453. Growth in exports but decline in relative share of trade.—The table of trade of the United Kingdom in the preceding chapter shows that the period of stagnation in the English export trade ended about 1900, and that there was a marked recovery between that date and 1914, even after allowance is made, as it should be, for the rise in the general level of prices, which magnifies the actual growth. Studying the course of trade during the generation comprised between the dates 1880-1909, the United Kingdom maintained or increased the value of its sales in all but two of the more important markets of the world; and the two countries to which British exports have declined, Russia and Roumania, would not by themselves form very serious exceptions. If, however, we select for study not the bare figures of export values, but the figures showing the percentage which British sales to any country form of that country’s total imports, the result is very different; for we are then measuring British progress not by the home standard but by the standard set by commercial competitors.
454. Illustration by the recent commerce of Japan.—The distinction is so important that it deserves illustration by a particular example, and we may choose for the purpose a country which during the recent period has furnished a rapidly growing market to the merchants of the world, namely, Japan.
| Annual Average Imports of Japan in Recent Decades (Values in millions of yen) | |||||
|---|---|---|---|---|---|
| From United Kingdom | From Germany | From U.S. | From other countries | From all countries | |
| 1881-1890 | 19.6 | 3.4 | 4.2 | 19.3 | 46.5 |
| 1891-1900 | 46.6 | 14.8 | 22.8 | 87.0 | 171.2 |
| 1900-1909 | 84.3 | 36.1 | 65.8 | 199.8 | 386.0 |
The Japanese monetary unit, the yen, has declined considerably in value in the course of the period, and therefore no exact equivalent for it can be given; but even allowing for this decline the growth of British export trade to Japan appears satisfactory if the student regards merely the figures in the first column. If we apply, however, the comparative standard, and measure the British exports to Japan alongside those from other countries, the result is not the same.
| Percentage of Japan’s Imports from Each Country | |||||
|---|---|---|---|---|---|
| From United Kingdom | From Germany | From U.S. | From other countries | From all countries | |
| 1881-1890 | 42.2 | 7.2 | 8.9 | 41.7 | 100 |
| 1891-1900 | 27.3 | 8.6 | 13.3 | 50.8 | 100 |
| 1900-1909 | 21.80 | 9.3 | 17.0 | 51.9 | 100 |
455. Relative decline of the United Kingdom in the world’s markets.—Pursuing the comparative method, illustrated by the last preceding table, we find that the United Kingdom during the generation 1880-1909 showed an increased share of sales in only three of the minor markets of the world: Spain, Argentine Republic, Sweden. It almost held its own in France, Switzerland and Norway; but in most of the important markets of the world it lost ground seriously.
Even in its trade with the British dependencies the United Kingdom did not hold its own. Comparing the percentage of British exports to a dependency with its total imports, we find that the United Kingdom kept its place in only one of its colonial markets, Mauritius, a purchaser of relative insignificance, while foreign countries gained ground from it in British India, Australia, Canada and all the other important colonial markets.
456. Significance of the decline, and three possible explanations of it.—The relative decline in English exports did not imply that the country was approaching industrial bankruptcy, but it did mean, if long continued, the loss of industrial leadership; and the causes of this decline and remedies proposed to meet it are worthy of careful attention. The decline in exports may be attributed to one of three factors: (1) weakness in manufacturing the wares which form the staple of the export trade; (2) weakness in marketing these wares, when they have been made; (3) the adverse influence of protective tariffs in other countries.
457. (1) Competition in manufactures by low-grade labor.—Considering the first of these factors, we find English manufactures menaced by competition from two different directions: from the East (countries like India and Japan), and from the West (countries like Germany and the United States). Eastern competition threatened especially England’s staple manufacture, cotton. The English laborer was superior in every point to his Asiatic competitor, but not enough better to earn his higher wages when employed in the manufacture of coarse goods. England had built up a serious and growing competition by exporting machinery and sending out skilled managers and foremen to superintend it. During the past generation there had been an immense development in the textile manufactures of India and Japan, and these countries were able now not only to supply a large proportion of their own demand, but also to reach out into neutral markets like China.
458. Competition in manufactures of high-grade labor.—More serious, because capable of far greater extension, was the competition which the Englishman had begun to experience from advanced western peoples. This confined itself to no one branch of production, but spread over the whole broad field of manufactures. Americans and Germans had begun to supply not only the British dependencies but England herself with manufactured wares, in increasing measure. Some of the reasons suggested to explain their superiority were as follows: (1) Elementary education had been developed only recently in England, and had been hampered by sectarian questions; the average laborer in Germany and the United States was better equipped for modern methods of manufacture than was the Englishman. (2) It was asserted that trade unions had seriously detracted from the productiveness of English manufactures, by preventing the introduction of improved machinery and by limiting output. (3) Technical education was even more backward than general education; improved processes were introduced earlier and developed further in other countries, for lack of a class of trained manufacturers in England. (4) Finally, and probably the most important point of all, English manufactures appeared to suffer from the very fact that they had been long established. An industry was divided among many independent firms, each clinging resolutely to the plant, the processes and the methods which had won for it success in the past. Foreign countries learned all that the English had to teach, and applied the lessons in a new field in which they could build up great manufacturing units, with fresh machinery adapted to production on a large scale, and with a more flexible and more efficient organization. It was charged that the directing class in England had lost its original energy, and did not realize its serious responsibilities. An English expert who investigated the American cotton industry reported that there was a great difference in the energy, intelligence, and adventurousness of the managing class in the two countries, all to the advantage of the United States.