British Industry: Anglo-Canadian and Empire Trade

Mr. Chairman and Gentlemen,-I feel a great deal of gratification in speaking to the members of the Empire Club-a club with such a splendid reputation and with

-----------------------------------------------------

Mr. F. W. Field is British Trade Commissioner in Ontario. Before his appointment to his present position he was the Imperial Trade Correspondent in Ontario. He is a member of the Canadian Mining Institute and the Toronto Board of Trade, and has a comprehensive knowledge of the state of industry and trade in Great Britain and, generally, throughout the Empire.

-----------------------------------------------------

such excellent aims. I may say that I feel quite at home here-just like a chat with old friends. I am glad that the British Government has allowed me to stay here a few weeks longer.

In taking my subject, "British Industry; Anglo-Canadian and Empire Trade" you will see that it is a rather long title, so if I digress at any point I think I may be fairly covered by the title. I propose to say a few words about the position of the industrial conditions in England and the trade relations between Canada and the Old Land, and also a few words about the development between the foreign units of the Empire. I asked a distinguished member of this Club how long I should be allowed in delivering my address and he said, "Make it as long as the skirts you see along Yonge Street, long enough to cover the subject and short enough to be interesting. (Laughter)

Well, Gentlemen, I have just returned from a visit to the United Kingdom, and while over there I visited England, Scotland and Wales. I didn't visit Ireland-they don't seem to have any great love for Government officials at present. During my stay in the old country I visited over forty plants, had a number of talks and a great many meetings with industrial and commercial organizations, and was interviewed by 528 manufacturing and merchant firms in regard to trade opportunities in Canada, and in Ontario particularly. During that visit I went to almost all the important industrial centres, including Glasgow, Edinburgh, Birmingham, Coventry, Leicester, Nottingham, Leeds and other places, and I also spent two months in London. But before proceeding to discuss briefly the conditions in the United Kingdom I would like to say a few words about the functions of a British Trade Commissioner. There has been a good deal of misunderstanding about our functions in this country, and I believe it is a good thing to remove misunderstandings. This reminds me of Tommy Jones at the front. He wrote home to his mother saying, "Dear Mother, I am a defaulter, and have got C.B." His mother wrote back saying, "Dear Tom, I am glad to hear of your promotion and decoration; be kind to the boys under you, and remember that you were a private once yourself." (Laughter)

Now, as to the British Government's Overseas Trade Departments; we have forty or so Trade Commissioners in the various parts of the Empire, including two in India, two in South Africa, two in Australia, one in New Zealand and several in Canada. Our Trade Commission service in Great Britain works in connection with the Consular services, and covers foreign imports in the Empire.

In the constitution of our Department overseas, in the personnel of that Department, we have different sections which are recruited from the Civil Service. The trade section is adequately divided and covers practically every industry. We have now iron sections, a steel section, a textile section, a mechanical section, a motor vehicle section, etc. So that whatever inquiries come into the office from any part of the world through the consular services or the Trade Commissioner services, it finds its way into that particular branch for which it is intended. We have in Canada three British Trade Commissioners-one in Montreal, one in Toronto and one in Winnipeg; and it is their function to promote Canadian import trade from the Old Country and to build up a greater inter-Empire trade.

In my trip throughout the United Kingdom I found that manufacturers had great confidence in Canadian manufacturers and in the future of Canadian trade. The establishment of our service, while primarily in the interests of the United Kingdom manufacturers, is among the first practical steps to link the Empire commercially. It is a matter of great interest to see how all the junior officers are trained in the English and foreign markets in connection with the various trades. It was decided to send juniors to every Trade Commissioner's office to be a general assistant. After they have served for three years in that office they report to London, and then they are sent out to another market, India, Australia, as the case may be. In the course of time they have acquired a first-class, or rather first-hand, knowledge of the various markets and the requirements of the various markets. I have in my office a very energetic young fellow who will be with me for three years, and then he will prepare to report to London and be sent out for a period to another market and become in time junior Trade Commissioner, and finally he will be promoted to the highest honours in the service. In that way we are training men who will do very valuable work in any part of the world to which they may be assigned.

Now as to the industrial situation of the United Kingdom. Many of the problems which the British manufacturers have to face today are, first, unsettled conditions in Europe, the world-wide lack of demand for goods, the exchange situation, labour troubles and cancellation of orders by buyers in the various markets.

In regard to European conditions we must realize, as Stells Maitland said here a few weeks ago, that the American continent cannot stand aloof in the belief that what happens in Europe is of no consequence here. English-speaking countries are bound sentimentally, commercially, and financially, and I believe that in their cooperation is probably one of the best hopes for the speedy solution of European troubles. As to the lack of demand, aside from exchange, my belief is that a more normal demand is unlikely until, among other things, all the artificial props of the industrial situation are removed, production costs reduced, and the relations between manufacturers and labour have become more harmonious, and we have arrived at the belief that prices are as low as they are going to be. Until these disturbing factors are removed, the demand for merchandise is unlikely to improve. In England I found the same trouble existing there as apparently exists here. Until we go to the root of the price factor it is not likely that the demand for any kind of goods will come back again until we remove all these artificial considerations and props to business. There is no time at present to discuss the exchange situation. It is a very important subject, and is much misunderstood. It reminds me of another story of misunderstanding. An elderly Shakespearean lover once said to an elderly lady, "Have you read Shakespeare's As you like it?" She replied, "No, but I have red flannel where I need it". (Laughter) That was a case of misunderstanding which the old gentleman found great difficulty in removing.

In regard to the labour situation in the United Kingdom, judging from the press reports which are cabled over here, one might imagine sometimes that the old country is in a terrible state of chaos. I really don't think that is so. The situation has been and still is somewhat critical, but it is gradually righting itself. Conditions are certainly unsettled, but I think we are very apt to take an exaggerated view of things in general. I am optimistic enough to hope that before very long we shall have weathered the storm and once more sail in comparatively smooth waters. After discussing the situation with hundreds of manufacturers and talking with a great many factory hands and the men on the street it is my belief that whatever happens, moderate opinion will triumph, and the extremists will not prevail in any walk of life in the Old Country-a country famous for its liberty, enterprise, tact and compromise. Here is an illustration of the change that is taking place in the labour outlook in the past year, and it is rather typical of the situation as it exists in the United Kingdom today. About six months ago a hosiery manufacturer received an order in Leicester for several hundred pairs of socks. The acceptance of this order depended on the manufacturer being able to reduce wages; there was to be a slight wage cut-every three workers were to receive two cents less per dozen pairs; it was to be divided so that one worker would take one cent less per dozen pairs; two workers one-half cent each less per dozen pairs. This order had to be refused because the operators refused to accept the wage reduction.

Six months later a similar condition arose. A boot manufacturer had receiver on order for 250,000 pairs of rough boots required by a European country. These boots were not as good as the average made at this manufacturing house; they were very rough, and in order to accept the contract and make a small profit on the order, it was necessary to see that wages were reduced about three and a half cents less per pair of boots. The manufacturer called his men together and explained the circumstances to them, telling them that in order to accept the order and to make a small profit he would have to reduce the wages. The men, after some considerable discussion, finally agreed to accept the wages and the order was executed, otherwise the factory would have to be closed. (Applause) Again, the other week the men employed in the British shipyards volunteered to accept less wages in order to keep the yards running and to prevent the work going to foreign yards. (Applause)

I have found the attitude of British manufacturers very reasonable indeed, far more reasonable than I had expected to be the case. They don't expect or desire pre-war wages or pre-war labour conditions to return, but they do anticipate lower wages, and they expect a full day's work for a full day's pay. After all, Gentlemen, in order to get down to normal conditions we must keep in mind that old adage, whether it is applied to labour or capital, that a man must work before he can eat. (Applause)

In regard to welfare work in British factories, I found that a great number have canteens and splendid entertainment rooms, and it is not an uncommon thing for the workers to go out for a warm cup of tea at eleven o'clock in the morning. In discussing the labour question with a number of various factory hands I find that they don't seem to have the faculty to understand any logical argument in regard to labour and capital. I think that in order to help to solve these problems between capital and labour it would be a good thing to educate the navvy's son, or the bricklayer's son, or the carpenter's son in a good working knowledge of economics, so that when the boy grows up and comes to work in the factory it would be much easier for both parties to get together, because of a better understanding of these labour problems.

Now, as to the cancellation of orders, this is one of the things I hesitate to mention, but we must look things squarely in the face. I have often been told while in London, that when some of us Canadians go over there it is with a bottle of wine under our belts and everything in the garden looking lovely, and when the Englishman comes to Canada the same thing happens. But I am afraid it is not a question of a bottle of wine; it is a question of cancellations of orders. This is a matter which you will be glad to hear something about, as I know it will interest a great many of you here today. You know, British manufacturers have received a large volume of cancelled orders from buyers in various markets, including Canada. Many of these cancellations have been entirely unjustifiable, and the results to the overseas manufacturers have been serious. Large quantities of stuff made to order are held up in the manufacturers' warehouse and entailing serious loss. This is a very serious matter indeed, for British manufacturers have to meet their obligations. In one warehouse alone I saw three hundred thousand dollars worth of woollen piece goods that were cancelled. In Nottingham a number of lace makers had received cancellations from various markets. Of course that meant that a great number of employees were thrown out of work. I think most manufacturers are willing to make a reasonable compromise with the various buyers. There are cases, no doubt, where delivery has been made, or the goods have been faulty, which may, of course, be considered a quite legitimate reason for the cancellation of that order. Many cancellations, however, are simply because buyers had caught a falling market and they tried to place the responsibility on other shoulders. In a rising market previously, buyers had insisted on goods at contract prices. I believe that all the members of the Empire Club who are in business or otherwise will agree that upon the respect shown to the validity of contracts both by buyers and sellers, largely depends the credit and commercial stability of that country. (Applause) I was told by many British manufacturers that these Canadian buyers who had observed their contracts and who had stated their case plainly to the British manufacturer in regard to a falling market will have no reason to complain of their treatment by British manufacturers either at present or in the future. There is no desire of the British manufacturers to take advantage of a falling market. He has certain obligations to meet, and the Canadian buyer will receive the very best treatment from him so far as falling markets are concerned. These, briefly, are a few of the outstanding and troublesome features in the industrial situation today.

Dealing with some of the favorable factors, there is much ground for confidence. We have in the United Kingdom a nation of manufacturers who have had long experience of trading in the world's markets. We on this continent are sometimes inclined to think that they are "slow old sticks" over there, but when we get to know them a little better, we find that they are not quite so slow as they seem to be. The war gave a great impetus to the modernizing of factories, and in consequence we find that a great many factories in the majority of trades, are up to date in every way, with new equipment and first-class condition and splendid office systems. Labour-saving machinery is adopted extensively, and much improved. Many of the changes which I saw were quite equal to the best American factory systems, indeed I found a great many of these American labour-saving machines being taken to pieces by British mechanics, who had made considerable improvements on them.

The industrial laboratories are much more in use than before the war. Goods are tested at various stages of manufacture, and this has an excellent effect upon the quality of output. Much of the raw material which comes in is put through certain processes, and very often tested four or five times before it comes out as a finished article. The importance of the chemist in industrial life is fully realized, and the effect is very noticeable in various industries. Take the dye industry, as one example. Before the war all the dye plants in England were only turning out one thousands tons a year. Today one large dye company alone has an output of twenty thousands tons a year. (Applause) Two other factors helping to bring British manufactures back into the world's markets are, the excellent quality of British goods and the excellent quality of British business methods. At the end of four years of war, Britain, you know, was prepared for a war of almost any period or length. All its mighty resources were thrown into the great war machine and even yet it has not been possible to dismantle that machine which played such a great part in the tremendous war and get it back into peaceful pursuits. One sees even now many reminders of that huge machine, such as tons of equipment, great quantities of ammunition, and the various paraphernalia of war. It is to be hoped that before very long all these things will be absorbed in more peaceful occupations. Despite all these drawbacks, my principal impression in leaving the United Kingdom is that it is rapidly approaching a position of conducting export trade again. Given better conditions, the United Kingdom will again assume its important role in the world's markets, as in the past, and will be able to meet foreign competitors.

The recent business depression is helping to bring about readjustment necessary for the revival of trade. As to trade between Great Britain and Canada, much progress has been made by Canadian manufacturers. By all means buy "Made in Canada" goods, but what you cannot buy here, buy in the United Kingdom or any other part of the Empire where possible. (Applause) Canadian manufacturers should do that instead of dealing with foreign markets. Where Canadian manufacturers are making finished articles the British manufacturer can often supply parts. Last year I was conferring with a Toronto manufacturer who buys certain articles every year--from seventy-five thousand dollars to one hundred thousand dollars worth, from the United States. He called me up one day and asked me to go to his factory. I was over there at eight o'clock the next morning and spent an hour going through his plant, taking out the stuff bought in foreign markets. I had a talk with him, and as a result we hope to switch from seventy-five thousand to one hundred thousand dollars' worth of his buying per annum from a foreign country to the United Kingdom.

I found that British manufacturers want to do business with Canada direct, and not through foreign markets, and Canadian buyers also want to do the same thing. This matter came before the British Government's D.O.T. and they are doing everything possible to encourage this direct business. I also conferred with many British manufacturers who propose to build branch plants in Canada. When I was in London I was misquoted in a cable dispatch to Canadian papers which said that I didn't recommend branch plants here for British firms. That was quite incorrect. While many British firms will find it the best policy to manufacture in the United Kingdom and export from there, there are others who will find that the only way to secure business here is to build a plant here, and they were so advised.

Despite all the present economic ailments, the heart of the Empire is sound. There is a strong feeling overseas in its future, and the greatest affection and admiration for Canada. This quiet confidence is typified by a story which I heard of a British sailor. A very arrogant German sailor belonging to one of the war ships of the German fleet which surrendered to the British navy was standing alongside a British Jack-Tar. Every now and again the German would spit into the sea, saying, "That for Admiral Beatty"--spit--"That for your British Navy"--spit--"That for your British Empire"--spit. The British sailor looked at him for a minute and then said, "Look here, you can say what you like about Admiral Beatty or the British Navy or the British Empire, but take care whose ocean you are spitting into" (Laughter)

In conclusion, Gentlemen, I think that a great volume of inter-Empire trade can be built up if each part of the Empire will learn what the other parts can do and supply. Probably you have heard of the story of the American who said to the Britisher, "With a little American pep, hustle and get-together stuff, this British Empire of yours would be the greatest proposition in the world;" to which the Britisher replied "I quite agree with all you say, except that the British Empire is the greatest proposition in the world." (Loud applause)

MR. S. R. PARSONS in moving a vote of thanks said, In expressing our appreciation of Mr. Field's splendid address I am sure you will all agree that it is quite in accordance with our views of trade in Canada. As a manufacturer, and knowing something of the conditions of manufacturing in Canada, I may say that what Mr. Field has said this afternoon is quite in line with our views. We agree with him in his statement of "Made in Canada goods", that outside of what we can manufacture in Canada we should give preference to the British Empire. I am sure that I voice your sentiments when I say that our love for the British Empire was never so strong in Canada as it is today. While we have had many men representing Great Britain who have given us a picture of conditions in the Old Country and of its service and aspirations commercially, we have never had a picture so clearly presented and so definitely placed before us as that given by Mr. Field. (Applause)

I would just like to say a word with reference to cancellations. A friend of mine residing in the United States told me one day that he had ordered a line of goods before the armistice, which afterwards he found he could not use, and it would cost him thirty thousand dollars to get relieved of the contract. He was a very straightforward man, and he realized the position that he had placed the manufacturer in to whom he had given the order, and he told him that rather than fall down on his contract he would gladly pay the thirty thousand dollars, and not have the goods which he couldn't use. (Applause)

I have very great pleasure in proposing a hearty vote of thanks to Mr. Field for his very interesting and illuminating address. (Loud applause)