TRADE DEPRESSION.

Thames Star, Volume X, Issue 3150, 24 March 1879, Page 3

TRADE DEPRESSION.

(To the Editor of the Erening Star.) Sib, —The last mail brought no news regarding commercial affairs at home that can in any way be called cheering, and we regret to see that the depression in trade, which ha 9 beggared so many an English household, should have extended to the Australian colonies, and finally be threatening New Zealand. It is, alas> too palpable as regards the Thames (although that may be accounted for by the uncertain nature of the local industry), yet when we hear that Dunedin, Christchurch, Wellington, Auckland, one and all have experienced a lull in their commercial progress, we are driven to enquire what can be the cause of such a universal depression over the world. Manifold causes are assigned for this—nay, vary with the respective branches of industry. At home, the ship-builders they cannot pursue their trade Jnoe the strike of the iron-workers—the latter throw back the onus of blame upon the miners; who shift it to the coalition of masters. As at home, so in the colonies. Wool is utterly stagnant, since the brokers cannot procure it reasonably from the settlers, who again blame the scarcity and expensiveness of labor; We then are justified in assigning as one cause of this depression*-the vaguely defined relations between employers and employed. This, however, is merely a proximate cause, not an ultimate one. The sharp verbal warfare (let us be thankful the missiles are so harmless, if stinging) between the advocates of capital and labour ; has resulted in a catalogue of strikes, but left the root of the evil untouched. A strike may gain a rise of a shilling per day, but is a loss of 5 per cent, to the operator himself on the cessation of his industry* Thus, if only on strike a week the shortest period men have ever been out on strike—it will be five months before he recovers his ground lost during that .idle week. True he is supported by the Union, but is not this very support, merely, the return of his own money— without interest. We must seek deeper for the cause of such a depression as that which we are now suffering than the mutual disagreement of capital and labour. . This ultimate cause we find in the close of a trade-cycle, &0., of a period during which commerce experiences all the vicissitudes of progress, healthy progress, and collapse. A trade-cycle, as John Mills, of Manchester, has pointed out, lasts about ten years, and its conclusion is marked by a period of spasmodic and reckless trade —a period during which, what we may designate as the philosophy of investment, is flung to the winds, during: which the formation of bubble companies, the projection of enterprises quite as Utopian as the South Sea Bubble, an unnatural increase of wages to particular trades, the insane craving for shares in some puffed up company, and the.monstrous price paid for them—all characterise the close . of a trade cycle, and betoken an approaching commercial crash. The commercial crises that have taken place this century are here appended^ and it will be seen how closely the decade is followed: —1813, 1825, 1836, 1847, 1857, 1866, 1877-78. Accordingly it is seen that tbe capitalists are as much to blame for the present depression, by their reckless speculation, as the laborers are with their strikes. Nay, we may almost say that the former induces the latter, in that they render the market dizzy by their fluctuations, and infect laborers with the desire to partake of the vaunted gains resulting from some speculative " coup de main." As a remedy for this chaotic state of affairs, for the continual wranglings between the employers and employed, we would substitute a Bysteiri of trade cooperation. We hear a great deal about " good steady wages." What are they ? A man's real wages we consider to be what he has over and above the demand for necessaries, by which to afford himself Borne of the relaxations of life. Now, he may be nominally in receipt weekly of £2, £3, £4, as the case may be, and yet at times, in reality, not be in receipt of one half of this sum. His employers may be coining a mint of money, yet his wages do not vary, and the gain iB all to the capitalist; but; on the other hand, it may hare been a bad grain year, as was 1866 and 1874, or a failure of the potatoe crop may have occurred, as in 1848 and 1877, or from other causes the expense of living may have been vastly increased, and accordingly the price of. necessaries becomes greater, leaving, his real wages proportionately smaller. Few masters at this juncture sympathise with their employees by either increasing the wage or giving a a special bonus, but nevertheless they sell their commodities at the same figure and amass a corresponding gain. It is at this point that strikes originate—when an -operative poverty-pinched and denying himself all but the barest necessaries, sees his .employer in receipt.of trebled or quadrupled gain from a commodity tile operative himself has produced. Such was the cause of the Blackburn and other North Lancashire riots last May, and such will continue to be the case until more amicable relations are established between capital and labor. We would effect this by a system of co-operation between employer and employed, by which the latter would be in a measure part shareholders, say to the extent of 15 or 20 per cent, upon the total profit of their individual labor, giving their labor as their share of the capital. This would give an operative an interest in the commodity and would tend to the improvement of the quality of labor. Those who belong to trades-unions work upon the principle of half-work, that they may not take away work from their fellows. But by the system of co-operation trades-unions would receive their death, since interest in the commodity would be more remunerative and more sure than a prospective and small support in the case of strike from the union. Had such been the case the terrible strike in the Midland Counties of England, in the cotton and mining interest, amongst the Huddersfield engineers, and the Greenock and Aberdeen shipbuilders would have been impossible. But it may be urged "what are the wages of a master?" Should not he who has airthe risk, all the responsibility, and likewise the lender of the capital, likewise hare all the gain as his share? By all means, if he is willing to accept as the concomitants of this gain—the risk of ruinodrlo'ss by strike, or by a compulsory lock-out on the part of his employees, in

place of a larger profit from an improved quality of labour, and moreover possess the good-will of his humble collaborateurs. To us co-operation between master and man upon this principle is the sole anodyne for that aching sore of " capital and labor " which has puzzled alike politicians and economists to heal. We are glad to perceive men such as Prof. Stanley Jer« vons and Mr Herbert Spencer, staunch friends of co-operation.—l am, &c. W.H.O. S. Waiotabi, 21st March, '79.