Читать книгу From Empire to Europe: The Decline and Revival of British Industry Since the Second World War - Geoffrey Owen - Страница 21

The cotton industry came through the war in good condition, despite some reduction in output as a result of restricted imports of raw cotton. The expectation that profits would continue at a high level prompted a wave of financial speculation in the industry. Some mills took on large bank overdrafts, while others were bought by financial syndicates in the belief that they could be refloated on the stock exchange at a higher price. Hence the industry was poorly prepared for the downturn in trade which began in 1920. Purchasing power in the primary producing countries that absorbed the bulk of the industry’s exports was affected by the low level of commodity prices, and there was a continuing trend towards import substitution. In India, for example, indigenous production had increased during the war, and Indian mill owners were clamouring for more protection. The 11 per cent tariff imposed in 1921, up from 3.5 per cent before the war, was nominally a revenue-raising measure, but it was greatly resented in Lancashire, and the Manchester Chamber of Commerce lobbied hard to get it reduced.⁸ But there was another, more ominous development which affected Lancashire’s share of Asian markets in the inter-war years – competition from Japan.

Japanese entrepreneurs had bought their first spinning machines from Platt Brothers in the 1860s, and the cotton textile industry played a similar role in Japan’s industrial development as it had in Britain a hundred years earlier. Exports, principally to China and other neighbouring countries, rose strongly after the turn of the century. As production increased, the larger firms installed ring spindles and automatic looms, some of which were designed and built in Japan. The industry was less fragmented than in Lancashire, and there was a greater degree of co-operation across its various sectors. Overseas marketing was handled not by a proliferation of export merchants as in Britain, but by a handful of powerful trading companies.⁹ By the mid-1930s Japan had overtaken Britain as the leading exporter of cotton textiles.

The response in Lancashire to falling demand and increasing competition had two main strands. One was to reduce capacity through rationalisation. The biggest merger of the inter-war years was the formation of Lancashire Cotton Corporation in 1929; it absorbed 96 firms and 109 mills, accounting for about a fifth of the industry’s spinning capacity. The Bank of England took the initiative in getting this venture off the ground. The Governor, Montagu Norman, was concerned about the stability of the banks which had lent heavily to the Lancashire mills in the early post-war years.¹⁰ The new company had a shaky start, but when Frank Platt, an exceptionally able manager, was installed as managing director in 1932, rationalisation proceeded more swiftly, and about half the spindles which had been brought under its control were scrapped.¹¹ Platt was an enthusiastic proponent of reorganisation, and he helped to promote the Cotton Spinning Industry Act of 1936, which gave statutory backing to an industry-wide scrapping scheme, financed by a levy on the manufacturers.

The other strand was to seek government help in preserving the industry’s export markets. Lancashire’s attachment to free trade was discarded with remarkable speed in the inter-war years.¹² The cotton industry welcomed the imposition of the tariff in 1932, not only because it protected the home market, but also because it provided a bargaining weapon in negotiations with overseas governments. Japan was the principal target, and the Manchester Chamber of Commerce used its influence in Whitehall to limit Japanese exports. Because of the industry’s importance as employer and exporter – and the presence of sixty Lancashire MPs in the House of Commons – ‘King Cotton’ carried considerable political weight, and the government agreed in 1934 to impose quotas on Japanese exports to the colonies.¹³

These were defensive reactions to the crisis. Were there other steps which Lancashire could have taken to improve its competitive position? Some historians believe that modernisation was held back by the inability of employers and trade unions to break away from a labour-intensive production system which had become entrenched in the years of prosperity.¹⁴ What was needed, according to this view, was a shift to high-throughput technologies, based on ring spindles and automatic looms. This would have required changes in the structure of the industry – a move from small, specialised firms to large, vertically integrated companies – and changes in the way labour was managed. Instead, employers adopted the simpler strategy of lowering the costs of operating their existing machines, by using inferior grades of cotton and by intensifying the pace of work. There were several serious strikes in Lancashire between 1929 and 1932 over these issues.

Whether the industry would have done better in the inter-war years if it had reorganised itself on American lines is far from clear.¹⁵ There was a great deal of debate inside and outside Lancashire at the time about what structural changes were needed to meet Japanese competition. A report published in 1934 by Political and Economic Planning (PEP), an independent research organisation, called for greater co-operation between the different sections of the industry and for the creation of new industry-wide associations to co-ordinate the activities of member firms.¹⁶ The separation of manufacturing from marketing was regarded as particularly harmful; the interests of the manufacturer, according to the PEP report, had too often been sacrificed to those of the merchant. The authors argued that more horizontal amalgamations were desirable in order to reduce destructive price competition, but they rejected US-style vertical integration, on the grounds that such a structure would limit the industry’s ability to produce the variety of yarns and fabrics which its customers needed. The way forward, they suggested, was a greater emphasis on high-quality products which would be less vulnerable to Japanese competition.

The industry’s reaction to the PEP report, and to prescriptions offered by other bodies, was lukewarm. Most firms preferred to muddle their way through the crisis in the hope of better times. There was, indeed, no easy solution to Lancashire’s problems. The industry’s extreme dependence on exports made it exceptionally vulnerable to the collapse of world trade and to the rise of new competitors. The two other principal sectors of the British textile industry – wool textiles, based in Yorkshire, and hosiery and knitwear, based mainly in the East Midlands and Scotland – were in a more favourable situation. The wool textile manufacturers had never expanded to the same extent as the cotton mills, and although they were badly affected by the depression in world trade, employment fell by only 11 per cent between 1912 and 1937, compared to 42 per cent in cotton. The growth of hosiery and knitwear in the inter-war years was mainly geared to the home market. A useful boost to trade came from the wider use of rayon in women’s stockings, and some manufacturers began to develop their own brands. Another development which was to have important consequences for the textile industry as a whole was the emergence of multiple retailers, led by Marks & Spencer, as major customers for the hosiery and knitwear firms.

Lancashire cotton was the unsolved problem, and it was one which, because of the industry’s size and economic importance, governments could not ignore. The first step towards intervention was the Cotton Spinning Industry Act of 1936, followed by the Cotton Industry (Reorganisation) Act of 1939, which provided for a statutory Cotton Board to fix minimum prices and to set production quotas for individual firms. Although this second Act was suspended after the outbreak of war, a Cotton Board made up of employer and employee representatives was established in 1940 to act as a co-ordinating body on export policy and other matters, and to assist the government in dealing with wartime emergency measures.¹⁷ As a result of the transfer of labour to the armed forces, some 40 per cent of the industry’s capacity was temporarily closed, and the mills which remained in operation concentrated on military contracts and the production of yarns and fabrics under the ‘utility clothing’ scheme.

The Cotton Board was also involved in planning for post-war reconstruction. In 1943 it produced a report for the Board of Trade which suggested, among other things, that the necessary re-equipment of the industry would depend on stable prices, and this would require a price maintenance scheme of the sort envisaged in the 1939 Act. Another view, pressed by Frank Platt following a mission which he led to the US in 1944, was that the industry should be reorganised along American lines, with more standardisation, more vertical integration and more investment in new equipment.¹⁸ No consensus on these issues had been reached by the end of the war.