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carry out all these processes in one factory, buying the raw material and selling the finished cloth.
According to certain modern schools of thought, the vertical organisation as established in Japan, is superior to the British organisation, owing to the presumed saving of intermediate costs and profits. It will be remembered, however, that in the earlier stages of the British worsted industry there were many firms carry- ing out all the processes as in Japan to-day, but with the lapse of time, these have gradually made way for the organisation at present in being in England. Again, some of the Japanese com- plain that in the recent slump in wool prices, the vertical organisa- tion has been to their disadvantage, as it has meant the purchase ahead of large quantities of raw material in a falling market. They say that had there been a free wool market in Japan, as in England, with wool merchant and top maker as intermediaries between the grower and the spinner, the losses of the machinery users would not have been so heavy.
SUPPLIES OF RAW MATERIAL.
58. England has the advantage of her own domestic wool clip and comparative nearness to South America and South Africa. So far as the supply of Australian wool is concerned, however, Japan is in a better position than England, the difference in freight being equivalent to-day to about 1d. per lb. on the cost of the top. Japan's consumption is preponderatingly Australian. The whole question of freight rates either on raw material imported into Great Britain for our industries, or on the finished product exported from Great Britain to various markets-particu- larly the Far East-in our opinion, calls for serious investigation and correction so that British industry shall suffer no disability in competition with other industrial nations.
Japan's competitive power mainly depends upon
(a) conversion costs, and
(b) marketing costs and methods.
Conversion costs may be broadly divided into
(1) Labour.
(2) Power costs.
(3) Rates and Taxes.
(4) General overhead.
CONVERSION COSTS.
59. Labour. The large mills work from two shifts of 8 hours actual working time up to single shifts of 11 and even 12 hours. An average of 10 hours per shift is probably a reasonable estimate over the whole industry.
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These hours are worked every day except that usually two Sun- days rest per month (first and third) are given, equal to 24 rest days per year. We understand that it is customary, where mills are working two shifts a day, to allow four rest days a month, instead of two. In addition, there are certain national holidays, but the observance of these varies in different districts. It would seem that the factory inspection system is unable to exercise the same control over the many small mills (some being in remote districts) as it can over the comparatively few large mills, and in consequence, local, and in many cases individual, arrangements are made outside the general law.
As these small mills are said to be responsible for from one-third to one-half of the total output, this factor is important. One mill informed us that they worked one shift 8 hours actual time and rested every Sunday, but kept only four other holidays in the year. Another extreme in the Nagoya district worked 11 hours actual, one shift, allowing two nominal rest days per month, which were omitted if business pressed, and six to eight holidays per year in addition, also omitted if necessity arose. A fair average over the whole industry is 312 working days per year, and it is possible that this is an understatement. At the time of our visit, trade was bad and it may be that the particulars given referred in some cases to present conditions and not to normally active ones. The lowest wage for women weavers, stated to us (a statement we believe to be quite reliable) was 20 yen per month, fair average 26 working days of 11 hours, or 1.72 pence per hour. In this mill there were no other allowances except one free meal a day, value 10 to 12 sen (or say 24d. to 3d.).
60. In addition to money wages there are given not in all cases, but probably in the majority.
(1) an annual bonus to workers who have been with the firm not less than a full year, ranging from two to five weeks' pay. (2) a leaving bonus, e.g. on retiring from work. This is stated to range from two to six weeks' pay per annum and is calculated on the whole time the employee has been with the firm. This leaving bonus is supposed to be optional on the part of the employer, but has, in fact, become an unwritten law and we had it stated that many textile strikes in Japan have been caused by the failure of the employer to observe what the employees have considered the former's rightful obligations in this respect.
In some mills-only the larger ones-some or all of the girl employees are provided with dormitory accommodation free. This consists of a room occupied by from eight to twelve girls, the usual sleeping mattresses common throughout Japan being used on the floor, and one or two cupboards used in common for their small personal belongings. This system operates only in those cases
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