Problems of Empire/Tariff Reform and the Cotton Industry

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A Letter to the 'Manchester Guardian,' July 25th, 1903.

Sir,—I ask your permission to make a few observations on the resolution passed yesterday at the Joint Conference of the Cotton Employers' Parliamentary Association and the United Textile Factory Operatives' Association. The Conference was 'convinced that the great cotton industry of the United Kingdom owes its pre-eminence to and can only be maintained by the policy of Free Trade,' and pledged itself 'to oppose any proposals which, by imposing taxes on food or raw materials, and so raising the cost of production and living, will cripple it in its severe struggle to uphold its position in foreign markets.'

Depression in the cotton trade. The present depression in the cotton trade, and the fact that the mills have had to work short time, is mainly due to a shortage in the supply of raw cotton, to some extent perhaps to speculation. It has been foreseen for some time that the development of the cotton manufacturing industry in the immediate neighbourhood of the cotton plantations of the Southern States of the Union, where an unlimited supply of black labour is available, might produce the conditions with which we are now face to face. If American cotton mills gradually absorb, as I believe they will, the whole of the cotton produced in the United States, the British cotton trade may be ruined by the loss of the main source of supply of its raw material.

The considerations which I have set forth above lead, I submit, to the conclusion that a fixed adherence to our existing fiscal policy may be attended with the most disastrous results to the cotton trade. They have, at any rate, had a powerful influence in convincing me that the policy outlined by Mr. Chamberlain deserves the most serious consideration, and that the Tariff Reform League, inaugurated yesterday for the development and defence of the industrial interests of the British Empire, is deserving of support.

Cotton growing within the Empire should be stimulated.  Those who bear in mind a particular passage in Mr. Chamberlain's speech in the House of Commons on May 28th and ignore another which follows are not justified in assuming that a tax on raw materials is a part of Mr. Chamberlain's policy. A tax on raw materials which would cripple any industry is totally opposed to its spirit. The cotton trade has nothing to fear on these grounds. On the other hand, it is of vital importance to the future of the industry to ensure an adequate supply of raw cotton. Tentative steps have already been taken to develop new sources of supply in West Africa. But much more vigorous action is required to meet the necessities of the case. Cotton can be grown in other parts of Africa, in India, in the West Indies, and in Northern Australia, and the whole of our supplies of raw cotton might in time be drawn from within the Empire. A bounty on cotton grown in the British Empire and imported into the United Kingdom would further this object. All bounties are open to grave objection, but a bounty such as I suggest could be justified on the ground that the cotton industry accounts for over one-fourth of our export trade, that it gives employment to a large proportion of our population, and that its continued existence is of importance not only to Lancashire, but to the nation.

Dependence of Great Britain on foreign foodstuffs. But the cotton trade is not the only industry of national importance, and cotton is not the only article for which we are too dependent on the United States, The decline in agriculture and in our agricultural population is at least as important from the national point of view, while the extent to which we draw our food supplies from the United States constitutes a national danger. Import duties on corn and other agricultural produce, with a substantial preference in favour of the Colonies, would tend to benefit the British agriculturist, and to make the Empire self-supporting as regards its food supply; while, judging from the history of prices during the past century, it is quite possible that the imposition of moderate duties might not lead to a rise in the price of food.

Consumer versus producer. The industrial progress of Germany and the Consumer United States during the last ten years at any rate producer. shows that protective tariffs are no hindrance to cheapness of production. For the past sixty years the fiscal policy of this country has been governed by the interests of the consumer. No other important country has followed our example. It is therefore possible that our existing policy may be wrong, and that a fiscal policy which would pay some regard to the interests of the producer while not ignoring those of the consumer may be worthy of adoption. In any scheme of tariff reform the cotton industry is entitled to full consideration, but those engaged in it must remember that there are other industries of great, if not of equal, national importance.

I am, &c.,

July 22nd.