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ted the largest purchaser was the U.S.A., which indeed brought meat ckpacker and canning into the vocabulary of commerce. Whereas lhi the Lancashire cotton industry depended on America for nearly the whole of its raw material, the South Wales tin-plate industry depended on it for its main market. But the imposition of the McKinley tariff in 1891 killed the export trade in seven years, ave the last section to go being the Pacific trade, which at first was protected by the heavy costs of inland transportation between East and West, until these were reduced and the duty of import and further increased in 1897. After this there remained the re-export and trade, which enjoyed a rebate. For the American Oil Companies purchased much of their plate for re-export, and having to meet keen competition from Russia in foreign markets threatened to ship oil in bulk and make cans abroad, if the rebate was withdrawn. try The American tin-plate industry is a plain example of the rial successful employment of protection to hasten the growth the of an infant industry. But the South Wales tin-plate industry de also proves the power of a free trade country to survive the loss of a single great market by the development of numerous small ones. Tin-plate exports sank to £2 millions in 1898, but rose steadily to 6 millions in 1910, the biggest new markets being in the East. The dumping of foreign steel bars hurt Welsh steel producers, but the tin-plate manufacturers benefited; and a strong impetus was given to the integration of steel producers and steel users and to the extension into allied uses of tin-plate, such as galvanised sheeting for roofing. The case of tinplate is that of British trade in miniature-loss of old markets through hostile tariffs: the capture of new ones under the stimulus of necessity dependence on foreign countries for raw materials in whole or in part: self-sufficiency in fuel, labour and the processes of marketing and finance.


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(8) Coal. In 1913 the leading British exports in order of value were textiles, iron and steel manufactures, machinery and coal. The export of coal became important only after 1850. Coal exports rose from 5 million tons in 1855 to 97 million tons in 1913, the latter figure including about 20 million for bunkers of foreign-going vessels. Translated into percentage values of total United Kingdom exports, they rose from 2% to 10%. In the same interval the percentage quantity of coal exported to coal raised rose from 8% to 34%. Four-fifths of the coal exported in 1913 went to Europe and the Mediterranean, the balance chiefly to South America. The South Wales coalfield owed its growth to the export trade and the Navy. The building of the Glamorgan canal in 1798 from Merthyr to Cardiff opened it up. Then followed the railway and the steamship to make the fortunes of

Cardiff and Swansea. The Bute East Dock of 1859 followed the Bute West Dock of 1839. Between these dates the name of John Nixon stands out as a pioneer of coal export to France. In 1909 a coal port pure and simple arose at Barry, nine miles along the coast from Swansea.

Meanwhile the coalfields on the East Coast of Britain were increasing their trade with the Baltic and the Mediterranean. What Newcastle was to London in 1800, North-East Britain and South Wales were to the coal-lacking regions of the world in 1914. Strung out along the trade routes of the world were coaling stations, stocked with British coal for the service of British ships.

Is the export of coal a sign of national decline? Is Great Britain after the lapse of centuries returning to a stage in which other nations will take from her only raw materials? The answer is No, because of the part which coal plays in the economy of British shipping. In 1913 coal accounted for 75% of the total weight of exports. Coal thus found employment on the outward voyage for three-quarters of British carrying power. The main imports to Britain are foodstuffs and raw materials, which occupy a large space. Coal made up the deficiency of volume on the outward journey, the other exports being mainly manufactures which are small in volume.

'Oh, where are you going to, all you Big Steamers,

With England's own coal, up and down the salt seas?'
'We are going to fetch you your bread and your butter,
Your beef, pork, and mutton, eggs, apples, and cheese.'
'And where will you fetch it from, all you Big Steamers,
And where shall I write you when you are away?'
'We fetch it from Melbourne, Quebec, and Vancouver.
Address us at Hobart, Hong-kong, and Bombay.'

Section 6. The Trade Balance


Early writers disputed furiously over the balance of trade. It was their approach to the tariff problem, but very unsatisfactory in view of the lack of comprehensive trade statistics and the prevalence of smuggling. The British trade balance was a disquieting paradox. As she grew in commercial power, it became increasingly unfavourable. For other nations had to pay something for the shipping services and capital which Great Britain supplied and therefore British imports normally exceeded British exports; that is to say, the trade balance was normally unfavourable. But it was unfavourable for a reason precisely opposite to that which made Canada's trade balance so until recently. For whereas Canada had a temporary excess of

imports, because she was borrowing heavily for capital investment, Great Britain had a permanent excess of imports, which every decade made more inevitable. The balance sheet of British foreign trade stood in 1924 thus:

Recorded imports (1280) + unrecorded diamond imports (8) Recorded exports, including re-exports, (935) + excess export of bullion and specie (12)

(a) Excess of imports of Merchandise and Bullion

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(b) Net national Shipping Income

(c) Net Income from Overseas Investments (d) Commissions and other services



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(e) Total Invisible Exports' on balance
Income available for Investment Overseas (e) — (a) •


= 29

(a) is obtained from recorded statistics, in contrast with (b) to (f), which are conjectural estimates after the Board of Trade.1

(b) refers, not to shipowners' profits, which are a very much smaller figure, but to gross earnings of British shipping less disbursements in foreign ports. Per contra, credit is taken for disbursements by foreign ships in British ports.

(c) is net income. From the gross estimated income are deducted the sums payable by Great Britain to foreign countries. In the latter the main item is £35 million in respect of the war debt to the government of the U.S.A. (d) consists of the earnings from the financing of foreign trade. (e) is the sum of (b), (c) and (d). It is easy to see why shipping and financial services fulfil the same purpose in the balance sheet as the export of goods. And income from overseas investments does so too, because to that extent imports arrive from which no compensating export is required.

A large rather than a small (a) is the true measure of favourableness. This item was less favourable in 1924 than in 1913, when it stood at £181 million, or in 1923, when it stood at £102 million. But the trade balance is not everything. Is the total external trade of import and export growing? Are both growing? Have they recovered from the disturbance of the war?

Measured in money both have grown; but since 1913 money has declined in value, and if in order to arrive at volume the value is corrected by the general change in the price level, the following position is disclosed. Imports rose as from 100 in 1913 to 104.1

1 Committee on Industry and Trade, Survey of Overseas Markets (1925), pp. 665-6. For a revised estimate issued by the Board of Trade in the light of later information, see Economic Journal, March 1927, pp. 140-6. The revision puts (f) as high as 86 for 1924. (Cf. also Economic Journal, December 1927).

in 1924 but exports declined as from 100 in 1913 to 75.5 in 1924. Of itself it is no disadvantage that the pre-war volume of imports should be purchased with three-quarters of the pre-war volume of exports. But in 1924 nearly 10% of the population was unemployed, and since the majority of British employment depends directly or indirectly on foreign trade, the need for extension of exports is imperative. The war and its aftermath caused a shrinkage in the world total of foreign trade; and of this shrunken total Great Britain retained its pre-war percentage. Therefore to recover the pre-war volume of exports means a bigger slice of the shrunken total; and to this the obstacles are twofold. The first class of obstacle concerns the productive and marketing efficiency of British enterprise; and here two weaknesses have been the disturbance of production by repeated labour troubles and a certain backwardness in specialising to the wants of particular markets. The second class of obstacle concerns the decline of purchasing power abroad and the imposition of hostile tariffs; and both of these have been felt since the war. As Europe slowly recovered, China fell into chaos. Everywhere self-determination has displayed itself in economic Chauvinism; and Great Britain has been hurt by shipping discriminations as well as by new tariff walls. The shipping legislation by which numerous countries reserve to themselves their coastal trade and emigration traffic has not been applied against Great Britain exclusively, but they hurt her more than others because she is the nation whose ships have in fact been excluded. So too with new tariffs. An island Power with a world market is hurt more than a continental Power by tariff barriers; and when two island Powers such as Britain and Japan are in competition on other markets, it is difficult for the old Power to neutralise the geographical and racial contacts of the new, especially when these are supplemented by the short period advantage of cheap labour.



Section 1. London and Southampton. Section 2. Liverpool and the Manchester Ship Canal. Section 3. Glasgow as a Port and Ship-builder. Section 4. Trade Routes. Section 5. Evolution of the Shipowner. Section 6. Evolution of the Steamship. Section 7. Insurance and Registration.

Marshall writes:

Section 1. London and Southampton

At the time of the Restoration England's foreign trade was less than a hundredth part of her present foreign trade in money value, and less

than a two-hundredth part in volume. And though it increased fivefold during the next hundred years, yet in 1760, when the establishment of England's supremacy at sea told that the main work of the great trading companies was accomplished, it had not attained to a sixtieth part of its present bulk.1

To accommodate this vast increase artificial port facilities were necessary. The port systems of to-day-the landings, docks and channels of approach-are the construction of the 19th century. In 1800 London had practically no docks, Liverpool had a small dock system, and Manchester was not a port. The Clyde, as we of the 20th century see it, is nearly as much an artificial navigation as the Suez Canal.' 2

London lies on that point of the river Thames at which the marshes of Kent and Essex narrow to a convenient crossing. The old harbours of Billingsgate and Queenhithe were packed away within the City limits; and when London was rebuilt after the Great Fire of 1666 the demand of merchants for a point of discharge close to the City warehouses frustrated the scheme of a beautiful London with a port further down the river. By 1800 the crowds of colliers were converting the Thames into a coalyard and obstructing the passage of ships. Fleets of merchantmen piled up in the Kentish Downs until a favourable wind allowed them to enter and discharge their cargoes, which then for want of accommodation lay on the open wharves or afloat on barges. During the 18th century about three-quarters of the total recorded imports of England and rather less of the exports passed through London; and in 1800 the congestion was worse than ever before owing to the necessity of sailing in convoys during the Napoleonic war and the great expansion of the West Indian sugar imports, the whole of which arrived inside three months of the year.

The first modern dock, the West India, was sanctioned by Parliament in 1799 and completed in 1802. Then came the London and the East India Docks, opened in 1805 and 1808 respectively. These, with their later extensions, were all on the north or City side. The dock system on the south or Surrey side developed independently, beginning with the Surrey Commercial Dock Company of 1810, which extended the old Howland Great Wet Dock of c. 1700; and it was not amalgamated with the system on the north of the river until 1908.

Dock construction and warehousing went together. Some bonding privileges already existed. By the Act of 13 Anne, c. 18 (1713), merchants were allowed to warehouse tobacco on 1 Alfred Marshall, Industry and Trade (1919), p. 37.

2 W. R. Scott, The Industries of the Clyde Valley during the War, p. 5.

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