IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I "■ 1^ 112.2 ^ 140 2.0 IL25 i 1.4 1.6 V ^J <'? V W' ^ '^ ^^ ,"a. V "..' ". -■-L'J.. Vi' CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. n n Coloured covers/ Couvertures de couleur Coloured maps/ Cartes gdographiques en couleur Pages discoloured, stained or foxed/ Pages ddcolordes, tachetdes ou piqudes Tight binding (may cause shadows or distortion along interior margin)/ Reliure serr6 (peut causer de I'ombre ou de la distortion le long de la marge int^rieure) L'Institut a microfilmd le meilleur exemplaire qu'il lui a 6t6 possible de se procurer. 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Les images suivantes ont 6t6 reproduites avec le plus grand soin, compte tenu de la condition et de la nettetd de I'exemplaire filmd, et en conformity avec les conditions du contrat de fllmage. The last recorded frame on each microfiche shall contain the symbol —►(meaning CONTINUED"), or the symbol V (meaning "END"), whichever applies. The original copy was borrowed from, and filmed with, the kind consent of the following institution: Library of the Public Archives of Canada Maps or plates too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Un des symboles sulvants apppraftra sur la der- nldre Image de cheque microfiche, selon is cas: le symbole — ► signlfie "A SUIVRE", le symbole V signifie "FIN". L'exemplaire i\\m6 fut reproduit grdce d la g6n6rosit6 de i'dtabiissement prdteur suivant : La bibliothdque des Archives publiques du Canada Les cartes ou les planches trop grandes pour dtre reproduites en un seul clichd sont filmdes d partir de Tangle supdrieure gauche, de gauche d droite et de haut en bas, en prenant le nombre d'images ndcessaire. Le diagramme suivant lllustre la m^thode : 1 2 3 1 2 3 4 5 6 J THE COTTON INDUSTRY '•■> < THE COTTON INDUSTRY (F,-om THE GAZETTE, Montreal, 21at April, 1894. In view of what has been said in and out of Parliament recently, the ar- ticle printed elsewhere on the Canadian cotton industry will be found of general interest The facts, as stated, are ob- tained from authoritative sources, and convey a correct idea of the past history, present position and fature prospects of what has become a factor of very great importance in the commer- cial and industrial life of Cana- da. The cotton mills in Canada represent an investment of thirteen mil- lion dollars. They have a yearly output of some nine million dollars. They give work directly to about nine thousand people, v'iiose aggregate wages amount to 12,400,000 a year. The twenty-three mills are mainly controlled by three large companies, two of which last year paid 8 per cent, to their proprietors, and one of which paid nothing. This is not a record to excite the envy of invo'itors in other fields of finance or commerce; bat it is better than that of the early days of the industry for most of the projectors and first own- ers of the mills lost money. They started in enterprises in which they had little or no experience. They did not well enough understand either their purchas- ing or selling markets. They were not able to suit their supplies to the demand* There was over-production in certain lines, losses on goods sold, and, in some instances, threatened bank- ruptcy. It was in view of such a state of affairs that the large companies were formed and took over the smaller ones' property. Large sums of money were spent in improvements and enlarge- ments. The production of the mills was suited to the requirements of the trade. New lines of goods were introduced. More hands were employed. A trade with China was opened up, which, though yielding no profit on the goods shipped, serves the purpose of keeping the ma- chinery in operation and the work-people busy, when but for it they would be Idle and losses be involved. All this has been, and is, of benefit to Canada, it gives employment to those who would otherwise be idle or emigrants to a for- eign land. It promotes the local trade in towns and cities where the industries are established. It adds to the wealth and commerce of the whole country. The charge has been made that the price to the consumer is raised by the protection the industry has received. The price put upon two pieces of cotton cloth siKuifies nothing. The quality is the only test. Some English cloths are made with from 10 to 50 per cent, of China clay filling. They have little cotton and less wearing quality. Tue Canadian mills do not use such filling. Their clo^h is of cotton, and quality for quality can stand any reasonable comparison. And a great deal of the protection has been swept away by recent legislation. It has been reduced on some lines as much as 50 per cent. There is, especially in view of the present abnormal conditions prevalent in other parts of the continent, danger that Canada will again become a slaughter market, and the work be taken from Canadian artizans and laborers, for the benefit of menof other lands whose financial and political follies have cast their commerce into a state of depression almost unpar- alleled in the world's history, and in which the man who has the money to pay for what he wants practically makes the market price. This condition is, however, only temporary. The main point at issue is whether Cana- dians wish to maintain the industrial position they have now. A few days ago the substance of a report of a number of Scottish labor coocmissioners who visited this continent was published. They came from the best off of European countries from a workingman's stand- point. They went home and told their friends who seat them here that on this continent wages were nearly double what they were in Great Britain, that the standard ' of living among workingmen in America was vastly superior to that across the Atlantic, that their comforts were greater and their prospects brighter, and that those natives of the British islands who had come here to live would not go back. In Canada, in the cotton industry especially, wages are higher than in the general run of mills in the United States, and mucti higher than in those of the South. They are much better than in Europe. And the operatives work shorter hours. All this represents a heavier expenditure on the part of the mill owners, who, in addition* have to pay higher rates of interest on the money they use, higher prices for their machinery and more for the buildings they occupy. This state of affairs is not peculiar to the cotton industry. It applies more or less to all manufacturing enterprises. It is the ac- companiment of the superior conditions ot comfort that prevail on this continent ; and between protection and these condi- tion, and free trade and the conditions of labor in continental Europe which free trade invites, there is no question of choice whatever. In the speech made by Mr. Edgar in the House of Commons a few days ago there was a repetition of the charges against the cotton industries, which he brought forward during the last session, the important features of which were then discussed and corrected. This, how- ever, did not deter him from again placing before the country what he must have been aware was positively an in- correct statement. The following facts are gathered from the most reliable sources, and give a fair idea of the extent and value to the country of an important branch of manufacturing industry. CAPITAL INVESTED AND LABOR EMPLOYED. The amount ot capital that has been in ^rested in the cotton mills is in round numbers about $13,000,000. The yearly production of goods manufactured by tlie mills is somewhere under $9,000,000. The number of hands employed in the different mills is somewhat under 9,000. The yearly wages paid in connection with the manufacture of cottons is about $2,400,000 per annum. In addition to the above large outlay in wajjes, there is the ordinary supplies used in large ma- nufacturing concerns, also fuel, freights, insurance, etc., which necessarily amount to a very large sum. The mille number 23 in all— from Brantford in the west to Halifax in the east. Prior to 1878 there were six mills in operation. Following the institution of the National policy a number of addi- tional mills were started, very largely with a view of employing the local labor, by those seeking the development of the respective towns in which they were sit- uated. This development in certain cases might be considered, as far as the local interests were concerned, somewhat imprudent, as it tended to create more or less overproduction, the result being that in most of the smaller mills, where there was also lacking the experience neces- sary for the conducting of such, to them, new enterprises, a serious loss to the own- ers was the consequence, this loss being caused by the continued competition in the prices of goods manufactured. HOW CONSOLIDATION WAS BROUGHT ABOUT. After eight or nine yt rs' continuance of this condition of matt' 3,during which time the mills were .ly partially run- ning, and the famili d of local help de- pending on them, fe iing somewhat inse- ure ae to the futu; o, an effort was made ^v certain parties to purchase the differ- ent properties and consolidate them into large companies. The owners of the res- pective mills were very glad, indeed, to embrace the opportunity of disposing of, what to them, was an unpro- ductive property, the result being that the mills were purchased at a ^ery low valuation, entailing a loss ot over $3,500,000 to the original owners. In addition to this actual loss made, it is well to state that with one or two excep- tions, no dividends were paid by any of the companies, so that if a dividend ot 5 or 6 per cent, was added to the above, as being only a reasonable return per an- num on the capital invested, it would be apparent at once that the loss actually made would be greatly increased in amount. The Hochelaga Cotton company, who became the purchasers of the grey cotton mills, found it necessary to procure a new charter (the Dominion Cotton Mills Co.) from Parliament, seeing that the mills were situated in different provinces. THE ISSUE OK NEW STOCK. Mr. Edgar and others have repeated the statement, which was corrected last session, that the Dominion Cotton Mills company has increased its stock out of the accumulated profits of the business to the amount of $1,350,000. This, there is authority for saying, is positively in- correct. When the Dominion Cotton Mills company was formed by taking over the entire properties and assets of the Hochelaga Cotton company, and assuming the outside mills, which had just been recently purchased, covering additional value of about $2,500,000, and which had been acquired at something less than $1,000,000, it simply continued the then capital of the old Hochelaga company, viz., $1,500,000, with, how- ever, the distinct understanding that the board of directors should, as soon as they deemed it advisable, and safe, make further issue of stock, covering, in some measure, the value of the large properties which had been pur- chased at Such a low valuation ; so that the issue of the $1,350,000 of stock was Siinply a completion of the ararngemcnt and agreement entered into between the two companies, and therefore in no sense whatever an increase of stock in the terms used. It is right, however, to say that, as against this stock, an issue of bonds exists as a liability. This state- ment should set at rest what has been made use of so very freely in the hope of decrying these important manufactures in the eyes of the country, seeking there- by to confirm the statement that the stock issue was created from the ac- cumulation of profits made. WHAT SOME LOSSES AMOUNTED TO Mr. Kenny, the member for Halifax, in speaking on this subject in the House the other day, gave his own experience, he having been for many years a large stockholder and president of the Halifax Cotton company. This gentleman stated that while he had received no dividend whatever during the whole existence of the company, he also had made a loss of 75 cents on the dollar on his entire invest- ment Information supplied warrants the statement also that in some cases the loss was still larger. It was only the other day. that a 6 gentleman, one of our most respected cit- izens, and who certainly cannot be charg- ed with beint; partial to the present Gov« ernment. but one whose statement no person would take the res- ponsibility of questioning for a moment, the Hon. J. K. Ward, who, with- in the last ten days or so, made the state- ment openly and frankly, that his cotton investments, which he has held almost since the beginning of the cotton manu- factures, had not yielded him a return of 2^ per cent, per annum. In speaking of this matter in the House of Commons, Mr. Kenny also stated that had it not been for the purchase of these mills by the parties now owning them, the major portion of them would be closed and the labor employed would now be working in the manufacturing towns of New Eng- land. The dividend paid by the Domin- ion Cotton Company is 8 p. c. per annum ; and by the Montreal Cotton Co. (engaged in the manufacture of a difierent class of jroods) 8 per cent The Colored Cotton Company, the most recently formed of the large companies, is not paying a dividend. Surely, tor industrial stocks, these cannot be regarded as excessive dividends. The capital stock of the Canadian Colored Cotton Mills Company is on the market at a discount of 30 to 35 per cent. IMPROVEMENTS AT THE WORKS. bince the acquiring of these different properties the two large companies have expended large sums in their improve- ment, in new machinery and in other directions, buildings, etc., with a view of making them as complete as possible. In their large print works, situated at Magog, a very considerable outlay has just been incurred in the development of the indigo print trade, these requiring a special and expensive plant for their manufacture. This is a class of goods that up to the present time had not been manufactured in this country. It might be mentioned here, as showing what may be accomplished by the hands of those who understand these branches of manufactures, that when the present owners acquired the print works at Magog in 1890 the actual deliveries were about 90,000 pieces per annum. In 1891 thev increased to 190,000 pieces ; 1892, 275,000 pieces ; 1893, 351.000 pieces, and the deliveries for the first three months of the present year were over 250,000 pieces. The mill expects that before the year is closed the deliveries will be over 400,000 pieces. The present manufactur- ing capacity of these print works is 500,- 000 pieces, or about 20,000,000 yards per annum. It might be stated here also, in connection with these works alone, that they are at present producing over 3,600 patterns in all variety of styles and colors. This not only means the placing on the market of 20,000,000 yards ol prints, but it means the manufacturing of 20,000,000 yards of cloth for that pur- pose, which is a very important fact in connection with the manufacture of cot- ton eoods, giving the full benefit of the additional labor and supplies, in making this cloth, to our own industries, instead of importing the finished productions of foreign labor. THE VARIETY OF GOODS. In regard to the apparent endless va- riety in colored cottons shown in the warehouse). , the following remarks were made: — " We make this statement fearless of contradiction, that there is not any one mill in existence to-day, either in Eu- rope or America, making the variety and number of patterns that they are doing, for the simple reason that it is not re- quired of them. Having a large market to supply, they can run on large quanti- ties, and the number of the different works makes up the variety. In England and (iermany, there are, doubtless, over a thousand on print works alone. This holds good with the American print works also ; there, with a population of over sixty millions, you will understand they do not require to make ,the small quantities required of us with our limit- ed population." THE COST OP MANUFACTURE. The question of the cost of manufacture has been very frequently brought up in connection with these and other manu- factures in the country. It would require very little experience in manufacturing — more particularly in this class of goods which have occupied so prominent a position in England and Germany for mauy years past— to ascertain that, w^ith the great and varied advantages which they have,as against manufacturers here, that their cost must necessarily be much lower. Their great advantage in the low cost of machinery and general plant (on which 30 per cent, duty has been paid on all imported into this country), the low prices of buildintn, cheap money, which is never over from 3* to 4 per cent, the low rate of wages (skilled help at that), and in addition to these advantages, the German manufacturers run 72 hours a week, while in the Southern states, where cheap colored labor is used, they run from 72 to 76 hours per week, as against 60 hours in this country. Also fuel (both as to price, and owing to climatic differences, the large quan- tity used here) can be procured in Europe for less than half the price of Canadian coal. General supplies are also very much lower in value than can be jprocured here, our manufacturers having to pay duty on a large portion of their dyes, acids, etc. In addition to all this the foreign manufacturers possess the great advantage of, which" every manufacturer is cognizant, namely, a large market The major portion of the cotton industries in England and Ger- many, as well as the United States, run on very few lines of goods, some of them only one or two for the entire yeai, thereby increasing the production to the very maximum that it is possible to make, whereas, with our limited popula- tion, our mills are constantly obliged to change from one fabric or pattern to another, creating a serious loss by every change. The number of patterns and colors as stated above in connection with the print works alone, givos an indication of what is required in Canadian mills, a condi* tion of things entirely unknown to the large manufacturing concerns of either Europe or the United States. THE SHIPMENTS TO CHINA. Special attention has also been called to the shipping of grey cotton to China. This is done solely and for the purpose of keeping the mills running ; there is no profit made on these goods. In fact, sometimes they involve a loss. It is well known that the owner of any manu- facturing establishment will make extraordinary eflorts and consider- able sacrifice before he will shut down, thereby scattering the help and causing serious injury to property. The cloth made for the China market is a special low grade cloth not adapted for the Canadian market, and is not sold in China in competition with European cloths, which are, as before stated, of an entirely dillerent make. The competi- tion the Canadian manufacturer has in China is with the cloth of the United States. Tne surplus goods shipped from that market as well as from our own in- volves a serious loss to the makers. HOME AND FOREIGN PRICES. Mr. McCarthy also, when speaking on this subject the other evening, made the statement that the vakes of English cot- tons were very much lower than those procured in this country. This is purely a matter of quality. There are, doubt- less, many still in business who can re- member the days when English cottons were imported into this country, and the dissatisfaction caused the consumer by the well known practice of filling the goods with China clay and other in- gredients. It is also well known to every importer that cottons, both un- bleached, bleached and colored, can be procured there (they forming the large production of the cotton goods made in Lancashire) with from 10 to 50 per cent, filling, while goods in Canada are com- paratively pure. The Canadian manu- facturers have more particularly followed the better makes of goods produced by the New England manufacturers, so that the difierence in price can only be made on relative values. Last year a reduc- tion in the price of both grey and white cottons was made to the general trade. A further reduction took place during last week. The revised tariff will make a moPt serious difierence in the manufac- ture of these goods. The larger portion, probably three-fourths of the production of all cottons made in this country, are in low and medium values, so that the change in the tariff necessarily affects these to a larger extent than * e finer goods of which there are so few d. QUALITY AND DEMAND. It is learned that out of the 350,000 pieces otiprints'distributed in the country, not over 50,000 pieces would be over 9 cents per yard— the great bulk being considerably under that price. This ap- plies also to all other grades of cottons. The new tariff on cotton goods is as follows : — On erey or unbleached oottons. . 2i% per cent. On bleaclied cottons 25 *' On colored cottona 30 " A detailed statement showing the old 8 and new duties from the lowest to the best numbers of clotbs, makes tbe dif- ference on tbe low and medium clotbs, wbicb form tbe large production of our mills in tbis country, is certainly very marked. It amounts to a cutting down of tbe protection, in some cases by over 50 per cent. During; tbe preparation of tbis article there has called to mind the serious in- convenience and losses suffered by tbe mills in existence before 1878 by tbe continual pro9sinK on this market of tbe over production both of tbe English and United States manufacturers, at slaughter prices. 7i?bis is a diffi- culty that will still exist, and to all ap- pearances, those engaged in the manu- facture of these goods will find under the new low tariff great difficulty in meeting that outside ruinous competi- tion, and maintaining their works in profitable operation.