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Rh and some exclusively to foreign trade, but there is a large class with what may be called a margin of alternation, which serves to redress the balance as business in one or other of the sections is good or bad.

Certain kinds of light goods made for India and other Eastern markets are not used in the home trade, and the typical Eastern staples are not generally used in their particular “sizings,” but with these exceptions and various specialities almost every kind of cotton cloth is used to some extent in Great Britain. Grey calicoes for home use, except the lowest kinds, are comparatively pure, and of late years the heavy fillings which used to be common in bleached goods have become discredited. The housewife long persisted in deceiving herself by purchasing filled calicoes, and the movement in favour of purer goods owes a good deal, strangely enough, to the increase in the making-up trade and the consequent inconveniences to workers of sewing machines, whose needles were constantly broken by hard filled calicoes.

This development of the making-up trade has become an important element in the home trade, and it has greatly reduced the retail sale of piece-goods. The purchase of ready-made shirts, underclothing, &c., corresponds to a change in the habits of the people. The factories which have been erected in the north of Ireland, on the outskirts of London and elsewhere turn out millions of garments that would, under the old conditions, have been made at home. It is not necessary here to balance the advantages and disadvantages of the two systems, and it must not be supposed that made-up cotton garments are necessarily cheap and inefficient.

The chief distributing centre of cotton made-up goods is London, though a considerable trade is done through wholesale houses in Manchester and elsewhere. Large warehouses in the city of London carry on the trade and frequently supply Lancashire with her own goods. Of course the partial loss of the piece-goods trade by the shops is not a loss in aggregate trade, as they are the ultimate distributors of the made-up garments, which are probably at least as profitable to retail as calico or flannelette sold in lengths.

The normal course of home trade piece-goods is from manufacturer to bleacher, dyer, printer or finisher, either on account of a merchant to whom the goods are sold or on the manufacturer’s own account. By far the majority of Lancashire manufacturers sell their goods as they come from the loom, or, as it is called, in the “grey state,” but an increasing number now cultivate the trade in finished goods. Usually the manufacturer sells either directly or through an agent to a merchant who sells again to the shopkeeper, but the last twenty or thirty years have seen a considerable development of more direct dealing. Some manufacturers now go to the shopkeeper, and this has made it difficult for the merchant with a limited capital and therefore a limited assortment to survive. The great general houses such as Rylands’s, Philips’s and Watt’s in Manchester, and Cook’s and Pawson’s in London, some of which are manufacturers to a minor degree, continue to flourish because under one roof they can supply all that the draper requires, and so enable him to economize in the time spent in buying and to save himself the trouble of attending to many accounts. Some general merchants, indeed, supply what are practically “tied houses,” which give all their trade in return for pecuniary assistance or special terms.

The tendency to eliminate the middleman has not only brought a good many manufacturers into direct relation with the shopkeeper, but in some exceptional cases the manufacturer, adopting some system of broadcast advertisement and postal delivery, has dealt with the consumer. Naturally, the merchant resents any developments which exclude him, and some mild forms of boycott have occasionally been instituted. In the United States there has been an arduous struggle over this question, and combinations of merchants have sometimes compelled favourable terms. In England, though the merchant has maintained a great part of the trade with shopkeepers, the developing trade with makers of shirts, underclothing, &c., is mainly done by the manufacturers directly, and perhaps the simplification of relations by direct dealing in the cotton trade has now reached a point of fairly stable compromise. The tendency to direct trading is naturally controlled by the exigencies of capital. Those manufacturers who act as merchants aim to retain the merchant profit and must employ a merchant capital in stocks. There has been a tendency, indeed, to make the manufacturer the stock-keeper, and some merchants do little more than pass on the goods a stage after taking toll. The great improvement in trade during 1905 and 1906 checked this tendency, and probably the manufacturing extensions owed something to the capital set free by the reductions of stocks.

It must be noted, however, that while most of the spinning concerns are worked by limited companies or individuals with a considerable capital, a good many small manufacturers exist who have little capital and are practically financed by their agents or customers. This is so in both the export and home trades.

The home trade merchant or merchant-manufacturer works largely through agents and travellers, and though railway facilities continue to improve, some shopkeepers rarely visit their markets. The difficulty that is naturally experienced by a traveller in finding sufficient support on a sparsely populated “ground” has brought into vogue the traveller on commission who represents several firms. The traveller with salary and allowances for expenses survives, but the quickening induced by an interest in the amount of sales has caused many firms to adopt the principle of commission, which may, however, be an addition to a minimum salary. Of course, such travellers are not peculiar to the cotton trade, but cotton goods in various forms are an important factor in the home trade.

The profits of manufacturers, merchants and shopkeepers are commonly very much less on the lower classes of cotton goods than on the higher ones. Thus while there may be a difference of 1d. per yd. between the qualities on a manufacturer’s list, the difference in cost may not be more than a farthing; and, again, while the shopkeeper sometimes pays 2½d. or even 2 5&frasl;8 d. per yd. for a calico to retail at 2¾d., his next selling price may be 3¾d. for one which costs him only 2¾d. or 3d. per yd. It appears, therefore, that if the poorer classes of the community have the discretion to avoid the lowest qualities they may obtain very good value in serviceable goods. In the matter of profits, however, there is a good deal of irregularity.

The Manchester Royal Exchange.—There are not many cotton mills or weaving sheds in Manchester, which is, however, the great distributive centre, and its Exchange is the meeting-place of most classes of buyers and sellers in the cotton trade and various trades allied to it. As buyers of finished goods for London and the country do not attend it, certain departments of the home trade are hardly represented, but practically all the spinners and manufacturers and all the export merchants of any importance are subscribers. Transactions between spinners and manufacturers are largely effected on Tuesdays and Fridays, the old “market days,” when the manufacturing towns are well represented, but a large amount of business is transacted every day. Besides the persons immediately concerned in the cotton trade and connected with allied trades, a large number of members find it convenient to use this great meeting-place as a means of approach to a body of responsible persons. Thus not only bleachers, carriers, chemical manufacturers, mill furnishers and accountants find their way there, but also tanners, timber merchants, stockbrokers and even wine merchants. Since the Ship Canal made Manchester into a cotton port there has been a steady development of the raw cotton trade in Manchester, and many cotton brokers and merchants have Manchester offices or pay regular visits from Liverpool.

The various expansions and developments have made it difficult to maintain the ratio between accommodation and requirements, and although overcrowding is troublesome only during some three or four hours a week, at “high ’Change” on market days, various complaints and suggestions provoked in 1906 an appeal from the chairman of directors to the Manchester corporation. This took the form of a suggestion that the Exchange should be worked as a municipal institution on a new site, and though such a development met with opposition it was