7.7. Over-Production and Home Competition

“Can you point out any other cause for the distress of the hand-loom weavers to which you think some remedy might be applied?” “Since 1815, when I began to manufacture on my own account, prices have had a continual tendency to fall; there have been temporary reactions, but the uniform tendency has been downwards. This appears to me to arise in a very considerable degree from over-production, itself the effect, I would say, of an intense competition among the manufacturers themselves, which competition I consider has been in a very considerable degree at the expense of the operative, arising from the irresponsible power with which each manufacturer is invested of buying labour as cheap as he supposes he can obtain it, or rather of creating a price of labour himself, which any considerable manufacturer has been able to do.”

(Select Committee on Hand-Loom Weavers’ Petitions, 1834, p. 135, Mr. Thomas Davidson, Manufacturer, Glasgow)

“Have the goodness to explain in what manner what is termed home competition lowers the price of goods and lowers the price of weaving?” “If I and my neighbour have both the same kind of goods to take to market, and we both of us go to the same individual to sell, and I am disposed to sell my goods for less money than my neighbour, then I supplant him in that market, and the operation of it would be when he found it out, as a man of spirit he would go, and most probably, if he could afford, say, “But I will not be outdone in that way; you shall have them at so much less;” and so the thing has been going on shifting up and down, up and down, in that way, till things have got where they are; that is what I call home competition. The same remark applies to the goods when they are sent abroad as when they are sold at home.”

“Is there not a customary rate of profit on capital employed in trade, which customary rate, if the manufacturer does not obtain, he will cease to employ his capital in that way; if two persons are manufacturers, and one competes with the other, selling his goods at a price which will not return him such a customary rate of profit upon his capital, will he not employ his capital in some other way?” “No; we should go to work at this as a man who has his own preservation at stake. In this instance my neighbor has cut me out; I will cut him out, and I think I can nick it in another way, as we express it; I can subtract a little from the width or a little from the quantity; I can put a little coarser material in, or, as a last resort, I will screw down the poor weaver another sixpence, and that will do for me; that is the real and true state of the case.” 

(Select Committee on Hand-Loom Weavers’ Petitions, 1834, pp. 405, Mr. John Makin, Manufacturer, Bolton)

It was also true that the hand-loom weavers were not in a good position to defend themselves against the masters, who were fixing the prices for buying the woven cloth.

“Can you assign a reason why the wages of spinners have not fallen in the same ratio that the weavers’ have?” “The spinners being assembled more under one roof are more capable of combining, and by combination they have opposed a barrier to reduction, inasmuch as the mill owner having a capital invested he is interested in having his machinery moving, for it suffers from standing, and not being worked.”

(Select Committee on Hand-Loom Weavers’ Petitions, 1834, pp. 419, Mr. John Makin, Manufacturer, Bolton)

“Do you consider that wages at present are regulated by the power of starvation on the part of the people, rather than by the degree of profit on the part of the manufacturers?” “Yes.”

(Select Committee on Hand-Loom Weavers’ Petitions, 1834, pp. 385, Mr. John Makin, Manufacturer, Bolton)

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