"BRITISH NEED FOR RAW MATERIALS FOR INCREASED PRODUCTIVITY"
An Address by SIR WILLIAM ROOTES
Chairman, The Dollar Export Council
Joint meeting with The Canadian Club of Toronto
Friday, December 14th, 1951
CHAIRMAN: The President, Mr. D. H. Gibson.
MR. GIBSON: Our speaker will be introduced by Mr. J. Gerald Godsoe, President of The Board of Trade of the City of Toronto.
MR. GODSOE: We in this City have always taken pride in our closeness to the Mother Country, but I doubt if we have ever before felt closer than we do at this time following the complete and triumphant conquest of our hearts by Their Royal Highnesses, the Princess Elizabeth and the Duke of Edinburgh. It is against this backdrop that we warmly welcome our overseas visitor of today.
Sir William Rootes, at an age when most men of success are just beginning to see a goal in sight, already has to his credit achievements that are many. He comes to us today as a great Empire and Commonwealth builderat a time when we could do with more such men. He comes to us as a man who has served his country in two world wars with honour to her and distinction to himself, and who is now serving her again in an hour of need, publicly as Chairman of the Dollar Export Council, and privately as one whose business alone is responsible for one per cent. of Britain's exports. He comes to us as an industrialist who has made a noteworthy success in one of the most competitive industries in the world, and who in the process has acquired so many companies that I am sure Ford and General Motors lock up their doors and go for cover whenever they hear of his arrival on this continent. And he comes to us as a great internationalist who I am told sells his products in 119 countries in the world (and I never before knew there were so many countries in the world) and who visits and is at home in each of these countries.
Add to all this a warm and enriching personality, an unusual ability for making friends and a very real capacity for public service, and we come to realize that Britain has not yet lost her happy faculty of breeding great men.
SIR WILLIAM ROOTES: I notice that I am asked to speak on materials. Whilst this-as I will endeavour to bring out-is one of the paramount problems that we in Britain have to deal with, there are, obviously, other important issues to be taken into account in regaining our balance of trade. As you are all aware, we have a new Government-a Government that has come into power not by making rash promises or by outbidding its opposition, but rather one that has made it clear that the people of the United Kingdom have yet to make further sacrifices.
For long Britain has made a great contribution to the industrialisation of the world. It has carried a great burden in the last two World Wars; and, together with other members of the Commonwealth and British Empire, has had on both occasions to make major contributions by standing alone. Indeed when it comes to Britain I submit that her sacrifices in the common interests have been greater than she should have borne. And this is the major reason why we found ourselves faced with so many economic problems since the end of the second world war.
With the return of a conservative Government that is liberal minded, new heart has been put into the old country. The spirit of the people is such that given the materials they will take up the tools to re-establish the United Kingdom's position. The task is great. Indeed the Chancellor of the Exchequer said recently that if we could not narrow the dollar gap the United Kingdom would be a land of bankruptcy, idleness and misery. In saying this he knows that the Government will receive support regardless of political party.
As you know, we are confronted with the problems of importing in order to live and produce; and let me say immediately that there is full recognition of the great help we have received from our friends, and your neighbour that lies to the south-as well as from this great country of yours. During the first nine months of 1951 Britain's exports and re-exports to Canada were increased by 22% over the same period of 1950. However, the cost of Britain's imports from Canada during this period were increased by nearly 40%.
The Government has let it be known that they will endeavour to cut imports by E 350 million, and that this is being undertaken not only in Britain's interests but also in the interests of her partners. The policy of our treasury is to tighten credit, lower Government expenditure and do its best to hold inflation; for we are today spending at the rate of £ 700 million a year above our earnings. What is more the Conservatives entered office to find the cupboard bare in all respects.
There are today four competing needs:
Home consumption, investment, defence and exports It is obvious, therefore, that if we are to re-establish out economy, and carry out the very great defence programme that we have before us, our exports must be increased. Whilst at the same time we must hold our home consumption to a minimum.
This is a hard outlook for our workers, for amongst other things it must not be overlooked that the people in Britain are still on rations. Owing to stockpiling and world inflation we have to deal with a big increase in the cost of our import bill. At the same time it is essential we increase our imports of materials in order to carry out not only our export but our defence programme. It may well be that we are trying to do too much; that some adjustment in the vast contribution we intend to make towards defence may have to be made. The great thing to ease this, and to achieve our programme is to see that we have sufficient steel and non-ferrous metals to enable us to use the capacity of our factories to a fuller extent.
For instance, 70% of the armaments programme falls on the engineering industry. At the same time the engineering industry as a whole is the greatest contributor to our exports. Lack of steel in particular causes continual frustration and stoppages within our works, with the result that the wages of our workers, and our overhead charges do not bear proper relation to output. Whilst working hours have increased to 47.9 per week they have not been effective hours so far as output is concerned. The shortages of materials has brought about too much waiting time, and has lowered the tempo of production. Therefore, in my opinion, I can say without hesitation that more materials are the first essential to increased exports and the maintenance of rearmament in order that we can achieve higher output without raising costs.
Today not only the instruments of war but the necessary every day needs have become more complicated; require more materials and often more man-hours to produce. In the field of steel we in the United Kingdom have always relied upon imports from the continent, and indeed, over recent years, from the United States.
These supplies have been cut.
We have found ourselves, on the continent, competing with North American industry in the purchase of supplies; which has meant that, not having the dollars, we have had to forego this source of easing our materials position. What is more, our scrap position has been acute. For there again there have been vast dollar purchases.
The fact that we have been exporting our engineering products to such a high degree--thereby starving our home market--has, in effect, meant, that we have been deprived of what normally, would have been our own source of scrap supply.
One of the greatest things the United States can do at this stage is to sell us steel, for as you know their output is prodigious.
The Dollar Exports Council has been created to give particular attention to increasing the U.K.'s trade with North America. It is comprised of some of our best industrialists and businessmen working with the aid and assistance of the United Kingdom Government. It includes members who have been enlisted both in Canada and the U.S.A. in order that it may have the closest contact and co-operation on this side of the Atlantic. And I am glad to say that Mr. James Duncan, President of the Canadian Dollar-Sterling Trade Advisory Council, who has done so much-indeed an outstanding job-to contribute to our mutual problems in the Dollar-Sterling field; and Mr. Forbes, the President of the Canadian Association of British Manufacturers, are two of its members; and are present with us today. I wish to thank both these gentlemen for their public spirit in coming forward at this time of our crisis.
The Council will also include high level officials of the Treasury, the Board of Trade and Ministry of Supply, who will make themselves available to discuss matters where the Government can help. Britain's economic circumstances today make all exports important. But let me emphasise the Dollar area comes first. And I should tell you that Sir James Turner, who represents the farmers in Britain, is a member of the Board and is a strong supporter of the policy we intend to pursue, which is not one of export only, but of exporting in order that we can import more.
In Canada you have much that we require-grain, flour, fruit, meat, newsprint, lumber, non-ferrous metals and ore. Whilst we in turn, in the past, have had much to offer you, including the great majority of the pioneers of your country. For the future, apart from goods, there is research, the "know-how" and the technique of manufacture. For let it not be forgotten many things that are widely used in the western hemisphere originated in the United Kingdom. For example, penicillin, radar, television; whilst at the moment both U.S.A. and Canadaindeed the world-recognize that we have much to offer them in regard to new aircraft and the jet engine. For they now rank among our dollar earners.
Further, we in England are pioneering the first commercial jet air line. This means that within a given time there will be quicker and greater facilities for travelling, which in turn will mean a greater interchange between the peoples of the world-and this alone can lead to better understanding of each other's problems. It is significant that where freedom of worship, freedom of speech, and the desire for peace prevails, countries accept one another; that where communism is rife, travel and free interchange of ideas are impossible. This question of communism is the western world's number one problem.
Just as the United Nations are fighting in Korea so are the British fighting in Malaya. Mr. Oliver Lyttelton, a distinguished member of our cabinet, who is in the East at the moment, has already said that great courage will be required by our people to overcome the situation there, and that there is no quick solution.
Again, Britain has the burden at the moment of policing the Suez Canal. The defence of that area has been imposed upon British forces for a long time; but this, being an international waterway is as much an international responsibility as is the fight against communism in Korea. Let me emphasise that this must not be allowed to drift, with consequent threats to lawful commerce and peace.
All this means that the North American people and those of Europe must pull together, and work for the common cause of maintaining or increasing the standard of living of their people, and the preservation of peace.
In this the British Commonwealth, alongside the U.S.A. has a full part to play. The British Isles is the bulwark, the aircraft carrier, the atom bomb base; and in consequence it strengthens the whole defence of Europe and North America. You and we have the same Monarch. You recently had Elizabeth, Princess of Canada, with the Duke, through your country. The reception you gave them made a deep impression at home.
You will shortly be receiving a visit from our Prime Minister, the man who, together with his government colleagues, is determined to remove some of the controls that have been imposed upon the U.K. and to give free enterprise and the business man the opportunity of doing a better job.
Never let it be forgotten that whilst we respect and look up to the Dollar, the greatest trading area in the world is the Sterling area. And the headquarters of this still remains London. It may often be necessary for us to export the products of Middlesborough to Malaya, in order that we may help the total overall dollar position; for not only does North America purchase from the U.K., but from the other sterling areas of the Commonwealth. We, within the Dollar Exports Council, intend to be open-minded; to be aggressive. I am here to learn, and let me say that by the contacts I have made with the great stores in the U.S.A. I have been much encouraged. I find appreciation of the quality of our products. They find our integrity high. Inspection of our goods before shipment is such that they are profoundly impressed. But what is more, without exception, I found they were going to send more buyers than ever to the U.K. and to our Great British Industries Fair to be held in the Spring. U.K. motor manufacturers for instance have suffered with others in the recent volume of sales, but we are not retracting from this market, we are here to stay; and at your great Canadian National Exhibition I am now able to announce we are haying a U.K. Motor Show, including a widest possible range of products.
There is one thing regarding which our government has made a promise and will make a determined effort to fulfill. That is, the provision of more houses. For years now young married couples in the U.K. have found it almost impossible to start their life in their own abode. Rather have they had to share houses, or live with their in-laws or brothers and sisters. It is an intolerable state of affairs; and only breeds discontent and unhappiness.
The goal is to work not only for a higher standard of living for our people, but also for less barriers, freer trade within the Commonwealth, and the liberalisation, as far as possible, of world trade.
Canada is the land of opportunity. It may well be that we in Britain have committed sins of omission in the past; but with the change of heart that has been born with the change of government we intend to give evidence of our determination to win through. I ask that in our Dollar Export Drive the people of this great country will give us all the help they can in the purchase of British goods. Not on the basis of charity, but on the basis of quality, and value for money; and thereby continue to increase the trade between our two countries to the maximum, which is so vital to the stabilisation of the economy of both.
In conclusion I would like to read you this message from the president of the Board of Trade, the Right Hon. Mr. Peter Thornycroft, who is a member of Mr. Churchill's inner cabinet and a key pin when it comes to trading:
"I am delighted to learn that the Dollar Exports Council has been assured of the support of leading Canadian businessmen. I know how much our trade with Canada owes to the encouragement and assistance in recent years of farsighted Canadians and Canadian organizations. There could be no more appropriate place to say this than in Toronto. You may assure our Canadian friends that the present government attaches supreme importance to the development of British exports to Canada as a means both of expanding the mutually advantageous trade between us, and of strengthening all the links which bind us together. I know that there are difficulties. We must work together to surmount them".
THANKS OF THE MEETING were expressed by Mr. R. M. Barbour, President of The Canadian Club of Toronto.