§ To meet these conditions of an adverse trade balance which is alarming, an increased expenditure which is inevitable from the reasons I have given—apart altogether from any criticism which may be directed against this Department or another—pensions, sinking fund and interest on debts—there is but one resource, and that is increased production. What are the facts there?
§ Mr. ADAMSONWhat about the Army and Navy?
§ The PRIME MINISTERI am going to discuss finance later on. I am only now giving a review. What are the facts? There is almost a sensational decrease in output. The output is less than ever, and that is true of every branch of production except agriculture, where you have had an increase during the War. I have inquired in every direction, and the output is sensibly diminished in every branch of industry. We are spending more, we are earning less; we are consuming more, we are producing less. Those are the facts of the situation, and it cannot last. Take coal. It enters into everything, almost every form of production, every manufacture, iron and steel, textile, shipping. In coal you have a most alarming fact. There could be no more serious blow at the business, the trade and the industry of this country than a diminution in the output of coal. Our trade depends more upon it than upon any other commodity. It fetches and carries, it goes to the shop, and fetches the goods, carries them back and pays for them. Food, raw material-coal fetches them, and coal pays for them. If you go down to the Argentine to fetch wheat for bread, you pay largely for it 1987 with coal. In addition to that you pay the outward journey with coal, and the man who sells you the wheat pays you half the price of the cost of carrying.
Where there is a diminution in coal it means that food must go up in price, that raw material must go up in price, and that our shipping will be hit. Every industry will be hit, our international trade will be ruined. Therefore, there can be no more serious fact in the whole of our international trade than the depression in the output of coal. Before the War 287,000,000 tons were produced per annum in this country. At the present rate there will be 200,000,000 tons produced. That is a diminution of 87,000,000 tons per annum in the output of coal. I believe last year the output was 220,000,000 tons. That is not due to the fact that you have fewer men engaged in the coal business than you had in 1914. On the contrary, you had 1,110,000 in 1914, and you have 1,141,000 engaged in the same industry now, so that there has been an increase in the numbers employed. With regard to the price, there has been an increase which is most disconcerting for all those who are engaged in any industry that is dependent largely upon coal. A ton of coal raised in 1913 cost 10s. at the pit head; on 16th July last it cost 26s. The fact is that we are not producing or handling as much per man as we were producing or handling on the 4th August, 1914. This reduction in output is the outstanding feature of the moment. It is one which causes the greatest anxiety and apprehension, and unless by concerted effort it be removed, the future is indeed dark. It is partly responsible for the abnormally high price which is the inevitable outcome where the supply is less than the demand, and it handicaps us in competition with other countries where production is greater and cheaper. I have had reports recently that in the United States, where wages are higher and the hours of labour no longer, the labour cost in proportion to the article produced is less. If that be the case, then competition is impossible, and let me say at once no tariff would ever remedy that.
I should like to say a word about the effect upon the exchanges. Unless you nay the adverse balance by means of goods it must have the effect of depreciating the purchasing power of your coin. At the present moment in the United States of America the British sovereign is worth 1988 17s. 6d. [HON. MEMBERS: "Less."] Well, that strengthens the argument. If it be less than 17s. 6d. it is what I have anticipated, as I shall point out later on, that is due to the fact that we are not paying for the goods we are getting—either food or raw materials—by goods that we are producing here.