The Washington herald., 1920-04-12
TEST BRITISH
COTTON BOOM
Wild Speculation and In
creased Min Capitalize
tons Subside.
MAINSTAY IN EXPORTS
Cotton Industry the Chief
Source Of Englands Out
side Income.
MAINSTAY IN EXPORTS

Indications are that Great Brit
aims cotton boom is entering upon
new phase which will provide the
first test Of its stability. For the
past six months the cotton manu-
featuring situation has been un-
precedented with respect to in
creased capitalization and value of
output.
The inevitable reaction In the
form OF increased wages and higher
taxation is now impending. They
are among the rocks ahead" OF
which a warning has been sounded
by Sir Herbert Dixon, president OF
the World Cotton Conference.
The cotton industry Is England's
greatest export industry in point of
financial return from output. Any
development. therefore, which Is
Ilkely to anect the export status of
the Industry Is OF Significant interest
In Great Britain and elsewhere.
Following the war the world de-
mand for cotton goods resulted In
an era Of high prices which returned
enormous profits on the capital in
vested in the British cotton mills.
Illustrating the higher prices, seven
billion yards of cotton goods export
ed In 1913 brought about S4s5,00o,-
900, compared with about SSs0,O0O,-
600 received for three and a half
billion yards exported in 1919. Dur
ing 1919 $50 mills in Lancashire,
with a capital of about S37, ,o00, 600,
are estimated to have distributed in
dividends or added to capital about
$l4,O0O,000 from their earnings. One
hundred and fifty-six other COM
panies. capitalized at about $1,000
goo, are estimated to have paid about
S13,000.000 in dividends and bonuses.
Some mills returned recent quarterly
dividends at the rate of from 200 to
500 per cent per annum.
Increased capitalization of the
mills was logical consequence. The
boom in mill buying and recapital-
lzation which followed and which
has hardly subsided, resulted in
deals involving $50 mills and about
$3.50, ,ooo, 900.
Financial reorganization after ths
purchase OF these mills has meant
new capitalization in some cases at
twenty to thirty-two times the orig
inal paid-up capital and in most
cases four or five times the amount
OF the original paid up capital.
This accepted evidence of prosper
ity In the cotton industry has made
the mill operatives keen for a Iarg.
er share in the proceeds. The high
est that have yet prevailed in Brta-
ish cotton manufacturing arc now
being paid under a nine months
agreement, which expires on April
60 next.
The present wage agreements
have required the payment, during
the latter part of 1919. and the pres
ent year. of wages from IS to 81 per
cent higher than were paid in jan
uary
Returns made to the ministry OF
labor by manufacturers employing
1O6,00o workers, which is only part
of the total number employed in
the British cotton industry. indi-
cate that the average weekly pay
during January was about f2 Is.
young workers. girls of Is being
employed in the industry.
1t is the weekly average of the
total amount paid in wages. and may
not, because of stoppage from one
cause or another. represent full ave-
erage weekly wages.
The industry is on a 4s-hour week
basis. 1t is reported to be no un-
common thing for girl of 10 TO
earn f3 a week at weaving. Some
of the men workers in the spinning
mills have been earning fS to flo
per week.
During the present quarter of 1920
bonuses of from IS to fs per worker
have been paid in the spinning mills.
Taxation on the new valuation OF
the mills will. ii is expected, be all
most double the old rates.