MIA > Archive > J.T. Walton Newbold
From International Press Correspondence, Vol. 2 No. 80, 19 September 1922, pp. 600–601.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2020). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
An incident occurred the other day at the port of Newcastle-on-Tyne in connection with the American Consulate there which, whilst it may be smoothed over for a time, is a sure index that the relations between the great capitalist trusts of Britain and the United States are steadily pushing the two mighty empires to war. The British Government protested, without success, to the American Government against the alleged action of one of its consuls in making the granting of a visa to a passport, or at any rate, the hastening of this, conditional on booking a passage to the States in an American owned ship. The American Government has answered the protest by saying it does not consider that its consul has acted irregularly and has declined to discipline him. The British Government has therefore closed the consulate. It is only a straw, but it shows the way the wind is blowing. A few incidents of this kind and we shall soon have the American capitalist press working up a war to defend the honor of “Old Glory”, and to stop the British Lion tweaking tail feathers out of the American Eagle.
The British capitalist press and the British shipowners have been very angry in their criticisms of the Shipping Subsidy Bill which was recently introduced into the U.S. Congress, and in support of which President Harding himself came to make an impassioned speech. There is much talk of retaliation and of the British Government using powers under existing but now dormant laws to subsidize or otherwise assist British shipping. Nineteen years ago, when Pierpont Morgan bought up a number of British shipping companies, the British Government loaned £3,000,000 to the great Cunard Steamship Company to enable it more easily to meet American competition. The year following, the greatest shipping company trading to South America had an alteration made in the Royal Charter, under which it operates, laying it down that the directors and the capital were to remain British. Thus the British Government assisted two British transatlantic shipping companies to resist the competition of lines owned and assisted by American finance capital.
Just before entering the War, the United States Government set up the U.S. Shipping Board and, in conjunction with the American International Corporation (a financial institution established by the industrial capitalists of America and presided over by Mr. Frank Vanderlip), it initiated a gigantic shipbuilding program. Then, it followed this up with the U.S. Emergency Fleet Corporation formed to operate the new boats. By one means or another, the American Government built and put at the disposal of the American export trade, a gigantic shipping fleet of about 13,506,000 tons. This fleet has been described as a monument of the wastefulness and inefficiency of state ownership and management. It has been run at an enormous loss. It seems, however, that the Shipping Board has hired out the services of its ships to American exporters in the China trade at charter rates and freight charges with which the British lines could not compete. It was used and there is talk of it again being used in such a way as to enable the American coal exporters to undersell their British rivals in European and South American markets. It is very largely the competition of this enormous American shipping fleet which has knocked the bottom out of the market for ships. There are 10,000,000 tons too many ships just now. The greatest of all the shipbuilding companies in the world, Harland & Wolff Ltd., with six huge yards at Belfast and on the Clyde, which used to build the biggest ships that steam the seas, has now to be content with orders for two ferry boats costing each £1,500 and weighing, approximately 150 tons each. The yearly possible output of all the British and Irish shipyards is more than 3,000,000 tons. In the first six months of this year, new orders did not total 90,000 tons.
Researches I have made enable me to say with absolute assurance that most of the big shipyards of Britain and Ireland are owned by the shipping companies, and that two-fifths of the British steel output is, normally, used in the shipyards and many of the great steel works owned by shipbuilding companies. Hence, having forced the price of ships down from £30 to about £7 a ton, having spoiled utterly the freight markets, and having driven the British Shipbuilding trade to the brink of ruin, the Americans have achieved a tremendous victory. They have devastated three great British industries – shipping, shipbuilding and steel manufacture. Now, these are just the industries upon which the sea power, i.e., the naval superiority of Britain has been reared.
Right on the top of this, the American Government, able as it is to draw upon enormous sources of taxation and of loan issues, decides to subsidize American shipping more fully and more directly than hitherto. It is turning the operation and ownership of the State-built and State-supported merchant fleet over to private interests, mainly those of the Harrimans, who already have established connection with the technically efficient but financially handicapped German transatlantic shipping companies and who, also, are predominant in the ownership and direction of the great transcontinental railways of the United States. If American capitalism can lower the wages and increase the productivity of the American miners and railroad operators, then it will be ready for the terrific and overwhelming barrage of cheap commodity production, for export with which to complete the destruction of the financial power of the City of London.
The one remaining source of British capitalist money power is the cotton industry. Just when Gandhi’s campaign in India had been blown sky high and the Indian and Eastern trade looked like recovering, the cotton boll-weevil got busier than ever eating up the supply and increasing the cost of the raw cotton of America. Lancashire cotton buyers are in a terrible state of anxiety, for the economies they have effected in wages will appear “insignificant” if they have to pay the increased prices for the raw material that they anticipate. Besides, the Guaranty Trust Company and Brown Brothers, the chief houses to finance the transfer of the cotton crop, are not in a mood to be generous to the advantage of Manchester and to the detriment of New England and Carolina mill-owners.
Moreover, the U.S. Supreme Court has recently annulled, as being a measure “in restraint of trade” and contrary to the Constitution, the law to suppress the horrible exploitation of Child Labor by means of which the Democratic South is building up its mill-industry. Already. British exports of cotton yarn have fallen from 210,000,000 lbs. in 1913 to 146,000,000 lbs. in 1921, and of cotton piece goods from 7,075,000,000 yards in 1913 to 2,903,000,000 yards in 1921. That is the writing on the walls of the Manchester and Liverpool Cotton Exchanges. That spells ruin, if it continues, not only for Lancashire but for the banks of Britain. Lancashire has, for a century, been a fountain from which a flood of profits, wide, deep and torrential, has swept out to all the waiting channels of world investment. Now, the fountain threatens to run slow, to run shallow, to run dry.
Shipping, shipbuilding, steel and coal, no longer yield the profitable surplus from which to replenish the coffers of British Capitalism. If cotton fails them, then the British bourgeoisie might as well “put up the shutters”.
But the proud inheritors of the great traditions of classic capitalism, the sons and grandsons of the men of Manchester, Glasgow, Liverpool, Leeds, Birmingham and London, who were the grand architects of British industrial capitalism; the magnates whose directorships read like a compendium of world geography and of the economy of all trades; the industrial captains, merchant princes, and rulers of subject races in a far-flung Empire “whereon the sun never sets”, will never “put up the shutters” or yield up the dominion without one, last, terrible struggle. That struggle – war between Britain and America – cannot long l»e delayed. Already they are gathering their allies and marshalling their forces. Already they are fixing the stakes and discussing the spoils of battle.
Last updated on 2 September 2019