I20 SECTIONAL ADDRESSES 



Influences Limiting the Expansion of British Exports. 



It is obvious that the two reasons advanced are not necessarily separate 

 and mutually exclusive ; the second becomes prominent after 1925-26. 

 Passing these influences in review, it may be said that the growth of local 

 manufacture and the desire of many countries to develop what they 

 believe to be their industrial resources has always been recognised as 

 a main factor in the changes which have taken place. It is clearly a 

 permanent influence which received special stimulation in the years after 

 1914 ; large groups of markets outside Europe found themselves cut 

 off from their usual sources of supply for industrial products owing 

 particularly to the absence of the two countries which held industrial 

 leadership, Britain and Germany. New industries therefore grew up in 

 India, China and Japan, in Brazil, Argentina and Chile, in Canada and 

 Australia, which required some measure of protection to entrench them- 

 selves against the competitive power of long-established foreign organisa- 

 tions. This new effort was usually directed to the common grades of 

 staple goods, leaving the upper ends of the markets and the specialities 

 for later attention. The tendency is one which was familiar before the 

 war period, in the textiles at least. 



There is little need to labour the difficulties which accumulated in the 

 years 1914-21 for the British staple export industries : fuel production, 

 the textiles, the heavies, comprising general engineering, steel smelting, 

 iron and steel rolling, together with shipbuilding, became, after 1921, the 

 depressed group ; the war period had naturally led to extreme over- 

 development of the heavies and of shipbuilding, and had given to Japan 

 and to the U.S.A. unrivalled opportunities of making new business con- 

 nections in former British markets. For coal-mining the prospects 

 seemed at first bright ; neither the Ruhr nor the Nord coalfields recovered 

 rapidly ; but the return of these areas to full output, the development of 

 the German lignite beds, the new Dutch coalfield, the Polish efforts in 

 Silesia, as well as the technical advances in fuel economy, the growth of 

 hydro-electric power, the use of oil fuel for shipping, the expansion of 

 road transport, placed a serious limit on British power of export. The 

 industry was also damaged by the strike of 1926, and by the dislocation of 

 its marketing through the method of paying reparations in kind. 



The textiles began to affect the position from 1924 ; the difficulties in 

 the Far Eastern markets, the troubles in India, the successful competition 

 of Japan, all played their parts. 



The decline in the purchasing power of local populations was also 

 commonly advanced as a cause of difficulty ; it was stated that in the 

 immediate post-war period the populations of certain regions, such as 

 Russia, India, the Near East, the Far East, and Mexico, had suffered a 

 decline in their standards of living, and that for a considerable period they 

 would be bound to buy goods less expensive than those offered by Britain ; 

 they had drifted to a cheaper class of article than formerly. The evidence 

 upon this matter is far from satisfactory, and it will be the subject of 

 comment later in this survey. 



The heritage of restrictive tendencies and of financial and exchange 



