Evening star., 1925-07-26


buy foreign securities. For more than
half century there had been no real
competition, America had not arrived
Germany was only learning and the
rest Of the world did not count. Yet
just before the World War there were
signs which were already marked, Ger
man competition was beginning to
make itself felt and. what was quite
as serious, India and China, two vast
markets, were going into the indus
trial business themselves and had the
obvious advantage of cheap labor in
unlimited quantities.
In certain fields, too, British eff
cheney was falling behind. Germany
and the United States were already
perfecting great labor saving devices
particularly in the coal trade. devices
which were successfully opposed by
British labor, because they meant the
reduction Of employment Thus 10
years ago the coal production of one
American miner equaled that of three
British, while the German advantage
was less marked. but growing.
War Paralyzing Stroke.
1t is conceivable that had there been
no World War the British situation
would still have grown worse, that il
was inevitable that the rest of the
world should by degrees develop its
own industrial organization and pro
tect itself against Britain by tariff
walls. But the war at a single stroke
paralyzed British industry so far as
the world markets were concerned
since all British manpower was con
centrated either upon fighting or max
ing war material for the struggle.
Moreover. the rest of the world, or q
| considerable part of it, was engaged
in destroying its purchasing power at
the greatest possible speed. Finally,
the United States. long neutral, in
evitably expanded it's machinery to
meet the world demand which Britain
| could no longer supply, and when we
came into the war we still further
expanded our industrial plant for war
purposes
When the war was over the British
position in the world had changed
greatly. Temporarily, at least the
wealth of the world was centered in
| New York and not in London. and
America, while perhaps not richer by
| reason of the war. was incomparably
| better off with respect OF all competi-
tors, because she had suffered com
paratively little. We had a merchant
marine, built to meet the submarine
situation. but now available to COM
| pete with the British. We had made
great inroads into the markets Of
| South America and of the Far East
| where we had in part replaced the
| British.
| In Europe. on the other hand. peace
| did not bring tranquility or restore
purchasing power Russia, where
Britain had bought cheap food, was
out of the situation. and expensive
| food had to be bought from us and
| from Canada All the little states
! which had risen TO freedom in the war
| or had greatly expanded their from
| tiers were totally unable to purchase
| British goods by reason of the state Of
| their exchange. and they were driven
| first to restrict their own purchases
and secondly to create their own in
| dustrial plants.
Reparations Prove Curse.
Reparations. which was to be a
| blessing to the victors, proved an inn
| mediate and continuing curse to the
| British. The taking over of the Ger
man shipping. which was divided be-
! tween the allies, the British properly
| receiving the bulk, since their sub
marine losses had been greatest. pro
vided all countries with a surplus of
| tonnage at a moment when freights
were lacking. Only the German ship
yards were hereafter to be busy, since
the Germans, deprived of their ship
| ping, must build new. German coal
| O6IlNeTeQ TO rance, belgium ana lIdly
! replaced British, while the United
] States appeared as a competitor in the
| coal trade as we'll as in shipping.
| Again, the results of the war hit
| Britain in a new place. France had
never been serious Industrial COM
| petitor. but in reconstructing the dew
astated area France replaced obsolete
machinery with new, her coal mines
| when restored produced more coal
| than before, while her Steel iron and
! textiles. thanks to lower exchange,
played havoc with British export trade
and also invaded the British domestic
market in some departments. While
| it was always certain that eventually
German competition would be most
| dangerous, in the immediate present
French and Belgian competition was
Unexpectedly annoying in the extreme.
To add to all these circumstances
| Britain was faced with grave disorders
in her great Asiatic dominion. India.
too, struck at the British by means
of a boycott which effectually reduced
! British exports and brought great un-
employment to cities like Manchester.
At home. too, an epidemic of strikes
| eliminated in disastrous coal strike,
which for the moment reduced British
coal exports to nothing and gave
America temporary advantage.
Coal Episode Significant.
I The coal episode was, and is. too,
significant and illustrative. The sim
pie fact OF the matter seems to be
| that British coal cannot compete with
| German in the European market at
the present state of wages. The de-
bate between miner and owner Is not
over the division of profits, since
there are practically no profits in the
trade. The question is whether the
owners shall close down an unprof1t-
able extraction, the miners accept
wages which are generally recognized
to be below the cost Of living or the
government take over the mines and
thus shoulder the deficit. And, of
course, in the end this resolves itself
into the battle between labor and capi-
tai, with labor facing conditions which
must be accepted as we'll nigh intol-
erable.
British finance. too, by it's very cour-
age, has imposed terrific burdens.
Germany, as a consequence of the
war, repudiated her vast domestic
debt. France, through the deprecia-
ton of the franc, has already seen
hers shrink by three-quarters. Pres
emily the franc will be stabilized at
some point which will represent the
actual reputation of three-quarters
I and possibly more of the amount bor-
rowed from Frenchmen to win the
war. But the British have restored
the pound sterling to par and have
now to pay back their enormous bor-
rowings not merely at par, but, allow
ing for war-timS sSdation. probably at
twice par. As O xNSult today British
taxation is somethAsS almost beyond
endurance, and there Is no present
hope of any substantial relief.
In addition, the British during the
| war lent vast sums to their allies