which have displaced and replaced our own fancy articles. The lace trade is entirely dependent upon fashion, which is constantly changing and must be kept supplied with new styles and fresh designs. The Germans, we are informed, have si)ecialised upon a tyjie of lace, wliicli permits of great variety, and they follow on from season to season with beautiful and artistic designs. By this means they have acquired a predominant position in botli the Bi'itish and foreign markets for their type of lace, with the result that, before the war, they secured the bulk of the world's orders. This powerful position enabled them to produce on a large scale, with all the attendant consequenc'es of limited changes, long runs, and greatly reduced costs. As already stated, the Nottingham manufacturers appear 97 to have made an iiiifoituuate mistake when in early days they failed to take up the Plaixen machine. The resnll lias been that in this class of lace they have had to follow instead of lead. They have seen the biilk orders o'o to Germany and have had to be content with taking- orders for special lines or for goods for immediate delivery. This has meant production iipon a small .scale with its well known attendant disadvantages. Moreover, Germany has been able to unload her surplus stocks upon the British market, and that has often depressed the prices of current g-oods made in Nottingham. We are informed that, since the war, the removal of German competition has greatly stimulated tlie jiroduction of Plauen laces in the Nottingham district, and that manufacturers are prepared to extend tlieir plant if they can obtain any security that they will not be exposed to the full blast of German competitioii after the conclusion of peace. Their contention is that this branch of their trade is in the position of an " infant industry " and that it cannot meet imlimited competition until it has become established, has organised itself upon the basis of larg'e production, and so reduced its costs to a minimum. Germany draws a very large proportioii of its supjDlies of fine yarn — the raw material of lace-making — from Lancashire. It lias been pointed out to us that if these exports of yarn to Germany are restricted after the war, an extension of the Nottingham lace trade is one of the most obvious compensatory markets for Lancashire spinners. (b) In Foreign Markets. The competition encountered in foreign markets is very similar to that experienced in the home trade and emanates principally from Germany, France and Switzerland. Plain A^eLi.—The chief markets for plain nets are Continental countries. North and South America, the Far East, and the Overseas Dominions. In recent years German competition in mosquito nets has been felt to some extent in the East. France also has a large export trade- in silk nets, millinery tulles, veilings, silk laces, and cotton Valenciennes. Leavers Laces. — France is our only competitor in Leavers laces. The United States of America and South America are the largest markets, the export to these countries amounting to nearly £1.500,000 in 1913. During recent years the Americans have increased their lace- making plant considerably, and it is estimated that there are now nearly 600 Leavers machines in the United States, as compared with about 2,200 in this country. Japan is also developing her own industry by obtaining macliiuery from Great Britain. The manufacture of Leavers laces in Germany is increasing. Prior to the war, with the exception of the finest goods, she was able to meet her home demand, but was (inly able to export on a very small scale. Lace Curtains. — -During the last decade foreign countries have supplied a gradiially increasing proportion of their own requirements of lace curtains, and British trade has become more and moi^e confined to the Empire. In former times a large trade was done with the United States, but tlie introduction of the McKinley tariff brought about a stoppage of the business. Tariffs have also caused reduced trade with France and Germany, and the export trade in lace curtains to foreign countries is how practically restricted to South America, Holland and Belgium. Plauen Laces, Barmen Trimmings and Embroideries. — As already stated, the manufacture of these articles was, jirior to the war, only carried on to a small extent in this country, and the world's requirements were met mainly by Germany, and so far as embroideries are concerned by Switzerland. The (jermans carried on a very large export trade in these goods to all markets. The following table shows the value of lace, embroidery, &c., of all kinds exported from Germany in 1912, the last year for which detailed statistics are available: — Exported from Germany (1912): — £ Silk lace materials and silk lace, embroidery, woven and other ... 225,500 Embroideries on silk materials ... ... ... ... ... 156,400 Woollen lace material, lace, tulle ... ... ... ... ... 2,700 Cotton-lace materials, lace: — Embroidered, machine-made guipures, lace ... ... ... 1,764,400 Hand-made ... ... ... ... ... ... ... 6,500 Woven, sewn, knitted, &c. ... ... ... ... ... 666.500 Embroidery on cotton, woollen, linen and similar foundations: — Broad-stitch embroideries ... ... ... ... ... 1,556,800 Chain-stitch embroideries ... ... ... ... ... 98,400 Others 509,400 Tjace materials and lace of otliei spun materials ... ... ... 133,100 Total £5,119,700 The three most important markets for German-made lace and embroiderv were the United Kingdom ('£1,485,600), the United States (£1,477,200), and France (£258,400). While Plauen laces and Barmen trimmings are not separately classified, there is no doubt that the bulk of the German exports of lace were of these varieties. 99 7y 98 Swiss Embioideries. — As already stated, tlie pioductiou of Embroideries — i.e., designs worked upon a woven fabric — is mainly carried on in Switzerland and the adjacent Vorarlberg district of Austria. The town of St. Gall is the centre of the indiistry. The fine yarns used, and also the cambrics, lawns and other fabrics, on which the design is embroidered, are obtained from Lancashire in large quantities. Although Swiss Embroideries do not compete directly with goods made on the Nottingham lace machines, they are substitutes for them, and therefore enter into competition with the British articles. Moreover, there are now a certain number of Swiss machines in England, and the claim made by the British manufacturers of Swiss Embroidery is that if they can obtain assistance from the Government they are prepared to erect sufficiently large plants to insure the establishment of the industry in this countiy. The extent of the Swiss competition in the home mai'ket will be seen from the following table, compiled from the Board of Trade Eeturns, which gives the imports of cotton laces and embroideries into the TJnitpd Kingdom from Switzerland during the years 1910-1916: — I'JIO I'.in 1912 191.S 1914 1915 19Ii; Year. Cotton lace aud articles thereof iOmbroidery and needlewm k except embroidery. made by machinery. £ £ 7,949 2,220,270 13,190 2,363.492 11, .378 2,408,351 20,935 2,504,68.^. 19,737 2,18fi,801 20(;,541 2,919,070 22.">,419 .^,219,2,53 Supplies. (a) Ynrn-1. — The raw material of the lace industry consists of yarns of cotton, silk, artificial silk, or linen. The cotton yarns are almost entirely obtained from Lancashire, which .supplies the best fine yarns in the world. Small quantities of coarse yarns were formerly imported from Belgium on account of their cheapness. Linen yarns came from Belfast and from Belgium, and the silk yarns largely from Italy and France. Artificial silk yarns are obtained in this country. (b) Other SeTni-manufactured Materials. — Small quantities of chemically prepared cotton for Tise in the embroidery industry are obtained from France, and organdie and silk fabrics for the same piirpose are imported from Switzerland. The latter country and Germany formerly supplied the embroidery needles used in the industry, but since the war their manufacture has been commenced in the United Kingdom. Germany also supplied quantities of tape for use in the " edging " of curtains. As white, cream aud ecru are the principal colours used, the industry has not suffered to the same extent as other textile industries from the shortage of dyestuft's since the war. Difficulty has, however, been experienced in securing adequate supplies of bleaching powder, caustic soda, white vitriol, &c. Plant and Machinery. The machinery in use in the " Leavers," curtain, and net sections of tlie lace industry is entirely of British origin. On the other hand the Barmen trimming, Plauen lace and em- liroidery machines are almost all of foreign manufacture. Witnesses generally expressed the opinion that so far as the manufacture of Leavers laces aud plain nets are concerned, British machinery is as efficient as that of any other country. The Factory Systkm. A feature peculiar to the lace trade is the tenement factory. These factories are let in " shops or standings " to owners of lace machines at rents inclusive of power aud heating. A large proportion of the tenants of such factoiies are merely the hirers of machinery which they obtain on agreement from the machine builder. This system has given rise to the existence of a large number of small makers engaged in the lace trade. By paying a deposit of say £100 per machine to the machinist and entering into an agreement for the jjayment of the balance of the cost over a term of years the would-be lace maker secures a small plant of a few machines — three being the average number. Tlie machine owner then instals his tenant in a tenemenf factory, and retains considerable power over him until full liability under the agreement is discharged. In the event of non-payment of instalments or of rent he is entitled to seize not only the machines but all other assets of the hirer. This system is said to have serious drawbacks. We are informed that it has encouraged irresponsible production, and has led to excessive com- petition within the indiistry, and the frequent breaking of prices dui'ing times of bad trade. Labour Questioxs. The CeMsu> (il Prodiicfioii of 1907 gives fhe total number of em])loyees in the lace indusfiy as 3G,S40, of wliom 20,459 were females. In Nottingham the recognised hours for " twist " hands are 10 per day, including li hours off for meals. Tiic machinery is run 20 hours per day except on Saturdays, when nine hours are worked. Tlie " twist " hands work in two shifts. Tn ordinai'v time-; when machinery is kejit fuUj- going two twist liauds are required for each machiue, one of whom starts at 4 a.m. and works until 9 a.m., when he is relieved by his " butty," who works until 1 p.m. The first man then returns and continues until 6 ii.m., at which hour the "butty" returns, and works until 12 midnight. The order of working is varied each week, and the man who takes the morning shift one week works the night shift the following week. These abnormal hours only apply to machines that are " double-handed " — i.e., engage two workmen. Single-handed machines are \isually run from 7 a.m. to T p.m., with two hours off for meals. All female workers and young persons are, of course, subject to the usual conditions of the Factory Acts. Speaking generally, employers were of opinion that but for the action of the Trades Unions some years ago the lace-making trade would still be centred in Nottingham City itself, and would not have migrated to the surrounding districts. Inside the city practically all the " twist " hands are members of a Trade Union, but in the outlying districts this is not the case. In the opinion of employers the restrictions imposed by the Unions in Nottingham City have had the effect of reducing the output considerably, while there appears to be little restriction in the outside districts. Technical anu Art Education. We are informed that there is a well equipped Art and Technical School at Nottingham, but it seems doubtful whether full and effective use is made of it by an industry which haa everything to gain from both artistic and technical training. More than one witness has told us that much of the success of German lace is due to the beautiful designs produced at Plauen, and has attributed the taste and execution of those designs to the training given in the schools in Germany, although the original designs were often of French origin. It has been suggested that manufacturers do not interest themselves in local technical schools so much as they might, and that the courses of instruction are for that reason less practical than they might otherwise be. The importance of co-operation between manufacturers and the managing bodies of Technical and Art Schools is obvious, especially in connection with such industries as lace and silk, which depend for their success upon beauty of design and delicacy of execution. We deal fully with the question of technical education in another section. Tariff Questions.. Almost all witnesses examined were in favour of the drastic restriction of German imports after the war. We have already stated that since the war efforts have been made by several firms either to begin or to extend the manufacture of lace hitherto made almost solely by Ger- many. These efforts have been made under war conditions, which sheltered them from the pressure of German competition. It is considered unlikely that such firms would be able to compete successfully against Plauen and Barmen in normal times. For success production on a large scale is essential, and that, it is contended, can only obtain if the home market is assured to British manufacturer's. The trade accordingly suggests that for a period after the war the import of German laces should either be absohitely prohibited or subjected to heavy duties. Witnesses also advocated reciprocal tariff arrangements with France and Switzerland. Summary. 1. The machine lace industry is one of the youngest of the British textile industries, and dates only from the last quarter of the eighteenth century. 2. It may be divided roughly into five sections as follows: — (a) Leavers laces and nets. (b) Plain nets. (c) Lace curtains. (d) Plauen laces and embroideries. (e) Barmen trimmings. Of these only the first three were carried on to any extent in this country before the war. The last two were almost entirely in German and Swiss hands. 3. According to the Census of Production the value of the gross output of the industry in 1907 amounted to about £6,000,000, of which £5,500,000 was represented by cotton lace. " Of this output aboiit 80 per cent, of the lace is exported, the principal overseas markets being the Continent, the Ignited States of America, and the Dominions. 4. The raw material of the lace industry consists entirely of yarns, either cotton, silk, artificial silk, or linen. Lancashire sujiplies all the fine cotton yarns, Belfast the linen yarns, and silk yarns are imported largely from France and Italy. 5. Various other semi-mannfactured materials were imported from abroad. Specially prepared cotton, together with organdie and silk for embroidery jiurposes, were obtained from France and Switzerland, whilst the latter cnuntry and Gprmany supplied all the needles used in the embroidery industry. 6. The plant and machinery used in the British sections of the industry, i.e., the manu- facture of Leavers laces, lace curtains and nets is entirely of British origin, and is efticieut and up-to-date. The machinery for the production of Barmen trimmings and Plauen lace is all of foreign manufacture, principally German. S978 G 2 100 T. Two quite distiuct sets of labour conditions exist iu the lace-inakiug trade, those obtaining witliin the citj- of Nottingham and those in the surrounding districts. It is stated by employers tliat inside the city considerable restriction of output exists. Owing to trouble in the past with Trades Fnious, the industry has tended to drift out of Nottingham into the neighbouring towns and villages, where it is said there is no appreciable restriction. 8. In the original "Nottingham" lai'es, curtains, and nets there is very little direct competition from foreign countries in the liome market. Fiance sends us silk laces and competes successfully in narrow cotton Valenciennes lace, and in silk nets and tulles. The principal competition, however, is in Planen laces and liarnien trimmings from Germany. Germany's exports to the United Kingdom amounted to over £1,100,000 in 1913, and consi.sted almost entirely of Plauen lace. Barmen trimmings and embroideries. 9. The success of the German lace industry is due mainly to the fact that German manu- facturers struck out a line of their own and produced new articles which were successful substitutes for the old Nottingham lace. Their Plauen laces and Barmen trimmings have established for themselves a position which until lately was practically unchallenged. Having command of all markets in these types of lace, they have been able to produce on a large scale, to reduce costs to a minimum, and practically to defy competition. The same conditions also apply in the case of the Swiss embroidery manufacturers. It is important to note that (jermany and Switzerland were dependent on this countiy for their supplies of the fine yarns which are essential to their lace-making industries. 10. The competition in foreign markets is similar to tliat experienced in the home trade. The principal markets for Leavers laces are North and Sontli America, tJie exports to these countries amounting to nearly £1,500,000 in 1918. Increasing comiietition has been felt during recent years in the American market from domestic manufactures. Most foreign coimtries manufacture their own lace curtains, and British exports tend to become confined more and more to the Overseas Dominions. Tariffs imposed with the intention of fostering home industries have gradually excluded British goods from most Continental and American markets. A fair trade, however, is still done with Holland, Belgium, and South America. 11. Before the War the manufacture of Plauen laces, Barmen trimmings and embroidery was only carried on in this country on a small scale. The bulk of the world's trade was in German hands. Nottingham suffered considerably by the introduction of these articles as substi- tutes for Leavers lace. Since the War an eflort has been made by Nottingham manufacturers to take advantage of the excellent opportunity now offered for the extension of British trade in these goods and for the establishment of the industry on a large scale in order that it may be in a position to compete with the German productions after the War. This effort has met with considerable success in the absence of German competition, but it is doubtful whether it coxild be maintained without assistance when normal conditions return. 12. Witnesses are practically unanimously in favour either of totally excluding German goods for a period after the War or of submitting them to a regime of lieavy duties. If this is done, it is considered that Nottingham, secure in the home market, will be able to organise its Plauen lace industrj- on the basis of large production, and will eventually be able to compete with all comers both in the home and foreign markets. There is a strong feeling in the trade in favour of reciprocal tariff arrangements with France and Switzerland. SECTION 8 -THE HOSIERY AND FABRIC GLOVE INDUSTRIES. General Position of the Industry. The hosiery industry has been estnhlished in Great Britain for upwards of three centuries. The first machine for producing a looped fabric by mechajiical means was invented in 1-589, since which time development has been iiractically continuous. In the early days the industry was centred around London and at Godalming in Sxirrey, but, as time went on, Nottingham and Leicester gradually displaced the two foimer towns and became the home of the hosiery trade. The last fifty years have witnessed a series of remarkable improvements and modifications in hosiery machinery, with the result that an immense variety of goods can now be produced with great rapidity. Such articles include all manner of hosiery, socks, underwear and fancy goods such as knitted scarves and fabrics for coats, gloves, &c. Although machines can be used in the manufacture of goods from various kinds of textile raw material, hosiery manufacturers usually confine themselves either to the use of cotton and cotton mixtures or to wool and allied materials. Before the war, whereas the woollen hosiery trade of the ITnited Kingdom was in a fairly satisfactory condition, the cotton hosiery industry was far from flourishing. Whilst British woollen hosiery held its own both at home and abroad, our cotton hosiery and gloves were beaten Ixith in price and quality by German competitors who supplied practically the whole world with this class of goods at very low prices. The Germans have specialised on cotton hosiery and have built up an industry based upon production upon a large scale. They have enjoyed the benefits of superior oppor- tunities for scientific and technical training, and have derived immense advantage from the discovery of a process peculiarly adapted to the black dyeing of cotton hosiery. This process long remained a secret in Chemnitz, but we are informed that an equally successful process is now in use in this country. It is doubtful, howe^-er, whether m.-uiufacturers will be prepared without some measure of assistance to invest sutHcieut capital in the industry to secure the necessary large-scale production without which it would appear impossible successfully to break the German monopoly in cotton hosiery. Supplies . (a) Yarns. (1) Cotton. — Most of the fine cotton yarns required for hosiery manufacture, whether in Great Britain or in Germany, are obtained from Lancashire. In 1913 about 40 million pounds of fine yarn, valued at about £4,000,000, were exported to (iermany. One permanent result of the war, however, will probably be that Germany will endeavour to free herself from her former dependence on this coiintry for fine yarns. If that proves to be the ease, although other compen- satory outlets may be found in Allied and ]S"eutral markets, it is to the development of the hosiery trade in the United Kingdom that, we are informed, spinners must in the future look with most hope. (2) Wool. — The worsted yarns used in the hosiery trade were supplied both by liome and foreign spinners. About 15,000,000 lbs. of foreign worsted yarns were imported in 1913, of which about one-third came from Germany, and the rest from France and Belgi\im. These Continental yarns were mule spun and without oil, and were considered more suitable for hosiery manufacture. The English method of cap sj^inning with oil is not adapted to the production of such yarns. Indeed British spinners have in the past paid very little attention to the spinning of hosiery yarn. A few firms specialised in the trade, but the majority found sufiicient business without going to the trouble and expense of changing their system to meet the requirements of the hosiery trade. It is clear that unless English spinners produce mule-spun dry yarn it will be impossible to dispense with Continental yarns after the war. (3) Other Textiles. — Net silk, spun silk, artificial silk, and mixed yarns are also used in considerable quantities in the manufacture of hosiery and fancy knitted goods, and as a rule they are obtained in the United Kingdom. (b) Other Semi-Manufactured Materials. (1) Dyestujfs. — Although black is the principal colour used, a fairly wide rauge of shades possessing the essential qualities of fastness to light and washing are necessary to the hosiery trade. Since the war it has been very difficult to obtain s\ich dyestuflis, and the trade has been carried on with the aid of a limited variety of colours. If, however, foreign competition is to be successfully met after the war a full range of colours will be essential, and for this reason witnesses are unanimous in recommending that some measure of assistance should be given to British dye makers for a sufiicient ijeriod to enable them to produce all the colours required, and .so render the industry independent of enemy sources of supply. (2) Hosiery A^eedles. — The hosier}' needle is an essential accessory to the hosiery machine which actiially performs the oiieration of knitting the fabric. There are two main kinds — the 9978 G 3 102 latch and the bearded needle — of which the former is the more important. Before the war bearded needles were made in adequate quantities m the United Kingdom, but all our latch needles were imported — by fnr the greater part from Germany. Efforts are now being made to supply the jjlace of German needles by one or two firms with varying degrees of siiccess. Wit- nesses are of opinion that some assistance, probably similar to that afforded to the dye industry, will have to be extended to the trade if it is to be permanently established in this country. A special section devoted to synthetic dyes and hosiery needles will be fotind on page 107 of this Report. Plant and Machinery. The plant and machinery in use in the hosiery trade is only partly of British origin, about one-half being imported from the United States or Germany. Many of the early inventions of hosiery machinery were of British origin, but later develop- ments, especially in the direction of automatic machinery, have come from the United States. A machine invented in 1864 by William Cotton, and known as " Cotton's Patent," is still extensively used, but it is being siipevseded by the "fashioned" and "seamless" machine. Some types of the latter machine will ])roduce about 500 ])airs of stockings per week, and as one girl can tend three or four machines labour costs are very low. Other types of flat frames will make as many as thirty small articles at once, whilst the newer circiilar machines turn out single articles at an enormous rate. The competition among machine builders liotli at liouie and abroad, combined with co operation between manufacturer an ■■dumj)pd" on the British market at prices lower than those obtained in the United States. The trade is almost unanimously in favour of the restriction of the imports of enemy hosiery for a period after the war either by absolute prohibition or a tariff. (b) In. Foreign Markets. (1) Cotton Hosiery. — The total exports of cotton hosiery in 191:'. were valued at i'671,000, of which £-189,000 or nearly 73 per cent, was sent to Colonial markets. During the same period the exports of cotton hosiery of all kinds from Germany amounted in value to £7,681,000. It is probable that a portion of the hosiery exported from this country was in fact of German origin, having been purchased by London houses or by the agents of Colonial firms. In all markets British goods could make little headway against German productions, the low prices of which gave them an immense advantage. Since the war German competition in many of the Colonial markets — Canada, Australia and India — have been largely replaced by that of America and Japan. Before a large British export trade can possibly be built up it is necessary that steps should be taken to establish the indiistry on a large scale in the United Kingdom. (2) Fabric (rloces. — Before the war the export of British made fabric gloves was negligible, and amounted in value to £23,550, of which £12,500 was exported to Australia and a further £7,000 to other British colonies. These exports were probably (German goods imported into the United Kingdom and subsequently re-exported, or were specialities. In 1912 (the last pre-war year for which detailed figures are available) the German exports to all destinations were valued at £1,597,350. (3) Woollen and Wor.stcd Hosiery. — The exports of woollen and worsted hosiery went chiefly to the Colonies, which, in 1913, took goods to the value of £1,533,000 out of a total export of £1,967,000. The principal markets were Canada and Australia, the exports to each of which amounted to over £500,000. There was also a fair trade with the United States and the Argentine and some trade with Continental countries. In the better quality goods very little competition was experienced, but in the lower classes of hosiery (known as " merino " hosiery, and manufactured from a mixture of cotton and wool) the competition from Germany was severe. It is to be hoped, however, that as a result of the development of the cotton hosiery trade in this country we shall be in a better position to compete in these mixed goods after the war. Since the war the Americans have competed in Canada and the Japanese in India and it is likely that this competition will become permanent. On the other hand increased business has been forthcoming from France, Norway and Denmark, and it is to be hoped that a considerable proportion of this new trade will be retained. Tariff QtrESTioN,s. (a) The Cotton Ho.tieri/ and Fabric Glove Industries. There is practical unanimity throughout the trade that the establishment on a large scale of the cotton hosiery and fabric glove industries in this country is imjiossible without some protection for a period against (xerman competition. Most witnesses favour the adoption of drastic measures against Germany for a period after the war. It was suggested thai , during the jjeriod of reconstruction an absolute prohibition should be maintained against all hosiery of enemy origin, to be followed by the imposition of a duty of 50 per cent, ad valorem upon German goods. As regards the imports of hosiery from other countries, small duties were proposed with graduations in favour of our present Allies and of such neutral countries as are prepared to offer reciprocal concessions. With this protection manufacturers expressed their confidence that they could supply the whole demand in the home market and, in time, so increase and standardise their output as to be able successfully to meet foreigji compel it ion abroad. (b) Woollen and Worsted Hosiery. Witnesses are practically unanimous in proposing similar measures to those suggested above with regard to the import of woollen and worsted hosiery of enemy origin, but, as regards other imports, opinions were divided. A graduated scale of duties on imported manufactured goods is suggested by some witnesses, with small duties on imported yarns. 105 Summary. 1. The hosieiy industry lias been taiiied ou in the United Kingdom for upwards of 300 years, the present centres of the industry being Nottingham and Leicester. 2. The industry is divided into two main divisions — cotton hosiery, to which section belong fabric gloves, and woollen and worsted hosiery. Before the war the cotton hosiery industry was not in a flourishing cojiditiou as compared with the German industry. Our exports in 1918 amounted to £671,000, whereas our exports of woollen hosierv amounted in value to nearly £2,000,000. 3. Before the war both Great Britain and Germany obtained their supplies of yarn for the manufacture of cotton hosiery and fabric gloves from Lancashire, which has a practical monopoly in the spinning of very tine counts. Lancashire's exports of fine yarns to Germany in 1913 amounted in value to about £4,000,000 and considerable imeasiuess is feh among cotton spinners as to the future disposal of their products if the German demand is restricted. It is to the development of the hosiery trade in the United Kingdom that, we are informed, spinners must in the future look with most hope. The woollen and worsted yarns required for hosiery- making were obtained partly from the United Kingdom and partly from the Continent. About 15,000,000 lbs. were imported in 1913 chiefly from France, Belgium, and Germany. These yarns were principally mule-spun, were free from oil, and were, therefore, more suitable to the manufacture of knitted fabrics. British spinners have not in the past paid very much attention to the spinning of this type of yarn, although since the war they have produced yarns equal in quality to those formerly obtained from foreign sources. Although witnesses were divided in their opinions, many considered that a small tariff on imported yarns would assist in developing mule spinning in the United Kingdom. ()ther textile materials are also utilised in the manufacture of hosiery. The principal are silk and artificial silk, ample supplies of which are available from United Kingdom sources. 4. The hosiery industry has been greatly handicapped by the lack of dyestuffs since the war. Fast blacks and colours are essential, and such colours are only obtainable in small quantities. Witnesses were agreed that steps should be taken to render British textile industries independent of German sources of supply of dyestuffs after the war. 5. A large measure of the German success in cotton hosiery was due to the discovery of a patent process of dyeing black on cotton known as the " Hermsdorff " process. This process imparted a soft, velvety finish to goods dyed by it, and remained for many years a closely- guarded German secret. This process is now being employed in this country. 6. In addition to the incouvenieuee caused by the scarcity of dyestuffs, the shortage of hosiery needles has been a great drawback to the industry since the war. There are two kinds of hosiery needles — the bearded and the latch. The former have always been produced in sufficient quantities in the United Kingdom, but before the war supplies of the latter came almost exclusively from Germany. Efforts have been made to establish the manufacture of latch needles in this country, but, owing to the difficulty in securing skilled labour, progress has been slow. It is considered that similar assistance to any which may be afforded to the dye making industry will have to be extended to the manufacture of hosierv needles if German supplies are to be dispensed with after the war. T. The plant and machinery used in the hosiery industry is only ijartly of British origin, about one-half being of American or German manufacture. British machines are mostly of the "fashioned " type, whilst American machines are " seamless." The subsidiary plant, i.e., the dyeing and finishing machinery, is of British, German, or American manufacture. 8. Generally speaking, witnesses are of opinion that in the main branches of the industry there is practically no restriction of output on the part of operatives. This is due chiefly to the prevalence of piece rates and the predominance of women among the workers. It was sug- gested, however, that a modification of some of the rules enforced by the male operatives engaged in some of the dyeing and finishing operations would tend towards greater efficiency of the industry as a whole. 9. The requirements of the industry as regards finance appear to have been adequately met in the past by existing banks and financial houses. 10. Before the war the cotton hosiery and fabric glove industries, although originally British, were almost exclusively in German hands, and tlie manufacture of these articles was only carried on in Great Britain on a small scale. Attempts have been made since the war to establish the industry in this country, but serious competition has arisen recently from America and -lapan. It is considered by the trade that the home market will have to be secured to British manufacturers if they are eventually to establish this branch of manufacture upon a firm basis It is stated that such protection would result in a large output and a consequent reduction in costs of production, and would in time enable British goods to compete successfully with foreign articles in overseas markets. In woollen and worsted hosierv there is very little com- petition, except in the lower qualities. British trade is largely confined to the home and Colonial markets, and such competition as was experienced in pre-war times ca]ne from Germany and Austria. Latterly the Americans and Japanese have entered the trade in the coarser lines, and have secured a considerable share of the Canadian and Indian trade respectively. On the other hand, increased business has been forthcoming from Eussia, Scandinavia, and France, and these countries appear to offer considerable opportunities for the expansion of IBritish trade 106 11. There is a uuanimous feeling througiiout the industry in favour of restrictive measures against enemy trade for a period following the war. It is suggested that all imports of semi 01- fully manufactured goods from enemy States should be prohibited during the period of reconstruction, and thereafter subjected to heavy import duties. This would give a great stimulus to the manufacture of cotton hosiery and gloves in the United Kingdom. 12. Apart from the treatment to be accorded to enemy States, there was a slight division of opinion on the general question of import duties. A large majority were in favour of a tariff on all imported hosiery, glove fabrics, and fabric gloves. Where duties were proposed witnesses were generally agreed that concessions should be made in favour- of our Allies and possibly of such neutral countries as were prepared to offer reciprocal treatment. The Hosiery Sections of the Nottingham and Leicester Chambers of Commerce have passed resolutions to the effect that a duty of 25 per cent, should be imposed on hosiery, underwear, knitted fabrics, and glove fabrics imported from foreign countries, with a surtax of 25 per cent, on those goods imported from present enemy countries. 107 SECTION 9.-" KEY'' INDUSTRIES IN THE TEXTILE TRADES. SYNTHETIC DYES AND KNITTING NEEDLES. In the separate sections iipou iudividual textile industries attention has been called to certain articles or materials, which are indispensable for the carrying on of those industries, and for the supply of which previous to the war they were in the dangerous position of being entirely or mainly dependent upon enemy sources. The most important are synthetic dyes and knitting needles. The industries connected with these articles belong to what are known as " key" or " pivotal" industries in relation to the larger industries, which they serve. They are indispen- sable links in the chain of textile production at one stage or another. The outbreak of war revealed our weakness with regard to them, and it is only by vigorous action and with the assistance of neutral countries that it has been possible to supply very imperfectly a portion of the requirements of the textile trades. The matter is so important that we make no excuse for dealing with it at some length in a separate section. SYNTHETIC DYES. The importance to all textile trades of an adequate supply of dyes is too obvious to need any elaboration. In the year 1913 out of our total exports of textiles valued at about £200,000,000 it is estimated that at least £80,000,000 represented goods in which dyes were used in one form or another. During the same year we imported 18,000 tons of synthetic dyes valued at £1,890,000. At least 90 per cent, of these imports came from Germany. Our home production did not exceed one-tenth of our total consumption, and even that percentage does not convey an accurate idea of our dependence upon Germany, for it has been ascertained that a considerable part, probably the greater part, of our pre-war production was not competitive, but was tolerated by the Germans upon conditions, which practically made British dye manufacturers tributary dependents of the gigantic German industry. It is not necessary for our present purpose to set out in detail by what methods Germany succeeded in obtaining a virtual monopoly of an industry, which was British in its origin, for, as is well known, the original discoverer of aniline dyes was an Englishman — Dr. Perkin — just as the original discoverer of the first developed direct cottcm dye was an Englishman- — Professor Green. The means Germany employed to gain her ascendancy were in the main legitimate — energy, enterprise, the most industrious application of scientific research, in which all the resources of chemistry and chemical engineering were brought to bear upon industrial problems, skilful combinations of trade interests, having for their object the avoidance of internal friction and unproductive competition, so as to concentrate the united efforts of the entire industry upon the paramount aim of procuring for Germany a practical monopoly of the world's synthetic dyes. On the other hand the means she used to maintain her ascendancy were largely illegitimate, ruthless undercutting of jjrices in order to crush the competition of producers in other countries. Moreover, bribery on the most extensive and elaborate scale was iised to secure a preference for German dyes in the dye-houses. It will always be a matter for wonder that great and powerful trades like the British textile trades should have allowed themselves to sink into a state of complete dependence upon a foreign country in respect of the supply of materials vital to their industry. It is a striking instance of the absence of foresight and of co-operation and taking counsel together in matters of common interest, which has been too frequent in the past in many branches of British industry. At the present time all branches of the trade are fully alive to the necessity of freeing them- selves from dependence upon Germany and of establishing and maintaining in this country a dye-making industry capable of supplying the whole of their requirements. We have had amjjle evidence in the course of our enquiry of the difficulties with which all the textile trades have been confronted during the war, owing to the absence of an adequate supply of dyes of the proper quality. That these difficulties were not greater still was due to the presence in this country, when war broke out, of considerable stocks of German dyes, to the valuable assistance Switzerland has been able to render us in respect of certain dyes, and not least to the great increase in the output of British-made dyes under the stimiihis of action, which we shall refer to later. The present state of trade is, of course, abnormal and is due to war conditions. International competition is more or less suspended and the dependence of the world upon the British textile trades is greater than ever. People both at home and in foreign markets have to take the limited number of colours we can offer them and be satisfied with them. This, however, is not a state of affairs which will long survive the conclusion of peace. Unless we are in a position as soon as the war is over to offer as full a range of suitable colours as 108 any of our competitors, we shall find ourselves at a serious disadvantage in international competi- tion. Assuming therefore that we are iu earjiest in our determination to free ourselves from dependence upon Germauj', the question is what steps should be taken to arrive at that result. The problem is a precise and in a sense a limited one and may be stated as follows: — A certain ascertainable number and quantity (approximate) of dye-stuffs are necessary to the various textile industries, if they are to meet inteiiiatiunai competition with an easy mind after the war. Can we hope to produce them aJl in this country, say in the course of the next year or two. If not, how many can we count uixju producing and what steps shouki we take to secure such as cannot be produced here '■i From the very outset the Board of Trade recognized the vital importance of the problem and immediately after war broke out took steps to deal with it. As a result of prolonged discussion with various interests concerned there was formed iu March, 1915, a limited company called " British Dyes," Ltd., which was intended to be a combination of dye users tor the manufacture of dyes. Substantial financial assistance was given to the Company by His Majesty's Govern- ment in the form of an advance up to a maximum of £1,700,000 secured by debentures, but paying only a low rate of interest. The advance is repayable in 25 years, and so long as any portion is outstanding, the dividend on the orilinary shares is limited to 6 per cent. In addition to the above the Government promised to grant to the Conqjany a sum of ±'1U0,00(.I (payable at such time as the Comi)any may desire, but within 10 years) for scientific research in respect of the production of synthetic dyestuffs. If " British Dyes " has not altogether fulfilled the expectations of its promoters with regard to the production of dyes, it is largely due to the fact that its chief energies were directed almost at the outset to the manufacture of explosives or the materials tor explosives,, which it has supplied in large quantities to the Ministry of Munitions. Meanwhile it has gradually increased its output of dye-stuffs and what is very important — it has laid the foundation of a large pro- ducing plant which will be available when the demand for explosives is less insistent. A number of other companies have meanwhile been actively engaged in the production of dye stuffs. One in particular, Messrs. Levinstein, Ltd., has made great progress diiring the period of the war both i)i the enhirgenieut and equipment of its works, in the acquisition of other works, and in the actual output of dyes on a large commercial scale. From this it will be seen that some jjrogress has been made towards the solution of the problem of production. In his evidence before the Committee in July, 1916, Mr. Milton Sharp, the Chairman of the Bradford Dyers' Association, made the following statement: — " Assuming that our business after the war is of the same character as in the year ' before the war (1913) we could execute about 60 per cent, of it with dyeing materials " now made in Great Britain. For the remaining 40 per cent, we should be dependent on '■ colours made in Germany or Switzerland.'' It is true that much more has been done in connection with wooUeu dyes than with cotton or cotton printing dyes, but on the other hand further general progress has been made since July, 1916 — so that Mr. Milton Sharp's evidence may be taken as fairly representing the position to-day — at all events so far as the most commonly used or standard colours are concerned. While it is generally recogjiised that good work is being done, it has been rejiresented to us that progress would have been more rapid, if the efforts of the various producing companies, and more parti- cularly of the two principal companies we have referred to, were co-ordinated and if the areas of their research and subsequent production were demarcated. By such means it is believed that overlapping and dispersion of effort would be avoided and much precious time saved. The number of competent chemists available in this country for research work of the character required iu the dye industry is very limited, and in view of the pressing nature of the task of producing the largest possible number of colours of tlie right kind before the end of the war, it is considered lamentable that diff'erent comi)auies should be employing their ablest chemists upon the same problems, when their activities might be spread over a wider field of research. We concur in these views and consider that the Board of Trade should take steps to bring about comjilete co-ordination of the work of the most competent companies engaged in making dyes by some arrangement which would put an end to overlapping and waste of effort. If this were done, we believe a maximum result would fidlow during the limited time before us, and that the number of dyes it will be necessary to import from foreign, and more particularly from enemy, sources after the war would be reduced to a minimum. It is generally agreed that in the best of circumstances the whole problem cai)n{jt be solved by the end of the war and that nuire or less dyest\iffs will have to be ini])oit(Ml at all events for a time after the conclusion of i)eace. If that is so, it will be necessary to make arrangements to secure for the textile trades a sufficient supply of such dyes as are not produced in this country. We understand it is ])roposed that the impoitatiou of foreign dyes should be ])iohibited For a term of years except xmder licences to be issued ))y a Commission or Anthoiity to be set u]) in connei^iioii with the whole group of '■ Key " or " Special " industries. Without pledging ourselves in advance to the details of such a scheme, we consider it promising in its character and likely to \\ork well. In the circumstances i>rohibition of foreign imports except under licence a]ipoars to us preferable to the imposition of duties. [t is quite certain that the German colour-inoducers will make a desperate effort after the war to recover their monopoly and witli that object will be ]ire])ared to adopt even more ruthless methods than in the past. It is known tliat tliey have brou;jht about among them- selves a com])lete fusion of interests during tlie war and that they now contnd a joint capital estimated at £40,000,000. ^o think it would be fatal to expose the nascent British colour- making ind\istry— no matter what assistance it received from the State by subsidy or otherwise 109 —to the overwlielining competition of so powerful a group. lu our opinion nothing short of prohibition of imports except under licence would effectually protect it in the early stages of its development, while the issue of such licences by an independent authority should safeguard the interests of colour users and of our export trade in general. In this latter connection it would obviously be the duty of such an Authority to watch over the maintenance of efficient and adequate production in this country at reasonable prices and to receive complaints from dye-users, if the protection offered to dye makers was being improperly used. In connection with the issue of licences we wish to express the hope that special regard will be had to the products of Swiss producers in view of the great services they have rendered to the British textile trades during the war. To sum up — we recommend that steps should be taken by H.M. (jovernment to co-ordinate the operations of the principal manufacturers of dye-stuffs so as to put an end to overlapping and dispersion of effort, and that such financial assistance as may be necessary sh(juld be given to them either by subsidy or by way of loan. We further recommend that the importation of foreign dyes should be prohibited except under licences to be issued by an independent Authority, whose duty it would be, while fostering the growth and maintenance of the colour producing industry, to safeguard the interests of colour users by means of the control it would exercise over the admission or exclusion of foreign dyestuffs. HOSIERY NEEDLES. There are two main types of needles used in the hosiery trade, known resjjectively as "bearded" and "latch" needles. There appears to be a sufficient supply of "bearded" needles in this country. " Latch " needles, on the other hand, which are used in the manufac- ture of stockings, glove-fabrics, underwear, cardigans, dress goods, frozen-meat bags, gas mantles, and many other machine-made knitted goods were a German speciality, and had in fact become practically a German monopoly before the war, although their manufacture does not apjjear to have been protected by any patents. We have not been able to obtain precise figures, but are informed that 95 per cent, of all the needles used in this country were imported from Germany, and that of fine needles all were of German origin. Serious difficulties arose when the supply was cut off by the outbreak of war. Stocks were far from being inexhaustible, and the supplies obtainable from Switzerland and the United States were not very large. We understand that by strict economy, and owing to the concentration of hosiery manufacturers upon naval and military requirements large in quantity but limited in variety, consumption has been materially reduced during the war. It is necessary to point out that our imports include " latch " needles of a great variety of gauges — several hundreds in number. Some types are used in large quantities, others in smaller quantities, and others again in very small quantities, but all are necessary for the production of a full range of knitted goods in normal times. The manufacture of the larger lines has been successfully started in this coimtry diiring the war. and it is stated that about 350,000 a week are now being turned out. The difficulty arises in connection with types for which there is a comparatively small demand. Manufacturers state that, apart from the delay and difficulty in installing suitable machinery and training efficient hands, they could not expect to compete on anything like eqxial terms with Germany, on account of the smallness of the British demand for particular types. Germany, having the practical monopoly of the world's consumption, was able, by pooling the. orders from all sources, to produce every type upon a comparatively large scale. It is, of course, possible that this position may change after the war, as the United States and other cx)nntries are making arrangements to meet their own requirements. We consider it essential that all the branches of the hosiery trade should be made indepen- dent of foreign sources for the supply of " latch " needles. If this is to be brought about, we think that the needle-making industry will need some assistance immediately after the war. We are informed that expenditure already incurred for the manufacture of the larger lines has been undertaken, in the expectation that the trade would not be submitted to the full blast of German competition after the war. It is quite certain that the production of the smaller ranges will not be undertaken, unless the home market is secured for some years to those who embark their capital in the business. We understand that manufacturers ask for the total prohibition of imports from present Enemy countries for a period of at least five years, to be followed by such tariff protection as may appear necessary. No apprehensions appear to be entertained as to comjietition from other quarters. We miist, however, point out that it is probable, if not certain, that the demand of the hosiery trade for the finer gauges will not immediately after the war be fully satisfied by British needle-makers, and that it may not be possible to make up the deficit from sources other than Germnny. It is therefore necessary to provide for this contingency. We recommend the total prohibition of imports from present enemy countries for a period of at least five years, dating from the conclusion of peace, except by licences granted by a competent authority. We further recommend that after the lapse nf that period such further assistance should be given as may be considered necessary for the mninteiinnce of efficient and adequate production iii this country. If these recommendations were accepted and carried into effect it has been suggested to us that Nottiu'^liiini and Leicester hosiery manufacturers might co-operate with needle-makers in forming an organization and providing the necessary capital foi' niannfncturing all the needles, which are not at present jirodiiced iri this country. I no SECTION l().-8UBJECTS COMMON TO ALL THE TEXTILE INDUSTRIES. .So far we have dealt with each of the niaiu branches of the textile trades separately; but, (rljile they differ from each other in so many important ways as to render this course necessary, Hiey are sutKciently similar to have iiuiiiy points in common, with regard to which much can be said which applies to them all. These points we group under the heads Production and Distribution. Under Production we consider — Machinery and Equipment. General Organisation. Efficiency of Management. Efficiency of Labour. Technical Education and Scientific Eesearch. Under Distribution we deal with — Marketing. Einancial Facilities. Transport. The Metric System. PEUDU(!TION. Before dealing with the subjects grouped under the head of Production it is necessary to point out that the conditions of production in this country after the war are likely to be in many important respects materially different from those which prevailed before the war. There may for a time be local shortages of labour, owing to the numerous casualties during the war and to the unwillingness of men to return to former occupations. Then there has been such a shifting of labour eithei- for service in the Army or from one industrial occupation to another that some time must elapse before the labour position becomes normal again. The same remarks apply to office and factory staifs, to transport and to all the subsidiary occupations. The cost of new machinery' and of rojiairs and renewals will l)e exceedingly high. Taxation, too, will play a more important part in industry than formerly. It is anticipated that the cost of raw materials will remain comparatively high for a considerable time, as every country will want to replenish its stocks and will be in the market to l)uy. But most important of all, the rates of wages, which war conditions have raised to a high level, are not likely to return to the pre-war standard or anywhere near it. It is impossible to estimate the cumulative eli^ect ot these and other factors upon our position in international competition in comparison with that of our rivals, since production in all competing countries will he affected by similar factors, though in varying degrees. They undoubtedly create a new situation which will require very able handling. To take a single instance— we have pointed out elsewhere how menacing tlie competition of Japan is in the export trade in certain cotton goods to India and the Far East. The higher rates of wages which will continue to be paid in this country, even when war conditions are past and gone, must, unless they are offset by some compensations, constitute a further handicap in our competition with Japan. The question is by what means we can meet conditions which, if left alone, necessarily involve a seriotis rise in our costs of production. In the Textile Trades the control by the British Erajjire of some of the most important textile raw materials, merino wool, jute, Egyptian and Sea Island cotton, gives us a great initial advantage, and places in our hands a powerful weapon, if we are prepared to use it to the full. We must, however, in the main rely upon continuous improvements in our methods of production — the drastic scrapping of out-of-date plant and the adoption wherever possilile ol labour-saving machinery, the organisation of our industries with a, view to the highest collective, as well as individual, efficiency, production on a large scale and combined selling in siicli in- dustries as admit of them, efficiency of management in all branches, higher and more wides]irea(l commercial and technical education, and perhai)s in(,-i important of all, liigli efficiency of labour, so as to attain the maximum nulput hotli in qnaniily and i|ualiiy. High wages must be ac(M)mpanied by high ouliiut. Even these means may not of lliemselves suffice to enable \is (o meet with com]il(>ie success the competiiiou of countries, which, by means of tariffs, have reserved their home markets to native industries as a basis for the develoiimont of their overseas trade, and which place at the service of tlieii' manufacturers in a multiplicity of ways the full aid and co-ojieration of the State. In tliese circumstances it will l)i> necessary for us to consider, in tiic liglit of the new conditions of production, the wislies and reouiremenis of tjie various brancln's of the Textile Trades witli regard to tariffs iind nthei' metliods of GovernnnMit assistance, Ill Plant and Machinery. The machiuery used iu tiie princii)al branches of the textile trades is almost entirely of British make. Where foreign machines are used they are, as a rule, specialities — that is, patented inventions in connection with some subsidiary process. Ultimately even these are manufactured in this country and our dependence upon foreign sources of supply ceases. The development of the British textile machinery industry has proceeded pari passu with the growth of the textile industries themselves. Just as Great Britain is the largest producer of textiles, so she is the largest manufacturer of textile machinery. In earlier days most of the textile factories in the world were equipped from British machine sliops. We liave still a world-wide market, and that undoubtedly helps to keep our machinists at a very high level of etfioiency, and to tliat extent reacts to the advantage of our own textile trades. On the other hand it has been pointed out to us that the export of British machinery has helped to establish many foreign competing industries, that some of our most capable workpeople have been taken abroad to teach its use, and that in many cases the products of the machinery have been sent to this country to compete with similar home-made goods. No one, however, suggests that in normal times the export of machinery should be restricted by State action. We have had occasion to point out in the sections devoted to individual trades how great an advantage the cotton and woollen trades have derived from being so closely associated geo- graphically and otherwise with a highly in-osperous and progre.'^sive machine-making industry. The close co-operation of manufacturers and machine-makers has led to a most satisfactory exchange of ideas and suggestions and to the rapid co-ordination of their joint experience and inventiveness. In the smaller textile trades— hosiery, lace and silk — a considerable amount of foreign- made machinery is in use. This is due to the fact that particular branches of these industries are carried on upon a much larger scale in foreign countries than in Great Britain. Large industries like those connected with cotton and wool give rise to a number of ancillary industries, which grow up round them, cater for their requirements, assist them in all their subsidiary processes and are a great source of additional strength to them. It is obvious that the smaller an industry is the less the number of such ancillary industries it can support, and to that extent the weaker it is in the struggle with more powerful competitors. Wherever perfection of machinery and equipment are indispensable, as they are in most modern production, it is necessary for complete success that an industry should be on a large i .jugh scale to attract and maintain the maximum co-operation of ancillary trades, and most of all the machinery trade. As an instance of weakness in this respect our attention has been called to the British silk trade. All the evidence we have received goes to show that the standard of equipment in our larger textile trades is very high and that, broadly speaking, the machinery in use is efficient and up-to-date. There is no doubt a good deal of comparatively old plant in use and still doing good service, but we have every reason to believe it is the exception, especially in the cotton trade. The most recently equipped mills represent wtiat is best in modern invention and improvements. It is often suggested that industries that have been long established in a country must always be at some disadvantage in point of equipment in com])arison with the same or similar industries in countries which have developed their industries more recently, because in the latter case tlie plant and machinery will be more modern and will embody all the later improve- ments. This might be true if machinery in the older country were not kept up to date by continual scrapping of antiquated models and their replacement hy impi'oved types. We have no direct evidence as to the equipment of German textile factories, but as they are well known to British machine makers, and as many of them are largely equipped either with British machinery or with machinery of British types, we have no reason to suppose their standard is higher than — nor indeed so high as — that of Britisli factories, except in certain well-known branches upon which they have specialised. We find that electricity is not very largely used for driving textile machinery. This may be due to the relatively high cost of current, owing to tlie absence of large central power stations in the industrial districts. AA''e consider that the establishment of such central power stations producing current from large generating units with a maximum of economy might prove of great advantage to some of the textile industries. In America the relatively high cost of labour causes manufacturers to attach special im- portance to the perfection of the machine and to its continuous and smooth rimning. For instance, American manufacturers are said to bestow greater care than we do upon the processes immediately preliminary to weaving, so as to ensure the lea.st number of loom stoppages and the maximum output of cloth per loom. High cost of labour also predisposes them to scrap promptly out-of-date machines and to substitute, whenever they can, automatic^ machinery and labour-saving appliances of all kinds. In view of the higher rates of wages, which are likely to rule in this country after the war in comparison with the pre-war period, it seems to us pro- bable that British textile manufacturers will have to pass all their processes in review, and to show a similar readiness to undertake even more frequent and drastic renewals of their machinery than in the past. For this purpose it will be necessary to write down their plant more rapidly than has been customary with jnost firms. In this connection we wish to point out that the drastic writing down of plant and machinery in this country is discourai these branches the effect of restriction was rarely put higher by witnesses than 10 per cent, to 1.^ per cent, upon a possible maximum with existing niaehinerv, working hours, and scales of piecework rates. The reasons generally assicned for such resfrietion as does exist are: — (1) Fear on the port of the workers that if thev turn out the maximum aninunt of work and earn hitrh waires. the pieee-rafe may be reduced by the eninloi-nr (2) A fixed idea or standard in the minds of workers as to how munh thev wish to earn per week, and a disinclination to work harder in order to e;\rn -nnro. (^) Iri some branches of trade, fear on the part of workers that if they get on too fast with their jobs they will eome to the end of the orders and will have to play. (4) The benevolent idea that if they do too much work they will be d'^privin'* their fellow workers ot jobs 115 All these reasons exercise a very real influence. The last three time and experience may be expected to modify and eventually to get rid of. The first is probably the most widespread, and is certainly the most powerful in creating distrust and ill-feeling between employer and employed. The fear on the part of the workers that if they exert themselves to the utmost they will not reap the full reward of their efforts is easy to understand and is not altogether groundless. If there is a standard of earnings in the mind of the workers, there is also a standard in the minds of some employers, and piece-rates have sometimes been cut by such employers, because they thought operatives were earning too much. Employers, in our opinion, should realise that high earnings, if they accrue from high output, are just as much an advantage to the employer as to the workpeople. Workers on their side should realise that it is to increase in output and not solely to increase in piece-rates that they have to look for the maintenance and extension of those higher wages to which the war has accustomed them. If these two positions were generally understood and accepted, there would be the basis for a concordat. In fixing pieoe- rates for new articles there is room for discussion and " give and take," and a job must often run for some time before a rate can be finally and equitably settled, but when once a piece-rate has been fixed it seems to us that it should not be altered except for very special reasons and by agreement. Although, as stated above, we have had little evidence of serious restriction of output in the principal processes, there is evidence of considerable interference, by means of Trades Union and " Shop " rules and action, in the subsidiary processes of the various textile industries, which, though minor wheels in the mechanism of a mill, ore essential to the smooth running of the whole. The actual effect of these rules, which relate, for instance, to the number of people who may be emploved in a particular process, the amount of work they may do, and perhaps most important of all, the proportion of apprentices or learners who mav be trnined. is to reduce the efficiency of the combined operations of a mill. Those emploved in the principal processes suffer at least as much as the employers from the dislocations and delays not infrequentlv caused bv the operation of such sectional rules, and it is greatlv to the interest of both parties that there shoxild be a proper adjustment and co-ordination of all parts of the complicated organisation of the factory. In view of the destruction of wealth durinsr the war, the need for it,s rapid re-creation after the war, and the intense competition for the world's trade, which will set in with the return of peace, there can be no doiibt that the necessity for securing the mavimum output in nil industries is of the utmost consequence if this country is to retain its stroncr position in interuitionnl competition. The whole question is one of national importance, and althono^h the deliberate lestriction of output bv workers in the texfile trades is not practised on anythinc like the scale which is said to prevail in some industries, it is in the interest of all who are enmno-ed in the textile trades to brine it to an end. This can only be done if relations of mutual interest, con- fidence and good feeling exist between employer and employed. The best results cannot be brousrht about unless the workers feel that thev receive uuffrudcrinmlY the full reward of their more streniious labo\xr, and unless employers feel that honest and willing work is given in return for adequate pay. The moment appears particularlv favourable for the establishment of even better relations between the two parties than have existed in the textile trades in the past. We consider that no effort should be spared to bring about a complete understanding and agreement between labour and capital. In our opinion two things are absolutely essential elements in our "after the war" conduct of British trade : — (1) That British emiiloyers should put all their brains and ener.cries as well as their capital into their biisinesses with renewed vigour and determination, and (2) That British workers shoiild rid their minds once for all of the fatal and paralysing idea of restriction of output. Efficiency of management and efficiency of laboiir miist go hand in hand. Elementary Education. While we have not made any full inquiry into the resuH;s of the present .system of elementary education, we gather from many employers that boys coming to them from the elementary schools are not so well grounded in the rudiments as used to be the case some years ago. We are glad to know that practical consideration is being given to the best means of improving the curriculum and of extending the period of compulsory education. Art and Technical Education. Our enquiry appears to us to reveal a very insufficient appreciation on the part of those engaged in the textile industries of the vahie and importance of technical education in industrial life. There has always been in the British mind a certain distrust and suspicion of " theoretical knowledge." While many witnesses admitted that technical instruction had benefitted their employees, and stated that they were in the habit of providing- facilities for their attendance at day or evening classes, there was a frequent expression of opinion that the best place for a man or boy to learn his trade was the workshop. There is, of course, a decided element of truth in this latter view, but the technical school is intended to supplement the workshop and not to replnre 't. It should be an addition to and not a substitute for workshop training. We have freouently been told tha* the curriculum in existing technical schools is not sufficiently practical and this is 997? H 2 UtJ probably a just criticism. It arises largely from the fact that manufactiuers are too often insufficiently represented upon the committees of management and take too small a part in their direction. There is not that close co-operation between the local industries and the schools which seems to us essential if we are to get the best results from the schools. This is to some extent due to legislation which vested the management of the majority of schools in municiiaal bodies, which are elected for quite different pur^joses and rarely prove attractive to local manufacturers. The power of co-opting members of school management committees from oiitside has not in our opinion proved a sufficient corrective. Further, we do not find any widespread demand on the part of individual employers for highly specialised education. The lack of appreciation by textile firms of the value of adequately educated assistants has a two-fold result — it brings it about that the staffs of British firms often occupy a lower intellectual plane than their foreign competitors, and it discourages the British youth from taking a course of higher education when that qualification brings him no advance- ment nor substantial reward in his industrial career. It therefore a])pears to us that an awakening of employers in the textile industry to the vahie of adequate education, particularly of their higher staffs, is urgently necessary. Technical schools with special equipment for the local industry appear to be established in all important textile centres. We are told that the equipment of some of the schools is excellent, but in others a considerable sum of money would be required to bring them up-to-date. Most of the schools, although ministering only to local needs, provide an advanced course of teaching for those who are to occupy positions of responsibility in textile firms — foremen, overlookers, mechanics and others engaged in skilled work. Efficient training is impossible "where the machinery or other appliances are obsolete, it is therefore essential that provision should be made wherever necessary for the renewal of or addition to the equipment of all schools. We consider that there is urgent need for more liighh'-trained teachers in our technical and art schools. They will not, however, be forthcoming unless the remuneration they receive is more adequate than at present and unless their status is improved. It is useless to raise the standard of equipment unless the standard of intruction is placed upon a higher level. We had overwhelming evidence that in all branches of the textile trade in which success is dependent upon design, foreign competition is particularly severe. This may arise in part from the admitted superiority of the French in matters of taste, in part from our past neglect of art teaching in a national sense, but a contributory cause is undoubtedly the want of co- operation between our art schools and technical schools in the training of designers and of those who are to become the managers of our manufacturing firms. It is clear to us that for any industry requiring taste as well as technical skill designers cannot profitably receive instruction in the one without the other. It is useless to teach the art of designing without giving the student the opportunity to study the process of manufacture of the particular article for which the design is intended. The student must at least know the possibilities of machinery, its almost unlimited capacities in some directions, and its strictly limited powers in others, if he is to be an efficient designer. Similarly the young man who is preparing to occupy a position of direction or control in a manufacturing business, where design and colour are indispensable features, should, in addition to his coiirse in the technical school, receive in the art -chonl an insight into the beauties of form and colour and at least some knowledge of the principles of designing and draughting. It is therefore essential that in all textile towns of importance there should be an art school and a technical school, which, if not actually under the same roof, should work hand in hand in the training of young people who will become manufacturers, mill-managers or designers. In our opinion it should be made a condition of Government grants that in the management of both schools practical men in the industry — not necessarily employers — should have the opportunity of taking an active part. 0\ir attention was called, particularly by witiiesses in the silk and lace trades, to the need for the establishment in connection with each important branch of the textile industry of a central institution fully equip]ipd with the most modern types of machinerv, and with the appliances necessary for testing materials and investigating processes. Such an institution should provide opportunities equal jn every respect to the best to be found abroad for the most complete study of manufacture, and sho\ild afford a course of advanced training in design with special application to the needs of the pnrticnlar industry. Thus Manchester. T-eeds, Belfast, Macclesfield, Nottingham and Kidderminster might become seats of great schools serving respectively the needs of the cotton, woollen, linen, silk, lace, and carpet weaving trades. Scientific and TF.riiyTCAT, Research. We cordially welcome the establishment of a Department for Scientific and Industrial Research and we consider that working in co-operation with committees of the great trade associations, which we have suggested elsewhere, or with Trade Associations of Research established on the lines contemplated by the Department of Scientific and Industrial Research, it should confer immense benefits n]ion all branches of the textile trades. The textile industries undoubtedly offer great opjiortunitic^ for organised scientific research. We suggest three im])ortant lines of enquiry : — (a) Scientific research in connection with raw materials. ^h) Scientific research in connection with the improvement of processes — carbonising. carding, spinning, weaving, dyeing, blenching, printing, finishing, &l-. («) Technical investigation with legnrd lo tlie impKivftmiMit nf niachinary . 117 The first of these subjects presents a wide field for study. In the past, our machinery and methods have lieeu adapted to s\iit the various types of textile fibres commonly produced, but we consider that, by means of research in connection with the raw materials themselves, special types might be evolved and selected, specially suited to the products required, and the cultiva- tion of these types might then be encouraged. With regard to the various processes of manufacture, it seems to us that by the application i)t scientific study of the principles involved, great improvements might be effected in existing processes ;>nd entirely new processes might be discovered. The discovery of the mercerising process of cotton and the production of artificial silk are cases in point. There appears to be no limit to mechanical research and invention in connection witii machinery and plant. DISTRIBUTION. Marketing. We consider that the organisation of the larger textile trades for the distribution of their goods both in the United Kingdom and abroad is as efficient as that employed by any of our competitors, and in the case of the cotton and woollen industries is far more highly developed and organised. Indeed we do not hesitate to say that the marketing organisation of the cotton industry, by reason of its magnitude and the extent to which specialisation has been carried, is probably the most efficient distributing organisation in the world. This high standard of efficiency has been evolved gradually and may be attributed to : — (1) The magnitude of the trade and the fact that about 8U per cent, of the products of the industry are exported to markets all over the world, thus providing all the oppor- tunities for large scale distribution and intense specialisation both in respect of markets and of goods. (2) The localisation of the trade in one principal centre, Manchester, which has become the leading cotton textile market in the world. This has permitted concentration of effort with resulting economies in all the subsidiary processes of distribution such as making-up, packing, shipping, office management, &c. We view, however, with some concern the increasing share secured by German merchants before the war in the distribution of British textiles in many markets, notably in China and parts of Central and South America. It is suggested that this was largely due to the eagerness of young Germans to acquire foreign languages, and their willingness to enter upon commercial careers in t'oreign countries with less prospects of immediate reward than would attract young Englishmen, who generally prefer to settle in countries where their own language is spoken. It is true that by their determination to secure a large turnover for a very small remuneration, by granting extended credit facilities to native dealers, and by their readiness to take up and develop new styles and qualities German merchants have incidentally contributed materially to a consi('/erable extension of British textile production, since the goods they pushed were largely British. On the other hand the introduction of long credits and unsound methods of trading was sure, sooner or later, to react adversely upon the general current and prosperity of trade. Moreover, we consider that the war has brought into strong relief the danger of allowing any essential function in the conduct of a great national trade to fall into foreign hands. We therefore urge that every effort should be made by exporters in this country either on their own accoiint, or in co-operation with merchants on the spot, to secure and retain after the war as great a proportion as possible of the legitimate business formerly handled by German distributing houses. The present time offers an excellent opportunity. In Hong Kong and Singapore the German houses have been closed and placed in liquidation, and in China and South America they have lost ground con- siderably. In these circumstances it seems to be desirable that British merchants should either open branches in these markets, or co-oj^erate more closely with existing hoiises on the spot, or finance jroiing and energetic men with knowledge of the markets and encourage them to open businesses on their own account. We are informed that the number of British merchant houses, which have been established in these markets diiring the past ten or twelve years is remarkably small. So far we have dealt mainly witli the distributing (jrgauisationinthecotton trade. Conditions in the woollen and worsted, linen, and jute trades are somewhat similar, although the degree of specialisation is not so intense owing to the fact that the volume of trade handled is much smaller. In the silk, lace and hosiery trades, however, we are faced with the difficulties incidental to highly diversified production on a small scale, and constant duplication of effort. For instance we are told that at least ten representatives of Nottingham houses visit South America each year, and each carries a similar range of samples. The result is that the co.st of travelling and incidental expenses is out of all proportion to the value of the trade done, and it is obvious that individual effort of this kind must be at a considerable disadvantage in competing in overseas markets with German or American selling combines. It seems to us that the remedy lies in some form of combined representation or co-operative selling, having for its object not only the reduction of marketing expenses, but also the systematic working of old markets and the exploitation of new fields, which it would otherwise be impossible for individual firms in a small industry to under- take. _ To effect this, British distributors should be prepared to sink some of their intense individualism in combined action, over^^ome their tendency to narrowness and jealoiisy, and look S)978 H .s 118 more to the interests of their respective industries as a whole than they have hitherto done, being sure that the larger and more prosperous an industry is, the more opportunities there will be for individuals. We are satisfied that British selling methods in the textile trades leave little to be desired as compared with those of our competitors. We find that our exporters are prepared to quote in any currency and to supply goods in any reasonable quantity and in any system of measure- ments or make-up desired. We consider that the elasticity of our system has greatly con- tributed to our success in certain markets, notably in Central and South America. There is no doubt that German houses have secured a good deal of business by granting extended terms of credit in Russia, the Levant, China, Central and South America. We are informed that they have been able to do this owing to the assistance rendered by German financial institutions. It has been the custom of British banks and merchants to discourage such long credits and experience of the disastrous consequences, which have at times resulted from the practice, has undoubtedly justified their caution. It appears, however, that in many important markets longer credit than the usual British terms is frequently insisted upon and is already being accorded by some British houses. This is obviously a matter which must be left to individual exporters. It involves the question of extended financial facilities to British trade with which we deal below. We are gratified to find that British textile merchants have of late had little difficulty in securing competent travellers of British birth. As a rule travellers are men selected from the home stafi's, who, after acquiring the necessary languages, are sent abroad. Evidence is very general that the difficulties formerly experienced in inducing the right tyi)e of man to learn foreign languages and to travel abroad have not been felt during the last few yeaVs. We con- sider that the choice might be still furtlier ensured and enlarged by the more systematic and practical teaching of modern languages in this country. Financial Facilitie.s. The textile trades, owing to the character of their business, probably present fewer diffi- culties of finance than any of the other great groups of trades. Many of the complaints which have been made with regard to the want of close co-operation in the past between British industry and British finance — for instance in connection with large engineering contracts — do not apply to the textile trades, in which the majority of individual transactions are comparatively small. We are satisfied that importers of raw material, spinners, manufacturers, and others engaged in the textile trades as a rule receive adequate facilities from existing banks and financial institutions for financing their business. Industrial finance in the textile centres is largely in the hands of local banks, which specialise on local business, thoroughly understand the require- ments of their clients, and afford all reasonable facilities. The export trade to the large overseas markets such as India, China, the Far East, South America, and Turkey is very largely financed by British banks operating in those countries, and so long as the present system of short terms of credit is maintained, the facilities given appear to meet all legitimate requirements. Not a few witnesses expressed the opinion that if business upon a large scale is to be developed in Russia, special financial facilities will have to be ntt'orded to meet the system of long credits, which cannot be avoided in that country. Many British textile firms have been deterred from doing direct business with Russia in the past, and have preferred to use the intermediary of German merchant houses, because of the difficulty they experienced in handling Russian com- mercial paper. It is alleged that German distributing houses in Russia, the Levant, Central and South America have been able to ofl'er extended terms of credit and thereby to obtain a considerable amount of trade, owing to the support they receive from their banks. The bills drawn upon clients in these markets eventually find their way to London. They are endorsed by the German banks, upon whose endorsements they are readily discounted in the Loudon market. In effect, therefore, the longer credits given by German merchants rested ultimately upon British finance. British merchants complain that the facilities thus aftorded to their German rivals by London financial houses have had the effect of actively promoting German competition in the marketing of textiles. If extended credit becomes an established practice in important markets, means must be found, either by our existing banks or otherwise, to provide facilities to British exporters and merchants at least equal to those which have been afforded to German merchants. Transport. The evidence we have received on railway rates and sea freights and their incidence in international competition is both meagre and superficial, possible because, as a rule, transport charges upon textile goods do not bear a large proportion to the landed cost of the goods, and are not of the same consequence as they are in the case of the heavy industries. At. the same time there is little doubt that British exj)orters have fre(|iuMitly been handicapped by having to pay higher conibinnrl land and soa freights from the ])lace of manufacture to llic doors of 119 buyers in the British Dominions and foreign countries than were paid by their German com- petitors. This is due to the fact that in Germany export traflSc from the manufacturing dis- tricts to the ports was allowed to travel at greatly reduced rates, and the clos^ co-operation which existed between the German State Railways and the Shipping Companies enabled relatively favourable through rates, covering both sea and rail transit, to be granted between the inland centre of production and the foreign port of destination, even when the sea freights were fixed by agreements between the British and German Conference lines. There appears to have been little co-operation in the past between British railway com- panies and British shipping lines for the purpose of encouraging export traffic, although in view of the importance of oxw export trade it might be expected to be the object of a special policy. The whole question is too intricate to be dealt with in the course of an Enquiry such as ours. We are not prepared to make any recommendations, and content ourselves with recording our opinion that it will have to be fully investigated by a competent Committee in connection with the policy of encouraging trade after the war. We consider that in any such investigations all branches of the textile trades should receive their due share of attention. The Metric System. We have found among individual witnesses a decided predisposition in favour of the metric system, but rather as a counsel of perfection than with a view to its immediate adoption in this country. The idea of a common system of weights and measures for the whole commercial world is very attractive and it is only when the practical difficulties in the way of its adoption come to be realised that the feeling in its favour begins to cool down. In the case of the Textile Trades these difficulties are very serious indeed. The great British Textile Trades — iind more jiar- ticularly the cotton trade — are so predominant in the world that siniilar industries in other countries have had in the main to follow their lead and to accept their technical standards. For instance the "counts" of cotton yarn used in most metric as well as non-metric countries are the English " counts," which are based upon the hank or skein of 840 yards. The " count " is known by the number of hanks of 840 yards to the English pound. If one hank weighs one pound the count is Is. and if one hundred hanks weigh one pound the count is 100s. and so on. All calculations of cost are made upon the basis of these lengths and weights, and any change would produce for a longtime an almost world-wide confusion. Then the yard is so well known in India and China as to have become the linear measure of foreign trade and a change to the metre would cause confusion and embai'rassment in the largest and most conservative cotton- using markets in the world. All our textile machinery in this country and in most of tiie countries supplied with British machinery is based upon British measures and, as it would be too costly to alter it, it would obviously take many years to replace it, during which period spare parts would have to be provided in the old measurements while all new machinery would be based upon metric measurements. For these reasons amongst others, we understand that the Federa- tion of Master Spinners' Associations and the Cotton Spinners' and Manufacturers' Association are opposed to any change. We consider that these objections on the part of the cotton trade have great weight, and we believe they are applicable in varying degrees to other textile industries. An argument of great force against our adoption of the metric system is to be found in the fact that a larger proportion of our textile export trade is done with non-metric countries than with metric countries. The yard is the standard of measurement in almost all the great mnrkets of the East, in the United States and throughout the British Empire. A change to tlie metric system would therefore be attended with more inconvenience thnn attaches to the present st-te of affairs. If our present system is a disadvantage to us in dealing with a minority using the metric system, our metric competitors must find the metric system a still greater disadvantage to them in dealing with a majority not iising the metric system. In point of fact both exporters and manufacturers in the British Textile Trades do habitually both quote and deliver to metric using countries in their own weights and measures, whenever they are asked to do so — and it is doubtful whether any textile trade is lost either to this country or to the United States by the maintenance of the present system. While agreeing that a universal system of weights and measures would be a source of great convenience and would facilitate international trade, we do not think it is practicable at tlie present time so far as the Textile Trades are concerned. If and when it does come, it can only be adopted by this country with the full concurrence and co-operation of the British Empire and the United States of America. Meanwhile as a step in advance we recommend the simplification of our present weights and measures and the decimalisation of our money. Most of the suggestions we have so far made with a view to increasing our national industrial efficiency are such as can be carried into effect by the individual or combined action of those engaged in the various industries without assistance from outside. They were just as important before the war as they are now, just as essential to the maintenance of our efliciency in international competition, but the war has given them a more immediate and living inters'^t, since it has created a new attitude of mind in all classes and has determined us to take stock of our commercial position, to scrutinise the sources both of our strength and of our weakness, to overhaul our methods in the light of new experiences, and to set our industrial and commercial house in order before the economic re-grouping of the world, which is likelv to follow the con- clusion of peace, takes place. In these circumstances there is reason to hope that, wherever possible, measures for increasing the efficiency of our industries and securing their complete economic independence may be carried into effect by voluntary action within the industries themselves. 997S H 4 121) SECTION ll.-THE STATE AND INDUS rRY. It remains for us now to deal with a group of suggestions, which involve questions of public policy and imply either legislation or administrative action on the part of the State. ^^ e refer to various methods of State assistance to trade and industry and to the question of tariffs. There seems to be little doubt that German overseas trade has gained greatly by the encouragement and support it has received from the State. It has been impossible in an enquiry such as ours to make a detailed examination of German official methods of fostering overseas trade. Broadly speaking, it may be said that Germany has looked upon her export trade as a great national interest, and it has been the policy of the German Government to assist and encourage it by every means in its power; by tariffs contrived with the object of conserving the home market to German industries as a basis for the development of overseas trade; by the manipulation to the advantage of German industries of the " most favoured nation" clause in international commercial treaties ; by the encouragement of scientific research and technical training; by bounties to shipping lines on important ocean routes; by preferential rates on the State railways for overseas traffic; by diplomatic action through Ambassadors, Ministers, and Consular agents in foreign countries and in ways which could be multiplied almost indefinitely. In the United Kingdom British trade has in the past been built up by ihe unassisted and unco-ordinated efforts of individuals. Until comparatively lately it has been the. policy of the State to interfere as little as possible and to leave commerce and industry to woik out their own salvation. Before the war, however, a change was already coming ab(nit and British overseas trade was beginning to be recognised as a great national asset and interest, worthy of greater attention and care by the State. The war itself has revealed directions in which the State can intervene in industries with advantage as well as directions in which it cannot. In other words we know far better than we did both the extent and the limits of beneficial State co-operation. It is realized that without any danger to individual enterprise there is much that the modern State can do for British trade. COMMERCIAL INTELLIGENCE. We have pointed out the importance of the reorganization of technical ami art education by the State in order to make it more practical and eificient and to bring it into closer relation with industrial life, and we have also referred to State aid to scientific and industrial research. We consider that most valuable assistance might be given to British commerce and industry by a highly developed and comprehensive State Dejxirtment of Commercial Intelligence. The present Department of Commercial Intelligence of the Board of Trade has done and is doing most useful work, but its activities appear to us to be too little known and its usefulness too little appreciated by fire commercial community. AYe think that the scope of the Department should be greatly extended and that the immense amount of information in its jjossession should be made more readily accessible. T^he moment seems to us peculiarly opportune. During the war, as a result of the temporary State regulation of the avenues of overseas trade, information of great value has been collected by many Public Departments. It would be a pity if the organization connected with its collection were wholly dispersed, and if the infoi-mation itself were allowed to fall into arrear. The best elements both of the very able staff and of the system of collection should, we think, be maintained in connection with the Board of Trade, and a well equipped Bureau of Commercial Information should be established. It is not easy to suggest how information should be disseminated and made of real practical use to British trade and industry. In a previous section we have suggested the formation of representative Trade Associa- tions in connection with the textile industries, each of which would be an authoritative and accredited medium of communication with Government Departments ui)on all questions connected with its industry. We think there should be the closest co-operation between these Associations, selected Chambers of CV)mmerce, and the Department of Commercial Intelligen<'e, and that together they should determine the best methods of making infoimatiou readily and widely accessible. Such a department as we have in mind should, however, do much more than collect and disseminate information, it should study and interjjret ii. It should for instance keeji a vigilant eye uyian the currents and general trend of overseas trade and should from time to time cons\ilt with the representatives of each industry as to the practical bearing of these movements iipou our position in international competition. At home it should closely scrutinize all legislative pro- posals affecting industry and commerce with a view to the avoidance of ill-considered legislation such as in the past has i)roved injurious to several important Britisti trades. British industiy being the creation of the efforts of individuals has the defe(;ts of its qualities, it lacks co-ordina- tion. Every man cultivates his own jilot and it is no one's business to stuvey the whole area of an industry and see its weak places. The war revealed many gaps in our industries — the absence of dye-maliing in the group of textile trades, of magnetos in the group of motor industries are well known instances. We consider that by the co-operation of an adequately equipped and 121 ciauned State Organization with the great Trade Associatious and selected Chambers of Commerce ii real and useful "thinking department" caii be created with great advantage to the whole range of British industries. If some sort of precedent is of value from a friendly but competing cuuntry, we may mention that we understand a Trade Commission sits permanently at Washington, the chief activities of which are said to be the organization of each separate American industry for export trade. An essential point in an improved system of Commercial Intelligence would be IMPKOVEU CUMMEECIAL SERVICES ABKUAIJ. In this connection witnesses have adversely criticised our present consular system and have evinced a widespread desire for its reform. We think this arises largely from a misapprehension of the nature of a Consul's chief duties, which do not consist solely in the writing of commercial reports, and that the real path of reform lies in another direction. Some years ago the Board of Trade established in the British self-governing Dominions a system which has worked so well that it has recently been decided by H.M. Government, in agreement with the Dominions Governments, to enlarge and extend it. It consists in appointing to each Dominion one or more Trade Commissioners, who have an office and staff at the most important or convenient centre with paid correspondents in each imijortant trade district, who keep continually in tou6h with the Trade Commissioner and supply him witli information. General reports are sent home regularly, and urgent information is cabled. Following this precedent, we think that the present system ot appointing Commercial Attaches should be greatly extended, and that one or more should be appointed to every foreign country with adequate assistants and staffs. Their functions should be purely commercial, but they should have a proper and recognised diplomatic status. They should be authorised to make use of selected consuls as their co-respondents, and it would be their duty to see that those consuls were trained to supply them with the kind of practical information required for the maintenance and extension of British trade. We believe that if some such course were followed, an efficient system of foreign commercial intelligence would gradually be built up. The commercial officials would, of course, be members of the Ambassador's or Minister's stati', and would be his advisers in commercial matters. Although appointed by the Foreign Office, their selection should be entrusted to u special board upon which the Foreign Office, the Board of Trade, and the commercial commvmity should be represented. Their instructions should, in our opinion, be drafted by the Department of Commercial Intelligence in agreement with the Foreign Office, and all communications and reports should l)e forwarded to the Department of Commercial Intelligence by the Foreign Office immediately upon their receipt. However, details of this character would, no doubt, be arranged between the two departments. We concur in the view expressed by most witnesses that Commercial Attaches and Consuls in the principal commercial centres should, wherever possible, be British-born subjects. EMPIRE CONTROL OF TEXTILE RAW MATERIALS. We have drawn repeated attention in the raw materials section and in other parts of this Report to the exceptional and very powerful position the British Empire holds with regard to the production of textile raw materials. India grows a class of cotton which io largely used by our competitors, und has a practical monopoly of the world's supplies of jute. Axistralia, New Zealand and South Africa X'roduce two-thirds of the world's surplus production available for export of merino and crossbred wools, while Australia has a practical monopoly of the finer merino wools. Egyijf and the West Indian Islands have a practical monopoly of the production of the long-stapled cotton which is essential for spinning the finest counts of yarn. We are aware that the control of these great Imperial supplies can only be exercised by tbe Governments of India, the Dominions and Egypt. We therefore -repeat oiir recommendation, made elsewhere, that the Imperial Government should at the earliest possible date negotiate with the various Governments concerned with a view to arriving at an agreement for the effective control of the distribution of all textile raw materials. The primary object of such an agreement would be to safeguard the industrial recjuirements of the Empire and to fulfil our pledges given to the Allies at the Economic Conference in Paris, whereby we bound ourselves to recognise their prior claim to the supply of raw materials during the period of reconstruction after the war. When Imperial requirements had been met and our obligations to our Allies fulfilled, the disposal of the surplus of all the above textile raw materials would constitute a most powerful instrument for negotiating with foreign Powers either in connection with their twriifs or otherwise. AVe have pointed out, for instance, tlie dependence of Germany upon the British Empire for her supply of merino wool, of Egyptian cotton, of yarns spun from Egyptian cotton, and of jute, which before the war were absolutely essential to important branches of her fine wool and worsted manufacture, her cotton-hosiery and lace trades, and her whole jute industry. It is obvious that we have here in our hands means which could be used with great effect, provided always that our control is based upon an effective agreement between different parts of the Empire. 122 TARIFFS. We have not thought it came within the terms of our reference to consider the fiscal policy of this country in its broad national aspects, but have confined ourselves to obtaining and examining the views of the various branches of the textile industries upon tariff questions in connection with their own industries. In the sections devoted to individual industries (2 to 8) we have recorded those views, and have set out fully the facts with regard to international com- petition, including the restrictive effect of foreign tariff's on British trade, upon which their wishes and requirements are based. As might be expected in the case of industries which differ from each other so widely in magnitude, in general conditions, in prosperity, and in the extent of the foreign competition they encounter, the views held by those engaged in the industries differ widely. It will be convenient to recapitulate briefly the views of each industry as represented by the evidence we have taken. The Cotton hidustry.- — In the cotton trade there is very little demand for any change in our present policy. The trade is predominantly an export trade, 80 per cent, of its output being exported, and it cannot expect to derive direct benefit from any system of import duties upon yarns or manufactured goods. On the other hand, there is a generally expressed fear that the imposition of anything like a general tariff' might raise costs of production, and to that extent handicap and lessen the efficiency of the trade in world competition. A majority of witnesses were in favour of restrictions upon trade with the Central Powers after the war, although such a course might involve the partial loss of valuable exports of fine yarns to Germany, for which compensatory markets could only be found in other countries or by the development of the cotton-liosiery and lace industries in this country. AVitnesses were unanimous in asserting that if our Allies, and more particularly Russia and France, could be induced to lower their tariff's in our favour, such compensatory markets might be found in their territories or in the territories xinder their control. The Woollen and Worsted Industry. — There are diff'erences of opinion in this trade with regard to the policy of imposing duties upon foreign imports of woollen and worsted goods for men's wear. The finer fabrics of this class hold their own in the home and Colonial markets but their sale is much restricted in foreign markets by adverse tariff's and has in the past suffered frequent fluctuations in consequence of repeated tariff changes, such as the McKinley and Dingley Tariffs in the United States, the effect of which was to reduce British imports into the United States by about 70 per cent. In the case of dress goods for women's wear the position is diff'erent. There is active competition in this branch in the home market as well as in foreign markets, as also in the yarns from which the cloth is woven. Suggestions were made by some witnesses for a small duty on the importations of yarns and a higher duty upon piece goods of this class. It was asserted that spinners would not erect buildings nor provide machinery for mule spinning unless they had greater security in the home market. The same arguments were used with regard to dress piece goods. So far as Allied countries were concerned, it was urged that any duties imposed should be upon a minimum scale, and that every eff'ort should be made to conclude ' arrangements for mutual tariff concessions, the general view being that Russia in particular off'ered favourable opportunities for a considerable extension of British trade if modifications of her tariff in our favour could be brought about. The feeling in favour of restrictions upon German and Austrian trade after the war was practically unanimous. Prohibition for a short period to be followed by the imposition of heavy duties or a heavy surtax in case duties became general were the most common suggestions. The Carpet Industry. — By a large majority the representatives of the British carpet industry advocate the imposition of minimum and maximum tariffs on foreign carpets entering the United Kingdom. The minimum tariff to be 20 per cent, ad valorem and to be levied upon carpets coming from Allied countries. The maximum tariff to be 30 per cent, ad valorem and to be levied upon goods coming from neutral countries; a preference to be accorded to the various portions of the Empire consisting of a percentage oft' the minimum tariff' equivalent to whatever percentage of preference each Dominion may accord goods coming from the United Kingdom. A surtax of 50 per cent, over and above the duties levied under the maximum tariff to be charged upon all carpets imported from Enemy countries. The above suggestions are based upon the entry of raw materials free of customs duties. The Silk Industry. — This industry is practically unanimous in its request for tariff assistance on the ground that it cannot compete with the highly protected and carefully fostered silk industries of other countries — some of whicli habitually " dump '' their goods in iliis market — unless such assistance is given at all events for a period. It is asserted that it has suffered severely from the policy of free imports, owing to the fact that it has been in competition with much larger and in some cases older established industries in otlier countries. The British silk industry, just because it is a small industry, has to produce on a small scale and is confined in tlie main to specialities which are always expensive to produce. It is said at the present time 1o be in tbc prisitiou of an " infant industry " and ihe general contention of witnesses is that it cannot get on to its feet and become a genuinely comxieting industry unless a larger share of the home market is for a time secured to it l)y a tariff', as is the case with all its competitors. Witnesses further contend that it is of national importance and in the interest of the textile industries as a whole to maintain in this country an industry which represents the higli water 123 mark of tecliuical and artistic attaijimeut among textiles, since it would be impossible to secure the hig-lLest standard of technical training, knowledge and skill in other textile industries if the silk industry in its highly develoijed and artistic forms were allowed to die out. The Silk Association of Great Britain and Ireland, which represents every branch of the industry, has put forward the following proposals for a tariff: — Raw and waste silk to be admitted free of duty. With regard to thrown silk and spun silk yarns coming from our Allies, opinions are divided between free entry and a small duty. It is suggested that there should be a duty averaging 18 per cent, upon thrown silk and spun silk yarns coming from neutral countries. The tariff asked for upon piece goods and made-up goods is as follows : — In respect of our Allies, 15 per cent, ad valorem. In respect of neutrals, 20 per cent, to 25 per cent., subject to reciprocal arrangements. In respect of imdyed jjiece goods of Chinese and Japanese manufacture, 12 per cent, to 16 per cent, ad valorem. Duties averaging 40 per cent, are asked for upon all silk manufactures coming from enemy countries. No tariff to be imijosed upon any goods coming from any part of the British Empire. The Jute Industry. — This industry asks that an export tax of Id. per lb, (approximately £5 per ton) may be imposed upon all jute leaving India, with a total rebate iu favour of the British Empire, total or graduated rebates in favour of our Allie-. and graduated rebates in favour of such neutral countries as may offer reciprocal concessions of some kind. In the case of the present enemy countries there should be no rebates. Representatives of the trade state that if this export duty is ini])osed, they do not desire any import duties upon yarn or manufactured goods coming into this country. The Linen Industry. — The prevailing feeling in this industry is in favoiir of a graduated scale of duties on manufactured goods, distinctions being made between Allies, neutrals and enemy countries. In the case of flax yarns opinions are more divided, although there is a considerable feeling in favour of very moderate duties accompanied by anti-dumping legislation. The trade is unanimous with regard to restrictions upon German and Austrian trade after the war. The Hosiery and Fabric Glove Industry. — -There is a practically unanimous demand in the hosiery trade that duties should be imposed upon all hosiery, underwear, knitted fabrics and glove fabrics, whether of woollen, worsted, cotton or silk, imported into the United Kingdom from foreign countries. The hosiery sections of the Nottingham and Leicester Chambers of Commerce suggest a standard duty of 25 per cent, with a surtax of 25 per cent, on goods imported from present enemy countries. The hosiery trade consists of two main branches : — > Woollen and worsted hosiery. Cotton hosiery and fabric gloves. In woollen and worsted hosiery, foreign competition is not very severe, except in the cheaper ranges and in goods made with admixt\ires of cotton and silk. In the case of cotton hosiery and fabric gloves, the position is qiiite different. Before the war these industries, though originally British, were almost exclusively in German hands, and the maniifacture of these articles was only carried on in Great Britain upon a small scale. The Germans had secured almost a monopoly of the trade in British, colonial and foreign markets. Their command of the trade enabled them to organise production on a large scale, with the result that their expenses were reduced to a minimum and their prices became such that British manufacturers producing on a small scale found it impossible to compete with them. It was pointed out that they obtained the bulk of their supplies of fine cotton yarn from this country, and that it is of great importance to establish a strong British cotton hosiery industry in order to find compensatory outlets at home for these yarns for which it might be difficult to find markets elsewhere than in the hosiery and lace trades. Since the war, British makers have shown great enterprise iu endeavouring to secure this trade, and have overcome most of the difficiilties connected with qualitj-. dyes, finish, &c. They have, however, been so largely engaged upon Government work that they have not been able to make as great progress as they wished. Meanwhile, the United States and Japan have taken advantage of the absence of Germany from the field of competition and have enormously increased their output and their exports of these goods, especially to this coimtry. It is represented that the secret of success in this, as in other branches of trade, lies in production on a large scale. In this country our manufacturers, not having command of the market, all make small quantities of a large number of articles, while, in Germany, a whole mill will be working upon one tyjie of stocking. Witnesses are unanimous in asserting that, if this industry is to be established upon a large scale in this country it can only be done by a measure of seciirity being aft'orded them in their own market. It is stated that without such security manufacturers would not be prepared to invest the capital necessary for large-scale installations. The Lace Industry. — This industry is in practically the same position as the hosiery industry. One branch of it, namely, the manufacture of Leavers lace, plain nets and lace curtains, is prosperous and is able to hold its own in international competition, while another branch, namely, the manufacture of Plaueu lace. Barmen trimmings and embroideries, encounters almost overwhelming competition from the specialised industry of Germany in these articles, based upon large-scale production. All the arguments advanced in connection with 124 cotton hosiery and glove-fabiics aie used with regard to lace. The weakness of one branch of the industry is considered a serious danger to the prosperity of the other, because it is said iu these days to be wholly successful an industry of fashion and taste like the lace industry should be able to show the whole range of an article, otherwise it may find its speciality gradually eaten into by the foreign makers of other specialities. During the war, in the absence of German competition, efforts have been made with considerable success to establish the pro- duction of laces similar to the German on the basis of large-scale production, but it is asserted that this progress cannot be maintained without assistance when normal conditions return. Witnesses are practically unanimous is favour of excluding German goods for a period after the conclusion of peace and subsequently of submitting them to a regime of duties. It is as erted that if this coui'se is followed, Nottingham, secure in the home market, will be able to establish its Plauen lace and embroidery business on the basis of large-scale production, and will eventually be able to compete successfully both in the home and foreign markets. There is a strong feeling in the trade in favour of reciprocal tariff arrangements with France and Switzerland. In view of these diverse wishes and reqitirements we confine ourselves to making the following genera] recommendations: — (1) That when the settlement of the general fiscal policy of the United Kingdom comes up for consideration and decision due attention should be given to the differing wishes and lequirements of the textile trades and to the facts in connection with international competition upon which they are based, as set out in Sections 2-8 of this Beport. (2) That H.M. Government should as soon as possible institute an expert examination of the tariffs of the Powers signatory to the Paris Resolutions, and of any others of our Allies, who may desire an economic rapprocliement witli the IJritish Empire, with a view to negotiations for reductions in our favour of such of their duties upon textiles (yarns and goods) as affect our trade. TEEATMENT OF ENEMY TEADE AFTEE THE WAE. (1) Intertm Treatment. In the course of our Enquiry we were asked to express our opinion with regard to the treatment of enemy trade during the period of reconstruction, which will immediately follow the termination of the war. In reply the following recommendation was forwaidod to the President of the Board of Tjade : — " That for a period of not less than one year after the conclusion of peace the import " and export of textiles and the raw and partly manufactured materials for textiles between '■ the British Empire and Enemy States shall be prohibited except \inder licence." This recommendation we now re-affirm. (2) Subsequent Treatment. A large majority of witnesses in all branches of the textile trades were in favour of restric- tions upoTi ti'ade with tlie Central Powers for a further period subsequent to the period of ri'consti'uct ion . We therefore recommend that imports from Geiniany and Austria -Hungary should be subjected for such a period as may be determined b> considerations of national policy to a special tariff' regime, either by the establishment of dutie- For the purpose or by a surtax upon any duties which may be levied \ipon imports from othei' sources. DUMPING. We have found cunsiderable evidence of the " dumping " of foreigu-niade goods in several branches of the textile industries — more particularlj^ in silks, linens, linen yarn,, cotton-hosiei-y and lace. Sometimes dumping consists in the unloading of surplus stocks in the open market of Great Britain, in which case its effect is to break the price of regular goods, but that effect is only temporary, even if . recurrent. At other times it is a deliberate policy having for its object to crush the (•om])etition of local manufacturei's, and when once that object is attained the price of the article may be raised to normal commercial value or even higher. We consider that steps should be taken to prevent unfair methods of foreign competition of this character, which an' highl>- disturbing and injurious to our producing industries, and we recommend that anti-dumping legislali(ui should be enacted in thi-< country upon the lines of that of the United States of Ameiica. peeferi<;ntial trade within the empire. We found almost complete unauimity among witnesses from all branches of the textile industries in favour of preferential treatment of the products and manufactures of the British Dominions Overseas iu connection with any duties which may be levied upon imports entering the United Kingdom. We therefore recommend that if duties are levied upon imports entering the United Kingdom, prefeience should be accorded to the products and manufactures of the British Overseas Dominions. 125 SECTION 12.-SUMMAHY OF RECOMMENDATIONS. We make th« following recommendations : — I. TEXTILE RAW MATERIALS. Cotton (pp. 6-20). A. — That every possible effort should be made to secure a more extended j>rowth of cotton within the British Empire; That in order to further such efforts a standing Advisory Committee should be appointed, including representatives of the Governments of India, Egypt, and the Colonies and Depen- dencies concerned; the trades interested both in the United Kingdom and in India: the British Cotton Growing Association; the Imperial Institute; and at least one botani.st who has devoted special attention to the growth of cotton. The duty of this Committee should be to investigate in all its bearings the question of increasing the supply of cotton within the British Empire, to act as a clearing-house of information, and generally to assist and advise the Governments concerned in the development of their cotton-growing resources ; B. — That representations should be made to H.M. Secretary of State for India, urging upon him the need for the immediate acceleration and extension of the excellent work which has already been taken in hand by the Indian Agricultural Department in connection with cotton-growing ; C. That the Governments of Egypt and the Sudan be moved through the proper channels to take steps to increase the growth of cotton within their territories. Wool (pp. 21-29). That in view of the serious shortage of wools for clothing purposes, particularly of merinos, and in view of the predominant position of the British Empire in the production of these wools, H.M. Government should convene at an early date a conference of the representatives of the Governments of Australia, New Zealand and South Africa in order to formulate a workable scheme for the effective control of the distribution of all wool grov^n within their territories. Flax (pp. 30-33). 1. That in order to stimulate the production of flax in Ireland, the work of the Dejiartment of Agriculture and of private bodies such as the British Flax and Hemp Growers' Society should be further extended, and that steps should be taken to promote and assist the undertaking of research into flax, its cultivation, and the preparation of the fibre for manxxfacture, particularly in regard to an improved method of retting; 2. That the production of flax should be encouraged in Canada. India, and any other parts of the British Empire suitable for its growth ; 3. That the Allied countries should take joint measures to conserve for each other's use in priority to other demands the supply of flax. Jute (pp. 34-89). That the attention of the Indian Government be called to the opportunity offered by India's monopoly in the production of jute to safeguard for the British Empire and its Allies the supplies of the fibre. To this end we recommend the imposition of an exjjort dutj- (£5 per ton has been suggested by expert witnesses) on shipments of raw jute from India to all destinations with a total rebate of the duty in favour of the British Empire, total or graduated rebates in favour of its Allies, and graduated rebates in favour of such neutral countries as may offer reciprocal concessions. Silk (pp. 40-44). That although the supply of raw silk and silk waste keeps pace with the continually increasing world's consumption, the development of sericulture in India under efficient direction should be actively undertaken, as well as its stimulation and encouragement in other parts of the Empire where climate and labour conditions are favourable. Empiee Control of Textile Raw Materials (page 121). That in view of the exceptional and powerful position which the British Empire holds with regard to the production of textile raw materials, and in particular of wool, jute, and the finest qualities of cotton (Egyptian and West Indian Sea Island), H.M. Government should arrive at an agreement with the Governments concerned for the effective control of the distribxition of all textile raw materials, with a view to: — (a) The complete safeguarding of the industrial requirements of the British Empire; (b) The fulfilment of the pledges to the Allies, as laid down in the Paris Resolutions; (c) The utilisation of the resources of the Empire in textile raw materials for purposes of negotiation with other countries. 126 II. "KEY" INDUSTRIES. DTESTUFFS AND KNITTING NEEDLES (pp. 107-109). That stejis should immedintcly be taken by the Government to ensure the establishment and maintenance of the manufacture of dye materials and knitting needles in this country upon a secure basis, in order as speedily as possible to make the textile industries independent of foreign sources of supply of these articles. III. PLANT AND MACHINERY (pp. 111-112). A. — That in view of the large renewals and repairs to textile machinery whicb will be required after the war, a system of priority certificates with regard to the execution of orders should be strictly maintained for a sufficient length of time to allow of the re-equipment of British textile factories and of those of our despoiled Allies before other foreign orders are taken in hand ; B. — That to encourage renewals, a higher scale of allowances for depreciation of machinery and plant than is at present in force should be sanctioned by the Income Tax Authorities and a reasonable depreciation upon buildings; C. — That with a view to further efficiency and economy in manufacturing processes by the use of the cheapest possible supply of electricity, the establishment of Central Power Stations upon a large scale in the industrial districts should be encouraged; and that for this purpose advantage should be taken of water power wherever it exists. IV. ORGANISATION OF PRODUCTION (pp. 112-114). ■ A. — That each of the textile industries should form a Central Association, representative not of sectional intei-ests but of the industry as a whole, to deal with all matters of common interest and to be an authoritative and accredited medium of communication which the Govern- ment Departments should consult upon all questions connected with the industry; B. — That in view of the modern tendency towards larger units of production, and of the economic waste and inefficiency in competition which arise in the smaller textile industries from a multiplicity of small concerns, each making a great variety of articles upon a small scale and all making the same articles, with separate buying, producing, and selling organisations, we recommend that attempts should be made where possible, either by amalgamation or by means of working agreements, to enlarge the units of production and thereby to avoid the duplication of effort, which is incidental to highly diversified production on a small scale; C. — That manufacturers and merchants should co-operate with the Schools and Universities with a view to the entry into commerce and industry of a larger number of highly-educated young men, and that the training of such yoimg men, both before and after their entry upon a commercial career should be carefully directed towards increasing their efficiency for organisation and administration. V. EFFICIENCY OF LABOUR (pp. 114-115). That in view of the vital importance of the largest possible output to repair the destruction of wealth during the war, and to meet the intense competition for the world's trade, which will follow the return of peace, every effort should be made both by H.M. Government and by Asso- ciations of Employers and Employed to bring about a complete understanding between labour and capital on the liasis of mutual interest, confidence, and good feeling; since the best results cannot be expected unless the workers feel that they receive ungrudginsly the full reward of their more strenuous labour, and employers feel that honest and willing work is given for adequate pay; Two elements of the highest importance in our after-the-war conduct of British producing industries are : — (a) That emiiloyers should put all their brains and energies, as well as their capital, into their businesses with renewed vigour and determination. (b) That workers should rid their minds of the fatal and paralysing idea of restriction of output. Efficiency of management and efficiency of labour must go hand in hand. VI. TECHNICAL AND ART EDUCATION (pp. 115-116). A. — That our system of technical and art education should be thoroughly overhauled in order to raise the standard of instruction and enable the schools to supply the textile industries with more highly trained workers and managers; B. — That steps should be taken to ensure the ]irovision of more highly trained teachers with more liberal emolumonts and im]iroved status; C. — That the managing bodies of technical and art schools should always include a con- siderable proportion of members connected with the industries which arc taught in the schools; D. — That employers should afford opportunities to promising young people to attend the courses at technical schools durinor the ordinary workintr hours without deductions of pay; E. — That in addition to local schools, a central institute should be established in connection with each of the textile industries, fully oqiiipped with niodorn macliinory and with the appliances necessary for testing materials and investigating processes, and capable of providing opportunities for the most complete study of manufacture and design. 127 VII. SCIENTIFIC AND TECHNICAL RESEARCH (pp. 116-117). A. — That there should be continiious and systematic research into the raw materials and various manufacturing processes of the several textile industries in order to stimulate their development and prosperity; B. — That scientific and industrial research for the benefit of an industry should be directed by the industry itself, aided by funds from the Government, and that with ithis object the great Trade Associations we have suggested, or Trade Associations for research on the lines con- templated by the Department of Scientific and Industrial Research, should be established for the several branches of the Textile Industry. VIII. MARKETING (pp. 117-118). A. — That every efFort should be made by British merchants in the open markets of the world such as China, Central and South America, with the aid and co-operation of our manu- facturers and exporters, to secure the distribution of British goods formerly handled by German houses ; B. — That with a view to the reduction of the expenses of distribution incurred by individual firms in overseas markets, efforts should be made in the direction of combined representation or co-operative- selling ; C. — That for the better equipment of British representatives in foreign markets there should be a more systematic and practical teaching of foreign languages in this country. IX. FINANCIAL FACILITIES (page 118). That while in the main the textile trades receive adequate facilities from existing Banks and Credit Institutions so long as the present system of short terms of credit is maintained, we con- sider that in those markets in which extended credit is an established practice means must be found, either by our existing Banks or otherwise, to provide facilities to British exporters and merchants at least eqiial to those afforded to German merchants. X. TRANSPORT (pp. 118-119). That in any increased facilities for transport by land or sea which may be afforded after the war for the purpose of developing British trade, our textile industries should receive their due share. XI. THE METRIC SYSTEM (page 119). While agreeing that a universal system of weights and measures woiild be a source of great convenience and would facilitate international trade, we are not able to recommend the compul- sory adoption of the metric system at the present time, so far as the textile trades are concerned, for reasons which we have fully set out in a previoiis part of this Report. In our opinion it could only be adopted at any time by this country with the full concurrence of the British Empire and the United States of America. Meanwhile we recommend the simplification of our present weights and measures, and the decimalisation of our money. XII. COMMERCIAL INTELLIGENCE SERVICES AT HOME (page 120). That the scope of the Department of Commercial Intelligence be greatly extended and that it should act in close co-operation with the great Trade Associations already referred to, that this department should not only collect and disseminate information but should study and interpret it, for instance it should watch the currents and general trend of overseas trufle and should consult with the representatives of industry as to the practical bearing of these movements upon our position in international competition. We consider that by the co-operation of an adequately equipped and manned State organization with the great Trade Associations, a real and useful " thinking department" can be created with great advantage to the whole range of British industries. XIII. COMMERCIAL INTELLIGENCE SERVICES ABROAD (page 121). That the system of appointing Commercial Attaches to our Embassies abroad should be extended and that one or more should be appointed to every foreign country with adequate assistants and staffs. Their functions should be purely commercial but they should have a proper and recognised diplomatic status. As members of the Ambassador's or Minister's staff, they would be his advisers in commercial matters. They shoiild be authorised to make use of selected Consuls as their correspondents, and it would be their dutj^ to see that those Consuls were trained to supply them with the kind of practical information required for the maintenance and extension of British trade. Although appointed by the Foreign Office, their selection should be entrusted to a special Board upon which the Foreign OtficF. '■he Board of Trade, and the Commercial Community should be represented. Their instructions should be drafted by the Department of Commercial IntelJ^gence in agreement with the Foreign Office, and all their commuuications and reports shouhf be forwarded to the Board of Trade for the use of the Commercial Intelligence Department immediately upon their receipt. 128 XIV. TARIFFS (pp. 122-124). A. — Tliat when tlie settlemeut of the general fiscal policy of the TJniterl Kingdom comes up .or consideration and decision, due attention should be given tn the differing wishes and re- quirements of the textile trades and to the facts in connection with internntional competition upon which they are based, as set out in Sections 2-8 of this Eoport ; B.^Tliat H.il. Government should as soon as possible institute an expert examination of I he tariffs of the Powers signatory to the Paris Resolutions, and of any others of our Allies who may desire an economic rapprochement with the British Empire, with a view to negotiations for reductions in our favour of such of their duties upon textiles (yarns and goods) as affect our trade. XV. TREATMENT OF ENEMY TRADE AFTER THE WAR (page 124). (1) Inteeim Treatment. • That for a period of not less than one year after the conclusion of peace the import and export of textiles and the raw and partly manufactured materials of textiles between the British Empire and Enemy States should be prohibited except imder licence. (2) Subsequent Treatment. That imports from Germany and Austria-Hungary should be subjected for such a period as may be determined by considerations of national policy to a special tariff regime ei1,]!er by the establishment of duties for the purpose or by a surtax upon any duties which may be levied upon imports from other sources. XVI. ANTI-DUMPING LEGISLATION (page 124). That anti-dumping legislation be enacted in this country upon the lines of that of the United States of America. XVII. PREFERENTIAL TRADE WITHIN THE EMPIRE (page 124). That if duties are levied upon imports entering the United Kingdom, preference should be accorded to the products and manufactures of the British Overseas Dominions. XVIII. REMOVAL OF WAR TRADE RESTRICTIONS (page 113). That State control of and restrictions upon industries arising out of war conditions, which have been recognised and accepted as necessary during the war, biit which we consider are detrimental under normal conditions, shoiild be removed as soon as possible aftei' the conclusion of peace, regard being had to the circumstances of each particular case. In conclusion, we wish to say how much we are indebted to our able Secretary, Mr. Thomas M. Ainscough for the invaluable assistance he has rendered us at every stage of our Enquiry. His wide knowledge of the Textile Trades and his special acquaintance with Eastern markets have been of great service to us throughout oiir investigations and in the preparation of our Report. Our thanks are also due to our Assistant-Secretary, Mr. W. Graham, for his loyal and most helpful co-operation with Mr. Ainscough, ami to Mr. T. G. Gibson, of the (,'ommercial Depart- ment of the Board of Trade, for the ability and care with which he has prepared the many statistical tables embodied in our Report. We have the honour to be. Sir. Yniii (ibcil lent Servants, HENRY BIRCHENOUGH (Chairman), F. FORBES ADAM, JAS. BEATTIE, T. CRAKi-BEOWN, EDWARD B. FIELDEN, JAMES W. HILL, J. H. KAYE, EDWARD H. LANGDON, JOHN Vv'. MrCONNEL, II. NORMAN RAE, FREDERICK H. SMITH, C. THOMAS SMITH, THEO. C. TAYLOR, EGBERT THOMPSON. FRANK WARNEE. Thomas M. Ainscough (Secretary), W. Graham (Assistant vSscratary), 22nd May, 1917. 129 RESERVATIONS BY Mr. JOHN W. McCONNEL. While agreeing generally with the report, I do so with some reservations. 1. The Committee was asked to report on a scattered, widely spread group of Trades which are in many respects disconnected from each other. It also thought it to be its duty to inquire into practically the whole range of matters affecting these Trades. As a result of this the inquiry has seemed to me inadequate in regard to many subjects, and there are several points of detail in regard to which I should have wished for more information. 2. In particular this may be said of the question of Dyes, referred to in Section 9. The Committee was informed early in its inquiry that the question of dyes was in other hands, and no evidence was taken except from iisers of dyestuifs. Their evidence established the greatness cf the shortage and the urgency of the question, but hardly dealt at all with the qiiestion of remedies. Such little information as I have obtained privately does not coincide with the views expressed in Section 9, and I am of opinion that a strong expert Committee of makers and users ought to be api^ointed and to be kept in existence at any rate for some time after the Conclusion of Peace. 3. Again, in Section 10, as regards the relations between Capital and Labour, the Com- mittee records the fact that its only evidence came from one side. Under these circumstances I consider it would have been judicious to have refrained from all discussion of the questions involved. I agree with the general opinion of the witnesses that British labour in the Textile Trades is highlj- efficient. I also concur in the recommendations of the Committee that every effort should be made both by H.M. 'Government and by Associations of Employers and Employed to bring about a complete understanding between Capital and Labour on the basis of mutual interest, confidence and good feeling. 4. In Section 12 there are three recommendations in which I cannot concur. Recommendation 1. — Jute. I disagree with the definite recommendation of an export duty on shipments of raw jute from India. The Committee was not in a position to take evidence as to the needs and wishes of either ]5roducers or consumers of jute in India. It was, however, stated that the position of the producers was far from prosjierous, and that, on the other hand, the Indian manufacturers were making very large profits. Under these circumstances further inquiry seems necessary before any recommendation can be made. 5. In regard to the treatment of Enemy Trade after the war, I disagree with both parts of Recommendation 16. Part I. — Interim T reatment. In my oj)inion the Committee would have' been better advised if it had consiilered the very important question of the steps to be taken immediately after the conclusion of jjeace, directly from the jioint of view of the trades entrusted to it for inquiry. Many matters have been brought to the notice of the Committee in regard to which special action will be necessary in the interests of the Textile Trades during the first months of peace. These will not be covered by simply controlling the import and export of textiles between the British Empire and Enemy States. There is now every indication that the world's supplies of cotton will for some time be insufficient for the world's requirements. This is largely d\ie to the war, and it is therefore right that Germany and Austria should have their supplies temporarily curtailed. This is not solely a matter for the British Government; it is one in which the co-operation of the United States will be required. Again, there are the supplies of certain dyes and knitting-needles, the making of which it is understood cannot be entirely achieved within Great Britain for some years after peace begins. If it is in the power of the Allies to do so, it will be necessary to insert conditions in the terms of peace to prevent supplies of these things being withheld by the German Government. There are probably many other matters requiring special attention in connection with those articles which formed a large part in the pre-war interchange of trade in textiles between this country and Germany. In my opinion the Government should set up small committees of each textile trade to be ready to advise on technical matters diiring the peace negotiations. Part II. — Suhseqvent Treatment. — It appears to me to be impossible to give any useful advice as to the subsequent treatment of Enemy countries until the general conditions under which peace is made are known. If the result of the war is indefinite it may be necessary to protect the industries of this country against German aggression in the future time of peace. But a real peace is the greatest need of the British Textile Industries, and if a complete victory is eventually obtained by the Allies a system of differential duties specially detrimental to our present enemies will not, in my opinion, be beneficial to our textile trades. With these reservations, I have pleasure in signing the report. JOHN W. McCONNEL. n'.i78 130 ilESERVATlUNS BY Me. THEUDOEE C. TAYLOR. Phoposed Expokt Duty on Raw Jute leaving India. On paj^es 39 and 125, the Committee recommend that an export duly should he levied upon raw jute leaving India, to be subject to a system oi rebates according to the country at which it arrives. We have had evidence showing that the spot cost to the Indian peasant farmer of the production of raw jute is about i/lO per ton. An export duty of £5 per ton is suggested. To place so heavy a tax upon the ])roduct of the Indian peasant, without his consent, would seem to me both economically unjust and objectionable on grounds affecting the relationship of Great Britain and India. The chief object of such a duty clearly would not be the raising of Indian revenue, because it is at the same time proposed that the export duty paid on raw jute leaving India should be wholly repaid on its arrival in Great Britain, in part or wholly repaid upon raw jute arriving in Allied countries, and in part repaid upon raw jute arriving in certain neutral countries. The compli- cations of such a system would be endless. Every form of the policy of varied discriminations in our trading with various foreign nations must be difficiilt. This one would have the additional drawback of requiring the perpetuation, not only as between present enemies and ourselves, but as between those enemies and our present allies and neutrals, of a policy which these allies and neutrals might soon deem to be irksome and inquisitive. But, granting that this difficulty might be overcome, the proposal to place an exjjort duty on the produce of the Indian peasant for the benefit of British or British and Allied jute manu- facturers seems open to grave objection. It would seem to be both unjust to the Indian producer and, as regards our relationship with India, highly impolitic. What would be thought of a proposal, emanating from India, that we should tax the export of any British product going to countries outside the British Empire, so that India might buy from us at a lower price than foreign customers could? It is claimed that the Indian production of jute is a "monopoly immune from attack.'" I do not consider that proved. It is further held that " the effect of the proposed duty would be a negligible factor in limiting demand." If that be so, why should the export duty, once levied by the Indian Government, not be retained in its exchequer? If an export duty on raw jute would be a legitimate source of Indian revenue, why should India be called upon to return any part of that revenue by way of bonus to the jute using industries of ourselves and our allies? On the grounds, therefore, that to levy differential export duties on raw jute leaving India, among other objections would seem to me unfair to the Indian producer and impolitic as respects our relationship with India, I am unable to concur in the recommendation that they should be imposed. Empire Conteol of Textile Raw Materials. Regarding the recommendation under this heading on pages 121, 125 and elsewhere in our Report, that the disjiosal of British Empire resources in wool, jute and cotton should be used for purposes of negotiation with other countries to secure certain advantages, I have grave doubts as to the feasibility of such schemes. Tariffs. As the insertion on pages 122-124 of a recajiitulation of the demands of certain textile trades for tariff protection might be misunderstood as an endorsement of those demands by the Committee, I desire to make it clear that it is there as a record only of the opinions of witnesses and not as a part of the recommendations of the Committee. Preferential Trade within the Empire. In agreeing to the principle of Imperial preference, " if duties are levied upon imports entering the United Kingdom," I do not wish to be understood as favouring the creation of a general tariif on goods entering the United Kingdom, including duties on food and raw materials, whether from the Dominions or elsewhere. Subject to the above-named reservations 1 have pleasure in signing the Report. THEO. C. TAYLOR. Printed under tlic authority of His Majesty's Stationery Office By DARLING a.nu SON, LmrrEo, Bacon Street, E.2. TRADE OF CANADA, 1916. (ieneral Note; Economic Conditions; United Kingdom Trade with the Dominion; Hints to Tradera with the Dominion; Reports from Imperial Trade Correspondents; Report on Trade of Newfoundland. Appen- dices : — Value and Dertailed Statement of the Value of Imports for Consumption of Selected Articles in which the United Kingdom Manufact\irers compete with those of Foreign Countries, for the years 1916 and 1916 compared, together with the percentage proportion of such Imports from the United Kingdom as well as the gross amount of Imports during those years. [Cd. 8679] of Session 1917-18. Price M., post free 4d, IMPORT TRADE OF AUSTRALIA. Repoet on the Position of, in Jult, 1917. General Conditions : — Drought ; Expenditure of Loan Money ; Harvest Conditions ; the Luxuries Board ; Shipping; Shipbuilding; Difficulties of Importers; Local Development. Trade with Principal Countries: CJomparative Statements of Trade; Trade at Certain Poi-ts; Non-competitive Imports; Trade with Parts of the British Empire, other than with the United Kingdom ; Trade with the United States, with Japan, and with Allied Countries other than the United States and Japan. Trade in Principal Articles: — Metals and Machinery; Apparel and Soft Goods; Japanese Textile Trade; Boots and Shoes; Vapei and Stationery; Earthenware, Cement, China, and Glass; Chemicals and Drugs; Motor Cars; Musical Instruments. The Future Outlook. Methods of Distribution. Demand for Engineering Supplies. Co-operative Selling Organisations. Local Industries: — Growth of Local Manufactures; Branch Factories [Cd. 8841] of Session 1917-18. Price 3d., post free id. TRADE OF NEW ZEALAND, 1916. General Conditions ; Import Trade ; Exports ; Shipping ; New Zealand Market ; Trading Methods ; Public Works; Legislation; Miscellaneous. Appendix: — -Trade by Countries (by Classes). [Cd. 8686] of Session 1917-18. Price Qd., post free 7id. TRADE OF SOUTH AFRICA, 1915 and 1916. General Note; General Remai-ks; Local Industrial Conditions; Necessity for Capital Outlay; Industrial Bank, &c. ; Labour; Agriculture; Fruit Growing; Ostrich Breeding; Wool and Meat; Dairy Produce; Eggs; Miuing; Public Works; Railways and Harbours; Irrigation; Character of Import Trade, Quality, &c. ; Effect of the War on Imports; Foreign, American, and Japanese Competition; Advice to British Firms; Methods of Business; Wholesale and Retail Trading; Country Storekeepers; Urban Stores; Native Trade; Agency Arrangements, &c. ; Legislation. Appendices: — Reports of Imperial Trade Correspondents; Report on Mining Conditions in the Transvaal. [Cd. 8614] of Session 1917-18. Price M., post free 4d. TRADING WITH THE ENEMY. The Te.4ding with the Enemy (Statutoet List) PEOCLAiiATiON, together with the Consolidated Statutory List of Persons and Firms in Countries, other than Enemy Countries, with whom Persons and Firms in the United Kingdom are prohibited from trading. With Notes for British Merchants engaged in Foreign Trade. Complete to April 5, 1918. No. 51a. Price Qd., post free 8d. BRITISH TRADE AFTER THE WAR. Repoet with respect to Measures for securing the Position, after the War, of certain branches of British Industry. [Cd. 8181] of Session 1916. Price 2id., post free did. Stjmmaeies of the Evidence Taken. [Cd. 8275] of Session 1916. Price U., post free dd. STATISTICAL ABSTRACTS. The United Kingdom in each of the last Fifteen Yeaes feom 1901 to 1915. 63ed Numbee. Imperial Revenue and Expenditure; Income Tax; Estate Duties; Inhabited House Duty; Local Taxa- tion; Excise; Imports and Exports; Shipping; Agriculture; Sea Fisheries; Railways; Tramways; Mines; Joint Stock Companies; Coinage; Savings Banks; Bankers' Clearing Houses; Accumulative Government Stock; Building Societies; Industrial and Provident Societies; Life Assurance and Annuities; Bank of England; Post Office; Patents, Designs and Trade Marks; Population; Migration; Police; Army; Education; Paupers ; Crime ; Insolvency ; Wrecks ; &c. [Cd. 8448] of Session 1917-18. Price l.«. 9^., post free 2s. 2d. British Self-Governing Dominions, Colonies, Possessions and Protectorates IN EACH YeAE FEOM 1900 TO 1914. 52nd NtlMBEE. Area and Population ; Births, Deaths, and Marriages ; Immigration and Emigration ; Revenue and Ex- penditure; Expenditure from Loans on Public Works; Customs Revenue; Public Debt; Shipping; Imports and Exports; Banking; Savings Banks; Postal Statistics; Coinage; Railways; Telegraphs and Telephones; Crown Lands; Agriculture; Tea; Wheat; Sugar; Cotton; Rubber; Tobacco; Wool; Live Stock; Jute; Mineral Statistics ; Petroleum : Customs Tariffs. Appendices. Index. [Cd. 8329] of Session 1916. Price Is. lid., post free 2s. id. Note —For detailed statistics, sfe " Statistical Tables relating to British Self-Governing Bominions, Colonies, Possessions, and Protectorates," the latest published being Part xxxvii., 1912 [Cd. 76C7] of Session 1U14-16. Price 6s. llrf., post free 7s. 6rf. BOARD OF TRADE JOURNAL. The Boaed of Te.\de Jouenal is the principal medium through which intelligence intended for general information is conveyed to the public. It includes articles dealing generally with all the activities of the Board of Trade as well as those of the new joint Depai-tment of the Foreign Office and Board of Trade— the Depart- ment of Overseas Trade (Development and Intelligence). It also contains Notes on Trade, Government notices affecting Trade, Customs Regulations and Tariff Changes, reports on trade conditions and openings for British Trade, and other items of interest to Traders. Price 6d. weekly, post free 6^^. ; or, post free per annum, 27.?. Qd. in the United Kingdom, and 31^. Qd. Overseas. DEPARTMENTAL COMMITTEE ON THE TEXTILE TRADES *. • V . 1 REPORT OF TIIK DEPARTxMENTAL COMMITTEE APPOINTED BY THE BOARD OF TRADE TO CONSIDER THE POSITION OF THE TEXTILE TRADES AFTER THE AVAR. Presented to Parliament bv Commanil of His IDajestv. LONDON: PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE. To be purchased through any Bookseller or directly from H.M. STATIONERY OFFTCJ^ at the following: addresses: Imperial House, Kingsway, Loxdo.v, W.G.2, ami 28, Abingiiox Stiuckt, London, S.W.I; 37, Petee Street, MANCHBSTEii.- 1, St. Andhew's Crescent, Cardiff; 23. Forth; Street, EmNiit'RGH; or from E. PONSONBT, I/rn., IIR, Graeton" Street. Dfulin. 1918. [Cd. 9070.] Price U. ?>d. Net. I )h UIUI4 n 390028 UNIVERSITY OF CAUFORNIA LIBRARY RETURN TO the circulation desl< of any University of California Library or to the NORTHERN REGIONAL LIBRARY FACILITY BIdg. 400, Richmond Field Station University of California Richmond, CA 94804-4698 ALL BOOKS MAY BE RECALLED AFTER 7 DAYS 2-month loans may be renewed by calling (510)642-6753 1-year loans may be recharged by bringing books to NRLF Renewals and recharges may be made 4 days prior to due date DUE AS STAMPED BELOW jm. 3 1.996