Fifty years in Wall Street
because of the large profits of previous years. Notwithstanding the cuts
made in standard goods, the demand for them is still abnormally light,
and hence stocks are accumulating in the face of the heavy decrease in
production.
No wonder, therefore, that those most intimately concerned are more or
less at sea as to how long this depression will continue, and what the
results will be. They see certain grades of goods that were selling at
8⅜ cents a yard just before the panic now being offered at 5½ cents, and
this is an object lesson that tends to make even the most optimistic of
them a trifle blue for the time being. But this is precisely the time
when courage and confidence in the situation are most needed. I give you
all credit, however, for being equal to the occasion.
With eighty-five millions of our own people to clothe—to say nothing of
the rest of mankind—manufactured cotton products will before long be in
demand again at rising prices, for civilization demands clothes in hot
weather as well as cold.
Meanwhile, endurance is called for, and will doubtless not be found
wanting, except where special circumstances impose limits to it, and we
all know that patience is a virtue.
Recovery to normal conditions will, of course, be gradual, and it is
better that it should be so, to ensure permanence. In the meantime, it
will be a relief to the dry goods trade when sales are no longer
extensively made by cutting under quoted prices more or less sharply.
The bold, and even aggressive, action of the American Federation of
Labor in going to Washington and making demands upon Congress, and
criticizing not only the laws but the decisions of the Supreme Court of
the United States, puts a new and serious face on the old contest
between Labor and Capital. It arouses some apprehension as to the
lengths to which Labor will go, and how far its political influence may
enable it to accomplish its purposes. Politicians are ever ready to show
subserviency to Labor, merely for the purpose of gaining votes for
themselves.
We all want to see justice done to Labor, but we also want to guard
against injustice being done to Capital by Labor, and Labor’s resistance
to a reduction of wages to correspond in some degree with the decline in
the earnings and profits of those employing it, is a practical injustice
to all those outside the ranks of organized labor.
The readjustment of wages to existing conditions is, therefore, of the
first importance and should be first to receive serious consideration,
with a view to harmonizing both sides, and a prompt settlement. Half a
loaf is better than no bread, for both Labor and Capital, and it is not
to the interest of either to kill the goose that lays the golden egg.
Their interests are mutual, but Labor is posing as if they were
antagonistic. It has often done this before, but never more
conspicuously than now.
With respect to our foreign market for cotton goods, there is plenty of
room to widen it, but our exports of these, in competition with England,
Germany and other countries, are more or less checked by the high price
of labor here, and its comparatively low price there. Hence we should
constantly endeavor to overcome this disadvantage by keeping ahead of
the rest of the world in labor-saving devices, and improvements in
machinery and manufactures. We should try to surpass all Europe in the
quality, as well as the cheapness of our goods.
As we are the most inventive of all nations, and the quickest to adapt
ourselves to new or altered conditions, we shall doubtless find this
feasible, if not an easy task, whereas England, our greatest competitor
in manufacturing, is proverbially slow in changing machinery.
I once asked Mr. Andrew Carnegie what was the mainspring of his
phenomenal success as a manufacturer of iron and steel, and he replied:
“I always kept foremost in making improvements in my machinery and
methods of manufacture. Whenever a new invention that I could use was
patented, I secured it at any cost, and so kept in advance of all my
competitors.
“At one time I had two million dollars’ worth of new machinery that I
was about to install, but a man came to me with an improvement in it
that he had just patented, and I bought his patent and adopted it. In
doing this, I had to cast aside, as old material, the two millions’
worth of new machinery. But the improvement recompensed me many times
over for what I had sacrificed to make the change.”
It is in promoting improvements in manufacturing processes and machinery
that this Association, apart from its general utility, can be of great
and permanent value to the cotton mill industry and kindred
manufacturing enterprises. Ready adaptability of means to ends is as
important in manufacturing cotton sheetings, and the other products of
the loom, as in every other business and everything else.
I remember that in conversation with Admiral Sir Charles Beresford, of
the British navy, when he was visiting New York, he told me of an
instance of American adaptability to circumstances, that he noticed
while in China. The Chinese had been long complaining of the want of
sufficient width in a certain grade of British cotton fabrics that they
were using and they had asked the English agents from time to time if
they would increase the width. But nothing came of their expostulations
and requests, as the agents, after writing home, told them the
Manchester manufacturers said they would have to alter their machinery
in order to give them the desired width, and this could not be done.
But the agent of a large American dry goods house, with extensive cotton
mill interests, arrived at Shanghai, and hearing the complaint of the
Chinese, he said: “Give me your order and you can have whatever width
you want,” and he got the order. Sir Charles added: “So, you see, you
people are smart and give them what they want; besides, you make your
cotton goods heavier than we do and the Chinese like them better because
they wear longer, for when the Chinese put on such clothes they never
come off until they rot off.” Here was an instance of ready adaptability
to the occasion and market needs by an American, which the English
lacked.
An illustration of the importance of scientific investigation with a
view to the discovery of new elements and processes in manufacturing, is
found in silkine, a fabric closely resembling silk, which has come into
popular use. It resulted from the discovery that the mulberry and other
trees on which silk worms feed possess properties that could be
extracted and utilized, to a certain extent, in the production of a
silky fibrous material which in combination with fine Egyptian cotton,
made a cloth so closely resembling silk as to be possibly mistaken,
except by experts, for the silk of the silk worm. Here theoretical and
practical science were happily combined with mechanical skill to produce
an entirely new material, and doubtless there are many similar
opportunities awaiting discovery. This Association by stimulating such
investigation in mechanical science may achieve even greater results
than it anticipates.
The world’s markets offer a most magnificent opportunity for the
enterprise of American cotton manufacturers. We grow four-sixths of the
world’s crop of cotton but manufacture only one-sixth. That is to say,
we export three-fourths of the cotton we grow, leaving England and
Germany to turn the fibre into yarns and fabrics for other countries in
all parts of the world. A much larger share of this foreign trade ought
by right to come to the United States, for the foreign market offers a
field vastly larger and quite as profitable as the domestic field, if
the extraordinary profits of Lancashire spinners during the past few
years are to be taken as an index.
Last year Great Britain exported cotton goods valued at $500,000,000,
while our exports of cotton manufactures were valued at only
$26,000,000. During this same period Great Britain exported
6,298,000,000 yards of piece goods valued at $400,000,000; our exports
meanwhile being only 216,000,000 yards at $15,000,000. Here, then, is a
field for our best ambitions and skill. We cannot forever endure the
sight of seeing other nations manipulating our raw product at enormous
profits, a goodly portion of which should remain for distribution on
this side of the Atlantic.
There is one respect in which the New England cotton industry much
impresses an outsider. Your industry, I am glad to say, is, and always
has been, remarkably free from the evils of promotion and speculative
enterprise. Furthermore, it has most fortunately not been inoculated
with the fever for trusts and consolidations; although I happen to know
that such projects have from time to time been presented to your
consideration. Perhaps your refusals to entertain such propositions thus
far have been due to conditions peculiar to the industry; yet I venture
to hope that it has been not a little due to the strong spirit of
individualism which is one of the best characteristics of the New
Englander; a characteristic which I trust will be cherished for
generations to come, because it is a most wholesome and necessary check
upon the paternalistic tendencies of the day. One beneficial result of
this policy is that the cotton industry is adapting itself to the new
conditions following the panic with much less friction than in other
industries. You have lowered prices, curtailed production and diminished
costs in order to stimulate a revival of consumption in a manner that
promises to make you among the first in completing the process of
readjustment. When recovery begins the cotton trade ought to be among
the first to feel reviving influences. While other industries have been
using or misusing their newly acquired powers of combination to resist
natural tendencies, or to squeeze out dividends upon grossly watered
stocks, you have squarely faced the new conditions and trimmed your
sails accordingly. I have no doubt, therefore, that, with your mills
honestly capitalized, you will soon be going along safely and
comfortably in smoother waters when the trusts will still be struggling
against adverse conditions simply made worse by foolish resistance to
economic laws.
The most encouraging feature of our business situation now is the
prospect of an unusually large wheat crop, winter wheat being in extra
fine condition, and spring wheat having been planted under the most
favorable conditions, owing to the season for farm work being three
weeks earlier this year than last. The planting of other crops has also
been facilitated by good weather, and altogether the agricultural
outlook, at this date, has very rarely been so promising of bountiful
results.
This is a great national blessing, for the foundation of our national
wealth is our crops. Agriculture is indeed the great source of both our
national and international strength. It was almost entirely from this
source that we were enabled, from a merely nominal sum last August, to
build up a foreign trade balance of 521 millions of dollars in the first
eight months of this fiscal year, and the large preponderance of our
exports over our imports still continues, and will make the balance in
our favor at the end of the year one of unexampled magnitude.
This curtailment of our imports, especially of luxuries, has made the
shoe pinch in Europe, for we had been Europe’s best foreign customers.
But, naturally extravagant as we are as a people, we can economize with
as much ease, celerity and determination as we can spend, when the
necessity to do so arises. So we are at present economizing on a grand
scale and with great success.
We have only to consider our unlimited sources of national wealth,