An Economic History of the Silk Industry, 1830-1930 (Cambridge Studies in Modern Economic History)

An economic history of the silk industry, 1830—1930 is an ambitious and innovative historical analysis of the development of a major commodity. Dr Federico examines the rapid growth of the world silk industry from the early nineteenth century to the eve of the Great Depression of the 1930s. Silk production grew as a result of Western industrialization, which in turn brought about increased incomes and thus increased demand for silk products. The author documents the changes in methods of production and the technical progress that enabled the silk industry to cope with this new influx in demand. Dr Federico then discusses the significant changes in the geographical distribution of world output which accompanied this growth. Italy was the traditional supplier of thread to the Western weaving industries; China, the cradle of sericulture, became a large supplier to European weavers from the 1840s; and finally Japan entered the market in the 1860s. In conclusion, Federico points out that silk did indeed become the first example of a Japanese success story on the world market, Italy and China both losing their markets due to Japan's large agricultural supply of raw material (cocoons) and its adroitness in importing and adopting Western technology. Italy retained a sizeable share of the market until its industrialization diverted labour from silk to higher wage occupations. This same fate was to befall Japan's silk industry after the Second World War.

Cambridge Studies in Modern Economic History 5

An economic history of the silk industry, 1830-1930

Cambridge Studies in Modern Economic History Series editors Charles Feinstein All Souls College, Oxford Patrick O'Brien The Institute of Historical Research, London Barry Supple The Leverhulme Trust Peter Temin Massachusetts Institute of Technology Gianni Toniolo Universita degli Studi di Venezia Cambridge Studies in Modern Economic History is a major new initiative in economic history publishing, and a flagship series for Cambridge University Press in an area of scholarly activity in which it has long been active. Books in this series will primarily be concerned with the history of economic performance, output and productivity, assessing the characteristics, causes and consequences of economic growth (and stagnation) in the Western world. This range of inquiry, rather than any one methodological or analytic approach, will be the defining characteristic of volumes in the series. Thefirsttitles in the series are: 1 Central and Eastern Europe 1944-1993: detour from the periphery to the periphery Ivan Berend ISBN 0 521 55066 1 2 Spanish agriculture: the long siesta, 1765-1965 James Simpson ISBN 0 521 49630 6 3 Democratic socialism and economic policy: the Attlee years 1945—1951 Jim Tomlinson ISBN 0 521 55095 5 4 Productivity and performance in the paper industry: labour, capital and technology, 1860-1914 Gary Bryan Magee ISBN 0 521 58197 4 5 An economic history of the silk industry, 1830-1930 Giovanni Federico ISBN 0 521 58198 2

An economic history of the silk industry, 1830-1930 Giovanni Federico University of Pisa

I CAMBRIDGE UNIVERSITY PRESS

CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, Sao Paulo, Delhi Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www. Cambridge. org Information on this title: www.cambridge.org/9780521105262 Originally published in Italian as Ilfilo d'oro - L'industria della seta dalla restaurazione alia grande crisi by Marsilio editori (Venice) 1994 © Marsilio editori (Venice) 1994 First published in English by Cambridge University Press 1997 as An economic history of the silk industry, 1830-1930 English translation © Cambridge University Press 1997 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. This digitally printed version 2009 A catalogue record for this publication is available from the British Library Library of Congress Cataloguing in Publication data Federico, Giovanni, 1954[Filo d'oro, l'industria mondiale della seta dalla restaurazione alia grande crisi. English] An economic history of the silk industry, 1830-1930 / Giovanni Federico. p. cm. - (Cambridge studies in modern economic history : 5) ISBN 0 521 58198 2 1. Silk industry - History - 19th century. 2. Silk industry - History - 20th century. I. Title II. Series. HD9910.5.F4313 1997 338.4'767739 - dc20 96-43922 CIP ISBN 978-0-521-58198-1 hardback ISBN 978-0-521-10526-2 paperback

Contents

List of illustrations List of tables Forward and acknowledgments List of abbreviations

page ix x xiii xiv

1

Introduction

1

2

The characteristics of the industry

7

The situation in the 191 Os Patterns of location: sericulture Patterns of location: reeling and throwing The technology of the modern silk industry An highly competitive industry A 'crazy business* Reeling firms: manpower and management

3

The growth in the long run An overview A country analysis Crisis and recovery at the middle of the nineteenth century The trade in thrown silk

4

Consumption of silkwares and demand for silk Introduction: the 'democratization' of silk Consumption of silkwares and demand for silk: an overview of the trends Production of silkwares and consumption of raw silk Democratization and the quality of silk A digression: was fashion really important? Summary

5

The demand for silk: an analysis by country Why is an analysis by country necessary? Why did growth rates differ? Why did silk consumption differ? Patterns of import

7 13 16 18 21 24 27

30 30 34 36 41

43 43 46 48 53 58 60

61 61 63 69 74

viii 6

Contents The roots of growth: agricultural production Introduction: the growth of inputs On the causes of growth The shift of supply: technical progress The shift of supply: other components Crises and remedies

7

The industry: technical progress and structural change Introduction: innovations in reeling Technical progress in silk reeling: the Italian experience Technical progress: Italy's competitors The response of traditional industry The consequences of steam: structural transformation and changes in location The Italian leadership: productivity The Italian leadership: the quality of silk Where competition was really tough: the throwing industry

8

Institutions and competitiveness: the markets Introduction: what are the institutions and why do they matter? The market for cocoons The market for silk: an overview The market for silk: modernization in the West The market for silk: efficiency and risk in the modern institutions The market for silk: the persistence of traditional institutions in Asia The market for credit Did institutions matter?

9

Institutions and competitiveness: the state Introduction The tool of industrial policy Beginning from scratch: Kashmir and the United States How to promote exports: Japan How (not) to promote exports: Italy and China The struggle for survival: Italy and France Some final remarks

10

Conclusions

Statistical appendix References Index

79 79 81 86 98 99

104 104 112 117 122 126 130 133 139

146 146 147 151 154 157 162 164 167

174 174 175 177 179 183 187 189

191 196 233 256

Illustrations

Figures 1 Quantity of traded silk and real price of silk 1850-1930 2 Silk exports by country 1860-1930

page 33 37

Maps 1 Main sericultural areas of Italy 2 Main sericultural areas of China 3 Main sericultural areas of Japan

8 9 10

IX

Tables

2.1 Equipment, output and manpower in steam-reeling, c. 1910 page 11 2.2 Equipment, output and workforce in throwing, c. 1910 12 2.3 Characteristics of the silk industry in Italy and Japan, c. 1910 19 2.4 Rates of survival of reeling firms in Italy 1890-1927 23 3.1 World silk production, 1870-1930 31 3.2 World silk trade and real prices, 1870-1930 32 3.3 Percentages on world output 35 3.4 Shares on total exports of silk, 1820-1930 36 4.1 Growth of total consumption of textile fibres, 1875-1930 44 4.2 Trends in final products/silk prices 47 4.3 Growth rates of production of silkwares, various countries, 1870-1930 48 4.4 Productivity growth in powerloom weaving 56 5.1 Consumption of silk in the major countries by provenance of raw silk, 1913 62 5.2 World distribution of total silk consumption 62 5.3 Constant-market share analysis 62 5.4 Apparent consumption of silk 64 5.5 Performance of the weaving industry in major countries c. 1910 65 5.6 Percentage of power looms in total equipment, 1840-1913 71 6.1 Relative prices of silk in Italy, 1736-1846 82 6.2 Relative prices of silk in the major producing countries, 1875-1929 82 6.3 Parameters of the supply curve, 1870-1913 83 6.4 Decomposition of total productivity growth 84 6.5 Total Factor Productivity in Japanese sericulture 85 7.1 Productivity growth in reeling in Italy - yearly rate of change 1876-1938 116 7.2 Rates of change in unit production costs in silk reeling in Italy, 1876-1911 117

list of tables 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 8.1 8.2 8.3

Motive power in Japanese silk reeling, 1893-1917 Rate of productivity growth in steam-reeling, Japan, 1893-1929 Rates of change in unit production costs in steam reeling, Japan 1894-1929 Profits of reeling in Japan Productivity of steam-reeling, around 1910 Hourly output per worker in steam-reeling 1890-1930 (grams) Capital per worker in steam reeling, Italy/Japan ratio Total Factor Productivity in steam reeling, Italy/Japan ratio Nominal wages and labour costs per unit of output, Italy and Japan (data in 1911 francs) Price ratios in Lyons in 1911 -1913 (Italian silk =100) Speed of spinning spindles (revolution/minute) Costs of throwing per unit of output in Italy and the United States Methods of purchase of cocoons in Italy Quantity of silk traded in the main marketplaces (tonnes) Commission fees for marketing the silk (percentages of the silk prices)

xi 121 122 122 123 130 131 131 132 133 134 141 142 149 153 168

Statistical appendix AI All AIII AIV AV AVI AVII AVIII AIX

The silk trade before 1860 The silk trade, 1859-1938 The silk trade, 1859-1938: market shares Output of silk before 1870 Output of silk after 1870: total estimates Output of silk after 1870: yearly series Trade in thrown silk Silk prices Prices of silk relative to other fibres in the United Kingdom AX Silk consumption in the main countries AXI Market shares by consuming country AXII Estimated 'real' market shares AXIII Location of sericulture in the main producing countries AXTV Sericulture in Japan AXV Yields of silkworm eggs AXVI Silk content of cocoons AXVII Trade in dried cocoons

196 197 200 201-2 203 204 207 209 212 213 214 217 219 220 221 221 222

xii

list of tables

AXVIII AXIX AXX AXXI AXXII

Equipment of reeling Development of steam-reeling Relative prices of silks in the Western markets Relative prices of silks in Asia Concentration of exporting firms in the Far East marketplaces

222 227 229 231 232

Foreword and acknowledgments

This book is not simply a translation of the book (Ilfilo d'oro) which was published in Italian in 1994. The volume has been substantially abridged, dropping chapter 9, which analyses the behaviour of Italian entrepreneurs, and all the appendices, which dealt with specific technical issues. On top of this, many footnotes have been trimmed or altogether suppressed and the Appendice Statistica (Statistical Appendix) has been reduced from 73 to 22 tables. On the other hand, this version takes into account some recent works, including some unpublished ones. In some cases, the differences are substantial and some outright mistakes have been corrected. The original chapter 4 has been split into two, and the layout of other chapters (e.g. 5 and 7) has been drastically changed to make the exposition clearer. The author hopes that all these changes have improved the outcome. The book has greatly benefited from the help of several people. First, from the participants to seminars in the Universities of Pisa, Venice, Florence, Madrid (Carlos III), the European University Institute and the Waseda University (Tokyo) and from a long conversation with Y. Kyokawa and F. Makino, P. Solar. F. Cripps, K. Ishii, M. Scardozzi, R. Tolaini and C. Zanier have kindly given me information or copies of their unpublished works. The Italian version has been read and usefully commented upon by M. Aymard, L. Cafagna, S. Fenoaltea, S. Laudani, G. Mori, G. Toniolo and V. Zamagni. The English project has been made possible by constant encouragement from P. O'Brien and G. Toniolo. Finally many thanks to L. Graziani and to the editors of CUP who have worked very hard to improve my poor English. Unfortunately, I have no one else to blame but myself for the remaining shortcomings.

xiu

Abbreviations

Archival sources ACC CO ACdCMi CL CMS MAE ADC Asie NS

Archive of the Como Chamber of Commerce (State Archive, Como) Archive of the Milan Chamber of Commerce Archive L. Luzzatti ('Istituto Veneto di Scienze, Lettere ed Arti', Venice) Archive of the Civico Museo setificio, Abbadia lariana Archive of the Ministere des Affaires Etrangeres, Paris; files: Affaires Commerciales diverses Aflfacom Affaires Commerciales Asia CCC Consular correspondence, RC Relations Commerciales Nouvelle Serie

Journals and Newspapers Annual ASJ BA BNA BS BSS BU CPVD CR, PP CVD xiv

Silk Association of America, Annual Report (New York) American silk journal (New York) Bollettino dell 'agricoltura (Milan) Bollettino di notizie agrarie (Rome) Bollettino di sericoltura (Milan) Bulletin des soies et soieries (Lyons) Bollettino ujficiale del Ministero di Agricoltura industria e commercio Ministere du commerce, Commission permanent des valeurs de douane, L'industrie textile jrancaise en . . . Consular Reports, in Parliamentary papers Ministero di Agricoltura industria e commercio, Direzione industria e Commercio, Commissione centrale

List of abbreviations

GIS InS MS Semiannual

xv

dei valori per le dogane, Atti e relazioni per Vanno> in Annali delVindustria e del commercio Giornale delVindustria serica (Turin) Industria serica (Bergamo) Manifattura serica (Como) Silk Association of America, Semi-Annual Report (New York)

Introduction

The effect of foreign trade on economic growth and welfare is one of the oldest and most controversial topics in economics. The discussion has been particularly intense in regard to the developing countries. They usually have little to export but primary products, and this specialization has not been unanimously welcome, to say the least. The radical writers of the so-called dependency school regard it as a form of exploitation of the 'periphery' by the greedy capitalists of the 'core' countries. And consequently, they suggest that backward countries should reduce exports as much as possible and adopt an inward-looking policy to speed up industrialization. These drastic views are not accepted by the overwhelming majority of economists, who stress the benefits of free trade and of specialization according to comparative advantages for any country, regardless of the goods it exports. Therefore, they recommend a free-trade policy, and possibly measures to foster exports. Yet even among mainstream economists there is a sort of uneasiness about the exports of primary products, and many would not condone permanent specialization in their production. The historical evidence has been extensively used in this discussion at least since the 1950s, when Prebisch and Singer pinpointed the alleged century-old deterioration of the terms of trade of primary producers exporting to the United Kingdom as an evidence of the disadvantages of specialization. The attention has focused inevitably on the years from the middle of the nineteenth century until World War I. The period was characterized by an unprecedented growth in total world trade and by the creation of a world market for many commodities. The literature on these processes is very large. However, it tends to focus on a single country, taking into account either the whole of its exports or a specific commodity - e.g. tin from Malaysia, cotton from Egypt etc.1 This 1

See Ken 1965 and Hoong 1969 and Owen 1991. This approach inspires also the books by Sugiyama (1988) on Japan, and Li (1981) and Eng (1986) on China which will be extensively used in the following pages. Recent examples of aggregate studies are Lains 1986 (on Portugal) and Prados de la Escosura 1988 (on Spain). 1

2

An economic history of the silk industry

approach is undoubtedly useful for assessing the consequences of exports for development but it misses a basic preliminary question: what caused exports? Such a problem can be dealt with only by taking into account the competition of other producers (sometimes including advanced countries) and the trends in demand. The performance of any given country can be understood only if framed in a general analysis of the world market of the goods it exported. Such an approach is quite common in development studies, and there are plenty of examples of commodity analysis dealing with the period after 1945. 2 In the area of historical analysis, however, it is very unusual. The main exception is Hanson's Trade in transition but Hanson deals with many commodities, and therefore cannot tread any of them in detail.3 This book is the first and hopefully not the last - example of commodity analysis in historical perspective. It considers the case of silk (the yarn to be woven) from the 1830s to the 1930s. Silk is arguably the most beautiful and surely the most expensive of natural fibres. Yet its biological origin is very humble. The silk is in fact secreted by an insect, the silkworm (Bombyx Mori) so as to protect itself inside a cocoon during its transformation into a pupa and then into a butterfly. Several other species (out of the around 200 which spin a cocoon) produce a workable thread, but only that of the silkworm is real silk. The thread of the others is decidedly inferior.4 Unlike other species, the Bombyx Mori is nowadays a purely domestic creature, which can no longer survive on its own in the open air. It has to be raised in closed rooms, hatching the eggs laid down in the previous season and feeding the worms on mulberry leaves. The production of cocoons (sericulture) therefore entails both the cultivation of mulberries to provide the feed and the actual raising of silkworms. The silk is then extracted by winding ('reeling') the cocoons in a basin full of hot water which dissolves the gum which holds them together. Even if the product (raw silk) can be woven, most of it is further processed to strengthen it ('throwing'). Two threads are joined and twisted together, producing two different types of yarn, the tram (used for weft) and the organzine (for warp). Finally, the silk is woven or otherwise processed to produce fabrics, ribbons, 2

3

4

See e.g. Sarkar 1972 on tea; Gupta 1981 on zinc; Baldwin 1983 on tin; Banks 1985 on coal; Maillard 1991 on bananas (which includes a short historical overview) etc. The other exceptions - as far as the author is aware - are the old books by Ukers on coffee (1922) and tea (1933) and the more recent work by Malenbaum on wheat (1958). A lot of information on the economic history of tobacco are in Goodman 1993, which however deals mainly with the cultural implications of the consumption. These silks were known in the West as tussahs. The main types were the tasar silk (produced by the Antheraea mylitta, paphia and pernyia), the muga silk (produced by the Antheraea assama) and the eri silk (produced by Attacus ricini).

Introduction

3

knitwear, stockings and all other silkwares for final consumption. This book focuses on the first three phases of this process. Manufacturing is considered only to the extent that its characteristics affected the demand for silk. According to the Chinese legends, silk was discovered by an exceedingly clever princess. The reality is no doubt more prosaic, though unfortunately unknown.5 The first archeological evidence dates back to sometime between 2850 and 2650 BC in Northern China, but very little is known about the first phases of the history of the silk industry. It is probable that the industry flourished first of all on account of internal consumption. From the first millennium BC, however, China began to export silkwares. These wares were sent as far as Greece and Rome, along the famous Silk Road (so christened by a nineteenth-century geographer). They were, in fact, so expensive as to make long-distance trade profitable, even with the transportation technology of that time. In many countries, the competition of Chinese goods stimulated the development of a local manufacturing. At first, the local manufacturers used Chinese silk (or the yarn obtained by unravelling old cloths) because China managed to keep a monopoly on the business for many centuries. The export of silkworm eggs from China was punished as a capital offence. This monopoly ended around 300-200 BC, during a period of political turmoil. The silkworm eggs were smuggled eastward to Korea, westward to Khotan (Central Asia) and probably southwards towards India. Although some Indian literary sources of 1300-1400 BC mention the production of silk, the silkworm in question is probably the indigenous one (which produced tussah silk) instead of the Bombyx Mori. The next wave of expansion of silk production began some centuries later, around AD 300-400. Within China, sericulture moved southwards to the Central region (around Shanghai), which was to become the country's main producing area after the eleventh century. Silk production began around the same time in Japan too, where it was almost certainly imported from China, the nationalistic legends notwithstanding. In AD 552-556 sericulture reached the shores of the Mediterranean. The silkworm eggs were smuggled out of Persia by two monks on a mission on behalf of the Byzantine Emperor Justinian. The 5

The following account is based on Legget 1949; Boulger 1920; Feltwell 1990; Kuhn 1988, 41, 249f and 272; Li 1981, 2 - 3 and 113; Survey 1925, 2; Eng 1986, 17; Bell 1985, 50-5; Report 1909, 3; Rondot 1885-87, I, 110, 162, 273, 309-10 and 346; Silberman 1897, I, 223, 235 and 247-58; Report 1933, 9-10; Ladero Quesada 1993; Dini 1993; Battistini 1992; Comba 1991, 34-8; Rosso 1991, 40-2; Moioli 1981, 11-25; Cayez 1993, 598-9 and, specifically on weaving, Morand 1889; Pariset 1901; Pinchetti 1894; Warner 1921; Cayez 1993; Ciriacono 1981; Kriedte 1991; Kermann 1993; Pohl 1993; Margrave 1986; Mottu-Weber 1993; Clark 1949,1; Brockett 1876; Bishop, 1868,1.

4

An economic history of the silk industry

further diffusion of sericulture westward was halted for some centuries, probably more by the poor economic conditions than by the attempts of the Byzantine emperors to keep a monopoly on it. Eventually, the Muslims brought sericulture to Spain (in the ninth century) and in Sicily (in the eleventh). From there, it began a slow march northwards along the Italian peninsula, spreading all over the Northern regions in the fifteenth and sixteenth centuries. It arrived in France in the late fourteenth to early fifteenth century, but large-scale silk production began only some two centuries later, as was the case in Austria. At the same time, sericulture resumed its movement southwards in China, also localizing around Canton. At the end of the seventeenth century, nearly 5,000 years after its first discovery, the production of silk had spread to most of Asia and to the whole of Southern Europe. Its worldwide location was not to change for the next three centuries, despite an enormous growth of production. After the eighteenth century, however, an epochal change occurred the development of a world market for silk. Some silk had always been traded, as in most Asian countries the development of manufacturing had preceded the growth of national supply of raw material. Eventually, however, these countries became self-sufficient. The same did not happen in Europe. Long-distance silk trading became a permanent feature of the industry since the development of silk weaving in Lyons in the late fifteenth century. The French industry thrived so much that the national production of raw material was to remain constantly insufficient to its needs. The trade was greatly boosted by the development of manufacturing in the North European countries (Germany, United Kindgom etc.) and, from the late eighteenth century, in the United States. For climatic and economic reasons none of these countries succeeded in producing commercially significant quantities of silk. As a result they had to resort first to Mediterranean silk and later to Indian, Chinese and, after 1859, Japanese silk. The quantity traded grew twenty times from the 1820s to the 1920s. From the 1870s to 1929 the value of trade increased nine times, roughly as much as the world trade (the percentage of silk fluctuated around 1.5 per cent), and the world trade/ output ratio increased from 0.5 to 0.75. The growth was abruptly interrupted from the 1930s to the 1950s. The combined effect of the Great Crisis, World War II and of the invention of several artificial substitutes caused the world consumption of silk to plunge to a third of the level reached in the 1920s. This fall affected the producing areas differently. Sericulture disappeared altogether from Europe and the Middle East and the Japanese production fell by two thirds. China remained the only exporter of silk, and has been

Introduction

5

challenged in more recent times by new competitors such as Brazil, Thailand and South Korea. The long history of worldwide expansion ended with 'the return to the cradle of sericulture'.6 This book describes in some detail this great surge in production and trade of silk. It aims at answering two basic questions: why did it happen and why did market shares of different producing countries change? It consists of this introductory chapter, eight further chapters and a short conclusion. Chapter 2 outlines the main characteristics of the silk production. It starts by analysing the causes for its location both worldwide and within each producing countries. Then it discusses the the features of the technology (notably the absence of scale and scope economies and the low Value Added) and their consequences on the economics of the industry, such as the almost perfect competition and the high level of risk. The third chapter outlines the long-term changes in production, trade and market shares, with a particular attention to the period from the 1850s to the 1860s which marked a watershed in the development of the world market. The rest of the book is intended to explain these trends, dealing in turn with the demand side (chapters 4 and 5) the supply side (chapters 6 and 7) and the role of institutions (chapters 8 and 9). The discussion of chapter 4 focuses on the effect of the increase in the consumption for silkwares on the market for silk. Chapter 5 examines how the technology and product mix of manufacturing caused the demand for silk to differ in the importing countries, and how these differences affected the world demand by quality, that is by country of production. Chapter 6 deals with sericulture. It begins by showing that the quantity of inputs increased despite the fall in the real prices of cocoons. It then discusses the contribution of the technical progress and of the vent-for-surplus growth to this achievement. The last paragraph examines some exceptions to the overall expansion of production, notably in the Mediterranean countries. Chapter 7 examines the development of reeling, focusing on the effects of the adoption of steam. It begins by describing the main innovations and their effects on the productivity of inputs and/or the quality of the output. Then it outlines the technical progress in Europe and in the Far East, and the reaction of traditional producers to the challenge. Finally, it illustrates how these patterns affected the competitiveness of the producers both regarding the productivity of inputs and the quality of the silk. Also the analysis of institutions is strictly comparative. It aims at assessing if and to what extent they were, as often claimed, a relevant source of competitive advantage. Chapter 8 deals with the markets for cocoons, 6

Gueneaul923,48.

6

An economic history of the silk industry

silk and credit, discussing the causes of different arrangements, their changes in time and their overall efficiency. The final chapter analyses the role of the state. It contrasts the much-praised support of the Japanese government with the inactivity of the Chinese and Italian ones, and discusses the role of government support in the silk export record of each country.

The characteristics of the industry

The situation in the 1910s On the eve of World War I the silk production was diffused all over Europe and Asia - in Spain (around Murcia), in southern France (the Cevennes and Provence), in nearly all the Italian peninsula (with some offshoots in the Austrian provinces near the border), in the Balkans (notably around Salonicco in Greece and Adrianople in Bulgaria), in Anatolia (around the city of Brussa), in the Lebanese mountains, in the Russian Caucasus, in Persia, in Turkestan, in India (Bengal and Kashmir) in Indochina, and - of course - in China and Japan. This list may seem impressive, but three countries, Italy, China and Japan accounted for as much as 85 per cent of world silk output.1 Moreover, within each of them, sericulture was concentrated in smaller areas - the regions around Shangai (Chekiang, Kiangsu) and Canton (Kwangtung and Kwangsu) in China, Lombardy, Piedmont and Veneto in Italy and the central prefectures of the island of Honshu (Gifu, Gumma, Nagano, Fukushima etc.) in Japan.2 In those areas, almost the whole rural population raised silkworms - but only in some districts of southern China did the proceedings provide most of the peasants' income (up to 80 per cent in the Shuntak district).3 Elsewhere, the sale of cocoons (or of silk) accounted for a minor part of total earnings - between 20 and 45 per cent in central China according to which area, 25 per cent in Lebanon, 10 per cent in Lombardy (with peaks around 30 per cent for some households). The nation-wide percentages were of course much 1 2

3

See Statistical Appendix table AV. See Statistical Appendix table AXIII; see for further information, Silberman 1897, I, passim; for Italy, Federico 1994b; and for Japan, Sugiyama 1988, 79-80 and De Bavier 1874, 57-66. See Statistical Appendix table AXTVb for Japan, and Li 1981, 140-1 for Central China; the data on income are from Howard-Buswell 1925, 112-15 (southern China); Labaki 1984, 152 and 156, and Owen 1987, 275 (Lebanon); l i e u 1933, 59-67 and Bell 1994 (central China); Federico 1994b, table 4.2 (Italy). The figures for Central China refer to the 1930s and therefore may understate the percentage in 'normal' times.

0

80

160 kilometres

Map 1 Main sericultural areas of Italy

0

160 320 480 kilometres

SEA Shanghai

o

ngchow

PA

c i Fi

OCEAN

Map 2

Main sericultural areas of China

c

80

160

240

320 kilometres

50

100

150

200 miles

PA Map 3

Main sericultural areas of Japan

C I F I C

OCEAN

The characteristics of the industry Table 2.1

11

Equipment, output and manpower in steam-reeling, c. 1910

Japan Italy Southern China Central China Lebanon Anatolia France Caucasus Austria Spain Kashmir Switzerland

Factories

Basins

Output (tonnes)

Workforce

2,490 900 160 59 195 165 172 84 ns 35 7 2

183,300 61,000 65,000 16,400 8,400 9,000 11,700 3,850 6501 1,000 992 240

9,550 6,380 2,220 1,310 540 410 678 285 240 60 80 2

224,000 97,000 75,000 36,000 9,700 10,500 20,000 7,500

uoo1

1,700 2,250 400

1

Tirol only Sources: output (average 1910-12) and number of basins Statistical Appendix tables AVI and AXVIII (except Caucasus, taken from from Beauquais 1910, 460 and Kashmir, from Report 1933, 29); on the workforce in Italy, see Federico 1994a, Appendix D; Japan Resume 1914; Kashmir Report 1933, 29; other countries estimated assuming a basin/ worker ratio of 2.2 in the Shangai area, 1.7 in European countries and 1.15 elsewhere.

lower: cocoons accounted for 9.7 per cent of the agricultural production in Japan, 2.4 per cent in Italy and 0.75 per cent in China.4 About 95 per cent of cocoons were reeled in the producing countries because, though tradable (if dried), they are far heavier and bulkier than silk. On the eve of World War I, nearly 60 per cent of the world output was produced by steam-heated factories. The basic data on them are collected in table 2.1. Hand-reeling had long since disappeared from Italy and the Mediterranean basin, but it was still widely diffused in the Far East. The actual number of basins is largely a matter of conjecture. They were about 10,000 in India in the late 1920s (with about 32,000 specialized workers) and 330,000 in Japan in 1915.5 The number in 1911 can be estimated at around 500,000 - assuming that the average number of basins per 'reeling-house' had remained constant at 1.4. There are no 4

5

For data for Italy, see Federico 1992c; for Japan, Umemura et al. 1966, table 1 cols. 11 and 14 (both in 1911); and for China (in 1933), Perkins 1968, 289. The data on India (for the late 1920s) are from Report 1933, 29; those for Japan from Fujino et al. 1979, table 60A (average productivity computed with the output data from table 55). The production of hand-reeled silk in China is estimated deducting the exports of filatures (Hsiao 1974, cols. 33 and 37) from the estimates of China's output (Statistical Appendix, table AV, hypothesis a).

12

An economic history of the silk industry

Table 2.2

Equipment, output and workforce in throwing, c. 1910

Italy France United States Germany United Kingdom Switzerland

spindles (000)

output (tonnes)

workforce

1,800 1,800 2,160

4,350 5,200a 10,000a 3,590 a 620 310

50,000 60,000* 52,700 40,000* 7,000* 3,500*

a

estimated as apparent consumption less 10 per cent (the percentage of raw silk woven without throwing) * estimated assuming a productivity equal to the Italian one (8.7 per worker per year) Sources: number of spindles (spinning and throwing) Federico 1994a, Statistical Appendix table L; employment in Italy, Federico 1994a, Appendix D; in the United States US Census 1914, table 6; output in Italy, Fenoaltea 1988, table 5, col. 3

data for China, but if the average productivity per basin were equal to the Japanese one, the total may have exceeded the 2 millions. The case of throwing was totally different, because the transport costs of raw silk were practically negligible and the production had been mechanized since the Middle Ages. Western countries enjoyed a large technological superiority over Asia, where throwing produced only for the home market.6 Most silk was processed in the importing countries but Italy still had a substantial market share. Unfortunately the data (table 2.2) are scarce and sometimes ambiguous, as the sources do not clearly specify the product (tram or organzine) and the type of spindles (for preliminary processing, for spinning and for throwing). As a whole, the silk production employed about 750,000 full-time industrial workers in steam-reeling and throwing, and many more parttime peasants in silkworm-raising and hand-reeling. According to the available (but not totally reliable) data, about 1,700,000 households were engaged in sericulture in Japan, 120,000 in France, and perhaps 600,000-700,000 in Italy and as many in India.7 A world total can be hypothesized by extrapolating the implicit average productivity per family to other countries. These countries accounted for 40-50 per cent of the world output, so the worldwide figure could vary between 5 and 6.5 million families. If each had on average 5 members, the income from 6

7

See Rondot 1885-87, I, passim; Tsing 1928, 84; Li 1981, 157; Kuhn 1988, 405-12; Bolle 1898, 71; and Bertazzoli 1910, 874ff. See Statistical Appendix, table AXTVb for Japan; Federico 1994a, Appendice statistica, table XLJI for France; Industria 1891 and Cafagna 1989, xlv-xlvi for Italy (in the 1880s1890s); and Report 1933, 29 for India (in the 1920s).

The characteristics of the industry

13

silk production would be distributed among 25 to 35 million persons (including the industrial workers) all over the world. Of course, the estimate is highly tentative, but still gives a rough order of magnitude of the importance of the industry. Patterns of location: sericulture The location of sericulture depended first and foremost on the climate. The (different species of) mulberry tree can grow in all the temperate and subtropical countries. The silkworms cannot survive if temperatures drop below 15-20°C, and this prevented the diffusion of silkwormraising in northern Europe. In fact, without heating the rooms, the sericulture would have been too risky and with it too expensive to be economically viable. Climate determined also the intensity of cultivation - and therefore the importance of sericulture as a source of income. In subtropical countries the mulberry tree is in leaf almost continuously and worms can be raised all year. Thus, seven (sometimes eight or even nine) crops were produced in southern China each year, and five crops in Bengal.8 In the Canton area sericulture was integrated with pisciculture. About 30-40 per cent of the available acreage was dug out to create a small pond and the mud-rich soil was dug into the remaining land for planting the trees. In temperate climates, however, the mulberry tree blossoms only once, possibly twice a year and worms cannot be raised (without heating the rooms) from October to April. Therefore, any given total output of cocoons requires proportionally more trees (i.e. more land) than in tropical countries and each family could raise the worms only three times each year, in spring (from the end of April to the beginning of June), summer (from late June to early August) and fall (from the end of August to the beginning of October). In the 1910s, this technically feasible maximum was reached only in Japan. The summer and spring crops accounted for an eighth and a fourth of the total output respectively, and the mulberry fields covered 16 per cent of the cultivated acreage, with peaks of up to 25-35 per cent of the total area in some prefectures.9 In other temperate countries the worms were raised only once a year, in spring, and the mulberry cultivation was consequently much less intense. In Chekiang, the 8

9

For China, see Eng 1986, 106-9; Howard and Buswell 1925, 48-52; So 1986, 83-9; and Kwangtung 1926; and, for Bengal, see Maxwell and Lefroy 1916, 16-18; Silberman, I, 254 and Report 1933, 40-4. See Statistical Appendix, table AXTV and Federico 1994a, Appendice Statistica, table XLId (for the provincial data). It can be estimated that about two thirds of families raised silkworms twice a year (for the estimate, see Federico 1994a, ch. 5 note 110).

14

An economic history of the silk industry

leading producing area of central China, mulberries were gathered in groves, which in the 1930s covered about 15 per cent of the total acreage (up to 30 per cent and more in some districts). In the neighbouring Kiangsu, the trees were scattered in fields and in the fringe spaces (along the edges of the fields, banks of the rivers etc.). The mulberried fields accounted for 11 per cent of the total acreage in the province, and more than 30 per cent in the Wuxi district.10 The same system prevailed in Italy. In the late 1920s, 93 per cent of mulberry trees were in the so-called 'seminativi gelsati', which accounted for about a half of the total acreage in Lombardy, with an average of seventy-seven trees per hectare.11 The climate alone cannot account for these differences, nor can it explain why sericulture did not develop in apparently suitable areas such as the United States. In fact its diffusion depended also on the inputs it needed. Sericulture was a relatively land-saving, very labour-intensive activity.12 The mulberry tree is not a particularly demanding plant. It can grow on all types of soils, and needs only abundant manure and a pruning once every two years. The labour is required to feed the worms, specially during the last ten days of the season. Then, two workers for eighteen hours a day are needed to feed an ounce of eggs producing 40-50 kg. of cocoons. Silkworm-raising was thus not compatible with factory work, unless the mills closed during the season, as the Italian ones traditionally did. Silkworm-raising does not need strength, but does require much care and caution in handling the worms, which are extremely delicate animals, very sensitive to any form of ill-treatment and/or sudden change of temperature. Therefore, sericulture was traditionally women's work, while men cultivated the mulberry trees and sometimes helped to transport the leaves. At the same time, however, raising silkworms required little capital. The cost of tools (nets, wood structures) was negligible, and in principle any type of building could be used, including urban dwellings (as in southern China) or purposely 10

11

12

The figure of Chekiang is a weighted average of the data by district reported by l i 1981, 140-1; those for Kiangsu are respectively from Faure 1989, 44 and Bell 1992, 217. The mulberry fields accounted for 0.3 per cent of the total Chinese acreage (Buck 1937, 21). See Federico 1994b table V (from Catasto 1929); the acreage excludes the permanent meadows. Only 3 per cent of the mulberries were in specialized fields — most of which were nurseries. The requirements varied according to the raising techniques. On the Italian ones, see the evidence discussed in Federico 1994b, 351 (notably the accurate inquiry by Passerini 1942, quadro IV.9, IV. 10 and IV. 11 and the textbooks by Nenci 1900, 118-19 and 126 and Niccoli 1914, 324). According to Huang (1990, 79) the labour/ land ratios in sericulture was eight times higher than in rice cultivation. This statement is confirmed by the difference between the rents of mulberry and rice fields (Hemmi 1970, 319; Keishi and Tamotsu 1957, 288; Bell 1985, 122; and Eng 1986, 95).

The characteristics of the industry

15

built wooden huts (as in Persia).13 The worms were usually reared in peasants' houses, while the habitual dwellers went to sleep (when they had time) in stables, barns or even in the open air. Consequently, sericulture was more viable where peasants' houses were scattered in the fields instead of being gathered in villages, as this settlement minimised the costs of transporting the leaves. Moreover, the dispersion of breeding minimized the risks of epidemic diseases, to which the worms were extremely susceptible. Frenchmen said 'petites magnaneries grand filature' (small breeding, large production): in fact, epidemics brought about the failure of large-scale raising both in Italy in the 1830s to 1840s and in Kashmir in the 1880s. 14 In summary, the ideal environment for silkworm raising was a densely populated area, with dispersed dwellings and few opportunities for nonagricultural work. It is not surprising that sericulture did not develop at all where the population was scarce and labour expensive (as in the United States) or where people lived in large villages far from the fields (as in the interior of Sicily or Spain). But nor did sericulture develop even in apparently suitable areas such as central Italy. It is likely that its growth had been hampered by competition with alternative crops (olive trees, grapes) for land - or, more precisely, for so-called 'soprassuolo' (the room to plant trees in the fields).15 Li suggests that also riskaversion prevented full specialisation, as peasants tend to avoid putting all their eggs in such an uncertain basket unless they had no alternative.16 It does not seem that the tenancy system substantially influenced the diffusion of sericulture. It was practised successfully by tenants, as in Japan and China, by sharecroppers, as in Lebanon and Italy (specially Lombardy and Veneto) and by small-holders all over the world.17 French experts believed that the Italian sharecropping was superior to their own smallholding because the landowner could buy the best eggs, force his tenants to adopt the best raising practices and deal more

13

14

15 16

17

On urban rearing, see Howard and Buswell 1925, 56; or in Italy, Relazione 1914; and, on the Persian tilimbars, Federico 1994b, 348. Quoted by Gaddum 1948, 13. Lists of diseases, with all their symptoms, can be found in any textbook of sericulture (e.g. Verson-Quajat 1896, 306-51). On the failure of large scale breedings in Kashmir, see Geoghegan 1872, 79-84 and Liotard 1883, 35-49, in Italy, Cafagna 1989, 104-5 and Berengo 1963, 310-11. See Federico 1994b, 349-51. I i 1981, 139-42. The lack of an alternative is crucial to explain why, by contrast, their Southern cousins were prepared to take the risk. For Japan, see Paini 1910, 831, Francks 1991, 131-3; and Smethurst 1986, 115-20; for Lebanon Bourgaud 1901, 33-7 and Owen 1987, 282; for China, Howard and Buswell 1925, 12 and Bell 1985, 97; for Italy, Federico 1994b.

16

An economic history of the silk industry

effectively with the buyers of cocoons.18 These advantages, if real, were surely not decisive, as the growth of production in Japan shows. Sericulture was not compatible with wage-labour since the supervision costs of a scattered raising of highly disease-prone creatures would have been unbearably high. This fact, however, did not prevent its development in capitalistic areas (such as the Po valley) as the constraint was easily circumvented by stipulating sharecropping contracts with the employees' families. The causation probably runs in the opposite direction. The tenancy system changed to accommodate the needs of sericulture. For instance, the boom of silk production in Lombardy from the end of the eighteenth century favoured the breakdown of larger farms into smaller units and caused the adoption of a new contract, the c fitto misto', a combination of tenancy for wheat and sharecropping for

Patterns of location: reeling and throwing The location of reeling used to depend strictly on the location of the sericulture: traditionally cocoons were processed by the same peasants who produced them or by their neighbours. This link was loosened if not totally severed by the development of steam-reeling. By definition, industrial processing was more concentrated than the production of cocoons. There were, however, substantial differences among countries in the patterns of location of the mills, and hence in the distance to the fields.20 In central China, reeling was exclusively an urban activity. Roughly a quarter of the basins was in the town of Wuxi, in the middle of a sericultural district, and the majority in Shangai, hundreds of miles from the production areas.21 The plants were the largest in the world: each of them had on average some 300 basins, employed more than 600 workers and produced over 20 tonnes of silk a year. In the South, too, reeling was highly concentrated: in 1918 about 50 per cent of the productive capacity was located in the Shunde district (a quarter in three towns only, Yung-Chih, Shuiteng and Ta-liang). The factories were, however, somewhat smaller than in Shangai (about 450 workers on 18

19

20

21

See 'Les industries de la soie en France et en Italie', BSS, 19 April 1879; O. May, 'Les achats des cocons a prix indetermine', BSS, 17 June 1899; 'La soie en France et le marche americain', BSS, 4 Oct. 1905, etc. See Romani 1957, 8 6 - 9 1 ; Corner 1993, 43ff; and above all, the thorough description bySerpieri 1910. In the following, the workforce and the output of the average factory are computed by multiplying the number of basins (Statistical Appendix, table AXVIII) respectively by the worker/basin ratio (see table 2.1) and the average yearly productivity (table 7.7). See l i 1981, 166-7; Bell 1985, 2 5 1 - 7 ; Furuta 1988, 2 2 7 - 3 0 ; Eng 1986, 44; and on Canton, see Survey 1925, 2 - 7 .

The characteristics of the industry

17

average, producing 13 tonnes of silk) and, above all, these towns were in the core of sericultural areas. In Italy and Japan the industry was more scattered and the reeling factories were smaller than in China. The average Italian reeling mill produced about 7.5 tonnes of silk with slightly over 100 workers; the average Japanese mill produced only 4 tonnes with about 90 workers. In both countries, very few mills reached the 20 tonnes per year - about 35 in Italy, and 20-30 in Japan.22 However, even in Italy and Japan, reeling was concentrated in some areas.23 In Japan, the core area of modern steam reeling, the Nagano prefecture accounted for a quarter of all basins, and one only district, that of Suwa, for about 10 per cent. In Italy, almost half the basins were installed in three provinces (Como, Milano and Bergamo). Why these differences in location? In theory, if the transaction costs were similar everywhere, an activity should settle near its least mobile input - which in the case of reeling used to be the raw material. The first factories were thus located in the sericultural areas. The development of railways eased this constraint, increasing the relative importance of the supply of manpower as a factor of location. By the 1870s an Italian industrialist was able to point out that 'the main preoccupation of the filandiere is to settle his industry in villages where the population is large enough to supply locally the necessary manpower'.24 The change did not greatly alter the optimal pattern of settlement and a scattered rural location remained the most profitable one. Wages in the countryside were usually lower than in the cities and in each rural locality the pool of prospective workers within a commuting range was limited. So the 930 Italian reeling mills were established in 590 different towns and hamlets, 300 of which were in Lombardy alone (i.e. one out of three villages of the region).25 If the needed workforce exceeded the local supply, the firms had to build dormitories near the factory and provide the manpower with food, incurring substantial additional costs. 26 This was the rule in Southern China and in the Nagano prefecture, specially in the Suwa district.27 In 1910 three quarters of the manpower came from outside the 22

23 24 25

26

27

T h e threshold corresponded roughly to 170 basins in Italy and 4 0 0 in Japan. T h e number of mills is taken from Annuario 1904 and Stamm 1923, 8 2 respectively (the full distribution by size is in Federico 1994a Appendice Statistica, table LVII). Data for Italy from Annuario 1904, for Japan, from Ishii 1979, 2 4 6 . Inchiesta industriale D S 6&1, witness Bozzotti. Annuario 1904. A similar 'local' pattern also prevailed in the Yamanashi prefecture in Japan (Smethurst 1986, 165). T h e cost for board and lodging of outhoused manpower was about 2 5 - 3 0 per cent of the wage ( D e Bernardi 1886, 105; Duran 1913, 62; Bartezzaghi 1910, 8 6 7 ) . T h e system, however, reduced the waste of time in commuting, making it possible to maximize the actual worktime for any given total commitment. O n the Canton area, see So 1986, 1 2 0 - 5 ; Howard and Buswell 1925, 1 4 2 - 3 ; Eng

18

An economic history of the silk industry

district (a quarter from other prefectures), being recruited by a complex and expensive network of agents. The costs were thus higher than in Italy. The highest cost was borne out by the Shangai mills. They had to pay higher wages, and the transportation of cocoons (an extra 1 per cent in the 1920s).28 It was probably a case of geographical lock-in. The factories settled in the city because the transaction costs were lower than in the countryside, and their development had created a pool of trained manpower which newcomers could not find elsewhere in the region. Silk throwing was more concentrated than reeling. In Italy it was located in a few provinces in the North (Como alone accounting for half the Italian equipment), in France in the area north of Lyons and in USA in the city of Paterson (New Jersey) and in a few counties of Pennsylvania.29 The price of material was so high that the location of reeling had no effect on the location of throwing. Traditionally, throwing was located where water-power was abundant and/or close to the buyers, to minimize transaction costs (a lot of silk was thrown to order). In the long run, however, the cost of labour became more and more important: throwing settled 'where it is possible to find low-cost labour'.30 For instance, the availability of low cost, non-unionized manpower caused throwing to move from Paterson to Pennsylvania in the 1900s.31 The technology of the modern silk industry The silk industry spearheaded industrialization in all the producing countries in the nineteenth century. On the eve of World War I, it was still more modern than most forms of manufacturing: the factory system was widespread and almost every factory used some motive power especially steam (table 2.3). The early start of mechanisation owed a great deal to the simple needs of the industry. Both reeling and throwing entailed only elementary mechanical manipulations of existing threads. Moreover, even in Italy,

28

29

30 31

1986, 6 1 - 2 ; and Survey 1925, 3 - 7 . O n N a g a n o , see Kyokawa 1 9 9 1 , 5 3 - 4 ; Hunter 1984a; Tsurumi 1990, 59ff; and on the data o n recruitment costs, see Fujino et al. 1919, table 59; those o n the origin of the workforce are from Ishii 1979, 2 6 2 - 6 3 . In Anatolia as well, the steam/reeling mills had been located at first in the city of Brussa, but by 1913 the proportion of these 'urban' basins had dropped to 22 per cent (Quataert 1993, table 4.4). For the higher cost of labour, see Bavier, 'La crise des filatures europeennes de Shangai', BSS, 6 March 1897; CR, Shangai 1896 [PP 1897 X C ] ; Li 1 9 8 1 , 1 6 5 - 6 ; and Eng 1986, 62. T h e estimate of the transportation costs is from Shangai 1928, 6 0 1 . T h e causes of the initial settlement will be discussed in ch. 7. For Italy, see Annuario 1904. T h e data refer to the production of organzine. T h e production of tram was concentrated in the nearby province of Milan (Annuario 1917). Filatura 1913, 7 4 6 . Margrave 1986, 3 3 0 - 5 ; M a s o n 1910, 55; Golin 1988, 21ff.

The characteristics of the industry

Table 2.3

19

Characteristics of the silk industry in Italy and Japan, c. 1910

Italy (1911) Concentration in factories

Mechanization

a

b

c

d

e

Silk Cotton Textiles Metalworking

96.6 87.9 48.4 75.1

99.4 99.4 83.7 68.9

95.3 178.5 20.1 9.5

0.07 1.51 0.50 0.69

87.6 87.6 13.9 18.2

Total

68.5

66.2

9.4

0.53

21.4

Japan (1909) % Mechanised factories

Motive power f g

h

i

Reeling Textiles Engineering

67.4 31.8 49.7

0.4 11.0 47.3

79.2 75.9 43.4

0.3 6.0 9.2

20.1 7.1 0.2

Total

28.2

21.8

60.1

6.6

11.5

Sources and definitions:

Italy: (a) ratio of the number of industrial workers (Censimento industriale, 1911, IV) to the total workforce of the branch (Censimento della popolazione, 1911, IV); (b) share of workers in factories with over 10 employees (Censimento industriale, 1911, III and IV); (c) average number of workers per factory (Censimento industriale, 1911, IV); (d) horsepower per worker (Censimento industriale, 1911 for silk, and Chiaventi, 1988 for the other industries); (e) share of mechanized plants (Censimento industriale, IV); Japan: (f) electricity; (g) steam; (h) internal combustion engines (i) hydraulic motion. Minami, 1987, reeling table 8.3 and 8.4; other industries, tables 4.5 and 6.3.

then the most advanced country in the world, reeling was not yet fully mechanized and some crucial tasks were done manually. Therefore, the equipment of the silk industry was notably simpler and less capitalintensive than that of other industries (including cotton). The number of HP per worker in Italy, a rough proxy for capital intensity, was low. The data of table 2.3 omit the steam-power used for heating the water, but its inclusion would raise the figure to 0.21 - that is, about half the average. This feature of the technology had three very important consequences: (a) The value added was very low. 32 It was about 20-25 per cent of the 32

The figures for Italy (which includes throwing) are computed dividing the Value Added in 1911 (Fenoaltea 1992) by the number of workers (Censimento industriale 1911 vol. IV). The figure for Japan is crudely estimated by dividing the share of reeling of total output (Shinohara 1972, table 14 and 1) by that of industrial manpower (Resume 1914 and Umemura et al. 1988).

20

An economic history of the silk industry

manufacturing average - about 460 lire in Italy in 1911 (throwing included), versus 1,600 in cotton spinning, 2,400 in metalworking and 1,750 in the whole manufacturing field. The industrial value added accounted for 15-20 per cent of the final price of raw silk in Italy and for about 25 per cent in the Far East, where the productivity was inferior.33 The actual percentage fluctuated from one year to another because the prices and the silk content of cocoons varied much more than industrial costs. Throwing added only a further 10 per cent. In other words, silk was so expensive because it embodied a great deal of farm labour. (b) Reeling needed remarkable manual skill and a lot of attention. A poorly skilled or careless worker produced less silk (up to 20 per cent less than a prime hand) and a defective yarn. 34 The skill had to be learnt by 'long and uninterrupted training, under the patient and diligent surveillance of a master of the art'.35 The process lasted about five years: the workers entered the factory very young and performed increasingly complex jobs, eventually becoming reelers. Everywhere but in India about 95 per cent of the manpower was constituted by women - men usually working only as machinists or porters.36 Women may have been more suited than men for handling cocoons and silk yarns thanks to their nimble fingers, as some experts declared, but surely they were preferred mainly because they cost less than men. (c) Scale and scope economies were negligible. The equipment was totally specific (even throwing spindles had to be modified to process other fibres) and perfectly divisible. The only indivisible piece was the boiler. However, the constraint was not really binding, as the minimum viable size was very small - around 20-30 basins. The heating costs were indeed inversely proportional to the boiler's power, but savings were minimal in comparison with the total production costs. In fact, there is no evidence whatsoever of correlation between the plant size and the productivity per basin. The coefficients are extremely low (0.21 for a sample of forty-three Italian firms in 1900, 0.21 for eighty-seven Japanese ones in 1908) 33 34

35

36

Federico 1994a, Appendice statistica, table LXVIII. Beauquais 1910, 8 1 . See also Duran 1913, 3 1 ; Colombo 1917, 37; Mariton 1905, 8 1 ; Giretti 1932, 154; Kyokawa 1991, 5 9 - 6 1 ; and, for the estimate of the productivity differential, 'Interessi filandieri and filatoieri', InS, no. n. 7 1907. Colombo 1971, 37. T h e information on the training process is from Sericulture 1905a, 10; Gallese 1959, 187; Eng 1986, 65; Kyokawa 1991, 5 9 - 6 1 ; Shangai 1928, 597. W o m e n accounted for 94.8 per cent of the manpower in Italy in 1911 (Censimento industriale 1911, IV, table IV), 93 per cent in Japan in 1911 (Resume 1914) and 96.5 per cent in Shangai in 1931 (Lieu 1933, 79). For India, see Report 1 9 3 3 , 8 5 .

The characteristics of the industry

21

or even negative ( — 0.22 for another sample offiftyJapanese firms in 1891 and —0.17 for country averages).37 These three characteristics created a distinctive, possibly exceptional, economic environment - highly competitive, very risky and inhabited by very many small firms. These features will be discussed in the three following paragraphs. An highly competitive industry Modern steam-reeling was by definition more concentrated than handreeling, and there is also evidence (reviewed in chapter 7) of increasing financial concentration. How far did these processes go? Did they change the nature of the silk industry, from competitive to oligopolistic? The unanimous reply of contemporary sources was no. All over the world the industrialists complained about excessive competition.38 As often happened, they resorted to unconvincing psychological reasons such as the 'old individualism of the industrialists, hostile to any form of co-operation which could reduce their freedom'.39 Arguably, the competition was a consequence of the absence of scale and scope economies, which removed the most pressing motive for concentration and the increase in the size of the firms. The issue is too important, however, to be settled with qualitative evidence or with a priori reasoning because the degree of competition determines the suitable analytical framework for the whole book. A quantitative test is therefore necessary. This chapter deals with the sellers (reeling or throwing firms), while competition among buyers (the manufacturers of silkwares) and intermediaries (the merchants) will be considered in chapters 5 and 8 respectively. The hypothesis of perfect competition (producers had to take the prices as given, and could decide only how much silk to produce) cannot be directly tested. However, it has two testable pre-requisites: that no firm had a large share of total sales and that barriers to entry were low. Usually, the concentration is measured by the Herfindahl-Hirschman 37

38

39

Firm data from Esposizione 1900; Takeda-Masakazu 1976; and Chabrieres-Guinet 1894, 2 9 - 6 6 respectively; aggregate productivity from table 7.6; factory size from Federico 1994a, Appendice Statistica, table LVI. For Italy, see Inchiesta Serica 1910, II, 632; Dubini 1910, 62; Relazione 1910, 8; Bachi 1923, 210; Arimattei 1923, 107; for Japan, Uyehara 1926, 1 0 3 - 5 ; Bartezzaghi 1910, 859; and 'La campagne soyeuse au Japon', BSS, 3 Oct. 1891; for China, see Decennial Report 1 8 9 2 - 1 9 0 1 , 5 1 3 ; for the Middle East, Quataert 1993, 132. Inaugural speech of Tondani, president of the newly established Italian Ente Nazionale Serico, quoted by the French consul in a report of 15 Feb. 1926 ( M A E R C 1 9 1 8 - 4 0 B-textiles no. 20).

22

An economic history of the silk industry

index of concentration, which may range from 0 (infinitely low market shares) to 1 (monopoly). In the case of silk, it has to be computed proxing the unknown output with the number of basins. The coefficient was 0.0032 in Italy and 0.046 in Shangai at the beginning of the twentieth century and 0.015 in Japan, 0.012 in Shangai and 0.004 in Southern China in the 1920s. 40 These figures are extremely low: the American anti-trust commission begins to investigate if the coefficient exceeds 0.25. To have a more concrete idea one can consider the market shares of the leading companies. 41 In the 1900s, the larger Italian company (P. Gavazzi) managed 728 basins out of about 61,000 and produced less than 4 per cent of the total output. The top ten firms did not reach 10 per cent of the basins and 15 per cent of the throwing spindles. In 1911, the top ten Japanese companies accounted for 13% of steam-reeling basins, and the largest one, the Katakura company, had 3,356 steam-heated basins out of over 128,000: in the 1920s, notwithstanding its very rapid growth in the meantime, it still produced less than 8 per cent of country's output (and the second largest, the Gunze company, another 4.5 per cent). Also the barriers to entry were very low - too much so according to one of the most important Italian industrialists who complained about the 'great ease for anyone to speculate in cocoons and to play the filandiere, even by producing low-quality and not profitable silk'.42 This statement is supported by the evidence on the turn-over of firms in Italy, reported in the right-hand part of table 2.4. 43 More than half of the firms existing at the end of each period had been established during the period, and only a third lasted more than fifteen years (a mere 7 per cent over the whole period). It could be argued that the turn-over of firms is not an appropriate measure of barriers to entry, because the change of name and/or principal of a firm did not affect whatever 'rent that is 40

41

42

43

See Annuario 1904, an untitled table in BS, no. 24, 1904; Ishii 1979, 88; Shangai 1928, 593-6; and Survey 1925 respectively. Reeling was the least concentrated industry in Italy: the coefficient for 'textile and clothing' in 1907 was 0.014 (Giannetti, Federico, Toninelli 1994, table 1). The output of the P.Gavazzi company is from 'A famous silk industry', ASJ, March 1910; its equipment from Annuario 1904 (for the top ten, see Federico 1994a, Appendice Statistica, table V). The production of the Katakura company has been kindly communicated by Prof. Ishii (the Gunze company's share is from AamakawaOono 1975, 147), while the number of basins is from Molteni 1982, n7. The national totals are in the Statistical Appendix, tables AV and AXVIII. Letter from Semenza to L. Luzzatti (1 Oct. 1906), in CL b.106. 'Industria serica. Corrispondenza 1878-1906'. See also Colli 1911, 13; and Ferrario 1923, 11-14. See Federico 1994a, Appendix M, for details. The estimate is deliberately biased against the hypothesis of a high turn-over, counting all the uncertain cases as survived firms. Thus the figures are the upper limits of the actual survival rate and lower limits of the innovation rate.

The characteristics of the industry

Table 2.4

Rates of survival of reelingfirmsin Italy Factories

1890-1904 1904-1917 1917-1927 1891-1927

23

Firms

a

b

a

b

63.2 73.8

22.2 30.5

29.9 30.7 34.3 7.2

57.6 49.3 64.7 83.5

Col. (a) survival rate (the percentage of survived firms on the initial population); col. (b) innovation rate (the percentage of new entries on the final population). Sources: 1890: Industria, 1891; 1904: Annuario, 1904; 1917: Annuario, 1917; 1927: Annuario, 1927.

derived from incumbency' the firm had. 44 This statement is questionable, as the commercial skill of the manager and the reputation of the brand were surely important assets. The result, however, does not change if the definition of entry is restricted to additions to the productive capacity. This definition is used in the data on factories in table 2.4, which takes into account the plants. The turnover was indeed less frantic, but still very high. Actually, the figures overstate the real number of 'entries', as they include the factories built by incumbents. Even assuming that these investments accounted for half of the new factories, the rate of entry would have been in the region of 1 per cent per annum - i.e. still very high by any standard. A similar analysis is not possible for the Far East, but there is nevertheless plenty of evidence about the low barriers to entry. The most compelling piece is the fast growth of steam-reeling from the 1870s onwards, which will be discussed in chapter 7. It can be supplemented with some data on the average life of reeling firms - twelve years in the Nagano prefecture in 1908, fourteen years in southern China and five years in Shangai in the 1920s. 45 As the number of firms was rising, the implicit rate of innovation should have been as high as in Italy. The high turn-over and the low barriers to entry can be considered a structural feature of the silk industry. The previous result should not come to a surprise. To set up new firms was not such a difficult task for a gifted manager (that is, as we will see later, a good trader). The bulk of capital was necessary to purchase 44

45

This statement is questionable, as the reputation of the owner and the brand were surely important assets. T h e definition of bareers to entry is by Gilbert 1989, 4 7 8 . Data for N a g a n o from Takeda-Masakazu 1976 (for other evidence see McCallion 1983, 3 8 6 - 7 , and O n o 1986, 5); for Shangai, from Shangai 1928 (see also l i e u 1933, 2 8 - 3 0 ) ; for Canton, from Survey 1925.

24

An economic history of the silk industry

the cocoons, and was anyway borrowed. The fixed capital was not so large, and in many countries the factories could be rented. Leasing was quite common in Italy and in southern China, and absolutely predominant in Shanghai, where 80-90 per cent of the silk mills were rented out.46 The owners were usually landowners or merchants who sought a profitable and moderately risky investment for their capital (they could protect themselves from the risk of default by asking for an anticipated payment, but the rents followed the ups and downs of the industry). Some historians have argued that leasing of mills was an incentive for short-term speculation, with negative consequences on the quality of the product.47 Actually, the system could not have been so harmful: the Italian silk and the Shanghai filatures were the best silk in the world. A 'crazy business9 The silk industry had a long-standing reputation for being risky. In the words of the Chinese saying, 'in the morning you have no food to eat, in the night you have a horse to ride' (and vice versa).48 It can easily be shown that this reputation was well deserved. It is sufficient to compute the 'industrial mark-up' as the difference between the sale price and the cost of the raw material.49 In Italy from 1867 to 1913, the first difference of the series (i.e. its variation from one year to another) was equivalent to 16 per cent of the price of silk - that is it exceeded the Value Added (a mere 14 per cent). In five out of forty-seven years, the mark-up was negative: in other words, the proceedings of the sale of silk did not even cover the cost of the raw material. And these figures might understate the real risk, because the proceedings are computed on the basis of yearly averages of silk prices. This method is tantamount to assuming that the firm sold the silk as soon as it was produced. But a firm could also concentrate its sales in one month, by stipulating contracts for future delivery at a fixed price and/or by storing the silk waiting for a good opportunity to sell it. In this case, the variations of the mark-up were much greater, as prices fluctuated widely during the crop year. The average (all-seasons) range between the minimum and the maximum 46 47 48

49

Howard and Buswell 1925, 122; Shangai 1928, 591, Lieu 1933, 28 and 39ff. I i 1981, 172-3; Furuta 1988, 9 6 - 7 ; Eng 1986, 75. I i 1981, 160. The tide of the paragraph is from F. Clerici, 'La campagna bacologica', BA, no. 22 1900. See also Rusconi 1923; Ussi 1930, 168; Uyehara 1926, 99; Pratt 1928, 110; Warner 1921, 425; and Quataert 1993, 133. See Federico 1994a, Appendice statistica, table XVa. The cost of the raw material is the market price of fresh cocoons after the harvest multiplied by the average silk content; the proceedings are the sum of the price of silk and of the waste silk (multiplied the relative yield). For details on sources and methods of computing, see Federico 1994a, Appendice I.

The characteristics of the industry

25

possible mark-up (which a firm could gain by selling at through and at peak of the year's prices respectively) was as high as 22.5 per cent of the silk price. In the season 1875-76, the range varied by a coefficient of six, from a minimum of 8.4 lit/kg, in April 1876 to a maximum of 55.4 lire/kg in December 1875. The variation of mark-up entailed an equivalent change of unit profits, because the processing costs hardly changed in the short term. In relative terms, however, profits fluctuated much more. 50 The coefficient of variation of the estimated rate of profit in Italy is 8.8 (versus 1.0 for the mark-up) and that of profits of the Katakura company over the period 1896-1929 was 2.1. By definition, the proximate cause of these fluctuations, and hence of risk, was the fluctuations in the price of silk in the period between the harvest of cocoons to the sale of silkwares to the final consumer. The unit price of fresh cocoons was determined by the current price of silk net of industrial costs divided by the expected yield ratio.51 All subsequent variations of the silk prices changed the value of the stocks (of dried cocoons or of silk) and thus caused whomsoever held them to gain or to lose. The risk was almost always borne by reeling firms or dried cocoon merchants. In fact, peasants and weavers usually behaved as normally risk-averse people. The peasants sold their cocoons as soon as possible (before the harvest with delivery contracts or immediately after it), the weavers bought the silk from hand to mouth. Therefore reeling, not silkworm raising or weaving, was the really risky business. This type of risk was not exclusive to the silk industry. Other industries processed agricultural commodities harvested once a year and sold their product many months later. So why was reeling so risky? The experts were inclined to blame the excessive volatility of prices. Arimattei, secretary of the Associazione serica (the Italian reeling firms' association) called reeling ca speculation, whose results depend mainly on the price variations, often large, sudden and unpredictable'.52 This

50

51

52

Federico 1994a, Appendice statistica, table XVa. Profits are estimated by deducting from the mark-up an estimate of the production costs for a 'median' plant of 100 basins with average productivity. For details, see Federico 1994a, Appendice I. T h e profits of the Katakura company have been kindly transmitted by Prof Ishii. For the fluctuations of profits in earlier years, see the data in Tolaini 1995b. See 'I prezzi delle sete e dei nuovi bozzoli', GIS, n o . 1, 1889; Fossati 1887, 24; G h o s h 1933, 18; Merie 1930. Sometimes, as in May 1900 in Italy ('Bachicoltura', BA9 nos. 17 and 18, 1900), the price of cocoons could diverge from this standard because traders expected further variations in the silk price. Arimattei 1923, 109. Nearly identical statements can be found in many other sources in Italy (e.g. Chiarini 1886a, 10; Filatura 1913, 745; Ferrario 1923, 86) and elsewhere (e.g. 'Raw silk supply', ASJ, August 1897, Semi-annual 1908).

26

An economic history of the silk industry

opinion is only in part supported by the statistical evidence. 53 Silk prices in the Milan market fluctuated more than those of wheat and iron but less than cotton, but there are no significant differences between the variances. Taking into account only the shocks of the series (the residuals of the ARMA models), silk prices appear less volatile than wheat prices and more than the iron and cotton ones (this last difference is significant at 1 per cent). But the same percentage loss or gain on raw material stocks weighed much less on the budget of a cotton spinning firm, as raw cotton accounted only 30-40 per cent of production costs instead of the 80 per cent for the average reeling firm.54 In other words, the real peculiarity of reeling was the low value added. Silk reeling was risky in all countries, but not to the same extent. The amount of risk varied according to the likelihood of price shocks which, if the shocks were evenly distributed throughout the year, depended on the length of the period between the harvest and the final use of silk. In other words, ceteris paribus, reeling was the less risky the more frequent the crops were. If the shocks had been the same everywhere, the industry would have been less risky in southern China or Japan than in the Mediterranean or in central China. But the shocks were not the same everywhere, because the exchange-rate movements added a further source of uncertainty. A revaluation of the producing country currency reduced the domestic value of the proceeds of export, a devaluation increased it. As the Mitsui sales manager remembered, 'those engaged in business transactions were obliged to spend a great part of the attention upon the behaviour of daily fluctuating rates of exchange'.55 The producing countries were on a different exchange-rate regime until 1913. The Italian lira was pegged to gold, save minor devaluations in 1866-1881 and during the 1890s (never exceeding 15 per cent), while the Chinese tael and, until 1892, the Japanese yen were on a silver standard. The difference disappeared in 1914 when all the three currencies started to float. Therefore, reeling in Italy may have been less risky than in the Far East. The two criteria, the number of crops and the exchange-rate regime, imply a different ranking of countries, even if central China was at the bottom of the league according to both. A final caveat. The whole discussion assumes that risk was something 53

54 55

All the prices are monthly quotations o n the Milano market in 1 8 9 4 - 1 9 1 3 . For details on silk, see Federico 1994a, Appendice F; other commodities from Cianci 1933. See the similar results in Mills 1927, Appendix. Romano 1992, 205. Masuda, n.d., 5 4 . See also l i 1982, 90; Uyehara 1926, 100; Remer 1926, 7 8 - 7 9 ; and the frequent references to exchange rates in the reports of the British consuls - eg. from Yokohama in 1875 (PP 1876 LXXVI), Shangai in 1893 (PP 1894 L X X X V ) or for Canton in 1903 (PP 1905 CXXIII).

The characteristics of the industry

27

negative for the development of the silk industry as a whole and a fortiori in countries where it was more risky. In jargon, it is assumed that prospective investors were risk-averse: they required higher returns to be lured into a risky activity. This assumption is plausible but not necessarily true. The industrialists might even have been risk-lovers (who else would have chosen such a business?) and/or the degree of risk aversion might have differed between countries. Therefore a definitive assessment of the role of risk is not possible, even if it was an important factor to be reckoned with. Reeling firms: manpower and management The steam-reeling firms were undoubtedly quite substantial enterprises: the smallest of them employed dozens of workers, and the Japanese giant companies in the 1920s had in excess of 20,000 labourers. Yet, possibly with a handful of exceptions, they were not large enterprises in the Chandlerian meaning of the word. Their structure was in fact extremely simple and white-collar workers did not exceed 4 per cent of the total workforce.56 In many small firms, the whole staff consisted of the principal and of one or two clerks, with agents hired during the collection of the cocoons. In larger multi-plant firms, each factory had a production manager and marketing was centralized. The organization was that simple because the peculiar characteristics of the business made most functions useless. A silk firm did not need a sales department because it had to sell few homogeneous commodities (raw silk, thrown silk, waste silk) in efficient and well-organized markets; it did not need a financial department because its operations were very simple (a big loan to purchase the raw material, to be repaid with the proceedings of sales); it did not need an RD department because the innovation on product was non-existent, and those on process was entrusted to the producers (save in Japan in the 1920s); and so on. What a successful firm needed was good labour management and the best trading skills. The labour management was essential because, as already said, careless work could reduce the productivity and/or worsen the quality of silk and therefore lower its price. There were two systems to extract the necessary care for long hours of tiring and repetitive work in a rather 56

They accounted for 3.6 per cent of the total in Italy in 1911 (Censimento industriale 1911, IV), 3.6 per cent in Japan in 1920 (Resume 1923) and 3.7 per cent in Shangai in 1932 (Lieu 1933, 79). See also the descriptions by Provasi 1905, 264-7; Mariton 1905, 123-15; Ussi 1930, 570; Shin 1976, 56-7; Howard-Buswell 1925, 125; Kyokawa 1991, 64-8; and Quataert 1993, 127.

28

An economic history of the silk industry

unpleasant environment.57 The Italian and Chinese companies strictly supervised the reelers. They monitored the quality and quantity of the output of every worker, fining those who failed to meet the standards. By contrast the Japanese companies relied more on the self-discipline of the labourers, suitably encouraged. The piece-rate payments accounted for a substantial part of the total wage, and the competition among workers (or teams of workers) was spurred on by prizes. Trading skill ('shrewdness and common sense in trading'58) was extremely important because profits depended so much on the result of 'speculation'. The secret of a successful manager was to be able to discover the best buy for cocoons and to sell the silk at the right moment (i.e. to forecast well the silk price). In this capacity, he had to be a sort of cultural broker between two different worlds - the local peasants and the Western final consumers. In fact, in non-European countries many managers belonged to social groups which had closer ties with Westerners (compradores in China, Christians in the Middle East, etc.). But the need to deal with peasants disadvantaged the foreigners. In fact, foreignowned firms did not exist at all in southern China or in Japan where the industry had been established by local people, and were a tiny minority in central China and in the Middle East, where steam-reeling had first been imported by Western investors.59 From this point of view, silk reeling stands out as an exception in China, where in the 1920s more than half of the output of the modern industry was produced by foreignowned companies.60 Foreign ownership was perhaps more widespread in the Mediterranean basin, where the cultural differences were smaller. Anyway, it still remained an exception: there were few 'multinational' enterprises. The largest of them, the French Veuve Guerin, had twentyone factories with some 1,900 basins in the early 1920s. 61 An interesting indirect evidence on the importance of (unobservable) trading skills is the difficulty of explaining the turnover of firms with 'structural' variables such as their size or technical efficiency. A simple model can be tested for Italy and Japan (as usual there are no data on China).62 For Italy, the dependent variable is the probability of survival 57

58 59

60 62

T h e following description is based o n Provasi 1905, 1 7 1 - 8 3 ; Teruzzi 1915, 24; Mariton 1905, 1 2 3 - 5 and 1 4 8 - 7 5 for Italy; Howard and Buswell 1925, 135; So 1986, 1 2 0 - 1 ; Lieu 1933, 75ff; Li 1981, 175 for China; Tsurumi 1990, 7 5 - 8 5 ; Kyokawa 1 9 9 1 , 6 2 - 3 ; Ishii 1979, 293ff for Japan. RE 'Appunti di un setaiolo', Sole, 3 0 April 1904. T h e y were 5 out of 48 in Shangai (Furuta 1988, 110), 7 out of 195 in Lebanon (Labaki 1984, 90) and 12 out of 145 in Brussa (report of the French consul in Brussa of 22 July 1926 in M A E R C 1 9 1 8 - 4 0 , B-textiles no. 19). In the 1920s the Japanese firms tried unsuccessfully to gain control of the Shangai firms (Furuta 1988, 196ff). 61 Wang 1992a, 7 3 . Gueneau 1923, 85. Federico 1994a, Appendix M .

The characteristics of the industry

29

from 1904 to 1917, and the explicative ones are the size of firms in 1904 (proxied by the number of basins), the vertical integration with throwing and the 'tradition' (a dummy for companies already in business in 1891). The two first variables are significant, but the whole model explains less than 10 per cent of the total variance. For Japan, the dependent variable is the number of years of business in 1908, and the explicative ones the number of basins and the output per basin (as a proxy for technical efficiency) in the same year. No variable is significant. This result is not conclusive because the number of new entries was high, and one cannot assert that new firms were larger and more efficient than the incumbents. This effect may have blurred somewhat the results, but it is unlikely that it could have concealed the positive correlation between age and 'structural' variables, had it been very strong. In other words, the survival of firms was accounted for by other variables. Among them, the trading skills played an important role, along with sheer chance (e.g. the death of the owner, a family quarrel). Business in reeling was an art, not a science.

The growth in the long run

An overview The European silk production has been growing at least since the late seventeenth century. There are no data but the evidence of growth in France, in Lombardy (since around 1650) and in other areas of northern Italy (but not in the south) is abundant.1 The increase was suddenly halted in the 1780s by a crisis in the French market which was worsened by the French revolution. However, it does seem that during the Napoleonic years growth resumed, albeit at a slower pace, so that output in 1810 was higher than thirty years before. Peace brought about an era of prosperity for the silk industry. The number of looms, which unfortunately is not a good proxy for output, grew from 18,000 to more than 70,000 in Lyons (1810-1857), from 2,600 to 7,300 in Krefeld (1816-1858), from 6,000 to 25,000 in Zurich (1830-1855).2 The output of raw silk grew quite fast in Lombardy (between 1.5 and 2 per cent pa.) and even faster in France (around 3.5 per cent) or in Piedmont (nearly 6 per cent pa. in the 1820s).3 These data are not exceptionally reliable, but the growth is consistent with the increase of exports from Italy and the Middle East, which would not have been feasible without a growth in output, as these areas exported most of their production. The 1

2

3

For Lombardy, see Moioli 1981, 94-159 and Caizzi 1968, 93-5, for Piedmont, Chicco 1992 and Levi 1967, for Venetia, Caizzi 1965b, 90ff; for the South, Chorley 1965, 180ff and Laudani 1989a and b. Data on looms is from Federico 1994a, Appendice Statistica, table XXVI (except Krefeld, from Kriedte 1991, table 10). The number of looms would be an accurate proxy if and only if the coefficient of utilization of the loom, its hourly output (i.e. the technology and the average skill of the workers) and the product mix remained constant. On the growth of the British industry, see Clapham 1952, 20; Warner \92\, passim', and Malmgreen 1985, 6-16 and 21-25; on Lyons, see Pariset 1901, 291£f; Cayez 1978, 142-7 and 196-203; and for the short-term trends, Lequin 1984, I, 27-31; Sheridan 1981, I, 155-268; Sheridan 1984 and (on the Napoleonic period) Biagioli 1990; on Krefeld, Upwich cap 1, Cayez 1978, 147-50; and Pohl 1993, 650-55: on Berg, Schumacher 1914; finally on Zurich, Berger 1984, 162-4 and 204-08; and MottuWeber 1993, 152-3. See Statistical Appendix, table ATV.

30

The growth in the long run

Table.3.1

C. 1872 C. 1880 C. 1900 1914-18 C. 1920 C. 1927

31

World silk production, 1870-1930 Output

Trade/output

Growth rates

17200 19800 30200 37200 41900 60800

0.47 0.43 0.57 0.65 0.68 0.75

C. 1872-c. 1880 C. 1880/c. 1900 C. 1900/1914-18 1914-18/c. 1927 C. 1880/c. 1927 C. 1872/c. 1927

1.0 2.1 1.3 3.4 2.4 2.8

Sources: Statistical Appendix table AV - hypothesis (a)

production of silk was also rising in China (throughout the whole Ming period) and in Japan, although these trends were independent of the increase in European consumption.4 The 1850s and 1860s were a very eventful period: Japan was opened to world trade, the Mediterranean sericulture was hit by a very serious disease (called pebrine) and Chinese sericulture by the effects of the Tai'ping war, which ravaged the region around Shangai. The crisis was over in the 1870s when Italian (but not French) output and China exports regained the pre-crisis levels. From then on, the world output and commerce began to grow steadily. Unfortunately, it is not possible to reconstruct a yearly series of production, as data on China and India are limited to a few scattered guesstimates. Table 3.1 reports the estimates of the total world output which can be pieced together from them. The growth of output was indeed remarkable by any standard - and it seems even more so considering the poor reputation of the producer countries' agriculture. To give just one example, the USA agricultural output had been growing from 1870 to 1927-29 at 3.9 per cent pa.5 The growth of the trade/output ratio shows that the emphasis of world silk consumption had shifted from Asia to the West. This movement is totally accounted for by the growth of Chinese exports. They increased from about two fifths to two thirds of national output over a period when while the trade/output ratio seems to have remained fairly constant in Italy (about 0.85) and Japan (about 0.70). 6 The data on trade are abundant, even if not totally reliable before the 4

5

6

For China, see Huang 1990, 25 and Osterhammel 1992, 87-8; a different view appears in Kuhn 1988, 315 and 385-6; for Japan, see McCallion 1983, 14ff and 40; Furuta 1988, 27. Data in current prices for 1870 from Towne and Rasmussen 1961, table 1, for 1927-29 from Historical Statistics (F 127) deflated with the wholesale price index in Historical Statistics (E 40). Federico 1994a, Appendice Statistica, table I.

32

An economic history of the silk industry

Table 3.2

1820-24 1859-61 1864-66 1873-75 1911-13 1919-21 1927-29 1936-38

World silk trade and real prices 1870-1930 Quantity (tonnes)

Prices (1913=100)

2350 6118 (2.6) 4162 (-7.7) 8075 (7.4) 24904 (3.0) 26686 (1.2) 48904 (6.6) 34843 (-3.8)

140.3 170.1 (0.5) 208.8 (4.1) 130.0 (-3.0) 98.6 (-0.7) 87.8 (-1.7) 83.4 (0.6)

Source: Quantity Statistical Appendix, table All; prices 1820-1867 Tooke 1838-48; Tooke and Newmarch 1857 and Sauerbeck ad annum; 1868-1929: Statistical Appendix AVIII.

1870s (see graph 1). It is possible to estimate a yearly series of world commerce as the sum of the net exports from Italy, Japan, China, India and the Middle East (Lebanon, Anatolia etc.). 7 Table 3.2 reports the main turning points with the annual compound rates of change between brackets. The real price is proxied by the price of Chinese silk on the London market until 1867, and later by the unit values of total trade and is deflated by the wholesale British prices. The growth of trade was rather steady throughout the whole period. The only remarkable dent was caused by the fall in Chinese and Italian productions in the 1860s not counterbalanced by the beginning of exports from Japan. The crisis, though very serious, was short. The previous peak was reached again at the end of the decade. World War I caused export from Mediterranean countries to fall, but the deficit was made up for by the increase in the Asian exports, and total trade went on growing, albeit at a reduced rate.8 The 1920s were the heyday of the silk trade, which grew more than the aggregate (for a while raw silk was the largest single item in American imports). The Great Crisis affected a luxury consumption item like silk more than other productions, and the crisis was further worsened by World War II and the invention of viable artificial substitutes for natural silk (such as nylon). So the silk industry 7

8

Federico 1994a, Appendix A for the sources and methods. The data for India refer to gross exports of Indian silk. The exports from the Middle East are estimated as the sum of imports in the Western countries - United Kingdom and France from 1820, Germany from 1880, the United States and Switzerland from 1894 because the trade statistics of the Ottoman Empire are totally unreliable (Pamuk 1987). Bacon-Schloemer 1940, 455-6; Aftalion 1915.

(tonnes) -600,000

A

-500,000 -400,000 -300,000 -200,000 -100,000

180TRADE'*-**

' — ' ""

160-

-0 PRICE

14012010080601850

1

1860

'' I ' ' ' ' I '

1870

1

1880

1890

1900

1'''' I •

1910

Figure 1 Quantity of traded silk and real price of silk 1850-1930

1920

1930

1940

34

An economic history of the silk industry

has never fully recovered the lost ground: nowadays, the world trade is still about half of the 1929 peak.9 The combination of increasing quantity and falling real prices suggests that supply has been shifting at least as fast as demand - i.e. that the total growth was not simply a passive response by producing countries to the expanding consumption. This conjecture is backed by the results of an econometric model of silk production in the period 1870-1913. 10 Demand (i.e. the increase of income in the 'core countries' of the West) accounted for a half of the total growth, the technical progress in the consumer countries for a third, and the balance was made up by the devaluation of the Asian countries' currencies.11 This trend seems to have continued in the 1920s.

A country analysis The aggregate growth is the outcome of different country performances, which caused the location of world silk production to change remarkably in the long run (table 3.3). The most evident feature is the rise of Japan, which reflects its absolutely outstanding growth performance. In those years, its output has increased twenty times, at a yearly rate of over 6 per cent. This growth overshadows the results of all other countries, but the differences should not be overlooked. In France, Spain and (possibly) India the production declined, in China it stagnated or slightly increased - if the output data are to be trusted. On the other hand, the Levant and above all Italy recovered brilliantly from pebrine and succeeded in increasing their output (even if not to match the Japanese performance) until the beginning of the twentieth century. Italian production was severely hit by the war, but it succeeded in recovering part of the losses in the 1920s. Until the late eighteenth century, the growth of Mediterranean production was sufficient for the increase in the European demand for silk, and the continent imported very little from the Far East. The imports from India increased remarkably from the 1790s onwards, but the growth was constrained by the poor quality of the product. 12 Exports 9

Federico 1994a, Appendice Statistica, table XIV. See Federico 1996b. The dependent variable is a yearly series obtained by substituting the unknown Chinese and Indian production with exports (Statistical Appendix, table AVI). 1 * The yen (till 1893) and the tael (throughout the whole period) were on a silver standard and thus they depreciated against the (gold) currencies of the consumer countries. The real exchange rate of producing countries (weighted by their market shares) was declining at a yearly rate of 1.8 per cent. For the effects of devaluation of silver, see Nugent 1973. 12 See Report 1836. 10

The growth in the long run

Table 3.3

Percentages on world output c. 1880

Italy Other Europe1 China Japan Levant Other Asia2

35

14.5 5.1 54.0 8.7 7.2 10.4

c. 1900 18.6 3.5 37.6 23.0 9.9 7.1

1914-18 11.5 1.5 31.7 47.1 4.4 4.6

1927-9 9.1 0.7 25.1 60.8 2.0 0.8

Note: l France, Spain, Austria-Hungary; 2 India, Indochina, Middle East and central Asia Source: Statistical Appendix table AV

from China were hampered by restrictions set up in 1755-60 at the request of the Imperial Manufactures which feared that exports could jeopardize their supply of raw material.13 These restrictions were to be abolished by the Nankeen Treaty (at the end of the Opium War) in 1842, thus boosting exports.14 Table 3.4 reports the shares on the world trade of silk since the 1820s. The results would not be different if the data included the silk content of silkwares, which can be regarded as a 'superior' sort of export, as they also included the added manufacturing value. In fact, the silk content of exports of silkwares from Italy, China and Japan grew approximately to the same extent, up to a 10-15 per cent of total exports.15 Unsurprisingly, the trends are quite similar to those demonstrated in table 3.3. The figures are different, however, as Italy exported much more silk in proportion than any other country. If computed on value instead of quantity, the Italian share would be even higher because its silk was the best and most expensive in the world. The trade data are not only more accurate and reliable than those of output. They offer at least two important additional pieces of information. Firstly, they show how the pebrine and the Tai'ping rebellion crisis had affected Italian and Chinese exports in the 1850s-1860s. Secondly, they single out 1905-7 as the beginning of the crisis of the Italian industry and show how a relatively modest decrease in absolute terms 13

14

15

See Greenberg 1964; Dermigny 1964; Banister 1933, 4; Li 1982, 61-70; Osterhammel 1992, 172-4; and Eng 1986, 23. Silk had to be exported only from Canton and the trade had to be intermediated by a small group of merchants. Banister 1933, 9-21 and 49-51; Morse 1910-18, I, 358; Remer 1926, 1-15. The merchants* privileges had been abolished in 1834. For the data, see Federico 1994a, Appendice Statistica, table XXVb (exports of silkwares) and XXVe (silk content) and for a short discussion of the exports of silkwares from these countries, ch. 5.

36

An economic history of the silk industry

Table 3.4

Shares on total exports of silk 1820-1930 Italy

1820-24 1848-50 1859-61 1864-66 1873-75 1905-07 1911-13 1927-29

65.7 55.8 26.5 21.4 30.9 32.8 19.2 10.3

China 11.9 20.1 50.6 39.7 53.1 33.9 35.4 21.9

Japan

_ 6.7 13.9 8.3 27.0 41.5 67.2

Levant

India

5.7 11.5 7.6 12.6 4.1 4.8 3.2 0.3

16.6 12.5 8.6 12.5 3.7 1.5 0.7 0.2

Source: Statistical Appendix table AIII

(exports in 1911-3 and 1927-29 were 75-80 per cent of their 1905-7 peak) could cause a slump in the market share in a rapidly growing market. It would, of course, be possible to refine the analysis, taking into account also the medium and short-term fluctuations (see figure 2) but this would make the discussion unnecessarily long and cumbersome. It will suffice to stress that generally speaking exports were broadly correlated with the profit trends in Japan and Italy.16 Crisis and recovery at the middle of the nineteenth century As already said, from 1850 onwards the world silk market was upset by the coincidence of three exogenous shocks - pebrine in the Mediterranean basin, the opening of Japan to international trade and the Tai'ping revolt in China. The first two shocks reduced the world supply (in the economists' jargon they shifted the curve to the left), the last increased it (shifting to the right). The balance was at first negative - i.e. the supply shrank. If the demand curve had remained stable, the shift would have increased prices and/or decreased quantity, according to the demand elasticity. From 1856-59 to 1864-66 the silk trade decreased by 30 per cent and prices increased as much: these values imply a price elasticity of demand around unity. However, the demand curve did not necessarily remain stable. It was pushed to the right by the growth of world income and of the demand for cloth, to the left by the silk-saving innovations in manufacturing (analysed in the next chapter). Therefore the outcome is undetermined. The crisis began when pebrine hit the Mediterranean sericulture like a 16

Federico 1994a, Appendice Statistica, table XV.

(tonnes) 400,000-

/\/\ A

300,000-

200,000-

100,000-

EXPCINA EXPITV EXPJAP-* 1850 Figure 2

1860

1870

1880

Silk exports by country 1860-1930

1890

1900

1910

1920

1930

1940

38

An economic history of the silk industry

bombshell - and, in the words of a well-known Italian textbook, 'threatened to extinguish' it. 17 The disease had been identified for the first time in France at the beginning of the 1840s. 18 It arrived in Lombardy in 1851-2, in Piedmont in 1854 and then it spread progressively eastwards as far as Persia, which was reached at the middle of the 1860s. India and the Far East countries were never affected, in spite of the hopeful news that spread in Italy several times. The disease was so devastating because it could not be cured and it is both hereditary and contagious.19 If infected during the raising period, the silkworms may survive and lay eggs, but the newly born insects are doomed to a certain death before spinning the cocoon. Therefore, the raisers had to hatch healthy eggs and hope that their worms were not infected later on. The technology of the 1850s did not allow the breeders to ascertain whether a lot of eggs was healthy or not: the only system to minimize risk was to buy the eggs in non disease-stricken areas. The task was entrusted to specialized traders called 'semai' or 'graineurs', who collected the orders from landowners and raisers. Many of them tried to breed the race their customers were used to in allegedly uncontaminated areas and in this way they probably spread the disease. 20 Thus, the 'semai' had to search farther and farther away each year. They first combed the Italian peninsula, then all the Mediterranean basin and finally Asia with some raids in North and South America (Peru, California etc.). 21 In 1860 some eggs were imported from Japan for the first time. 22 At first, trade was quite difficult and the Japanese government even forbade exports in 1862. In the long run, the Japanese eggs proved to be the salvation of the Mediterranean sericulture. In fact, they remained immune from pebrine - possibly because the Western 'semai' were forbidden even to travel in the interior of the country. Exports of eggs boomed from 1864-65, peaking at the end of the decade, while Japan became the sole supplier of the whole Mediterranean sericulture. The disease transformed the economics of sericulture. It greatly 17

18

19 20 21

22

Verson-Quajat 1896, 3 0 1 . For local case-studies on Lombardy, see Caizzi 1958 and Cafaro 1988, 2 0 9 - 1 3 . See the (sometimes conflicting) chronologies of Rondot 1 8 8 5 - 8 7 , I, passim; VersonQuajat 1896, 3 0 1 ; D e Bernardi 1900, 500; N e n c i 1900, 150; Rosa 1887, 9 7 - 9 . For technical details, see Verson-Quajat 1896, 3 0 6 - 1 8 and N e n c i 1900, 153. See e.g. Rondot 1 8 8 5 - 8 7 , 1 , 4 3 3 ; Pariset 1890, 2 8 - 9 ; Zanier 1986. See Rondot 1 8 8 5 - 8 7 , 1 , passim', Pestalozza, 'II baco da seta deH'America', Sole, 2 3 , 25 and 17 N o v . 1867; Legget 1948, 337; and the case-study of a much-publicized official mission in China, Zanier 1992. See Notizie 1879, 7 5 0 - 1 ; D e Bavier 1874, 7 5 - 8 ; and the data in Federico 1994a, Appendice Statistica, table XVII. T h e news of the ban on exports is in a letter of the French ambassador in Yedo (Tokyo) of 2 0 Jan. 1862 {MAE, CCC, Y e d o 2); the Japanese policy towards exports of eggs is described in more detail in ch. 9.

The growth in the long run

39

increased the risk of losing the harvest, and with it all the work and the money the raiser had invested in the eggs. The sum could be very high, if the eggs came from distant places and if the reputation of the seller was good. In 1873-75, it amounted on average to 13 per cent of the proceedings of a 'median' harvest.23 It was by no means a negligible bet for a peasant household. Moreover, pebrine upset the whole process of framing expectations on output and prices. Before the outbreak of the disease, the yield (output per unit of eggs) was fairly constant, and so a rough guess of the quantity of eggs hatched in a given area was sufficient to forecast the output and possibly the prices. The epidemic made output and thus prices unpredictable. In fact, the larger the total losses were, the higher the cocoon prices were ceteris paribus and therefore the income of the lucky peasants who had some cocoons to sell. In the 1870s, the massive use of Japanese eggs substantially reduced the risk of losing the harvest, but prices became increasingly dependent on the Asian output - and this made prediction no easier at all. The temptation to give up sericulture altogether had to be very strong. Unfortunately, it is not possible to assess to what extent the peasants yielded to it because there are no data on the quantity of hatched eggs. The output decreased less in Italy than in other European countries.24 It may thus be inferred that, if, as likely, the disease was similarly serious everywhere, the Italian breeders had less alternatives than the French ones. Just while the pebrine crisis was at its worst, Chinese sericulture was hit by the Tai'ping war. Actually, the revolt had broken out in 1851 but for about ten years it had not interested the silk-producing areas. The war had even helped exports by reducing internal consumption.25 The hostilities in the Shangai area broke out in 1860 and lasted until 1863. Export collapsed only two years later, because the fall in production was offset by the sale of stocks at hand and probably by the increase of exports from southern China. In 1863-66 the total Chinese exports fell to half the pre-war level. Assuming (conservatively) that exports from the South had remained steady, those from the Shangai area would have shrunk to a third of the previous peak. The diminution of output may have been even greater. 23

24

25

T h e price-lists of eggs-importers are published by the GIS (various issues); the median yield per 'cartone' is assumed to be 3 0 kg. T h e fall from the pre-disease level to the trough (in different years) was about 3 5 - 4 5 per cent in Italy, 70 per cent in France, 9 0 per cent in Spain, 70 per cent in Austria (Statistical Appendix, tables ATV and AV) and 80 per cent in the Bursa area (Quataert 1993, table 4.3). See Morse 1 9 1 0 - 1 8 , 1 4 6 6 ; Remer 1926, 2 8 - 9 ; Li 1981, 1 0 5 - 6 ; Banister 1933, 25 and 59; Silk 1881, 7 1 ; and for the war events, Y u - W e n 1973, passim.

40

An economic history of the silk industry

Japan began therefore to trade with the West at the best possible time. The prices of silk relative to other agricultural crops such as cotton or rice approximately doubled after the realignment of internal prices to the world oneSj and this caused the production to increase by a quarter and the internal consumption to decrease by as much. 26 The surplus was exported. In 1862, exports soared to 1,200 tonnes (a sixth of the world total), in spite of the opposition of some xenophobic warlords and of the governments' attempts to the regulate the trade. But this first boom of Japanese sericulture was short-lived because its competitors began to recover in the second half of the 1860s. The Chinese exports returned to the pre-crisis peak in the early 1870s, while output seems to have taken much more time. 27 Italian production took about ten years more, specially because of two disastrous crops in 1876 and 1877. Its recovery was decisively facilitated by Pasteur's invention of the so-called cellular system to produce disease-free eggs in 1865. 28 The idea was simple but really brilliant. The insects were mated in gauze cells (hence the name), making it possible to check the parents and pick out the infected eggs. The method was introduced in Italy around 1867-68 but its advantages were at first strongly contested, above all by the eggs importers.29 These controversies scared the breeders and slowed the affirmation of the cellular method. Imports of eggs from Japan began to be affected after 1870, and disappeared altogether at the beginning of the 1880s. 30 At the beginning of the 1870s the crisis was apparently over. The world commerce of silk was back to the pre-crisis levels and the market shares were similar to those of twenty years earlier - except, of course, for the presence of Japan. But the period of high prices had changed the silk 26

For the movements in prices from 1 8 4 5 - 5 5 to 1 8 7 1 - 7 9 , see Huber, 1970 table 1. Interestingly, the price of silk relative to tea (another staple) remained stable. T h e (extremely rough) estimate of the changes in output and internal consumption is from

DeBavierl874,24. 27

28 29

See Li 1 9 8 1 , 105 and Banister 1933, 62 (let m e stress again that all statements o n Chinese production are extremely tentative). Pasteur 1970. T h e method is mentioned in Italy in two articles in / / Sole ('Confezione di seme-bachi', 9 - 1 0 March 1868 and F. Franceschini and A. Gadda, 'Confezione di seme-bachi', 19 and 2 7 - 2 8 April 1868). A n example of the debate is the controversy in 1871 o n the same newspaper between Susani ('Bachicoltura', 8 Feb., 8 March and 1 May) and G. Rosa ('Studi bacologici', 23 Feb. and 'Bachicoltura', 15 March); see also C . Orio, 'La questione bacologica del giorno', Sole, 22 June 1872; and P. Luisetti, 'La semente dei bachi' Sole, 3 - 4 Feb. 1873. For the similar debate in France, see Reynier 1 9 2 1 ,

117-30. 30

See Federico 1994a, Appendice Statistica, table XVII (exports of eggs) and XLIII (type of eggs hatched) and also Bachicoltura 1871, 254; Notizie 1879, 8 3 0 - 3 1 ; Relazione

1870-74,413-15.

The growth in the long run

41

industry for good.31 The high prices of cocoons had speeded up the diffusion of steam-reeling, which produced a better and more expensive silk with the same raw material. In due time, the technical progress in Europe was to compel also the Asian industries to adopt the more modern techniques. The higher price of silk had stimulated silk-saving innovations in weaving (e.g. the 'weighting') and caused the share of mixed fabrics to increase. The effects of these endogenous changes were enhanced by two exogenous facts. The first was the change of trade policy in the United Kingdom and the United States in 1861-1863, which in the long run was to change the location of weaving and hence of the raw silk consumption. The second was the improvement of means of transportation and communication - the new steamship services from Asia to Lyons and New York (via San Francisco) and the laying of the telegraphic cables between Europe and the Far East, which strongly accelerated the already ongoing process of integration of the world silk market. In short, the 1850s and 1860s mark the beginning of a new era for the silk industry. The trade in thrown silk So far, the analysis has dealt with the trade in silk without distinguishing the raw from the thrown silk. The percentage of this latter on total depended on the location of throwing, which, as already said, was unconstrained by the availability of raw material. In the long run it moved from the silk-producing countries to the silk-consuming ones.32 In the early nineteenth century, Italy exported mainly thrown - not raw - silk. Until 1834, the exports of raw silk were even forbidden from Piedmont (even if some was surely smuggled out). Afterwards, they accounted for one tenth of exports from Piedmont and one quarter of those from Lombardy. Piedmont specialized in high-quality organzines, while Lombardy exported both organzines and trams. By contrast, China and Japan never succeeded in exporting thrown silk, because their industry was hopelessly backward. Therefore the relative importance of the commerce of thrown silk was bound to fall because the market share of these countries was increasing. The variation, however, was not proportional. The location of throwing depended on the productivity of this activity and on the trade policy of consuming countries. During the pebrine years, the Italian 31

32

These changes are discussed in more detail in chapters 7 (the diffusion of steam reeling), 4 (changes on the demand side) and in Federico 1994c (the integration of the world market). All the quoted data o n the trade of thrown silk are in the Statistical Appendix, table AVH. T h e Italian output of thrown silk is from Fenoaltea 1988, table 5, cols. 2 - 3 .

42

An economic history of the silk industry

exports of thrown silk did not decrease as much as the home production because the industry began to process the Asian silk.33 The 1860s and 1870s marked the heyday of Italian throwing. Until 1880, its output (including the Asian trams) always exceeded the national production of raw silk. Italy monopolised the world trade in thrown silk, which still accounted for about a third of the world commerce of silk. The situation began to change in the 1880s. Firstly, the world demand for thrown silk decreased because of the protection in consumer countries. In 1888 France, then Italy's best client, raised a prohibitive duty on thrown silk (imitated by Russia in 1892), while the effect of the American prohibitive duties (in force since the 1860s) was increasingly been felt as the United States accounted for a growing percentage of total world silk consumption. Total trade of thrown silk went on growing until the war, but it fell to a quarter of total trade in the 1890s and to a fifth in 1908-13. On top of it, two new competitors, France and Germany, began to erode Italy's traditional monopoly since the 1890s. On the eve of World War I, its market share had shrunk to a mere 65 per cent of world trade and thrown silk accounted for about two thirds of gross exports only. Half of them consisted of Asian trams, while only a third of the Italian silk was thrown in the country.34 Italian throwing was clearly in jeopardy. From 1880 to 1906 its output had increased by 25 per cent only (versus the 125 per cent of the production of raw silk). Experts lamented its Very poor conditions', 'terrible crisis' and the like, prophesying that throwing was 'doomed to disappear' or - at best - to become an 'auxiliary branch of reeling'.35 The situation was dramatically worsened by the war. In the 1920s the world trade in thrown silk fell to a half of the pre-war peak (roughly 6-7 per cent of total silk commerce), never to recover. Italy succeeded in increasing its market share immediately after the war by capitalizing on the crisis of the German industry but in the late 1920s it lost all the gain as a result of the aggressive French competition. The traditional import flow of Asian silk to be processed reduced to a trickle, so that in the late 1920s thrown silk accounted for only a third of Italian exports. However, the dire prophecies about the Italian industry proved to be false: in the long run, throwing was to survive by processing foreign silk and other fibres for the Como weaving. Throwing was much more suited than reeling to Italy's new status of industrialized country. 33

34

35

See 'Lavoro e commercio' delle sete asiatiche in Italia', Sole, 26 August 1865; M . Morand, 'L'industrie de la soie en Italie', BSS, 2 N o v . 1878. Estimated from 'II valore delle nostre importazioni ed esportazioni e la loro composizione', BS, no. 5, 1911. T h e first quotation from Inchiesta serica, III, 121; the two others from 'II congresso e le mostre agrarie di C o m o ' , BA, no. 3 7 , 1 9 0 9 .

Consumption of silkwares and demand for silk

Introduction: the 'democratization' of silk From 1875-77 to 1927-9 the world consumption of raw silk increased by 5.5 times: in per capita terms it tripled in the four largest Western countries (United States, Great Britain, Germany and France), from about 50 grams to more than 150 grams.1 This increase exceeded that of any other natural fibre: in the same period, the consumption of cotton increased only 4.2 times, that of wool doubled and that of linen and hemp roughly halved. Moreover, as table 4.1 shows, the consumption of silk was the only one to grow steadily throughout the period. Of course, the growth in the consumption of artificial fibres thwarted that of all the natural ones, silk included: the world production of rayon multiplied almost 300 times from 1896 (the beginning of the commercial production) to 1925-29.2 Rayon, though marketed under the tempting label of'artificial silk', was not a real substitute for natural silk, except in secondary uses, such as the production of trimmings. Rayon cloths began to be produced in bulk only in the 1920s, and they competed mainly with those made of cotton and other natural fibres. Moreover, rayon was unsuited for the production of stockings, the consumption of which was soaring in the 1920s. Not until 1936, with the beginning of the commercial production of nylon, which was specifically designed to be used in the hosiery industry, was an artificial substitute for silk available.3 During the period considered in this book, the silk had no real competitors in the market for high-quality goods. If anything, it was the other way round. Silkwares invaded the market for cotton and woollen goods, and became a mass consumption item for the 1

2

3

The numerator (Statistical Appendix, table AXIII) includes the consumption of Switzerland, which exported almost its entire output of silkwares. The denominator is Maddison 1991, tables B2 and B3. The first artificial fibre was invented in 1884 by Chardonnet, but the real breakthrough was the invention of viscose by Cross and Bevan in 1892 and of the industrial production process by Steam in 1898 (for details, see Federico 1994a, Appendice P). See Aftalion 1991, 155.

43

44

An economic history of the silk industry

Table 4.1

1876/1896 1896/1912 1876/1912 1913/1928

Growth of total consumption of textile fibres 1875-1930 linen

Hemp

Cotton

Wool

Silk

Rayon

0.00 -0.28 -0.12 -1.83

-1.08 -0.12 -0.67 -0.62

3.04 3.77 3.36 1.04

1.80 1.05 1.47 0.82

3.29 2.36 3.14 3.92

n.a. 18.44 n.a. 17.88

Note: Data in triennial moving averages, except 1913. Source: silk output Statistical Appendix table V, output of rayon Federico 1994a, Appendice statistica, table LXXXIII; output of other fibres: for 1876-1912, data kindly provided by Peter Solar; for 1913/1927-29, League of Nations 1930, Annex II and League of Nations 1936.

growing middle class and even for some of the better-off workers. Silk, as experts said, 'democratized'. The first signs of the process were detected in Great Britain as early as the 1830s: according to one merchant, 'previous to the time spoken of, ten or twelve years back, the bulk of silks were sold only to persons moving in the better circles; now the lowest class of persons wear them'.4 The claim is probably exaggerated for that time, but it was to become real afterwards. Nowhere was the process more advanced than in the United States. In the 1920s, 'everyone ... wants silk clothing instead of the linen or cotton to which he or she has been accustomed'.5 And an Italian official committee remarked reproachingly that the 'desire for luxury' was so 'excessive' as to cause the expenditure in silk clothing to be 'not proportional to the income'. 6 Democratization was made possible by economic growth. If the income elasticity for silkwares in 1913 was about 2 (as estimated by a cross-section of thirteen countries in 1913), the growth of income alone would have caused the per capita consumption of silkwares to more than double from 1875-77 to 1911-13 and to increase by a further 60 per cent from then to the eve of the Great Crisis.7 The total consumption of silkwares would have increased by 170 per cent and 70 per cent respectively. These estimates are very tentative but nevertheless useful to appreciate the extent of the growth of the mass market for silkwares. The process totally transformed the silk industry. In the words of the most important historian of the Lyons industry, 'though maintaining the capability to be, in some moments, an aristocratic Fabrique for luxury 4 5 7

Evidence by Baggally to the Select Comittee on silk trade (quoted by Tolaini 1995). 6 Report 1921, 85. CVD, 1912, 200. The per capita GDP is computed from the data in Maddison 1991, Appendixes A and B (not adjusted for boundary changes); the elasticity is estimated in Federico 1996b.

Consumption of silkwares and demand for silk

45

production, it should in most cases be a plebeian one for cheap production'.8 This entailed a drastic change in the product mix and in the very nature of silkwares. The income growth and the ensuing change in the composition of demand for silkwares are only a part of the story, and possibly not the most interesting one from the point of view of the analysis of the market for silk. The consumption of silkwares also increased because their price fell in real terms. Experts considered this fall even more important than the growth of income. For instance, the Chambre du Commerce de Paris remarks that 'the taste or the need for luxury, becoming more and more diffused among the middle classes, increased the consumption of fabrics which once were used only by the more wealthy classes, and which the low price had now put within everyone's reach' and, more straightforwardly, an official French source states that 'now the low cost is a necessary condition for a wide sale, and is the only determinant of consumption'.9 These statements are technically wrong: surely, the price fall contributed much less than income growth did to the overall increase in consumption. None the less, it was extremely important because, unlike the income growth, the 'low price' was endogenous to the silk industry. In part, it was due to the fall in the price of silk, both in real terms and relative to other natural fibres (from 1846-52 to 1925-29 the silk/cotton and silk/wool price ratios halved).10 But the manufacturers of silkwares also contributed to the 'low price'. In the short run, the manufacturers could mitigate the impact of sudden rises in silk prices by cutting their profits. Actually, they frequently complained that they were compelled to do so, of course without quoting either their windfall gains when the silk price decreased and/or the possibility of transferring the burden onto wages.11 These cuts could be but temporary. Indeed, a permanent reduction of profits below the average economy-wide would have driven away investors from the industry. It therefore cannot be consistent with the increase in production of silkwares. In the long run the manufacturers reduced the price of silkwares in relation to that of silk by reducing the value added (mainly thanks to technical progress) and/or the silk content - that is, the 8 9

10

11

Pariset 1901, 393. The first quotation from CdC, Paris 1905 (stress added); the second from CPVD 1900, 25 See Statistical Appendix, tables AVIII and DC (relative prices in other countries in Federico 1994a, Appendice Statistica, table XXI). The price ratios to other fibres, however, overstate die actual decrease. The price of silk in fact includes the fall of value added in processing (reeling), while those of cotton and wool exclude it. 'Facts and comments', ASJ, June 1898; 'Facts and comments', ASJ, June 1899; 'Key to the situation' ASJ, August 1903; Allen 1904, 38; Annual 1911, 39; for France, see CPVD 1894, 28 and CPVD 1898, 23 and so on.

46

An economic history of the silk industry

quantity of silk per unit of output (other raw materials being decidedly less expensive). The following sections will discuss their strategy, and the consequences on the quantity and the quality of the demand for silk. First of all, it is worthwhile to review the available evidence on these trends.

Consumption of silkwares and demand for silk: an overview of the trends The simplest index of the effects of the cost-saving strategies is the ratio of prices of the final product to the silk price for a specific product. A slightly more sophisticated version of the same idea involves the estimation (in logarithmic form) of the regression Pf = a + bPs + cT where Pf is the price of a given type of silkware and Ps the price of silk. The coefficient c is the rate of change in relative prices, while b is the elasticity of the price of silkwares to that of silk. Two examples are given in table 4.2. If the price of silk had remained steady, the price of taffeta in Italy would have fallen by 15 per cent, and that of black cloths in USA by 45 per cent. The question is further complicated by the possible changes in the product mix. In fact, both the absolute level of the price/silk cost ratios and their rate of change could and indeed did differ between products. In theory, an aggregate index could be obtained as a weighted average of the coefficient c for a representative sample of silkwares, with the composition of output as weights. In this case, it would be possible to estimate the contribution of changes for single goods (as those in table 4.2) and of the composition of output. Unfortunately, these computations are not feasible. There are no other price series for silkwares, and data on the composition of output are too sketchy and not sufficiently homogeneous to enable us to construct anything similar to a world distribution at any moment in time. An alternative approach is a straightforward comparison between the variations in the total output of silkwares and the consumption of silk. It implies a change of perspective, from prices to quantities, and, unfortunately, a loss of information. In fact, this approach can take into account the diminution of the silk content of silkwares but not that of value added per unit of output. Luckily, the former trend was also the most important one from the point of view of the demand for silk. Before the 1870s, there are very few data. According to Deane and Cole, the total production of silkwares (Volume') in the United Kingdom

Consumption of silkwares and demand for silk Table 4.2

47

Trends in final products I silk prices

a) taffeta, Italy 1870-1913 Pf = -0.631* + 0.609 Ps* - 0.0038 T* R2 = 0.974 (4.10) (16.79) (5.11) DW = 2.15 F = 562.8 SEE = 0.03 AR(1) = 0.42 b) black cloths, USA 1871 -1891 Pf = 4.414 + 0.163 Ps - 0.0289 T* R2 = 0.92 (6.80) (1.29) (6.93) D W = 1 . 2 6 F = 119.8 SEE = 0.07 Note: significant at 1 % Source: prices of silk: a) Federico 1994a, Appendice F; prices of cloth: a) Cianci 1933, 455-457, b) Wholesale prices, p. 78

from the 1800s to 1860 grew about 10 times, much more than imports of silk (only 5.5 times). 12 In other words, the use of silk per unit of output would have almost halved, a really dramatic change. Nothing similar seems to have happened in Lyons: from the early 1830s to the 1870s, the number of looms grew approximately as much as the apparent consumption of yarn.13 It is impossible to assess to what extent the difference between France and Britain was a real one or simply reflects the shortcomings of the number of looms as a proxy for output. As table 4.3 suggests, from the 1870s the data are more abundant, though not homogeneous. In table 4.3, column (a) estimates the variation of the value of output from the point of view of the consumer. 14 The relevant comparison is between the two last columns on the right, which are deflated with the same series, the implicit world price of silk. There is clear evidence of a different trend in Europe and in the United States. In Europe, the output of silkwares increased more than the consumption of silk, and therefore the silk producers did not benefit from the whole increase in demand for silkwares. In the United States, they did not lose before World War I and actually gained afterwards, because the silk content of silkwares increased. With the data available, it is not possible to push the quantitative analysis further, for instance to allocate, even tentatively, the total reduction in the aggregate silk content between the changes for 12

13 14

The data on apparent consumption are from Federico 1994a, Appendice Statistica, tables XXXI and XXXII; the English output of silkwares, from Deane and Cole 1978, 210 (column Volume'). See Federico 1994a, Appendice Statistica, table XXVI. The rates are systematically lower than those in column (b) because the ratio between the two denominators (the inverse of the real price of silk) was growing.

48

An economic history of the silk industry

Table 4.3 Growth rates of production of silkwares, various countries, 1870-1930 (in percentages) Period (a) World USA France UK Italy Zurich Krefeld

1890-1913 1869-1914 1914-1929 1874/76-1908/13 1860-1907 1861/63-1911/13 1895-1912 1874/76-1908/13

Consumption of silk

Output

2.55 7.69 4.24 0.43 1 -0.55 3.42 2 -0.31 1.04

(b) 3.46 8.22 4.55 0.93 1 n.a. n.a. 0.86 1.80

3.75 8.11 7.15 -0.48 -2.78 2.33 0.53 1.17

Note: Col. (a) deflated with national wholesale price indexes (proxing the * world' prices with the British ones and the Swiss prices with the French ones); col. (b) deflated with the world implicit silk price 1 sum of Lyons and Saint-Etienne 2 Value Added Source: Statistical Appendix, table AV (world silk output net of apparent consumption in Japan), Federico 1994a, Appendice Statistica, tables XIII, XXIII and XXIV (value of output of silkwares) and XXXII (apparent consumption of silk by country); wholesale price indexes, Mitchell 1975, 737-9.

a single product and the changes in the product mix. There is, however, a lot of qualitative evidence, which makes it possible to outline the main trends and to assess their effect. The next section will review it. Production of silkwares and consumption of raw silk The manufacturers could reduce the silk content of a given type of silkware in two different ways - either by using a thinner silk or by 'weighting' the silk - that is, by adding extraneous substances to it during dyeing. The raw silk is obtained by joining the threads of several cocoons: the number determines the diameter of the silk or count.15 It can range from a minimum of 3-4 (corresponding to a count of 9-11) to a maximum of 20-30 (a count of 60-70). Traditionally hand-reeled silk was very thick but the trend towards finer yarn began in Italy in the late seventeenth and early eighteenth centuries.16 By the 1820s the average count of 15

16

The count was expressed as the weight in grams of a given length of yarn (450 metres according to the standard system), so that the lower the count die thinner the silk. See Tolaini 1996. The filament of a single cocoon has a count of 2 - 3 - so that joining three or four cocoons yields a 10/12 silk. The count of the organzine is roughly the double, as it consists of two threads of raw. See Poni 1981; Tolaini 1995; and Tolaini 1994b, 72.

Consumption of silkwares and demand for silk

49

organzines was already about 36 (corresponding to a raw silk of around 15-18), and it was to drop to about 22/24 towards the end of the century.17 This was the minimum - as thinner threads were unfit to stand the stress of weaving. Asian hand-reeled silk remained always rather coarse, with few exceptions. The count of filatures was on average rather low, but usually higher than that of Italian silk. For instance, the standard count in Japan was about 16-17 and only the Shangai filatures were as thin as the Italian ones. Of course, the silk content of fabrics did not fall as much as the average count of silk, as more yarns had to be used to produce the same surface area of cloth. Savings were substantial anyway, though impossible to estimate precisely. On top of this, the use of a finer silk improved the quality of the fabric, making it lighter and softer than a similar one produced with coarse raw material.18 Weighting reduced the silk content because it increased the diameter of the yarn, making it possible to use fewer threads per unit of surface. It began to be used in the 1820s, using sugar, tannic acid, gall-nut and other vegetable substances.19 All these methods had some technical shortcomings (it was even said that sugar-weighted fabrics could attract flies!) and, above all, they did not increase the weight enough. The vegetable weighting was barely sufficient to recover the loss caused by dyeing - in the jargon, the load factor could not exceed one. A real breakthrough was achieved thanks only to the development of chemical weighting. The first successful experiment dates back to 1856, but the commercial use began in the 1870s. In the next twenty years, new and more suitable blends of chemicals were made available, causing the load factor to grow up to 3-4 in the 1890s for black cloths (which could stand more weighting). In other words, silk might constitute no more than one quarter or one third of the weight of a cloth allegedly made of pure silk. The industrial standard was anyway lower. The average load factor was around 2 for blacks and 1.3 for pale colours in Lyons and 1.5-1.6 (for all cloths) in Italy.20 The late 1890s probably marked an all-time peak of 17

18 19

20

Data estimated from Gera 1829, 160 and 174. In the 1900s, the standard for raw silk was 10/12, corresponding to an organzine of 22/24. See F. Clerici, 'La campagna bacologica in Italia nel 1901', G/S, no. 5 1 , 1901; Giretti 1932, 136; and Belloc and D e Vecchi 1910, 526. O n the count of Japanese silks, see Kyokawa 1987, 3 1 - 2 . See Pinchetti 1877, 2 5 4 - 6 9 ; and 1905, 2 2 - 4 . On the history of weighting, see Moyret 1877, 1 5 6 - 1 9 2 ; Gera 1829, 7 2 - 1 0 4 ; Gabba 1878, 107; Sheridan 1 9 8 1 , 1 , 219 and 1984, 4 3 - 4 ; Cayez 1980, 1 1 0 - 1 4 , and, above all, the technical works of Severini 1906 and Ciucci 1931. For the peaks, J. M . Berliat, 'L'industria dei tessuti di seta', BS, no. 4 2 , 1905; Conference 1905, 7; Pinchetti 1904; and G. Gianoli, 'Intorno alia imperfezione degli artuali sistemi di tintura della seta', in BS, no. 10, 1898; and for the fall in the 1920s, Schober 1930, 76 and 257; and Ciucci 1931, 9 - 1 0 . T h e figures of the load factors in Lyons are from Association n.d., and the estimate for Italy is from Fenoaltea 1988, table 6, col. 4. T h e qualitative evidence is supported by a statistical test o n the existence of a

50

An economic history of the silk industry

the diffusion of weighting. The load factor did not grow further, and it may even have diminished somewhat after the First World War. Weighting yielded substantial savings. It can be estimated (assuming that chemicals cost a tenth of the price of silk and that the Value Added accounted for half the price of the fabric) that a weighted black cloth cost about a quarter less than the same piece made with unweighted silk. Not surprisingly, then, manufacturers came to regard it as essential for their business. A representative of Fabrique Lyonnaise defined weighting as an 'economic necessity which the consumers' needs impose on weavers' and stated that 'the development of the European silk industry was due to weighting'.21 The Silk Association of America shared this opinion, though perhaps in a less extreme way. Its journal announced that 'a certain degree of weighting' ('not injurious to the silk') was 'not only permissible but desirable'.22 But weighting raised also a lot of opposition. Weighted fabrics had a very poor reputation, as they were deemed unattractive and not resistant to wear and tear. From the 1870s experts warned that the spread of weighting might 'disgust' the buyers and jeopardize the sale of silkwares.23 This argument was eagerly seized by silk producers, who feared that weighting could reduce the demand for raw silk. In spite of all the discussions, nothing was done until 1897, just at the end of the great surge in the load factor. In that year, Swiss and German weavers agreed to set an upper bound to the allowed load factor.24 However, the Lyonnaise refused to join, and the agreement collapsed under their competition. In 1905, the idea was resumed by the Italian producers, who convened a conference of all the European weaving associations.25 Well aware of the previous failure, they simply suggested branding the cloth made by 'pure' (i.e. not weighted) silk with a label. Even this modest proposal was turned down by the representa-

21 22 23

24

25

structural break around 1895 in the equation of table 4 . 2 . T h e F coefficient of the C h o w test is 4.02 (significant at 1 per cent). See Associazione Serica Piemonte 1906a, 9 - 1 0 . Semi-annual 1912. See e.g. 'Situazione delle sete e seterie', GIS, no. 2 2 , 1873 (a translation of an article in the 'Moniteur des soies'); 'Le surcharge des soieries a la teinture et le " T i m e s " ' , BSS, 1 D e c . 1877; Annual 1876; 1877; 1878; and 'La surcharge a la teinture', BSS, March 1889. Italian newspapers were ready to blame weighting and the ensuing consumers' neglect for any fall in silk prices (e.g. F. B., 'La situazione serica', Sole, 2 2 D e c . 1876; F. M . 'Produzione commercio e c o n s u m o delle sete', Sole, 30 N o v . 1877; C. Vedovelli, 'II commercio serico', Sole, 27 March 1879, etc.). See Conference 1905, 38; Severin 1906, 5 5 - 9 ; C. Dangon, 'II sopraccarico della seta' BS, no. 10, 1897; G. Gianoli, 'Intorno alle imperfezioni degli attuali sistemi di tintura della seta', BS, no. 10, 1898; and (for Lyons' refusal to abide by) 'La carica delle sete', BS, no. 5 1 , 1900. See also the opinion of Swiss weavers reported by the French consul in Zurich (report of 3 October 1905 in MAE Affacom 1 9 0 2 - 0 7 ) . T h e proceedings are in Conference 1905 and Associazione serica Piemonte 1906a (the quotation is on p. 10).

Consumption of silkwares and demand for silk

51

tive of the Fabrique Lyonnaise who bluntly declared he was participating in the conference 'with a clear goal: to defend the principle of freedom which we feel threatened by your initiative'. A year later, in the midst of a severe market crisis, the SAA launched a campaign against weighting (emphatically named the 'silk crusade'), allegedly with some success.26 The proposal of a 'pure silk' label for fabrics was resumed in the 1929 World Silk Congress of Zurich, to be turned down once again.27 So 'weighting' went substantially unchecked throughout the whole period and people went on buying adulterated wares. Of course, a single consumer was bound to be deceived as 'weighting' could be discovered only by a chemical analysis of the cloth. Yet, there was no mass flee from silkwares. The president of Lyons' Chambre du Commerce may not have been totally wrong when he wrote that 'it is the consumer himself who ranks first the low price of the fabrics, pushed to the extreme'.28 An adulterated silkware was better than no silkware at all. Even the producers of silk may have gained something, if the price elasticity of the demand for silkwares were high enough. In this case, the total consumption of silkwares could have increased enough to compensate for the lower amount of silk in each piece. With the parameters of the previous example, this would have happened had the elasticity for black cloths exceeded 2.5. This was quite an high value, but not impossibly so for a luxury item. Changes in the product mix could affect the total consumption of silk to the extent that the average silk content per unit of value for various goods was different. The range was quite wide both across the different classes of product (ribbons, cloth, stockings etc.) and within each class. For instance, the silk content of a sample of the thirty-one most common types of cloths produced in Lyons varied from 8.3 to 14 grams per one franc's worth.29 The content was lower in mixed goods (made by silk and other fibres) and in the so-called light fabrics (crepes, muslin etc.). Thus, ceteris paribus, the total consumption of silk was inversely proportional to the percentage of mixed and light goods on total production. As usual, it quite difficult to deal with the issue because the evidence 26

27 28 29

See the articles in the ASJ in 1906 ('Wanted an honest silk', February; 'The silk crusade', June; 'Continuation of the crusade', July, etc.). Retrospective appraisals of the effects are in 'The silk crusade', ASJ, September 1906 and in Annual 1907. See the proceedings in MAE, RC, 1 9 1 8 - 4 0 B-textiles, no. 2 1 . See the letter in Associazione serica Piemonte 1906a, 26. See 'Tableau synoptique de nombreux types de soieries', BSS, 17 N o v . 1894. T h e silk content ranged from 13 to 71 gr. per metre (i.e. by a factor of 5.5) but the percentage of Value Added of total value (varying from 31 per cent to 56 per cent) was inversely proportional to the quantity of silk, so that the two effects offset each other.

52

An economic history of the silk industry

is scarce. Paradoxically, the task seems easier before 1870, even if there are no data on the product mix. All the qualitative sources agree that in those years the share of mixed fabrics, and light cloths grew.30 This trend is by no means surprising. They were the cheapest available cloths and so their increased consumption was a part of the democratisation. From the late 1870s onwards, the quantitative evidence is rather abundant. The Chambre de Commerce of Lyons and Saint-Etienne published detailed breakdowns by type of the production since 1878, the US Census from 1899 onwards, and there are data also on Zurich, Krefeld and Italy.31 Unfortunately, the data are hardly comparable and it is difficult to single out any clear trend, especially before World War I. The percentage of mixed goods diminished in Lyons (from nearly 40 per cent in 1878-82 to 25 per cent in 1908-13), remained steady in Krefeld and Saint Etienne while increasing in Italy, in Zurich (where it was anyway very low) and in the USA (from 18 per cent in 1899 to 30 per cent in 1914). It is likely that the aggregate share decreased somewhat, causing the silk consumption to diminish. This fall may have been compensated by the boom in consumption of the other low-silk content goods, the light cloths, which soared from 5 per cent to 31 per cent of the value of the output of the Fabrique Lyonnaise. The total silk content per square yard of broadcloth in the USA fluctuated from 1899 to 1914 between 3.3 and 3.9 pounds. 32 Conversely, it does seem that after 1914 the changes in product mix increased ceteris paribus the consumption of silk, at least in the United States (which after the war accounted for more than half of total world consumption of silk). The percentage of mixed fabrics fell to 12 per cent in 1929 and the quantity of silk per unit of cloth increased by a quarter. Moreover, the consumption of silk was boosted by the boom of stockings, which were made by a relatively thick yarn (count 20/22) of unweighted silk. The hosiery industry had used a mere 4 per cent of the American consumption of silk in 1910, a third in 1929 and 80 per cent in 1939. 33 One could hypothesize that the increase in income had enabled American consumers to afford more expensive and possibly better (less weighted) wares - a sort of higher phase of democratisation. 30

31 32

33

O n Lyons, see Morand 1889, 14; Rondot 1894, 60; Pariset 1 9 0 1 , 309; Sheridan 1981, I, 1 5 6 - 7 9 ; Cayez 1978, 175; and Levy and Leboyer 1964, 1 4 3 - 4 ; on Krefeld, see Chung 1980, 6 5 - 7 0 and Kriedte 1991, 8 1 - 4 . See Federico 1994a, Appendice Statistica table X X I X . See U S Census 1914, tables 15 and 2 1 ; U S Census 1919, table 2 1 ; and U S Census 1929, table 3. See Federico 1994a, Appendice Statistica, table XXII; Brown 1994, 1 5 - 2 6 ; and Aamakawa and O o n o 1985, 146. O n the characteristics of the raw material, see Passerini 1 9 4 2 , 4 6 .

Consumption of silkwares and demand for silk

53

Democratization and the quality of silk Silk was not a homogeneous product: it could be distinguished by country and by production method (hand-reeled or filature) and each type had a different mix of physical characteristics (strength, evenness, cleanliness etc.).34 These qualities influenced its possible uses, making a certain type of silk comparatively more suited for producing a specific type of silkware and/or for being processed with some type of equipment. At least in theory, therefore, the changes in either the product mix or in the processing techniques might have affected the composition by quality of the total demand for silk, and hence the competition among countries. The effects of changes in the final product mix depended on the possibility of technical substitution between different qualities of silk. Two qualities of silk are (perfect) substitutes if they can be employed to produce exactly the same type of product at the same cost.35 If all the silks were perfect substitutes changes in the product mix would not affect the quality composition of the silk demand. But conversely, a variation in the demand for silkwares would cause a proportional change in the quality of the raw material if silks were not substitutes (and if the cross-elasticity in consumption between the different types of silkwares were nil). For instance, assume that high-class satins could be woven only with the best Italian silk: any increase in their consumption relative to, say, taffetas (producible also with Japanese silk) would have proportionally increased the consumption of Italian silk at the expense of Japanese and vice versa. Predictably, the real degree of substitutability was somewhere in the middle between these two extreme cases. In some cases, substitution was impossible or very difficult. Some silks were not good enough for certain uses (e.g. to be woven without throwing), others were too expensive to be used (e.g. the Italians in the production of sewing silk), others had some characteristics which were useful in the production of 34

35

T h e causes of the differences will be discussed in detail in chapters 6 and 7. Here it is sufficient to recall the quality ranking (see table 7.12). T h e best silks in the world were the Italian and French ones and the Shangai filatures (steam-reeled silks). T h e y were followed by the Japanese filatures and Middle East silk, the Japanese zaguris (handreeled), the Canton filatures, the Bengal (hand-reeled), the Chinese tsatlees (best handreeled) and by the other Chinese hand-reeled silks. T h e bottom of the list was occupied by the tussah silks, because the thread of other species was intrinsically inferior to that of the Bombyx Mori. Perfect substitutability is compatible with the existence of qualitative differences. In this case, the price differential would be equal to the extra costs to get the same final product using the qualitatively inferior silk. See Hofer, 'Comparative value of Canton and Japan silks', AS% February 1910; Chittick 1913, 74; and Rawlley 1919a, 110.

54

An economic history of the silk industry

special goods (e.g. the strength of Canton was useful to produce crapes). And substitution was always somewhat troublesome, as it entailed additional costs for learning to use a different raw material. Therefore, where possible, weavers used the same quality of silk to produce the same good. To quote Pinchetti, a well-known Italian weaving expert, 'nowadays every type of cloth is manufactured with a special type of silk'.36 Consequently, the changes in product mix did influence the composition of the demand for silk. For instance, the relative decrease in the consumption of high-quality high-price goods may have somewhat reduced the outlets for Italian silk. However, it is unlikely that these rigidities had gone very far. Technical substitution was nearly always possible if really necessary. In the short-term, manufacturers did react to large supply-side shocks by changing the mix of their raw material. For instance in the seasons 1881-2 and 1882-1883 the high prices of Chinese silk after a poor crop caused a massive switch to Japanese ones.37 In fact, the cross-price elasticities between Italian, Japanese and Chinese silks come out to be very high (between 3 and 9). 38 In the long run, the manufacturers adjusted their consumption mix to pursue the lowest possible price of silkwares. As Rondot noticed, 'nowadays the weaving firms know all too well how to use a type of silk if its low price allows them to produce a low-cost cloth'.39 Last but not least, there was a long-term feedback. The producers of the raw silk could change the quality of their product to widen their outlets. As detailed in chapter 7, at least some of them took this opportunity. The demand for silk was on the contrary deeply affected by the manufacturers' efforts to reduce the Value Added per unit of output in silk processing. This aim was pursued in three different ways. Firstly, they transferred the industry from the traditional urban location into the surrounding countryside, in search of low-cost (and not politically troublesome) workers. The percentage of rural hand-looms of the Fabrique Lyonnaise grew from 4 per cent in 1810 to 21 per cent in 1825 and to 52 per cent in 1840 (after the weavers' riots of 1834-36), in Krefeld from 21 per cent in 1825 to 51 per cent in 1825. 40 The rural 36

37

38 39

40

Pinchetti 1892, 144. A map of the most c o m m o n uses of each quality of silk is sketched in Federico 1994a, 3 4 1 - 2 . See 'Statistique de la production de la soie en Chine', BSS, 2 June 1882; and 'Statistique de la production de la soie en Chine', BSSy 16 1883. Federico 1996b. Rondot 1 8 8 5 - 8 7 , I, 3 3 8 . In the same vein, see Chittick 1 9 1 3 , 1 7 - 1 8 ; and Rawlley 1919b, 1 1 2 - 1 3 . Data from Levy-Leboyer 1964, 143 and Kriedte 1991, table 11. Also on the transfer in Lyons, see Cayez 1978, 1 5 2 - 9 ; Lequin 1984,1, 2 7 - 3 0 ; and Sheridan 1981,1, 1 9 1 - 2 0 5 ; on the transfer in Krefeld, see Upwich n.d., 1 0 3 - 4 , in Saint Etienne, CPVD 1896,

54-8.

Consumption of silkwares and demand for silk

55

weavers were on average much less skilled than the urban ones. They were not able to produce some goods (such as the rich-patterned fagonnes), which always remained an exclusive of urban weavers. Besides, the productivity of rural workers was lower, even if the initial gap might eventually be reduced by learning-by-doing. In the long-run the urban and rural labour quality-adjusted cost per unit of output converged to an equilibrium level, lower than the initial (only urban) one. It is, of course, impossible to assess how large the savings were, and how they were shared between increase in output and decrease in prices. The ruralization of weaving may have increased the use of low-quality silk. In fact, labour and the quality of silk were to some extent substitutes because the weaver could correct some defects in the silk (loose threads, dirty spots etc.). There is, however, no firm evidence on this. Secondly, the manufacturing industries began to weave raw silk instead of tram or organzine in order to save the Value Added of throwing.41 The innovation was first introduced in the 1820s in the production of light fabrics and was subsequently extended to all types of cloths. According to the available guesstimates, it used about a seventh of the total silk (1500 tonnes) around 1880, and a bit less than a fifth (5,000 tonnes) in the 1900s. 42 It did not spread further because only a good-to-excellent raw silk could withstand the stress of weaving. Therefore the innovation was particularly suited to the production of highquality wares which would have used good silk anyway. Its adoption in the production of other wares entailed an upgrading of the quality of silk, from the standard one (that would have been used as thrown silk) to the cheapest sort which could stand the weaving without being thrown. This change was profitable only if the price differential between the two qualities did not exceed the Value Added in throwing (about 7-8 per cent of the price of raw silk). So the diffusion of the weaving of raw silk marginally improved the average quality of the silk. However, the effect was likely to be small if not negligible. The real change was brought about by the third system of reducing the Value Added per unit of output - the mechanization of weaving.43 The first milestone in this process was the invention of the Jacquard 41

42

43

For technical details, see Lequin 1984, I, 8 4 - 7 , Conference 1905, 5 3 ; Schmidt 1912, 2 0 9 - 1 0 , for the spread,see Pariset 1901, 388; Rondot 1894, 60. For the consumption in the 1880s, see F. Forbes, 'II ribasso della seta', MS, no. 3 8 , 1880; and E. Turquet, 'Production de la filature et moulinage de la soie', BSS, 22 Feb. 1879; in the 1900s, see Risposte 1907, 124. O n technical progress, see Hills 1993; Beauquais 1910, 2 0 7 , 2 1 5 and 2 2 3 ; von der U p w i c h n.d., 1 3 0 - 2 ; U S Census 1900b, 2 2 3 ; Clark 1949, II, 4 5 4 , III, 2 1 2 - 1 3 ; M a s o n 1910, 1 1 1 - 1 2 ; Matsui, 1 4 1 - 4 ; Margrave 1986, 317-22ff; Scranton 1985, 4 7 - 8 ; and specifically o n the Jacquard loom, Pariset 1890, 3 5 0 .

56

An economic history of the silk industry Table 4.4

Productivity growth in powerloom weaving Per loom

USA 1880 1899 1911 1929

1918 2099 2635 4385

(0.47) (1.51) (3.64)

1876 1890 1903 1914

Italy 2350 3300 4150 4600

(2.26) (1.76) (1.14)

Per worker

USA 1880 1899 1914 1929

na 4057 6597 13609

(3.22) (5.19)

1875 1904 1913

Krefeld (velvets) 1.5 54 (11.95) 75 (3.65)

Source: United States (square metres/year) 1880-1914: Matsui 1930, 149; 1929: US Census 1929, tables 2 and 9 (the number of weavers in 1929 is estimated extrapolating the weavers/workers ratio in 1919); Italy (metres/year): Fenoaltea 1988, n25; Krefeld (metres/day): Pohl 1993,658.

handloom for patterned cloths in 1804. It employed one worker per loom instead of two like the traditional 'grand tire' loom, and enabled even an inexperienced weaver to reproduce the same pattern. So it spread quite fast: around 1830, there were 8750 Jacquard looms in Lyon (out of 37,000), 1,300 in the United Kingdom (out of 41,000) and 430 in Zurich (out of 6,000).44 Experiments in mechanization were pursued in the first years of the nineteenth century but there is no information on them. The first power looms for commercial production were installed in the 1820s.45 From then on, the equipment was constantly improved, to make the movement faster and smoother. The automatic (Northrop) looms were introduced after World War I. The increase in speed caused the productivity per loom to grow, as shown in table 4.4. In the meanwhile, the technology of the hand-loom did not change. In the 1880s-1890s, there were many attempts to fit the 44

45

The number of Jacquard looms in Lyons and Switzerland is taken from Levy-Leboyer 1964, 144; in the United Kingdom, from Chapman 1992, 72; the total number of looms, from Federico 1994a, Appendice Statistica, table XXVI. The differences reflect the different percentage of patterned cloths on total output. For the diffusion of the Jacquard loom in Krefeld, see Pohl 1993, 655. The first power-looms were installed in 1824 in Basel (Berger 1984, 226); in 1826 (or 1831) in Lyons (Sheridan 1981, I 211); in the 1820s in the United Kingdom (Warner 1921, 116, 150 and 209, Jones 1987, 82 and Malmgreen 1985, 20); in 1837 (or 1839) in the United States (Gabba 1878, 34; Margrave 1986, 34; Clark 1949,1, 576; Brockett 1876, 50); in 1844-46 in Elberfeld (Kermann 1993, 332); and in 1875 in Krefeld (Upwichn.d., 117-18).

Consumption of silkwares and demand for silk

57

looms with an electrical engine. They were successful for ribbons but not for cloths, because the machine was too expensive to be affordable.46 The productivity of the hand-loom for cloths stagnated at around 1,000 metres/day, while the gap with the power-loom increased in proportion. The productivity gap between hand and powerloom weaving was compounded by the possibility to increase the number of powerlooms per worker. In fact, the worker had only to supply the loom and to knot the broken yarns. By the way, this made it possible to employ unskilled, low-cost female and/or rural manpower, further lowering the unit cost of labour. The growth of the loom/worker ratio contributed substantially to the overall productivity growth. The United States were in the vanguard of the process: the double loom per worker was introduced in the 1880s and fifty years later a worker manned on average more than three looms -with peaks of up to six. 47 In spite of its great advantages, the power-loom was adopted in silk weaving only in the second half of the nineteenth century, first in the United States and then in Europe. The pattern of this process and the causes of the delay relative to the mechanization of other textile industries will be discussed in the next chapter. Here it is necessary to stress that it changed the demand for silk because the power-loom required a better raw material than the hand-loom. As the Silk Association of America explained to Chinese producers, 'the high price of labour and the speed of American machines make the low grade silk more expensive than the higher grades which can be worked with less labour and at a higher speed'.48 The speed increased the stress on the silk and therefore the chances that it could break at any weak point. Of course, the yarn had to be knotted by hand, wasting both time in having to stop the machine and precious silk. Moreover, the worker had to correct by hand any defect of the silk (loose threads, dirty spots etc.) which otherwise would have spoiled the appearance of the cloth. Therefore, the use of an inferior silk required more labour and could hamper the increase of the number of looms per worker - that is, of the productivity of labour. The 46

47

48

Beauquais 1910, 246. T h e experiments were described at length by the BSS ('L'application des moteurs mecaniques aux petits ateliers de tissage de Lyon', BSS, 8 Oct. 1881; 'L'atelier d'experimentations de tissage mechanique', BSS, 2 4 March 1883; E.T. 'Le tissage mecanique dans les petites ateliers et le chomages', BSS, 7 April 1883). On ribbon production, see Gras 1906, 3 6 3 - 7 9 ; and Guitton 1927, 2 9 - 3 0 . T h e estimate of the productivity of the hand-loom is from Fenoaltea 1988, n 2 5 . For the introduction of the double loom, see Margrave 1986, 3 2 5 . T h e loom/worker ratio was 1.93 in 1900, 2.50 in 1914, 3.20 in 1929 ( U S Census 1929, tables 2 and 9); the maximum is quoted by Hutchins 1928, 82 and Taussig, 1915, 4 1 2 . SAA, 1916, 6. See also M a s o n 1910, 13; Chittick 1913, 24; Tsing 1928, 1 1 7 - 2 0 ; Beauquais 1910, 216; Allen 1904, 26; Coleman 1969, 86; CPVD 1902, 27; Ferrario 1923, 145; Rawlley 1919a, 2 5 6 - 7 ; 'Handlooms in silk weaving', ASJ, May 1909.

58

An economic history of the silk industry

hand-loom had none of these constraints, and could use any kind of silk profitably. The stress was less intense and any breaking or defect could be corrected by the weaver himself. In other words, mechanization shifted, ceteris paribus, the average quality of silk upwards.

A digression: was fashion really important? The price was undoubtedly an important factor in determining the consumers' choices, but may have not been the only one. Fashion also played, or was believed to play, a very important role in shaping the demand for silkwares: c no industry depends more on fashion than the silk one' because 'nothing resists to its laws'. 49 Accordingly, the year's fashion trends were scrutinized by all reviews of the silk trade in the specialised journals at least as thoroughly as political events and supplyside shocks. They usually referred to the consumption of a specific type of silkwares. There was a class of fashion fabrics, the so-called novelties, designed to lure consumers with patterns and colours changing every year, but all types of silkwares had their periods of favour and oblivion. For instance, velvets were fashionable in the 1860s (with a craze in 1868-72), from 1898 to 1903 and after 1907 and neglected in the 1880s and 1890s. 50 These waves changed the composition of total demand for silkwares and affected the market for silk as any other demand-side shock did. They caused the quantity of silk to change to the extent that the average silk content differed among silkwares (e.g. a craze for mixed goods would have decreased ceteris paribus the consumption) and they might affect the quality too, if the silks were not perfect substitutes. Neither effect seems likely to have been substantial. Anyway, the overall importance of fashion was bound to be reduced by democratization, even if, as argued, it had become more volatile in the nineteenth century. 51 In fact, only wealthy people could afford to buy an expensive 'novelty' dress each year or to follow fashion. Most consumers purchased cheap goods which had to last for a longer period - and therefore were hardly sensitive to the year's fashion. But fashion could influence the total consumption of silk in other, and more important, ways. Firstly, the size and cut of dresses determined the quantity of silk to be used. For instance, a vogue for short and tight 49

50

51

Quotations from Beauquais 1910, 248 and Humbert, 'L'Industrie lyonnaise de la soie a la Societe d'economie politique de Lyon', BSS, 3 March 1883 respectively. See U p w i c h n.d., passim; CPVD 1908; Pohl 1993, 660; and Buccheim 1986, 78. Ribbons, as mere decorations, were particularly sensitive to fashion changes (Guitton 1927, 5 2 - 3 , Bergier 1984, 228; Ravaioli 1902, 2 8 3 - 4 ) . Pinchetti 1894, 1 4 6 - 8 ; Pariset 1890, 350; Rondot 1894, 7 5 ; D e Bavier 1892, 3 ; U p w i c h n.d., 104.

Consumption of silkwares and demand for silk

59

clothes caused many worries among silk producers in 1911 ('crisis of the length').52 The boom in the consumption of silk stockings was the indirect, and possibly unforeseen, consequence of the fashion for short skirts. Besides, silkwares as a whole - and not only a certain group of them - could be more or less fashionable. In this case, fashion would affect consumption exactly as income changes did. A favourable fashion would induce the consumers to buy more silkwares for any given price that is it would shift the demand curve rightwards (and vice versa). In some cases, the effect was really momentous - as in the 1780s, when the Versailles court had a craze for simple cotton goods which caused havoc to the Fabrique Lyonnaise.53 In the nineteenth century, there were no comparable crises, though silkwares seem to have been relatively neglected in the 1870s and 1880s.54 On the whole, the period was a fairly good one for silk. Out of the thirty-seven years between 1877 and 1913, thirteen can be labelled favourable, thirteen indifferent, six mixed (i.e. with changes during the year) and rive only really adverse.55 It can be proven statistically that these changes influenced the total consumption of silk (the relative dummy in the aggregate demand equation is significant).56 So far, it has been assumed that fashion was exogenous, as implicit in the trade reviews. This assumption may not have been true. It was for instance well-known that since the eighteenth century the Paris fashion houses had worked in very close contact with the Lyons industry, and that co-operation was a powerful weapon in international competition (so that in other countries there were frequent but unsuccessful appeals to create a 'national' fashion instead of slavishly imitating the French one).57 It would be interesting to assess how much the general trends were a pure product of artistic creation or else were influenced by more mundane consideration, such as the relative prices of different fibres. But this would need a different research on the economics of taste and fashion which cannot be pursued here.

52

See 'Rivista mensile del mercato serico' BS3 n o . 50, 1911; CPVD 1911, 50; and Annual

53

Poni 1993, 53; Levy-Leboyer 1964, 139; and Biagioli 1990, 5 6 - 7 . See Pariset 1901, 3 5 2 and 3 8 3 ; Stamm 1923, 16; Esposizione, 12; Beauquais 1 9 1 1 , 2 1 7 - 1 8 ; and Atti Congresso 1884, 10. See the yearly reviews of the silk trade by the Lyonnaise firm Aries Dufour - later Chabrieres Morel (published in the BSS) - by the Economist and by the CPVD. Federico 1996b. O n the French fashion system, see Poni 1993; Pariset 1901, 4 0 3 , and 1890, 3 7 4 and 416; Cayez 1980, 48; Pinchetti et al 1873, 15; Pinchetti 1894, 148; Levy-Leboyer 1964, 1 3 6 - 3 7 . For the appeals, see e.g. Atti 1884, 67; Annual 1902, 18; and Annual 1913, 37.

1911,22. 54

55

56 57

60

An economic history of the silk industry Summary

The evidence, though patchy, suggests that silk-saving methods (above all 'weighting') and changes in the product mix substantially reduced the use of silk per unit of output until the 1890s. Therefore the demand curve shifted less than it would have done: the silk producers lost part of the potential gains from 'democratization'. The case of silk thus confirms Nurse's fears about the effect of competition from artificial substitutes, at least for a while. 58 Luckily for silk producers, the process seems to have stopped if not reversed in the twentieth century. In fact, the average load ratio remained steady, while the product mix may have steered away from lowest-price, lowest silk content goods. The quality of silk was influenced mainly by the mechanization of weaving, while the effects of changes in product mix were uncertain, and possibly not so great. On the whole, the quality of silk demanded by Western market had improved, especially in the second half of the nineteenth century. This trend hit mainly the consumption of handreeled silks, and stimulated producers to shift to steam-reeling, as we will set out in chapter 7. 58

Nurkse 1955.

The demand for silk: an analysis by country

Why is an analysis by country necessary? The discussion in the previous chapter has dealt with world trends, using whatever country evidence was available to illustrate them. This basic approach has to be supplemented by a country analysis because each major consuming country used a different mix of silks, as table 5.1 demonstrates. Exports were similarly concentrated. In 1908-13 the United States absorbed 70 per cent of the Japanese exports, France 50 per cent of the Cantonese (there are no data on exports from Shanghai by country) and Germany and Switzerland 60 per cent of the Italian ones.1 In other words, there was a sort of biunique relationship between the producers and consumers of silk - between Japan and the United States, China and France, and Germany (and Switzerland) and Italy. These relations are of interest to the analysis because the different growth in the major countries caused the world distribution of silk consumption to change substantially (table 5.2). The effect of the different growth rates in the consuming countries can be estimated by the so-called country effect in a constant-market share analysis.2 It is measured by computing the quantity of silk each producing country would have exported if its share in all markets had remained constant. The difference between this estimate and the actual exports, called residual, measures the changes in the producers' share of each market - that is, their competitiveness. The results for the silk market since 1894 (in previous years some data are missing) are set out in table 5.3. 1 2

See Federico 1994a, Appendice Statistica, table XXXTV. The formula is: where Qi are the total exports of the i-th country, ri their variation (= Q[+ n / ^2 are the exports from i to j, rij its variation (= Q[+n/Qljt) and R is the residual. See Learner-Stern 1971 and Fagenberg-Sollier 1985. 61

62

An economic history of the silk industry

Table 5.1 Consumption of silk in the major countries by provenance of silk 1913 (percentages) Italy

China

Japan

Middle

East India

Germany Switzerland USA UK France (a) France (b)

49.0 48.0 8.6 24.3 9.4 23.5 1

23.3 22.5 21.8 52.8 53.9 45.6

24.7 26.8 68.1 18.1 25.1 21.1

2.3 2.2 0.3 2.2 8.6 7.2

0.7 0.5 0.0 2.5 3.0 2.5

World

22.5 2

28.7

44.3

4.0

0.3

France (a) imports; France (b) total apparent consumption includes the French production; 2 includes the French, Austrian and Spanish output. Source: World: Statistical Appendix, table AVI; France (b) and other countries: Statistical Appendix, table AXI; France (a): Federico 1994a, Appendice Statistica table XXXV.

Table 5.2

1831-33 1880-82 1911-13 1927-29

World distribution of total silk consumption (in percentages) UK

France

Germany

Switz.

USA

Italy

50.6 11.1 2.3 1.8

49.4 53.1 19.4 7.6

na 14.1 15.5 6.2

na na 6.8 2.7

na 16.3 50.0 80.3

na 5.4 5.9 1.4

Source: Statistical Appendix table AX.

Table 5.3

Constant market-share analysis Total

Country-effect

Residual

Italy Japan China

1.361 1.311 0.398

1894-1906 -29.2 130.2 25.1

129.2 -30.2 74.9

Italy Japan China

1.857 3.614 1.139

1906-1913 11.8 27.6 -153.4

88.2 72.4 253.4

Italy Japan China

0.350 1.544 0.447

1913-1929 105.4 64.5 35.2

-5.4 35.5 64.8

Source: Federico 1994a, Appendix A.

The demand for silk: an analysis by country

63

The figure in the first column of table 5.3 measures the overall performance of each country. The figure exceeds 1 if its exports have grown more than the total world trade, is between 0 and 1 if they have increased less than the total, and is negative if exports have fallen. The two other columns report the country effect and the residual as percentages of total variation. A negative sign means that the effect set off against the overall change. The results confirm that the location of demand mattered. The worldwide change seems to have damaged particularly Italy. In 1894-1906, its market share grew in spite of the poor performance of its main clients; in 1913-1929 the link with the ailing German industry (which had never recovered from the war) accounts for all Italy's relative decline. The country-effect was also negative in 1906-1913, when the fall of exports was almost entirely due to poor competitiveness. China too was harmed by the changes in location of the demand, though less seriously than Italy. In 1906-1913 the prevailing link with the French market prevented China from taking full advantage of the opportunity offered by the Italian crisis. By definition (being a zero-sum game) Japan benefited greatly from its association with the buoyant American market. This country-effect accounts for the whole increase in exports in 1894-1906 and for most of it in 1913-29. In the former period, Japan's exports would have decreased if the distribution of world demand had remained constant. The Japanese exports were really competitive (in the technical sense of the word) only in 1906-1913. The constant market share is an useful statistical device, but it misses the main point: why did consumers in, say, the United States, prefer the Japanese silk? And how strong was the link - that is, in which circumstances, if any, would they have switched to other types of silks? This chapter deals with these questions by suggesting some hypotheses based on the technical or economic features of weaving in each country (notably the output mix and the level of mechanization). Prior to this, it is worthwhile dwelling briefly on the causes of the different development of silk manufacturing in the main consumer countries. Why did growth rates differ? The percentages of table 5.2 may give an exaggerated impression of the extent of changes in silk consumption because they are computed on a fast-growing total. The data on apparent consumption are reported in table 5.4. Though there is no firm evidence about the consumption of omitted countries in the 1830s, it can be guesstimated that all together they

64

An economic history of the silk industry

Table 5.4 Apparent consumption of silk (tonnes)

1831-33 1874-76 1911-13 1927-29

1874-76 1911-13 1927-29 +1885-87

1874-76 1894-96 1911-13 1927-29

USA

UK

France

na

11,136 ( + 7,3) 34,463 ( + 7,1)

1,559 834 (-1,5) 516 (-1,3) 778 ( + 2,6)

1,522 5,194 ( + 2,9) 4,321 (-0,5) 3,265 (-2,9)

Germany

Switzerland

Italy

2,200 3,441 (+1,2) 2,643 (-1,7)

1,041 1,502 (+1,4) 1,176 (-1,5)

1,313 ( + 3,7) 604 (-2,9)

Austria

Russia

Japan

na 816

na

643 na 3,143 ( + 4,3) 6,843 ( + 4,9)

492

994 (+1,2)

1,033 1,703 ( + 2,9)

na

na

336

Source: Statistical Appendix table AX.

consumed as much as either the United Kingdom or France (United States and Italy a third of the two big consumers, Germany a sixth, Switzerland a tenth).3 The apparent consumption of raw material is hardly the ideal proxy for the Value Added or the sales (depending inter alia on the product mix), but the changes were so wide as to leave little doubt as to the underlying trends.4 The period can be neatly divided in three phases the Anglo-French dualism in the first half of the nineteenth century, the French predominance in the second and finally, the irresistible growth of American industry after the 1890s. Looking backwards from the 1920s, the American growth may seem to have been inevitable. The United States were the largest consumers of silkwares in the world, and the industry could enjoy all the advantages of the mass production. As 3

4

The data for Italy is estimated by Tolaini (1995); that for Krefeld and Zurich are obtained by extrapolating the number of looms as a proportion of the Lyonnaise ones (Federico 1994a, Appendice Statistica, table XXVI); finally, the American consumption is obtained as a residual from the total apparent consumption (silk trade from Statistical Appendix, table All plus the French home production from table ATV plus Tolaini's estimate of Italian apparent consumption). The available data on output are collected in Federico 1994a, Appendice Statistica, table XXV (and the growth rates in table 4.3).

The demand for silk: an analysis by country Table 5.5

USA Germany UK France

65

Performance of the weaving industry in major countries c. 19101 (a)

(b)

0.69 0.86 0.17 0.87

0.01 0.37 0.40 0.58

Switzerland Italy Austria Russia

(a)

(b)

0.42 0.69 0.65 0.86

0.93 0.56 0.20 0.02

1

col. (a) contains output/consumption ratios and col. (b) export/output ratios for silkwares in 1913. The USA figures, however, are for 1909. Source: USA (1909) Taussig 1915, 219-22; other countries: Kersetz 1917.

Clark neatly states, the United States were characterized by a 'machine production requiring substantial material for economic handling, and a prosperous middle-class market, whose purchasers demanded fabrics of good quality, but were less exacting in respect to novelties and exclusive styles than were a small elite of wealthy consumers'.5 To some extent these words could also be applied to the British industry in the first half of the nineteenth century - or at least this was Lyons' perception of its characteristics.6 Yet the silk industry was different from car-making or even other textiles. In fact the performance of the USA and the United Kingdom was quite poor. The British industry actually decayed and the American one was not competitive on the international market (table 5.5). As late as 1913, it was not able to export anything, exactly like the backward Russian Empire. Every other industry, even the battered British one, fared better. Moreover, the United States imported a sizeable part of their consumption, in spite of quite heavy duties. The Silk Association of America warned that 'there is grave reason to fear its decay and extinction should protection be withheld'.7 The source may seem somewhat suspicious, but the role of protection in the development of American industry is universally acknowledged. Matsui states that 'it does not exist in this country a better example of an industry born and grown behind the shield of an high protection than the silk industry'.8 The same holds true for Britain in the first half of the century: in the words of Clapham, it was 'made by protection 5 6 7 8

Clark 1949, III, 213. See Monfalcon 1834 and Tolaini 1995. Annual 1913, 40. Matsui 1930, 151. See also Taussig 1915, 217 and 257; Mason 1910, 175-8; Ravaioli 1902, 290; and Chabrieres-Guinet 1894, 172. Protection was instrumental also to the development of throwing (see ch. 7). The only exception seems to have been the produciton of seamless hosiery in the 1920s (Taussig 1915,415).

66

An economic history of the silk industry

and undone by free-trade, not strictly incompetent but always in difficulties'.9 The different lots of weaving in Great Britain and the United States can be attributed to their trade policies.10 These policies are curiously symmetrical. In the United States before the 1860s the imports of silkwares were subject to relatively modest duties (ranging between 15 per cent and 30 per cent according to the tariffs) - and the silk industry was very small. In the United Kingdom, imports were forbidden until 1826, and then subject to decreasing duties (30 per cent until 1845 and 15 per cent afterwards). This liberalization spurred an export-led growth on the Continent, especially in Lyons. The export/output ratio increased from about 75 per cent in 1811 to a staggering 83 per cent in 1832. 11 The increasing foreign competition, however, apparently did not hamper the development of British industry. Its output went on growing until 1860. In that year, the liberalization of the English market was completed by the Cobden-Chevalier Treaty which abolished all the residual import duties. Though the level was low, protection proved to be indispensable. In the following years, the British industry was not able to withstand the French competition, backed by the reputation of Paris fashion, and began its decline. But French and other exporters had a short time to rejoice at this prospect. In 1861-64 the American duties were raised first to 30 per cent and then to 60 per cent. Officially, the increase should have been a temporary measure to finance the Civil War, but the protection was not withdrawn at the end of the war. In the subsequent years, the various tariffs changed the rates, but the nominal duty never fell below 45 per cent. The effective protection was much higher, fluctuating between 150 per cent and 350 per cent. 12 The national production boomed, and tapped the whole enormous increase in the domestic consumption. Imports increased somewhat until World War I, but their market share fell from 80 per cent in 1870 to 30 per cent in 1913 (and further down to 10 per cent in 1929). 13 The American duties deprived the European exporters of a great opportunity. 9 10

11

12 13

Clapham 1951-52, III, 127. The information on the British policy is from Coleman 1969, 65-9; Margrave 1986, ch. Ill; Warner 1921, passim; Jones 1987, 90-2; Dunham 1930, 268-9; and - from Lyons' point of view - 'Lyon en 1889', BSS, 2 June 1889; Lequin 1984,1, 65; Sheridan 1981, I, 175-6. Those on the USA from Cayez 1978, 150-2; Sheridan 1981, 172; Margrave 1986, 35; Mason 1910, 56-110; Clark 1949, II, 457 and III, 216; Matsui 1930, 154-62; andTaussig 1915, 217-29. See Sheridan 1981, I, 171ff; Lequin 1984, I, 64-5; Levy-Leboyer 1964, 141-6; and above all Cayez 1978, 147-52. Hawke 1975. Silk ranked third among industries in 1904 and fifth in 1889. Taussig 1915, 219-222; and Taussig 1931, 408.

The demand for silk: an analysis by country

67

The United States were not alone in protecting the national industry. Actually, from the 1880s onwards, all European countries (except the United Kingdom) raised their duties on silkwares. Even in France there was a protectionist backlash, which caused the traditionally free-trade Association de la Fabrique Lyonnaise to split.14 From 1890, imports of silkwares in the Western countries stagnated, in spite of a 15 per cent increase to Britain.15 The situation of traditional exporters was worsened by competition from the silk-producing countries. The most dangerous rival was undoubtedly Italy. Until the middle of the seventeenth century, it had been the major European exporter of silkwares, but from then onwards, exports had declined in relative and absolute terms. The through was reached in the 1850s-1860s, and, though exports never ceased completely, Italy became a net importer of silkworms until the early 1880s. From 1885 to 1913 Italy's real exports increased a factor of 4.5, and its market share jumped from 3 per cent to 10 per cent.16 In the same period, exports from China nearly doubled, and those from Japan grew by a staggering seventeen times. However, both countries exported mainly to other Asian countries (especially India). On the Western markets they sold only a few special products, such as the Japanese habutae, which enjoyed a wide popularity for a short period in the 1890s.17 Not surprisingly, the aggregate performance of traditional exporters was not brilliant - a modest growth in output in Germany and possibly Switzerland, a stagnation or even decline in France. However, there was a big difference. France and Switzerland remained exporters and actually increased their exports - by 45 per cent and 20 per cent respectively from 1885 to 1913, while exports from Germany fell by a 14

15

16 17

See Beauquais 1910, 276ff; Cayez 1980, 21 and 154-5. Actually imports rose from 3 per cent to 22 per cent of consumption from 1869 to 1889. See the protectionist pamphlets Association n.d.; Question 1898; CdC Paris 1905; Godard 1906; and the free-trade rejoinders in Protestation 1904 and Protestation 1899. The same debate happened in Saint-Etienne (Gras 1906, 493-522 and Guitton 1927, 71). For details on trade policies, see Beauquais 1910, 286-94 and Silberman 1897, II, Appendix 2. The data on exports and imports of silkwares in constant (1913) prices are reported in Federico 1994a, Appendice Statistica, table XXV. The country sample includes the United States, the United Kingdom, Austria, Russia, France, Germany Switzerland and Italy. On export trends, see Pariset 1890, 411 (on Lyons); Schmidt 1912, 214-15 (on Zurich); Gras 1906, 547-63 (on Saint-Etienne); and Upwich n.d., 134-6 (on Krefeld). See Federico 1992b. For China, see Eng 1986, 155-6; Remer 1926, 136-9; and the reports of the French consuls in Shangai (MAE, CCC, Shangai 12, 1881) and in Canton (MAE, NS3 Chine 580) and the letter of 2 September 1904 from a French diplomat in MAE, AFFACOM 1902-07, n39. On the boom of habutae, see Uyehara 1926, 115-78 and Report 1909, 33-50.

68

An economic history of the silk industry

quarter in the same years (i.e. from 33 per cent to 18 per cent of the total).18 In fact, Germany reoriented its production towards the (protected) home market: exports fell from 64 per cent of the Krefeld output in the 1870s to 40 per cent on the eve of World War I, or from just over a half the total German production in 1895 to a third in 1913. 19 The home market was large enough to support a healthy growth of the industry: as the French consul in Dusseldorf somewhat enviously noticed, 'the German secret is that they work for a mass market which is continuously growing thanks to democratization'.20 After a crisis in the 1870s, the German industry doubled its consumption of raw silk from 1880-2 to 1911-13. 21 The war and the sluggish growth during the Weimar years plunged the German industry in a deep crisis from which it never recovered. The two other countries had no such option. The French home market was not that much smaller than the German one, but it was none the less insufficient to absorb the whole output of the Fabrique Lyonnaise. Thus the export/output ratio remained very high, and even possibly increased somewhat in the twentieth century.22 The Swiss home market was almost negligible, and so industrialists had to tackle the problem in a totally different way. They circumvented foreign duties by installing their mills in the importing countries. In 1911, there were as many Swiss-owned looms abroad as at home - and the ranking of the host countries (in descending order, Germany, the United States, France and Italy) is a revealing index of the relative size of each market.23 The efficiency of traditional exporters relative to the United States was motivated by two concurrent causes. First, democratization

18

19 20

21

22

23

Export/output ratios for Krefeld computed from the official statistics of the Chamber of Commerce ('La Fabrique de Krefeld en 1 8 7 5 - 7 6 ' , BSS, 18 August 1877,; 'La Fabrique de Krefeld en 1 9 0 8 - 1 2 ' , BSS, 17 May 1913; and 'La Fabrique de Krefeld en 1913', BSS, 4 July 1914); data for the whole Germany, see Federico 1994a, Appendice Statistica, table X X V . See Federico 1994a, Appendice Statistica, tables X X X I I and X X V . F. Pingaud, 'L'industrie des soieries en Allemagne', BSS, 3 0 July 1898. See also Pohl, 1993, 6 6 6 - 7 and Upwich n.d., 106. See Statistical Appendix, table AX. T h e data of table 4.3 underestimate the growth because they refer to the Krefeld area only, while the industry developed in the South, near the Swiss border. T h e percentage fluctuated between 5 0 and 60 per cent from 1885 to 1905, with an alltime low of 49 per cent in 1900, and rose to 75 per cent in 1913 and 1929 (see the data in Federico 1994a, Appendice Statistica, tables XXTVa and X X V ; and Cayez 1993, 6 2 0 for the ratio in 1929). See Federico 1994a, Appendice Statistica, table XXVIb; and the descriptions in Masnata 1924, 2 5 - 8 and Schmidt 1912, 2 1 3 - 1 5 and 2 1 9 - 2 0 .

The demand for silk: an analysis by country

69

notwithstanding, silkwares were still a luxury good - produced on a small scale and sold to a market which highly prized non-price factors such as the design. Secondly, even mechanized silk weaving was a relatively labour-intensive activity (though vastly less so than reeling), and therefore it was not particularly suited to a high-wage country. Why did silk consumption differ? As explained in the previous chapter, the characteristics of the required raw material depended on the degree of mechanization and the product mix. Roughly speaking, the more mechanized weaving was, the better the silk had to be, and the more diversified the product mix was, the wider the range of silk had to be. The section below will review the available evidence in a comparative perspective, while the following one will use these information to interpret the pattern of imports. The product mix around 1830 was characterized by a rift between the two major producers, the United Kingdom and France, and all the other countries. France was the real market leader, both for cloths (in Lyons) and ribbons (in Saint-Etienne). It produced every type of silkware, and since the eighteenth century it had had a monopoly in the production of high-quality goods. It provided wealthy consumers all over Europe with 'novelties' (thanks to its relation with the Paris fashion houses) and with patterned cloths of pure silk. Also the United Kingdom produced a wide range of goods, possibly with the exception of the best fabrics.24 The Continental exporters specialized in one or few articles - plain cloths of pure silk in Zurich and Como, velvets and plushes in Krefeld - while the United States produced almost exclusively sewing thread and other 'minor' goods (ribbons, braids etc.). In the long run, only Switzerland and, in part, Italy, maintained their traditional specialization.25 All other producers changed their product mix under the twin spurs of democratization and trade policy. As already said, democratization caused an increase in the percentage of mixed and light cloths at the expense of high quality wares. Therefore, it directly hit the Fabrique Lyonnaise. The process began in the late eighteenth century (or at least the industrialists began to complain about it) and went on throughout the first half of the next century.26 In the 24 25

26

S e e M o n f a l c o n 1834, 1 0 - 2 2 , Jones 1987, 80ff and Tolaini 1995. O n Zurich, see L. Pemerzel, 'L'industrie lyonnaise a la Societe d'economie politique', BSS 27 Jan. 1883; Pinchetti 1894, 69; Pariset 1890, 3 8 6 - 9 ; and Schmidt 1 9 1 2 , 2 1 7 - 1 8 ; on C o m o , see Federico 1992b, 4 7 - 8 . For the eighteenth century, see Poni 1993, 4 0 ; and Levy-Leboyer 1 9 6 4 , 155; and for the nineteenth, see Pariset 1901, 373ff (the quotation is o n 3 9 3 ) . Cayez 1980, 1 5 - 1 7 ;

70

An economic history of the silk industry

1880s, when the Chambre du Commerce began to publish its statistics, the change was over: the traditional fagonies accounted for 10 per cent of the production. Predictably, this mutation was not welcome. The industrialist Aynard bemoaned the 'vulgarization of the taste' and the well-known expert Rondot wrote that 'the excellence of the raw material, the skill of the composition of the fabric, the art of design and the perfection of the execution are now an exception'.27 But of course the trend was irreversible. The democratization and the development of the production for the home market moved the product mix in Krefeld away from its traditional specialties. The percentage of Krefeld's traditional specialty, the velvets and plushes, diminished from about 50 per cent of the output in the 1830s-1840s to a third or less from the 1880s onwards.28 As in the United States, the production concentrated towards 'medium quality fabrics, to which the producers try to give a deceptive appearance of elegance' (according to the French consul in Dusseldorf, totally out of sympathy with any attempt to compete with Lyons). The trade policy was the major factor behind the changes in the United Kingdom and the United States. Both countries had a large and diversified demand for silkwares, but, as already said, the industry was not really competitive. Therefore, in the United Kingdom after 1860 imports progressively took over, leaving to the home industry only some market niches. 29 Possibly the most successful was the production of black crapes for mourning dresses, the first specialization of Courtaulds which was to become the world market leader in the production of artificial fibres. On the contrary, in the United States, the protection enabled the national producers to substitute almost all imported wares. The process was rather slow to begin: as late as the 1880s, the traditional 'minor' wares accounted for three-fifths of the aggregate value of output.

27

28

29

Lequin, 1 9 8 4 , 1 , 64; Beauquais 1910, 2 5 7 - 6 0 ; and Pinchetti 1894, 5 8 - 6 0 . T h e data o n product mix are from Federico 1994a, Appendice Statistica, table X X I X . T h e quotations are from 'L'industrie lyonnaise de la soie a la Societe d'economie politique de Lyon', BSS, 17 Feb. 1883; and Rondot 1894, 72 respectively. Every sign of recovery in the demand for patterned cloths was welcomed with enthusiasm by the Bulletin des soies et soieries (see M. M . , 'La production de la Fabrique Lyonnaise en 1879', BSS3 14 Feb. 1880; Marius Morand, 'La production de la Fabrique Lyonnaise en 1881', BSS3 11 March 1882; E. T . , 'La production de la Fabrique Lyonnaise en 1889', BSS 31 May 1890). For the percentages in the 1 8 3 0 s - 1 8 4 0 s , see Kriedte 1991 (table 13); for those after the 1880s, see Federico 1994a, Appendice Statistica, table X X I X . See also L. Pemerzel, 'L'industrie lyonnaise a la Societe d'economie politique', BSS, 27 Jan. 1883; Sheridan 1 9 8 1 , I, 180; Morand 1889, 27; Pinchetti 1894, 7 8 - 8 0 ; Upwich n.d., passim; Pohl 1993, 6 6 0 - 1 ; and Buccheim 1986, 7 6 - 7 . Coleman 1969, 2 4 - 3 2 , 101, 1 2 8 - 3 0 and 1 6 2 - 5 ; Rawlley 1919a, 2 7 1 - 8 5 ; and Pinchetti

1894, 66-7.

The demand for silk: an analysis by country

71

Table 5.6 Percentage ofpower looms in total equipment, 1840-1913

c.l 840 c.l 860 c.l 870 c.l 890 c.l 900 c.1913

USA

Zurich

Krefeld

Lyons

UK

na na 76.7 2 97.4 99.9 100.0

na 3.3 1 8.6 52.8 80.7 3 95.8

na na na 26.6 83.8 95.1

na 10.3 10.3 42.0 67.2 91.7

11.0 24.8 39.9 na na 97.1

Italy na

na 17.1 2 43.5 73.3 3 93.7

1

about 1865 2 about 1875 3 1904. Source: Statistical Appendix, table AXXVIII.

The share of cloths grew to a peak of about 80 per cent in 1919 only to fall in the 1920s after the boom of silk stockings.30 Predictably, the stronghold of the American industry consisted of the 'plain cloths of low and medium grade, made entirely of medium or coarse size and grades of raw silk dyed in yarn or in piece form in staple colors, finished in ordinary finishes and produced in large lots for ordinary consumption'.31 Even so, on the eve of World War I imports dominated the market for high-quality wares (novelties, patterned cloths etc.). In the long run, however, the American industry succeeded in substituting them: Taussing could state that 'by 1929' the national producers 'were able to imitate any foreign fabric that acquire sufficient popularity to justify its production on not too small a scale' (the proviso is quite significant).32 If compared to the change of product mix, mechanization was a simple and straightforward process. There are no data on the percentage of output, but it can be proxied by the share of powerlooms on total equipment (table 5.5): The figures are expressed in hand-loom equivalents, but they may still be biased downward as the hand-looms worked for shorter periods.33 Table 5.6 refers to cloth production only, but the situation was similar in the ribbon branch. In the United States it 30

31

32 33

T h e figures (Federico 1994a, Appendice Statistica, table X X I X ) are estimated from the census data assuming that all the silk bought by the cotton and wool industries was used to produce fabrics and that the consumption in the silk industry proper was proportional to the percentage of each product o n total output. Matsui 1930, 145. See also U S Census 1900, 2 0 2 - 3 ; Clark 1 9 4 9 , II, 4 5 5 and III, 2 1 3 - 1 4 ; and (on the composition of imports) Mason 1910, 1 1 8 - 2 1 , 1 2 9 - 3 5 and 1 5 2 - 6 5 ; and Taussig 1915, 2 4 7 . Taussig 1913, 4 0 9 . T h e data are expressed in hand-loom equivalents assuming that the power/handloom productivity ratio was 2.3 till 1875, 3.3 in 1890, 4.3 in 1903 and 4 . 6 in 1911 (Fenoaltea 1988). T h e ratios for other years have been obtained by linear interpolation.

72

An economic history of the silk industry

was entirely mechanized in 1890, while in Europe the (improved) handlooms prevailed even in the 1900s. 34 Table 5.5 provides two important and interrelated pieces of information. Firstly, silk weaving lagged well behind other fibres in mechanization. Secondly, the process was much faster in the United States than in Europe. In America, hand-loom weaving thrived for a short time in the 1870s-1880s thanks to British immigrants, but it disappeared altogether in 1890. 35 At the same time, however powerlooms still prevailed in Europe, especially in Lyons. In fact, the Fabrique Lyonnaise is one of the main examples in Zeitlin and Sabel's article on the 'Historical alternatives to mass production'.36 Indeed, the traditional organization of production had two undeniable advantages for the production of luxury goods: it was more flexible both in adapting to the demand cycles and in producing small quantities of differentiated goods, and it needed much less fixed capital.37 Yet, even in silk weaving, it could not compete with the higher productivity of the model power-loom production. The mechanization was delayed by technical factors. The fist power-looms had a very irregular motion and stressed the silk too much. They were suitable to the production of a few goods only (ribbons, crapes etc.). Therefore, the new technique did not spread in Britain in the first half of the nineteenth century, in spite of its appeal in an high-wage country.38 The shortcomings of the power-loom were slowly surmounted in the second half of the century, and the range of producible goods extended accordingly - to plain cloths for mass consumption (taffetas etc.), in the 1850s-1860s, to velvets in the 1870s, to high-quality plain cloths in the 1880s and eventually to patterned fabrics.39 The last bastion of the hand-loom, the production of two-sided grand fagonnes (the most complex patterned fabrics) fell at the end of the nineteenth century. Therefore the pattern 34

35 36 37

38

39

For the U S A , see Allen 1904, 3 1 ; and U S Census 1914, tables 3 1 - 2 . There were 11,500 of these looms (versus 4,000 power-looms) in Saint-Etienne in 1905, 4 , 0 0 0 in Basel in 1913 (versus 2,200 power-looms), 8,000 (versus 4,000) in the Berg and nearly 4,000 (versus 1,600) in Krefeld. See Upwich n.d., 2 2 4 and Thurkauf 1909, 7 6 - 7 on Basel. Matsui 1930, 1 3 4 - 6 ; Margrave 1986, 144ff and 3 1 9 - 2 3 . Sabel and Zeitlin 1985. See the descriptions of the traditional organization of the Fabrique Lyonnaise by Beauquais 1910, 3 3 9 - 4 7 ; and Sheridan 1984, 3 5 - 8 ; the importance of flexibility is very widely stressed (e.g. Guitton 1927, 3 7 - 8 ; D e Bavier 1892, 3; Gonnard 1905, 285; 'Dalla rivista deirindustria serica', BS, no. 6, 1903). T h e cost of changing the pattern is discussed at length by Sheridan 1984 , 4 2 - 4 . See Coleman 1969, I, 8 5 - 6 ; Warner 1921, 1 1 6 - 1 7 and 1 5 0 - 3 ; Margrave 1986, 80ff; Chapman 1992, 78; and above all Jones 1987. For a chronology about the fabrics, see Pariset 1901, 399; and Jones 1987; CPVD 1897, 26, about ribbons, CPVD 1896, 5 4 - 8 and Guitton 1927, 47.

The demand for silk: an analysis by country

73

of mechanization depended largely on the product mix of each country.40 For instance, Zurich adopted the power-loom before Krefeld because the production of plain taffetas was technically feasible well before that of velvets. The Fabrique Lyonnaise was the last to mechanize because it produced proportionally a greater number of high-quality cloths.41 But it did adopt the power-loom eventually. The number of hand-loom weavers fell from about 30,000 in 1884 to no more than 10,000 twenty years later, amidst the complaints for the loss of a century-old life style and organization of the production. There was no alternative to mass production in the age of mass consumption. Last but not least, a remark about the level of competition is required. The traditional organization of weaving was usually very competitive, because the barriers to entry were extremely low. Any master weaver could become a merchant and try his luck.42 It could be argued that mechanization increased the size of firms and therefore reduced the competition among them. This, however, did not happen.43 In the United States the rate of growth of output was so high that from 1879 to 1919 the number of firms trebled to more than 1,000. The barriers to entry were low as it was possible to borrow the equipment, and to get credit upon the pledge of silk on very liberal conditions.44 Actually, the Silk Association of America complained that the 'chief danger of the silk industry to-day is the keenness of competition among domestic manufacturers'. The evidence on Europe is less rich, but it points towards a competitive environment.45 It is thus possible to rule out the possibility of oligopsonistic agreements on controlling the silk market.

40

41 42

43 44

45

T h e case of the United Kingdom is different. T h e number of power-looms increased until the 1870s and then fell by 4 0 per cent in 1924 (see Federico 1994a, Appendice Statistica, table XXVId). T h e coefficient of table 5.5 increased because the number of hand-looms decreased m u c h faster. See Lequin 1 9 8 4 , 1 , 8 6 - 8 and 187ff; Gonnard 1905, 285 and Godard 1909. A n exception was Krefeld (Kriedte 1 9 9 1 , 8 7 - 9 5 ) , because until the beginning of the nineteenth century there were institutional constraints. See the data in Federico 1994a, Appendice Statistica, table X X X . Scranton 1985, 4 6 - 8 ; Brockett 1876, passim. T h e system was widely criticized as conducive to speculation(e.g. Annual 1906, 2 3 ; 'Long credit o n Japan raw', ASJ, August 1896; ' T o reduce raw silk credit terms', ASJ, N o v . 1911; Duran 1913, 1 3 2 - 3 ) . T h e quotation on the high competition is from Annual 1913, 41 (see also in the same vein Annual 1900; Matsui 1930, 4 3 ; Keir 1928, 4 2 4 - 5 ; and Scranton 1985, 36). For Lyon, see Gonnard 1905, 213; for Saint Etienne, Guitton 1927, 38; and for Krefeld, Upwich n.d., 106; Pohl 1993, 6 6 3 . In 1 8 7 5 - 8 1 , 39 new societies were established on average each year in Lyons ('Les societes commerciales dans l'industrie de la soie a Lyon', BSS, 23 Sept. 1882) and 18 in Saint-Etienne ('Les societes commerciales dans l'industrie de la soie a Saint-Etienne', BSS, 18 N o v . 1882).

74

An economic history of the silk industry

Patterns of import It is now possible to use the evidence on the changes in the product mix and on mechanization to interpret the demand patterns. Unfortunately, the analysis is complicated by the lack of adequate data on trade flows. The main source, the trade statistics of importing countries, reports the data by country, not by quality. This is particularly troublesome for China, because its production spanned the whole quality range, from the best Shangai filatures to the worst hand-reeled ones. The Chinese export statistics do detail the different qualities, but they are not useful anyway, because half of silk exports are reported as going to Hong Kong (where they were simply transhipped). Generalizations on the use of Chinese silk cannot be anything but tentative. Moreover, trade statistics of European countries usually registered the goods according to the country of (last) purchase, not of actual production (the British statistics until 1905 according to the country where goods were embarked). This method caused a systematic underestimation of the consumption of Asian silks in Germany, Switzerland and Austria, which imported a substantial part of their raw material via London, Lyons or Italy (after throwing). It is possible, with some plausible assumptions, to unravel these 'secondary' flows and estimate the 'real' shares in selected years (1894, 1906, 1913 and 1929).46 These data are sufficient for an outline of the main trends, if not for a formal statistical analysis.47 The causal link between characteristics of demand and composition of imports is clearest in the case of the United States.48 In its first decades of existence, the American industry used nearly exclusively Chinese silk. It was cheap, and suited to the production of low-price simple goods (sewing silk, trimmings, ribbons etc.) which composed the bulk of American output. The growth of the production of better-quality goods in the 1850s-1860s might have increased the consumption of Italian silks, if it had not been so scarce. Therefore in the early 1870s, imports from China still accounted for 90 per cent of the total. But China could supply only hand-reeled silks, which were unsuited to the growing production of cloths with the powerloom. Therefore, the American manufacturers had to search for suitable raw material elsewhere. They found it in Japan, where steam-reeling was then developing 46

47 48

It is assumed that the composition of exports of the 'transit' country (i.e. France or Italy etc.) was equal to that of imports (see Federico 1994a, Appendice A for details of the computation). See on the 'secondary' flows the data in Federico 1994a, Appendice Statistica, table XXXIII (percentages of re-exports o n imports of silk) and X X X V (distribution of imports by country). T h e data are reported in the Statistical Appendix, tables AX, AXI and AXII. For the whole process, see Matsui 1930, 60.

The demand for silk: an analysis by country

75

fast, and, from the 1880s onwards, in Italy, where the industry was recovering from the pebrine crisis. Imports from China remained steady from the 1870s to the 1890s, while their market share plunged from 90 per cent to a mere 25 per cent. The Chinese silk was used to produce low-quality goods, the Italian one for the high-quality wares, while the Japanese silk was the staple raw material for the mass production.49 In the long-run China managed to keep its market niche. Its market share dwindled slowly to 15 per cent in 1925-29, but the exported quantity increased by a factor of 5.5. By contrast, Italy did not succeed in keeping its niche. Exports climbed to an all-time peak of 1,700 tonnes in 1904-6 (equivalent to 24 per cent of total consumption), but from then onwards, they began to fall. Few years later, a review of market trends noticed that the Italian silks 'were more and more abandoned by the consumption in the consequence of the steadily growing price difference in favour of the Japan silks'.50 In the late 1920s, imports from Italy were down to 450 tonnes, i.e. a mere 2 per cent of the total. In the same period, imports from Japan exceeded 31,000 tonnes (i.e. more than the whole silk trade on the eve of World War I) and accounted for 80 per cent of American consumption. Japan not only enjoyed a monopoly on the markets for medium-quality silk for mass-consumption cloths and for special silk for stockings (the fastest growing portion of the market), but also supplied most of American consumption of high-quality silk. The United Kingdom pioneered the trend towards the growing use of Asian silks in the second half of eighteenth century. At the beginning of the nineteenth century, imports from India and China accounted for 40 per cent-50 per cent of total British consumption. This early start was largely inspired by political reasons, that is by the desire to rely on the internal resources of the Empire and not to depend on politically troublesome Continental suppliers. The British industry could use the Asian silks, in spite of their defects, because it produced large quantities of low-quality goods - mixed fabrics and stockings in Manchester and in Macclesfield. The production of medium-to-high quality wares (cloths in Spitalfields, ribbons in Coventry) needed Italian silk.51 The production of these wares was the first to be hit by the foreign competition 49

50

51

See Stamm 1923, 2 4 - 8 ; Duran 1913, 140-2; Mason 1910, 27; Clark 1949, II, 450; and 'Statistique de la production de la soie en Chine', BSS, 16 June 1883. H. Gwalter, 'Review of the silk market of 1911', ASJ, January 1912. For the reactions in Italy, see 'Rivista mensile del mercato serico', BS, no. 50, 1911; C. Paini, 'Italia e Giappone nel mercato americano', BA, no. 15, 1913; 'Industria e mercato serico nel 1913',So/e,8Jan. 1913. See Tolaini 1995. The actual variation of exports does not fully justify the hysteria about the 'loss' of the British market which swept Italy in the 1830s (see Angeli 1982, 6 9 - 7 0 ; Zanier 1988, 4 7 - 5 0 ; Tolaini 1994a, 7 5 3 - 4 ) .

76

An economic history of the silk industry

and therefore imports from Italy stagnated around 500-600 tonnes per year. From the 1830s onwards, the whole growth of demand was satisfied by Chinese and (to a lesser extent) Indian silk. This increase was consistent with the diffusion of cheap production for a mass market using prevalently the hand-loom. As everywhere, the pebrine crisis drastically curtailed the Italian exports, which plunged to a quarter of their previous level. In the 1860s, Chinese silk accounted for about 60 per cent of the British demand (about 1,500 tonnes), Japanese for a further 20 per cent (about 500 tonnes) and the Mediterranean countries and India accounted for the rest. The crisis after 1861 hit the imports from Asia more than it did those from Europe. On the eve of World War I, imports from China had fallen by four fifths (to 250 tonnes), while those from Italy had remained roughly constant around 125-150 tonnes, accounting for about a fourth of total consumption. But the British market had by then become decidedly a marginal one. Until the 1850s, and the pebrine crisis, the industries on the Continent used very little Asian silk. The traditional high-quality fagonnees needed the best silks and, in fact, since the eighteenth century France had imported large quantities of Piedmontese organzines.52 All the Italian silks together (including also the less-prized Lombard, Venetian and southern sorts) accounted for about 25-30 per cent of the consumption, the Levantine ones for a 10-15 per cent and the French silk for the rest. During the first half of the century, the division of market did not vary, in spite of the change of the output mix. Still in the late 1840s imports of Asian silks via London (at that time direct flows from Asia were negligible) did not exceed 5 per cent of the total consumption. The pebrine crisis changed it all. French national production plummeted to a mere 20-25 per cent of total consumption, and imports from Italy halved during the worst years. The market share of Asia silk increased to about 40 per cent (most of it from China). The industry had to learn how to handle it.53 And it learnt quite well, as the inferior Asian silk suited the needs of the 'plebeian' part of the Fabrique. French production never recovered from the crisis. By contrast, imports from Italy did apparently regain a part of the ground lost, up to a quarter of the market in the early 1880s. But three quarters of this flow consisted of thrown silk, including large quantities of Asian trams processed in Italy. This lucrative trade was destroyed by the French duty on thrown 52

53

See Ciriacono 1981, 196ff; Biagioli 1990; Moioli 1 9 8 1 , 9 4 - 1 0 5 . T h e following remarks hold true for ribbon production in Saint Etienne. Pariset 1890, 2 1 1 ; and Lequin 1984, I, 65. A n interesting piece of evidence of the growing consumption of Asian silks is the beginning of official listing of their prices on the Lyons market in 1854 (Cayez 1993, 6 1 6 ) .

The demand for silk: an analysis by country

77

silk in 1888. From then to the Great Crisis, the underlying division of the market remained remarkably stable, though the shares fluctuated widely in the short run. China supplied about half the consumption, with an all-time peak of 58 per cent in 1925-29, Japan about a fifth and the Mediterranean silk (i.e. imports from Italy and the Levant, and the national production) the remaining third, year in year out. Before the war, the French production accounted for about 20 per cent and imports from Italy for about 10 per cent. After the war, national production fell to a tenth and imports from Italy rose to a fifth. One could ask how this overall stability fits in with the general model of demand-induced changes, notably with mechanization. The answer lies probably in the differentiation of Chinese supply. Unlike other weaving industries, the Fabrique Lyonnaise used the whole range of available Chinese silks and could capitalize on the improvement of their average quality after the diffusion of steam-reeling. In fact the composition of direct imports from China in 1908-13 almost exactly matches that of total exports.54 Therefore, in general, the wide diversification of Lyons' silk supply is consistent with its wide product range and the delayed introduction of mechanization. The analysis of the German and Swiss consumption mix before 1880 and 1894 respectively is seriously hampered by the lack of adequate trade statistics. It is, however, possible to resort to a different set of data, the statistics of the Krefeld conditioning house.55 All the silk had to be conditioned once, but not necessarily where it was processed. The silk used in Krefeld could be conditioned in Lyons or in Italy: therefore, the data of the local conditioning house would be unbiased if the share of silk conditioned elsewhere on total consumption were the same for all provenances. This assumption unfortunately cannot be tested, but the results are consistent at any rate with the available anecdotal evidence. The Krefeld industry, like the French one, used very little Asian silk before the 1850s (no more than 1-2 per cent of its total consumption). National production being negligible, the German manufacturers used mainly Italian silk, especially from Lombardy and Veneto, which was qualitatively very close to the average French one. The consumption of Asian silk soared because of the pebrine crisis, but it never exceeded a third of the total, that is substantially less than in France (let alone in the United Kingdom).56 Besides, unlike in France, Chinese and Japanese 54 55

56

Federico 1994a, Appendice Statistic^ table X X X I V c3). See Chung 1980, table III. Conditioning is a test to ascertain the real weight of the silk (which is extremely hygroscopical) by drying it in special chambers (see Tolaini 1996). See on the massive use of Asian silk during the pebrine years, see U p w i c h n.d., 99; Pohl 1993, 656; and (on the region of Berg) Schumacher 1914, 9 0 - 2 .

78

An economic history of the silk industry

silks did not succeed in maintaining their market share after the recovery of Italian production. In the late 1870s, they disappeared altogether from the statistics of the conditioning house. Some Asian silk was undoubtedly imported from France (after being conditioned in Lyons) and Italy (after throwing and conditioning in Milan). But the share of Asian silk always remained quite low. Italian silk accounted for about 66 per cent of 'real' German consumption and 50 per cent of Swiss consumption before World War I and for 85 per cent and 70 per cent respectively after it. In both countries, the second main supplier was China, while Japan trailed far behind. Clearly, the German firms used Italian silk for mechanized mass production as much as the American ones did with the Japanese product. Summing up, the characteristics of demand can at least partially explain the differences in the composition of imports and its change through time. The different development of weaving did affect the exporters' performance. But it was neither the only nor, probably, the main cause. In the short and medium terms, silks could be substituted, as the example of the pebrine crisis shows. Moreover, the relative quality of silk could, and indeed did, change. In other words, the development of weaving offered some countries a great opportunity (notably for Japan, the boom in American weaving), but they had to grab it. They succeeded, and the next chapters will discuss how.

The roots of growth: agricultural production

Introduction: the growth of inputs Any increase of the silk production needs an equivalent growth of the output of cocoons or, more precisely, of their silk content. And, of course, the production can grow either because more inputs are allocated to sericulture or because their productivity grows. There is no doubt that in the very long run, growth of inputs accounted for most of the increase in silk production, while sericulture spread from its North China cradle all over the world. The process was still going on, though at a reduced pace, in the nineteenth century and even in the twentieth. New production began in areas such as Kashmir in the 1880s-1890, Mysore in the 1910s-1920s, Brazil in the 1930s.1 Besides, the geographical boundaries of many sericultural areas were expanding. In Japan the share of the six core districts fell from more than a half of the total in the 1870s to about a third in 1929 because sericulture spread to the whole Honshu island. Nation-wide, the number of silkworm raising families rose from 800,000 (i.e. one out of four) in the 1880s to more than 2 million (i.e. one out of three) in the late 1920s, and the mulberry acreage from 235,000 to more than 600,000 ha. (i.e. from one ninth to one fifth of total cultivatable land).2 In China, sericulture expanded in new provinces, Shansi, Hupeh, Szechwan in the centre and in Kwangsu in the south.3 Yet, the (not very reliable) data do not show any dramatic change in the location of sericulture: three provinces (Guangdong, Zhejiang, Kiangsu) accounted for about 80 per cent of the total output 1

2 3

On Kashmir, see the discussion in ch. 9; on Mysore, Report 1933, 25-9 (in both areas sericulture was already practised - but only on a very small scale, for home consumption); on Brazil, Gaddum 1948, 40. See Statistical Appendix, tables AXIII and AXIV. See Statistical Appendix, table AXIII. For a general overview, see Li 1981, 103-18; and Eng 1986, 93-101; and for further information on the new areas, 'Sericulture in Shansi', CEM, II, no. 15, 'Sericulture and silk industry in Hupeh', CEM, II, no. 7; 'Sericulture in Shantung', CEM, II, no. 10; and Survey 1925 for Central China; and Howard and Buswell 1925, 34-6 for Kwangsu. 79

80

An economic history of the silk industry

in the 1870s and 75 per cent around 1927. The data may however conceal substantial changes in location - as each of these provinces was much larger than an Italian region or a Japanese district. For instance, within the province of Kiangsu, the sericulture diffused in Wuxi district. The process began in the 1860s and culminated fifty years later, when the district's chief town became the second reeling centre of central China after Shangai.4 By contrast, the location of Italian sericulture did not change at all from the 1850s to the 1920s. All pleas to expand it beyond the traditional areas were entirely unsuccessful.5 If anything, the share of the north was growing, from three quarters of the output in the 1850s to more than 80 per cent in the 1920s. But in the nineteenth century the quantity of inputs allocated to sericulture grew also - or, to be precise, mainly - in the traditional areas. In fact, the same families began to raise silkworms more than once a year. This development was particularly important in Japan. The second (summer) crop was introduced in the second half of the eighteenth century, the third (fall) crop in the 1870s, after the discovery of the technique of summer hibernation.6 In the 1930s, together they accounted for almost a third of the production. The supply of leaves was increased to meet the rising demand by converting fields into mulberry groves. Already in the early 1890s these latter accounted for about 70 per cent of the plants, and this figure was to increase slowly later.7 From the 1890s to the 1920s, the (adjusted) acreage increased 2.5 times while the production of cocoons grew more than 7 fold. The difference was made up by the double stripping of the same trees (in spring and fall), by food-saving technical progress in silkworm raising and possibly by an increase in the density of plants in the specialised mulberry fields. As usual, the case of China is poorly documented, but there is some evidence of intensification. The double crop was adopted in the Wuxi district in the 1910s (but not in other areas of central China) and the number of crops in the south grew, within a general process towards specialisation in the sericultural districts.8 Intensification accounted for the whole growth of inputs of Italian sericulture. The number of mulberries in Lombardy tripled from 1796 to 1834 and then it doubled 4 5 6

7

8

See Eng 1986, 96; Bell 1985, 69ff, 76-80 and 97-114; Faure 1989, 31 and Wusih 1924. See Federico 1994b and Statistical Appendix, table AXIII. See McCallion 1983, 30; Smethurst 1986, 205-6; and Hemmi 1970, 319; and for the summer hibernation, Nghiep and Hayami 1975. The data are in Statistical Appendix, table AXIV. See Report 1870; Smethurst 1986, 188; and, for the acreage, Statistical Appendix table AXIV. On Wuxi, see lieu 1933, 52; Lieu 1940, 104; and Li 1981, 19; and on the South, Howard-Buswell 1925, 18-19; and Eng 1986, 99 and 141-3.

The roots of growth: agricultural production

81

again from 1836 to 1929.9 This increase was achieved by augmenting the density of plants in the fields, specially in the Po Valley. But, in Italy, unlike in Japan or China, intensification was never pursued beyond the limit of mixed culture, as advocated by some experts.10 And the shortage of leaves prevented the diffusion of double cropping, which was shown to be technically feasible in many experiments since the beginning of the nineteenth century.11 At its peak, in the 1920s, the fall crop accounted for less than 1 per cent of total output.12 On the causes of growth It would be easy to explain the growth of inputs if the relative prices of cocoons had increased. This would have augmented, ceteris paribus, the returns to sericulture and would have made a reallocation of land and labour from other crops profitable. There is some evidence that this mechanism can explain the growth in the eighteenth century in China and Italy. In China silk prices relative to rice grew by 20-25 per cent.13 In Italy, prices increased during periods of growth and fell during the crises (table 6.1). Unfortunately, this simple explanation no longer holds true after the 1870s. Relative prices of cocoons and silk had been declining in all countries as shown in table 6.2. The price indexes used to compute the rates in table 6.2 are national averages and therefore they may not be representative of the farmgate prices in the sericultural areas. In fact it has been argued that the fall of transportation costs caused by the construction of railways had been instrumental in the growth of sericulture in the Wuxi district in China or 9 10

11

12 13

Moioli 1981, 213 and Catasto 1929, tab. VII. See e.g. Gasparini 1881, 103-8; Fossati 1889, 53; G.Barocco, 'Per i gelsi', BA, no. 51, 1906; O. Zatti, 'I gelseti specializzati', BA, no. 9, 1911; C. Fornaci, 'Gelsi moribondi e morti', BA, no. 28, 1911; and 'Alcune cifre sull'impianto dei gelseti', BA, no. 36, 1911. For the first half of the nineteenth century, see Tolaini 1990, 588; Zanier 1988, 69-70; for the 1900s, the debate between E. Perroncito ('Allevamento dei bachi annuali in primavera, estate, autunno', BA no. 20, 1902); L. Martini, ('L'allevamento dei bachi in autunno', BA, no. 35, 1902; 'La foglia per gli allevamenti di bachi in autunno', BA, no. 5, 1903; 'Ancora degli allevamenti autunnali', BA, no. 1, 1906) and F. Clerici ('Dei bachi estivi ed autunnali', BA, no. 39, 1903; 'L'allevamento dei bachi in autunno', BA, no. 32, 1905; 'Se sia conveniente un secondo allevamento estivo-autunnale dei bachi da seta', BA, no. 21, 1906); and for the 1910s-1920s, C. Paini, 'Allevamenti estivi di bachi da seta', BA, 37 and 39, 1913; Castelli 1920 and 1922; A. Lenticchia, 'Allevamenti estivi di bachi', BA, no. 39-40, 1917; F. Acqua, 'I secondi allevamenti di bachi', BS, no. 33, 1926; 'II problema dei secondi allevamenti', BS, no. 5, 1924; L. Martini, 'Risultati dei secondi allevamenti dei bachi in Italia nel 1924', BS, no. 1925; and Martini 1923. NSRB 1929; Mortara 1930, 100. Silk prices from Sun 1972, 91; rice prices from Wang 1992a table 1.1.

82

An economic history of the silk industry Table 6.1

1736 1766 1786 1803 1846

Relative prices of silk in Italy 1736-1846 Silk/wheat

Silk/cheese

55.4 145.4 97.1 38.2 115.3

74.3 151.9 113.1 57.1 110.6

(3.22) (-1.92) (-3.61) (2.57)

(2.32) (-1.40) (-4.27) (1.54)

Note: (Triennial moving averages with 1840-2 = 100; compound rates of change between brackets) Source: De Maddalena 1974, table 16.

Table 6.2 Relative price of silk 1875-1913

Italy Japan China

1875/1929

Cereals

Total

Cereals

Total

-0.86 -2.30 -0.82

-0.70 -1.93 -0.51

-0.23 -1.54 -0.71

-0.78 -1.19 -1.06

Sources: Japan, prices of cocoons, rice and index of farmgate prices: Okhawa et al. 1967, table 6; Italy, market price of cocoons: Federico 1994a, Appendix E; price of wheat and wholesale price index; ISTAT 1958, 172-3; China price of silk (unit value of exports of hand-reeled silk): Hsiao 1974, table 3; price of rice, Brandt 1985, Appendix II; 'total' (index of the six main crops): Brandt 1990, 103-04.

the Yamanashi prefecture in Japan.14 This argument is dubious. It is, in fact, likely that the construction of railways had reduced the transportation costs of silk and even cocoons less than those of other, bulkier, agricultural product. Therefore, if anything, they caused the relative prices of silk and cocoons to fall, ceteris paribus, not to rise. The results of table 6.2 would be consistent with the growth in output production only if the supply curve had shifted, i.e. if producers were willing to offer more product for the same price. The parameters of the supply curves for the three main countries are set out in table 6.3. The short-run (or impact) elasticity refers to the effects of price variations in the same year, the long-run one to the total change, after all adjustments were made (e.g. mulberries had been planted etc.). Both coefficients are positive as expected, even if quite low. A 1 per cent growth in real silk 14

See respectively Li 1981, 109-10 and Eng 1986, 115 (they refer to the ShangaiNanking railway, built in 1908) and Smethurst 1986, 158.

The roots of growth: agricultural production Table 6.3

83

Parameters of the supply curve, 1870-1913 Price elasticities

Italy Japan China

short-run

long-run

Shift rate

0.32 0.26 0.21

0.61 0.61 0.37

1.01 1.63 1.31

Source: Federico 1996b, table A regression III.

prices would have increased the world output, ceteris paribus by about 0.5 per cent. The shift rates are reported in the last column on the right. As expected, they are all positive, but the country ranking is somewhat puzzling. The figure for China seems to contradict all the available evidence on the country's performance. Actually, the three rates are not directly comparable because the dependent variables are different - the production of cocoons for Italy and Japan and the export of silk for China. This latter entails a double bias. Firstly, exports grew faster than the total output of silk (2.6 per cent versus 0.9 per cent pa); secondly, the estimate includes the technical progress in reeling and the increase in the silk content of the cocoons (i.e. the quantity of silk per unit of cocoons). Table 6.4 shows that together they accounted for about a half of the growth of silk output in Japan and Italy. A tentative estimate of'true' shift rate of total silk production in China yields a figure around 0.6 per cent pa.15 If this total result could be apportioned in China as in Italy or Japan (table 6.4), the shift rate of agricultural production would be in the region of 0.3 per cent. The figure is much lower than the estimate of table 6.3, but nevertheless, the performance would have been respectable, given the poor reputation of Chinese agriculture. And the country ranking would tally much better with the evidence of the export performance. This shift of the supply has clearly been instrumental to growth of the world silk production in that period. What caused it? In theory, there were four possible answers: a) a growth of Total Factor Productivity caused by technical progress (which made it possible to use the same quantity of inputs more efficiently) b) an exogenous decrease in the relative price (s) of the input(s) intensively used in sericulture (i.e. labour) 15

The regression is estimated by using as dependent variable a series obtained by superimposing the short-term fluctuations of exports on the long-run growth of output implicit in the data of Statistical Appendix, table A (hypothesis a).

84

An economic history of the silk industry

Table 6.4

Decomposition of total productivity growth Growth in

Italy Japan China

Shift of agricultural supply

silk content

reeling productivity

Total growth

1.01 1.63

0.54 1.27

0.55 0.65

2.10 3.55 1.31

Sources: shift rate of agricultural supply table 5.3; other data, Federico 1994a - silk content of cocoons Appendice Statistica table XLV, reeling productivity estimated as the growth of Total Factor Productivity (Appendix G) times 0.25 (the average percentage of industrial Value Added on total silk price from table LXVIII).

c) the availability of otherwise under-utilized input(s) at a very low opportunity-cost (the so-called vent for surplus growth.)16 d) a reduction in the transaction costs and/or in the expected risk relative to those of competing activities. The growth of Total Factor Productivity (II) can be estimated by Solow's method of residual, assuming that economies of scale were negligible, the market competitive and the factor shared remained constant.17 It is simply the difference between the growth rates of output and inputs, weighted by their share on the total income: ris = Q - a L - p K - y T (where Q, L, K and T are the growth rates of output, labour, capital and land - and a, P and y are the respective shares on output). Actually the supply curve does not necessarily shift for the full amount of IIs. In fact any activity (in this case sericulture) has to compete for scarce inputs with the rest of the economy, which presumably also enjoyed technical progress. Thus sericulture had to increase its productivity just to keep up with the rising opportunity-cost of inputs economy-wide. In other words, what matters for the shift of supply is the relative - not the absolute - technical progress.18 The total shift S can be written as 16 17

18

See Myint 1958 and Todaro 1983, 350-1. The two former conditions were surely satisfied in the case of sericulture. The third was not totally met, as technical progress was labour-saving, but the bias was small (see table 6.5). The required rate of technical progress might be smaller in the (unlikely) case that the demand for other goods were totally an el as tic. On the other hand, it should be higher if the industry is not small compared with the rest of the economy, its development causing the total opportunity-cost of inputs to increase.

The roots of growth: agricultural production

Table 6.5 ture

85

Total Factor Productivity in Japanese sericul-

Total spring crop 1889-91/1911-13 1911-13/1927-29 1889-91/1927-29

(a)

(b)

(a)

(b)

3.2 3.4 3.3

3.0 3.2 3.1

2.6 2.5 2.6

2.6 2.7 2.6

Note: col (a) labour share 80 per cent; col (b) labour share 50 per cent Source: Statistical Appendix tab. AXII

s = (ns-na) where the subscript s refers to sericulture, a to the other activities and C is the aggregate contribution of the 'other' factors. This latter could be obtained as a residual

c = s-n s + na. Table 6.5 reports the results of an estimation of Total Factor Productivity growth in Japan. The figures refer to the whole production and the spring crop only and are computed with two alternative sets of factor shares. The total estimates are likely to be overvalued because the data omit the growth of inputs caused by the diffusion of double cropping.19 In fact, labour is proxied by the number of families and land by acreage (i.e. the stock of mulberries), while, as already said, the same families raised worms and the same trees were stripped more than once a year. Therefore the lower figures for the spring crop are more accurate. The performance of sericulture was in any case brilliant, and probably better than the average of the Japanese economy. The growth rate of productivity in agriculture and services was about 1-1.2 per cent, while in industry it exceeded 2 per cent. 20 The aggregate rate n a would have ranged from 1 to 1.5 per cent, and C from nothing to 0.5 per cent pa. 19

20

The computation leaves capital out altogether. This omission would bias the results if technical progress had not been neutral - but in this case the whole computation would be biased anyway. According to Minami (1994, 60 and 88) the rate of growth of Total Factor Productivity would have been 2.4 per cent in industry (1908-1938), 0.9 per cent in services (0.87 per cent) and 0.94 per cent in agriculture (1889-1910); the estimates of Hayami and Yamada (1991, table A. 12) for agriculture are more sanguine (1.07-1.46 per cent in 1890-1910, 0.88-1.03 per cent in 1910-1930, 1.05-1.17 per cent 1890-1930).

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These computations are highly tentative and subject to biases (for instance, the estimates of sectoral productivity growth refer to different periods). They are, nevertheless useful as a first assessment of the relative importance of the different causes of the shift. Unfortunately it is not possible to replicate the analysis for China and Italy because no data on inputs are available. However, the available scattered evidence would suggest that technical progress was also the main dynamic force there.

The shift of supply: technical progress There are plenty of sources on technical progress in sericulture university textbooks, practical handbooks for growers, specialised journals, pamphlets, official surveys etc. They are however sometimes contradictory and often misleading. The authors - usually experts with some education - are inclined to assess the technology in use according to their own standards of efficiency instead of understanding its economic rationality given the factor prices. Moreover, their statements are sometimes inspired by their personal financial interest. The sale of items such as mulberry saplings or silkworm-eggs was, in fact, a large business, and some 'experts' used their reputation to promote the varieties sold by firms with which they had business connections.21 With the due caution, it is nevertheless possible to single out the main innovations and to outline a (sometimes vague) map of their diffusion. The results will be discussed separately for mulberry growing and silkworm raising, taking into account for each of them the two main areas, the selection of races and the improvement of the techniques of cultivation and breeding. Mulberry growing (a) The generic name mulberry (morus) includes a large number of varieties (alba, nigra, multicaulis etc.) - different in size, shape of leaves, type of fruits etc. (which are a good feed for cattle). Which variety was the best had been hotly debated in Italy in the first half of the nineteenth century. Many new ones were imported from Asia (the Philippine mulberry, the zhou mulberry etc.) and some of them became strong fads.22 After 1850 the issue is almost never referred to in journals, suggesting that the search for new varieties had stopped or drastically slowed down. Possibly the slackening of the growth of the mulberry 21

22

E.g. in the first half of the nineteenth century, the Italian botanist M . Bonafous was associated with a Lyons mulberry nursery (Tolaini 1990). Zanier 1 9 9 0 , 1 5 - 1 8 ; Tolaini 1990; Romani 1957, 1 9 6 - 8 .

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stock reduced the possible market for new varieties, making research on them not profitable. Or possibly the search stopped simply because it had achieved its goal - i.e. the optimal mix of varieties. In fact several different varieties were used (or named) - so many, that an Italian historian speaks disdainfully of a 'mulberry chaos'.23 Actually, it may have been a rational adaptation to differences in climate, soil etc. from area to area and/or to the growers' preference for productivity versus resistance to diseases and to adverse weather. This hypothesis can be supported to some extent by a comparison with Japan. There, by contrast, research (backed by the state) has carried on well into the twentieth century and the stock has been largely renewed. In the 1930s, the so-called 'new' varieties accounted for 90 per cent of the mulberries in the Yamanashi prefecture. Yet this change did not lead to any standardisation: on the contrary, the number of local varieties grew from about 60 in the 1910s to 385 in the 1930s.24 (b) The technical progress in mulberry growing aimed mainly at saving time in picking the leaves. This was achieved by reducing the average size of trees and by introducing two new systems of cultivation, the mulberry-bush and the mulberry lawn ('gelso-prato'). In the case of the former, the trunk was reduced to a thickness of only a few centimetres by repeated prunings; in the latter it was disposed of altogether. The mulberry seeds were sown and the leaves were scythed as soon as they sprang out of the ground. Besides saving labour, both systems shortened the lag between planting and the beginning of the production and increased the productivity per acre in specialised fields.25 The mulberry lawn required a drastic change in the growing practices, and possibly for this reason it did not became common anywhere.26 On the other hand, the bush was widely used, specially in the Far East.27 It was traditionally 23

24

25

26

27

Zanier 1990, 18. According to Lombardi (1936) the situation was less chaotic than it appeared, as the many local varieties came from just four basic strains. See Bartezzaghi 1910, 848; Ghosh 1933, 11; and the case-study on the Yamanashi prefecture by Smethurst 1986, 1 8 7 - 9 4 . Jelmoni 1936; Fuschini 1924, 52; Bertazzoli 1910, 692; and Report 1933, 48 (which states that the productivity was 50 per cent higher). O n the experiments in Italy and the spread in other countries, see Relazione 1914, 3 1 ; Ferrario 1923, 5 9 - 6 0 ; G. Gatti, Trato-gelso e bozzoli', BS, no. 5, 1927; C. Fuschini, 'Alcune osservazioni sui cespuglieti di gelso', BS} no. 16, 1925; L. Martini, 'Intorno alia coltura del gelso ed alia bachicoltura in Italia', BS, no. 5 0 , 1926; Mortara 1925, 121; and Jelmoni 1936, 146. O n India, see Geoghegan 1872, 13; Report 1933, 4 6 - 8 ; and Zanier 1984, 4 7 6 (who describes the failure of a project to introduce Italian-style mulberry-trees in the 1830s); on southern China, see Howard and Buswell 1925, 4 1 ; Wusih 1924, 143, Survey 1925, 8; on Japan, see Huber 1929, 8; Ghosh 1933, 12; Smethurst 1986, 1 9 7 - 8 ; and Merie 1930; on central China, Li 1981, 15; Survey 1925, 25 and Shansi 1925, 10; on Italy, Moioli 1 9 8 1 , 134 and 139; Berengo 1963, 308; and, above all, Relazione 1914, 2 9 - 3 1 , who describes the situtation in the 1910s.

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used in Bengal, and in the 1920s it prevailed also in Southern China and in Japan (where it accounted for 70 per cent of the plants). By contrast the traditional tree-size was still by far the most common in Italy, Central China and Kashmir. In Italy, bush-cultivation, though known since the eighteenth century, spread very slowly, and an official survey in the 1910s had to consider its adoption largely as a goal to be hoped for. This pattern is not casual. In fact, the bushes could replace the traditional tree-size plants in mulberry fields, and in the rows along the edges of fields, the banks of rivers etc., but not in the fields, because their presence would have hampered the cultivation of other crops. Thus the bush-cultivation could not be easily adopted where mixed cultivation prevailed. Traditional tree-size cultivation was improved at any rate by many micro-innovations such as more rational pruning and new grafting techniques.28 The yield was surely raised by the availability of chemical fertilisers because the mulberry needs an abundant quantity of manure. The experts, however, were not satisfied with these improvements. In Italy they complained that the trees were pruned too often, manured too little and hardly cared for, and that the situation was deteriorating in the 1900s. 29 In China, techniques are said to have remained the same or even worsened from the seventeenth century onwards.30 These statements, however, should be accepted with a pinch of salt. The main evidence is the stagnation or decrease of the output per mou, which of course depended also on the (unknown) amount of labour used. Silkworm-raising a) The quality of silkworm-eggs was - if not the most important - surely the most debated issue in silkworm raising technology. It was in fact believed that 'the key to a filature's success was its supply of cocoons and the key to the quality of cocoon was disease-free eggs'.31 The quality depended on the race of cocoons and on the mating system. There was no doubt that the Pasteur (cellular) mating system was superior to the traditional (industrial) one. After its achievements of the 1870s it was the only one in use, at least officially. It seems that unscrupulous dealers sold industrial eggs under the name of cellular ones. Italian accused mainly French firms of the fraud - not without reason (the president of 28

29

30

For some information on innovations in Italy , see Zanier 1990, 15; Tolaini 1990, 577; and Berengo 1963, 3 0 6 - 7 ; in Japan, Ghosh 1933, 12; Douteau 1930; Merie 1930; Smethurst 1986, 1 9 5 - 8 ; and in southern China, Howard and Buswell 1925, 55. See the overview in Relazione 1 8 7 0 - 7 4 , II, 400ff; Zanier 1990; Bachicoltura 1 8 7 1 , 246ff; Verson and Quajat 1896, 190. T h e alleged decay of sericulture is discussed in Federico 1994b, 3 5 4 - 5 . 31 Li 1981, 1 5 - 1 8 (specially table 1) and 185. Li 1981, 188.

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the Syndacate des producteurs des grains de vers a soie du Var admitted in a confidential letter to the Foreign Ministry that 'what the producers fear are the consequences of a generalised use of the Pasteur method, which has never been necessary in France').32 Actually the use of Pasteur method was no longer necessary in a pebrine-free environment, as the risk of producing infected eggs was close to zero. The cellular method remained indispensable for the scientific selection of races through cross-breeding. France and Italy have been in the forefront of research on the issue at least until the 1900s. The Italian firms supplied their large home market, while the French had to export more than 80 per cent of the output.33 The choice of the best race was not easy, as the continuous changes in the composition of the stock of hatched eggs show. 34 Some change was decidedly helpful, and unanimously welcome. This was the case of the switch back to the traditional (yellow) race in Italy in the 1880s. In fact it had an higher silk content and yield than the green Japanese one, which had been adopted after the pebrine.35 This alone accounted for half the growth of yield and 60 per cent of that of silk content from the 1880s to the end of the century. In other cases, however, the choice of the race was much more controversial because the peasants and reeling firms had conflicting interests. The raisers were interested mainly in breeding resistant worms, the industrialists in getting a good thread (notably a fine one). No race met both requisites. The latent conflict broke out in Italy in the 1890s, when the egg-producing firms marketed the so-called Chinese breeds (a cross-breed of the yellow European race and white Chinese one). They were very resistant, suiting the peasants' need, but the thread was deemed inferior to that of yellow races. Thus, the industrialists bitterly fought their use - but, interestingly, to no avail.36 32

33

34

35

36

Letter of 2 July 1906 in MAEAffacom, 38. For the Italian suspicions see also Atti 1884, 86ff; Atti 1886, 114ff; Inchiesta serica, II, 2 7 0 - 1 and 3 7 8 - 9 2 ; Paini 1915, 15, and the long, warning articles in the GIS, which unfortunately the mostly illiterate peasants could not read. Half of exports went to Italy and half to the other Mediterranean countries (see CPVD 1911, 22). French eggs were used all over the Middle East, and the local production was substantial only in Anatolia (Martineau 1902, 153; Labaki 1984, 3 0 - 6 ; O w e n 1 9 8 1 , 157 and 252). For the available data in Italy and France, see Federico 1994a, Appendice Statistica, tables X I I V - X L V . Provasi 1905, 18; C o l o m b o 1917, 8 - 9 ; and Verson and Quajat 1896, 4 0 8 - 9 . For the enthusiastic reception to the change, see e.g. Esposizione 1 8 8 1 , 17; and 'Rivista semestrale delle sete. Primo periodo della campagna 1 8 8 4 - 1 8 8 5 ' , Sole, 2 3 Jan. 1885. See Provasi 1905, 2 6 - 3 1 and Colombo 1917, 10°. T h e breeders' favourable opinion is echoed by N e n c i 1900, 2 4 3 ; F. Clerici 'Studi e osservazioni sull'allevamento dei bachi in Cina', BAy no. 2 1 , 1 9 0 1 ; F. Clerici, 'Sulle razze di bechida seta oggi piu reccomandabili', BS no. 14, 1903; Lenticchio (report to the agrarian congress in C o m o , in 'II congresso agario e le mostre di C o m o ' , BA3 no. 3 7 , 1 9 0 9 ; Monzini, 'Qualita migliori di seme-bachi',

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After World War I, the Chinese breeds were substituted by another cross-bred race, the 'bigiallo' or double yellow (crossing of Italian yellow with Chinese gold cocoons). 37 The Asian countries were more backward than the Mediterranean ones. In Japan the silkworm eggs had been produced by specialised firms since the eighteenth century but still at the end of the nineteenth, they used almost exclusively the industrial system. 38 The search for the ideal race was even more troubled than in Italy: the green one of the Media era (which had been exported to Europe) was substituted by a white one in the 1880s, came back to vogue in the following decade, to be definitely abandoned in favour of other white races afterwards.39 In 1911, in the wake of a serious market crisis, the Japanese state stepped in, forbidding the production of industrial eggs and setting up a research centre (the National Institute of Silkworm-egg Production). This initiative was an outstanding success. In three years' time, the centre produced a new Fx hybrid, with a higher silk content, a lower percentage of losses and a shorter breeding season than any other previously available.40 Thus it diffused very quickly: in 1923 it already accounted for the whole supply of eggs for the spring crop and two thirds of that for the other crops. The process was substantially fostered by the large reeling companies which distributed the improved eggs to peasants and pledge themselves to buy the cocoons. But also the egg manufacturers 'played a leading and decisive role in diffusing new technical knowledge about silkworm breeding and rearing'.41 Until the beginning of the nineteenth century, the whole stock of Chinese eggs was produced using the industrial method, mainly by specialised firms, whose reputation was anyway very poor. 42 This system was harshly criticised for its alleged negative consequences on the

37 38

39

40

41 42

GISy n o . 3 1900, T h e industrialists' negative one is set forth by Marini 1889 1 7 - 1 9 , Atti 1898 48 sgg. e 6 1 - 7 1 , Ferrario 1923 158, A. Peano, 'Razze pure ed incrociate nel Cuneese', GIS, no. 3 1 , 1901; 'II m o m e n t o serico mondiale', Sole, 1 Jan. 1903; and by the official statement of the President of the Associazione serica in its speech to the annual congress in 1896 (E. Gadda, 'Relazione della presidenza', BS, n o . 5, 1896). Other (contrasting) opinions are quoted by D e Bernardi 1900, 1 9 0 - 7 and 3 7 9 - 9 1 . See Gallese 1950, 154 and Passerini 1942, 4 3 - 4 . For the origins of the trade, see Sericulture 1904, 142 and Morris-Suzuki 1994, 39; for the methods of production, see Bolle 1898, 4 5 and Report 1909, 1 5 - 1 6 . See Kyokawa 1984b, 36; Smethurst 1986, 2 0 2 - 5 ; Rondot 1 8 8 5 - 7 , 1 , 2 8 5 - 8 ; Silberman 1897, I, 2 6 4 - 5 ; Paini 1910, 828; Bartezzaghi 1910, 8 5 2 ; D o u t e a u 1930; Merie 1930; and G h o s h 1933, 1 5 - 1 6 . T h e data o n the diffusion of the F j hybrid are from the well-researched article by Kyokawa 1984b, 4 0 - 1 ; those on the percentage of losses are from Merie 1930; see also Huber 1929, 1 0 - 1 1 ; Allen and Donnithorne 1 9 6 1 , 2 2 7 - 8 ; G h o s h 1933, 1 4 - 1 5 ; Smethurst 1986, 207; and Ishii 1979, 7 0 - 1 and 4 3 8 - 4 1 . Kyokawa 1984b, 36. See Survey 1925, 2, 9 and 24; Eng 1986, 1 2 3 - 4 and 1 2 7 - 8 ; La 1 9 8 1 , 22 and 156;

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quality of the silk, and thus in the 1910s local authorities and reformers began to campaign for the use of improved (the local name for cellular) eggs. 43 The project was wholeheartedly supported by French merchants, who envisaged a new outlet for the national production. The results were however poor: even in the late 1920s the cellular eggs accounted only for about 5 per cent of the total. India was as backward as China in the use of the cellular seed. Before the war it was used only in Kashmir (where it was distributed by the state), and even in the late 1920s it accounted for only a half of the stock in Bengal and a third in Mysore.44 b) The case of breeding techniques is perhaps the best example of the divergence between the 'technical' and economic definitions of efficiency. Most experts, at least in Italy, identified progress with the increase of the yield ratio - i.e. the output of cocoons per unit of silkworm eggs. For instance, in the late 1920s, in an official report the former president of the Associazione serica, Ferrario stated that all the difficulties of the Italian sericulture could be overcome if the yield had risen to 70 kg. per ounce. 45 In those years the average yield was about 50-60 kg., and it had remained constant since the 1890s (after two decades of quick growth). By contrast, the yield was steadily growing in Japan (at a yearly rate of 3.8 per cent from 1899 to 1929). 46 This difference was considered an undisputed proof of the technological stagnation of Italian sericulture. Actually, the question was not so simple. The yield depended first and foremost on the race of eggs and, for each race, on the losses of worms during the raising. They could be minimised by following some well-known rules (hatch the eggs gradually, keep the worms extremely clean, feed them abundantly and at regular intervals, change the 'bed' very often, air the rooms keeping the temperature as even as possible etc.). 47 The peasants were not so keen to

43

44

45 46 47

Howard and Buswell 1925, 7 0 - 7 . In Kiangsu, m o s t of the eggs were still produced by peasants (Wusih 1924, 142). See Li 1981, 24 and 1 8 8 - 9 2 ; Eng 1986, 130ff (the estimate of the use of cellular eggs is o n p. 136); Bell 1985, 2 1 6 - 4 9 ; Howard-Buswell 1925, 1 7 2 - 5 ; Survey 1925, 9, 'Sericulture improvement in the Shangai district', CEM, II, no. 1 (Oct. 1924); and o n the French attitude and initiatives, Organization 1917; Jouvel 1930; and the dossiers in MAE, Asie 1 9 8 1 - 4 0 , no. 417 and in MAE, N S Chine, no. 580. See Report 1933, 4 0 ; Maxwell-Lefroy 1916, 24; and Wardle 1904, 42ff. Until the 1920s, the supply of cellular eggs for the Kashmir state was monopolized by the French firm Larbosset, which resisted all attempts to enter the market thanks to its good connections in the French Foreign Office (see the dossier in MAE Affacom 1 9 0 2 - 0 7 no. 38). 'II problema attuale della seta', Sole, 8 Feb. 1929. See Statistical Appendix, table AXI. T h e 'bed' is the surface (usually sheets of special paper on metal nets) o n which the worms lie. T h e rules were laid down in Japan in the early 18th century (Morris-Suzuki

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follow these rules. An Italian expert in 1924 criticized the 'insufficient selection and bad storage of the eggs, the poor situation of the incubation rooms, the excessive quantity of hatched eggs, the insufficient or totally absent disinfestation of the hatching rooms, the unsuitable situation of these rooms, the lack of care and the defective methods of raising, the humidity which favours the spread of diseases'.48 The situation in central China was no better: 'the peasants, guided by routine only, ignore the first rudiments of hygiene for the silkworms; they use as raising room any nook of their house - usually dirty and obscure; the worms are heaped in bamboo chests and get an insufficient feeding'.49 And even in Japan, peasants were accused of having abandoned their traditional systems in their lust for greater production.50 Experts attributed the persistence of these defective practices to peasants' stubborn conservatism ('poor and ignorant people, whose compass in whatever undertaking is always the tradition') and contrasted their 'ancestral empiricism' with the 'landowners' rational systems'.51 Actually, the 'ancestral empiricism' was quite sound from an economic point of view. In fact, the 'rational' techniques needed additional inputs per unit of silkworm-eggs - more capital to buy the special incubators for rational hatching and to heat the rooms to keep the temperature even, more labour to clean the worms frequently and to prepare the leaves etc. It is doubtful that the higher yield was worth the increase of inputs. In fact, since the 1910s, the average yield was 20-25 per cent lower in Lombardy - where the competition of industry raised the opportunity cost of labour - than in Veneto. 52 In a nutshell, the adoption of rational techniques did not necessarily entail a technical progress - and yield was not a reliable proxy for it. 53 A technical progress in the economic meaning of the word (i.e. an increase of the productivity of inputs) could be achieved by changing the way of feeding the worms - i.e. by giving them branches with the leaves

48

49 50 51 52 53

1994, 3 9 - 4 1 ) . The most famous Italian compilation was Dandolo 1 8 1 7 - 9 (but see also e.g. Verson and Quajat 1896; Nenci 1900; and Reali et al. 1985, 9 5 - 6 , who claim that the basic principles are 'still now perfectly valid'). One of these textbooks (Colombo 1917, lesson 7) promised a 15 per cent increase of yield to growers who followed his advice. Mortara 1924, 126, but see also Caizzi 1968, 9 6 - 7 ; Valenti Fiorelli 1980, 69; Relazione 1870-74 II etc. Organization 1917, but see also Production 1925; Eng 1986, 1 2 5 - 8 ; I i 1981, 185 etc. D e Bavier 1874, 26 and Report 1870. Quotations respectively from Alfonso-Spagna 1867, 87 and Relazione 1 8 7 0 - 7 4 , II, 417. Passerini 1942, quadro IV-14. There are no data on the yield by region before 1913. This fact was clear to foreign experts, at least in the 1940s (Gaddum 1948, 34), while G. Pasqualis was probably the only Italian one to realize it: see e.g. his article 'Bozzoli grossi o bozzoli piccoli?', in Sole, 25 March 1899 or his intervention at the Inchiesta serica(II, 119).

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still on instead of leaves picked one by one. 54 The branches were arranged on special wooden supports ('branch feeding5 or 'cavallone' in Italy) or simply laid down on the ground until they piled up ('tower feeding' or 'pezzone' in Italian). This method reduced the consumption of leaves, making picking single leaves and the change of 'bed' unnecessary (the faeces simply fell on the ground). 55 On the other hand, the new methods required more room to raise the same quantity of worms. Branch feeding needed a 20 per cent bigger surface (being thus still compatible with the traditional home raising), while tower feeding required a particular space - such as a shed or a barn.56 In other words, the new methods were (relatively) capital-intensive and labour- and land-saving. The most eager supporters promised extravagant savings (up to 80 per cent of labour and 30 per cent of leaves), but the reality was less appealing. Branch feeding saved about 15 per cent of labour, the tower feeding about 10 per cent - and both perhaps a 10 per cent of total costs. 57 Moreover, the cutting of whole branches on trees was an hard task, which in most cases required a man's hand. 58 The higher opportunity cost could cancel out the savings of the new systems. The advantages of the new methods were not so overwhelmingly large as to compel their adoption. In fact, they were adopted in some countries only - especially those where bush cultivation prevailed. Branch feeding was the traditional practice in Bengal and is quoted by sources on China and even on the Middle East, but without any clear information on its diffusion.59 It was used in Japan as early as in the 1870s, but it probably became diffused only later, up to 60 per cent of the total acreage in the 1920s. 60 The 'cavallone' was known in Italy from at least the 1850s, and it was largely publicised from the 1880s onwards, 54

55

56

57

58

59

60

See Verson and Quajat 1896, 250; Castelli 1909, 3 - 2 1 ; Lenticchia 1916; Ottavi 1880, 89 and 96ff; Beauquais 1910, 2 7 - 3 5 ; Reynier 1921, 145-50; Smethurst 1986, 196 and 212; and R e a l m a/. 1 9 8 5 , 9 6 - 1 0 6 . On labour, see Zanoni 1907, 8; Castelli 1909, 29; Fuschini 1932, 77; Ottavi 1880, 81; and Ghosh 1933, 15; on land, see Castelli 1909, 29; Zanettini 1936, 122; Lenticchia 1913, 7; and Relazione 1914, 2 8 - 3 1 . See the (sometimes conflicting) data of Fuschini 1932,63; Zanettini 1936,126; Verson and Quajat 1896, 237; Nenci 1900, 5 8 - 9 ; D e Bernardi 1900, 82; and Report 1933, 7 2 - 3 . The data on labour are from the very accurate survey of Passerini 1942, quadri IV 9 - 1 1 ; those on total savings from Ghosh 1933, 10. The risk of damaging the trees is stressed by Ferrario 1923, 58 and Verson and Quajat 1896, 253. In Japan it was minimized by special pruning techniques (Bertazzoli 1910, 696 and Paini 1910, 826). Tower feeding had other minor technical shortcomings (such as the difficulty to have all the worms grow at the same time) - Reali et al. 1985, 1 0 1 - 3 . On Bengal, see Report 1933, 68; Maxwell-Lefroy 1916, 22 and 28; and Wardle 1904, 223; on central China, see Kuhn 1988, 3 2 1 - 2 ; on Guangdong, see Howard and Buswell 1925, 41; on Syria, see Bourgaud 1901, 32. See D e Bavier 1874, 37 for the use in the 1870s and for the subsequent diffusion, see Keishi and Tamotsu 1957, 284; and Smethurst 1986, 1 9 6 - 8 and 2 1 2 - 3 . According to

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An economic history of the silk industry

but it did not spread until the 1920s. 61 Some envisaged much more drastic changes. In the 1920s the Italian Fioruzzi devised a futuristic system of mechanised raising which combined the mulberry lawn and automatic feeding of worms. 62 It was intended to minimise the need for labour, and it would have surely changed the whole economics of the silk industry, had it worked. But it never worked. Today, silkworm raising is still largely a manual task. A comparison Many experts attributed the Japanese success to the technical progress in sericulture and blame Italy and China for having failed to imitate Japan. Some years ago, Zanier has accused the Italians for having culpably overlooked Japan, deluding themselves in their 'belief of an undisputed and indisputable technical and organizational superiority'.63 This 'gap in attention' would have caused them to miss the opportunity of a fruitful import of technology. Such a gap may have existed in the nineteenth century but surely not afterwards. In the twentieth century the concern for Japanese competition bordered on obsession, endorsing the most extravagant claims on its performances.64 The Chinese and Indians are charged with being badly organised and lacking the necessary coordination between egg production, sericulture and reeling. An official report in the early 1930s states that 'the main defect of the Indian industry is not the want of natural resources but the want of organisation and failure to change its methods'. 65 Many of these allegations ended in

61

62

63

64

65

R. D u m o u l i n ('Osservazioni sull'industria della seta nel Giappone', BSy no. 7, 1926); branch feeding was used mainly for the spring crop. T h e figure is from Huber 1929, 1. T h e method was described in GIS, no. 2 3 , 1867; Freschi, 'Grande allevamento a metodo friulano', GIS, no. 1, 1873 (Friuli is an area in the North East near the Austrian borders) and it was enthusiactically endorsed by D . Tamaro in three articles published by the Bollettino dell'Agricoltura (house journal of the Societa Agraria Lombarda a) in 1888 ('L'alimentazione del baco a foglia intera', no. 2 2 , 'L'alimentazione dei bachi con la frasca', no. 24; and 'Foglia intera o foglia tagliuzzata', no. 26); and by many pamphlets in the 1900s and 1910s (quoted in notes 54 and 55). O n the spread, see C d C BS 1925, 30; Mortara 1925, 121; and Passerini 1942, 36. See the description by V. Fioruzzi, 'L'allevamento razionale e industriale e continuo del baco da seta', BS, no. 4 3 , 1925 and the negative assessment by Dubini in a report to the Milan Chamber of Commerce in M i sez. IV.B scat 226 fasc.2. O n Fioruzzi's predecessors and on more recent research, see Reali et al. 1985, 106ff. Zanier 1990, 45. T h e author unfavourably compares this attitude with the attention given to the Far East practices in the late eighteenth century, which had suggested the translation of many textbooks (Zanier 1988, 1989 and 1990). E.g. in the 1920s Mortara's authoritative yearly trade review stated alarmingly that the average yield was about 3 0 0 kg. of cocoons per hectogram of seed - i.e. the double of the real one (Mortara Prospettive 1 9 2 1 , 106; 1924, 125; and 1925, 123). Report 1933, 30. T h e same report affirms (p. 3) that China's development had been hampered by the 'absence of these factors of State aids, technical efficiency and

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a plea for state intervention - following the (largely idealised) Japanese example. As we will discuss in chapter 9, the state did not intervene. These allegations are so widespread as to deserve a careful assessment. The point is not whether technical progress was important for the growth of Japanese sericulture (it was) or even whether a more backward country (as Japan probably was in the early nineteenth century) could catch up with the leader (supposedly Italy). The question is whether and when the country succeeded in taking a clear leadership - either in the productivity of inputs or in the quality of the production - and, if so, what effect this achievement had on Japan's competitiveness. It is, unfortunately, almost impossible to bring quantitative evidence to bear on the question of productivity. The only comparable series refer to the yield ratio. In 1898-1902 it was 2-2.5 times larger in Italy than in Japan, and the lead gradually decreased until it disappeared altogether between 1925 and 1929. 66 This might show a catching up, but the yield itself is, as already said, hardly a proxy of productivity at all. The previous qualitative discussion suggests that Japan adopted the labour-saving innovations (bush-size cultivation, branch feeding) before Italy. But on this criterion, the technological leader would have been India - hardly a plausible conclusion. And anyway, the Italian raisers had some good reasons not to adopt these techniques. Without further research, the issue cannot be solved. It is possible to be more precise on the quality of cocoons. The issue is important for the possible effects on quality of the silk, which, as we will see in the next chapter, was undoubtedly a major factor in competitiveness. It is important to stress that good cocoons were not indispensable to produce good silk. With the modern equipment and a skilled workforce it was almost always technically possible to make a high quality yarn, no matter how bad were the cocoons (and, vice versa, a defective equipment and inexperienced workers could spoil the best raw material).67 But it was expensive, at times very expensive. So, the quality of cocoons mattered, even if less than sometimes assumed. The generic concept of quality of cocoons concerns three different characteristics -

66

67

marketing organization which Japan has borrowed from the West'. O n China, see Li 1981, 185; Eng 1986, 1 2 5 - 6 ; So 1986, 96; Allen and Donnithorne 1962, 6 3 . See Federico 1994a, Appendice Statistica, table XLJV; the extent of the gap is uncertain. T h e data o n the number of ounces hatched in Italy are dubious (Federico 1994a, Appendice E) and the producers of eggs are said to have increased the weight of an ounce in order to boast an higher yield ( N S R B 1891 and Paini 1915, 6). See Duran 1913, 4 9 - 5 0 ; Wardle 1904, 189; Pariset 1890, 106; Mortara 1924, 39 etc. T h e methods to obtain the best silk are described in detail by Provasi 1905, 1 0 7 - 2 4 and Colombo 1917, lessons 3 1 - 3 5 and 1 3 - 1 4 .

96

An economic history of the silk industry

the intrinsic properties of the thread, the proportion of defective cocoons (called 'cleanliness') and the homogeneity of each lot. The intrinsic properties of the thread (colour, strength, fineness of the bave etc.) depended mainly on the race of cocoons and were transferred to the silk yarn. For most of them, the differences among different races (countries) were not very large. The two main exceptions were the fineness (a finer thread reduced the processing costs) and the colour. White silk was traditionally preferred because it was easier to dye it, but this advantage gradually disappeared during the nineteenth century thanks to the development of modern dyeing techniques. 68 The economic value of these properties can be measured quite accurately by the relative prices of dried cocoons (which were sold in Milan with a compensation for any difference in the silk content). 69 In the 1900s, Chinese cocoons brought prices as high or even higher as Italian ones (Japanese cocoons were not imported in Italy); those from the Middle East or the Balkans, Italy's usual suppliers, were priced about 5 per cent less. This evidence is unfortunately not conclusive, because imports from China were sporadic, and therefore the figures might refer to highquality stuff. The qualitative evidence is not very helpful, because the opinions on the relative quality of cocoons were oddly divergent. The experts of each country deemed their competitors' cocoons better than their own. The Chinese and Japanese attributed the clear superiority of Italian silk to the quality of cocoons, while the standard Italian textbook of the beginning of the twentieth century states 'the Chinese and Japanese raws are usually better than ours as far as the intrinsic properties are concerned'.70 Cleanliness was probably the most important among the three characteristics because it determined the production costs in reeling. The less 'clean' the cocoons, the more labour was needed to process them, and the greater the proportion of them which had to be discarded and sold as waste at a loss.71 Until the late 1800s, the Italian supply was 68 69

70

71

See D i Dardini 1873, 47; Rawlley 1919a, 2 5 4 - 5 ; C o l o m b o 1917, lessons 2 5 - 3 0 . Data from the price lists of the Bollettino di sericoltura from 1894 to 1914 (see Federico 1994a, Appendice F). About the opinions of Far Eastern experts on the better quality of Italian cocoons, see Uyehara 1926, 103; Tsurumi 1990, 47; Kyokawa 1987, 29 and 1 9 9 1 , 57; Howard and Buswell 1925, 133; and Rondot 1 8 8 5 - 7 , I, 249 (and also O w e n 1987, 2 8 0 about Lebanon). T h e quotation is from Provasi 1905, 247 - and see also e.g Gabba 1878, 29; Robbiani 1936, 207; M . , 'La voce dei setaioli', Sole, 28 April 1911; C o l o m b o 1917, lessons 1 1 - 1 2 . In theory it would have been possible to include in contracts for fresh cocoons a compensation for the percentage of defective cocoons and/or an incentive for standardization. T h e monitoring of these clauses and their enforcement against opportunistic behaviour in the hectic days of the collection was however quite expensive (Federico 1992d, 199). Similar clauses were included in the long-standing agreement

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decidedly 'cleaner' than the Japanese one. The maximum percentage of double or defective cocoons allowed by contracts was 6 per cent, while in Japan the nationwide average was 10.6 per cent in 1896-1906 and fell to 7 per cent in the 1920s.72 Changes over time can be very roughly proxied by the average silk content, which unfortunately depended also on the silkworm race (which determined the silk/chrysalis weight ratio) and on the reeling technology. The data are somewhat uncertain, but they nevertheless show clearly that the content in Italy was by 10-15 per cent higher than in Japan until World War I, and roughly the same afterwards.73 The homogeneity was useful because any difference required expensive changes in the technical parameters of reeling (speed of reels, water temperature etc.). It was absolutely necessary to use the new technology of cooking (a Japanese invention of the 1910s, which will be described in the next chapter) to prepare cocoons before reeling them. The homogeneity depended mainly on the use of a uniform type of eggs. It was therefore reduced by the competition among egg-producing firms, each of which tried to differentiate its product. Competition was very keen in Italy (there were about 150 different firms) and, until the beginning of the twentieth century, even more in Japan: in 1900-4 there were about 17,000 producers, offering at least 800 different races of worms.74 The situation was drastically changed by the diffusion of the Fi hybrid in the late 1910s, which made the Japanese production highly homogeneous. Thus the new hybrid has been authoritatively called 'the most important technological advance' of Japanese silk industry before 1925.75 In the 1930s, the Italian experts warned that 'the number of races of cocoons available in Italian markets is too high, and it has been regarded as one of the causes of the crisis in our silk trade'.76 The government tried to imitate the Japanese system, forcing all the eggsproducing firms to use the same stock, but it failed utterly. The discussion can be tentatively summed up saying that Italy enjoyed 72

73 74

75

76

purchases between co-operatives of peasants and reeling firms in Japan in the 1920s (Merie 1930, Ishii 1979, 4 3 8 - 4 2 ) . See Trespioli 1907, 188 (beyond the limit the seller had to pay a compensation) and for Japan, Bertazzoli 1910, 7 1 2 - 1 4 and Merie 1930. T h e silk from double cocoons accounted for about 6 - 7 per cent of Japanese output (Statistical Appendix, table AXDC). Statistical Appendix, table AXVI. N u m b e r of firms in Italy from Annuario 1904, in Japan from Merie 1930 (more data in Federico 1994a, Appendice Statistica, table X I J e); the estimate of the number of races in Japan is from Kyokawa 1984b, 36. Another source listed about 2 0 0 different races in the 1860s (Morris-Suzuki 1994, 40). Minami et al. 1995, 4 5 . T h e date of 1925 refers to the installation of the first Minorikawa multi-end reeling machine (see ch. 7, this volume). Pigorini 1936, 103. See also Passerini 1942, 4 5 - 9 .

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An economic history of the silk industry

a clear technological leadership, especially in some areas (such as the quality of eggs) at least until World War I. In the 1920s Japan made great strides in some areas (notably the homogeneity of the supply), but the best bet is that it did not acquire a clear advantage. However, these statements are based on quite flimsy evidence. The lack of any data on the productivity of inputs is particularly regrettable. The qualitative evidence would also suggest that China was more backward than both Italy and Japan.

The shift of supply: other components As previously said, technical progress probably did not account for the whole shift of supply, at least in Japan. It is thus advisable to discuss as well, albeit more briefly, the three other causes listed in the first paragraph. Two of them can be easily discarded. It is highly unlikely that a fall in transaction costs had been really important, simply because they were fairly low from the beginning. The expected risk may have fallen, but only as a consequence of technical progress itself (via the reduction of variance of crops) and of the diffusion of double cropping. The vent for surplus growth and the exogenous change of input prices are more likely candidates. If, as repeatedly said, the production of cocoons was a labourintensive activity, any decrease of the wage/rent ratio should have favoured its growth. Such a process may have been very important before 1850. According to the available estimates, the Italian population grew by a third from 1801 to 1851, and the Chinese one doubled from 1750 to 1850.77 It is likely that the labour/land ratio increased as much, causing the opportunity cost of labour to fall. Unfortunately, it is totally impossible to assess the relative importance of this trend. It is on the contrary possible to rule out a contribution of this effect after 1850. In fact, the total Chinese population and agricultural workforce in Italy and Japan remained steady, and so there was no exogenous reason for relative price of labour to fall. Actually, as we will discuss later, wages increased, at least in Italy, and their rise jeopardised sericulture. It thus remains only the Vent for surplus'. In a recent article (tellingly tided 'Mobilising slack resources for economic development') Nghiep and Hayami attribute to it the diffusion of double and triple cropping in 77

The data for Italy are from Del Panta 1984, 13 (total population 1801-1851); ISTAT 1958, 39 (total population 1861-1931); and Zamagni 1987, table A.I (agricultural labour force 1881-1931); those for China from Osterhammel 1992, 54 and those for Japan from Umemura et al. 1988, table 10.

The roots of growth: agricultural production

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Japan.78 The slack resource to be mobilised was labour. In spring, silkworm raising had to compete with the cultivation of rice, but in summer and fall women were not absorbed in other main activities. There was also some under-utilised land, in the mountains, and the same trees could be stripped a second time in the year (but the practice was deemed harmful).79 But the supply of leaves was obtained mostly by reducing the acreage of minor crops such as barley and potatoes. According to the authors' calculations, the conversion yielded a 15 per cent return. Some slack labour may have been available in central China, but the evidence is scarce and somewhat contradictory.80 The other main areas had not such an opportunity for a vent-for-surplus growth. In southern China, sericulture was already a full-year activity. In Italy, the spring crop coincided with many other agricultural tasks, which were performed mainly by men, but with the assistance of women too. There was no under-utilised labour at all in summer, while there might have been some spare time in fall (after grape-gathering). A second crop in autumn was, however, hazardous and expensive because the climate made the supply of leaves uncertain and heating of the breeding rooms necessary. These constraints on the input side (presumably not balanced by a sufficient technical progress) prevented the diffusion of double cropping, and thus jeopardised the growth of Italian cocoon production. Crisis and remedies Even before the collapse of the 1930s the triumphal march of sericulture had been tainted by crises in southern Italy, Bengal, France, Spain, the Middle East, and northern Italy (the most important of all). In all these countries, production stagnated or declined as a result of long-run economic changes. A different case was Anatolia, where the sericulture was suddenly destroyed in the early 1920s by the genocide and mass exodus of the Christian minority, who constituted most of the silkworm raisers and reeling workers.81 The timing and extent of the first two crises of the list is uncertain. Production in southern Italy seems to have decreased already since the 78

79 80 81

Nghiep and Hayami 1979. The availability of labour at different times of the year is also discussed by Keishi and Tamotsu 1957, 285; Hemmi 1970, 318; and Smethurst 1986, 153. Ghosh 1933, 16-17. See Huang 1990, 7 9 - 8 0 and 126-27; Bell 1985, 36; and 1992, 2 1 8 - 2 1 9 ; I i 1981, 18. See C. Brazzafolli, 'La sericoltura in Turchia', BS, no. 48, 1924 and the report of the French consul in Brussa of 22 July 1926 in MAE, RC 1918-40, B-textiles, no. 19 (the number of factories plummeted from 145 to 15).

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An economic history of the silk industry

beginning of the nineteenth century, when silkworm raising was discontinued in most traditional areas (save the provinces near the Messina strait).82 Exports from India halved in the 1870s and remained steady afterwards, in spite of the increase in exports of tussah and Kashmir silks from the 1880s onwards.83 There are no data on the output for the internal market, but it is widely believed to have decreased too. The French and Spanish sericulture never recovered from the blow of pebrine.84 In France the number of peasant families and the quantity of eggs hatched by each of them went on decreasing from the 1870s. In Italy, the crisis began some thirty years later, and was preceded by a remarkable slowdown in the rate of growth in the 1890s (from 2.5 per cent pa to 1.5 per cent). The all-time peak in the production of cocoons was hit in 1906. The output declined by 15 per cent in the following years and partially recovered in the 1920s. The crisis in the Middle East was even more serious than in Italy.85 It began approximately at the same time but, unlike in Italy, it was not followed by any recovery. The output in the 1920s plunged to a third of its pre-war peak. These crises attracted a lot of attention in those years.86 Most experts blamed the low cocoon prices, either in general or relative to a specific competing crop. The list of these latter includes citrus and other fruits in Spain and Italy, vegetables and tobacco in Spain and the Middle East, wine in France, rice, jute, mango and sugarcane in Bengal etc. Other authors stress the effect of changes in relative input prices - specially labour - as a consequence of industrialisation (northern Italy) or emigration (Lebanon). Finally, the crises are said to have been caused also by high rents (Bengal), insufficient technical progress (Bengal), by taxes (southern Italy), diseases (India and Italy), change of tenure arrangements (Italy) or by a vague 'apathy or indifference' among the 82 83

84

85 86

See Chorley 1965, 170ff; Laudani 1989a and 1989b; Bevilacqua 1988. See Statistical Appendix, table AIL T h e last Western-style plant in Bengol was shut down in 1927. See Rondot 1 8 8 5 - 7 , I, 3 0 7 - 8 ; W a n 1893, 2 7 - 3 0 ; and Ansorge 1917; Report 1921; and Report 1933. See the data on output in Statistical Appendix, table AVI, and those on the number of families and quantity of eggs in France in Federico 1994a, Appendice Statistica, table XLII. See Labaki 1984, 148. T h e following discussion is based for southern Italy, on Chorley 1965, 170ff; Laudani 1989a and 1989b; Bevilacqua 1988; for France, on Rondot 1 8 8 5 - 7 , I, 37 and 101, Beauquais 1910, 6 0 - 5 , Reynier 1921, 130 and 138; Pariset 1901, 364; C P V D 1911, 18; and L. Larbosset, 'L'awenire della coltivazione del gelso', GIS, n o . 1, 1901; for Spain, on Rondot 1 8 8 5 - 7 , I, 159; Perez Picazo-Lemeunier 1987, 5 6 8 - 7 1 ; Vallejo y Miranda 1878; lOff; for India, on Maxwell and Lefroy 1916, 12 and 24; Rawlley 1919b, 164; Charsley 1982, 7 4 - 9 ; Wardle 1904, 307; l i o t a r d 1883, 22; Zanier 1984; Report 1921 and Report 1933; Chevallier 1960, 3 0 2 ; O w e n 1 9 8 1 , 2 5 1 - 3 ; Labaki 1984, 1 4 8 - 5 1 ; the crisis in Northern Italy is discussed in more detail in Federico 1994b, 3 5 2 - 6 2 .

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peasants.87 Some of these causes were not really important in the long run. For instance, in northern Italy the mulberry disease (the Diaspis pentagona), though very damaging in the late 1890s and 1900s, disappeared after 1915, thanks to one of the first examples of biological treatment, and the change of tenure arrangements affected only the area north of Milan while the crisis was nation-wide. Or, more generally, the 'apathy' must have been motivated by something. The importance of the other causes could be assessed properly only by a country analysis. It is, however, possible to make a general comment. The fall in cocoon prices was hardly new in most countries and had not prevented sericulture from growing previously, and was not preventing it from growing elsewhere at the same time. In other words, it could have caused a crisis only if something new had happened - such as a slowdown of relative technical progress, the appearance of a new alternative crop or an increase in the opportunity cost of labour. This last cause is the likeliest. No new crop appeared (at least in Italy), and there is no substantial evidence that the rate of technical progress changed so abruptly (and in few countries only). On the contrary, the increase in wages is a welldocumented outcome of economy-wide changes such as emigration and above all industrialisation. In fact, the crisis begun in France before in Italy and, within North Italy, in Piedmont and Lombardy (the most industrialised regions) before Veneto. 88 In a nutshell, it can be argued that industrialisation killed sericulture. In the long run, the fall in output of cocoons caused the silk industry to disappear. Of course, the industrialists did not accept their fate so light-heartedly. They showed a distinct reluctance to accept any cut in their productive capacity, even as a short-term measure.89 In the short run they searched for their raw material abroad.90 France was the first to resort to a massive importing of cocoons in the 1860s and 1870s. Imports declined in the 1880s and grew again after 1892, when the silk industry began to get large subsidies. Italy was a net exporter of cocoons (to France) until the 1870s, and it began to import massively from the 1890s - just when the growth of national output began to slow down. 87 88 89

90

This latter expression is used by Wardle 1891, 14, referring to Bengal. See Federico 1994b, tables II, VII and VIII. In Italy all the suggestions to this aim during the crisis (see e.g. 'Sull'andamento degli affari in fabbrica', BS, nos. 5, 6, 8 and 9, 1908; M . 'La voce dei setaioli', Sole, 28 April 1911; V. Charollais, 'Sulla situazione dell'industria e del commercio della seta', BS, no. 5 1 , 1911) were let drop. In 1928 the Associazione serica asked the government for the right to order compulsory cuts in the productive capacity -allegedly as a temporary measure (see the copy of the m e m o in RC 1 9 1 8 - 4 0 B-textiles no. 20) - but it did not obtain it. See the data in the Statistical Appendix, table AXVII. T h e figures have to be divided by four to get the equivalent weight of silk.

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An economic history of the silk industry

Italian demand boosted the commerce, which peaked on the eve of World War I with 5,200 tonnes of dried cocoons (equivalent to 1,300 tonnes of silk). Nearly nine-tenths of them went to Italy, where they accounted for a fifth of the raw material (as much as in France but, of course, the French industry was much smaller). A market analyst hailed this increase as the beginning of an epochal change in reeling, which was 'losing its original character of a subsidiary industry of agriculture, which only processes the cocoons to export them more easily'.91 He envisaged a new world-wide division of labour - whereby Italy would exploit its comparative advantage in reeling while some other countries would specialise in sericulture. This perspective never materialised because the potential supply of cocoons was not large enough. Italy imported cocoons from an area stretching from the Balkans to the Middle East (Lebanon, Turkey) and to Persia-Turkestan (from the 1890s). Some of these areas were in crisis too, and production in other areas was very far from the potential needs of the Italian industry. As a matter of fact, the trade of the 1910s was at an all-time peak. Imports were curtailed by the war, and afterwards by the crisis in Anatolia and by the ban to export from the Soviet Caucasus, so that in the 1920, they were down to 50 per cent of the pre-war level (less than 10 per cent of the total supply).92 Actually, only China could have supplied the Italian factories with a sufficient quantity of cocoons. The trade was technically feasible, but it had been substantial only in special circumstances (e.g. in May 1904). 93 The transportation costs to import cocoons from China were probably too high: the unit cost per mile was approximately eight times higher, and the distance to cover almost double. 94 The Italian industrialists were well aware that imports were a shortterm solution only. Their most important political ally (and future prime minister), L. Luzzatti in his opening speech as president of the Committee for the Inchiesta Serica, stated that '[Italian] agriculture must save the industry', because 'without a cheap supply of raw material

91 92

93

94

'Rivista mensile del mercato serico', BS, no. 46, 1913. This shortage compelled the reeling firms to shut plants and/or to reduce the worktime (Arimattei 1926, 108; Ferrario 1923, 121; G. Gatti, 'Crisi della filatura serica', BS, n o . 5 1 , 1926). Report 1905. China exported cocoons to Japan, where they accounted for a minimal of total raw material (Statistical Appendix, table AXVII). O n Chinese exports, see Rondot 1 8 8 5 - 7 , 1 , 259; Tsing 1928, 1 1 1 - 1 3 ; and Furuta 1988, 184. T h e same lot of material should have travelled first (as cocoons) from China to Italy and then (as silk) from Italy to e.g. the United States instead of going straight (as silk) from China to the United States. This trip would have required also twice as m u c h time (i.e. financing). T h e weight to be transported was about four times, and the so called stowage factor (i.e. the space per ton of good) was double (Thomas 1930, 2 3 0 ) .

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the industrial processing would die'. 95 Most of the proceedings of Inchiesta (five massive volumes) deal with the means of increasing the output. Twenty years later, Tondani, the president of the newly established 'Ente nazionale serico', hopefully reiterated that 'the growth of the internal output will eliminate all the difficulties which hamper the development of reeling'.96 The industrialists pleaded for the state's intervention to foster the sericulture. Actually, as we will see in chapter 9, the Italian government did almost nothing till the final crisis of the 1930s (as the English one in Bengal or the Turkish one in Lebanon). On the other hand, the French state heavily subsidised sericulture (and reeling) from the 1890s onwards. But the result was exactly the same everywhere: the crisis went on till the final demise. 95

96

Inchiesta serica, II, 3 6 4 . See also the speech of Ferrario, then vice president of the Associazione serica to the Milan congress of 1906 (ibid., II, 613). See the despatch by Craponne of 15 Feb. 1927 to the MAE (RC, 1 9 1 8 - 4 0 , B-textiles, no. 20).

The industry: technical progress and structural change

Introduction: innovations in reeling The modern reeling industry began in 1805, when the Frenchman Gensoul patented the first steam-reeling machine. The steam was used not as a source of power but as a way of heating the water in the basins.1 In a way, Gensoul's machine extended the principle of centralized heating, which had been applied to fire-heated basins since the eighteenth century.2 However, the use of steam substantially enhanced the efficiency of the machinery.3 A boiler could heat much more hot water than any fire, saving up to two thirds of the fuel. Besides the silk was better because the soot of the fire no longer dirtied the humid yarn and the temperature of the water in the basin was kept steady (any sudden changes in the temperature could cause the thread to wind irregularly). The first boilers, which were made in copper, had, however, one very serious drawback. They did not heat the water enough. Thus a part of the natural yarn was wasted and the silk output per unit of cocoons was substantially lower than that of the fire-reeling. The problem was solved in the 1830s by building more resistant boilers, in iron this time. This innovation made steam-reeling totally viable, thereby creating a new technological paradigm. In the next 120-odd years it was to be developed thanks to a stream of innovations which affected all the phases of reeling. The most important innovations were as follows. 1. The steam stoves and the drying chambers. They were devices to kill the pupae inside the cocoons before they could make their way out as 1

2

3

Therefore in the following the term 'steam-reeling* will be used instead of the more usual 'mechanical' (or 'mechanized') reeling. The latter in fact should be referred only to plants using the powered motion of reels. Gera 1829, 238-57; G. Gallese, 'Cenno storico suirintroduzione del vapore nelle acque di filanda', BS, no. 1, 1928; Caizzi 1972, 30; Tolaini 1994a, 754-5; and 770-3; Tolaini 1994c, 62-5; and Fumi forthcoming. Experiments to build a fire-heated machine were carried out also by the East India Company (Report 1836). Gensoul is said to have been preceded by the Italians Silva in 1778 (Gera 1829, 7) and Ocelli in 1782 (Rapport 1807; Lucifero 1870, 41), none of whom had the money to build the machine he devised. See Rapport 1807, 30; Frattini 1856, 59; Kechler 1878, 179; and Tolaini 1994a, 754-5.

104

The industry: technical progress and structural change

105

butterflies, making the cocoon unreelable. Cocoons with dead pupae inside dry naturally and can be stored for some years. In traditional hand-reeling, most cocoons were processed immediately after the harvest (i.e. before the pupa could exit) and the others were dried under the sun or with other makeshift systems. These methods were not really effective, and anyway, could not cope with the increased consumption of modern factories. The steam stoves - invented in the 1830s in Italy solved the problem by suffocating the insects.4 These devices were quite effective, but the method was still pretty expensive. In fact, it required purposely built warehouses and continuous care. The cocoons had to be left lying on shelves and moved from time to time until they dried completely. Moreover, natural drying did not guarantee the perfect preservation of the cocoons in very humid years. The loss of a substantial part of the stock in 1895 prompted the Italian Ministry of Agriculture to award a prize for a machine that would dry the cocoons. The initiative was successful, leading to the construction and patenting of drying chambers.5 Unlike the traditional stoves, they dried the cocoons completely in just a few hours, making it possible to keep them in bags or boxes. It was thus possible to save both capital (the construction costs were halved) and manpower, lowering the total costs by about 1 per cent. 2. Mechanized brushing and cocoon-cooking. These innovations dealt in different ways with the problem of removing the external strata of unreelable yarn (which were sold as waste) and of searching for the beginning of the filament ('capofilo' in Italian). To that end, cocoons had to be plunged into very hot water and their surface had to be brushed with a small broom.6 Traditionally, these tasks were performed by the reeler herself- either in the same basin (as in Italy and China) or in a separate one (as in Japan). In both cases, brushing distracted the worker from reeling, lowering her productivity. Besides, the Italian system jeopardized the quality of the silk. In fact, brushing needed much hotter water than reeling (90°C versus 60°C), so that neither task could enjoy optimal conditions unless the temperature was continuously changed, resulting in a serious waste of fuel. Moreover, the waste and 4

5

6

See Gallese 1950, 23ff; Verson and Quajat 1896, 414-27; and Colombo 1917, lesson 15. See Filatura 1913, 187-213; Provasi 1905, 61-2; Atti 1899; Dubini 1911, 116-18 and 120-3; Gallese 1959, 230-4; Colombo 1917, lesson 15; Sansone 1903, 17-28; and Associazione serica n.d., 122. The estimates of savings are from Federico 1994a, tables H.2 and H.7. See Carena 1838; Colombo 1917, lesson 25; Provasi 1905, 97-101; and Tolaini 1994a, 777-9 for Italy; Kuhn 1988, 364-6 and 388 for China; and Report 1870; Bartezzaghi 1910, 862; Duran 1913, 88; Keishi and Tamotsu 1957, 274; and Honda 1909, 136, for Japan.

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An economic history of the silk industry

the dirt produced by brushing tended to deposit on the silk. The Italian solution to both problems was to separate brushing from reeling altogether - i.e. not only to have it performed in a separate basin but also by a specialized worker ('scopinatrice') who prepared the cocoons for several reelers.7 This system solved the quality problem, but it reduced labour productivity, as the increase in reeling efficiency was more than made up for by the growth of the worker/basin ratio. Moreover, brushing remained a difficult job, which needed a skilled hand so as not to lose too much silk. Thus many people tried to save labour by mechanizing it. The first patent was released in 1827 to P. Gavazzi, but a really effective machine was built only some decades later by G. Monguzzi.8 It substantially reduced the labour costs because not only did it increase the productivity per worker in comparison with the manual system but it could be manned also by unskilled workers.9 Cocoon cooking tackled the problem in a different way. Instead of being brushed, the surface of the cocoons was softened by an immersion in a bath of steam (called cocoon-cooking), so that the reeler could easily find the beginning of the thread herself. The technique was developed in the first two decades of the twentieth century in Japan.10 It saved a lot of labour in comparison with the other technologies - both the traditional Japanese one and the Italian mechanized brushing. It did, however, need a substantial investment and was viable only if the supply of cocoons was highly homogeneous. 3. The double cross (or Chambon) and tavelle (or sans mariage) crossing. These were mechanical devices to wring the silk yarn when just out of the water in order to dry and strengthen it. Both systems were invented (or perhaps only described) in the late eighteenth century - by the Frenchman Vaucanson and the Italian Vasco respectively. The former crossed two yarns together, while the tavelle crossed the same yarn onto itself by means of a system of small wheels. In the first half of the next century both systems were perfected and widely adopted in 7

8

9

10

See Gera 1829, 393; Tolaini 1994a, 775-7; Cafaro 1988, 159; and Fumi forthcoming. In Piedmont, the first equipment was installed in 1845 according to Chiarini ('Filande di seta sistema a sbattrici', GIS, no. 39, 1868), or in 1851 according to De Bernardi (1900,242). See Cafaro 1988, 160 and Tolaini 1994a, 775 on Gavazzi's invention. The subsequent innovations (such as the devices to change the number of revolutions per minute so as to adapt brushing to suit cocoons of different characteristics) are described by Colombo 1917, lesson 25 and Provasi 1905, 97-107. See Lucifero 1870, 45 and the debate in the GIS in 1868 between the sceptical Lucisano, 'II sistema a sbattrici e realmente vantaggioso?' (no. 34) and 'Questioni di metodo' (no. 42), and De Bernardi (no. 36) and Chiarini, 'Filande sistema a sbattrici' (no. 39). See Kyokawa 1984a, 220-2; Gallese 1959, 130-7 and 210-25.

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Italy.11 Both noticeably improved the quality of the product, but the Chambon crossing had one serious shortcoming. It could not be applied to basins with more than four yarns ('ends'). So its use prevented the number of yarns per reeler from being increased and therefore constrained the productivity growth. The tavelle had no such limits. 4. The mechanical motion of the reels on which the silk was rolled up. Previously, they were moved by the reeler herself, either by hand or by a treadle mechanism (in use in Piedmont or in some Far East countries), or by a specialized worker ('menera'), who in some cases moved several reels.12 In theory, a manual motion may have been compatible with steam reeling. It was adopted in the majority of Italian factories until the 1840s and as late as the 1890s it was discussed as a serious option in the construction of steam-reeling houses in Kashmir, where the manpower was abundant.13 But mechanical motion saved labour (the workers could be employed as brushers) and, being more even, improved the quality of the silk.14 It was first installed in Lombard factories in the 1830s, using water as a source of power. The use of steam was technically more demanding, but it spread rather fast, as it could exploit the economies of scope. Electricity began to be used from the late 1890s onwards, especially in Japan. 5. The bave-sticker (the 'attaccabave5 or 'jettebout'). It was a small hooked wheel which attached the thread of the new cocoon to the unwinding silk yarn automatically. This operation ('ponura' in Italian, 'tencho' in Japanese) was a crucial one, as its imperfect execution left loose threads Cpeli') which greatly depreciated the silk. The 'attaccabave' enabled even inexperienced reelers to produce good silk, and thus lessened the labour cost. It was invented in 1851 by Daina, and it is reported to have been in use as early as 1867 in a Piedmontese mill.15 These first models were not really effective, and the bave-sticker began to be widely used only some forty years later. 6. Minorikawa's 'multi-ends reeling machine' - patented in 1903-7, 11

12

13 14

15

See Tolaini 1994a, 786-97. Hie double cross was improved by Chambon, the tavelle by Wansey (1825-26), Keller (1836-37) and above all by De Tomi, who took his patent in 1844. This pooling was made possible by the invention - in the late eighteenth century - of a brake which enabled the reeler to stop the reel when her thread broke (Tolaini 1994a, 777-8 and 1994b, 62-5). See Wardle 1903 and 1906. See Tolaini 1994a, 778-9; Gera 1829, 433-7 and the evidence by Bozzotti (MI), Consonno (CO) and Lanfranchi (CR) in Inchiesta industriale DS 6&1. See 'Trattura. II lancia-capi automatico', Seta, 7-8 March 1887, and 'Macchinetta Vagnone per attacco della bava di seta', GIS, no. 29, 1867 respectively; for further information on its advantages, see De Bernardi 1900, 256-68; Colombo 1917, lesson 36; Dubini 1911, 70-1; Associazione serica, n.d., 126.

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An economic history of the silk industry

and installed from 1925. 16 It was a large basin, with twenty or more ends (moving quite slowly), which embodied many mechanical innovations such as the bave-sticker, the end-groper and the independent motion of reels. All these devices were already in use in Italy and therefore the Minorikawa machine was not, strictly speaking, a worldwide innovation. However it was a great improvement over the standard Japanese equipment because it produced a more regular silk which was particularly suited to the production of stockings. The price of Minorikawa silk was thus 10 to 30 per cent higher than that of the standard one. 17 7. Re-reeling (known in Italy as 'cleansing'). It was a further processing of the silk thread designed to improve its quality by forcing it to pass through a narrow fork at high speed. It was thus possible to test the strength of the silk and to clean it from all knots and loose threads, which remained stuck in the fork. By definition, the adoption of rereeling increased the labour input, but the increase was modest roughly an extra 5 per cent. 18 The innovation was introduced in Italy in the first half of the nineteenth century, as the first stage of throwing, and in the Far East in the 1870s as the last stage of reeling. Thus the Italian and Mediterranean silks were cleaned only once and the Asian ones twice, first by the producers before selling it and then by the Western throwsters. Many other innovations could be added to this list.19 Possibly the most important ones were the devices to dry the silk before it was rolled up on reels and to reduce the humidity of the air. They were aimed primarily at preventing the yarns from sticking together, but they also substantially improved both the environment and the well-being of the workers. And of course, there were also many failures. Two of them are worth a brief mention. The first is 'filanda a rocchetti5 (spool-reeling). It was designed to avoid the job of rewinding the silk before throwing, making it roll up on pirns instead of on the usual reels. 20 It was not adopted because the silk yarns, still humid, tended to stick together. The second was 'cold' reeling - i.e. the use of solvents instead of hot water to dissolve the sericine.21 The idea was stubbornly pursued by many 16

17

18 19 20

21

See Matsui 1930, 7 1 ; R. D u m o u l i n , 'Osservazioni sull'industria della seta nel Giappone', BS, no. 8, 1927; Gallese 1959, 257; G a d d u m 1948, 4 1 - 3 ; Merie 1930; Ufficio seme bachi 1955, 1 0 9 - 1 0 . See Minami et al. 1995, 47; and Kyokawa 1984a, 2 2 2 - 3 (who also states that labour productivity was 50 per cent higher) respectively. See for Japan, Minami et al 1995, 29; Ishii 1979, 341 and for Italy, Salari & Orari 1909. See above all Associazione serica n.d., 1 2 4 - 9 ; and Duran 1913, 5 6 - 6 0 . It was devised by A. Keller, who introduced it in his factory (see 'Filanda-filatoio', GIS, no. 1, 1868). See Moioli 1981, 108; Fumi forthcoming; Gera 1829, 7 - 1 1 ; the untitled article in GTS,

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109

people in the 18th century, and again in the 1860s and 1870s. None of them succeeded: the right blend of chemicals was found in the 1920s, but it proved to be too expensive and difficult to use in industrial production. Mechanization can also be listed among the failures.22 Though some operations had been mechanized, even the most modern equipment of the 1920s still relied mainly on manual work. The construction of a truly automatic reeling machine was quite a demanding engineering task. It had to work in hot water, handling objects (cocoons, baves, silk yarns) of different and irregular shape and size. The job may not have been beyond the reach of nineteenth century technology but it would have undoubtedly required massive investments in research and development. Not surprisingly, the main engineering firms shunned such a commitment, leaving the dream of automatic reeling to private inventors. The pioneers were the American (living in France) Serret in the 1880s and the Italian Fioruzzi in the 1920s. Both succeeded in building test machines, which unfortunately proved to be useless in industrial production. In the 1920s, the research in Italy and in Japan went on, but the results were not so good. In Italy, the prevailing mood was openly sceptical. The former president of the 'Associazione serica', conceded that 'the machines have made some progress which increase their productivity but they do not yet seem to bring about substantial changes, the ongoing researches notwithstanding'.23 The Japanese were more stubborn, and eventually they succeeded in building really operational automatic machines at the beginning of the 1950s. A perusal of the list of innovations given above shows that most of them were devised and introduced in Italy. Italy took the lead from Gensoul's France in the early nineteenth century and kept it for about a century. As early as 1854, only a third of boilers installed in Lombard reeling factories were imported (and no doubt that many of them were fitted to Italian machinery); fifteen years later seventy-three out of seventy-five Italian reeling firms used only national machinery.24 The equipment was produced by outside suppliers, consistent with the small size of most Italian reeling firms. At first, they were all-purpose

22

23 24

no. 2 8 , 1875; Mencarelli 1879; the dossier in A C d C M I sez IV B fasc. 2; Associazione serica n.d., 129; Beltrami 1936, 2 0 9 - 2 1 ; and Gallese 1959, 3 7 2 - 3 . This paragraph relies mainly on Gallese 1959, 2 5 7 - 3 3 4 ; see also Garbini 1993, 2 1 0 - 1 ; D e Bernardi 1900, 4 6 4 - 5 ; and Broggi 1967, 4 8 - 5 0 (on the Serret machine); Ferrario 1923, 151 (on the Fioruzzi machine); and Ufficio seme bachi 1955, 9 0 - 1 (on the Japanese achievements in the 1950s). 'II problema attuale della produzione della seta', Sole, 8 Feb. 1929. T h e first figure from Tolaini 1994a, 8 0 1 , the second from the answers to question 26 of the Inchiesta industriale.

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An economic history of the silk industry

engineering firms which produced a wide range of goods.25 In those years the bulk of the equipment consisted in the boiler with its accessories (pipes etc.), and thus its construction did not need any specialized know-how. As the silk machinery became increasingly complex, some firms ('Corti5, 'Battaglia', etc.) specialized in its production. Interestingly, they did not patent their innovations. The firms sold whole factories as going concerns, and so could afford not to patent every single device which was anyway often to be improved in the next order. Therefore the number of patents in the silk industry was extremely small: less than 100 per year compared with several thousands in Italy before 1913 and a few dozens afterwards.26 Most of them were granted to unheard-of individuals, who possibly wanted to protect their ideas just to sell them to the engineering firms. Besides, failures such as Serret's machine or chemical reeling account for a sizeable number of patents. In a nutshell, patent data seriously downplay the innovative drive of the Italian silk industry. One wonders to what extent this case is an unfortunate exception or if it casts doubt on the widespread use of patents as an index of technological progress. As the previous analysis has shown, innovations aimed at increasing productivity and at improving the quality of the silk. The relative importance of these goals changed in the long run. In the first half of the nineteenth century, labour was cheap and quality was still poor. Therefore, the main goal of technical progress was to improve the qualitative standards. Out of a total of fifty-eight Italian industrialists, forty-nine surveyed by the Inchiesta industriale of 1872-73 quoted the improvement of the quality of silk as the main advantage of steamreeling.27 The saving in labour is the second most frequent reply but it trails far behind with sixteen quotations only. One of the replies elaborates the point: cit [steam reeling] allows the temperature to be kept steady, which eases the cohesion of the threads, makes them more elastic and firmer; it saves fuel, time and manpower; the silk is softer and firmer to throwing; the quality is better than that of the old system5.28 The 25

26

27

28

See Tolaini 1994a, 7 5 9 - 6 1 and 7 9 9 - 8 0 1 ; see also the list of suppliers of equipment to reeling-firms in the Udine province, Kechler 1878. Federico 1994a, Appendice Statistica, table XLVIIa. T h e figures may slightly understate the number of patents, as the list does not includes patents for throwing without explicit reference to silk processing. Inchiesta industriale D S 6&2 (question no. 20). T e n replies expressed doubts about the superiority of steam reeling - the majority because of its lower productivity. Evidence by Fiscal in Inchiesta industriale D S 6&1. See also D e Bernardi 1900, 4 4 6 - 9 ; D i Dardini 1877, 3 4 - 4 4 ; and Kechler 1878, 1 7 8 - 9 . T h e price data are from Trattura 1 8 6 3 - 6 8 , ad annum (see also Statistical Appendix, table A X X I for the difference in China and Japan). T h e estimates of the savings are weighted with the shares on total costs of Federico 1994a, Appendice H.

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111

interest in quality made perfect sense from a financial point of view. In those years, steam-reeled silk fetched 10 per cent more than handreeled, and this was pure profit. On the contrary, the savings on labour and fuel, though substantial as a proportion of processing costs, hardly affected the market price of silk. A 20 per cent saving on labour costs and 75 per cent on fuel costs together reduced the silk price by a mere 3 per cent, while the depreciation and upkeep of steam machinery raised it by 1 per cent. At the time of the Inchiesta, however, the priorities were already changing. On the one hand, the quality of Italian silk had improved so much that there was very little scope for further progress. On the other hand, wages showed the first signs of rising. Therefore, the emphasis of technical progress shifted towards the increase of labour productivity. This aim was pursued by augmenting the number of ends that each worker had to oversee. The number of ends per basin grew from two or four in the first steam-reeling plants to 16-20 in the state-of-the art equipment in the 1930s. The increase of labour productivity was not as great. The speed of the reels was slowed down and the reeler was helped by other specialized workers who performed all the auxiliary operations. An official wage survey of the 1900s lists ten different tasks (brushing, knotting the broken yarns, supplying cocoons, carrying the silk and waste away etc.).29 Therefore the worker/basin ratio was rising - up to 1.9 in Italy in the 1930s, and to 2.2 in the Shangai plants, which used the Italian technology in a very labour-intensive way.30 This increase enabled the worker to concentrate on her task, giving each thread the necessary care to prevent and correct the faults. So, the opinion of many experts notwithstanding, the modern Italian technology succeeded in increasing productivity without worsening the quality of the yarn.31 As we will detail later in this chapter, the Italian technology (or the 'Italian system' - as it was sometimes called) was imitated by all other producing countries. Only Japan showed a distinct originality. It imported several Italian innovations, such as the tavelle and probably the steam stoves in the 1870s, the drying chambers in the 1890s and the 'attaccabave' in the 1910s.32 They were, however, framed in a different 29 30

31

32

SalarieOraril909. See for Italy, Federico 1994a, Appendice G; for Shangai, Shangai Decennial report 1892-1901, 511; Shangai 1928, 596; and l i e u 1933, 8 0 - 3 . On the slowdown of reels in Italy, see Provasi 1905, 134; and Robbiani 1936, 206; for the slowdown in Japan (in the Minorikawa machine), see Kyokawa 1987, 2 2 2 - 3 . See e.g. Pariset 1890, 9 6 - 8 ; Wardle 1904, 124; Mariton 1905, 8 9 - 9 1 ; D e Bernardi 1886, 50 and 1900, 2 7 3 - 7 . On the import of the tavelle and the steam-oven, see Kyokawa 1987, 29. The sources do not state explicitly that the drying chambers and the bave sticker were imported from

112

An economic history of the silk industry

'system5, which began to emerge in the 1890s.33 It was marked by less capital-intensive techniques and by different methods of labour management and by a less extreme division of labour.34 The worker/basin ratio remained constantly below 1.2, and the capital per worker was less than half the Italian.35 Eventually, in the 1920s, the 'system' was completed by original innovations such as cocoon cooking and by the Minorikawa machine. Unlike in Italy, at least the major firms (Katakura, Gunze etc.) built their own machinery and played an active role in technical innovation. They invested heavily in research and development and, if necessary, bought the patents from the inventor. For instance, the original Minorikawa basin was a Katakura exclusive, even if other companies built their own version of the machine.36 Technical progress in steam reeling: the Italian experience Steam-reeling was by no means an instant success in Italy.37 To be sure, it was imported in Piedmont in 1806 - that is, only one year after the Gensoul patent - and in 1815 there were almost 1,000 steam-heated basins in the whole region. This early start was not however imitated elsewhere. The first steam-reeling factory was built in Lombardy in 1815, in Tuscany in 1824-26, in the Marche in 1837 and in Sicily in the 1840s, and most areas the subsequent increase in the number of steamheated basins was anything but fast. Even in Piedmont some factories were shut down in the 1820s. The diffusion of steam-reeling was hampered by the technical shortcomings of the copper boilers. The most authoritative textbook on reeling in the 1820s dismissed the innovation as Very expensive not only for the first investment but also for their upkeep' and therefore 'more for appearance than really profitable'.38 It is also possible that at first the buyers were not ready to recognize the

33 34

35

36 37

38

Europe. This hypothesis tallies, however, with the early mentions of their use - 1899 (Honda 1909, 8) and the Taisho age - i.e after 1912 (Keishi and Tamotsu 1957, 275). Kyokawal991,58. See table 7.9 and for descriptions, Molteni 1982; 7 4 3 - 5 ; Minami 1987, 1 8 2 - 3 ; Hemmi 1970, 315; and McCallion 1983, 258. As usual, Zanier (1990, 4 1 - 2 ) highly praises the Japanese technology, scolding the Italian firms for not having imitated the Japanese ones. For the capital, see table 7.7. The worker/basin ratio is computed by dividing the total occupation (in 1911 from Resume 1914; in 1 9 1 7 - 2 7 , Fujino 1979, table 58 cols. 4 and 6) by the number of basins in the same years (Fujino et al. 1979, table 60B). There were about forty models available in the 1930s (Kyokawa 1984a, 223). For the spread of steam-reeling, see Tolaini 1994a, 7 6 2 - 5 ; and also Caizzi 1972, 30; and Moioli 1981, 2 7 6 - 8 , for Lombardy (the date of the first plant in Sicily is from Romeo 1973, 235). The available (not really reliable) data are reported in the Statistical Appendix, table AXVIIL Gera 1829, 3 8 9 - 9 1 and 147. See other evidence in Tolaini 1994a, 7 6 6 - 7 .

The industry: technical progress and structural change

113

superior quality of the filatures (steam-reeled silks) and to pay the corresponding price. Many entrepreneurs, therefore, understandably held back from investing large sums in a new technology which entailed such a radical change in their traditional business. Their reluctance was to some extent overcome by the technical improvements of the 1830s and 1840s, which stimulated the first massive wave of investments in steam-reeling. At all events, steam-heated basins still accounted for only a fourth of the total in Lombardy in the 1850s, producing possibly a third of the output.39 The great transformation was brought about by the pebrine crisis. The keen competition to buy the now-scarce cocoons caused the advantages of steam-reeling to loom much more largely. In the 1850s, the investments were discouraged by the fear that European sericulture could not survive. They therefore soared as soon as the gloomy predictions were dispelled by the imports of Japanese eggs. In the late 1860s, the Chamber of Commerce of Como noticed that the 'smallest5 traditional factories were closing while the 'large ones were being transformed into steam-heated plants5.40 This wave of change became a real frenzy in the early 1870s, when the entrepreneurs5 expectations were boosted by the very high prices of silk and by trust in the Pasteur method. The total number of steam-heated basins in Italy doubled from 1866-68 to 1876, up to two thirds of the total, and the share of output soared from a half to three quarters.41 The transformation was concluded in the next decade. In 1890, hand-reeled basins did not exceed 10 per cent of the total equipment, accounting for a mere 5 per cent of the output. Hand-reeling disappeared altogether from the 'core5 areas, and barely survived in some marginal areas of central and southern Italy.42 The quantitative evidence on the diffusion of other innovations of the 'Italian system5 is unfortunately rather scarce. Separate brushing was widely adopted in Lombardy in the 1830s and 1840s, and the tavelle crossing in the 1840s and early 1850s. The mechanical motion of the reels spread in the 1850s, but water power was still preferred to steam (in 1854 only a fifth of the boilers supplied motive power too). 39

40

41

42

See Tolaini 1994a, 7 6 4 - 5 , and the case-studies by Cova (1984, I, 21) about Cremona and by Fumi (forthcoming) about Bergamo. Report to the Ministry of Agriculture of 13 May 1868 in A C d C C o cart. 216. See also Scalini's witness in the Inchiesta industriale, D S 6&1, Caizzi 1958 and, o n the case of the province of Udine (in the North-East), Kechler 1878. N u m b e r of basins from Statistical Appendix, table AXVIIIa; percentage of output, Trattura 1 8 6 3 - 6 8 (a not-totally-reliable official statistic). Nearly half of the boilers existing in the late 1880s had been installed in 1 8 7 3 - 7 7 (Statistica 1890). However, some of them substituted older ones (the average life-time of a boiler was 2 0 - 3 0 years). See Federico 1994a, Appendice Statistica, table X L I X (a) and LJII. T h e share o n output is from Federico 1994a, Appendix G.

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An economic history of the silk industry

The great surge of investments in the wake of the pebrine crisis offered the opportunity of a massive leap forward. In the 1870s the 'Italian system' (including the mechanical motion of reels and in some cases, the mechanized brushing) was the standard in Piedmont and Lombardy and some mills had already six or eight-end basins.43 Their entrepreneurship gained Italian industrialists a reputation abroad. The most authoritative French expert praises them for being Very active, very prompt, always ready to adopt any new idea or system'.44 This enthusiasm was not unanimously shared at home: De Bernardi, in his well-known textbook, blames the 'excessive extravagance of expensive construction in the equipment, not always matching a real industrial aim'.45 His warnings however did not deter the industrialists. From 1894 to 1904 the number of boilers increased by 40 per cent and their motive power by 75 per cent. 46 The reeling firms went on investing, even during the crisis of the late 1900s. From March 1904 to July 1912 the engineering firm Corti sold more than 1,000 new basins.47 In other words, only one of the several specialized suppliers renewed about 1.5 per cent of the existing equipment in eight years. So it is not surprising that on the eve of the war, the Italian machinery was decidedly modern. Nearly all the reels were steam-powered, each basin had on average 5.87 ends (about 3.5 per worker) and two thirds were supplied with drying-chambers (invented only fifteen years before) instead of with traditional steam stoves.48 Only the bave-sticker was still unusual, as only 5 per cent of the basins were fitted with it. The Italian industrialists were quite proud of their achievements (Arimattei, then secretary of the Associazione serica, wrote that cit is the virtue of the Italian industry to have always been the harbinger of all the technical improvements in reeling'), but any suspicion of nationalistic selfindulgence is dispelled by the even more laudatory comments by foreign experts (e.g. according to the American Duran, the Italian

43

44

45 46 47

48

See Tolaini 1994a, 7 7 5 - 8 1 and Inchiesta industrial (answers to question 21 and 22) and, for the six-end basins, D i Dardini 1877, 52. It can be estimated that in 1876 the aggregate worker/basin ratio for steam-reeling plants was about 1.5 (see Federico 1994a, Appendice G, 387) - i.e. basins with separate brushing equipment were 9 0 per cent of the total. See Rondot 1 8 8 5 - 7 , 1 , passim (the quotation is from 135); see in the same vein Rapport 1881, 2 4 0 - 6 and Bonnefon-Craponne 1916, 6 1 - 2 . D e Bernardi 1900, 2 5 1 . See Statistica 1899, 2 7 4 and Statistica 1904, 2 4 3 respectively. See C M S , carte Corti. See for similar data for the provinces of Milano and Brescia in 1 9 0 7 - 1 9 1 2 Filatura 1913, table 5. T h e data on the type of motion from Annuario 1904, the other data are from Federico 1994a, Appendice Statistica, table XLVII (b) and (c).

The industry: technical progress and structural change

115

industry 'has reached perfection').49 The outbreak of World War I drastically changed the situation. The productive capacity fell by 20 per cent as some factories were destroyed and many others, usually the oldest ones, were forced to shut down by the shortage of cocoons.50 The new investments came to a complete halt. So in the early 1920s, Rusconi, an industrialist, warned his colleagues that 'Japan has very modern plants, while ours are mostly antiquated and worn out'.51 As we will discuss later, this assessment was too pessimistic, at least in comparative terms. And technical progress was to resume in the following years. In 1937'-39, the average number of ends per basin was up to 10.5 (5.7 per worker) - i.e two thirds higher than in 1913, and about half of them were equipped with a bave-sticker.52 The anecdotal evidence however suggests that these increases had been achieved by modifying the existing equipment more than investing in new factories. For instance, it was a common practice to join together two eight-end basins to get a sixteen-end one. Besides the Italian industrialists of the 1920s, unlike their predecessors, showed a distinct aversion to radical innovations, specially if imported from Japan. Re-reeling was adopted by a minority of firms, though it had been intensely campaigned by the 'Associazione serica' as a part of a broader effort to regain the lost ground on the American market.53 And no firm installed the cocoon-cooking equipment which had been imported in the late 1920s, possibly because the Italian raw material was not homogeneous enough.54 It is likely that large investments in innovative technologies had been discouraged by the creeping crisis in silkworm-raising. Most entrepreneurs may have waited for the effects of the promised incentive to sericulture. Of course, no one 49

50 51

52

53

54

Arimattei 1923, 101 and Duran 1913, 46. See also Risposte 1907, 1 2 1 - 3 and Paini 1914, 36 in Italy; and Beauquais 1910, 450; Bonnefon-Craponne 1916, 6 1 - 2 ; and Chittick 1913, 13, abroad. Statistical Appendix, table AXVIIIa). See Rusconi 1923, 2 0 - 3 (the quotation is on p. 2 0 ) , Associazione serica n.d., 1 2 7 - 8 ; and Mortara 1 9 2 1 , 110. Censimento 1 9 3 7 - 9 , 2 5 . These data may overstate the technical level of reeling, as the source does not survey about 10,000 basins out of the existing 4 0 , 0 0 0 . It is likely that they included a higher proportion of obsolete equipment. O n the characteristics of the new equipment, see Robbiani 1936; Gallese 1959, 1 5 8 - 8 7 , 200; Associazione serica n.d., 127; Ussi 1930, 5 8 5 - 8 ; and Banti 1936. See V. Rossati, 'II commercio delle gregge negli Stati Uniti', BS3 n o . 2, 1924; 'La riannaspatura delle sete gregge all'esportazione', BS, n o . 2 5 , 1924; and the series of articles 'La riannaspatura delle sete gregge*, BS, nos. 2 8 , 29 and 3 0 , 1925; the disappointing results are described by Associazione Serica, n.d., 132. T h e need to adopt the American standards was stressed quite often (see e.g. Mortara 1929, 106; E. Semenza, 'L'industria della trattura della seta in Italia ed il suo awenire', BS, n o . 7, 1927; and Ussi 1930, 581). Gallese 1959, 1 3 0 - 7 .

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An economic history of the silk industry

Table 7.1 Productivity growth in reeling in Italy -yearly rate of change, 1876-1938

steam-reeling only basin/day worker/year worker/day worker/hour TFP

1876-91

1891-11

1876-1911

1911-1938

4.37 3.30 3.15 3.42 3.32

1.00 1.39 0.89 1.52 1.36

2.44 2.18 1.83 2.31 2.18

1.48 2.46 1.79 2.79 2.17

2.56

1.36

1.84

2.17

total production TFP

Source: Federico 1994a Appendix G.

dared to invest during the Great Crisis. Whatever the reason, it is certain that the slackening of investments in those years caused Italians to lose their century-old technological leadership. Unfortunately it is not possible to measure the effects of technical progress on the productivity before the 1870s, simply because no data are available. The first comprehensive reliable survey on the Italian silk industry was held in 1876. Table 7.1 reports the estimates of the rates of change of three different measures of productivity growth - the output per basin/day (the measure of productivity most widely quoted by technical sources), the output per worker and the Total Factor Productivity. The last column somewhat overstates the real productivity growth in the 1920s, if, as likely, the crisis in the 1930s had forced the least efficient units to shut down first. Even taking into account this factor, the long-run performance remains impressive for a mature industry which is usually deemed stagnant or technically backward.55 Its importance can be appraised from the data of table 7.2. Not only did the productivity increase compensate for the rise in wages, but it also caused the value added per unit of output to fall by a third. This was an impressive achievement indeed, but its impact on the final sale price of silk was a mere 7 per cent because the VA in reeling did not exceed 20 per cent of the silk price. 55

See e.g. Tremelloni 1937, 89; Morandi 1966, 188-9; Caizzi 1965a, 332-5, 396-8 and 460; and more recently Castronovo 1980, 25-6; Angeli 1982, 159-60; and Sori 1987, 335.

The industry: technical progress and structural change

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Table 7.2 Rates of change in unit production costs in silk reeling in Italy, 1876-1911 Labour

1868-1876 1876-1891 1891-1911 1876-1911

1.94 1.15 0.98 1.01

Fuel

-1.78 -2.55 -0.69 -1.41

-2.65 -0.90 0.14 -0.27

Capital*

-4.42 -5.27 -0.64 -2.47

1.08 2.25 -0.24 0.76

Total

-3.49 -2.09 -1.01 -1.42

-2.26 -2.08 -0.70 -1.24

* upkeep and depreciation col. a input prices; col. b costs per unit of output Source: Federico 1994a, Appendix I (triennal moving averages).

Technical progress: Italy's competitors The first steam-reeling factory was built in France in 1805 and in Austria before 1825, but, as in Italy, the big spurt began only in the 1830s.56 The number of basins in Tyrol (the main Austrian producing area) grew four-fold between 1830 and 1850 and doubled again by 1870. Pebrine caused a deep crisis in France and Austria-Hungary and neither country totally recovered. The number of basins in Tyrol fell drastically from 1870 to 1913, and this caused the total number of basins in the whole Empire to fall as well, in spite of the development of silk production in Hungary. It is therefore likely that technical progress contributed largely to the growth of Austro-Hungarian silk production, even if a precise computation is not feasible.57 In France, the number of basins halved from the 1870s to a low in 1888, and then it remained approximately constant.58 Their average yearly productivity per basin increased by less than 2 per cent pa from the 1870s to the 1890s (versus nearly 5 per cent pa in Italy) and stagnated afterwards (while the Italian one doubled). In the 1880s it was still similar to the Italian one (about 56

57

58

O n France, see Lequin 1984, I, 34; Beauquais 1910, 107; and Reynier 1 9 2 1 , 150 (unfortunately, no data are available prior to 1873); the information about the existence of a steam-reeling plant in Rovereto in 1825 is from Tolaini 1994c, 9 2 , and the data on the number of basins in Tyrol are reported in the Statistical Appendix, table AXVIIIf. T h e output increased three times from 1 8 7 3 - 7 7 to 1 8 9 3 - 9 7 to remain stable later (Statistical Appendix, table AVI). For some information o n technical progress, see Leonardi 1984, 369 and 4 8 5 no. 79. See Federico 1994a, table XLJXe. T h e yearly aggregate productivity is roughly estimated as the ratio of output (Statistical Appendix, table AVI) to the number of basins (data for Italy from Appendice G, table G.3 (for steam-reeling only). T h e figures on productivity in the 1880s are from E. Turquet, 'Forces productives de la filature et du moulinage de la soie en France', BSS, 1 March 1879; and Rapport 1 8 8 1 , 2 4 5 ; in the 1910s BSS, 13 April 1912, Reynier 1921, 1 5 6 - 7 ; and Lanino 1916, II, 136.

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An economic history of the silk industry

180-200 grams per day), while thirty years later it had fallen to two thirds (about 300 grams versus about 470). This situation was well-known at the time: an official source stated that cour reelers have let the Italian competitors space out. They have not been able to enter new roads, transform their equipment, improve their production techniques'.59 As we will see in chapter 9, the French government tried to stave off the technological stagnation with generous subsidizies, but with little or no success. On the eve of World War II, French equipment was quite backward by Italian standards. Only two thirds of French reeling basins were fitted with separate brushing basins and only a third had more than five ends. 60 In the late 1920s the situation was apparently better (all basins had separate brushing and four fifths had six ends or more) but only because the most obsolete factories had been shut in the meanwhile. Steam-reeling spread all over the Mediterranean basin, usually after the initiative of French merchants, in the 1830s-1840s. The first factory in Greece was built in 1834-5, in Spain in 1837, in Lebanon in 1840 and in Anatolia in 1845. 61 The subsequent growth was quite fast: there were already eighty-five steam-reeling factories in Anatolia in 1856 and thirty-three in Lebanon in 1862. Production was growing too, and thus it is not possible to assess to what extent the steam-heated basins added to or replaced the old fire-heated ones. 62 However, the technical performance of the Middle Eastern industry was even worse than the French. The average (yearly) productivity per basin increased at approximately 1.5 per cent pa in Lebanon and 1.7 per cent in Anatolia. Most new mills simply copied the imported machinery. On the eve of the war, the standard equipment still used the French technology of the 1840s: more than two thirds of the Lebanese basins had two ends only, the remaining ones four, and only one factory was equipped with six-end basins and separate brushing.63 The Western steam-reeling technology was imported by the Far East in the 1860s and 1870s. 64 The timing suggests that it was a reaction to 59

60

61

62

63

64

CPVD 1889, 5. Similar statements by Rapport 1881, 2 4 0 - 6 ; Rondot 1 8 8 5 - 8 7 , 1 , 135; Reinach 1891, 7; Pariset 1890, 171; and Bonnefon-Craponne 1916, 6 2 - 5 . Data from Annuaire, vols. 3 4 and 36. O n the technical shortcoming of French reeling, see also Beauquais 1910, 3 5 , 1 1 2 - 1 3 and 4 5 0 and the proceedings of the Parliamentary committee in 1912 (summed up in BSS, 13 April 1912). See respectively Agriantoni 1991, 46; Santos Ysern 1 9 8 1 , 226; Labaki 1984, 96; and Martineau 1902, 149; the number of plants in Anatolia and Lebanon is from Quataert 1993, table 4.4 and Owen 1981, 156. In the Bursa area the percentage of steam-reeled silk on total output increased to roughly 2 0 per cent in the early 1850s, and then soared to 8 0 - 9 0 per cent in the 1 8 6 0 - 1 8 7 0 s when pebrine caused the total output to plunge (Quataert 1993, table 4.3). Owen 1981, 251 n41 and 1987; 2 7 9 , A. Carini, 'La bachicoltura e sericoltura in Siria', Informazioni seriche, no. 1, 1915; and Labaki 1984, 96. All the details are in Brown 1979; Eng 1986, 3 8 - 4 1 ; Furuta 1988, 19; So 1986, 105ff;

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the prospects of recovery of the European production after the pebrine crisis. If the supply of good silk were to increase again, the Asian producers of a low-quality one were faced with the alternative - either to imitate the West or lose their newly acquired market shares. The first steam-reeling plant in the Far East, the Ewo filature, was set up in Shangai in 1861 by Jardine Matheson, the well-known British trading firm. Five years later, and possibly independently, a factory was built by a local entrepreneur near Canton. Japan followed suit some years later. Merchants and feudal daymos imported Italian equipment in 1870-71 (but apparently without the steam-boiler), and the state bought turnkey a French steam-reeling mill (the famous Tomioka factory) in 1872. The import of steam-reeling in India was delayed until the 1890s, when some modern plants were built by the Kashmir government as a part of its plan to modernize the silk industry. These initiatives were not an unconditional success. The first two Chinese factories were closed, in 1872 and in 1869 respectively. They were soon replaced by others, but, while in the south steam-reeling developed heftily from then on, in Shangai it did not take off until the early 1890s. 65 Sooner or later in all areas the initial difficulties to master the technology, provide a supply of cocoons, recruit the workers and find an outlet were overcome in all countries, and steam-reeling began to grow. The time pattern was quite similar in all countries.66 It started with a burst ('a real mania of building Western-style plants' according to one source), followed by a period of relatively slower growth, marked by wide fluctuations according to the trade cycle. All these new factories were equipped with locally produced machinery. In China - as in the Middle East- the engineering firms simply reproduced the Western equipment, apparently without any effort to adapt it to local conditions or to adopt the Italian or Japanese innovations. In other words, the characteristics of Chinese machinery came to depend on when the technology had been imported for the first time and from where. In the south it reproduced the French technology of the 1870s (with Chambon crossing, two ends per basin and without separate brushing), in Shangai the Italian one of the 1890s (with tavelle

65

66

Otsuka 1977, 2 - 5 ; McCallion 1983, 249ff; and Keishi and T a m o t s u 1957, 2 2 9 . There is some evidence of a failed attempt by a Western firm to set up a steam-reeling mill in Japan already in 1 8 6 1 - 6 2 (see the letter of the French ambassador in Tokyo MAE, C C C Yedo 1). T h e role of the state in the technology transfer into Kashmir and Japan will be discussed in ch. 9. See Furuta 1988, 5 9 - 6 1 ; Li 1 9 8 1 , 1 6 4 - 5 ; Eng 1986, 3 8 - 4 1 ; Silk 1 8 8 1 , 70; CVD 1884, 132. T h e data on the number of steam-heated basins are in the Statistical Appendix, table AXVIII (b) and (c). T h e quotation (about Shangai) is from an untitled article in BNA, no. 3 8 , 1896.

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An economic history of the silk industry

crossing, 4-6 ends per basin and separate brushing).67 The only innovation seems to have been the massive introduction of re-reeling, specially in southern China, in the 1910s. In spite of technological stagnation, the productivity per basin did increase, albeit slowly (a yearly growth rate of approximately 0.5 per cent pa both in Canton and in Shangai).68 The Chinese were gradually learning to master the imported technology. They did not wholly succeed; in 1911, the labour productivity in southern China was approximately 90 per cent of the Italian industry in the 1870s, and in Shangai it was two thirds of the Italian industry in the 1890s. 69 A fortiori, the productivity increase was insufficient to keep up with the ongoing technical progress in Italy. So in 1936 an Italian expert bluntly stated that 'the Chinese industry can compete neither with the Italian nor the Japanese one for equipment and organization'.70 The peculiar circumstances of the technology transfer to Japan offered the local entrepreneurs a choice between two different options, the modern and relatively capital-intensive technology of Tomioka and the Italian traditional (i.e. fire-heated) one. 71 Not surprisingly, the Japanese entrepreneurs chose the least expensive one, adding only the steamboiler and possibly re-reeling.72 To keep construction costs as low as possible they used wood for buildings and china for basins instead of bricks and iron, and water-power instead of steam to move the reels.73 67

68

69

70 71

72

73

For Shangai, see Eng 1986, 74; Li 1981, 29; Shin 1976, 55; Shangai 1928, 592 and 596; Furuta 1988, 3 1 , 72 and 85; and Bell 1985, 255 and 266; for southern China, see Howard and Buswell 1925, 122 and 130; Duran 1913, 90; and Eng 1986, 59. T h e figures are guesstimated as the difference between the growth rates of exports of filatures (Buchanan 1932, 50 and Eng 1986, 53) and of basins (Statistical Appendix, table AXVIIIc). T h e productivity per basin in this case is a good proxy of labour productivity because the worker/basin ratio remained roughly constant in both areas. T h e Chinese productivity (per gram/hour) is from table 7.5b, the Italian is computed from the data of Federico 1994a, table G.3. In the late 1920s, the average daily productivity per basin was still 1 5 0 - 1 8 0 gr. in Canton and 3 7 5 - 4 0 0 in Shangai (Eng 1986, 171; l i e u 1940, 1 0 7 - 8 ; and Shangai 1928, 5 9 4 ) . Robbiani 1936, 207. See Kyokawa 1987, 30 and Morris amd Suzuki 1994, 77. T h e import of this equipment (then obsolete in Italy), was engineered by a Swiss, C. Muller, who is said to have purposely chosen it because of its low-cost and simplicity. T h e average cost per basin in the 1870s was about 2 0 yen - i.e. a thirtieth of that in Tomioka (Otsuka 1977, 6; Minami 1987, 183; McCallion 1983, 381). McCallion (1983, 249ff) dwells at length upon two alternative models available, without however describing the technical differences. Re-reeling had been widely diffused in traditional industry since the 1870s and was probably adopted by steam-reeling as well (Kyokawa 1987, 30). Anyway, all filatures were re-reeled in the 1900s (see Bartezzaghi 1910, 865 and Duran 1913, 91). See the data in Ono 1986, table 2 on the materials, and the descriptions by Molteni 1982, 7 4 3 - 5 ; Duran 1913, 90; Minami 1987, 1 7 6 - 8 1 and 185; Merie 1930, 44; and Ufficio seme bachi 1953, 109.

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Table 7.3 Motive-power in Japanese silk reeling, 1893-1917

1893 1900 1907 1917

Hand

Water

Steam

Electricity

25.1 7.6 3.3 -

49.1 39.9 34.5 20.3

25.8 52.3 61.4 39.4

_ 0.2 0.8 40.3

Source: Makino 1987, table 2.

These solutions were surely sensible in the short- and medium-term, but in the long-run they were not compatible with the desired productivity growth. Thus Japan too had to adopt more capitalintensive techniques: the capital per worker doubled from 1892 to 1929.74 For instance, steam and later electrictity substituted water as the main source of power (table 7.3). Besides, the best Japanese firms adopted the drying chambers (from the 1900s) and cocoon-cooking (after World War I), both quite capital-intensive pieces of equipment.75 The process culminated in the massive adoption of the Minorikawa machines, which in 1934, i.e. after only nine years from its first installation, accounted for about 20 per cent of total output.76 Technical progress was supplemented by innovations in training (such as the setting up of specialized centres) and supervision of manpower aimed at improving the quality of the silk.77 How much did technical progress raise productivity in steam-reeling? The only available estimate before 1893 refer to the Nagano prefecture (the cradle of Japanese steam-reeling).78 The Total Factor Productivity would have increased at 9.5 per cent-19.2 per cent per annum from 1878 to 1887. Even allowing for a massive learning-by-doing process, these figures are hardly plausible. In fact the national rates from 1893 onwards (table 7.4) are decidedly lower, though still impressive. The average hourly output per basin grew from 9.1 grams in 1893 to 39.7 in 1929 - at 3.8 per cent pa.79 Labour productivity grew approximately as 74

75

76 79

See Fujino et al. 1979, table 52. T h e capital is proxied by the number of ends per worker, which grew from less than two to more than five. See Honda 1909, 148; Bertazzoli 1910, 7 0 3 ; Paini 1910, 832; Huber 1926; Merie 1930; Kyokawa 1984a, 2 2 0 - 1 ; and O n o 1986, 3. 77 78 Minami 1987, 184. Kyokawa 1991. Otsuka 1977. Average daily productivity per basin from Fujino et al. 1979, table 55, col. 2 and 60 B, col. 4 divided by the working hours estimated in Federico 1994a, Appendice G. Other sources report higher figures, possibly referring to the best plants: about 2 0 0 gr/day (instead of 110) in the 1890s (Chabrieres-Guinet 1894, 3 3 - 6 4 and Takeda and Masakazu 1976), 2 5 0 - 3 5 0 (instead of 200) in the 1900s (Bartezzaghi 1910, 8 6 3 ; Paini

122

An economic history of the silk industry Table 7.4 Rate of productivity growth in steam-reeling, Japan, 1893-1929

Basin/day Worker/year Worker/day Worker/hour TFPa) b)

1893-1911

1911-29

1893-1929

3.52 3.83 3.11 3.34 3.27 2.70

4.64 4.29 3.97 4.22 3.00 2.70

4.08 4.06 3.54 3.78 3.13 2.70

Source: yearly and daily productivity: Fujino et al. 1979, table 53, cols. 1 and 2 (quinquennial moving averages); hourly productivity and TFP: Federico 1994, Appendix G (rows a and b are computed by assuming the labour share to be 0.7 and 0.5 respectively).

Table 7.5 Rates of change in unit production costs in steam reeling, Japan, 1894-1929

1894-1912 1912-1928 1894-1928

Labour cost

Wages

2.05 0.93 1.48

4.21 4.72 4.46

Source: Fujino et al. 1979; the wages are from table 54 col. 4 and the labour cost is computed from data of table 51 as the value added (col. 3) less profits (col. 2) deflated with the implicit price index (ratio of col. 4 to col. 3) and divided by the total output (col. 1).

much (the worker/basin ratio having remained roughly constant), while the Total Factor Productivity increased obviously less (table 7.4). Impressive as it was, this increase was not fast enough to balance the growth in wages, which started from a very low level. Unlike in Italy the labour cost per unit of output grew in the long run (table 7.5). The response of traditional industry The adoption of steam-reeling in the Far East should not be surprising. As in Italy, it was more profitable than the traditional hand-reeling techniques. In the first twenty years of the twentieth century, filatures cost 60-70 per cent more than (not re-reeled) tsatlees in China and 10 1910, 834; Honda 1909, 153, Sericulture 1905b, 27) and 450 or more (instead of 440) in the late 1920s (Eng 1986,171; Merie 1930; Huber 1929, 22; Dumoulin, 'Osservazioni suH'industria della seta nel Giappone', BS, no. 7, 1926 and Matsui 1930, 70).

The industry: technical progress and structural change Table 7.6

1879 1888 1908 1929

123

Profits of reeling in Japan Zaguri

Steam-reeling

22.0 15.4 6.9

21.0 17.6 12.7 4.9

Source: 1879: Otsuka 1977, table 3; 1888-29: Minami 1987, 190.

per cent more than the zaguri in Japan.80 Besides, unlike in Italy in the first half of the century, the labour productivity in steam-reeling was substantially higher. Therefore it yielded substantially higher profits (table 7.6). Given this evidence, one might expect that steam-reeling had substantially displaced hand-reeling, at least from the 1880s onwards. This did not happen. Hand-reeling did not decline until well into the twentieth century. The production of Japanese zaguri remained steady or even increased until the late 1910s, when it still accounted for a third of the total output, and did not disappear even in the late 1920s.81 Hand-reeled silks accounted for a half of total Chinese exports on the eve of World War I - that is possibly for two thirds of the production (assuming that allfilatureswere exported).82 In 1927-29, the percentage on exports fell to a fifth and that on production to slightly more than a half. Moreover, only in southern China did steam-reeling develop from the very start in the traditional sericultural areas. In China it settled in Shangai, in Japan in what had previously been a second-rank silkproducing area (the Nagano province - notably the Suwa district). The core of the traditional Japanese silk industry, the Gumma province, adopted steam-reeling only in the 1910s, while the transformation in the Zhejiang began only in the late 1920s, to be immediately halted by the crisis.83 The stubborn resistance of traditional hand-reeling production is indeed puzzling. Why did producers not switch to steam-reeling as soon 80

81 82

83

See table 7.12 and Statistical Appendix, table A X X I . See also Li 1981, 3 0 and S o 1986, 105. See Statistical Appendix, table A X I X . See Statistical Appendix, table A X I X (percentage on output estimated from tables A l l and AVI). O n Japan, see Federico 1994a, Appendice Statistica, table L l l l b ; McCallion 1983, chs. IV and V; and Furuta 1988, 7 5 - 8 4 and 1 3 8 - 5 6 ; on China, see Li 1 9 8 1 , 1 6 6 - 8 ; C R Shangai 1913 [PP 1914 X C ] ; and Furuta 1988, 66.

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An economic history of the silk industry

as its superiority had become evident? In Europe, fifty years before, this change had been delayed by the technical shortcomings in the equipment and possibly by the small quality premium which filature commanded, but neither problem mattered any more in the 1880s and 1890s. The imported machinery was efficient, and Western markets were eager for good quality silk. The diffusion of steam-reeling was to some extent slowed down by the lack of skilled manpower or by the investors' distrust of novelty. Significant as they might have been in the short run, these hindrances could be overcome quite easily by training (possibly by foreign experts as in Tomioka) and by risk-sharing partnerships. So one has to search for some other reason. The usual one is the hostility of the traditional society towards modernization. In some cases, such a hostility was evident. In the 1860s some Japanese daimyos tried to resist the silk exports - according to the French ambassador of the time in order to hit the Shogun who wanted to monopolize the business.84 They were defeated, thanks also to the intervention of Western fleets, which bombed Shimonoseki (1864). Later, the prejudices towards Western habits (such as wine drinking) for a while hampered the recruiting of workers for the Tomioka mill. In China too there were some episodes of luddism such as the destruction of a reeling-house near Canton in 1881.85 These cases of overt opposition were however rare and short-lived. The Japanese government enthusiastically embraced the cause of the modernization of reeling and there is no evidence of permanent opposition in Southern China, allegedly because members of local elites had a financial stake in steam-reeling firms.86 The opposition proved more lasting in Central China. For about thirty years, the development of steam-reeling in Shangai was hindered by a shortage of raw material, which was overcome only by the growth of sericulture in the new areas of Kiangsu.87 Even in 1926 these areas still supplied 60 per cent of the raw material of the steam-reeling 84

85 86

87

D e Bavier 1874, 6 6 - 9 ; CR Yokohama 1864 [PP1865 U V ] ; Lehmann 1982, 4 4 - 8 ; Keishi and Tamotsu 1957, 217; and the reports of the French ambassador in Tokyo MAE, C C C , Yedo 2 and 3 (specially the report for 1863 and the letters of 29 October 1863 and 1 September 1864). About the difficulties at Tomioka, see Tsurumi 1990, 30 and Hunter 1984b. They were overcome simply by hiring the daughters of high-ranking officials as trainees. See Eng 1986, 1 - 3 . See So 1986, 1 0 7 - 9 ; Eng 1986, 55; the same condition favoured the development of modern reeling in Wuxi at the beginning of the twentieth century (Bell 1994). This problem caused the Ewo factory to close down in 1870 (Brown 1979) and also haunted later initiatives. See Furuta 1988, 1 0 7 - 1 0 ; Rondot 1 8 8 5 , 1 , 245ff; Bavier, 'La crise des filatures europeennes de Shangai' BSS, 6 March 1897; and the reports of British consuls in Shangai CR Shangai 1881 [PP 1881 LXXII] 1883 [PP 1884 LXXII] 1885 [PP 1887 LXXXII], 1887 [PP 1888 C] 1897 [PP 1898 XCIV (AP 43)] and 1898 [PP1899XCVIII]).

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125

factories in Shangai, while 80 per cent of the cocoon production of the traditional areas (Zhejiang) was hand-reeled by peasants.88 This behaviour is not necessarily evidence of obdurate traditionalism, or of a resistance to the advance of the capitalistic mode of production. The development of steam-reeling was quite rationally perceived by silk merchants and hand-loom weavers as a threat to their livelihood, as it could endanger their business or curtail their raw material supply.89 Their opposition was often supported by local authorities, who sometimes did not protect the cocoon merchants and in other instances effectively harassed or otherwise obstructed them (for instance by not allowing the construction of more drying-facilities). The peasants' opinions remain unknown, but they too may have had a good reason not to give up hand-reeling if the opportunity cost of their labour was low enough.90 They were bound to lose the income of reeling with no prospects to be hired by the steam-reeling factories, which were located in the far away cities. Hand-reeling production would not have been able to survive so long had it not been for two favourable circumstances. First, low-cost silk was eagerly demanded in the Asian markets, where power-loom weaving hardly existed and the low opportunity cost of labour enabled handloom weavers to use an inferior silk. The home market absorbed 60 per cent of the output of Japanese hand-reeled silk already in the 1890s and almost the whole production in the 1910s.91 China exported about 40 per cent of its hand-reeled silk in the 1910s and 25 per cent in the late 1920s.92 The Western markets received the best white tsatlees, while the coarse yellow silk of Szechwan went to India. In Bengal, the traditional charka method was believed to have survived the 'modern' Western-type factories just because the silk could be sold on the home market.93 88 89

90

91 92

93

Estimation from the data in Li 1981, 107 (see also Shangai 1928, 5 9 9 ) . Furuta 1988, 1 1 0 - 1 2 ; Bell 1985, 6 2 - 4 and 1 8 7 - 9 0 ; Buchanan 1932, 4; and Shih 1976, 55. In theory, the peasant should have reeled his cocoons instead of selling them if the world price of hand-reeled silk less the transaction costs and the opportunity cost of labour was higher than the world price of filatures less the industrial processing costs (including the profit) and the transaction costs. Federico 1994a, Appendice Statistica, table LIII b. Figures estimated as the ratio of exports of hand-reeled silk (Hsiao 1974, table 3 cols. 3 1 , 3 2 , 34 and 35) to total output (Statistical Appendix, table AV) less exports of filatures (Hsiao 1974, table 3 col.). In 1 9 0 9 - 1 3 yellow silk accounted for 97 per cent of total exports to India, and India absorbed 78 per cent of exports of that quality of silk versus 17 per cent of total exports of hand-reeled silk (Federico 1994a, Appendice Statistica, table X X X I V c.3). See also Li 1 9 8 1 , 1 1 6 - 1 7 ; and Report 1933, 1 2 4 - 8 . See Liotard 1883, 1 9 - 2 2 ; Rondot 1 8 8 5 - 8 7 , I, 3 0 6 - 9 ; Watt 1893, 3 0 - 3 1 ; and Report 1933, 12 and 8 0 - 2 . T h e last European-style factory in Bengal was closed down in 1927. Still nowadays, the charka silk accounts for about half of the total India output (Koshy 1993, 58).

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An economic history of the silk industry

However, the case is somewhat ambiguous, because the so-called 'modern' mills used very obsolete, fire-heated equipment which basically imitated the Italian model of the 1780s and 1790s. Secondly, the quality of the hand-reeling silk was improved by two important innovations, the threadle machine and re-reeling. The former was by no means a novelty: it had been invented and adopted in central China as early as the thirteenth century, but it was adopted in the Canton area only in the 1870s and 1880s.94 Threadle machines were imported (or re-invented) in Japan in the 1870s, and they widely diffused afterwards. Re-reeling was known in Japan in the 1870s, if not before, and was practised by most cooperatives of producers. The first cooperative was organized in Gumma in 1877 and thirty years later cooperatives processed roughly two-thirds of the output.95 In China, the practice diffused much more slowly: in 1926-28, re-reeled silk still accounted for only half of the exports of hand-made silk, and surely for a lower percentage of total output.96 Unlike in Japan, the silk was processed by specialized merchants, who sold it under their own brand. Thus, the low cost of labour coupled with some simple improvements to the machinery made it possible for traditional hand-reeling production to survive and even to thrive for a fairly long period. But its final demise could be only delayed, not avoided. The superiority of mechanical reeling was great and growing fast, so that in the long run it had to prevail. The consequences of steam: structural transformation and changes in location The most evident consequence of the diffusion of steam-reeling was the whole sale adoption of the factory system. In Italy, fire-heated basins had been assembled in workshops reunited since the second half of the eighteenth century to ease supervision and improve the quality of silk. This system was prevalent in Piedmont, where in 1815 two thirds of 94

95

96

See Kuhn 1988, 3 6 4 - 5 and about the diffusion in central China, Kuhn 1988, 3 8 8 - 9 0 ; Shih 1979, 3 7 1 - 2 ; Furuta 1988, 3 0 ; and Li 1 9 8 1 , 27; in the South, Howard and Buswell 1925, 1 1 7 - 1 8 ; in Japan, Duran 1913, 97; Furuta 1988, 123; Report 1870; Honda 1909, 1 3 4 - 7 ; Uyehara 1926, 88; Keishi and Tamotsu 1957, 2 4 3 ; Minami et al 1985, 42; Morris and Suzuki 1994, 37 and 95; and McCallion 1983, 3 2 , 52 and 3 8 3 . A similar device had been introduced in Piedmont in the eighteenth century (Carena 1838, 320£f). Improved Italian hand-reeling machinery was imported in the Bursa area too (Quataert 1993, 1 1 7 - 1 8 ) . Report 1870; Furuta 1988, 1 4 9 - 5 2 and 389; Ishii 1979, 319; and M e Callion 1983, 3 1 9 - 3 8 . T h e estimate is from Report 1909, 2 3 . See Li 1981, 33 and 159; Eng 1986, 112; Furuta 1988, 1 2 5 - 6 ; Silk 1 8 8 1 , 7 9 . T h e figure is computed from Hsiao 1974, table 3 (cols. 3 2 + 3 5 / 3 1 + 3 2 + 3 4 + 3 5 ) .

The industry: technical progress and structural change

127

basins were in workshops with more than twenty basins, while it concerned a minority of the basins in Lombardy and in other regions.97 In 1866-68 there were still more than 4,000 'filande a fuoco' (reeling factories), with an average of eight basins each. 98 They were too many by far for all to be converted to steam. In fact, twenty years later, the number of reeling mills was down to 1,400 and in the 1900s to about 1000, while the average number of basins was growing from about fifty to over seventy. The change had to be much greater in the Far East than in the Mediterranean countries because hand-reeling was almost exclusively a domestic activity.99 There are some remarkable differences in the evolution of the factory size between Japan and China. 100 The Japanese pattern was quite similar to the Italian one. The first factories were quite small - probably just above the minimum viable size - and the size grew progressively - from thirty-three basins in the 1890s to well over a hundred in the 1920s. By contrast, in China the large dimensions prevailed from the beginning, and the average size increased somewhat only in the Canton area. It is difficult to explain these differences, because, as already said, there was not an optimal plant size from a purely technical point of view. One might speculate that it depended on the supply of manpower (which could create scale diseconomies) and/or on the source of capital for the investments. The size was smaller and the growth more gradual in Italy and Japan because firms tended to plough back the profits, while in China the funds were provided en masse by outside investors. By definition, the diffusion of the factory system changed the nature of employment.101 Hand-reeling was a typically seasonal activity, performed by the whole peasant household in the days after the cocoon harvest. Even the Italian workshops did not work more than between 30 97

See Tolaini 1994a, 747 and, for Lombardy, Romani 1957, 2 3 7 - 9 ; Moioli 1981, 9 9 - 1 0 0 ; and Fumi forthcoming. In the early 1850s the average Lombard workshop had about 10 basins (Frattini 1856, 55). 98 See Statistical Appendix, table AXVIII and Federico 1994a, Appendice Statistica, table LVIa. 99 In 1 9 1 5 - 1 8 the average Japanese hand-reeling workshop had 1.4 basins only (Fujino et al. 1979, table 60A), but in the 1860s, there were some some larger ones with 6 - 1 0 basins (Report 1870). 100 See Federico 1994a, Appendice Statistica, table LVIb. T h e number of basins is a handy proxy of size, but one should always keep in mind that it understates the growth within each country (as the productivity per basin was growing) and biases the intercountry comparison (see ch. 2). 101 The evidence o n the number of workdays in Italy is discussed in Federico 1994a, Appendice G and the available data are reported in Federico 1994a, Appendice Statistica, table LXVII; the figure for Japan is taken from Fujino et al. 1979 (ratio of col. 1 and 2 of table 53), the one for China is a median of the data from Shangai 1928, 597 and 592; Shih 1976, 32; Li 1981, 175; Howard and Buswell 1925, 142, Wage rate 1935, tables III and DC; and Lieu 1933, 9 8 - 1 0 1 .

128

An economic history of the silk industry

and 60 days per year. Clearly, it would have been quite unprofitable to leave the mechanical equipment idle for a long period. Unfortunately, there is no evidence for the early stages of mechanization in Italy, but by the 1870s the steam-powered factories already worked on average 220 days a year. The number of days rose to about 250 in the 1910s (i.e. the whole year, excluding the religious festivities and the silkworm-raising season). The Japanese factories worked on average between 215 and 220 days in 1893 and 262 in 1929, the Chinese ones possibly even more. Managing a modern plant became a full-year commitment. As an Italian industrialist noticed in the 1870s, conce there were many small reelingmills managed by landowners, petty speculators and merchants . . . now the industry is more concentrated in the hands of industrialists'.102 This transformation must have enhanced the overall efficiency of the industry by improving the skill of both managers and workers. Full-time managers were undoubtedly superior to landowners or even merchants (not to mention peasants) in market knowledge, technical know-how and perhaps the readiness to take risks. And a continuous training and practice improved the reelers manual skills - with obviously positive consequences on the quality of the product. But full-time industrial work was not compatible with other activities such as housekeeping or working on the family farm. There were two alternatives. On the one hand reelers could decide not to marry, as in Southern China, or else they could cease working after marriage, as in all other countries. One Italian industrialist called marriage 'too high a price, which sericulture pays to human society'.103 The momentous consequences of either solution upon the division of labour within the family and in the society at large are beyond the scope of this study. Finally, a possible consequence of the diffusion of steam was a process of financial concentration - that is, the union of several plants in the same firm. The three main countries showed a remarkable difference from this point of view, even if, as already said, in none of them was the process intense enough substantially to reduce the competition among firms. There is no evidence of concentration in China, possibly because the size of the median firm was already large enough or else its lifespan was too short for it to grow. In Italy, a process of concentration accompanied the first stages of diffusion of steam-reeling. Traditionally, each firm had owned or managed only one plant, but in the 1870s 'a 102 103

Inchiesta industriale D S 6&1, evidence Bozzotti. 'Questioni di metodo', GIS, no. 4 2 , 1868. For southern China (where female-reelers gained a reputation for independence and tough-mindedness), see Howard and Buswell 1925, 1 4 0 - 2 ; So 1986, 1 2 2 - 7 ; for Japan, Hunter 1984a; for Italy Bonnefon and Craponne 1916, 62; and Filatura 1913, 727 (and about the social and demographical consequences of this change, see Serpieri 1910 and Corner 1993).

The industry: technical progress and structural change

129

large number of factories scattered in various villages, even outside the province [of Milan], are managed by one sole owner living in Milan'. 104 From the late 1880s to the 1910s the number of firms more than halved, and yet the average number of factories per firm rose only from 1.13 to 1.35. And the concentration did not proceed further. In 1927 there were still over 500 reeling-firms, 80 per cent of which managed only one mill, while only sixteen companies managed more than six factories. Both the largest ones, Gerli and G. A. Musso, had fourteen factories, and each company had perhaps 1,500-2,000 basins (less than 3 per cent of the total). An official report somewhat reproachfully stated that 'this is a highly divided industry, with an infinite number of small and medium firms and some larger organizations'.105 By contrast, in Japan, concentration went on until some firms became real giants. The most striking success-story was the Katakura company. It had been founded in 1873, it established its final mill in 1878 with thirty-two steam basins, and yet by 1920 it had as many as 14,706 basins. 106 In the 1920s, Katakura alone produced about as much as half of the whole of Italy. Why did Japanese firms grow that much, while the Italian ones did not? The evidence on competition rules out the easiest explanation - that some Japanese firms grew because they squeezed extra profit by exploiting their market power. It can be argued that it was a response to market imperfections. Larger companies could internalize functions - such as the RD in the production of equipment, the sale of silk or financing which in Italy were performed efficiently by the market. In the long run, this inferiority might have been turned into an advantage. At least, this was the prevailing opinion in Italy. Many experts attributed the poor performance of the national industry to an insufficient average size of the firms, and therefore advocated further concentration as the solution. 107 So far, the discussion has focused on how the technical progress affected the development of reeling all over the world. It is now time to tackle the second issue, the effects on competition among countries. As might easily be predicted, Italy's technical leadership gave it undisputed superiority both in input productivity and in the quality of silk. The next 104

105

106 107

Evidence of Bozzotti to the Inchiesta industriale, D S 6&1. T h e data o n the number of plants per firm (and on integration with throwing) are in Federico 1994a, Appendice Statistica, table LVIII. T h e number of basins of the firms is computed assuming an average of 7 0 - 1 0 0 basins per plant. Report of the Associazione serica to the Ministero dell'Economia nazionale of 9 M a y 1928 in MAE, RC 1 9 1 8 - 4 0 B-textiles no. 20. Cfr. Ishii 1982, 3 and Ishii 1979, 88 respectively. Rusconi 1923, 6 5 - 8 ; Mortara 1929, 94; C. Semenza, 'L'industria della trattura della seta in Italia ed il suo awenire', BS, n o . 7, 1927, the inaugural speech of the president of the Associazione serica (MAE, RC 1 9 1 8 - 4 0 B-textiles n o . 20) and above all Ussi

1930,569-73.

130

An economic history of the silk industry Table 7.7

Productivity of steam-reeling, around 1910

a) yearly data Japan Italy Canton Shanghai Lebanon Anatolia France Caucasus Spain Kashmir

Kgs silk/basin 52 117 34 80 64 45 58 74 60 81

Kgs silk/worker 45 65 31 36 44 44 34 38 35 35

Gms silk/basin 18.3 44.8 10.7 25.4

Gms silk/worker 15.8 25.0 9.8 11.4

b) hourly data Japan Italy Canton Shanghai

Source: yearly data table 2.1, except Italy from Federico 1994a, table G.3; hourly data computed assuming 250 days and 10.5 hours of work in Italy, 247 and 11.5 respectively in Japan (see Federico 1994a, Appendice G) and 300 and 10.5 in Shangai (see the sources quoted in note 101).

section will measure how large this superiority was and how it changed in time. The Italian leadership: productivity There is no doubt that on the eve of World War I the Italian industry was the most productive in the world. Its hourly output per worker was 45 per cent higher than the Japanese one and much greater than double the Chinese one (table 7.7). The gap was even greater if the comparison is extended to the total production, which included the hand-reeling sector. For instance, in Japan the zaguri-reeling accounted for one third of the total output and its productivity was about half of that of steam reeling.108 Therefore the aggregate Japanese productivity was about 13.4 grams/hour/worker that is, half the Italian one. 108

See Minami et al. 1995, 39.

The industry: technical progress and structural change

131

Table 7.8 Hourly output per worker in steamreeling 1890-1930 (grams) Italy c. 1890 c. 1910 c. 1930

18.2 25.0 46.0

Japan 9.2 15.8 35.7

Italy/Japan 1.98 1.58 1.29

Source: Federico 1994, Appendix G.

Table 7.9 Capital per worker in steam reeling, Italy/Japan ratio Equipment

c. 1890 c. 1910 c. 1930

3.24 2.05 1.72

Buildings

Total

2.05 1.76 2.47

2.52 1.89 2.02

Source: Federico 1994, Appendix G.

It is not possible to assess whether this Italian leadership preceded the age of steam. It is sure that whatever gap had existed in the 1820s was greatly widened by the diffusion of steam-reeling and by the technical progress. Unfortunately, there are no data to assess how much. A direct comparison is possible only between Italy and Japan from the 1890s onwards (tab. 7.8). The relative performance of the Japanese industry was outstanding - if one remembers that the labour productivity in Italy was growing quite fast (table 7.1). Given the sluggish productivity growth in China, it is likely that the same comparison would yield a totally different outcome. The previous analysis of technology in Italy and Japan suggests a very simple explanation of these results: labour was more productive in Italy because Italian technology was more capital-intensive and Japan was catching up because it was adopting more capital-intensive techniques. This simple hypothesis is confirmed by a straightforward comparison of the capital per worker in the two countries (table 7.9). The figure for buildings in 1930 is somewhat suspicious, but the qualitative evidence confirms that the Italian equipment even in those years was still more sophisticated than the Japanese. The Italian Robbiani was convinced of 'the technical superiority of the Italian reeling-houses over the Japanese ones', and the Indian Ghosh (not open to suspicion of a nationalistic bias) stated that the Japanese equipment was 'simpler than the French

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An economic history of the silk industry

Table 7.10 Total Factor Productivity in steam reeling, Italy/Japan ratio

c.1890 c.1910 c.1930

(a)

(b)

1.80 1.46 1.09

1.76 1.22 0.89

Column (a) is computed by converting the value of capital acccording to the purchasing power parity and assuming a 0.75 share of labour; column (b) using the market exchange rates and a 0.50 share of labour. Source: Federico 1994, Appendix G.

and Italian and much less costly'.109 Since the 1880s technical progress had been considered the key of Italian competitiveness: in the opinion of a French expert, innovations 'adopted readily and quickly have enabled the [Italian] reeling firms to survive and fight on nearly equal terms with their Asian competitors'.110 But the better equipment is only a part of the story: the total factor productivity was also higher in Italy than in Japan. The actual figures depend on the assumptions about factor shares and about the conversion of the value capital stock into the same currency. Table 7.10 reports two alternative computations. Column (a) is the 'preferred' one (i.e., based on the most plausible criteria), column (b) the lower bound of the possible gap. The trends are quite similar to that of labour productivity (table 7.8), with a residual doubt about whether Japan suceeded in catching up with Italy in the 1930s. For most of the period, the productivity gap was anyway quite large. The Italian experts attributed it to the superior qualities of their manpower. One of them even mentions the 'physical and mental weakness of the Japanese people'. 111 These 109

110

111

Robbiani 1936, 2 0 0 and Ghosh 1933, 2 0 . Italian experts were a fortiori more assertive in the previous years: see e.g. Paini's letter to Luzzatti of 4 September 1909 (in C L B. 106, Corrispondenza 1 9 0 4 - 2 7 ) ; Paini 1910, 8 4 8 ; A. D u m o u l i n , 'Osservazioni sull'industria della seta nel Giappone', BS, no. 7, 1926. In the 1950s an official mission to Japan, though duly reporting the recent innovations, was still not too impressed by the standard Japanese equipment (Ufficio seme bachi 1955, 9 0 - 1 ) . Beauquais 1910, 8 1 . See e.g. the anonymous articles published under the heading 'Filandieri italiani, badate all'Asia' in the Sole of 9, 10, 1 1 - 1 2 , 13, 1 4 - 1 5 , 16, 17 and 18 M a y 1888 and the rejoinders ('Le vere cause del basso prezzo dei bozzoli', GIS, n o . 19, 1888 and 'Gridi d'allarme', GIS, n o . 2 1 , 1888). 'II costo delle gregge giapponesi in rapporto a quelle italiane', Informazioni seriche, n o . 16, 1915; see also Bertazzoli 1910, 740; Bartezzaghi 1 9 1 0 , 8 6 4 (a 'less intensive, less feverish work*) and Mortara 1928, 118.

The industry: technical progress and structural change

133

Table 7.11 Nominal wages and labour costs per unit of output, Italy and Japan (data in 1911 francs) Italy

Japan

1893-95 1904-06 1911-13

Italy/Japan

hourly wages

labour cost

hourly wages

labour cost

hourly wages

labour cost

0.032 0.048 0.077

2.598 3.158 3.602

0.083 0.094 0.125

3.397 3.280 3.793

2.63 1.93 1.63

1.31 1.04 1.05

Sources: Italy: Federico 1994a, Appendice I; Japan: Fujino et al. tables 50 and 51; market exchange rates: Resume 1917 and Ciocca-Ulizzi 1990.

racist opinions were clearly absurd, but it is nevertheless likely - even if difficult to prove - that the Italian workers were more skilled than the Japanese ones. At the end of the nineteenth century, the former had been using modern steam-reeling equipment for some decades, while the Japanese workforce was still hastily being recruited to cope with the quick growth of output. They had to learn how to handle the modern machines by using them. The declining gap would therefore reflect a successful adaptation to the factory system, which would starkly contrast with the well-known case of Indian cotton weavers.112 Whatever the reason, the higher labour productivity allowed Italian firms to pay their workers more than the Japanese ones and to have roughly the same labour cost per unit of output (table 7.11). Thus, to quote Ishii's words, 'the secret of the low cost of Japanese silk lay not in the wage cost, but in the cheap price of cocoons'.113 And, as detailed in the previous chapter, the secret of this latter was the low opportunitycost of labour in the countryside. The Italian leadership: the quality of silk The Italian industry was not only the most productive in the world. It also produced the best silk in the world: few sorts (the French silk, the Shangai filatures) could match the Italian quality, none could exceed it. As discussed in the previous chapter, the contribution of the quality of cocoons to this achievement is at best uncertain. That of the modern machinery and of the skills of the manpower is on the contrary undeniable. As an Italian textbook puts it, 'ours [silks], on the contrary, 112 113

Clark 1987 and 1988; for a different view, see Hanson 1988. Ishiil982,9.

134

An economic history of the silk industry

Table 7.12 silk = 100)

Price ratios in Lyons in 1911-1913 (Italian

Hand-made

Filatures France Spain Shanghai Japan Lebanon Brussa Greece Canton Tussahs

99.8 97.9 97.2 91.3 91.0 89.8 88.2 78.7 38.6

Japan (zakuri) Bengal Tsatlees China white China yellow Tussahs

86.9 75.0 67.0 54.8 46.9 21.4

Source: Le prix moyen des soies en 1913, in BSS 2 V, 1914.

are superior to those [the Japanese and Chinese] because they are reeled with much more care and perfection'.114 The best proxy of the relative quality of two types of silks is the ratio of their prices. Table 7.12 reports the relative prices in the Lyons market on the eve of World War I. They would be a perfect proxy if silks were perfect substitutes in a technical sense - that is if they could be used to produce the same final product (the price differential being in this case equal to the extra costs encountered in using the worst silk). As discussed more thoroughly in chapter 5, the silks were good but not perfect substitutes. The movements of relative prices can therefore be used as a proxy of quality changes, but only if supported by qualitative evidence. 115 Luckily, such evidence is quite abundant, because, unlike productivity in reeling, quality was a matter of high concern for the buyers of silk. At the end of the eighteenth century, the Piedmontese silk was undoubtedly the best in Europe, and possibly in the world. 116 The French and the other Italian ones trailed behind, followed by the Levantine and by the Indian silk. This ranking changed substantially in the first half of the nineteenth century, as a consequence of technical progress. The Cevennes silk improved most, and its price in the 1820s out-distanced that of the ordinary Italian one, though remaining inferior to the Piedmontese organzines.117 But the ordinary French and Italian 114 115 116

117

Provasi 1905, 247. See Statistical Appendix, table AXX. See Tolaini 1994a, 748. The price of the top quality, the Novi Ligure (Piedmont) white silk, in London was 15 per cent higher than that of best yellow Lombard ones and 25 per cent higher than the ordinary Lombard silk (Tolaini 1995). See Tolaini 1995, table 5. Unfortunately, the comparison between organzines is not

The industry: technical progress and structural change

135

silk was also improving. Already at the end of the 1820s3 Gera could set no geographical qualification to his proud assertion that the Italian silks 'surpass all others for their shining colour, the fineness and strength of the yarn and the accuracy of the workmanship'.118 This statement is perhaps too enthusiastic, but it is clear from price data that in the 1860s the differences between French and Italian silks of any provenance (Piedmontese and Cevennes included) were minimal. 119 And, what was more important, the gap between the steam-reeled European silk and the traditional Asian one had become quite substantial. The price of Italian silk was 20 per cent higher than that of the Japan Maebashi and 25 per cent more than the best Chinese tsatlees. This movement was partially accounted for by the deterioration of Asian silk. This process, though affecting all provenances, was particularly serious in Japan, whose silk had gained a good reputation in the early 1860s. 120 Some Western experts blamed the exports of cocoon-eggs. De Bavier, author of the first book on Japanese sericulture, called them 'the ruin of the industry' as they would have deprived it of the best cocoons. 121 This thesis is not plausible, however, as exported eggs accounted for a small share of the total output and the quality of silk was anyway determined mainly by the reeling methods. It is much more likely that the quality had deteriorated because the pool of skilled workers was not large enough to cope with the increase in output. The Japanese state tried to contrast the process

118

119

120

121

totally appropriate, as their quality was determined also by the care and the amount of work during throwing. Gera 1829, 1 6 4 - 2 1 3 (quotation from 174). See also Moioli 1981, 2 7 6 - 7 ; Frattini 1856, 6 1 ; and Tolaini 1994a, 748 on Lombard silk; Tolaini 1994b on Tuscany; and Tolaini 1994c, 55 on Friuli. See the evidence of Bozzotti in Inchiesta industriale D S 6&2 and 'Le sete francesi e le sete italiane', GIS, no. 11, 1867; 'Delle qualita indispensabili di u n b u o n filo di seta', GIS, no. 5 1 , 1868. T h e French experts were divided - some acknowledging the Italian achievements (e.g. Persoz 1878, 3 0 1 - 2 ; Rondot 1 8 8 5 - 8 7 , I, 8 6 ) , while others still claiming a superiority of the Cevennes silk (Rapport 1 8 8 1 , 246; Beaux 1886, 19ff; and Morand 1891, 1 7 - 1 8 ) . See D e Bavier 1874, 8 8 - 9 5 ; McCallion 1983, 68ff and 320; and Furuta 1988, 4 1 . T h e complaints of Western merchants were echoed by the British consul in Yokohama Adams (see Report 1870 and the annual reports for 1869 [PP 1870 L X V ] , 1870 [PP 1871 LXVIII] and 1872 [PP 1873 LXVI]). T h e Westerners complained also of the deterioration in the standards of business ethics and of the increase in frauds ( D e Bavier 1874, 88; 'Osservazioni intorno al prossimo raccolto delle sete al Giappone', GIS, no. 36, 1873; and Sugiyama 1988, 9 0 and 9 4 ) . O n the worsening of Chinese silk, see Pariset 1 9 0 1 , 355; Banister 1933, 1 2 8 - 3 0 ; Decennial Report 1 8 8 2 - 1 8 9 1 , 3 2 3 ; CR Shangai 1873 [PP 1875 LXXVII]; and on the Indian silk, Maxwell-Lefroy 1916, 5. D e Bavier 1874, 9 5 - 7 ; this opinion was shared by the British consul (Report 1871), but of course neither by the Italian semai (see e.g. I. Dall'Oro, 'Le sete giapponesi', GIS, n o . 19, 1875) nor by the French consul in Yokohama 9 X 1870 (MAE, CCC Yokohama 1). H e accused the Western silk merchants of exaggerating the negative consequences of exports of silkworm eggs to induce the Japanese government to forbid them in order to curtail the European output.

136

An economic history of the silk industry

by imposing a quality control - but the system was a total failure. The reputation of the Japanese zakuri remained low throughout the 1870s: a textbook advises the French weavers to purchase Japanese silk 'with distrust'.122 However, the problem was eventually solved by mechanization. Italian experts were quick to recognize the improvement and even too quick to express concern for its possible long-term effects on the market. V. Ferri, the silk expert of the leading Italian commercial newspaper, // sole, ventured to warn that the competition of Japanese filatures would 'seriously worry our producers of sete classiche [the best ones]'. 123 These concerns proved to be largely exaggerated. The superiority of the Italian silks was not to be challenged for a long time. Until the 1910s the relative prices remained steady - or, at least, variations do not show any consistent pattern. Moreover, the challenge, if any, came from China, not from Japan. Since the 1890s, the quality of Shangai filatures matched the Italian, possibly because they were produced by modern Italian equipment in a very labour-intensive way. On the other hand, the Canton silk did not improve at all - and on the eve of World War I it had the dubious distinction of being the only filature to be priced less than the best hand-reeled silk.124 Until the 1910s, the reputation of the Japanese silk was not so good. For instance, the most authoritative American textbook for weavers complained that it lacked 'careful, constant and vigilant inside superintendence and the watchfulness over the smallest detail of the work that is typical of the high-class European filatures'.125 Besides, experts lamented the variation in the quality from one year to another in the 122

Persoz 1878, 288. See also the reports of the British consul for 1875 ([PP 1876 LXXVI]) 1876 ([PP 1877 L X X X I V ] ) , 1878 ([PP 1 8 7 8 - 9 LXXII]) and 1881 ([PP 1882 LXII]) and Annual 1876. T h e policy of the Japanese government is discussed in

ch.9. 123 y p } ^ sericoltura in Italia', Sole, 7 April 1878. See also V. Ferri, 'Rivista semestrale delle sete. Primo periodo della campagna 1 8 7 4 - 7 5 ' , Sole, 16 Jan. 1875; V. F. 'La sericoltura in Italia', Sole, 12 Jan. 1877. A similar worry was expressed by the Rovereto Chamber of Commerce ('Les soies asiatiques et la Chambre du commmerce de Rovereto', BSS, 22 June 1878). S o m e years later the alarm was launched again by Sole (see 'Filandieri italiani badate all'Asia', Sole, 9 and 1 1 - 1 2 May 1888) and by F. Dubini, 'Sulle conseguenze del nuovo dazio francese a carico delle sete italiane e sul m o d o di porvi riparo', handwritten m e m o in ACDC CO cart. 271 (March 1888). 124 See the meticulous listing of the defects of Canton silk in Howard and Buswell 1925, 1 3 3 - 7 and 143; Rawlley 1919b, 15; Duran 1913, 1 2 8 - 9 ; 'II commercio delle sete in Cina', BU, 1907, I, fasc. 7; and the report of the French consul in Canton of 19 November 1909 (MAENS Chine 579). 125 Chittick 1913, 19 and, in the same vein, Stamm 1923, 1 0 1 - 3 ; Duran 1912, 88 and 1 0 8 - 1 0 ; 'Of interest to raw silk importers', ASJ, November 1900; Eng 1986, 1 6 6 - 9 ; Report 1909, 5. This opinion was shared by all the Italian experts - see Giussani's reports from Japan (e.g. 'Sul commercio serico giapponese', BS, no. 19, 1898; 'La campagna serica al Giappone', Sole, 5 August 1900; 'Resoconto della campagna serica al Giappone', BS, no. 3 2 , 1901); and Paini 1910, 8 4 3 .

The industry: technical progress and structural change

137 126

same brand, which they attributed to the producers' greed. The firms were accused of increasing the output when prices were high without bothering about quality standards. However, the Japanese worked hard to change this reputation - and some experts were quite sanguine about the outcome. For instance, Mason in 1910 deemed it an 'instantaneous and almost marvelous' success.127 Actually, there was a small but growing number of firms (labelled as type I by Ishii), which produced a high-quality silk by using more labour-intensive methods.128 Mason's opinion was probably exaggerated - but another expert could safely predict that 'it is only a question of time when such [Italian] high qualities will be dispensed with, and some Japans giving almost the same result will be used instead at a much lower price'.129 The prediction was fulfilled in the late 1920s. From 1924-5 onwards, the American import unit values of Japanese silk exceeded the Italian ones. So the well-known Italian economist Mortara in his influential report on the market had to admit sadly that 'on average the Japanese silk is preferred to ours on the American market'.130 The reaction of Italian industrialists to this change is interesting. They were well aware that 'having lost any hope to compete with the Asian silk on quantity and price', the future of Italian industry hinged on 'the possibility of maintaining the leadership of quality'.131 When this superiority was vanishing, they seemed not to accept the hard reality. For instance, Rusconi stated in 1923 that 'the newly created Japanese yellow silks are only a pale imitation of the Italian ones' - and this belief was reaffirmed by the president of the Ente Serico in his inaugural speech as late as 1927.132 The Italian industrialists attributed the success of Japanese silk on the American market to the presentation according to the consumers'needs of an intrinsically inferior yarn. Actually, what the cause was did not matter much. The fact was that Italy had lost its century-old quality leadership. The contemporary loss of leadership 126

127

128

129 130 131 132

See e.g. 'La campagne soyeuse de 1 8 9 0 - 9 1 au Japon', BSS, 3 Oct. 1891; 'Concerning defects in Japan raw', ASJ, June 1900; 'Japanese raw silk trade', ASJ, February 1909; Chittick 1913, 28; and Pratt 1928, 118. Mason 1910, 20. Positive - if less enthusiastic - statements also in e.g. 'As to the world's silk supply', ASJ, July 1899; 'Expansion of the home silk market', ASJ, November 1898; 'Strands of "raw"', ASJ, October 1899; 'Facts and comments', ASJ, December 1899; 'The raw silk industry of Japan', ASJ, April 1909; Matsui 1930, 64. The number of these firms grew from 20 in 1893, with 2,596 basins (3 per cent of the total), to 26 in 1911, with 8,909 basins (4.9 per cent) (Ishii 1979, 4 9 - 5 8 , 63 and 341). Duranl913, 115. Mortara 1927, 99; see also Robbiani 1936, 200; Ussi 1930, 571. Arimattei 1923, 110. Rusconi 1923, 52; Ferrario 1923, 129; and the text of the speech in MAE, RC 1 9 1 8 - 4 0 , B-textiles, no. 20. This optimism was however not unanimous (see e.g. Colombo 1917, 49 or Commissione 1918, 137).

138

An economic history of the silk industry

both in productivity and in the quality of the silk added to the difficulties of keeping the cocoon supply steady (let alone increasing it) and to the consequences of the 1926 revaluation of the lira, and seriously jeopardized the Italian industry in the late 1920s. The Great Crisis was to deliver the coup de grace. The improvement in the quality of silk was the result of a deliberate effort of the producers of a given area, who invested in new equipment, training etc. in exchange for an increase of the price of their product. The previous account shows that some producers did not accept this trade-off and did not implement the necessary investments. Possibly the most interesting case is the reaction to the request by the Silk Association of America to adopt the 'standard American skein' (known in Europe as the Grant system) - a way of packaging silk which made it easier and less expensive to be processed by the powerloom. 133 The campaign began in 1882, but twenty years later, the 'standard skein' had been universally adopted only in Japan, partially in Italy and central China and not at all in southern China. 134 As late as the 1920s, the 'American skein' was not yet in use in southern China. The differences in the producers' behaviour are usually attributed to some in-built psychological feature - Japanese zeal, Chinese 'commercial indifference' etc. 135 For instance the British consul in Canton stated that 'the native is content to follow old lines and refuses to raise his standards of workmanship even when offered better prices'. 136 Conservatism might, of course, have mattered, but things were not necessarily that simple. The advantages of the improvement in the quality of silk were deeply asymmetrical. The buyers had nothing to lose and could gain if the improvement brought about an increase in the supply of good silk and/ or a reduction of the quality-premium. Thus, it is not surprising that manufacturers constantly required better silk. In the first half of the nineteenth century, the request was conveyed by the silk merchants, who urged the producers by luring them with the prospect of a higher price and an easier sale. 137 In the second half of the century, the Silk 133

134

135

136 137

See Matsui 1930, 132, 'Le systeme Grant*, BSS, 2 4 March 1888; Terfezioniamo', La seta, 21 Oct. 1886; and Arimattei 1926, 26. See for the savings, D e Bernardi 1900, 3 3 2 - 5 ; Annual 1903, 3 2 . See Annual 1903, 3 0 - 1 ; 'The standard American skein', ASJ, June 1902; and Howard and Buswell 1925, 9. T h e Italian Ministry of Agriculture transmitted the request to the Chambers of Commerce o n 3 0 July 1902 (see the circular in A C d C C o cartella 271) and published an article ('Industria e commercio della seta negli Stati Uniti') in its BoUettino Ufficiale (BU, 1902, II, fasc.l 1). 'A review of the American silk industry', ASJ, October 1906. O n the Japanese zeal, see Duran 1913, 114, M a s o n 1910, 3 3 ; and Ravaioli 1902, 2 6 4 . CR Canton 1904 [PP 1905 L X X X V I I ] . See Tolaini 1995 and 1994b in Italy; and D e Bavier 1874, 1 0 7 - 1 0 in Japan. T h e

The industry: technical progress and structural change

139

Association of America was particularly active - possibly because the American industry had more stringent requirements than the European ones. Besides campaigning all over the world for the 'American skein', it paid special attention to China. As early as 1873, just after its foundation, it sent its first memo to the Shangai Chamber of commerce on the problem of the adulteration of silk.138 In the late 1910s it launched a massive campaign to improve the quality of the Chinese silk - outspokenly aiming at reducing the American dependency on Japan.139 It also promoted the establishment of some institutes of higher education specializing in the silk industry, and of an international testing house in Shangai in 1924. The profits of quality improvements for the silk producers were less certain. On one hand, the task was not easy, as it required massive investments in new equipment and in training of manpower and possibly organizational changes. On the other, the returns to all these labours were not immediate (an entrenched bad reputation could be changed only slowly) and by no means sure. In fact, they depended on the permanence of the quality-premium, which the same improvement put into jeopardy. Therefore, the reluctance to comply with the buyers' requests may well have been rational - provided, of course, that there was a market for low-quality silk. The southern China producers could afford to be indifferent to American requests because, unlike the Japanese, they sold all their output to Europe. However, as explained in chapter 5, in the long run, this strategy proved to be a losing one, because the European consumption increased much less than the American one did. Where competition was really tough: the throwing branch Unlike reeling, throwing had been mechanized since the Middle Ages: the 'mulino da seta' (throwing mill) was one of the first machines ever built.140 They were circular wooden multi-storey machines which rotated around their axis, and the motion was transmitted to spindles by an elaborate system of shafts. The worker had only to supply the machine with raw silk and knot the broken yarns. Though greatly improved, the basic lay-out of the medieval machines had remained the 138

139 140

merchants had an obvious personal interest in getting easily saleable silk if they worked on commission and an even larger one if they worked on their o w n account. See Annual 1873 and Aamakawa and O o n o 1975, 142; SAA 1916, 1 0 - 1 1 ; Duran 1913, 108ff; Furuta 1988, 1 8 8 - 9 2 ; Howard-Buswell 1925, 7 - 8 ; Matsui 1930, 1 1 1 - 1 4 . See Annual 1873 and Aamakawa and O o n o 1975, 142. See Poni 1972 and 1976; Maiocchi 1980; Crippa 1990; and Hills 1993, 6 7 - 7 3 .

140

An economic history of the silk industry

same until the eighteenth century.141 They had three relevant defects. They were quite prone to catching fire; they could rotate only in one direction, while the production of organzines entailed two opposite torsions, spinning ('filatura', 'filature') and throwing ('torcitura', 'moulinage') - so that each mill had therefore to have at least two circular machines to produce organzines. Above all, their speed could not exceed 1500 revolutions per minute without causing the collapse of the whole structure. This limit was particularly serious because ceteris paribus (i.e. for the same product and type of raw material), the productivity in throwing was strictly proportional to the speed of the spindles. A radical change was therefore needed. The first step was the invention, in France in the eighteenth century, of a new type of throwing machine, the so-called 'square' one (also called Vaucanson's mill after the man who first described it). It was a breakthrough as it adopted a totally different principle - keeping the frame fixed and moving the spindles. It has some distinct advantages over the traditional 'circular' one. It could be used both for throwing and spinning, and could be manned by females, with a substantial saving on labour costs. Moreover, it was smaller (thus requiring less fixed capital for building), even if more expensive, being built in iron instead of in wood. But the 'square' machine still constrained the productivity rise, as the speed of the spindles could not exceed 2,000 revolutions per minute. In fact, the spindles were still moved by the same shaft (each of them moving a 'valico' of some 100) and therefore each broken yarn had to be tied while the spindle was in motion. This constraint was eventually removed by the invention of the so called 'cylindrical' machine in the United Kingdom in the 1820s. Each spindle was independent, and so one spindle could be stopped to knot the yarn without affecting the other ones. The innovation made it possible to increase the speed (i.e. the productivity) to previously unthinkable heights. The Anglo-Saxon countries, first the United Kingdom and then the United States, took the lead of the race. 142 The best English mills reached 3,000 revolutions per minute already in the 1820s - but the real leap forward was achieved in the second half of the nineteenth century (table 7.13). These data are very approximative, and it is not clear whether they refer to the average or to the best practice. Yet the American superiority is undeniable. This 141

142

T h e information on the characteristics of different machines and o n the innovations are from Belloc and D e Vecchi 1910, 524; Mariton 1905, 2 4 1 - 4 ; Provasi 1905, 2 2 0 - 7 ; and Crippa 1990, 2 0 2 - 3 . For the development of the British throwing industry in the first half of the nineteenth century, see Tolaini 1995; on the United States, M a s o n 1910, 114; Taussig 1915, 229; Ravaioli 1902, 2 7 1 ; and U S Census 1900b, 2 2 2 - 3 .

The industry: technical progress and structural change Table 7.13 minute)

Speed of spinning spindles (revolution!

Italy c. 1860 c. 1875 1880s c. 1890 c. 1900 c. 1910 c. 1930 c. 1950

141

United States 3,500 7,000

4,500 5-6,000 8-9,000 10-11,000

10-12,000 11-12,000 12,000 25,000 15,000

Sources: Italy: Crippa 1990, 204; Gallese 1961, 144; Beauquais 1910, 140; Associazione serica n.d., 134. USA: Margrave 1986, 317; Clark 1949, II, 453 and III, 212; US Census 1900b, 209; Mason 1910, 112; Chittick 1913, 62; Matsui 1930, 131.

fact should be by no means surprising: the high-wages countries had a clear interest in the highest possible labour productivity. But the higher productivity was not large enough to guarantee competitiveness against Italy (as already said, the Asian countries have never been competitive on that particular market). Firstly, the Italian product was better than the English or American one because the race for speed sacrificed, to some extent, the quality. Even the best raw silk occasionally had some defects, such as loose threads, dirt etc., which had to be corrected by hand. In Italy labour was cheap, and the firms could afford to employ as many workers as necessary. That is why the Italian organzines have always been the best in the world. In the 1830s, the best English organzines matched the quality of the Lombard ones but were decidedly inferior to the Piedmontese ones.143 The Americans did not try to compete at all - as they realized that the 'Italian system' was too labour intensive to be economically viable.144 Since the 1860s, the Italian mills had gained a long-lasting reputation of excellence in processing the low-quality Asian silk, which needed a lot of additional work. It was proudly stated as a matter of fact that 'the Asian silks processed in our mills are considered by all the European weavers as the best of all. The French and English throwsters cannot equal the workmanship of the Italian ones'.145 As 143

Tolaini 1995; until the liberalization of Piedmontese exports of raw silk (in 1834) the British throwsters were to some extent at a disadvantage as they could not use the best silk. 144 'The Italian system', ASJ, February 1899. 145 t w o quotations are from 'Lavoro e commercio delle sete asiatiche in Italia', Sole,

142

An economic history of the silk industry Table 7.14 Costs of throwing per unit of output in Italy and the United States United States tram

organzin (a) 1885 1890 1909 1913

1.00 0.75 0.65 0.60

(b)

(a)

(b)

11.70 8.88 7.44 7.55

0.55 0.45 0.35 0.375

6.44 5.33 4.00 4.36

Italy (organzin only) (b)

(c)

1867-71 1872-76 1894-98 1899-03 1904-08 1909-13

296 213 100 94 116 100

12.83 9.91 3.66 3.68 4.68 4.43

(a) dollar per pound; (b) lire per kg; (c) index 1909-13 = 100 in real terms. Sources: American prices: Scranton 1985, 47, and for 1913, Chittick 1913, 75. Italian prices: Federico 1994a, Appendice statistica, table XVIa; dollar/lira exchange rates, Ciocca-Ulizzi 1990, tav.l, wholesale Italian prices ISTAT 1958, 172.

explained in chapter 3, the processing of Asian silks was to remain an Italian specialty throughout the whole century. There is evidence, too, that Italian costs were lower than the British or American ones. In an inquiry of the 1830s the British industrialists affirmed that they could not withstand the competition of Italian organzine because the Italians costs were two thirds of theirs.146 The labour would have cost a third, (water)power a fifth and the percentage of waste was lower because the Italian firms used a better raw material. Some of these statements are hardly plausible, and they should all be taken with much caution, as most of the authors tried to fight back against the liberalization of imports. But they did have a point, as the United Kingdom still imported Italian organzines in spite of the high duty. Table 7.14 reports a comparison between Italy and the United

146

26 August 1865. For similar statements in Italy, see 'I perfezionamenti tecnici e l'industria serica', Sole, 3 March 1899; Arimattei 1923, 102; Ferrario 1923, 139; and in France, Rondot 1885-7,1, 86-7; Morand 1906, 168-9; and Beauquais 1910, 152. Tolaini 1995.

The industry: technical progress and structural change

143

States.147 Clearly, the productivity differential was not large enough to compensate for the higher American wages. Throwing was a relatively labour-intensive activity, if less so than reeling, without relevant scale or scope economies. So it was not suited to the American input endowment - and needed protection. Italian firms would not have been so competitive if they had not improved their machinery. In the first half of the century the progress in throwing had been as fast as that of reeling.148 Winding had been mechanized and 'cleansing' had become the standard first stage of processing since the 1820-1830s. In the following decade, many new 'squared' throwing mills (some powered by steam) had been built. The pebrine crisis accelerated the progress, as modern machinery was necessary to process the inferior Asian silk with profit. No more 'circular' machines were built from the 1850s and already in the 1870s the modern 'squared' and 'cylindrical' ones accounted for most of the equipment. An industrialist could then proudly state that 'in the last ten years the new equipment has reached a very high level of advancement'.149 Twenty years later, Pariset in his review book on the silk industry in the world admitted the 'unquestionable superiority' of the Italian throwing industry over the French one.150 It can be estimated that the total factor productivity from 1876 to 1891 grew at 3.5 per cent pa, a rate higher than that of reeling.151 Actually, this estimate is rather crude, as output is a sum of tram and organzine (while the latter needed more inputs), the capital is proxied by the number of spindles and the inputs are not adjusted for changes in the worktime. Luckily the two biases tend to compensate each other, and therefore the conclusion should not be drastically altered. Furthermore the productivity growth is confirmed by the fall in industrial costs shown in table 7.14. After the 1890s, everything changed. The growth rate of total factor productivity dropped to a meagre 0.65 per cent pa from 1891 to 1911, and production costs per unit of output remained constant (table 7.14). 147

148

149

150

151

T h e comparison understates somewhat the Italian superiority. In fact, the American data refer to the costs of processing the 14/16 count, and the Italian ones to processing the 10/12, which was ceteris paribus more expensive. See Moioli 1981, 2 7 4 - 8 4 ; Caizzi 1972, 401; Cafaro 1988, 199; Frattini 1856, 6 7 - 8 ; Trezzi 1989, 2 6 8 - 9 ; Fumi forthcoming; Angeli 1 9 8 1 , 23; and Tolaini 1995. Witness Bozzotti Inchiesta industriale D S 6&2 (but almost all the answers report improvements to the machinery). T h e machines were built in Italy. O n the improvements, see Crippa 1990, 2 0 1 - 4 and Associazione serica n.d., 134. Pariset 1890, 168. See also Rondot 1 8 8 5 - 8 7 , I, 4 6 6 - 9 ; CPVD 1886, 6; Beauquais 1910, 4 5 3 ; and the introduction to the tariff liberalization bill of 1923 (MAE, RC 1 9 1 8 - 4 0 , B-textiles, no. 23). Federico 1994a, Appendice G.

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An economic history of the silk industry

Clearly, the technical progress had slowed down. According to a very detailed survey at the beginning of the century, the state-of-the-art mills (the steam powered 'cylindrical' ones) accounted for only about 5 per cent of the total number of spindles.152 More than half of the spindles were installed in water-powered 'squared' mills (i.e. the technology which had been modern forty to fifty years before), and a fifth in 'circular' machines. As late as 1927 the 'circular' and 'squared' machines together accounted for nearly half of the spindles - and this percentage dropped to 15 per cent only when the Great Crisis forced the most antiquated factories to shut down.153 This slow-down coincided in time with the loss of the monopoly Italy had traditionally enjoyed as exporter of thrown silk. The question is: which was the cause and which was the effect? Did Italy lose (partially) its markets because it invested less or did it invest less because its outlets were shrinking? Most Italian experts blamed the duties in the consumer countries.154 They are probably right. It seems unlikely that the slowdown was caused by a lack of entrepreneurship. The same people had given abundant proof of it in the previous years and were still giving it in the reeling branch. All in all, it is much more likely that the investments were discouraged by the unfavourable expectations created by the foreign duties. Besides, the advantages of the technical progress were probably smaller than in reeling, because the productivity gap between the state-of-the-art technology and the existing machinery (built in the 1860s-1880s) was not that wide.155 The firms might have found it more profitable to leave the old equipment (already amortized) working until the end. To be sure, quicker technical progress would have made Italy more competitive with France and Germany, and thus it would have increased exports and production. But this would not necessarily have changed the lot of Italian throwing. Assume that Italy had retained its erstwhile monopoly of world market of thrown silk. On the eve of World War I, it would have exported an extra 1,750 tonnes, equivalent to 40 per cent of its actual output - hardly a revolutionary change. The possible increase in output would have been really large if the increased productivity had enabled the Italian product to overcome the French and American tariffs. This is by no means sure. Moreover, it is likely that any gain 152

153 154

155

T h e data are reported in Federico 1994a, Appendice Statistica, table XLVIId). See also Mariton 1905, 2 4 4 (who uses the term 'backwardness'); Filatura 1913, 747; Risposte 1907, 1 2 1 - 2 ; Belloc and D e Vecchi 1910, 5 3 3 - 4 . Cf Annuario serico 1929, 4 4 ; and Censimento 1 9 3 7 - 3 9 , table 24 respectively. See e.g. Giretti's report in Atti 1898, 115, 'I dazi doganali francesi sulle sete e seterie italiane (II)', Sole, 26 May 1905, and C d C B G 1913. Mariton 1905, 2 4 4 .

The industry: technical progress and structural change

145

would have been quickly lost since these countries would almost certainly have raised their duties if necessary. There was no room for the optimal location of industries in the protectionist climate of the nineteenth century.

8

Institutions and competitiveness: the markets

Introduction: what are institutions and why do they matter? The term 'market institutions' in this chapter denotes the set of procedures which regulated the exchanges of cocoons, silk and other related goods (silkworm eggs, mulberry leaves etc.) and the provision of credit to finance these exchanges. Potentially, they did matter a lot, first and foremost because they determined the level of transaction costs. From the producers' point of view (peasants and reeling firms), these were net liabilities, to be deducted from the market price of silk to get the factory price of silk or the farmgate price of cocoons. Therefore, ceteris paribus the lower these costs, the higher the output of the country.1 Besides, the institutions influenced the allocation of risk and the circulation of information. The more the institutions were favourable to the development of the silk industry, the more they succeeded in allocating the risk to people ready to bear it and in making the information available to all interested parties. The issue is relevant for the analysis to the extent that institutions differed from country to country - and that the differences affected competitiveness. This chapter tries to assess the extent of these differences, using a descriptive approach. In fact, some of the costs of inefficiency, such as the deadweight loss of possible limitations to competition or the losses due to imperfect information, are difficult to measure. Others, such as the brokers' mark-ups and the interest rates could be easily compared, had the relevant data been available. Unfortunately, the quantitative evidence is scarce. The description focuses on five questions: a) how many times was the same lot of goods exchanged? Did the producers (peasants for cocoons, reeling firms for silk) sell their 1

The transaction costs are not necessarily a liability from the point of view of the exporting country as a whole, as they can accrue, at least partially, to the domestic service sector.

146

Institutions and competitiveness: the markets

147

wares directly to the consumers (reeling firms and weavers) or to merchants working on their own account? b) where did exchanges take place - close to the production or to consumption? c) how and by whom were the stocks held? In other words, who (peasants, reeling firms, merchants weavers) bore the risks of price fluctuations? d) were the markets competitive or did buyers or sellers have some oligopsonistic/oligopolistic power? e) were the transactions on different markets (for silk, cocoons etc.) separate or linked together by implicit or explicit agreements? The analysis deals with the markets for cocoons, silk and credit. The markets for other commodities are not discussed because either they accounted for a small share of the final price of silk (such as the silkworm eggs and silk waste) or for only a minor share of the total consumption was exchanged (such as mulberry leaves).

The market for cocoons The development of the cocoons market was a direct outcome of the diffusion of industrial reeling. Where traditional hand-reeling prevailed, exchanges of cocoons were either totally absent or else involved small surpluses in a local setting because most of the cocoons were processed by the peasants themselves. By contrast, even the smallest factory with a few dozens of basins processed the whole output of hundreds of peasant farms. In Italy, the development of regular trade in fresh cocoons dates back to the construction of large fire-heated factories at the end of the eighteenth century.2 In the Far East it followed the diffusion of steamreeling from the 1870s onwards. For instance in China the likin (a longrange transport tax) was extended to cocoons in 1883 and a merchants' association was established to collect it.3 Fresh cocoons are bulky, highly perishable and do not withstand long journeys. So they have to be collected from the thousands of peasants' households, exchanged and conveyed to the drying plants in the shortest possible time. The task (known as 'ammasso' in Italy) was by no means an easy one. Each country developed a different set of institutions to

2

3

On Italy, see Federico 1992a, 185. An interesting exception to the rule is the town of Bologna until the late eighteenth century (Poni 1990). It imported all the cocoons of its dominion because reeling in the countryside was forbidden. Eng 1986, 110. There was a limited internal trade of cocoons in Togukawa, Japan (Furuta 1988,98).

148

An economic history of the silk industry

tackle it.4 However, they can be seen as different combinations of three basic systems: a) the private dealings before the harvest, sometimes involving a longterm commitment between producers and buyers; b) the sale on the public market after the harvest. These markets were run by local authorities or by private entrepreneurs (sometimes under an official licence) and usually provided traders with facilities such as stalls, a weighing system etc. c) the collection at the peasants' houses by specialised agents, who offered a fixed price. Many sericulture development plans organised the collection, to guarantee the prospective producers a safe outlet for their product. In some countries a substantial part of the crop was bought by speculators (merchants or reeling firms) who re-sold it later to the reeling firms. Usually cocoons were dried before being re-sold, because any delay in finding a buyer would have entailed an high risk of deterioration. Besides, all the cocoons imported in France or Italy were dried. The supply from 'speculators' and from abroad created a 'secondary' market for dried cocoons, which remained open throughout the whole year. This market offered the reeling firms an alternative way of purchasing cocoons - with different procedures and a different distribution of risk. In central China all cocoons had to be dried before being shipped to faraway Shangai. This operation was performed in drying plants (cocoon hongs) scattered in the countryside, where peasants brought their cocoons to be purchased by the manager. Only a minority of these plants (about 10 per cent in the 1920s) was owned by reeling firms. The others belonged to local capitalists, who rented them to reeling firms or to cocoon merchants. It is not possible to assess the importance of these 'speculative' purchases (and therefore of the 'secondary' market) on total production. There are some figures, but unfortunately they range from 40 per cent to 70 per cent - and it is not possible to assess whether the percentage actually changed so much from one year to another or if 4

The institutions in Italy are described in more detail in Federico 1992a. The following account is based on: for France, Reynier 1921, 137 and O. May, 'Les achats de cocoons a prix indetermine', BSS, 17 June 1899; for Anatolia, Quataert 1987, 284 and Martineau 1902, 154 and 164; for Lebanon, A. Carini, 'La bachicoltura e sericoltura in Siria', Informazioni seriche, no. I, 1915; Labaki 1984, 40; and Owen 1981, 321, n 12; for India, Geoghegan 1872, 11; Liotard 1883, 19; Silberman 1897,1, 253; Report 1933; for central China, Furuta 1988, 104-6; I i 1981, 177-8; l i e u 1933, 53-4; and Bell 1985, 171-2; for southern China, Howard and Buswell 1925, 18 and 105ff; Survey 1925, 7; So 1986, 92; for Japan, Furuta 1988, 99-102; Bartezzaghi 1910, 858; Keishi and Tamotsu 1957, 291-2; Smethurst 1986, 216; Uyehara 1926, 107, Ghosh 1933, 17-18; Paini 1910, 831; Honda 1909, 43; Huber 1929, 14; and above all Merie 1930.

Institutions and competitiveness: the markets Table 8.1

Methods ofpurchase of cocoons in Italy Public market

1872-74 1889-91 1910-12 1924-26

149

Private dealings

Secondary market

(a)

(b)

(a)

(b)

(a)

(b)

20.2 27.2 12.7 20.8

16.2 22.6 10.7 16.6

78.4 66.3 69.6 65.9

63.1 53.0 55.7 51.9

0.9 6.5 17.7 13.4

20.7 24.4 34.2 31.5

Source: Federico 1992a, table A.

some figure is simply wrong.5 In Italy the national harvest was sold in public markets (especially in Piedmont and in the Centre) or with private dealings (in Lombardy and in Veneto). There was also an important 'secondary' market, supplied by imports as well as by speculative purchases of cocoons during the 'ammasso'. Unfortunately, the only estimate of these purchases (a fifth of output) refers to 1911. 6 Table 8.1 reports the distribution of the total supply to reeling-firms assuming that there were no 'speculative' purchases (column a) or that they always absorbed a fifth of the output (column b). 7 Neither of these hypotheses is likely to be true. The secondary market for dried cocoons did not exist in the 1870s (and its advantages were passionately discussed in the Inchiesta industriale), and it is likely that it developed after the start of massive cocoon imports in the 1890s. 8 In other producing countries, the 'secondary market' for dried cocoons was small or altogether negligible. Cocoons were mostly sold on public markets in Anatolia (organised by the Ottoman Public Debt administration) and collected by merchants (usually the local notables) in Lebanon. In Bengal the modern factories had a network of agents (set up by the East India Company) to collect the cocoons, while the traditional producers purchased their raw material on the market. In southern China, the peasants could either sell the cocoons in a very dense network of public markets to firms or to traders, or bring them to factory stores. The former system seems to have been more common. 5

6

7

8

The available figures are 60-70 per cent of the crop in 1920 (Eng 1986, 111), 40 per cent in 1926-27 (lieu 1940, 104) and in 1930 (Buchanan 1932, 8), and 20-70 per cent (Li 1981, 179) or 40-60 per cent (Furuta 1988, 104) in the 1920s. V. Charollais, 'Sulla situazione deirindustria e del commercio delle sete', BS3 no. 51, 1911. The data on the sales on public markets are drawn from various contemporary surveys of the official statistics of each market. The columns 'private dealings' are computed as residual. See Inchiesta industriale (question no. 28) and Federico 1992a.

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An economic history of the silk industry

Finally, in Japan the procedures seem to have changed over time. In the 1870s and 1880s, the cocoons were collected by traders, who sold them back to steam-reeling plants. Both peasants and firms tried to bypass these brokers. Peasants organised cooperatives for collective sales. The first ones were set up in the 1890s, and the number was to rise to about 21,600 thirty years later.9 The firms established buying departments to collect cocoons and/or resorted to the growing network of public markets, where cocoons were sold on auction. In 1923, the reeling firms acquired 47 per cent of their supply directly, either from single peasants or co-operatives (often with long-term agreements), 23 per cent on the market and only 30 per cent from traders.10 Why did institutions differ so much from one country to another? An exhaustive reply is simply not possible, as it would need a detailed casestudy for each country.11 It is nevertheless possible to make some general comments. Firstly, the existence of a 'secondary' market was more likely if the cocoons had to be dried far from the reeling plants - as in Italy, France or China. However, this was not a sufficient (nor, probably a necessary) condition. Geographical distance by itself did not prevent reeling firms from organising the purchase of cocoons directly. The real point was who was going to take the risk. The reeling firms could eschew the risk by purchasing on the 'secondary5 market, as prices of dried cocoons were strictly correlated with those of silk, but someone else had to take the risk. The 'speculators' were ready to do so, but charged a risk-premium, which in Shangai might reach 25 per cent of the purchase price of cocoons. 12 So, not surprisingly, the reeling firms vociferously asked the cocoon producers to take the risk by drying and selling their output or, as one industrialist put it, to 'change into speculators'.13 And, even less surprisingly, the peasants proved to be most reluctant to comply: at the end of the 1920s the peasant cooperatives dried a mere 10 per cent of the output in Italy and 2 per cent in Japan.14 Secondly, the characteristics of the supply constrained the use of some methods. For instance, long-term private dealings were much easier if 9 11 12 13

14

10 Ghosh 1933, 108. Ishii 1979, 404. For Italy, see Federico 1992a. Eng 1986, 112. The figure includes also the interest on the capital. Inchiesta industriale DS 6&1, witness Consonno. For Italy, see Federico 1992a; for France, M. Morand, 'Une reforme necessaire', BSS, 10 April 1880; M. Morand, 'De la creation de fours publics communaux', BSS, 8 May 1880; O. May, 'Les forces productrices de la filature', BSS, 14 April 1883; Rondot 1885-87, I, 132; E. T., 'La creation du fours publiques', BSS, 11 May 1895; Reynier 1921, 135; for Spain, Graell 1926, 44; for Japan, Uyehara 1926, 107 and the report of the French consul in Yokohama of 15 July 1928 (MAE, CCC Asie, 1918-40, Japan no. 77). See Federico 1992a, table 8; and Ghosh 1933, 68 respectively.

Institutions and competitiveness: the markets

151

the seller could provide a substantial quantity of cocoons. This system was therefore in use where landlords organised the sale of the his tenants' product, as in Lombardy, or where peasants organised themselves into cooperatives as in Japan. In the small-holding peasant areas, the cocoons had to be collected by the firms' agents (Middle East) or sold on the public market (Piedmont, southern China, France). The collection needed a complex organisation to reach each peasant household, to prevent any opportunistic behaviour and to oversee the transport of cocoons to the factory. A reeling firm could find it profitable to internalise the operation only if it had to purchase the cocoons more than once a year (as in South China or in Bengal). Otherwise, it would have been more convenient to rely on public markets or on merchants, who could exploit the scope economies by collecting other agricultural products. Last but not least, the preferred system depended on the transaction costs. It is likely, for instance, that the reeling firms preferred private dealings wherever possible because they could be struck directly by the managers without using expensive and unreliable agents and they reduced the risk of frauds.15 It has been suggested that credit rationing is said to have prevented the Shangai reeling firms from buying their whole supply of raw material directly, compelling them to resort to traders and speculators in dried cocoons.16 This is unlikely. This case rests on the assumption that merchants were able to finance the purchases with their own funds and/or by means of a personal network. It is otherwise difficult to understand why banks should have preferred to finance a dealer instead of a reeling firm, given that both could pledge the cocoons they had bought. The market for silk: an overview The institutions for the international commerce of silk were more complex than those of the cocoon market. The sellers ranged from the poor Chinese peasant household who had to sell a few pounds of tsatlees to powerful companies such as 'Katakura' who could supply hundreds of tonnes of silk; buyers and sellers were hundreds or thousands of miles away; last but not least, the silk was not a homogeneous good.17 This latter feature was relevant for the organisation of trade because before the 1930s there was no scientific way to test some key properties of silk such as its cleanliness. Thus, unlike many other primary products, silk could not be traded on sample or according to standard classifications. 15

Federico 1992a, 210-11.

16

Buchanan 1932, 8-9.

17

Semenza 1930.

152

An economic history of the silk industry

The buyer had to inspect each lot personally. As transportation costs were so low in proportion to the price of silk, it was more expedient to move it instead of having the buyers travel all around. The silk trade was therefore concentrated in a few marketplaces. There were no more than six or seven important ones - one in each main producing area: Milan in Italy, Shangai and Canton in China, Yokohama in Japan (plus Kobe for some years after the destruction of Yokohama in the great Tokyo earthquake of 1920), and three in the consuming countries - New York, Lyons and London. Of course, silk was traded in many other cities as well but they were only subordinate marketplaces - intermediate steps on the journey from the producer to the main marketplace or vice versa from the main marketplace to the weaving company. Therefore these minor marketplaces can be disregarded in the discussion without losing any essential piece of information. In theory, the turnover of each (major) marketplace could be measured by the quantity of silk traded. Unfortunately, there is no homogeneous set of data for all the markets: the available figures refer to imports in London and New York, to exports in Shangai, Canton and Yokohama and to the total silk conditioned in Milan and Lyons. 18 None of these proxies is ideal (for instance, exports undervalue the turnover, because the Asian markets handled part of the silk for internal consumption too) but the figures in table 8.2 nevertheless provide a first approximation. They highlight the deep changes in the relative importance of the marketplaces in the long run - the decline of London and the growth of New York in the West, the boom of Yokohama in the East, to name but the most striking ones. 19 They broadly reflect the underlying changes in the production or consumption in each area. There is, however an interesting difference. In the East the effect was immediate, as there was no alternative to the dominant marketplace: anyone who wanted to trade in - say - tsatlees had to go to Shangai. In the West, on the contrary, buyers and sellers had some choice: an Italian producer could sell his silk in Milan, Lyons or New York. The decision depended also on the services each marketplace could offer (banking, handling facilities, transportation etc.). An efficient and well-established market such as London went on handling part of the trade in Asian silk for the Fabrique Lyonnaise until the 1870s. Vice versa, Milan remained 18

19

As explained in ch. 5, n. 55 the conditioning was a sort of sophisticated weighting of the silk. As a rule, each lot of silk was conditioned once, and the official statement of its weight was used in all transactions. The rule had an important exception when the silk was purchased raw by a manufacturer and then thrown on commission. In this cases, the tram or organzine was conditioned in order to assess the losses in processing. For further details, see Federico 1996a.

Institutions and competitiveness: the markets

153

Table 8.2 Quantity of silk traded in the main marketplaces (tonnes) Western markets

1820 1865 1895 1910 1928

London

Lyons

Milan

N e w York

1200 2850 1000 950 1350

445 2900 6250 7950 na

na 1650 6300 9850 na

na 2001 3300 9100 34650

Shangai 1865 1895 1910 1928

Asian markets Canton

Yokohama 2

1500 2200 2750

700 3050 8550 32850

1950 3980 5450 6300

Note: 1 1867 2 including Kobe Source: Federico 1996a (three years moving average)

a subordinate market until the middle of the nineteenth century, while most of the business in Italian silk was conducted in Lyons or London. The total of table 8.2 by far exceeds the international trade in silk (see table 3.2). In fact, Asian silk appears twice, first as exports from the producing country and then as imports in the West. The double counting reflects the business practice: all Asian raw silk was traded both at home and in the consuming country (while Italian silk was usually traded only once). Actually, the figures of table 8.2 understate the real turnover of the silk trade. They omit all transactions in minor marketplaces and assume that each lot of silk was exchanged only once in the same (major) marketplace. This assumption held true in some marketplaces, where the repeated exchange of the same lot was an exception, for arbitrage or speculative purposes. On the contrary the assumption oversimplifies the reality in other marketplaces, where the same lot of silk was exchanged several times, with the intervention of different intermediaries. The number of exchanges is only one of the features of institutions that differentiated the marketplaces. They differed also for the amount of information available, the extent of specialisation of functions among dealers, possibly also the level of competition and so on. These characteristics combined into two fairly distinct sets of institutions - the 'modern' and the 'traditional' ones. The analysis will focus on this

154

An economic history of the silk industry

difference for it may well have been important for competition in the world market. In fact, there was a clear differential of contemporaneity, to use Pollard's well-known expression, between the Western and the Asian marketplaces. The modernisation of institutions was largely completed in the 1880s in the West and only just beginning in the Far East fifty years later. The market for silk: modernisation in the West In the first half of the nineteenth century, the silk trade in Milan was still largely 'traditional'.20 The institutions pivoted around the silk merchants (negozianti in sete). They mostly worked on their own account: they bought the silk from the producers, sometimes sorted and packaged it in homogeneous lots, and dispatched it to Lyons or London either on order (for a client of theirs) or on commission (to be offered for sale by local merchants). These merchants did a lot more than simple trading: 'most of the large Piedmontese and Lombard firms work in Milan and Turin, and are at the same moment importers of silkworm eggs, silkworm breeders (as landowners), reelers, throwsters, brokers, bankers and sellers in direct relation with the consumers'.21 Working on many marketplaces, usually with a large network of correspondents, they were able to gather information at a lower cost than the producers of silk were, as the latter were insulated in the countryside. Not surprisingly, the merchant houses were much larger than the average reeling firm, with a capital from six to fifty times greater.22 In fact, they had to bear most of the risks of the trade. In some cases, the risk was too large even for them: the largest merchant company in Milan, the Marietti went bust in 1834-36.23 From the silk producer's point of view, these merchants were a mixed blessing. They shielded him from the risk of price fluctuations, but they could also curtail his revenues if they had some sort of oligopsonistic clout. Modernisation caused these merchant houses to disappear. The process was surprisingly fast. Already in the 1870s, they were remembered, somewhat regretfully, as something of a bygone past. The market review of the Sole (then the most influential business newspaper) wrote that £it is a misfortune that our market has no more silk merchants. 20

21

22

T h e description is based mainly on Angeli 1982, 9 7 - 1 0 4 ; Tolaini 1995; see also Gueneau 1923, 32; Moioli 1993, 7 2 9 - 3 5 ; and the case study by Tolaini 1994b. Beaux 1886, 27. T h u s Angeli ( 1 9 8 2 , 93) judges the market for silk as 'better organized and more regulated' than that for cocoons, as featured by 'the smaller number of traders, their larger financial means, the wider scale of their business and thus the wider geographical area in which they operated'. 23 Cova 1991, Appendice I, table 55. Angeli 1982, 1 4 9 - 5 2 .

Institutions and competitiveness: the markets

155

These companies, which acted as a counterweight between the production and the Fabrique, have nowadays almost disappeared because of the greater ease of communications between the producers and the weavers'.24 As a consequence, 'the traders have became simple agents and the producers bear the whole brunt of the stocks and this state of things makes the weaver the arbiter of the situation'. Undoubtedly, the 'greater ease of communications' contributed to the change. The telegraph enabled the producer, hundreds if not thousands of miles away from the marketplace, to follow the market and make his decisions himself in real time without risking to losing the deal because of the delay, and the development of the specialised press had made the relevant information available to anyone. But the most important factor was surely the increase in size of the reeling firms after mechanisation. A relatively large industrial company could offer a substantial amount of silk of homogeneous quality, appeared more reliable and trustworthy to clients and bankers, and could afford the fixed costs of an office in Lyons or Milan. As a source of the time somewhat reproachingly noticed, 'the big industrialist, hoping to make more profits, began to deal in the sale of his products with the weavers directly, leaving aside the intermediaries . . . and therefore these latter have had their role finished and the foundation of their business has disappeared'.25 In other words, the merchants' intermediation had become redundant. Those who wanted to stay in the business had no choice but to transform themselves into producers. The process also caused the decline of smaller marketplaces such as Como, Bergamo and even Turin, which had previously been a meeting point between the merchants and the small producers of the neighbourhood. The modernisation of London and Lyons seems to have been somewhat delayed. The process was still ongoing in the 1880s, and some sources stressed the survival of the merchant houses and of the traditional commercial procedures.26 It is likely that the delay was 24

25 26

T h e first quotation is from 'Rivista semestrale del mercato serico. Primo periodo della campagna 1 8 7 5 - 7 6 ' , Sole, 12 Jan. 1876, the second from Atti 1884, 113 - but see e.g. also 'Rivista semestrale del mercato serico. Primo periodo della campagna 1 8 8 4 - 1 8 8 5 ' , Sole, 23 Jan. 1885; Chiarini 1886b, 11; Relazione [of the president of the Associazione serica] GIS, n o . 7, 1889, etc. S o m e thirty years later, L. Gavazzi, owner of the largest Italian reeling firm, still remembered the merchants with s o m e nostalgia (M. M . 'L'organisation du commerce de la soie et le senateur Gavazzi', BSS, 13 April 1910). 'Consorzio serico nazionale. Relazione del comitato promotore', Sole, 11 Jan. 1884. See e.g. for L o n d o n , Rawlley 1919a, 3 4 0 versus Charini 1886a, 9; and D e Bavier 1892, 4 - 9 ; for Lyons, see Cayez 1980, 46 and 9 3 - 9 8 ; and Atti 1884, 1 1 2 - 1 6 versus Rondot 1883, 8 2 - 8 . In the 1880s, several articles on the B S S called attention to the transformation in m u c h the same terms as the Italian journals about ten years earlier (see e.g. E. Turquet, 'La baisse de la soie', 15 N o v . 1879; O. May, 'Le marche de soies de Marseille en 1884', 5 Sept. 1884; V. O. 'La Fabrique lyonnaies et les intermediaires', BSS, 6 July 1895, etc.).

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An economic history of the silk industry

caused by the higher transaction costs of the trade in Asian silk. New York developed as a 'modern' market from its beginning. The key feature of the 'modern' institutions was the minimal and subordinate role of middlemen.27 There were two different groups of them, the dealers (commissionari) and the brokers (mediatori, courtiers etc.). These latter drew up the contract and received a fixed fee. The dealers were charged by weaving firms with searching the silk or by the reeling firms with keeping the silk on display in their warehouses and selling it. Besides, the competition among intermediaries was very keen ('so keen that the price paid by producers does not differ from that they would have to pay abroad but for the expenses and a small commission'). 28 The profession of broker was totally free both in Milan and Lyons, though there was a list of'authorised' brokers who could perform some official tasks (such as the compilation of price lists or court valuations). The firms could choose among many dealers (forty-three dealers and twenty silk exporters, plus fifty-five brokers, in a relatively small market as Milan in the 1880s). 29 Some reeling firms had longstanding connections with a dealer, but there was by no means a right to exclusivity on either side. The largest Italian firms did not even resort to dealers, having their own sales offices in Milan and, less frequently, in Lyons and New York. Similarly, some manufacturers had specialised staff to purchase the silk. And anyway, unlike the traditional merchants, brokers and dealers simply executed their clients' orders, without risking their own money. The producer set the requested price, the dealers (with or without the help of the broker) collected the offers, transmitted them to the seller and this latter decided. Some interesting examples of this relation can be found in the correspondence of F. Falcone, the owner of one of the smallest Italian firms, with only twenty fire-heated basins in Acri (Calabria). Yet the agent asked respectfully whether 'the price of 70 lire has to be considered set until further notice, or I must ask you, or the price is absolutely unchangeable so that I have to withdraw your silk from sale until I get it'. 30 In modern institutions, the producer was the master of his economic decisions. 27

28

29

30

T h e following description is based on Pratt 1928, 135ff, supplemented by Teruzzi 1915, 3 0 - 1 for the M i a n market; Gueneau 1923, 7 8 - 9 and 166 for Lyons; Matsui 1930, 75 for N e w York; and Rawlley 1919a, 3 3 1 - 2 and 3 3 9 - 4 2 for London. Ravaioli 1902, 2 6 6 (referring to N e w York). See also U S Census 1900b, 2 1 8 and 'Come si trattano gli affari a N e w York', BS, no. 3 9 , 1913. Annuario serico 1888. In Lyons there were 127 merchants and dealers in 1870, 75 in 1890 and 60 in the early 1920s (Cayez 1980, 9 3 - 4 and 1 0 0 - 5 ; and Gueneau 1923, 7 8 - 9 respectively; see also Rondot 1883, 9 1 - 2 ) . Letter by Mandara of 7 April 1895 in Carte Falcone. Another dealer offered to refund, with his own money, a rebate he had made without permission Getter by Corti of 12 July

1879 in Carte Falcone).

Institutions and competitiveness: the markets

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The market for silk: efficiency and risk in the 'modern' institutions The independence from the merchants and the keen competition among intermediaries were not the only advantages of the modern institution from the producers' point of view. The European marketplaces were remarkably well organised. Since the early nineteenth century they had offered facilities such as the conditioning of silk, and a set of standard market regulations (on terms of payment, weighing etc.) which reduced the transaction costs.31 Curiously, these procedures were adopted in New York only in the 1900s. And modern institutions also offered traders also abundant information at the price of a subscription to the specialised press. Each marketplace had one or several weekly specialised journal (Bollettino di sericoltura in Milan, Bulletin de soies el soieries in

Lyons, American Silk Journal in New York, and so on), often issued by the associations of producers (the Associazione serica italiana, the Union des marchands de soie of Lyons). The journals reported price lists, data on inventories, estimates of output, forecasts on the future market trends and all other potentially relevant news (tariffs, wars, changes in fashion etc.). Of course, not all the information was exact or reliable, and in some cases it was even suspected of deliberate distortions. For instance, in Lombardy the forecasts on the probable production of cocoons during the season were a perpetual source of controversy between the house organs of the industrialists' and landowners' associations, which often ended in insults.32 Yet the system worked infinitely better and was more 'democratic' than the resort to informal networks which was the rule in traditional institutions. Did the traders make the best use of these information? Or was the silk market efficient in the economic definition of the word? A market is defined efficient if 'prices fully reflect all the available information' so that 'investors [dealers] cannot earn an unusual profit by exploiting available information'.33 There are three possible ways to gain 'unusual profits'. One is to arbitrage between the same commodity in different markets or between different commodities in the same market - that is, to buy silk in one place and ship it to another or to purchase dried cocoons, have them processed and sell the silk (or to buy raw silk and 31

32

33

O n the history of conditioning in Europe, see Tolaini 1996. Conditioning was introduced in N e w York only in 1905, after a long discussion; the first set of regulations was published in 1908 (SAA, 1908); for details, see Federico 1996a. See e.g. F. Clerici, 'La campagna bacologica', BA, nos. 22 and 24, 1904; or 'Bachicoltura', Sole, 3 June 1905. Levich 1985, 1022. In technical jargon, the three criteria are called integration, weak efficiency and semi-strong efficiency (Baillie and M c M a h o n 1994, 3 9 - 5 4 ) .

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An economic history of the silk industry

sell it after throwing). These operations would yield unusual profits if the price differentials exceeded the costs of transportation or of processing. Market integration is thus a necessary condition for efficiency. It is not, however, a sufficient one. In fact, 'unusual profits' can be gained also by forecasting the future prices better than the mass of dealers, exploiting some information they have overlooked. One could use past prices, discovering and using whatever statistical pattern exists in them. So, in an efficient market, the price movements should not exhibit any detectable pattern: they should remain steady because all information is used, and move (unpredictably) only when new data are made available. In statistical jargon, they should be random walks. Or one could search for any stable relation between the errors in forecasting future prices and other available information (e.g. prices of related commodities or output). In other words, in an efficient market the difference between the predicted and the actual future prices should not be correlated to any of the data available to dealers at the moment of forecasting. These three implications of the theoretical definition of 'efficient markets' can be statistically tested with the data on the prices of Italian silk from 1894 to 1914.34 The silk market passes the test reasonably well. The prices of dried cocoons, raw and thrown silk in the Milan market moved very closely together (the correlation coefficients between monthly prices were in excess of 0.95 between 1894 and 1913) because fi a multitude of people buys and sells cocoons and silks only to earn the price differentials'.35 The world market also was highly integrated. The correlation coefficient between monthly prices in Lyons, Milan and New York is about 0.90-0.95. Most price differentials were arbitraged away within a month's time and all within two months. Furthermore, it can be shown that approximately a third of the innovations of the price series (proxied by the white-noise residuals of the ARMA series) were common to the three markets. They could reflect the common reaction to the same pieces of information, which caused prices to move in the same direction and made arbitrage unnecessary. Strictly speaking, this analysis refers to Italian silk only - but it really would be surprising if the same mechanism did not work for Asian silks, at least in the West. It can thus be concluded that the silk market was highly integrated. Indeed, the scarce evidence available about other commodities (e.g. wheat and rice) suggests that silk was exceptionally well integrated. 34

35

T h e following discussion of efficiency and integration is based o n Federico 1995c (see also Federico 1994a, Appendice Statistica, table V i c ) . Unless otherwise stated, it uses the monthly prices of the Italian silk in Lyons, Milan and N e w York from July 1894 to June 1914. Ferrario 1923, 11.

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Because the results are mixed, it is not clear to what extent the market was also efficient. On one hand, the prediction error is not systematically correlated to the available information (or at least to what seems a representative sample).36 In other words, dealers could not improve their long-run forecasts when purchasing the cocoons by exploiting the available information. On the other hand, prices are not random walks, so dealers could make some extra profit in the short-run by forecasting the movements of prices on the basis of those of the previous two months. 37 One has to consider, however, that semi-strong efficiency is a very tough criterion which only few markets pass even nowadays. Another feature of 'modern5 institutions is somewhat more puzzling. They did not provide the standard system for dealing with risk - the Stock Exchange - to buy and sell future contracts on silk. It would have enabled the traders to avoid all risks by hedging their operation. For instance, a reeling firm could have bought a future contract on silk at a price equivalent to the purchase cost of the cocoons plus the processing costs. In this way, it could make up any loss on the actual sale with the profits of future contracts (and vice versa). This system was commonly used for many other primary products (notably wheat, but also cotton and wool) - and even in silk trade in Asia. Hedging was in use in Japan from the 1870s and in Shanghai in the 1920s; the first Silk Exchange was founded in Yokohama in 1893. 38 Markets for futures in silk were set up in Milan and New York only in 1927-9, just in time to be swept away by the crisis.39 In Lyons the Exchange was never established, as the proposal had been rejected in 1910-12 after a heated debate, allegedly because it would have further boosted speculation.40 Perhaps the Stock 36

37

38

39 40

T h e prediction error is computed as the difference between the silk spot market price in May-June (when cocoons were purchased) and the average of the following twelve months (when silk was sold). T h e explicative variables (the information set) are the lagged output of the three main producers, the lagged yearly prices of silk (of the same three countries), cotton and wool and the lagged world income. Of course, one cannot rule out that the prediction error was correlated with other pieces of information, but these seem the most likely. T h e regression is run for the period 1 8 7 0 - 1 9 1 3 ; the R 2 is 0.14 and the F-test is 1.73 (not significant). T h e random walk is an AR(1) process (P t = P t _ i + e t where e t is a white noise), while the prices of silk are AR(2) - i.e. P t = a P t _ j + p P t - 2 + e t- In other words prices were a weighted average of prices in the previous two months plus whatever innovation. O n Shangai, see Production 1925; Buchanan 1932, 38; o n China, G h o s h 1933, 3 1 ; Huber 1929, 3 4 - 5 ; Merie 1930; Pratt 1928, 1 2 1 - 3 . See Schober 1930, 50 and 1 1 1 - 1 2 . T h e proposal was put forward by E. Turquet o n the model of the Roubaix wool exchange ( l L a situation du marche de la soie', BSS, 19 March 1910) and was discussed in the following issues of the same magazine and in a public debate two years later ('Le commerce de la soie devant la Societe d'Economie Politique', BSS, 15 and 2 2 Feb. 1912). See the account by Gueneau 1 9 2 3 , 1 9 0 - 3 , and the dismissive assessment by Pratt 1928, 147 (Lyons does not need a silk exchange because 'it is not a real market at all').

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An economic history of the silk industry

Exchange would not have worked (one might wonder who would have assumed the risk of buying the contracts), but the delay is nevertheless indicative of the ambivalent attitude of silk producers towards risk. They accepted the gamble and loved to pocket the gains, and complained only when they lost. In this latter eventuality, they would have preferred someone else to buy their silk when prices were low. The quest for this white knight went on for quite a long time, with lively debates, especially (as predictable) during market crisis.41 The most frequent proposal was to set up a permanent marketing board, either as a private enterprise (as a joint-stock trading company or as a co-operative among industrialists, funded with a fixed contribution on the silk sales), or as an official agency. According to one of these proposals, the board 'should act as a market maker, intervening with purchases, sales or any other suitable measure, to contrast any excessive price movements - both on the rise and on the fall'.42 The most important attempt to set up such a board was the Consorzio serico at the end of 1883. The proposal was launched by a group of prominent industrialists and great landowners, 'to put a halt to the devastating landslide which draws together the ruin of the throwster, the reeler and the silkworm grower' (i.e. the price fall, which dated back to the 1860s). 43 It was designed as a joint-stock company, with 30 million lire of paid-up capital. However, only 600,000 lire was subscribed and so the initiative collapsed. Other attempts in 1890, 1897 and 1901 proved abortive at an even earlier stage. It was by then clear that no private company could ever raise the capital necessary to stabilise the world silk prices. Thus, the hopeful industrialists turned to the state, so resuming a very old tradition (the first idea of a 'Monte sete' dates back to the 1820s-1830s 4 4 ). The first draft of the law to support the Italian silk industry in 1910 explicitly included open-market operations to stabilise 41

42 43

44

A good example is the series of articles and letters published by the newspaper Sole in November 1901 under the headline 'Intorno al mercato serico'. 'Riunione di industriali in sete', GIS, n o . 50, 1901. T h e quotation is from 'Corrispondenza da I i o n e ' , GIS, no. 4 9 , 1883. For further details, see 'Consorzio serico', BA, no. 4 9 , 1883; 'Consorzio serico nazionale. Progetto di Statuto', Sole, 12 Jan. 1884 (and the list of subscribers in the following issues); 'Consorzio serico nazionale. Relazione del comitato promotore', Sole, 11 Feb. 1884; and the account of the failure in the letter of the president Borromeo to L. Luzzatti in C L b. 106.1, 'Industria serica. Corrispondenza 1 8 7 8 - 1 9 0 6 ' . T h e scheme was warmly welcomed by the Italian landowners (F. Clerici, 'II consorzio serico italiano', BA, n o . 10, 1884) and not surprisingly, staunchly opposed by the Lyons weavers (O. May, 'Le project du consortium milanais', BSS, 24 N o v . 1883; O. May, 'Le consortium milanais', BSS, 1 D e c . 1883). See Caizzi 1972, 7 1 - 8 0 ; and Cattaneo 1971, II, 3 8 7 - 4 9 5 . A similar institution worked for some time in the 1770s-1780s (Cova 1976).

Institutions and competitiveness: the markets

161

prices as being among the tasks of the proposed Istituto serico.45 However, the idea met with the hostility of many influential industrialists and was eventually dropped before the parliamentary debate. Few years later, the secretary of the Associazione serica attributed the failure to the 'independent and stubborn character' of the Italian industrialists. 46 More probably, attempts to set up marketing boards failed because stabilisation was a long-term solution to a short-term problem, the speculative losses. A permanent stabilisation of prices, if possible (which is highly doubtful), would have stripped the industrialists of the opportunity to make speculative gains.47 What the industrialists really wanted was a syndicate that cornered the market to raise prices when they were falling too much. This operation was attempted many times, but the first attempt was also the most successful one. A Franco-Italian group succeeded in raising the silk price on the Milan market from 41.5 lire/kg, in October 1885 to 52.5 in February 1886 by investing about 15 million lire (to the cheers of the Italian traders).48 These gains were lost afterwards (in July the price was back to 48.5), but the partial success stimulated many imitations - e.g. in 1887, 1888, 1895, 1902 and 1904 and 1908. Most of these corners were only talked about, not really attempted. And all of them, even the most successful ones, succeeded in augmenting the prices for a short period only. From the 1910s onwards, the Italian and Japanese governments substituted private speculators in organising corners almost inevitably with very poor results. These failures are hardly surprising. A corner could create an artificial scarcity of silk and compel the weavers to buy at a higher price, but the syndicate sooner or later had to sell the silk it had amassed, causing prices to fall again. Risk remained an unavoidable feature of the silk industry.

45 46

47

48

See Federico 1995. T h e draft was largely inspired by Gavazzi. Ferrario 1923, 106. T h e same Associazione resumed the idea of a marketing board in a list of requests forwarded to the Ministry of Economy in 1928 ( m e m o of 9 M a y in MAE, RC 1 9 1 8 - 4 0 , B-textiles, no. 20). Here the focus is strictly on the effects on reeling firms - i.e. on a part of the producers. Even assuming that peasants gained as m u c h from the price stabilization, the total macroeconomic effects are quite complex (see Newberry and Stiglitz 1981). See the daily 'Corrispondenze' of the newsapaper Seta, the articles in the Sole ('II rialzo delle sete', 7 N o v . 1885; 'II sindacato delle sete', 2 N o v . 1885; A. Chiarini, 'A proposito del rialzo delle sete', 11 D e c . 1885) and the accounts in 'Rivista semestrale delle sete. Primo periodo della campagna 1 8 8 5 - 8 6 ' Sole, 15 Jan. 1886; ' U n anno dopo', GIS, no. 4 5 , 1886; 'II banchetto degli iniziatori del Sindacato per le sete', Seta, 4 March 1886; and 'II sindacato italiano delle sete', Seta, 1 - 2 N o v . 1886. T h e governments' initiatives will be reviewed in ch. 9.

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An economic history of the silk industry

The market for silk: the persistence of traditional institutions in Asia The procedures for the commerce of Asian silk have always been more complex than the 'traditional' ones in Europe.49 The silk was exchanged four times, and the transactions involved three distinct intermediaries the wholesale merchant, the exporting firm (based in Shangai, Canton or Yokohama) and the importing firm (in Lyons, New York or Milan). The wholesale merchants, always Chinese or Japanese, offered the silk on sale to the exporting firm either on behalf of the producers or on their own account. In this case, they often sorted and packaged the silk under their own brand ('chop'). The exporters, mainly Westerners, bought the silk from the wholesale merchants, checked the quality and organised its transportation to the West. There the merchandise was received by importing firms, who sold it to the weavers. Some of them worked on their own account, other as agents of the exporters; some specialised in one quality of silk, others dealt with all the types (Italian silk included). This basic lay-out had many variants. Sometimes, it was simpler, as when the same firm performed different functions. A businessman could be at the same time manager of a reeling-plant, wholesale merchant and compradore for a Western exporting company.50 And many exporters in the Far East were local branches of Lyonnaise or of New York companies. In other cases, the procedures were more complex, and involved more steps. In fact, only relatively large producers such as the steam-reeling firms or the co-operatives of hand-reeled silk producers could resort directly to the wholesale merchant. The output of smaller producers and peasants had to be collected before the sale by a network of other merchants (called silk hongs in central China), who had been created for the need of domestic weaving.51 Re-reeling added a further transaction, where, as in central China, it was organised by specialised merchants. 49

50

51

This description is based on Gueneau 1923, 33 and 163-4; and Pratt 1928, 117ff. for all three marketplaces, supplemented by Li 1981, 9 1 - 9 2 and 154-60; Eng 1986, 8 3 - 9 1 and 109-20; Allen and Donnithorne 1962, 6 2 - 4 ; Buchanan 1932, 18ff; and Howard and Buswell 1925, 146 for Shangai and Canton, and Matsui 1930, 7 3 - 5 ; Keishi and Tamotsu 1957, 269; A. Dumoulin, 'Osservazioni suirindustria delle sete nel Giappone', BS, no. 9, 1926; Sugiyama 1988, 129-30; Honda 1909, 169; Bertazzoli 1910, 873; Huber 1929, 31; and Ishii 1979, 2 4 0 - 1 for Yokohama. This multiple role was very widespread in Shangai (see l i 1981, 9 1 - 2 ; Eng 1986, 7 9 - 8 3 ; and Buchanan 1932, 21) but was common also in Japan (Stamm 1923, 99; Sugiyama 1988, 130; Hemmi 1970, 315; Mitsui 1978). See for central China, see Li 1981, 92 and 158-61; Shin 1976, 2 2 - 6 ; Furuta 1988, 123-6 and 163-9; Buchanan 1932, 2 3 - 4 ; Shansi 1925, 15; for Japan in the 1870s, see De Bavier 1874, 5 4 - 7 . In the Canton area, the hand-made silk was sold on auction for domestic consumption (Howard and Buswell 1925, 146-7).

Institutions and competitiveness: the markets

163

This chain of intermediation survived largely intact the many attempts of simplification. Large reeling firms set up sale offices (commission houses) in the market places to bypass the intermediation of wholesale merchants, with some success, especially in southern China.52 Since the 1870s the Chinese and Japanese wholesale merchants and then the producers (large reeling firms and cooperatives) tried to get rid of Western exporters by selling directly in the Western markets, but with little or no success.53 Direct exports remained always negligible: in the season 1924-5 the largest Japanese firm, the Katakura, exported 70 tons of silk directly, equivalent to a mere 2.5 per cent of its production. On the other hand, exporters, including the Mitsui, the largest Japanese trading company, were unable to side-step the mediation of wholesale merchants.54 Clearly, the division of labour in the traditional institution reflected specific skills (for instance, in assessing the quality of silk, or in arranging the financing) that were quite difficult to replace. There were, however, two important changes. Firstly, wholesale merchants worked more and more on commission, as in the West, instead of on their own account. In Shangai, 'the dealer was no longer a true "merchant" but had become a trading chain, bound fast to the interest financing him' (i.e., presumably, the exporters).55 In southern China, the steam-reeling firms in the 1920s seemed to be in control of the sale of their silk as much as the Italian ones - with or without offices in Canton. Secondly, the Japanese trading companies progressively succeeded in replacing the Western merchants as exporters.56 The market share of national companies, still a mere 10 per cent in the 1880s, grew to 80 per cent in the 1920s. Unlike the Western firms, they largely speculated on their own behalf. The Chinese tried to imitate the Japanese in the 1920s but they failed, allegedly because the national steamship companies did not support them, because extra-territoriality 52

53

54

55

See Howard and Buswell 1925, 148; and Pratt 1928, 130 for Canton; Buchanan 1932, 21 for Shangai; Keishi and T a m o t s u 1957, 2 8 1 ; Matsui 1930, 7 3 ; Pratt 1928, 1 3 5 - 6 and Ishii 1979, 80, for Japan. T h e early attempts in the 1870s are described by Furuta 1988, 1 3 0 - 8 ; Sugiyama 1988, 132; and Allen and Donnithorne 1962, 2 0 2 - 3 ; the later ones by McCallion 1983, 3 3 9 - 5 5 ; and Matsui 1930, 8 1 . T h e data on Katakura are from a letter of the French consul in Yokohama of 30 Sept. 1925 in MAE, RC, 1 9 1 8 - 4 0 , n o . 18. Mitsui 1978, 56 and 7 1 - 2 . See also the report of the French consul in Yokohama of 7 D e c . 1877 (MAE, CCC, Yokohama 1). See Banister 1933, 79. See also Decennial Report 1 8 8 2 - 9 1 , 3 2 3 ; Remer 1926, 3 8 - 4 1 ; Lieu 1933, 1 1 6 - 1 7 ; and 1940, 143; and - o n Canton - Howard and Buswell 1925,

146-8. 56

See Sugiyama 1988, 1 3 2 - 3 ; Eng 1986, 1 7 7 - 8 ; and Pratt 1928, 117 and 1 3 0 - 2 ; and the case study of Mitsui 1978. T h e figures are from Federico 1994a, Appendice Statistica, table LXIII.

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An economic history of the silk industry

advantaged the Western companies and because the local authorities did not cooperate.57 In comparison with the sweeping transformation in Milan, these changes appear extremely modest. And this is somewhat puzzling. It is not at all surprising that institutions for the trade of hand-reeled silk had remained the same, but why were similar procedures adopted also for the commercialisation of filatures? Why did industrial companies not adopt 'modern' institutions as the (smaller) Italian reeling firms had done? A tentative answer may invoke the 'distance' between producers and consumers, in the broadest sense of the word (i.e. including differences in language, culture, commercial habits etc.). As Pratt puts it (in 1928!) 'there is practically no understanding between the seller in the Far East and the buyer in New York'.58 This made intermediaries more necessary than in the trade between homogeneous countries such as Italy and other Western countries. But there were two more factors. Firstly, the Western marketplaces were competing for handling the same transactions (the same silk could be sold in Lyons or in Milan), and it is likely that competition improved efficiency. Secondly, the modern institutions needed a banking system and an efficient capital market, which hardly existed in Japan and (specially) China until late in the period. The market for credit Even if not capital-intensive, the silk industry did need large sums to purchase the cocoons. The amount of capital depended ceteris paribus on its velocity of rotation that is on the number of crops. Central China and Italy needed two or three times more capital per unit of (yearly) output than Japan, and seven times that of southern China. Very few reeling firms all over the world owned the necessary funds. The overwhelming majority had to borrow the money, usually by pledging the cocoons or the silk. Usually, the loan did not exceed 70-80 per cent of the value of the pledge, to secure the lender from sudden fluctuations in prices. So the availability of credit was essential for the functioning of the silk industry. In the traditional institutions, financing was often a part of the transaction in silk, as merchants anticipated the proceedings of the final sale to weavers. In most cases, the same funds were lent several times, in a sort of downstream flow (from the exporter to the wholesale merchant, from this latter to the silk reeling firms etc.). Sometimes, the lenders at 57 58

Tsing 1928, 103; Eng 1986, 87 and 9 1 - 3 ; Buchanan 1932, 28 and Li 1 9 8 1 , 195. Pratt 1928, 143.

Institutions and competitiveness: the markets

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the beginning of this sort of chain used their own money, but more frequently they borrowed from banks. Indirect financing reduced the banks' risks because they could use the merchants' personal properties as a further collateral and because merchants, as insiders, could screen applicants more effectively. The intermediaries gained the interest rate differential. Indirect financing was the rule in Asia throughout the whole period. There were, however, many local peculiarities - specially regarding the source of capital. In the Middle East half of the funds was provided by Lyons merchants, the rest by local banks.59 The Western (i.e. British) banks heavily financed the exports of the Far East silk.60 They advanced the proceedings of the sale to the exporting firms, discounting the buyers' bills, which expired three months later (if drawn in Europe) or even six months later (if drawn in New York).61 However, the contribution of local sources was substantial, if not predominant. In China, steam-reeling firms were funded by the so-called native banks (chien-c'huang).62 According to an estimate, in the 1930s, they provided about 6 million taels out of 14-16, while the balance was made up by exporters and foreign banks. In Japan most of the funds were provided by local banks, supported - as a lender of last resort - by the Bank of Japan and by the Yokohama Specie Bank.63 In 1907 the two banks supplied 25-30 million yen, equivalent to about one seventh of the total value of the crop. They lent the money to wholesale merchants, who then financed the industrial firms and/or the cooperatives of producers. Most of the Italian silk industry in the first half of the nineteenth century was financed by foreign (mostly British) capital. The foreign merchants borrowed the capital and anticipated part of the proceedings to the Italian ones, who financed the reeling firms' purchases of cocoons. 64 59 60

61

62

63

64

Labaki 1984, 3 9 - 4 1 . See Gueneau 1923, 1 6 7 - 9 ; Hyde 1970, 5 0 - 8 ; Fivel Demoret 1983, 493ff; Rondot 1883, 7 3 - 5 ; Sugiyama 1988, 133. O n the conventions in L o n d o n , see Rayner 1 9 2 1 , 27; in Lyons, Gueneau 1923, 1 6 7 - 9 and 'Usages de la place de Lyon', BSS, 8 Feb. 1913; in Milan, Trespioli 1907, 2 6 3 and Teruzzi 1915, 26ff; in N e w York, SAA 1908 and Pratt 1928, 1 3 8 - 4 3 . See the descriptions of the system by Li 1 9 8 1 , 9 0 - 9 1 and 1 7 8 - 8 2 (the estimate is on 180); Eng 1986, 7 6 - 9 and 8 3 ; Shih 1976, 7 3 ; Lieu 1933, 48ff. and 1940, 1 0 1 - 2 and 142; Shangai 1928, 5 9 1 ; Howard and Buswell 1925, 148, and Buchanan 1932, 9 - 1 0 . See Keishi a n d T a m o t s u 1957, 2 7 8 - 8 1 ; Sugiyama 1988, 120; Pratt 1928, 117; Molteni 1982, 742; Bertazzoli 1910, 8 7 3 ; H e m m i 1970, 3 1 5 - 1 6 (source of the estimate); Furuta 1988, 9 1 ; Ishii 1982, 4 - 7 , Merie 1930; and for co-operatives, see McCallion 1983, 3 7 5 - 9 and 3 8 7 - 8 . In 1909, there were 1,139 co-operatives for credit (Honda 1909, 40). For the financing of international commerce in Lyons, see Cayez 1980, 45 and Cayez 1993, 603; and in London; Tolaini 1995; Angeli 1982, 1 2 4 - 5 and 1 2 9 - 3 0 ; on lending to producers, see Angeli 1982, 1 2 0 - 5 1 ; Galli 1 9 9 1 , 4 2 - 3 ; and Moioli 1993; and the case study of the Scoti family by Tolaini 1994c.

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However, at least in Turin, bank credit had been available since the foundation of the Cassa di riserva in 1835. The bank was imitated by other ones, such as the Banca di Torino (which was to become the Piedmontese bank of issue, the Banca nazionale) since 1850 and the Banco di sconto e sete, established in 1856. 65 From this point of view, Milan was decidedly more backward, as all attempts to establish specialised banks in the first half of the nineteenth century had failed.66 The first bank to give loans to the silk trade was the local branch of the Piedmontese Banca nazionale, set up in 1861. The availability of credit facilities was indeed a necessary but, apparently, not a sufficient condition for the development of a 'modern' market for credit. Loans on silk accounted for a negligible share of the total assets of the Banca nazionale (and later of the Banca d'ltalia).67 Moreover, it is not clear to what extent the credit was given to producers or to merchants. The breakthrough in the development of a modern credit system was the foundation of the Magazzini Generali (General Warehouses), modelled after the London docks (but with an official licence). They stored the dried cocoons and the silk and issued warrants which the law equalised to commercial bills and therefore could be used as a pledge for credit. The first of these warehouses specialising in silk was founded by a group of entrepreneurs in Lyons in 1859 (with branches in Avignon and Marseille in 1863-64). 68 The Credit Lyonnaise, the largest Lyons bank, established its own warehouse in 1877 and it was later imitated by other banks. The Magazines Generales were used both by silk merchants and agents before the sale and by weavers to stock their raw material before processing it. In Milan the project of a warehouse was hastily put forward in the spring of 1870, in the midst of the business crisis caused by the war between France and Prussia.69 It was opened by the Cassa di Risparmio delle provincie lombarde (the largest Italian savings bank) in July. At first, it was not a success. Many firms feared that their reputation might be tarnished by the resort to an institution which appeared too similar to a pawnbroker; the rates were deemed too high and the 65 66

67 68

See Conte 1990, 6 6 - 7 1 ; and Bracco 1992, 145. See Cattaneo 1971, II, 3 8 7 - 4 9 5 ; Bachi 1923 2 1 1 - 2 4 ; Caizzi 1972, 7 1 - 8 0 ; Galli 1 9 9 1 , 45 and 191; and 'I Magazzini generali per le sete e la Cassa di Risparmio di Milano', in Sole, 8 - 9 July 1870. Conte 1990, table 3 and Relazioni Banca d'ltalia, ad annum, from 1894 onwards. See Cayez 1980, 4 1 - 4 and for the policy of the Credit Lyonnaise, see Bouvier 1 9 6 1 ,

280-3. 69

See the articles in // Sole (notably 'I Magazzini generali per le sete e la Cassa di Risparmio di Milano', 8 - 9 July and 'II commercio serico e la Cassa di Risparmio', 17 July) and the later accounts by Bachi 1923, 2 1 4 and Galli 1991, 1 9 0 - 1 .

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procedures too cumbersome.70 The procedures were simplified in 1882 and the use of the warehouse spread quickly. As in Lyons, the success stimulated competition among banks (notably the Banco di Napoli and the Banca Commerciale) and the establishment of other warehouses.71 The system was further improved at the beginning of the twentieth century by introducing the so-called 'silk account', which allowed each firm to vary the quantity of silk on stock and therefore the amount of the loan with a minimum of paperwork. The financial system worked quite well - and firms found easy to get credit in normal times.72 Many industrialists, however, complained that the commercial banks would withdraw the credit during the market crisis, compelling the reeling firms to undersell their silk.73 They therefore put forward plans to establish specialised banks which were supposed to be more sensitive to the needs of the trade. For instance, a proposed Credito Serico should have lent the capital at 3 per cent (the discount rate being 5 per cent) - but, as predictable, the project found no subscribers.74

Did institutions matter? The discussion so far can be summed up by saying that the Italian institutions were, from the 1870s, the most modern and competitive, the Japanese the most cohesive, thanks to the pervasive cooperative movement from below and to the trading companies from above, and the Chinese ones the most traditional and the least structured. The question is, of course, how much did these differences matter? The quantitative evidence on the transaction costs in the cocoons market is rather scarce. The brokerage fees on cocoons were lower in Italy (about 1-1.5 per cent of the price) than in China (3-4.5 per cent).75 Eng states that the costs in Japan and in southern China were 70

71

72 73

74 75

Cf about the reputation e.g. Viribus Unitis, 'II monte sete', Sole, 17 Feb. 1871, and VF, 'II Monte sete', Sole, 24 March 1871 (for similar arguments in Lyons, see Cayez 1980, 43; and D e Bavier 1892, 6); for the rates, see Bachi 1923, 2 2 0 - 1 ; and Galli 1991, 193; for the procedures, 'Associazione deirindustria e del commercio delle sete in Italia. Assemblea generale del 27 I 1879', Sole, 2 8 - 2 9 Jan. 1879; and 'Magazzini Generali. Fedi di deposito e note di pegno', Sole, 9 May 1879. See Bachi 1923, 2 1 6 - 1 7 ; Associazione serica n.d., 22; and Confalonieri 1980, III, 139 and 1 5 0 - 1 and 1982,1, 472. See Inchiesta industriale, D S 6&1 (question no. 35). See e.g. Kechler, 'Crisi neirindustria serica', MS, no. 48, 1879; A. Andreae, 'L'attuale situazione serica', Sole, 13 Feb. 1901; 'Deficienza di denaro nell'industria serica', InS no. 1,1906; Associazione serica Piemonte 1906b, 660, and 1907, 129; Gavazzi 1910, 435-6. Cf Chiarini 1886b. On some unsuccessful attempts in the 1860s-1870s, see Polsi 1993. See Trespioli 1907, 2 1 8 - 9 ; Pratt 1928, 127; Li 1 9 8 1 , 186.

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An economic history of the silk industry Table 8.3 Commission fees for marketing the silk (percentages of the silk prices)

Milan (1877) Milan (1907) Lyons(1880) Lyons(1913) Yokohama (1909) Yokohama (1930) Shangai (1930) Canton (1925)

a

b

c

Total

0.6 0.7 na 1.0 na na na na

na na na na 1.5 1.5 0.4 0.8

na na na na 3 na na na

na na 2.5 na 4.5 na na na

Note: a) brokerage b) commission to the wholesale merchant; c) commission to the exporter Sources: Milan: Usi 1877, 105 and Trespioli 1907, 217-18; Lyons: Rondot 1883, 83 and Usages de la place de Lyon, BSS 8 II 1913; Yokohama: Honda 1909, 173-4 and Huber 1929, 31; Shangai: Buchanan 1932, 20; Canton: Howard and Buswell 1925, 146.

lower than in central China because peasants sold directly to reeling firms without the merchants' intermediation.76 On the same criterion, costs would have been low in Italy too. Unfortunately, the statement rests on the assumption that the resort to intermediaries was more expensive than the internalisation of their functions, an assumption which is not backed by any theoretical a priori reasoning. The question has to be left unsettled. The available evidence on the market for silk (table 8.3) confirms that the fees were lower in the Western markets. The data understate the real difference in total costs. The Italian silk had to pay the fees only once, while the Asian one twice, at home and in the West. The cumulated difference may have been equal to 2-3 per cent of the price of silk (implying a corresponding gap in the farmgate price). The cost of credit can be estimated by weighting the annual interest rate by the duration of the loan: a point of interest rate increased the price of silk approximately by 0.3-0.4 per cent in Italy and central China, by 0.15-0.2 per cent in Japan and by 0.05 per cent in southern China.77 The year interest rates for loans on silk in Italy were about 5 per cent - with peaks in some years of about 7 per cent (in 76 77

Eng 1986, 120 and 172. T h e figures are computed assuming that cocoons accounted for 8 0 per cent of the total costs, and that financing lasted for six months in Italy, three in Japan and o n e in southern China.

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France they were lower).78 All the sources on Asia quote higher figures. The rates varied widely according to the lender (private banks, merchants) and the borrower (industrial firms, merchants etc.). In Shanghai they ranged from 6-7 per cent to 20 per cent, in Canton from 8 per cent to 15 per cent still in the 1920s-1930s, while in Japan the rates for industrial firms declined from 20 per cent in the 1880s to 7-9 per cent in the late 1920s. 79 The total cost of credit would have been similar in all the areas, except in central China. All in all, transaction costs were probably lower in Italy by a few percentage points. The benefits of the modernisation of institutions were therefore relevant but not really great. The level of transaction costs is not the only feature which needs to be taken into account to assess the effect of institutions on competitiveness. Italian and Chinese experts (echoed by many historians) believed that Japanese institutions - and notably the trading companies - had largely contributed to the country's commercial triumph. The Italian experts praised them because they reduced the price fluctuations, and thus the risk for the industry as a whole. Paini described the Yokohama market as 'wonderfully organised' because managed by the 'disciplined will of a few'.80 This idealisation totally contrasts with the evidence. The prices varied in Yokohama as much as on the Western markets, the trading companies and the Silk Exchange notwithstanding. The Exchange was itself blamed for stimulating the Japanese dealers' love of speculation, causing 'fluctuations without any reason in the normal course of business'.81 The organisation of the Yokohama market was largely a myth created for propaganda purposes by traders seeking relief from their failed speculations. The Chinese experts stressed the positive effects of the institutions on the quality of the silk.82 The trading companies would have compelled the reeling firms to improve their product according to the clients' wishes, and the reeling firms would have coaxed the peasants to produce exactly the right type of cocoons by offering them long-standing purchase agreements. The system would have worked much more effectively than the Chinese loose network of 78 79

80

81

82

See Federico 1994a, Appendice Statistica, table LXVI. For Shangai, see Buchanan 1932, 22; Lieu 1933, table XV; for Canton, see Howard and Buswell 1925, 148; for Japan in the 1880s, see McCallion 1983, 1 9 6 - 7 ; in the 1910s, Ishii 1982, 7; and for the 1 9 2 0 s - 3 0 s , Huber 1929, 29 and Merie 1930. C. Paini, 'Italia e Giappone sul mercato serico americano', BS, no. 14, 1913; see also e.g. M . , 'La voce dei setaioli', Sole, 8 - 9 M a y 1911; and M . M . , 'L'organisation du commerce de la soie et le senateur Gavazzi', BSS3 13 Jan. 1912. T h e opinion was shared by some foreigners (Report 1909, 26 and D e Bavier 1892, 20). See Duran 1913, 90; Matsui 1930, 1 0 2 - 5 ; and Pratt 1928, 1 3 1 - 2 ; the quotation is from a report by the French ambassador in MAE, RC, 1 9 1 8 - 4 0 B-textiles no. 19. Eng 1986, 125 and 1 9 2 - 3 ; l i 1981, 93 and 1 8 4 - 6 ; Allen and Donnithorne 1962, 63; So 1986, 96. T h e same point is raised by O w e n (1987, 280) about Lebanon.

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merchants and intermediaries - and possibly more effectively than the purely competitive Italian market. This statement cannot be summarily dismissed but it is somewhat dubious. Firstly, as detailed in the previous chapter, the quality of Japanese silk was not outstanding: it was inferior to that of Shanghai filatures and that of the whole Italian production. Anyway, the quality improvement was only one component of the overall Japanese success. The country increased its market share well before the quality of its silk had reached the Italian standard. Finally, whatever praise there is has to be shared with the state and the producers themselves. One might conclude that the modern institution advantaged Italy over its Asian competitors, while there is insufficient evidence about the alleged merits of the Japanese system. In no case, however, were the differences likely to be very large. In other words, institutions were indeed important but hardly decisive. However, this provisional conclusion is subject to one very important qualification. The total transaction costs might have been much higher than the quoted official fees if imperfect competition had given the intermediaries the opportunity to gain extra profits at the producers' expense. As already suggested, this was surely not the case with 'modern' institutions. On the contrary, many descriptions of 'traditional' institutions stress the existence of market imperfections, especially concerning the power of buyers to set the price. In Italy before modernisation, the merchants would have dominated the silk producers, while in the Far East the market power would have been applied in a sort of descending order.83 The exporting firm would have imposed its will on the wholesale merchant, the merchant on the reeling firm and the reeling firm on the peasant, who had to bear the whole weight of the intermediation system. The main evidence for this alleged market power is the existence of interlinkage, even if the access to better information might have been as important. No doubt interlinkage between financing and the transactions in silk was extremely diffused. It was also usual in the cocoons market in most countries (some areas of Italy included). The reeling firms obtained a preemption right on cocoons by supplying peasants with silkworm-eggs and the landlords by lending them the cereals to survive during the winter.84 And there is little doubt (even without hard 83

84

See on Italy, Caizzi 1972, 22 and 56; and Angeli 1982, 101 and 1 2 1 - 5 0 (but see the different opinion by Tolaini 1995); o n China, see Eng 1986, 1 9 1 - 3 ; o n Japan, see Keishi and Tamotsu 1957, 2 7 9 - 8 1 . O n interlinkage between the provision of eggs and the purchase of cocoons, for Japan see: Kyokawa 1984b, 39ff; Huber 1929, 1 0 - 1 1 ; G h o s h 1933, 1 4 - 1 4 ; and Ishii 1979, 7 0 - 1 and 4 3 8 - 4 1 ; for China, see Howard and Buswell 1925, 111; Bell 1990, 1 2 5 - 3 1 ; for the Middle East, see, Labaki 1984, 3 9 - 4 2 and Quataert 1993, 121; and for Italy, see

Institutions and competitiveness: the markets

171

evidence) that the sellers received less than the 'market' price for their product. Neither interlinkage nor a reduced price is in itself, evidence of oligopsony or exploitation. Interlinkage is basically a loan on pledge of future production.85 The final price of the good has to include the interest on the loan, the risk premium and the remuneration for whatever service the buyer provides (e.g. information). In a competitive market, the buyer could charge only the market price for capital and for other services - and interlinkage does not entail any oligopsonistic clout. The key issue is whether and to what extent the market for commercial services was not competitive, possibly as a result of legal restrictions. The evidence regarding the cocoon market is unfortunately scarce. Legal constraints on competition existed only in central China, where the building of cocoon hongs was subject to official licence till 1926 (the concession had remained frozen from 1905 to 1926) and the prices were set by associations of local merchants.86 Agreements among industrialists seem to have existed in the Nagano area between the 1890s and the 1910s and even in Italy the landowners complained about the coalitions among buyers.87 It is not possible to know the spread of these agreements (being informal, they have left no written documents) and a fortiori - their effectiveness in restricting competition. A widespread success seems anyway in contrast with the already discussed complaints of reeling firms concerning the excessive competition in the purchase of cocoons. And even in central China the control on the cocoons market was much less effective and widespread than the legal restrictions implied. The official prices were not observed and peasants could choose among different hongs.88 On the other hand, it is likely that from the 1910s the growing size of the Japanese reeling firms had created the conditions for oligopsony at least in some areas. The French consul in Yokohama called them 'the new daymos'.89 Opinions on the competition in the silk market diverge. Furuta affirms that the Chinese peasants could freely choose the hong to which to sell their silk, while according to Li they depended totally on the merchants'

85 86

87 88

89

Marini 1894, 240. On the business relations between peasants and landlords, for Lombardy, see Serpieri 1910 and Angeli 1982, 8 3 - 8 7 , and for China, So 1986, 89; Shih 1976, 7 4 - 5 and Production 1925. See Bell 1988. See I i 1981, 182; Eng 1986, 112-14; Buchanan 1932, 4 - 5 ; Shih 1976, 1 8 - 2 2 ; Bell 1985, 181-92. After the liberalization, the number of drying plants soared from 763 in 1925 (Survey 1925, 1 0 - 1 6 and 26) to 1318 in 1930 (Li 1981 177). For the Nagano area, see Ishii 1979, 4 1 6 - 1 7 ; and for Italy, Federico 1992a, 2 1 6 - 1 7 . See Eng 1986, 115; Furuta 1988, 106; Bell 1990, 137; Shih 1976, 54 - and for general opinions on the competitiveness of the Chinese agricultual markets, see Brandt 1985, 1 8 1 - 3 and Faure 1989, 104. Report of 26 October 1926 in MAE, Asie 1918-40, Japan, no. 77.

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An economic history of the silk industry

will.90 The same Li defines the wholesale merchants as cthe masters' of the Shanghai market, while an official source stresses the 'sharpness in business and keenness in competition' among them - and similarly contradictory statements can be cited for the Yokohama market.91 The (unfortunately scarce) quantitative evidence tends to support the 'competitive' thesis. The number of merchants was rather high everywhere (about seventy in Milan in the late 1820s, and fluctuating between twenty and sixty in Shanghai and Yokohama), the turn-over was high and the Herfindahl coefficients of concentration in Japan in the 1920s were fairly low. 92 Discussion has, however, focused on the exporting firms. Some scholars see them as agents of Western exploitation. One Chinese historian contends that 'the control and monopoly exercised by foreign companies over the channels of foreign trade devastated the Chinese silk trade'.93 They would have exploited their dominant position by an unprincipled use of exchange rate fluctuations and of the right to reject the silk if inferior to the agreed quality standards, under the shield of extra-territoriality. Such behaviour allegedly prompted the Yokohama wholesale merchants in 1881-2 to set up a sales agreement, but the plan soon collapsed after the energetic reaction by the exporters who refused to buy the silk.94 This opinion is, however, contested by others and is not completely supported, to say the least, by the available data.95 The number of exporting firms was indeed small (about twentyfive in Shanghai, ten to fifteen in Canton and twenty-five to thirty-five in Yokohama) but the Herfindahl coefficients never exceeded 0.15. More90 91

92

93

94

95

Furuta 1988, 124 and 1 6 7 - 8 ; Li 1981, 160. T h e two quotations about Shangai are from Li 1982, 215 and Decennial report 1 8 8 2 - 9 1 , 3 2 4 respectively; the 'oligopsonistic' thesis about Yokohama is sustained by E. Turquet ('Le marche des soies de Yokohama', BSS, 22 N o v . 1913) and Mitsui (1978, 70), the 'competitive' one by H e m m i (1970, 315). T h e number of firms in Milan from Cova 1 9 9 1 , Appendice I, table 55; in Shangai, from Buchanan 1932, 18; in Yokohama, from Sugiyama 1988, 120. In 1929 there were 4 3 wholesale merchants in Yokohama (an Herfindahl coefficient of 0.069) and 29 in Kobe ( 0 . 1 5 4 4 ) - M e r i e 1930. W u Chengming quoted by Wright 1992, 21 and (in a less outspoken way) Eng 1986, 8 8 - 9 1 and 1 9 2 - 4 and Sugiyama 1988, 130. According to Western merchants, the right to reject was simply a defence against the continuous frauds of the producers (Duran 1913, 1 0 3 - 6 ; Rayner 1921, 24; and Pratt 1928, 131). See the report of the British consul in Yokohama in CR Yokohama 1881 [PP 1882 L X X I I ] , the articles in BSS (e.g. O. May, 'La suspension des affaires au Japon', BSS, 22 Oct. 1881; 'La suspension des affaires au Japon', BSS, 12 N o v . 1881; and 'La reprise des affaires a Yokohama', BSS, 14 Jan. 1882) and - from a Japanese point of view McCallion 1983, 190; and Sugiyama 1988, 132. S o m e merchants of re-reeled silk set up a similar agreement in 1907 - with no better results ('The rereels controversy', ASJ N o v . 1907, and Report 1909). See Statistical Appendix, table AXXII. See e.g. H e m m i 1970, 3 1 5 ; Furuta 1988, 50; and Wang 1993, 4 9 (who depicts Western merchants as at the mercy of local wholesale merchants).

Institutions and competitiveness: the markets

173

over, the success of the Japanese firms (which caused a remarkable rise in market concentration) proves that barriers to entry were not prohibitively high. In summary, the evidence does not support the hypothesis of widespread restrictions to competition in 'traditional' institutions. But the evidence is not conclusive, so that one cannot rule out the presence of imperfections in the Far Eastern market places. In this case, Italy's advantage would have been substantially greater and institutions would have mattered greatly to competitiveness.

Institutions and competitiveness: the state

Introduction The production of silk has always been specially cared for by governments all over the world. In China, it was a state monopoly until 1150 BC, and only the Emperor and the court could wear silk dresses.1 In Japan, the help of the central government and of daymios, eager to substitute imports from China, was instrumental in the recovery of the production in the seventeenth and eighteenth centuries from the crisis caused by the previous centuries of political turmoil.2 At the same time many European governments tried to foster the development of silk production, because they deemed imports of silk and silkwares particularly harmful to the trade balance. The France of Henry the IV and Sully led the way at the end of the sixteenth century, imitated some decades later by James Fs Great Britain and afterwards by Germany, the Netherlands and Sweden.3 Only France succeeded in developing a commercial production of silk, because elsewhere the climate was, as already said, unsuited to sericulture. These failures, jointly with the general crisis of mercantilism towards the end of the eighteenth century, halted the efforts in Europe. The British and French governments turned to their colonies (the former to the United States and India, the latter to Madagascar, the Reunion Islands and Indochina), hoping to find there a better environment - but with little or no success.4 After some decades of neglect, the idea of promoting sericulture was revived in the late nineteenth century. The silk-importing countries wanted to become self-sufficient. Exporters wanted to keep or increase their 1 2 3 4

Leggetl949,74. See McCallion 1983, 14ff; Furuta 1988, 27; Lehmann 1982, 41-3; Li 1982, 204. See Rondot 1885-87,1, 110-12, 442-6 and 475-6; Silberman 1897,1, 228-41; Legget 1949, 258-61, 294-7 and 307-10; and on Germany, also Schulze 1904. The cases of India and the United States during the British colonial rule will be briefly discussed later; on the French development policy, see Rondot 1885-87, I, 452; Gueneau 1923, 265-6; and Laffey 1976.

174

Institutions and competitiveness: the state

175

market shares, while many other countries nurtured the idea of entering the lucrative export business. This chapter will deal with these policies. It will begin by listing the available tools. The range was determined by the characteristics of the industry - notably by the high level of competition, which prevented a direct support to single firms. But the actual policies differed according to whether or not the country had a tradition in the industry and whether the production was intended for the internal market or for exports. The rest of the chapter will discuss the experience of the three major exporting countries and some other case studies. It adopts a 'mercantilist' approach to assess the outcomes of the policies. They are deemed effective if they achieved their aim - the growth of output or of exports or, sometimes, the improvement in the quality of silk. Of course, this approach is subject to a risk of a post hoc propter hoc fallacy. The growth of output cannot necessarily be attributed to incentives: the production might have increased notwithstanding an ill-suited and/or badly implemented policy. And conversely a stagnation or even a decline of production may have not been caused by an illconceived policy. On the contrary, this latter may have been effective in partially counteracting the adverse market forces. Besides, this 'mercantilist' approach neglects totally the opportunity-cost of the resources both for the state budget and for the economy as a whole. The development of the silk industry was not necessarily the best allocation of these funds. Unfortunately, it is not possible to delve into this last issue as the data on the actual expenditures for support to the silk industry are scarce and the possible alternative uses of the same money literally countless. The tools of industrial policy To promote silk throwing in consumer countries was quite easy. It was not bound by any location constraints, and thus it could be transferred wherever, simply by raising the duties enough. This system was adopted by many silk consumers countries - the United Kingdom until 1845, the United States from the 1860s and France from 1888. Russia too raised its duty on thrown silk in 1892, while imports remained free in Switzerland, Germany and the United Kingdom. The United States tariff was, as it were, a natural follow-up to the decision to protect weaving and was quite consistent with the American trade policy in the following years. French duty was, on the contrary, the outcome of a power struggle between two lobbies - that of the silk producers (silkworm growers, reelers and throwsters), who asked for generalised protection, and that of the consumers (the Lyons weavers), who of

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An economic history of the silk industry

course wanted to import their raw material freely. The weavers accepted the duty on thrown silk to split the protectionists' front. Once adopted, however, the duty proved exceptionally hard to get rid of. The throwsters' lobby succeeded in defusing all the attempts to abolish or reduce it until 1923, even after an official pledge by the French government to the Italian government in 1917. 5 The duties in all three countries were prohibitive, the effective protection ranging from about 75 per cent in France and the United Kingdom, to 225 per cent in Russia, and to 300-400 per cent (according to the different tariffs) in the United States. Not surprisingly, duties almost unfailingly succeeded in curbing the imports of thrown silk to zero. In principle, the consuming countries could also have used tariffs to foster reeling. However, none of them adopted this solution because the weavers' lobbies had the upper hand everywhere.6 Duties would, of course, have been useless in encouraging production for export. Thus, the commerce of raw silk remained free all over the world throughout the whole period. The governments resorted to (different mixes of) four policies: a) support for technical progress. This involved the establishment of advanced research facilities, the organisation of schools and/or practical courses in sericulture and the promotion of the use of modern techniques by prizes, exhibitions etc. Not by chance, most of these efforts focused on the production of eggs and on silkworm raising. The former activity was technically quite demanding for backward countries (involving the use of microscopes and some scientific knowledge), while the technical progress in sericulture (labour-saving raising techniques etc.) was mostly a public good and hardly appealing for private investors. b) the provision of services to export, such as credit or transportation (subsidising the steamship companies). c) quality checks, both for silk and - much more frequently - for eggs. Most governments provided inspection services (compulsory or voluntary, free or upon payment), and some subjected the egg production to licence. d) money subsidies. In some cases, where the silk industry was very small or did not exist at all, these 'standard' systems would have been insufficient - or so at least was the prevailing opinion. The development of the silk industry was thought to be very difficult because of a vicious circle between the scarce 5 6

See the dossiers in MAENS Italie no. 71 and RC 1918-40 B-textiles no. 23. Russia came close to imposing a duty on raw silk in 1906, but bowed (apparently) to Italian pressures (Federico 1995, 58).

Institutions and competitiveness: the state

177

supply of cocoons, which discouraged the construction of modern plants to process them, and the lack of outlets, which prevented peasants from raising silkworms. Some governments tried to break the stalemate by devising comprehensive development schemes. They always provided for the free supply of silkworm eggs, and often for the purchase of cocoons at predetermined prices. Some states even set up and managed, on their own account, the reeling factories. Beginning from scratch: Kashmir and the United States In the nineteenth and twentieth centuries, so many governments (and some well-disposed businessmen) tried to have the silk industry developed that one wonders if there was any exception besides the northern European countries - which had already tried and failed in previous centuries. A list, not necessarily complete, would include Bulgaria, Hungary, Jugoslavia, Rumania, South Africa, Kenya, Algeria, Mexico, Guatemala, Cuba, Colombia, Equador, Peru, Argentina, Uruguay, Chile and Brazil (which was to become a substantial exporter in the 1960s and 1970s).7 A review of all these cases would be boring. The analysis will therefore focus on two particularly significant cases, the United States and Kashmir. The United States stands out as an example of total failure, notwithstanding the unlimited endowment of land and the favourable climate (the mulberry tree grows easily in many states).8 The first attempts go back to the early seventeenth century when James I, who was really obsessed with silk, granted a patent to Virginia silk-growers. The efforts went on throughout the whole colonial period, and, after a pause during the revolution, were resumed in the 1830s by the central government and by many states (Pennsylvania, Connecticut, New Jersey, Maine etc.). Unfortunately, the reputation of sericulture was immediately spoiled by afrenzyof speculation over the Morus multicaulis saplings in 1838-9. The craze produced much paperwork (journals, textbooks, pamphlets - promising astounding profits to the would-be growers), large profits for few and huge losses for many others, but very little silk. Sericulture enjoyed a short revival in the 1850s and 1860s when California was singled out as a potential supplier of disease-free 7 8

See Rondot 1885-87, I, 449-73, Silberman 1897, I, 236-7; De Margheriti 1924, 55-87; Pariset 1890, 20; Rosa 1887, 79; and Gueneau 1923, 265-6. For details, see Brockett 1876, 26-35, 38-43 and 46-8; Rondot 1885-87, I, 456-60; Bishop 1868, I, 356-65, I, 393 and 413-16; Silberman 1897, I, 266-7; Clark 1949, I, 575; Matsui 1930, 14-20; and Klose 1963. A good example of the attempt to lure prospective growers is Johnson (1882, 33) who promises a rent per acre ten-fold that of cotton.

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silkworm eggs during the pebrine crisis, but the boom soon petered out as soon as the European growers discovered the virtues of the Japanese eggs. In the 1880s the idea of fostering the production of silk was resumed - this time to supply the thriving home industry. A Women's Silk Culture Association began to lobby quite hard, and in 1884 it succeeded in having a sericultural bill passed. It provided for a free distribution of mulberry saplings and eggs, for subsidies to farmers and for a purchase scheme for the cocoons. The results were - to say the least - disappointing. The maximum output was 85 tonnes of cocoons in 1889, enough to produce about 8 tonnes of silk - i.e. the 0.3 per cent of annual imports in those years. Not surprisingly, in 1891 the Congress refused to re-finance the bill. Only ten years later, the Secretary to Agriculture J. Wilson agreed to make another attempt - investing $80,000 on an eight-year plan. The project was very similar to the previous one, and the results were just as disappointing. This failure halted the state intervention forever, but the dream of producing silk in the United States was kept alive till the Great Crisis by private investors. The dream was and could not be fulfilled for a reason which the French expert Rondot had pinpointed already in the 1880s - 'the scarcity . . . or even the lack of a patient, careful and attentive rural population and the high cost of manpower'.9 This fact was always being put forward by the association of the manufacturers, the Silk Association of America, which staunchly opposed all these 'crazy schemes'. 10 They feared, in fact, that any success would have brought about a duty on raw silk. The case of Kashmir was the most relevant success among the many attempts by the British local authorities to develop a commercial silk production in regions where sericulture was previously unknown or else limited to local consumption only.11 The region had been the cradle of Indian sericulture in the third to fourth centuries AD, but since then the industry had decayed so much as to almost disappear. A first plan to modernise it was implemented by the Maharajah in 1869. 12 It failed because it foresaw the raising of silkworms in large breeding houses, where they were too prone to diseases. The predictable epidemic broke out in 1878 and the project was abandoned three years later. It was 9 10

11

12

Rondot 1885-87,1, 462. 'The sericultural movement', ASJ, January 1902, which is part of a campaign against the Wilson project (see e.g. 'Facts and comments', ASJ, June 1901, 'The sericultural madness', ASJ, July 1902 and 'Sericulture up to date', ASJ, September 1902). See Geoghegan 1872, Liotard 1883; and Warner 1921, 187-9. Some results were obtained in Mysore in the 1920s with a 'standard' policy of distribution of eggs and support to technical progress (see Report 1933, 33-5). See Geoghegan 1872, 79-84; Rawlley 1919a, 30-8; Liotard 1883, 35-49; Maxwell and Lefroy 1916, 39-40; Watt 1893, 49ff.

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resumed in the 1890s with almost Soviet-style planning.13 All the stages of production had to be strictly supervised by the government. It owned the mulberries, distributed the eggs, withdrew the cocoons (fining peasants if they did not reach a minimum output), processed them in its own reeling-plants and sold the silk. The system was devised to guarantee peasants a safe outlet for their cocoons and to maintain a high quality standard. The plan had some success: the Kashmir silk was fairly good and sold well in the Western markets, and in the 1910s nearly 50,000 households raised cocoons, producing about 80 tonnes. The whole enterprise was none the less in the red and the attempt to privatise it after the war failed.

How to promote exports: Japan In Japan the support to silk industry was resumed after the Meiji restoration in 1868, when the government singled out the exports of silk as an indispensable source of foreign currency. This basic tenet was never questioned in the following decades, but its implementation changed several times with a trial-and-error process, dotted by many expensive failures. It is possible to single out three main phases. (a) In the first years after the Restoration, the government focused on reeling, providing it with funds, importing Western technology and organising a system of quality control. Financing was not specifically aimed at the silk industry. However, the industry received a substantial amount of the funds the state had given to the ex-samurai to appease them after the loss of their traditional privileges. About 1.5 million yen - i.e., a quarter of the total - were invested in reeling plants. The results were modest because most of the payees did not show any entrepreneurial quality.14 They invested in traditional hand-reeling techniques instead of in modern mechanised steam factories. The inspection system for hand-reeled silk was set up in 1868 as a response to the Western buyers' complaints about the deterioration of silk and to raise money for the government.15 The silk was to be inspected at its arrival in Yokohama and the lots not meeting a 13

14

15

See Wardle 1903, 1904 and 1906 (who supervised the whole plan); Maxwell and Lefroy 1916, 40-51; Rawlley 1919a, 175-90; the report of the French consul in Calcutta of 31 May 1928 (MAERC 1918-40, B-textiles no. 20); and Report 1933. See McCallion 1983, 218-19; Yamamura 1974, 137ff; and Keishi and Tamotsu 1957, 221. For details, see Sugiyama 1988, 113-14; Furuta 1988, 160-1; Keishi and Tamotsu 1957, 227-8; Sericulture 1904, 135-6; and specially the careful account by McCallion 1983, 152ff.

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minimum quality standard were confiscated. Three years later, the principle of quality control was extended to egg exports - making an official stamp on layers compulsory.16 The measure was officially intended to avoid frauds, but it was regarded by the Italian semai (silkworm egg traders) as a further strengthening of the Japanese monopoly. They even urged the Italian government to protest officially to the Japanese one. 17 Neither system was a success. Inspection of eggs was rapidly made useless by the decline of exports and it was abolished in 1878. The inspection of silk was reformed in 1872, setting up local centres in the producing areas for a preliminary control. The new version also gave very poor results: the rules were too complex (a 'bureaucratic nightmare' according to McCallion 18 ), the fiscal revenue was scarce and the quality of silk did not improve. The Western merchants regarded the system at best as a nuisance if not as a move against their freedom.19 Besides, the production of filatures (exempt from the system) was growing. For all these reasons, national inspection was written off in 1877, leaving just few local centres whose importance declined steadily. The Japanese imported reeling machinery from Italy and France.20 By far the largest investment was the purchase turnkey of a French-built reeling factory. The factory was set up in Tomioka, a village in the Gumma prefecture, then the major silk producing area of the country, in 1872. It was intended to show the superiority of steam-reeling in the production of high quality silk and at the same time to train manpower in modern methods. It was a technical success and a financial (near) failure. The silk was good, and easy to sell, and the Japanese girls learnt so well as to make the Western trainers unnecessary after 1874, but the firm remained in deficit until 1885. The Tomioka factory has long been considered a milestone in the development of Japanese mechanical reeling, both as the first example of the successful use of steam and as a supplier of trained manpower. This traditional view is now widely discussed. As explained in chapter 7, the hypothesis of a direct technological filiation can no longer be sustained. It even seems that the managers were extremely reluctant to show people round.21 Tomioka's 16 17

18 20 21

See Keishi and Tamotsu 1957, 227; and McCallion 1983, 158. See C. Orio, 'La questione bacologica del giorno', Sole, 22 June 1872; 'Atti ufficiali del governo', GIS, no. 2, 1873; 'Effetti della ingerenza governativa nel commercio di semebachi di seta', GIS, no. 52, 1873 and nos.1-2, 1874; R. Iitta, 'Bachicoltura al Giappone', GIS no. 10, 1874 and for the French (more sceptical) opinion the letters of the French consul in Yokohama in MAE, CCC, Yokohama, 1). 19 McCallion 1983, 164. Report 1871; De Bavier 1874, 113-18. See Kyokawa 1987; McCallion 1989; and Smith 1965, 5 8 - 6 0 . See Yamamura 1980, 2 7 9 - 8 1 .

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role as a training-ground cannot be ruled out as easily. Over roughly fifteen years (1879-1893) about 5,000 workers were trained - and this number may seem quite respectable if compared with the existing factories (650 in 1879 and 2600 in 1892). But many of these workers came from the surroundings (where steam reeling did not develop until the 1900s) and/or were of high social class (and therefore did not search for a job elsewhere after having quit Tomioka). (b) The first phase of the support policy came abruptly to an end in 1881, when the so-called Matsukata deflation compelled the government to cut the expenditure. The financial support to the silk industry was written off, and Tomioka was put on sale, without finding a buyer.22 The government did not give up the attempts to improve the quality of the silk. A new inspection system was organised in 1884 in the Nagaro prefecture and was extended in the following year to the whole country.23 This attempt also was unsuccessful - apparently because of the opposition by Yokohama merchants and (later) by Nagaro producers. The central office was closed down in 1889 and the provincial ones some years later. The state also tried a new course - a direct support to exports. In 1881-2 it backed the failed attempt of Yokohama merchants to set up an export monopoly lending them one million yen. 24 Afterwards, it switched to indirect support, helping the national shipping companies and, via the Yokohama Specie Bank, the credit system. Eventually, in 1897, it approved a law to subsidise exports.25 The sums were low (about 2-4 per cent of the market value of silk) but this provision stirred up a lot of concern among Japan's competitors. It had to be withdrawn because Western governments deemed it to be in defiance of the existing trade treaties. (c) The third phase, the really successful one, began in the late 1880s. This time the government focused on silkworm raising, trying to improve the quality of the eggs and make the best practices known. The policy was co-ordinated by the Silk Yarn Advisory Council (later Research Council for Production), created in 1899, and by the Cocoon thread section (later Silk Yarn Bureau) of the Ministry of Agriculture, established in 1905. 26 22

23 24 25

26

McCallion 1983, 109 (and for a discussion about the deflationary policy, Francks 1 9 9 1 , 3 1 - 2 ) . T h e factory was eventually sold in 1893 to the Mitsui Company (Mitsui 1978, 68). McCallion 1983, 1 9 6 - 7 and 2 0 2 - 4 ; Keishi and Tamotsu 1957, 2 4 7 - 8 . See below, pp. (ch. 8, n. 93). Sericulture 1904, 136; CPVD 1896, 12; O. May 'Les primes a l'exportation des soies du Japon', BSS, 3 0 July 1898; and 'I premi serici giapponesi', Sole, 3 July 1897 (which echoes the Italian industrialists' worries about unfair competition). Keishi and Tamotsu 1957, 2 8 9 .

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The improvement of the quality of the eggs was pursued with the old tool of the inspection system. In 1885-86 the government set up a network of local facilities ('stations') which, unlike the one for silk, was a success. In fact it fit the breeders' need to be sure to buy disease-free eggs. The number of stations went on growing in proportion to the quantity of eggs to check -up to 206 major and 137 minor ones in 1928, employing nearly 1000 permanent staff and 70,000 temporary workers.27 As already said, in 1911 the state set up the National Institute of Silkworm Eggs Production, which had a decisive role in developing new races of eggs (specially the highly successful F! hybrid). Its work was supported by a network of local branches (forty-eight in 1928), which studied how to adapt the new varieties to the different local environments and propagandised them among peasants. The diffusion of modern techniques of mulberry growing and silkworm raising was entrusted to two complementary networks, the schooling system and the associations of producers.28 The pivot of the former were the national institutes for sericulture, which trained the researchers and the higher staff of the sericultural stations. The first one was established in Tokyo in 1896 (transforming a sericultural station), followed by others in Kyoto (1899) and Uyeda (1920). More practical teaching was given by the provincial schools of sericulture (seventeen in 1909 and 29 in the 1930s). Besides, many primary and secondary schools organised courses in silkworm raising under the supervision of the local branches of the National Institute and/or of sericultural stations. The two national associations of silkworm raisers were established in the 1870s, while that of the industrialists in 1892. The silkworm raisers organized conferences, exhibitions, prizes, distribution of mulberry saplings etc. In 1909 they had more than 136,000 members - and there were 127 provincial sericultural guilds (67 of growers and 21 of industrialists), and 2,442 cooperatives of peasants. In 1916, the network was reorganised, transforming the national associations into federations of provincial ones. Moreover, the affiliation to associations was made compulsory if the associations gathered more than two thirds of the potential members. The massive resort to Voluntary' organisations saved a lot of money. In 1928-9, the total outlay was 13 million yen (i.e. about 1.5 per cent of the value of exports or 0.2-0.3 per cent of total state expenses) - 2.8 27

28

Data from Ghosh 1933, 6 9 - 7 0 . See also Smethurst 1986, 2 0 5 ; Keishi and T a m o t s u 1957, 288; Morris-Suzuki 194, 102; and Honda 1909, 37. T h e information o n education is from Honda 1909, 2 5 - 8 ; Eng 1986, 174, and Merie 1930; o n co-operatives, see D e Margheriti 1924, 28; H o n d a 1909, 3 9 - 4 4 2 ; and Ghosh 1933, lOOff.

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million from the Ministry of agriculture (0.5 for the sericultural stations, the rest as contributions to associations and for propaganda), 0.7 from the Ministry of Education and 9.1 from the local authorities (2.6 for the inspection of eggs, 2.2 for the sericultural stations, 1.7 for the propaganda and 0.9 for teaching).29 The industry did not benefit from any of these initiatives - save possibly from the trained supply of managers from the institutes of higher education. It was supposed to be perfectly able to thrive without any outside help in normal times. But the government felt obliged to come to its rescue during the worst market crisis. It organised purchase boards to prevent silk prices from falling too much in the first months of World War I, in 1920-22, in 1926 and in 1929-30.30 All these initiatives except the second were unsuccessful. The last one was - in the words of the president of the Association of Foreign Merchants in Yokohama - £a complete fiasco'. It cost the Japanese state 120 million yen (more than ten years of incentives) and did not avert the collapse of silk prices. How (not to) promote exports: Italy and China Even if the efforts of all governments pale beside those of Japan, they cannot be totally overlooked. For instance, it would be unfair to accuse the British of having neglected the lot of Indian sericulture. Since the middle of the eighteenth century the East India Company set up an elaborate plan to improve the quality of the Bengal silk - to meet needs of British industry.31 The first move was the dispatch of an expert in 1757, but the critical one was the construction of Italian-style large reeling plants in 1770. Production and exports to Britain increased, even if the quality was not up to the target and the technical progress was very scarce. In 1832, the Company owned more than 12,000 basins and rented 3,700 more. After its dissolution in 1834, the factories were sold to European firms, which kept them running, apparently without any further investment in the equipment, for about a century. In the 1840s 29

30

31

T h e data are from the report of the French consul in Yokohama of 16 October 1930 in MAE RC 1 9 1 8 - 4 0 B-textiles, no. 2 1 . T h e total State expenses from Emi 1964, table A.6. See on the 1914 board Kobayashi 1930, 7 2 - 8 2 ; Yamasaki and Ogawa 1929, 6 7 - 7 1 . O n the 1 9 2 0 - 2 2 board: Yamasaki and Ogawa 1929, 1 8 3 - 5 ; Pratt 1928, 145; and Matsui 1930, 111. O n the 1926 board: the letter of 22 N o v e m b e r 1926 by the French consul in Yokohama in MAE RC 1 9 1 8 - 4 0 B-textiles no. 19. A n d finally on the 1 9 2 9 - 3 0 board: Bacon-Schloemer 1940, 4 6 3 - 4 and the reports of French consul in Yokohama in MAE RC 1 9 1 8 - 4 0 B-textiles n o . 19 and n o . 21 w h o followed very closely the events (the quotation is from a report of 8 M a y 1931). See Rondot 1 8 8 5 - 7 , I, 3 3 0 - 5 ; Watt 1893, 27 and 1 8 3 - 1 9 0 ; Geoghegan 1872, 9 - 1 2 , Bhattacharya 1983, 2 8 6 and 3 1 8 - 2 2 , and above all Report 1836.

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An economic history of the silk industry

the new British administration launched a plan to introduce Western sericultural techniques into Bengal (the so-called 'Mutti experiment'), which, however, failed.32 Afterwards, the Bengal sericulture was left on its own without any intervention. Other governments tried to improve the quality of the eggs by setting up research institutes. The forerunners had been France and Italy, followed by Russia and Turkey.33 The most successful of these undertakings was the Sericultural Institute of Brussa (Anatolia).34 It was founded in 1888 and acted both as an inspection centre for eggs and as a school for teaching the techniques of the cellular reproduction of eggs. In 1893, its degree was made compulsory for anyone who wanted to produce silkworm eggs. Actually the initiative was taken by the (Western) tax contractors, who were interested in possible increases in revenues. The reputation of the Italian and Chinese governments in fostering silk production is decidedly poor. They are accused at best of having been indifferent to the needs of the industry or even of having been actually harmful - in the case of the Chinese government an account of the heavy tax on the transport of silk and (since 1883) cocoons. The tax, the so-called likin, was quite burdensome, amounting to 3 per cent-8 per cent (varying according to years and prices) of the price of silk.35 Besides, in the violent 1920s, the government failed to protect the silk trade against the activities of street bandits.36 Actually, the accusation of total inactivity is not fully justified. Since the end of the Tai'ping rebellion, some local authorities tried to develop sericulture to increase the tax revenues.37 As Li points out, however, the results were poor, 'because they were strictly local and ad hoc in nature and not coordinated into a national plan or policy5. The need for a national plan began to be felt in the 1890s, under the spur of Japanese competition. In 1906 the newly established Ministry of agriculture instructed the local authorities to foster technical progress in various industries, including sericulture. These instructions had little if any effect, because of the 32 33

34 35 36

37

See Zanier 1984. On the Padua Institute (established in 1871), see 'Annali del Ministero di Agricultura,industria e commercio', 1871, part 1, Agricultura, 2 2 0 - 3 0 ; and Bonnefon-Craponne 1916, 4 6 - 7 ; on the Russian institute (in Tbilisi), see Silberman 1 8 9 7 , 1 , 248; Pinchetti 1906, 44; and Commissione 1918, 138. See Quataert 1987, 2 8 2 - 9 ; Martineau 1902, 150; and Owen 1981, 205. S e e E n g 1986, 1 1 5 - 1 6 and Li 1981, 1 8 3 - 4 . Eng 1986, 120, the report by Knight on the 'Situation du commerce etranger en Chine' (28 March 1925), and the copies of the protests of the French consul in Canton of 7 August 1916 and 2 5 - 2 7 August 1925 in MAE, Asie, 1 9 1 8 - 4 0 , no. 4 1 6 and NS, Chine, no. 580. l i 1981, 1 3 4 - 7 (quotation on 137); Eng 1986, 1 3 0 - 1 .

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political turmoil which followed. The policy was resumed by the new Guomingdang government in the 1920s. It abolished the restriction regarding the construction of new cocoon-hongs in 1925 and started a full-scale development plan in 1926 which closely followed the Japanese example. It encouraged the use of cellular eggs, set up practical courses of silkworm raising, provided for the creation of a network of local sericultural stations and offered incentives to cooperatives.38 Once again the results were disappointing because of the Great Crisis. The conventional wisdom on the Chinese policy is neatly summed up by Eng. He lists the hindrances both from inside the public service (bureaucratic inertia, the prevalence of particular interest over the general) and from outside (need for tax revenues to pay the war indemnities, political turmoil and eventually the Japanese invasion), concluding that 'all these reforms came too little too late to enable China to challenge Japan's pre-eminent position as the world's leading supplier of raw silk'.39 In the eighteenth century, the Piedmontese government had issued a set of compulsory regulations to enhance the quality of silk, and these regulations are believed to have been rather effective.40 However, they were undermined by technical progress or else dropped - the last measure being the ban on exports of raw silk in 1834. From then onwards, the Italian government did practically nothing for the silk production (save the establishment of the Padua institute). And the Italian industrialists bitterly complained of being damaged by taxes, trade policy and labour protection laws.41 Actually, their protests have to be considered with some scepticism. They affirmed that taxes on profits were too high, but the rate was a mere 10-15 per cent, and it was collected with a sort of collective agreement which left ample room for tax avoidance. They complained about the export duties on silk (from 1866 to 1892) and on waste silk (from 1866 to 1914) - but the duties amounted to about 0.5 per cent and less than 0.2 per cent of the price of silk respectively. They also criticised the Italian protectionist policy, affirming that it was bound to attract retaliation against silk exports. But the only case of retaliation was France's duty on thrown silk in 1888, which was probably unavoidable anyway. And raw silk was exempt from import duties in all countries. The Italian industrialists complained also to be compelled by the 1902 law for the protection of 38 39

40 41

See SAA 1928; Li 1 9 8 1 , 191; Furuta 1988, 2 2 1 - 7 . Eng 1986, 136. This opinion is widely shared (Shin 1976, 7 1 ; l i 1 9 8 1 , 199, Allen and Donnithorne 1962, 68; and Allen 1981, 72). See Poni 1981 and Chicco 1992. What follows is a summary of Federico 1995.

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An economic history of the silk industry

child labour to replace the girls with more expensive adult women. However, according to a semi-official estimate, the change increased the wage-bill by a mere 2.5 per cent, equivalent to 0.25 per cent of the total production costs. So the total damage of actual policies was small. It is, nevertheless, unquestionable that until the beginning of the twentieth century the government neglected the silk industry, while actively fostering the development of other industries - notably the heavy ones (steel production etc.). For this reason the silk industry became the favourite of the free-traders' lobby which vainly tried to fight the growing state intervention. The silk industrialists, however, were not committed to free-trade. As the president of their Association, De Vecchi, put it in 1905, CI am a free-trader a outrance when I sell abroad, but I am a protectionist when the government wants to give me real support, and I believe we all agree to accept support'.42 Few months later, the industrialists started a large-scale lobbying campaign to get help against the creeping crisis of the industry. The first step was a public inquiry among producers and traders (the well-known Inchiesta serica) to draft an agenda for the hoped-for state intervention. Some of the industrialists' requests were transferred to a bill which the government submitted to the parliament in 1910. It aimed at increasing the production of cocoons by stimulating technical progress and the spread of sericulture in the South and at improving the credit facilities for reeling. The bill was approved two years later, dropping all the clauses on credit and appropriating a very small sum for all other purposes. Whatever results the original draft of the bill might have achieved had it been approved, its rejection is clear evidence of the weakness of the silk lobby. Probably it was weakened by its traditional free-trade stance (which had alienated the support of other industries) and by the declining relative importance of the industry in the core Northern areas, which deprived the lobby of a strong local support basis. The failure of the sericultural law did not discourage the industrialists. After the war, they gained a reputation for being 'the most vociferous claimants for state protection and interventions' among the textile industries.43 They got as little as before the war. In 1926, the fascist government unified the various associations into an Ente Nazionale Serico.44 It had the usual long list of tasks (propaganda for silkworm raising, organisation of advanced research, and 'any other initiative' suitable for developing the industry etc.). The funds were however even 42 44

43 Conference 1905, 188. Tremelloni 1940, 91. See V. Alpi, 'Per la seta del filugello', BS, no. 3 1927; Associazione Serica, n.d., 88-9; Angeli 1986, 82; and Garbini 1993, 197-8.

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scarcer than before the war, and so the results were negligible.45 Besides, the industry was very severely hit, as were all exporting ones, by the return of the lira to gold in 1927 at a very high parity.46 The Italian government's sloth was to be shaken only by the Great Crisis of 1929. The struggle for survival: Italy and France When the world crisis broke out in 1929, the Italian industry - unlike the Japanese one - was already in a shaky condition. The Italian state came immediately to its rescue: in December 1929 it set up a board to finance the stocks of raw silk pending the hoped-for price upswing.47 Of course, this measure was wholly ineffective to shield the Italian producers from the world collapse of silk prices, compounded by the revaluation of the lira (which remained pegged to gold until 1936). On the Milan market the price of silk in 1934 hit an all-time low of 34.5 lire, equivalent - in real terms - to quarter of the 1928 price.48 Such a decline threatened the very survival of the industry. From 1932 onwards, the government heavily subsidised the production of silk.49 In ten years, the state spent about 400 millions lire, equivalent to 10 per cent of the value of the production. The subsidies were (barely) sufficient to redress the financial position of the reeling firms, but they were definitely too small to make sericulture profitable again. So the production halved. In other words, the state intervention only succeeded in averting the total collapse. During these hardships, some industrialists still hoped to resume their traditional self-reliance, once the world crisis were over. This illusion was soon abandoned: in his statement to a parliamentary committee on the perspectives of the Italian economy, the secretary of the Ente Nazionale Serico bluntly 45

46

47

48

49

See N S R B and Annuario serico, ad annum; Banca d'ltalia 1938, 2 , 1 , 7 8 8 , n l , Passerini 1942, 1 4 - 1 6 ; and Giretti 1932, 138. See G. Gatti, Crisi della filatura serica, BS, no. 5 1 , 1926; A. Ferrario, 'La crisi della filatura serica', BS, no. 12, 1927; Giretti 1932, 18 Ministero della Costituente 1946, 141. See Sindacato per la difesa dell'industria serica, 'Norme che regolano le operazioni del Comitato' (supplement to BS, 1930). Prices from Annuario Serico 1935, deflated by the wholesale prices in I S T A T 1958, 172. T h e 1928 real price was close to 1 9 0 9 - 1 3 average, but 25 per cent less than the post-war peak in 1926. For the fall of prices of cocoons relative to other agricultural products, see Passerini 1942, III. 1. Sericulture received a fixed s u m per kilo of cocoons, while the subsidy to reeling was inversely proportional to the price of silk (according to a quite complex sliding-scale system). See Ministero Costituente 1946, 144; Banca d'ltalia 1938, 2 , 1 , 7 9 3 - 5 and also Mortara's yearly trade review (e.g. 1934, 3 2 9 - 3 6 ) ; Tremelloni 1937, 1 9 5 - 7 ; and Giretti 1932 and 1934 (the hope of a return to export is on 6 8 2 - 9 0 ) .

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An economic history of the silk industry

stated that the silk industry could not survive without the state's subsidies.50 These latter were not given. The Italian experience in the 1930s is to some extent a repetition in a shorter span of time - of that of other Mediterranean countries, notably France.51 The producers' lobbies were well organised, and they were strongly backed by the members of parliament of the small silkproducing areas. They began to move as soon as the late 1870s, when it was clear that the national industry, unlike the Italian one, was not able to get over the pebrine crisis. The campaign gained momentum in the 1880s, exploiting the increasingly protectionist climate. The producers required a duty on cocoons and silk, but they ran into the predictable opposition of the weavers of Lyons. 52 These latter prevailed. The silk producers were given only a small duty on Italian silk in 1888 - as a retaliation in the trade war among the two countries. At any rate, the duty was withdrawn two years later and the Meline tariff (1892) left the imports of raw silk free from duty. As a compensation for not having been protected, sericulture and reeling were generously subsidised. The total subsidy amounted to about 20 per cent of the market price of silk. The farmers got a fixed sum per kilo of cocoons, while the subsidies for reeling varied according to the number of days worked and to the equipment, allegedly to reward the investment in modern technologies. Unfortunately, in the 1892 version, the subsidies were inversely proportional to productivity. This mistake (if it was indeed a mistake) was only partially amended when the bill was renewed in 1898 and 1909. The amount of subsidy was proportional to productivity, but only up to a maximum of 200 grams of silk per day/ basin (i.e. a third of the current average Italian level). Therefore the system £has not encouraged the improvement of the equipment; on the contrary, it has stimulated a routine behaviour because it favoured the firms which produced less'. 53 In fact, as already explained in previous chapters, the equipment remained quite backward in comparison with the Italian industry and the output of cocoons at best stagnated. In short, 'all these measures surely helped the French industry to survive, 50 51

52

53

Ministero Costituente 1946, 1 4 6 - 7 . See Beauquais 1910, 1 1 6 - 3 5 ; Reinach 1891; D e Margheriti 1924, 3 6 - 4 2 , BonnefonCraponne 1916, 35; for Austria-Hungary, see Leonardi 1 9 8 4 - 8 5 ; and for Spain, D e Margheriti 1924, 1 9 - 5 0 and Graell 1916, 1 - 4 5 . See the articles in the 'Bulletin des soies and soieries' (e.g. 'La Chambre du Commerce de Lyon et le renouvellement du traite de commerce avec l'ltalie*, BSS, 12 N o v . 1887; E T , 'Les negociations commrciales avec l'ltalie', BSS, 3 D e c . 1887; 'Les perils d'une rupture commerciale avec Tltalie', BSS, 10 D e c . 1887; 'Les negociations commerciales avec Tltalie et les droits protecteurs sur Is soies', BSS, 18 Feb. 1888; 'Les protestations contre les droits sur les soies d'ltalie', BSS, 25 Feb. 1888 etc.). Beauquais 1910, 125.

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but they did not succeed in enabling it to regain the rank it once had5.54 In other words, the French policy cannot be regarded as anything but a failure. And a costly one too - about 6-9 million francs each year (i.e. about a fifth of the value of the silk).55 The war drastically reduced the real value of the subsidies and thus their effectiveness. The producers' lobby did not give up. In 1923, when the output was down to 40 per cent of the pre-war level, the Federation de la soie still sent a memorandum to the government pleading for its support to 'redeem France from the dependency on foreign silk5.56 This request was not accepted and the silk industry approached to its final demise.

Some final remarks These examples (and several other possible ones) show how a 'moderate' policy of support was not a sufficient condition for the growth of silk production if the factor endowment was not suited to it. Sericulture could not prosper where labour was, or was becoming, expensive. Of course, this failure does not rule out the possibility that the development of sericulture could have been forced by extreme means such as a very large subsidy or (in consuming countries) a prohibitive duty. This policy would have been very expensive, both for the consumers and the state coffers. At any rate, no country resorted to it. Was state support a necessary condition for success in suitable countries? Many people believed so. For instance, the final report of the Italian silk inquiry praises the 'watchful assistance and the effective and solicitous support of their [France's and Austria's] governments'.57 Twenty years later a report about the prospects of the Indian industry stated that 'in its modern form [silk production] cannot survive without government organisation and assistance'.58 This opinion was officially endorsed by the Zurich world sericultural congress in 1929. It approved a motion stating that 'the great development of sericulture in Japan is due mainly to the strong organisation and propaganda by the state' and urged all other governments to follow its example.59 This opinion has been widely shared by scholars. Keishi-Tamotsu even ventures to state that 'without the aid and the support of the government in guiding the 54 55 56 57

58

Beauquais 1 9 1 0 , 5 3 . See Statistical Appendix, table AXVIIIe, and the table in Federico 1994a, ch. 8, n . 1 3 1 . See MAE, RC, B-textiles n o . 19 (and also Gueneau 1 9 2 3 , 2 6 5 - 6 ) . Inchiesta serica, I, 2 3 . It is however noteworthy that the experts' discussion of Japan in the same inquiry thoroughly discusses every issue but the role of the government. 59 Report 1933, 3 1 . See the proceedings in MAE, RCS B-textiles n o . 2 1 .

190

An economic history of the silk industry

sericultural industry, it could have hardly succeeded in Japan'.60 This upbeat assessment is now changing, specially as far as reeling is concerned. According to McCallion, 'in the end the government did little to encourage the process [the mechanisation of reeling] . . . actually contributed to the preservation of the traditional alternative'.61 This opinion well fits the current revision of the role of the Meiji industrial policy in Japanese development. In the case of silk, the scholars' assessment seems to depend on the effectiveness of single policies. McCallion refers specifically to the efforts to improve the quality of silk in the 1870s-1880s, which were outright failures, as were the market interventions in the 1920s-30s. Other initiatives are still under scrutiny, such as the construction of Tomioka. By contrast, the promotion of technical progress in sericulture has been surely effective. But in this task the state was substantially helped by 'landlords, raw silk entrepreneurs, prefectural officials and in the twentieth century even tenant farmers'.62 Moreover, as already said, the technical progress does not account for the whole increase in the cocoons production. So state support has surely helped the development of the Japanese industry since the 1890s - and thus it has been, by definition, a source of competitiveness. The extent of the advantage, however, is uncertain, and all in all it is not likely to have been decisive. A fortiori, it does seem unlikely that the state's inactivity was the main cause of the decline of its competitors. 60

61

62

Keishi and Tamotsu 1957, 2 9 0 . See also in the same vein Allen 1 9 8 1 , 71 and Smith 1965, 54-60. McCallion 1983, 8-9. For the reappraisal of Japan's industrial policy, see Hirschmeier 1964, 154-5; Francks 1991, 37 and above all Yamamura 1980, 269-92. Smethurst 1986, 184. T h e importance of these efforts 'from below' is stressed forcefully by Hayami (Hayami and Yamada 1977, 2 3 6 - 4 9 , and Hayami and Ruttam 1985, 235).

10

Conclusions

In the introduction, it was stated that this book aimed at replying to two main questions: why did world consumption increase in the long run, and what determined the competitiveness on the silk market (as represented by changes in market shares)? The book cannot offer a final word on either question because the data are not sufficient. But it does reach some conclusions, which in many cases do not fit with the conventional wisdom about the export of primary products and economic development. The difference is clearer on the causes of growth. Until quite recently at least, the conventional wisdom attributed the growth of exports almost exclusively to the demand side. LDC would have simply reacted passively to the big increase in demand from the growing economies of the 'core' countries in the West. This was not the case for silk. As discussed in chapter 4, the silk-saving strategies of Western manufacturers caused the yarn producers to lose a sizeable art of the potential increase - at least until the 1890s. And the silk producers helped themselves considerably. According to the result of the econometric model, the total growth is evenly shared between the demand and the supply side.1 Admittedly, a part of contribution of the supply-side consisted in the devaluation of the producer countries' currencies, which reflects their falling relative efficiency. None the less, as discussed in chapters 6 and 7, the technical progress in the silk production contributed substantially to this achievement. The performance of sericulture appears particularly remarkable. Supposedly backward agricultural countries achieved very high rates of technical progress, and succeeded in increasing their output and expanding the production in spite of falling relative prices of cocoons. The productivity increase in reeling contributed less to the aggregate growth but it was nevertheless important. In fact the industry showed a noteworthy capacity of innovation with practically no help from more advanced countries. So 1

Federico 1996b. 191

192

An economic history of the silk industry

on the whole the performance of silk producers was remarkable indeed. Of course, it may be wondered to what extent these countries were representative of the whole 'periphery'. The answer to this question cannot be conclusive, because there are no comparable studies for other products. Nowadays, the opinion of the performance of primary producers is somewhat less pessimistic than it used to be. 2 Yet there is a strong suspicion that the case of silk was atypical. Two out of three main producing countries have had an outstanding development record and are among the very few success stories in the late nineteenth century. The coincidence is indeed amazing, and has suggested a very optimistic appraisal of the role of silk exports in the development of these countries.3 In part, this assessment is based on the role of silk exports as a source of foreign currency. It is not really relevant in this context, as it holds true for any export. Therefore, it cannot discriminate between silk-exporting Italy and any other country (e.g. tin-exporting Malaysia). Moreover, it assumes a Keynesian approach to the adjustment of the balance of payments, which nowadays many economists would not agree with. Many scholars, however, argue that silk exports were instrumental to growth because silk production was intrinsically more conducive to development than other ones. This opinion relies on three arguments. Firstly, the proceeds went mostly to peasant households, who spent them on mass-produced consumer goods, instead of to owners of large plantations who were likely to squander them in conspicuous consumption. Secondly, the production of silk entailed an industrial process, which adopted modern techniques. Steam-reeling mills were an essential training-ground for workers and entrepreneurs alike. Last but not least, financing of silk production and exports was extremely important for the development of modern banking and commercial institutions. It is very difficult to assess these claims as there is little research on these microeconomic issues, at least for Italy. The only available evidence refers to the macroeconomic role of silk industry.4 The results, however, are mixed. On one hand, the silk production was indeed more dynamic than the rest of the economy in Japan, growing at an yearly 6.6 per cent (versus 3.1 per cent) from 1885 to 1928. But not in Italy, at least in those years: there, the growth 2 3

4

Reynolds 1985; O'Brien 1984; and Foreman and Peck 1994. For Italy, see Cafagna 1989 and Corner 1993; for Japan, Lockwood 1954, 16; Allen 1981 passim (notably 170); Francks 1991, 27-8; and (less enthusiastically) Minami 1994, 77 and 171-2. The silk production is from Statistical Appendix, table AIII; the total Value Added in Japan from Okhawa and Shinohara 1979, table A. 12 (GNP col. b); in Italy from Ercolani 1969, table 1.1.A (the growth rates from 1885 to 1928) and Rey 1992 (the benchmark estimate for 1911). Save this latter, all the data are triennal moving averages.

Conclusions

193

rate was a mere 1.0 per cent (versus 1.8 per cent). This last comparison is not conclusive, as the silk industry is said to have stimulated Italian development mainly in the first half of the nineteenth century, a period for which unfortunately no data are available. On the other, the silk industry was not that important nation-wide. In the 1910s it accounted for about 1.5 per cent of GNP in Italy and 4 per cent in Japan. It is likely that the Italian percentage had been higher some decades before, at the beginning of the country's development. But even a figure in the region of 5 per cent of GNP does not seem high enough to warrant the alleged essential role in national development. The case was of course different for the sericultural areas: in Italy they were in the forefront of industrialisation, but in Japan they remained stuck largely in the specialisation in silk. The main evidence against the thesis of the intrinsic worth of silk production is, however, China's disappointing development record. Actually, the conventional wisdom about China is exactly the opposite. Silk exports are deemed at best ineffectual to start development and at worst a means of Western exploitation.5 The economic mechanisms of this alleged exploitation are unclear and the most likely candidate, the oligopsonistic role of Western firms is, as said in chapter 8, unsubstantiated by the available evidence. On the whole, it seems difficult to believe that silk exports alone could have caused development (and that the silk-producing countries had been blessed by luck). Probably the causation has to be reversed - from development to silk exports instead of the other way round. Japan did not develop because it exported silk, it exported silk because sericulture was suited to its input endowment and it exported more silk than China because it had a greater development potential. This conclusion may be appealing but is a bit vague. Unfortunately, it is quite difficult to be more precise. There, is, in fact, a large number of possible sources of competitiveness - structural differences in the location of reeling and/or in the inherent riskiness of the business (chapter 2), product differentiation in manufacturing (chapter 5), the technology (chapters 6 and 7), the availability of low-cost inputs (chapter 6), the efficiency of markets for goods and for credit (chapter 8) and the state support (chapter 9). Many scholars attributed the success of Japan to the co-ordination among state, large firms and trading companies.6 In other words, silk would have been the testing ground of the Japanese system which was to score so many successes in the world 5 6

See Eng 1986 and Osterhammel 1992. The two most ardent supporters of this view are Eng 1986 and Zanier 1990, who frames the case of silk in a Spenglerian view of a centuries-old rivalry between Europe and Asia for world economic supremacy.

194

An economic history of the silk industry

market in subsequent years (cotton cloths in the 1920s and 1930s, electrical hardware and ships in the 1950s-1960s, hi-fi and cars in most recent times, and so on). The analysis brings some evidence to support this view. The state actually promoted the technical progress in reeling and (more effectively) in sericulture; the large reeling firms improved substantially the quality of Japanese silk, both directly by modernising their equipment and indirectly by distributing cellular silkworm eggs; the trading companies succeeded in gaining control of the export flow and effectively conveyed information on the customers' needs, the quality of silk etc. Yet the evidence is not sufficient. The technical progress was indeed very important, but it was largely an outcome of market competition, i.e. of a spontaneous drive from below rather than of a coordinated effort from above. And anyway, it was not sufficient to emulate Italy's productivity and quality of output until the late 1910s. Reeling companies were definitely larger than the Italian ones, but the advantages of size are very dubious in a perfectly competitive markets. The trading companies were probably an efficient response to market failures, but they were defenceless in the face of market vagaries as the small Italian firms. The real key to Japan's success was its favourable factor endowment - that is, the availability of agricultural labour in the countryside. In other words, the case of silk fits more with the 1950s cliche of Japan as a successful low-cost imitator than with the 1980s view as the pioneer of a new organisation of production. This conclusion is confirmed by subsequent development. Industrialisation, making labour scarce, jeopardised the Japanese industry after 1950s as much as it had the French one after the 1870s and the Italian after the 1900s. The Japanese one have not yet disappeared as the other ones only because it is heavily protected. The interpretation of the Italian case seems quite straightforward. Italy was undoubtedly the most advanced country in the world in reeling and possibly also in sericulture, and its institutions were remarkably efficient. Thanks to technical progress, it succeeded in overcoming the shock of pebrine, and in increasing the production throughout the whole nineteenth century. The crisis broke out when technical progress in sericulture was no longer sufficient to compensate for the growth of opportunity-cost of agricultural labour caused by industrialisation. Therefore, the output of cocoons began to decline, just when the Mediterranean supply was drying out for various reasons. This discouraged innovations in reeling, causing Italy to lose its traditional technological leadership. But even if the gap had remained as wide as before, it would not have been sufficient to save the Italian production because the cocoons accounted for such an high percentage of total

Conclusions

195

production costs. The demise of Italian industry was inevitable, and any support policy would have been a waste of money, as it had been in France in the 1890s-1910s. The case of China appears to be somewhat at odds with the underlying interpretation. The labour cost was probably lower than in Japan, so that as early as in 1920 Boulger forecast that 'it looks as if the last country in which the silk will be producible at profit will be that in which production began'.7 But this prophecy was to be fulfilled only when Italy and Japan stepped out from the competition. Before the 1910s, China had the second-worst export performance after India (by the way another low-cost country). This failure has been mainly attributed to socio-institutional factors, such as the inefficiency of markets, the hostility of traditional producers towards steam-reeling and the inactivity of the state. There is some evidence to all of these causes, but probably the most damaging factor was the political instability. Unlike Italy and Japan, China has been constantly in state of turmoil or civil war from the Tai'ping rebellion to the Communist victory in 1949, and the situation was made worse by the growing hostility to foreigners. This climate has surely hampered the long-term commitment to export production. These remarks on long-run performance suggest a final consideration. In recent years, many authors have stressed the importance of institutions (in a broad sense) in of international competition and have invoked a more active role for the state to enhance the competitiveness of countries. The case of silk may have been an exception, but it suggests a different view. The performance in the long run depended on the input endowment and, to a lesser extent, on entrepreneurship, provided, of course, that a minimum safety for investors was guaranteed. The institutions and the state did matter in the short term, but they could not change the long-term prospects. The very survival of the industry depended on the supply of low-cost manpower. In the words of Clerici, the leading Italian sericultural experts 'sericulture is an industry which can survive only in countries where labour is abundant, and therefore peasants are satisfied with an extremely low wage'.8 One might add that the demise of the silk industry is not to be regretted too much, if this was the price to be paid for improving standards of living. 7 8

Boulger 1920, 16. F. Clerici, *Se sia conveniente un secondo allevamento estivo-autunnale dei bachi da seta', BA no. 21, 1906. The date is significant, because in that year the Italian output hit an all-time peak, making Clerici's words somewhat prophetic. This idea was to become a commonplace later (see e.g. Bonnefon-Craponne 1916, 39; Rusconi 1923, 25-31; Ussi 1930, 168-9; Giretti 1932, 149-50).

Statistical appendix

Data in quintals if not otherwise specified.

Table AI

1820-24 1825-30 1831-33 1834-37 1838-42 1843-47 1848-50 1851-55 1856-59

The silk trade before 1860 Italy

China

India

Levant

Total

15,450 16,400 19,750 19,600 23,100 22,700 24,950 25,200 20,400

2,800 3,100 2,600 6,000 1,500 5,700 9,000 22,100 35,400

3,900 4,800 4,900 4,700 5,800 6,200 5,600 6,200 8,000

1,350 2,200 2,150 3,400 5,050 4,750 5,150 6,500 5,900

23,500 26,500 29,400 33,700 35,450 39,350 44,700 60,000 69,700

Source: Federico 1994a, Appendix A.

196

Table All

The silk trade 1859-1938 Italy

Levant

Quantity China Japan

India

Total

Value (S,m) 1913 Current prices

prices

1859 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884

15,598 19,616 17,293 13,174 15,847 12,378 5,706 13,104 14,451 14,407 20,566 17,857 34,264 22,872 26,423 22,434 26,515 20,313 16,092 19,722 16,843 23,371 35,479 31,639 31,762 29,424

5,444 5,510 4,104 6,428 8,570 7,830 6,256 4,241 3,537 3,302 2,861 4,117 3,164 3,013 2,998 3,633 3,298 3,724 1,966 2,828 2,821 2,431 2,864 2,935 3,137 4,124

31,482 38,142 30,877 36,931 18,163 14,530 24,823 18,768 27,244 35,115 29,666 29,666 36,326 39,353 36,931 44,802 48,434 47,829 35,720 40,564 49,040 49,645 39,353 38,748 39,353 41,169

2,910 4,850 5,505 12,561 7,127 8,016 5,619 6,574 5,968 7,250 4,360 4,120 7,980 5,470 7,210 5,880 7,090 11,190 10,340 8,720 9,820 8,770 10,880 17,370 18,790 12,590

6,884 6,000 4,083 3,968 4,978 5,232 7,034 5,991 6,376 5,298 4,904 4,970 5,080 3,732 3,940 3,147 1,704 2,064 1,618 1,937 1,687 2,529 2,024 1,924 2,646 2,697

62,318 74,118 61,862 73,062 54,686 47,987 49,438 48,678 57,576 65,372 62,357 60,730 86815 74,440 77,502 79,896 87,040 85,119 65,736 73,771 80,211 86,746 90,600 92,616 95,688 90,004

85.90 88.98 86.98 107.45 111.59 113.01 80.43 78.71 107.80 63.84 70.56 73.92 78.43 94.43 87.49 85.06 77.07

49.63 72.86 66.36 70.21 68.26 71.73 69.56 53.72 56.99 60.15 67.61 69.31 70.15 72.48 64.83

2Share of world trade (%)

1.95 1.92 1.83 :1.02 1L86 ]L.83 1.33 1.33 ]L.84 ]1.09 ]1.20 ]1.24 ]1.21 11.42 11.27

Table All contd

1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910

Italy

Levant

33,269 33,364 34,302 41,876 40,526 37,658 40,005 36,624 29,137 37,519 36,100 38,781 36,944 46,717 45,016 43,500 50,562 52,191 45,971 49,732 61,747 73,780 60,460 53,969 61,046 52,396

4,554 4,082 4,796 4,120 5,617 5,210 6,209 6,792 6,477 6,789 8,979 7,586 8,220 8,927 8,988 8,579 9,143 9,530 10,016 11,429 10,022 9,130 10,150 10,388 11,078 10,479

Quantity China Japan 35,115 47,224 47,829 46,618 56,305 49,040 61,754 61,148 56,910 59,938 66,597 53,278 70,230 65,992 89,604 58,727 78,100 72,652 56,910 75,679 64,176 67,203 70,230 78,100 79,311 84,760

14,740 16,030 18,880 28,200 24,770 12,660 32,180 32,590 22,290 32,910 34,870 23,510 41,520 29,020 35,680 27,790 52,190 48,470 43,890 57,950 43,680 62,370 56,130 69,130 80,820 89,080

India

Total

1,369 2,026 2,200 2,521 2,664 2,486 2,316 2,663 2,877 2,549 2,763 2,955 2,762 2,575 2,801 2,908 2,920 3,197 2,962 2,558 2,460 3,076 3,421 2,976 2,456 2,257

89,047 102,726 108,007 123,335 129,882 107,054 142,464 139,817 117,691 139,705 149,309 126,110 159,676 153,231 182,089 141,504 192,915 186,040 159,749 197,348 182,085 215,560 200,391 214,563 234,711 238,972

Value (S,m) 1913 Current prices prices 72.12 60.16 85.82 67.85 70.60 87.39 80.62 91.13 85.78 102.51 88.91 70.71 94.09 101.16 105.48 93.40 77.73 85.18 87.99 86.48 100.82 91.59 77.60 82.76 101.82 100.48 104.65 99.47 115.99 146.62 108.62 95.35 136.80 128.51 151.65 123.48 141.30 107.82 157.44 133.39 156.60 124.10 199.43 148.72 200.75 141.03 159.72 148.08 178.02 162.89 175.79 169.34

2Share of world trade (%) L.24 1.17 L.17 L40 L.37 1.37 1.42 1.18 1.33 L.47 ]L.20 ]1.24 ]L.39 ]1.07 ]L.29 1 .27 ].63 1 .14 1 .43 1 .55 ].33 ].44 1 .32 1 .51 1 .44 1 .24

1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938

43,265 54,030 45,595 39,639 49,376 40,157 29,175 17,027 36,934 29,608 41,614 35,980 48,292 44,521 59,571 54,104 46,533 49,791 55,224 58,571 51,974 28,753 31,565 17,165 19,044 23,372 18,484 23,242

9,642 8,763 7,670 4,500 2,210 1,300 1,000 1,000 2,528 1,541 3,331 3,956 2,920 3,269 4,085 2,817 3,444 2,220 1,590 1,259 921 708 592 97 130 0 0 102

78,100 95,952 90,815 65,992 86,576 74,468 75,679 74,468 100,501 62,359 90,815 87,182 83,549 79,311 101,712 102,318 96,869 109,583 115,637 92,025 81,733 47,224 46,618 33,299 46,618 37,537 41,775 32,088

86,740 102,620 121,370 102,890 106,890 130,450 154,970 146,070 171,730 104,350 157,060 205,500 157,030 221,770 261,640 264,000 311,920 328,780 344,910 281,940 333,550 327,750 289,880 303,320 331,550 301,140 282,310 285,250

1,986 1,732 1,230 988 1,130 1,137 1,203 1,100 1,444 914 1,000 1,030 950 850 850 1,050 1,300 1,250 850 400 150 0 0 0 0 0 0 0

219,733 263,097 266,680 214,009 246,182 247,513 262,027 239,665 313,137 198,772 293,820 333,648 292,741 349,721 427,858 424,289 460,066 491,624 518,211 434,195 468,328 404,435 368,655 353,881 397,342 362,049 342,569 340,682

159.08 184.47 201.16 162.35 163.14 257.02 312.27 325.81 516.52 343.96 351.60 510.07 475.68 526.02 567.35 533.83 512.75 506.41 521.20

Note: l deflated with the wholesale price index in the United Kingdom (Mitchell 1975, 736-7) Source: Federico 1994a, Appendix A; world trade 1870-1913: Lewis 1981; world trade 1925-29: Vidal 1991.

157.90 194.73 201.16 161.63 231.21 268.18 349.30 363.05 519.41 372.23 495.02 454.43 388.14 464.15 567.34 548.29 579.88 621.36 654.97

]i.28 ]1.15 0.98 11.04 ]1.07

L.88 1.83 1.67 1.61 1.61

200

An economic history of the silk industry

Table AIII

The silk trade 1820-1938: market shares Computed on quantity series Italy

1820-24 1825-30 1831-33 1834-37 1838-42 1843-47 1848-50 1851-55 1856-59 1859-62 1863-67 1868-72 1873-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1914-20 1921-25 1926-29 1930-34 1935-38

65.7 61.9 67.2 58.2 65.2 57.7 55.8 42.0 29.3 24.4 23.7 30.9 28.2 29.6 33.5 30.9 25.9 28.0 30.5 21.7 13.6 13.3 11.1 7.3 6.2

Levante

China

5.7 8.3 7.3

11.9 11.7

10.1 14.2 12.1 11.5 10.8

17.8

8.5 7.9

11.9 4.8 3.9 3.3 4.3 4.3 5.5 5.3 5.4 4.1 0.7 0.9 0.5 0.2 0.1

Japan

India

10.7 13.0 16.7 19.9 22.1 22.3 27.6 38.0 53.9 60.4 66.5 80.0 83.1

16.6 18.1 16.7 13.9 16.4 15.8 12.5 10.3 11.5 7.8 11.5 7.0 3.2 2.4 2.3 2.0 2.0 1.7 1.5 0.9 0.4 0.3 0.2 0.0 0.0

China

Japan

India

39.1 39.5 36.2 27.4 28.0 27.9 27.3 24.8 26.0 25.8 21.5 19.1

6.1 8.9 11.8 15.6 20.1 22.6 22.7 26.5 38.4 54.2 59.5 67.1

5.8 3.1 2.3 2.1 2.1 2.1 1.5 1.2 0.8 0.3 0.2 0.1

8.8 4.2

14.5 20.1 36.8 50.8 50.6 39.9 49.0 54.0 51.7 43.3 42.8 44.4 42.7 35.1 35.3 31.3 25.0 21.7 12.6 10.7

9.3

13.0 8.3

Computed on value series Italy 1868-72 1873-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1914-20 1921-25 1926-29

43.4 43.4 45.7 49.9 44.7 40.8 42.6 42.0 30.4 18.8 17.8 13.2

Source: table A, this volume.

Levante 5.6 5.0 4.0 5.0 5.1 6.5 5.9 5.4 4.4 0.9 1.0 0.5

Statistical appendix Table AlVa

201

Output of silk in Italy 1870

Annual data1 Lombardy

Piedmont 1750-3 1779-82 1808 1810

2,780 4,810 5,000 2,910

1840

5,950

Venetia

2,3302 6,000

c. 1750 c. 1785 1815 1820 1825 1827-29 1830-32 1833 1841-43 1846-47 1853

6,660 8,400 7,880 8,960 9,590 13,500 11,460 17,450 14,080

3,440 4,150 3,880 4,250 4,720 6,640 5,050

Estimates Piedmont Lombardy Venetia Tyrol Ducati Lucca Tuscany Papal States South Total

End 18th century

c. 1825

c. 1835

5,000 4,200 7,500 900 300 150 450 900 1,200 20,600

5,880 13,070

6,540 22,880

1,590 980 100 920 2,610 3,270 28,420

1,800 980 2,610 3,920 38,730

'Before the pebrine crisis' (c. 1855)1

Piedmont Lombardy Venetia Emilia Tuscany + Latium Marche + Umbria South Tyrol Total

(a)

(b)

9,090 12,680 9,100 1,630 1,660 750 6,100 1,730 42,740

5,150 13,100 7,000 1,600 1,400 1,200 5,150 2,500 37,100

(c) 5,720 ]15,570

1,560 760 1,100 3,190

(d) 9,080 14,067 7,036 3,095 1,400 5,890 1,488

42,058

Note: l When necessary, the production of silk is estimated by dividing the output of cocoons by 12. 2 Only the Duchy of Milan. Source: annual data: for Piedmont: Romeo, 1984, II, 54; Lombardy and Venetia: Moioli 1981,7,159,251 estimates: for end 18th century: Poni 1976, 497; for c. 1825: Gera 1829, 174-91; for c. 1835: Bowring 1838, 102. (a) Correnti-Maestri 1864, 449-50; (b) De Vecchi 1878, 82; (c) Notizie 1879, 277; (d) Boccardo 1859, III, 367.

202

An economic history of the silk industry

Table ATVb Output of silk in France before 1870 (2)

(1) 1801-07 1808-12 1813-20 1821-30 1831-40 1841-45 1846-52 1853-55 1856-58 1859-61 1862-64 1865-68 1869-72

3,540 4,290 4,330 9,000 9,610 15,220 21,430 20,020 8,520 8,120 6,690 9,930 8,640

(3)

(4)

3,940* 3,790 6,330 7,6602 21,8303

18,220

9,3604 6,6905 7,790 8,640

8,9006

Note: * 1808-10 2 1831-35 3 1849-54 4 1855-60 5 1861-66 1*1867-72 7 'before the pebrine crisis'. Sources: (1) La production des cocons en France depuis 1760, BSS, 14, DC, 1899; (2) L'industrie de la soie en France et en Italie, BSS, 19, IV 1879; (3) Official estimate in Archives Nationaux, F12, 2520; (4) Rondot 1885-7,1, 104.

Table AIVc

Output of silk in World before 1870 End 18th century

1833

1825-34

c. 1835

Italy France Spain India Persia China Anatolia Greece + Turkey Others

26,000 6,000 5,400 4,800* 600* 1,200*

41,350 9,700 11,500 6,900* 5,500* 2,900* 2,600* 2,600*

42,000 11,400 7,700 7,000* 5,500* 2,900* 2,600* 2,600*

38,730 7,680 1,100* 6,950* 5,480* 2,930* 2,560* 2,560*

Total

44,500

83,200

81,800

67,990

2

480

Note: * Exports 2 with Tyrol. Sources: End 18th century: Poni 1976, 497; 1833: Salvemini-Visceglia 1991, 56; 1825-34: De Bernardi 1886, 94; c. 1835: Bowring 1838, 102.

203

Statistical appendix

Table AV

.1872 a. a 1880 a 1895 a 1900 a 1913

1914-18

C.1920 C.1927 C.1930

Output of silk after 1870: total estimates France

Spain

Austria

Italy

Levant1

Japan

9,930 8,100 7,860 7,850 6,400 3,350 2,840 3,130 1,650

850 390 630 560 640 620 720 860 440

940 1,580 2,220 2,230 2,060 1,500

30,040 28,720 46,720 56,180 62,630 42,810 36,200 55,330 38,810

4,340 4,000 8,530 9,330 9,690 4,620 2,460 3,400 3,830

12,100 17,220 57,000 69,390 135,010 175,760 233,460 369,580 425,210

Central Asia

C.1855 C.1872 9,500 C.1880 10,300 C.1895 20,000 C.1900 20,700

c.1913

1914-18

C.1920 C.1927 C.1930

24,970 11,910 6,330 8,760 9,870

India

_ , ,. Tndocnina

China (a)

(b)

Total (a)

(b)

120,000

18,850 13,000 12,200 12000 10,600 5,450 6,510 3,540 1,370

6,200 7,600 9,800 10,000 8,390 8,390 9,710 10,840 12,350

87,000 106,900 113,500 118,000 118,000 120,500 152,500

Note: l Exclusive of exports from Central Asia. Sources: cf. Federico 1994a, Appendix A.

120,000 136,000 153,000 163,500 163,500 169,500 195,000

179,760 197,810 301,750 378,390 372,420 418,720 607,940

203,310 300,960 338,850 425,500 419,530 466,390 687,030

Table AVI

1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898

Output of silk: yearly series France

Spain

Austria

Italy

Other Europe

9,182 10641 9,975 8,949 6,497 10,110 7,373 6,897 8,245 7,891 9,236 5,691 5,821 7,298 7,343 7,655 5,602 6,141 5,797 7,268 7,367 7,244 7,966 8,322 8,450 8,101

1,017 674 856 364 587 215 108 193 494 930 677 867 595 354 594 793 962 770 900 787 378 655 899 638 598 425

1,431 609 781 559 432 1,110 1,392 2,009 2,211 1,202 1,487 1,469 1,449 1,856 2,171 2,815 1,255 1,242 2,472 2,238 2,116 2,118 2,190 2,405 2,267 1,998

29,810 28,940 31,390 23,070 17,770 22,760 22,710 27,120 37,050 33,940 35,780 36,870 36,740 37,820 43,180 47,250 46,670 44,730 46,420 44,080 42,350 49,600 47,840 47,980 45,810 50,960

50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

Levant 3,224 4,939 4,865 1,718 4,306 2,656 3,532 4,356 4,310 5,125 6,088 5,900 5,212 5,568 5,531 5,980 5,389 8,391 7,293 7,409 9,744 9,466 6,800 7,907 8,757 9,548

China (exp.) 36,931 44,802 48,434 47,829 35,720 40,564 49,040 49,645 39,353 38,748 39,353 41,169 35,115 47,224 47,829 46,618 56,305 49,040 61,754 61,148 56,910 59,938 66,597 53,278 70,230 65,992

Japan 12,965 10,574 12,750 20,122 18,594 13,600 16,690 19,990 17,290 18,560 17,120 21,380 19,050 26,960 30,190 27,940 36,240 34,580 44,130 44,930 49,130 52,180 64,100 58,010 61,560 58,980

India (exp.)

Total

3,940 3,147 1,704 2,064 1,618 1,937 1,687 2,529 2,024 1,924 2,646 2,697 1,369 2,026 2,200 2,521 2,664 2,486 2,316 2,663 2,877 2,549 2,763 2,955 2,762 2,575

98,550 104,376 110,805 104,725 85,574 93,003 102,582 112,789 111,027 108,370 112,437 116,093 105,401 129,155 139,088 141,622 155,137 147,430 171,131 170,574 170,923 183,800 199,205 181,545 200,484 198,629

1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

7,699 7,772 7,601 8,091 7,564 7,336 7,582 7,828 8,176 7,926 7,890 7,694 6,396 6,250 6,540 4,090 3,860 3,720 2,740 2,350 2,720 2,920 2,740 2,960 3,100 3,340 3,450 3,480 3,000 2,910 2,310

396 623 785 591 548 594 535 466 542 686 658 538 640 615 652 775 615 500 500 725 725 750 700 685 735 825 975 925 840 810 765

2,082 2,363 2,451 2,270 1,876 2,220 2,226 2,177 2,127 2,415 2,679 2,733 2,303 2,153 1,716 1,500 1,500 1,500 1,500 1,500

53,370 55,290 59,920 61,360 57,080 59,170 70,290 77,650 72,920 68,270 72,250 64,820 59,750 65,840 62,310 53,320 43,010 43,320 40,310 34,090 31,680 34,530 38,550 40,050 47,700 56,100 59,770 52,210 54,050 59,740 55,890

50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

11,071 11,595 12,450 15,455 14,670 14,740 13,786 14,321 18,257 18,008 22,130 19,484 18,053 11,966 12,751 10,000 8,000 6,000 5,000 4,000 4,000 4,000 3,260 2,770 3,330 5,265 3,530 5,315 6,110 3,160 4,970

89,604 58,727 78,100 72,652 56,910 75,679 64,176 67,203 70,230 78,100 79,311 84,760 78,100 95,053 90,815 65,992 86,576 74,468 75,679 74,468 100,501 62,359 90,815 87,182 83,549 79,311 101,712 102,318 96,869 109,583 115,637

73,740 71,020 70,680 72,530 74,930 74,870 73,100 82,130 91,980 101,680 108,830 119,050 128,050 136,690 140,290 140,850 151,720 169,500 199,400 217,340 238,490 218,770 233,950 242,610 253,350 284,140 310,660 341,300 370,510 396,920 423,470

2,801 2,908 2,920 3,197 2,962 2,558 2,460 3,076 3,421 2,976 2,456 2,257 1,986 1,732 1,230 1,130 340 870 850 1,050 1,100 1,300 800 850 750 500 350 300 550 800 600

240,813 210,348 234,957 236,195 216,591 237,217 234,204 254,901 267,704 280,111 296,254 301,386 295,329 320,348 316,354 277,677 295,641 299,898 325,999 335,543 379,236 324,649 370,835 377,127 392,534 429,501 480,467 505,868 531,949 573,943 603,662

Table AVI contd

1930 1931 1932 1933 1934 1935 1936 1937 1938

France

Spain

1,740 1,620 1,610 1,730 1,510 1,600 ,600 ,500 ,400

660 510 430 400 340 320 370 305 180

Sources: Federico 1994a, Appendix A.

Austria

Italy

Other Europe

52,610 53,932 29,652 32,836 31,238 29,822 28,122 28,600 27,380

20 20

Levant

8,480 5,600 4,900 5,900 6,450 6,400 6,900 7,400 8,800

China (exp.)

92,025 81,733 47,224 46,618 33,299 46,618 37,537 41,775 32,088

Japan 426,190 438,110 415,900 421,610 452,430 437,320 423,270 418,750 431,520

India (exp.)

200 490 100 50 50 50 50 50 50

Total

581,925 582,015 499,816 509,144 525,317 522,130 497,849 498,380 501,418

207

Statistical appendix

Table AVII

Trade in thrown silk Share of Italian exports Lombardy and Venetia

Piedmont

(a)

(a)

91.2 75.8 70.6 69.1 68.1 71.3 74.2 89.2 87.5 88.0

1815-19 1820-24 1825-28 1832-34 1835-38 1839-42 1843-47 1848-50 1851-54 1855-58

100 100 100 100

93.3 88.6 90.6 89.7 77.9

Italy (b)

149.0 155.6 98.6 112.2 130.6 99.0 84.7

1861-64 1865-68 1869-72 1873-76 1877-80 1881-84 1885-88

(b)

(a)

77.4 78.8 72.8 70.8 56.5 67.1 59.8 42.4 36.1

1889-92 1893-96 1897-00 1901-04 1905-08 1909-13 1914-20 1922-25 1926-29

60.9 55.7 50.3 48.7 40.5 44.0 80.3 44.9 37.7

Share of world trade (c) 1863-67 1868-72 1873-77 1878-82 1883-87 1888-92

17,680 20,870 25,020 26,820 29,170 31,460

(d)

2,240 2,780 3,620 2,470 1,510 1,180

Market shares

(e)

Italy

34.5 29.7 31.5 31.6 30.1 24.8

98.0 98.3 98.9 99.3 99.9 98.3

France

Germany China 2.0 1.7 1.1

208

An economic history of the silk industry

Table AVII contd Share of world trade

1893-97 1898-02 1903-07 1908-13 1914-20 1922-25 1926-29

Market shares

(c)

(d)

(e)

Italy

France

Germany China

35,000 42,680 48,280 51,160 30,560 25,900 27,860

1,610 2,120 -1,730 -1,730

25.4 25.1 25.5 21.5 11.9 7.1 5.9

81.6 76.3 70.1 66.1 86.6 78.3 69.4

9.3 12.7 19.4 24.6 13.4 18.4 28.6

11.4 11.0 10.5 9.3 0.0 3.4 2.0

Note: (a) ratio of gross exports of thrown silk to total gross exports of silk; (b) ratio of net export of thrown silk to the sum of net exports of thrown and raw silk (c) sum of net exports from Italy, France (1893-1913), Germany (1893-1913 and 1922-29), and China (1863-1877) (d) net exports from the United Kingdom (including yarns from waste silk) (e) ratio of (c) to world trade of silk Sources: Lombardy and Venetia: Caizzi 1972, 67; Piedmont: Romeo 1974, 37, Italy (a) Movimento Comerciale (including dyed silk); (b) Fenoaltea 1988, table 3, col. 5 (deducting 3.5% for the package); China: Rondot 1885-7, I, 257; France Tableau, ad annum; Germany, Auswartiger, ad annum; United Kindgom Annual statement, ad annum.

Table AVIII

Silk prices Japanese silk

Italian silk Unit values (1913 = 100) 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886

174.25 189.24 189.94 164.14 198.81 193.37 133.51 119.93 167.96 128.79 126.84 122.21 119.90 138.22 125.15 117.88 113.56 107.41 110.79

Real unit values (1913=100

176.04 148.14 168.91 161.68 118.36 110.23 155.66 119.36 124.36 123.45 116.52 136.85 125.15 117.88 119.41 120.42 127.05

Terms of trade (1913=100)

Current prices (Ht/kg)

Real prices (1913=100)

Current prices (yens/kg)

Real prices (1913=100)

151.01 163.29 168.02 141.19 162.33 158.46 113.50 106.22 153.82 119.67 123.86 121.37 114.26 134.20 121.06 117.23 118.74 118.68 127.26

72.165 71.670 96.085 96.835 101.54 110.92 90.625 90.210 76.665 92.375 85.710 69.125 58.915 69.250 71.250 66.830 69.250 63.880 57.500 57.500 51.920 50.920 47.330 52.000

178.61 177.38 241.69 232.99 242.96 249.87 219.02 219.99 181.22 201.17 176.00 142.22 136.87 166.06 150.61 145.84 161.05 147.77 142.15 138.50 133.56 136.69 120.60 131.72

12.584 13.267 10.384 8.9170 9.7170 10.000 9.0170 76.500 12.117 93.000 11.250 11.834 11.950 11.767 11.667 10.750 9.9670 9.9670 11.650

218.01 195.66 154.64 308.18 226.71 245.26 192.36 159.21 150.01 177.46 222.04 236.87 200.60 251.48

Table AVIII contd Italian silk

1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910

Unit values (1913=100)

Real unit values (1913=100

Terms of trade (1913=100)

107.31 97.99 104.67 110.15 94.17 100.05 95.99 82.07 89.50 87.01 84.53 90.49 106.79 101.83 94.08 108.13 117.35 105.80 114.09 122.70 132.86 98.73 100.55 97.62

124.34 113.54 120.04 126.31 107.99 113.43 110.08 98.52 109.95 106.89 101.47 104.86 126.68 114.16 106.67 122.60 131.56 117.30 126.48 134.54 142.70 108.26 109.17 103.74

123.33 112.44 116.65 121.05 105.95 117.24 114.28 105.48 116.87 112.53 109.70 117.55 130.88 116.74 111.96 129.66 137.57 121.94 130.22 132.44 137.81 108.30 109.33 100.03

Current prices (lit/kg) 51.330 44.750 48.830 52.330 43.330 48.580 59.170 42.090 43.250 40.954 39.190 42.840 54.105 49.765 42.525 44.605 49.175 41.135 44.310 47.890 60.700 44.110 45.700 42.305

Real prices (1913=100) 139.52 119.53 123.40 128.93 109.63 129.44 168.03 123.09 120.29 113.03 110.42 117.48 144.52 127.10 109.13 118.41 131.67 115.30 119.09 124.08 145.88 108.92 111.95 103.52

Japanese silk Current prices (yens/kg) 11.000 10.250 11.500 11.167 97.500 12.467 14.467 12.634 13.917 12.167 13.167 14.667 18.200 16.150 14.450 15.850 16.784 15.184 16.150 17.350 20.400 14.917 14.600 14.400

Real prices (1913=100) 246.38 223.57 239.55 204.05 182.15 231.87 267.87 218.40 220.46 179.11 161.34 167.87 209.46 174.76 157.59 167.17 168.09 149.19 146.59 149.03 162.81 120.44 121.41 121.69

1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

96.05 93.01 100.00 100.56 87.88 137.72 158.04 180.28 218.75 229.50 158.79 202.77 215.45 199.59 175.91 166.89 147.81 136.61 133.39

101.00 94.91 100.00 100.56 70.87 96.30 89.80 90.14 99.89 92.54 70.89 112.03 122.42 113.41 99.95 97.60 88.51 81.80 79.88

99.82 94.75 100.00 51.500 45.440 83.470 118.23 159.52 206.08 397.84 294.40 363.51 420.58 339.21 122.16 122.72 115.56 105.77 105.58

42.145 40.815 46.335 116.02 77.04 97.53 93.02 83.38 98.81 145.36 117.42 144.03 165.07 133.93 360.28 335.86 245.06 219.90 197.64

95.44 85.69 100.00 13.700 14.167 19.100 22.934 24.500 35.467 27.717 25.184 31.734 33.467 29.717 126.91 115.90 100.64 93.42 88.02

14.284 14.067 14.834 98.92 103.36 121.48 112.41 94.07 109.70 83.55 83.14 101.54 107.50 94.08 32.617 26.417 22.917 22.017 21.834

108.99 97.03 100.00

104.61 86.93 77.94 76.89 77.68

Sources: unit values table I, deflated with the index of wholesale price index in United Kingdom (Mitchell 1975, 736-39); terms of trade: unit values/unit values of world trade (1868-1913: from Lewis 1981; 1925-1929: from Vidal 1991); current prices of Italian silk: Federico 1994a, Appendix F, deflated with the wholesale price index from 1STAT 1958, 172; current prices of Japanese silk: Fujino et al. 1979, table 56, col. 11, deflated with implicit deflator of the GNE (Okhawa-Shinohara 1979, table A50), extrapolated backward for 1873-1884 with the index of agricultural prices of Okhawa et al. 1967, table 10, col. 6.

212

An economic history of the silk industry

Table AIX Prices of silk relative to other fibres in the United Kingdom (1913 = 100)

1846-52 1853-57 1858-62 1863-67 1873-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1914-19 1920-24 1925-29

Cotton

Wool

Hemp

Flax

194.4 201.1 169.7 101.9 170.9 158.9 165.0 163.7 167.9 186.3 146.0 101.6 96.6 125.6 95.6

153.0 145.2 143.6 175.1 136.5 123.7 132.4 135.3 135.7 123.2 125.2 95.1 77.1 93.8 64.4

154.1 146.9 203.6 218.4 227.2 190.2 152.9 158.4 131.5 131.2 140.9 102.1 59.6 98.1 66.6

147.0 170.9 165.5 185.9 214.6 176.8 176.4 196.5 146.0 156.0 150.7 115.6 72.0 92.1 73.9

Note: Silk 'tsatlees no. 4'; cotton 'middlin Upland'; wool 'Merino, average quality'; flax 'average of imports from Russia'; hemp 'St Petersburg, clean'. Sources: Sauerbeck, ad annum.

Statistical appendix Table AX

Silk consumption in the main countries UK

1829-33 1834-38 1839-43 1844-48 1849-53 1854-58 1859-63 1864-68 1869-73 1874-78 1879-83 1884-88 1889-93 1894-98 1899-03 1904-08 1909-13 1914-19 1920-24 1925-29 1930-34

213

14,770 16,120 15,580 18,070 27,250 22,640 24,800 14,080 13,950 8,890 8,760 10,470 7,760 5,130 4,130 6,980 5,570 6,190 3,600 6,610 12,500

Germany

23,72c 21,270 13,540 16,020 19,960 23,360 26,880 29,360 34,940

Switzerland

1

12,150 22,230 9,940

10,6202 13,360 15,260 14,780 15,330 14,890 14,730 12,310 12,060 3,740

USA

France

2,010 39 4,2109 5,1009 ll,920 9 19,2309 28,2709 36,720 52,370 75,600 105,590 152,8009 213,8009 332,8909 324,1409

17,0704 24,9805 35,3706 39,4707 33,0508 33,240 33,880 36,980 45,730 40,360 35,860 36,290 38,310 41,500 41,940 43,800 10,730 30,820 37,720 16,250

Note: l 1872-73; 2 1885-88; 3 1865-68; 4 1831-40 51841-45 61846-52 71853-55 8 1856-58 9fiscalyears (1st July-3Oth June). Sources: UK 1829-1830: Angeli 1982, table 2.2; 1831-1852: 'II commercio ed il consumo della seta in Inghilterra dal 1816 al 1902', in BU 1904, III fasc 1°; 1853-1913: Annual statement ad annum (from 1853 to 1899 inclusive of yarn of waste silk); France imports: Tableau ad annum, national production table V; Germany: Auswartiger, ad annum', Switzerland: Statistique du commerce de la Suisse, ad annum', USA 1865-1894: 'L'importazione ed il consumo di seta negli Stati Uniti dal 1895 al 1903', in BU 1903, IV. fasc. 32°; 1894-1913: Monthly summary, ad annum', 1914-1934: Fujino et al 1979, table 64.

214

An economic history of the silk industry

Table AXI

Market shares by consuming country

USA

Italy 1869-73 1874-78 1879-83 1884-88 1889-93 1894-98 1899-03 1904-08 1909-13 1914-19 1920-24 1925-29 1930-34

12.1 34.5 44.8

7.3 8.5

17.5 28.2

27.2 26.3 19.1 21.6 20.0 18.0 15.1

50.0 46.7 53.7 63.4 75.5 75.3 81.5 90.4

4.2 3.9 1.9 3.1

Europe

89.8 79.4 47.7 26.2

2.9

16.7 20.7 22.2 12.5

France

China

Japan

4.0 3.7 3.4 1.4 0.3 2.7 1.5 0.4

6.1

Germany 1880-83 1884-88 1889-93 1894-98 1899-03 1904-08 1909-13 1914-19 1920-24 1925-29 1930-34

Italy

France

Switzerland

Far East

13.0 39.1 55.9 55.6 64.0 62.5 66.3

14.2 13.0 9.2 7.0 7.2 7.5

61.1 41.0 29.7 31.4 24.0 22.1

14.8

6.6

81.0 80.0 67.5

3.7 4.9

11.5

12.4

16.0

2.8 6.4 0.9

Italy

France

Chinsi

Japan

0.2 0.6 1.0 1.2 7.6

7.8

Switzerland 1894-98 1899-03 1904-08 1909-13

70.7 75.0 74.0 71.3

7.1 6.7 8.0

11.1 10.7

10.8

5.8

6.0 4.9 8.0

1920-24 1925-29 1930-34

70.7 67.6 68.4

10.5 12.8 12.2

1.4 3.7 4.8

12.2 14.4

17.9

8.6

United Kingdom Italy 1773-75 1776-78

1

36.7 29.01

Europe

Japan

China

India

33.7 22.8

29.6 48.2

Levant

Statistical appendix

215

1

1779-81 1782-84

22.1 26.71

25.7 13.7

52.2 59.9

1800-04 1805-09 1810-14 1815-19 1820-24 1825-30 1830-34 1835-39 1840-44 1845-49 1850-54 1855-59 1860-64 1865-69 1870-74 1875-79 1880-84 1885-89 1890-94 1895-99 1900-04 1905-08 1909-13 1914-19 1920-24 1925-29 1930-34

63.2 57.9 56.9 42.3 47.0 50.9 36.6 29.6 38.8 24.1 13.7

9.3 8.6 5.8

27.5 33.5 37.5 45.1 32.5 28.4 29.7 30.0 33.1 25.7 24.6 17.1 11.9 16.8

6.6 4.7 5.0 6.1 6.1 9.5 1.8 2.2 1.3 4.3

17.0 15.8 17.2 22.9 22.3 17.6

12.6 11.7 9.7

22.2 26.3 8.8

19.1 18.2 15.3 19.8 16.6 20.7 29.5 49.7 46.7 21.2 12.9

5.4 5.8 1.8 2.7 2.0 4.9

5.9 3.6

24.5 12.4 25.6 60.3

10.8 5.1

43.1 50.6 73.5 60.0 58.3 68.4 70.0 71.4 61.7 49.0 34.5 32.9 35.4 43.3 41.0 42.4 26.0 10.0

8.8

11.0 11.4 14.0 19.2 7.1

11.2 2.7 4.3 1.7 0.8 0.5 0.3 0.5 1.0 0.3 0.3 1.5 2.2 0.3 0.2

9.4 3.7 2.2 3.2 8.6

10.0 13.0 12.3 3.0 5.0 8.3 2.6 0.2

Austria 1894-98 1899-03 1904-08 1909-13

Italy

France

Switz.

Germany

41.7 32.6 26.1 25.0

10.6 19.1 27.3 26.3

31.3 27.6 22.4 24.6

12.9 18.8 23.0 19.6

Italy

Germany China

Japan

Levant

Others3

15.0 30.1 32.1

27.1 33.4 42.2

0.5 1.3 2.1

0.7 0.3 0.8

48.0 29.4 19.8

Russia 1899-03 1904-08 1909-13

France (apparent consumption) Italy 1831-40 1841-45

34.8 26.6

Japan

7.0 4.8 2.9

China 0.1

Levant India 4.0 8.7

0.2

1LJK

2.1 2.8

France 57.5 59.9

216

An economic history of the silk industry

Table AXI contd France (apparent consumption} (contd) Japan Italy 1846-52 1853-55 1854-58 1859-63 1864-68 1869-73 1874-78 1879-83 1884-88 1889-93 1894-98 1899-03 1904-08 1909-13 1914-19 1920-24 1925-29 1930-34

25.3 30.2 30.0 20.0 19.4 27.3 27.4 27.3 24.1 12.3 11.5 9.5

11.9 10.0 10.2 22.8 22.3 23.1

China

Levant India 9.0 9.4

2.5 4.3 5.3 8.3

10.0 17.7 16.1 9.1 8.3

15.5 19.4 12.6 7.9

24.4

0.8 4.6

11.1 23.7 27.7 30.0 36.5 37.6 46.0 39.3 41.6 33.2 40.3 53.9 36.8

10.8 10.6 8.1

5.3

0.1 1L.8

5.8

L.8

4.8

:>.l

4.4 7.1 9.0 9.9

1.5 1.4 L.2 L.5 :5.0

9.9 10.6 9.0 1.8 2.5 2.4 1.8

UK

9.6 f 5.5 :5.3 :>.O L.I

16.4 33.8 42.1 25.4 20.6 9.9 4.7 2.3 1.1 0.1

France 60.6 50.7 25.8 23.0 29.3 23.4 19.8 20.1 19.9 17.9 20.5 18.9 18.4 16.3 29.8 10.1 7.8

10.1

Note: l including 'Levant' and 'others' 2 France. Belgium and Netherlands 3 France. Austria. Switzerland and United Kingdom. Sources: USA 1865-88: GIS no. 17 1885 and BSS, 3, VII 1889; 1894-1913: Monthly summary ad annum; 1914-1934 Fujino et al 1979, table 64; Germany Auswartiger, ad annum, Switzerland Statistique suisse, ad annum.

United Kingdom 1773-84: Rondot 1885-7, I, 332; 1800-30: Angeli 1982, table 2.2; 1830-84: Noel 1906, 669; 1885-1929: Annual statement; Austria Statistik, ad annum', Russia Obsor, ad annum', Imports: Tableau, ad annum, output: tables AIVbT220 andV.

Statistical appendix Table AXII 1894

217

Estimates 'real' market shares Switzerland

France

Germany

(a)

(b)

(a)

(b)

(a)

(b)

Italy China

69.8 14.0

15.4 44.6

0.2

61.0 24.4

9.3

12.1 50.3 21.0

57.0

Japan

52.4 29.3 14.2

4.1

12.1

13.3

Levant

9.0

1.6

Austria Italy China

UK

(a)

(b)

42.2

57.9 26.0 10.4

Japan

Levant 1906 Italy China Japan

(a) 0.6

(b) 7.2

48.0

58.6 17.6

9.7

4.2

4.0

Switzerland (a)

(b)

(a)

(b)

(a)

(b)

58.6 26.8 10.2

16.2 44.2 10.7 11.8

12.9 48.5 11.6 12.4

69.2

68.1 21.7

9.7 6.4

2.4

Austria

5.9

Russia

UK

(a)

(b)

(a)

(b)

(a)

(b)

53.2 28.6

17.8 23.5

26.9 45.2

36.9

66.2 21.9

8.2 5.1

1.7

5.7 3.8

Levant

Italy China Japan Levant

0.6 0.5

26.6

Japan

1913

Germany

France

72.4

Levant

Italy China

9.4

2.1 0.0 0.1

France

Switzerland

5.7 2.2

Germany

(a)

(b)

(a)

(a)

(b)

69.7

48.0 22.5 26.8

14.3 50.5 22.0

9.4

64.5

53.9 25.1

1.9 6.2

49.0 23.3 24.7

2.2

8.2

8.6

3.9

10.3

Austria

(b)

2.3

Russia

UK

(a)

(b)

(a)

(b)

(a)

(b)

22.5

15.2 26.9

24.4 52.8 18.1

23.8

Japan

40.5 30.5 23.8

56.6 22.1 18.6

Levant

3.8

Italy China

8.1

2.2

2.6 0.2 0.1

2.2

218

An economic history of the silk industry

Table AXII 1929

Italy China Japan

contd France

Switzerland (a)

(b)

(a)

(b)

(a)

(b)

72.2 4.9 7.7

76.8 14.7 8.5

23.2 65.4 4.7

25.0 69.9 5.1

68.0 1.4 4.8

83.4 10.0 6.6

UK

Italy China Japan

Germany

(a)

(b)

22.1 22.2 28.7

30.3 30.4 39.3

Sources: (a): table AXI, (b): Federico 1994a, Appendix A.

Statistical appendix Table AXIII

219

Location of sericulture in the main producing countries

Italy Piedmont Lombardy Venetia Emilia Marche Tuscany South

c. 1835

c. 1855

1878-82

1911-14

1927-30

16.9 59.1

22.2 30.9 22.2

18.2 39.8 21.5

17.0 36.8 24.4

12.8 35.1 34.1

13.9

4.0 1.8 4.1

10.1

14.9

6.3 4.1 4.2 5.9

7.2 4.7 5.1 4.8

6.1 5.2 3.0 3.7

c. 1875

c. 1895

c.1918

1914-18

c. 1927

27.1 38.9 13.0

25.4 36.1 12.4 11.3

25.6 29.3

29.6 28.6 16.8

28.9 31.1 14.9 12.9

China Guangdong Zhejiang Jiangsu Sichuan Henan Hubei Shangdong Anhui Altre

8.9

21.4

5.1 3.6 1.6 1.1 3.5

3.3 2.3 1.0 0.9

6.9 1.2 3.0 2.4 3.9 6.9

1876

1890

1900

1929

16.1 12.2 16.1 10.4

10.4 10.5 15.7

7.3 9.9

3.5 5.8

15.4

12.4

6.6 5.9

5.8 6.7 4.3

4.3 7.4 3.8

4.8 4.8 4.0

32.8

46.6

51.9

64.7

9.7 4.8 3.7 1.1 0.5 1.1

1.2 3.4 3.0 2.7 2.2

Japan

Fukushima Gunma Nagano Gifu Saitama Yamanashi Others

Sources: for Italy: c. 1835: Bowring 1838, 104; 1878-82, MAIC, BNAS ad annum; 1911-4 and 1927-30, Annuario serico 1935; for China: c. 1875 (silk), c. 1895, c. 1918, c. 1925, Eng 1986, 35; 1914-18, Perkins 1969, table D29; for Japan: 1876-1900, Sugiyama 1988, 115-16; for 1929, Marie 1933.

220

An economic history of the silk industry

Table AXTV Sericulture in Japan Mulberry acreage (hectares)

1884 1889-92 1893-97 1898-02 1903-07 1908-12 1921-24 1925-29

(1)

(2)

(3)

Specialized

Mixed

Total

168,815 195,814 224,654 263,151 345,940

64,904 73,976 79,752 81,902 88,413

(1) (3)

94,000 233,719 269,788 304,166 345,054 434,354 462,050 466,314

(4)

share of total acreage 4.7

72.2 72.5 73.8 76.3 79.6

11.25 12.38 13.20 14.56 16.93 18.64 21.74

Number of silkworm raising households (000) Spring crop 1884-87 1888-92 1893-97 1898-02 1903-07 1908-13 1920-24 1925-29

Total

% on Japanese households

Mulberry acreage/ family (ha.)

778

807

1,025 1,262 1,404 1,446 1,476 1,603 1,860

1,086 1,368 1,557 1,641 1,714 1,853 2,099

14.7 20.0 25.1 28.3 30.0 31.1 33.4 33.7

0.215 0.197 0.195 0.210 0.253 0.230 0.222

Summer

Fall

Total

Division of output by crop Spring 1874-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1914-20 1921-24 1925-29

75.31 75.52 74.5 72.2 64.4 60.5 53.2 54.5 51.0

24 .7 1 2

6.12

18.4 16.0 14.2 13.9 12.5 10.8

9.5

13.6 21.7 27.0 36.0 45 .5 49 .0

309,370 433,280 409,130 495,170 727,220 927,600 1,092,280 1,521,250 2,224,590 2,517,730 3,437,480

Note: l 1886-89 2 1890-92. Sources: for mulberry acreage: (1) and (2) Resume 1917; (3) and (3) Fujino et al. 1979, table 61, cols. 2 and 3; for households: Fujino et al. 1979, table 61, cols. 5, 6, 8 and table 62, col. 1; for output: division by crop 1890-1913: Resume 1917; 1914-20, Marie 1933; 1886-89 and 1921-29, Fujino et al. 1979, table 57, col. 6 and 7; total output 1874-78, Umemura et al 1966, table 12, and 1878-1929 Fujino etal 1979, table 57, col. 5.

Statistical appendix Table AXV

221

Yield of silkworm eggs France (kg./25 gr.)

Italy (kg/35 gr.)

1872-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1920-24 1925-29

(a)

(b)

(c)

24.71 29.3 31.5 44.9 40.9 34.4

32.71 38.9 41.9 59.3 64.6 45.3 45.4 59.7 52.9

29.3 36.6 41.5 62.8 61.8 55.5 60.8 63.6 58.0

13.3 19.12 27.8 31.93 42.6 39.6 41.0 37.9

Japan

(kg/.lOOgr.) (a)

(b)

(c)

89 87 106 151 199

62 68 78 179 241

79 79 93 128 168

Note: l 1880-2 2 1879-82 3 1888-89. Italy: (a) computed according to original output data of the Associazione serica; (b) computed according to rectified output data of the Associazione serica; (c) computed according to Fenoaltea-Mortara's output estimates. Japan: (a) Spring crop; (b) Summer-Fall crops; (c) Total. Sources: Italy: see Federico 1994a, Appendix E; France 1872-89: Morand 1891, 9-10; 1893-1913: CPVD, ad annum; Japan: Fujino et al. 1979, table 62, cols. 3-5.

Table AXVI

Silk content of cocoons (kg. of cocoons per kg. of silk) Italy

1863-67 1868-72 1873-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1920-24 1925-29

14.32 15.44 14.36 13.34 12.70 11.78 12.50 12.40 11.66 11.57 11.14 10.90

Japan (a)

(b)

19.73 24.25 17.63 11.89 12.20 13.54 13.97 12.66 11.84 10.23

10.15 10.89 10.25 10.71 10.14 9.82

Sources: Italy: Fenoaltea 1988, table 6, col. 6 (Italian cocoons only); Japan: col. (a) computed as a ratio of cocoons output (Umemura et al. 1966, table 12) to silk production (Fujino et al. 1979, table 55, col. (5), after deducting the silk equivalent of imported cocoons (table XVII); col. (b) Fujino et al. 1979, table 49, col. 4 (use of cocoons in plants with more than 10 basins).

222

An economic history of the silk industry

Table AXVII

1863-67 1868-72 1873-77 1878-82 1883-87 1888-92 1893-97 1898-02 1903-07 1908-13 1914-20 1921-24 1925-29

Trade in dried cocoons France

%

Italy

8,000 10,920 12,370 7,400 2,120

23.1 30.1 34.2 22.8

-220 -1,910 960

3,260 2,620 11,350 16,020 31,780 44,570 47,030 8,590 ll,060 2 24,010

7.5 2.2

550

%

6,500 20.7 5,790 18.5 4,480 15.6 5,290 18.6 1,500* 11.9 2,790 22.1 1,780 15.4

1.0 2.6 1.6 6.3 8.3

13.9 16.0 18.1 3.8 8.6 9.4

Total

Japan

7,780 5,130 13,330 10,660 4,740 11,900 22,520 37,570 49,050 52,320 10,090 13,850 25,790

%

354 355 507 833 983

0.5 0.4 0.5 0.5 0.4 0.5 0.3

1,147 1,116

Note: % on total consumption of cocoons. 1 1915-20 2 1922-24 Total: sum of Italy and France Sources: France Tableau, ad annum, Italy Movimento Commerciale, ad annum, Japan Oriental Economist 1936, 234.

Tab. AXVTII

Equipment of reeling

(A) Italy Piedmont Steam 1816-7 1822 1830 1840 1866-68

924 17,760 6,041

Lombardy

Hand

Steam

10,132 11,292 15,842 4,493

1819

660

1835 1854

4,011 9,718 11,591

Hand

28,2831 29,486 13,989

Note: l plus 'some thousands' of home basins Sources: Piemonte 1815-1840: Romeo 1984, 55; Lombardy 1819: Tolaini 1993, p. 355; 1835: Caizzi 1972, 27; 1854: Frattini 1856, 55. Basins

Plants 1866-68 1876 1891

Steam

Hand

Total

Steam

Hand

Total

419

4,201

4,964

21,657 53,370 51,952

34,363 29,666 6,408

56,020 83,036 58,360

1,401

Statistical appendix 1904 1909 1911 1912 1913 1914 1917 1919 1923 1927 1929-31 1932-34 1936-40 1946-50

931

223 134

1,065

59,793

1,579

983 1,397 1,032 896 841 691 640 737

167 160 145

1,008 851 785

63,141 58,897 47,513 47,138 53,317

1,288 1,216 855

61,390 62,985 62,668 73,292 59,565 60,185 48,729 47,993 56,444 54,193 40,910 28,098

534 256 676 423

Sources: 1866-1927: Federico 1994a, Appendix D; 1929-34: Banca d'ltalia 1938, pt. 2, II, 808; 1936-40 and 1946-50: Ente nazionale serico 1953, table 11.

(B) Japan

Steam Plants with more than 10 basins 1879 666 1892 2,602 1895 2,283 1899 2,073 1904 2,320 1907 2,385 1910 2,491 1914 2,260 1921 2,693 1930 3,232 All plants 1894-98 1899-04 1905-09 1910-14 1915-18 1919-22 1923-26 1927-29 1938-40

7,113 4,690 4,388 4,406 3,705 3,672 1,808

Zakuri

601l 6171 597 1 966 680 932 525 182 33

348,256 298,676 228,443 180,692 124,660 61,538 32,159

Number of basins for plants with more than 10 basins 1879 16,856 1882 17,238 1892 85,988 19,1691 1895

130,753

47,5M1

1899

122,166

55,022*

Double

Total

108 165 107 236 361 237

3,203 2,900 2,670 3,394 3,230 3,530 3,021 3,236 3,502

41,643 42,513 41,718 50,618 41,008 11,068 3,054

393,928 415,059 397,012 345,869 274,549 235,716 169,373 76,322 37,020

105,157 178,267 177,188

224

An economic history of the silk industry

(B) Japan (contd) Steam

Zakuri

Double

Total

1904 1907 1910 1914 1921 1930

128,152 153,771 183,255 197,335 291,959 327,441

100,720 24,335 23,133 9,069 3,502 533

3,431 6,119 3,400 11,911 23,038 15,310

232,303 184,245 209,788 218,315 318,499 343,284

All plants 1915-18 1919-22 1923-26 1927-29 1938-40

242,195 284,016 277,533 314,398 187,389

311,192 232,704 156,766 85,777 41,592

63,788 80,424 66,752 32,847 10,439

617,175 597,144 501,051 433,023 239,420

Note: l includes doubles Source: number of basins in 1879: Ishii 1979, 129; 1882: Stamm 1923, 76; others: Fujino et al 1979, table 60 (A) and (B). (C) China Central China (steam-reeling only) Shangai Plants 1883 1890 1894 1896 1897 1898-02 1903-07 1908-13 1914-18 1919-22 1923-26 1927-29

4 5 10 17 25 21 24 42 62 65 76 100

Total

Basins

Plants

Basins

36 35 33 59 73 85 90 162

9,130 9,280 10,410 16,398 19,208 23,336 23,752 40,354

620

7,500 6,907 8,335 12,466 16,545 17,606 18,172 23,501

1897 1901 1904 1911 1914 1918 1922 1928

Source: Shangai: Survey 1925, 16 and Lieu 1933, 5; total 1897-1911: Eng 1986, 45-6 (excepting 1904, from an untitled table in BS3 no. 24 ,1904); 1914-1928: Li 1981, 170.

Southern China (steam-reeling only) Basins 1878-9 1880-81

2,500 3,250

Plants

Basins

10

2,4001

Statistical appendix 1882-3 1883 1884-5 1885-6 1886-7 1910 1912 1921 1926 1929

225

4,500 8,750 11,250 13,750 25,000 109 162 180 202 147

42,100 65,000 90,064 95,215 72,422

Note: l c. 1880. Source: col. 1 1883: Pariset 1890, 190; others, untitled article in BSS, 18 July 1887; col. 2: Engl986,49.

(D) India Kashmir

1900 1903 1911

Bengal

Plants

Basins

6 10 10

1,272 2,120 1,800

1893-97 1898-02

Plants

Workers

75 66

8,180 12,410

Sources: Wardle 1904, 27 and 363; Kashmir 1911: Maxwell-Lefroy 1916, 40.

(E) Levant (steam-reeling only) Lebanon Plants 1870 1875 1879 1888 1889 1893 1897 1900 1913

67

Brussa Basins

Basins

45 73 78 84 103 165 145

2,500 2,980 3,968 4,767* 5,180 9,200 8,365

3,500 4,700

8,000 105 195

Plants

9,000 11,000

Note: l 1891-96 Sources: Lebanon: Labaki 1984, 89 and 104; Brussa 1879: Rondot 1885-7, I, 171; 1888: 'La sericiculture et la filature de la soie a Brussa', BSS, 28 July 1888; 1889: 'L'industrie de la soie a Brussa', BSS} 10 August 1889; 1891-96: Report 1898; 1897: Bourgaud 1901, 27; c. 1900 Quataert 1987, 295; 1913: report by the French consul in Brussa (20 July 1926), in MAE. RC, 1918-40 B-textiles, no. 19.

226

An economic history of the silk industry

(F) France Basins

Plants

1873-76 1877-80 1881 1892-97 1898-02 1903-07 1908-10 1911-14 1915-18 1919-21 1922-25 1926-29

22,563 19,406 12,628 13,150 13,755 13,386 13,511 11,668 4,319 4,101 4,011 3,520

723 515 385 262 257 230 219 172 92 84 84 78

Subsidies (mil. fr.) Sericulture

Reeling

Total

4.62 4.10 4.60 4.30 3.13 4.32

1.97 4.24 4.04 3.93 2.78 1.55 1.20 1.70 3.50

6.59 8.34 8.64 8.23 5.91 5.87 1.20 1.70 3.50

Sources: 1873-1880: Rondot 1885-7, I, 107; 1881: Pariset 1901, 357; 1888: Reinach 1891; 1892ff: Annuaire statistique, 1935.

(G) Austria (steam-reeling only) Tyrol

1820 1830 1840 1850 1860 1870 1880 1885 1892 1898 1913

Gorizia

Plants

Basins

3 11 21 38 50 98 59 51

230 519 967 2,170 2,693 3,980 3,045 2,593 c. 1,800 c. 1,000 c. 650

Plants

Basins

72 4 4

294 294

3

184

Sources: 1820-1860: untitled article rnBSS, 20 April 1878; 1870-1913: Leonardi 1984-5.

(H) Spain (steam-reeling only) (a)

1853 1878-79 1882 1883

(b)

Plants

Basins

35

2,359

Plants

Basins

8

1,000

581 18

3,039* 1,800

Statistical appendix 1889-90 1893-94 1902-02 1909 1910 1913

227

17 18 19 15

672 767 534 491

17

460

35

1,000

Note: 1 active plants 29 with 1795 basins. Sources: (a): Graell 1926, 98 and 113; (b) 1853: Vallejo y Miranda 1878, 9; 1882: Rondot 1885-87, I, 164; 1883: letter by Beaux (19 Oct. 1883) in CL3 B 106.1 Industria serica. Corrispondenza 1878-1906; 1910: Beauquais 1910, 455.

1897 1900 1904

Plants

Basins

3 2 2

416 260 240

1906 1910

Plants

Basins

to to

(I) Switzerland

232 240

Source: 1897-1906: 'La filature et le moulinage de la soie en Suisse pendant l'annee 1908', in BSSy 28 August 1909; 1910: 'La filature et le moulinage de la soie en Suisse pendant l'annee 1910', in BSS, 10 July 1911.

Table AXIX

Development of steam-reeling

(A) Italy: share of basins on total number

1866-8 1876 1891 1904

Piedmont

Lombardy

Venetia

Central

Southern

Italy

57.3 74.5 89.2 97.5

45.3 76.1 94.2 99.6

12.9 31.9 83.1 98.0

39.4 55.2 71.8 90.5

23.8 41.9 81.5 93.4

38.7 64.3 89.0 97.4

Source: Federico 1994a, Appendice D. (B) Japan: total output and exports Steam 1875 1878 1889-92 1893-97 1898-02 1903-07 1908-13 1914-18 1919-22

15,880 29,050 36,130 49,590 87,390 139,730 195,330

% 20.0 39.7 51.0 52.1 62.5 71.4 79.2 83.7

% exp.

Zakuri

%

Doubles %

7.5 20.5 48.9 72.1 74.7 89.5 96.5 98.2 99.5

21,500 24,300 27,770 25,550 27,480 22,690 18,620

80.0 53.8 42.6 40.2 31.4 26.6 13.3 8.0

2,600 3,640 5,390 4,870 7,340 13,340 19,510

6.5 6.4 7.8 6.1 6.0 7.5 8.4

228

An economic history of the silk industry

(B) Japan: total output and exports (contd) 1925-26 1927-29

Steam

%

% exp.

Zakuri

260,000 353,820

87.3 89.0

99.8 100.0

15,960 16,880

Doubles %

%

5.4 4 .3

21,400 26,270

7.2 6.6

Sources: distribution of output by types 1879: CR Yokohama 1878 [PP1878-9 LXXII (AP31)]; others: Fujino et al. 1979, table 55, cols. 6-8; percentage of filatures on exports 1875 and 1878: Smith 1955, 58; 1889-1902: table in BSS, 8 August 1903; 1903-1929: Fujino etal. 1979, table 63 (cols. 1-2/col. 1). Japan: percentages by provinces

Nagano Gifii Yamanashi Aichi Yamagata Saitama Fukushima Gumma

1891

1901

1911

84 86 70 69 37 11 8 6

93 89 74 87 34 29 13 10

97 75 82 93 67 72 35 35

Shangai filatures

Total

Sources: Ishii 1979, 198. (C) China: percentage on total exports Canton filatures 1882-87 1888-92 1893-97 1898-02 1903-07 1908-13 1914-20 1921-24 1925-29

6.4

6.4

13.4 21.2 28.7 33.1 27.9 27.3 32.8 29.3

13.4 26.6 38.4 44.8 43.1 52.9 59.2 58.5

5.4 9.7

11.7 15.2 25.6 26.4 29.2

Sources: exports from Shangai: Buchanan 1932; from Canton: Eng 1986, 54; total exports: table AI.

Statistical appendix Tab. AXX

229

Relative prices of silks in the Western markets (Italy = 100)

(A) London market

1815-19 1820-24 1825-29 1830-34 1835-39 1840-44 1845-49 1850-56

China

Bengal

104.2 72.5 87.4 80.2 86.3 97.6 76.3 70.5

104.3 73.7 83.7 78.9 72.5 69.2 58.2 55.86

Sources: Tooke 1838-48 and Tooke and Newmarch 1857. (B) Lyons market

France China Japan Bengala

1857-60

1861-64

1865-68

1869-72

1873-77

114.7 75.0

118.0 75.0 85.4 87.4

104.7 70.9 85.7 79.5

109.5 72 5 78.0 78.3

118.8 64.2 75.1 72.0

91.6

Note: France raw silk, 1st quality 11/13; Italy raw silk, 1st quality 10/12; China tsatlees no. 4; Japan, Meabashi no. 2; Bengala filatures 12/16. Source: 'Prix minimum, maximum et moyens annuels des soies a Lyon depuis 1857', BSS, 9 March 1878.

France China Bengala Japan

Canton fil.

1878-821

1883-871

1888-921

1893-961

103.7 67.7 78.4 97.3 81.9

100.8 68.4 79.0 103.8 84.9

96.4 67.0 79.2 103.0 83.6

97.0 66.3 75.9 100.8 77.6

Note: 1 prices 31 Dec. France organzines 1st quality, 22/28; Italy organzines 2nd quality 22/28, and raw silk 2 nd quality 10/14; China, tsatlees no. 4; Bengala filatures, 1st quality 10/16; Japan filatures, 1st 10/12; Cantonfilatures,2 nd 10/12. Source: 1878-1881, 'Tableau comparatif des prix des soies au 31 decembre des quinze dernieres annees', BSS, 5 Jan. 1884; 1882-1896: 'Tableau comparatif des prix des soies au 31 decembre des quinze dernieres annees', BSS, 9 Jan. 1897. 1898-01 France Spain Brussa

100.7 98.9 91.8

1902-05 99.1 96.3 90.0

1906-09

1910-13

99.0 97.1 86.3

99.8 97.9 89.8

230

An economic history of the silk industry 1906-09 91.3

1902-05 91.9

1898-01 94.0

Syria Greece Japan: filatures zaguris Shangai filatures Canton filatures Bengala filatures Tsatlees Cinesi whites Cinesi yellows Tussahs filatures Tussahs natives

94.7

94.0

91.3

100.5 76.8 73.6 66.9 55.6 48.1 32.2 20.1

100.8 73.4 70.8 73.1 62.1 49.4 35.7 24.7

97.0 73.1 70.3 66.6 56.3 47.9 39.4 23.7

1910-13 91.0 88.2 91.3 86.9 97.2 78.7 75.0 67.0 54.8 46.9 38.6 21.4

Sources: 1898-1902: 'Le prix moyen des soies en 1902', BSS, 5 April 1902; 1903-07: 'Le prix moyen des soies en 1907', BSS, 21 March 1907; 1908-12: 'Le prix moyen des soies en 1912', BSS, 5 April 1913; 1913: 'Le prix moyen des soies en 1913', BSS, 2 May 1914. (C) New York market

Japan Shangai filatures Canton filatures

1898-01

1902-05

1906-09

1910-13

92.5 103.6 79.0

93.9 106.2 78.8

91.9 104.5 78.0

87.7 105.5 79.8

Source: Monthly Summmary. (D) Krefeld market

(a) (b) (c)

1888-92

1893-97

1898-01

1902-05

1906-09

1910-13

99.2 101.7 91.1

95.0 101.8 86.5

96.1 100.1 86.2

96.4 100.1 84.8

94.3 99.1 83.4

93.5 96.1 83.2

Note: (a) Organzine Italy/Japan; (b) tram Italy/Japan; (c) tram Italy/China Italy organzines 18/20 and trams 24/26, Japan organzines 22/24 and trams 34/40. China trams 36/40. Source: Vierteljahrshefte 1900 and 1914. (E) Unit values of American imports

Japan China

1914-19

1920-24

1925-29

1930-34

1935-37

77.4 59.6

99.7 87.4

119.4 98.3

101.2 93.6

106.8 107.0

Source: Fujino et al 1979, table 65.

Statistical appendix Table AXXI

231

Relative prices of silks in Asia

(A) Japan: Filatures/Zakuri

1899-1902 1903-1907 1908-1913

1.206 1.140 1.171

1914-1918 1919-1923 1924-1929

1.144 1.203 1.233

Source: Fujino et al.1979, table 56, col. 7/8.

(B) China (a) 1897-1901 1902-1906 1907-1911 1912-1916 1917-1921 1922-1926 1927-1931

L707 L.480 1.667 L.691 :2.437 L.519 L.369

1910-14 1915-20 1921-25 1926-29

(b)

(c)

1.248 1.295 1.212 1.358

1.771 1.601 1.952

Note: (a) Shangai filatures/not re-reeled hand-made siks; (b) re-reeled/not re-reeled white silks; (c) rereeled/not rereeled yellow silks. Source: col. (a) Li 1981, 82; col. (b) Hsiao 1971; cols. 31/32; col. (b) Hsiao 1971 cols.34/ 35.

232

An economic history of the silk industry

Table AXXII places

Concentration of exporting firms in the Far East market-

(a)

(b)

(c)

(d)

(e)

Shangai 1883 1893 1897 1907 1912

23 28 25 29 23

1,989 2,600 2,692 2,266 3,012

27.9 12.6 13.0 9.1 12.3

60.1 45.0 48.2 36.6 39.8

0.122 0.062 0.072 0.052 0.054

Canton 1893 1897 1905 1912

11 12 16 14

2,103 3,112 2,465 3,263

20.4 20.0 20.1 19.9

78.2 69.1 73.5 48.1

0.137 0.121 0.133 0.118

Yokohama 1883 1893 1897 1907 1912 1927

36 37 26 27 25 26

831 1,634 1,867 3,879 7,210 19,276

15.3 20.7 22.1 24.3 26.4 23.4

43.8 53.2 58.5 63.4 66.4 74.2

0.067 0.087 0.091 0.116 0.124 0.134

Note: (a) number offirms;(b) average number of bales exported by firm; (c) market shares of the largest company on exports; (d) market share of thefivelargest firms; (e) Herfindahl coefficient. Source: Shangai 1883: 'Le commerce des soies dans l'Extreme Orient', BSS, 11 Oct. 1884; 1893: 'Exportations des soies de Shangai pendant la campagne 1893-94', BSS, 28 June 1894; 1897: 'Les exportations des soies de Shangai pendant la campagne 1897-98', BSS, 23 July 1898; 1907: 'Exportations des soies de Shangai pendant la campagne 1907-08', BSS, 15 August 1908; 1912: 'L'exportations des soies de Shangai pendant la campagne 1912-13', BSS} 9 August 1913. Canton: 'Exportations des soies de Canton pendant la campagne 1893-94', BSS, 25 August 1894, 'Les exportations des soies de Canton pendant la campagne 1897-98', BSS, 23 July 1898, 'Les exportations des soies de Canton pendant la campagne 1905-06', BSS, 23 July 1906; 1912: 'Exportations des soies de Canton pendant la campagne 1912-13', BSS, 23 August 1913. Yokohama 1893: 'Exportation des soies de Yokohama pendant la campagne 1893-94', BSS, 25 August 1894; 1897: 'Exportation des soies de Yokohama pendant la campagne 1897-98', BSS, 13 August 1898; 1907: 'Exportation des soies de Yokohama pendant la campagne 1907-08', BSS, 22 August 1908; 1912: 'Exportation des soies de Yokohama pendant la campagne 1912-13', BSS, 2 August 1913; 1927: report by the French consul in Yokohama in MAE, RC 1918-40 B-textiles, no. 20.

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Index

artificial silk see Rayon automatic reeling machines, 108-109 Bank of Japan, 165 barriers to entry in reeling, 22-24 bave-sticker invention, 107 spread of in Italy, 114-115 branch-feeding see silkworm raising, techniques of, new methods brushing innovations in, 105-106 diffusion in Italy, 114 chambon see crossing climate and diffusion of sericulture, 13-14 cocoon-cooking and the quality of cocoons, 97 spread of in Japan, 121 invention of, 106 cold-reeling, 108-109 competition in reeling, 21-22 in weaving, 73 in intermediation for cocoons, 171 for silk, 171-173 concentration in reeling, 128-129 conditioning of silk, 77 n. 55 constant-market-share analysis, 62-63 consumption of textile fibres, 43-44 consumption of silk by country, c. 1910, 61-62 crossing, 106-107 count of silk, fall in the, 48-49 democratization of silk, 43-44 Diaspis Pentagona (mulberry disease), 100-101 drying chambers, 104-105

256

East India Company see incentives to silk production in Bengal employment in silk production c. 1910, 11-13 exchange rate and increase in silk exports, 191 fluctuations and risk in reeling industry, 26 exports of silk destinations of, by country, 61 from China before 1850, 35 from India before 1850, 34 role in economic development, 192-93 see also Trade in silk enterprises organization of, 27 average life of, in the Far East, 23 fashion, 58-59 Fioruzzi V., 94, 109 France imports of silk in, by country of provenance, 76-77 weaving in development, 67-68 mechanization, 72-73 product mix, 69-70 Gavazzi (Italian silk company) size of, 22 Gensoul see steam-reeling, invention of Germany imports of silk in, by country of provenance, 77-78 weaving in development, 68 mechanization, 73 product mix, 70 Great Crisis, effects on silk industry, 32-34

Index hand-reeling decline of, 123 situation c. 1910, 11-12 resistance of, 123-126 demand for its products, 125 imports of silk, by country of provenance see France, Germany, Switzerland, United Kingdom, United States incentives to silk production means for, 175-77 need for, 189-90 policies in Bengal, 183-84 China, 184-85 France, 188-89 Italy, 185, 187-88 Japan, 179-83, 189-90 Kashmir, 178-179 USA, 177-78 industrial mark-up in reeling (Italy 1867-1913), 24-25 interlinkage, 170-171 Italy, development of weaving in, 67 Katakura Japanese silk company) exports of silk, 163 growth, 129 producer of machinery, 112 profits of, 25 size of, 22 labour management in reeling, 28 leasing of reeling factories, 24 location of silk production c. 1910, 11 silk throwing c. 1910, 12 Magazzini Generali, 166-167 market institutions, definition of efficiency of the, 146 see also Market for cocoons, market for silk market for cocoons and risk, 150 institutions, description of the, 147-50 'secondary* one (for dried cocoons), 149-50 transaction costs in, 151, 167 market for silk concentration in marketplaces, 151-53 corners in, 161 efficiency of, 157-158 information, 157 integration of, 158 modern institutions, description of, 156

257 modernization in the West, 155 state intervention in, 183 traditional institutions, description of, 162-163 transaction costs by marketplace, 168 Minorikawa see multi-end reeling machine motive power in silk industry situations 1910, 19 changes in Japan, 121 mulberry tree requirements of the, 12-13 varieties of the, 86-87 mulberry growing intensity c. 1910, 13-14 techniques, improvement of the, 87-88 mulberry bush, 87-88 mulberry lawn, 87 mulino da seta (throwing mill), 139-40 multi-ends machine invention, 107-108 diffusion of in Japan, 121 multinationals in silk industry, 28 multiple cropping, diffusion of the see Sericulture intensification Negozianti in sete (silk merchants) in Milan, 154 Pasteur, 40 peasants' income, percentage of sericulture on, 7-8 pebrine effects on world trade of, 36 characteristics of the disease, 38 effects on peasants' expectations, 39 patents in silk industry in Italy, 110 population growth, effects on sericulture, 98 prices of cocoons, long-term trends, 81-82 prices of silk differences as an index of quality, 134 fluctuations, 25-26 long-term trends, 32 relative to prices of other fibres, 45 production of silk, 1870-1930, 31 production costs reeling trends in Italy, 116-117 trends in Japan, 122 comparison Italy-Japan, 132-133 percentage of raw material on the, 20, 26 throwing comparison Italy-United States, 142-143

258

Index

productivity reeling and size of firms, 20-21 growth of, in China, 120 Eastern Mediterranean countries, 118 France, 117-118 Italy, 111, 116 Japan, 121-122 levels of all countries, c. 1910,130 comparison Italy/Japan, 131-132 sericulture growth in Japan, 85 silk production growth of the, 81 profits of reeling in Italy, 117 in Japan, 123 protection against throwing adoption of, effects on the trade in thrown silk, 42, 144-45 quality of cocoons definition, 95 comparison Italy/Japan, 95-97 effects on the quality of silk, 95-97 quality of silk advantages of the improvement of, 13839 campaigns for the, 138 constraints on the substitutability of silks, 53-54 definition, 53 effects on the, mechanization of weaving, 57 of changes in the product mix in weaving, 54 technical progress in reeling and changes in the, 110-111 see also prices of silk, trading companies Rayon, uses of, 43 see also consumption of textile fibres reeling, definition of, 2 reels, mechanical motion of invention, 107 diffusion of in Italy, 113 re-reeling definition, 108 diffusion for hand-reeled silks, 126 risk in reeling causes of, 25-26 institutions for dealing with,

scale and scope economies in reeling, 20 semei (traders in silkworm eggs), 38 sericulture definition of, 2 crises in, 99-103 expansion, 79-80 intensification 1870-1930, 80-81 input requirements, 13 supply curve of, 82-85 world-wide growth of, before 1830, 3, 4 see also mulberry growing, silkworm raising Silk Exchange in the West, 159 in Yokohama, 159, 169 silk content of cocoons, 89, 97 silkworms eggs cellular method of production, definition, 40 diffusion of the, 88-91 Fl hybrid, 90 French exports, 89 Japanese exports of, boom in the 1860s, 38 effects on the quality of Japanese silk, 135 quality inspections, quality control of, in Japan, race of, and the quality of silk, 96 changes in the, 89-90 silkworm-raising techniques of, 91-94 new methods of, savings thereby, 92-93 spread of, 93-94 teaching of in Japan, 182 size of plants in reeling situation c. 1910, 16-17 changes in time, 127 Solow's residual, 84 spinning spindles, speed of, 140-141 spool reeling, 108 Standard American skein, 138 steamship lines and silk trade, 41 steam-reeling spread of in Austria, 117 Eastern Mediterranean countries, 118 China, 118-119 France, 117 Italy, 112-113 Japan, 119 Kashmir, 119 invention of, 104 employment and machinery of c. 1910,11

259

Index steam stoves, 105-106 stockings, boom of consumption of in the 1920s, 52 substitution between silks see quality of silk supply curve for cocoons see sericulture survival of reeling firms rates of, in Italy, 22-23 causes of, 28-29 Switzerland imports of silk in, by country of provenance, 77-78 development of weaving in, 58 Tai'ping rebellion effects on world trade, 35 effects on China's exports, 39 tavelle see crossing tenancy systems and sericulture, 15-16 technical progress in reeling see bave-sticker, brushing, cocoon-cooking, cold reeling, crossing, Fioruzzi, multi-end reeling machine, patents in silk industry, productivity in sericulture see mulberry bush, mulberry growing, mulberry lawn, silkworm eggs, silkworm growing in throwing see throwing, spinning spindles, in weaving see weaving throwing definition of, 2 innovations, 139-140 technical progress in Italy, 143-144 Tomioka factory, 119, 180-181 Total Factor Productivity see Solow's residual and productivity tower feeding see silkworm-raising techniques of, new methods, trade in dried cocoons, 101-102 trade in silk growth of 1820-1930, 31-34 market shares by country 1820-1930, 35-36 ratio to silk output, by country, thrown silk, 71 trade statistics, reliability of the,

trading companies in Japan advantages of, 169-170 development of, 163-164 transportation costs for cocoons, 102 United States, imports of silk in, by country of provenance, 74-75 weaving in, development, 65-66 mechanization of, 71-72 product mix, 69-71 protection of, 66 United Kingdom imports of silk in, by country of provenance, 75-76 weaving development, 66 product mix, 69-70 mechanization of, 71-72 protection of, 66 Value Added, in reeling, 19-20 vent for surplus growth, 98-99 weaving growth of, before 1850, 30 growth of its output and consumption of silk, 46-48 mechanization of, 55-57 profits and the price of silk, 45-46 productivity growth, 56 transfer to the countryside, 54-55 use of raw silk in, 55 see also France, United Kingdom, Germany, United States, weighting 'weighting', 49-51 workforce recruitment and costs, by country, 16-17 training, 20 worktime, changes in, 127-128 yield ratio, trends in, 89 comparison between Italy and Japan, 95 Yokohama Specie bank, 165