of the trade depression in the United States in 1893, the exports rapidly declined. When business revived, our manufacturers were well prepared for it and the demand for cycles was so successfully filled at home, that, up to the end of the second quarter of this year, not a single complete bicycle had been sent for many months through the Birmingham Consulate.

But it is the experience of this very busy district that one thing goes out and another comes in, a fact well prove by the growth of the weldless steel tube export. In 1894 this only amounted to $85,899.55. During 1895 it rose at a bound to $507,041.29, and during the first quarter of 1896 it reached $231,200.36. This movement was the result of unusual foresight on the part of the American bicycle-makers. They entered into such large contracts for Birmingham tubes that they really monopolized the product before the English bicycle manufacturers knew what had happened. Then two movements developed simultaneously. The English bicycle-makers must needs have tubes or they could not make machines, while American tubemakers saw a chance to supply their own market with these necessary materials.

In England the formation of tube and bicycle companies has been the distinctive industrial movement of the year. Men who had been makers on a small scale saw an opportunity to become, all at once, large makers of a product for which there was a general demand. Hence, small shops were enlarged; tool and machinery makers were put to work, and promoters found it profitable to float new limited liability companies. So strong was this movement that thirty-two of these were formed during the first six months of this year with a combined capital of nearly $55,000,000. Scarcely a week has passed since the first of July without a new company, so that the number for the year promises to be not less than fifty. The speculative value of the shares of the large concerns seems to be justified by the dividends, either declared or promised, upon the first half-year's working. Some of the profits reported have been enormous, but the opinion is general that they cannot continue for another full year. It is thus impossible to separate the speculative from the investment element. So many are interested in maintaining the prices of shares that all naturally want to put off the day when the decline shall begin. The large companies in existence before this moveVOL. CLXIII.-NO. 481.

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ment began have shared in this speculative advance. Some of them had gone through a good many vicissitudes, but they seem to have so prospered under the influence of the general movement as to have become profitable concerns.

In the meantime the development of tube-making in the United States has been so rapid that shipments during the second quarter of this year dropped nearly one-half, to $130,253.84, and are still going down so rapidly that they promise within another year to reach almost the vanishing point. It is not necessary for me, at this distance, to tell progressive readers in the United States how the tube industry has developed there. But it is not less well known here in every establishment in which cycles or their component parts are made. Indeed, it is anticipated that tubes will be imported here next year from the United States for use in making cycles.

Except in the case of limited liability companies-most of which are too new to have made reports-it is far more difficult to get anything like complete returns of the number of employees and the extent of output than with us. The publicity incident to business is less, and trade jealousies are many fold stronger. It is estimated that there are in Birmingham about one hundred and fifty factories connected with the cycle trade in its various branches, with about fifteen hundred or eighteen hundred employees. In Coventry, which still remains the principal centre for complete machines, there are more than a hundred firms with about seventeen hundred employees. Wolverhampton, whose businesss has suffered during recent years, has found something of a revival through this trade, while several other less important "Black Country" towns have some machinery devoted to the making of cycle parts. All these are in the one consular district, within the limits of which fully 80 or 90 per cent. of all the cycles made in the United Kingdom are produced.

It is calculated that the output for the home trade will be about 750,000 cycles this year, valued at £11,000,000 or £12,000,000. The foreign trade also shows a substantial increase; the exports for 1895 being £1,393,810, against £1,200,913 for 1894. No comparative treasury returns later than the first quarter of 1896 are now available. Then the exports were valued at £444,509, against £329,096, in the corresponding quarter of 1895, and £329,535 for the same time in 1894. As to capital invested, the

According

returns are quite as vague and are mainly estimates. to these the limited companies engaged in the industry had a capital of about £6,000,000 at the end of last year; since which time similar companies have been floated with a capital roughly put down at £11,000,000, total of more than £17,000,000. When to this is added the large investment of private capital, it is probably within the mark to say that about £20,000,000, or nearly $100,000,000, has been invested in this industry. Its wide distribution was shown in a report made a few days ago by the Earl of Warwick, when, presiding over the statutory meeting of a new limited company, he stated that while the plant and fixtures were formerly owned by three men, the new shares were distributed among more than 4,000 separate holders. Nearly 2,000 patents were applied for last year for improvements and additions to cycles in their various branches. What proportion of these were issued to American inventors is not noted in the published

returns.

The new element in the British cycle trade is American competition. This was entirely unlooked for, and at first the tendency to belittle it was apparent. The publication of the returns of the Treasury Department showing that from 12,000 to 15,000 high-priced machines of American manufacture had been offered in this market within a few months, coupled with the prediction that not less than 40,000 or 50,000 high-class machines would be imported next season, opened the eyes of many people. The presence of aggressive, agents of American manufacturers in many of the larger towns, together with the competition of a number of expert riders in exhibitions and parades, have combined to remove a good deal of skepticism. Altogether, makers and the public now concede that American machines are likely to be an important factor even in the trade of the coming year, and to have a decided influence on prices and production if the demand for cycles continues here and grows in other parts of the world.

A word of advice to our manufacturers and dealers who hope to find a market here for some part of their product may not be amiss. The first caution I would give is concerning quality. There is a demand here, as everywhere else, for good wheels, at lower prices. The opinion is general that present prices for firstclass machines are excessive, and that if the demand continues

they must be reduced. Discounts to the trade have been reduced, causing many complaints, and being, in reality, an advance upon former prices. All this tempts both domestic and foreign manufacturers to cheapen products, so that they may meet the views of thousands of people, who, without money to waste, are still anxious to have good machines. This makes it imperative for our manufacturers not only to allow no deterioration in the quality of machines offered here, but that they should, if possible, give more value for the money here than at home. The reason for this is obvious. When a mechanical product is offered in a foreign market, aud especially among a watchful and intelligent people like those of England, who resent such a competition in their own markets, the reputation of the exporting country is more at stake than that of the individual manufacturer. A hundred bad machines sent by one maker, remote from the known and recognized centres of commerce, might easily stop the sale of 10,000 machines made under the best and most careful systems in the largest factories in the United States, while a dozen shipments of this kind might ruin a promising trade. Anything like a sudden cheapening of prices would look suspicious, and be accepted as a lowering of quality. After our own people, none in the world are more willing to pay a reasonable profit upon an article for personal use than those of England, and as there are already too many machines here of the cheap and nasty order to warrant competition in this kind of product, it is to be hoped for the good name of our manufacturers and the country, that there will be no attempt to enter upon it.

I am convinced that the field here for American cycles cannot be capable of indefinite expansion. This more than any other is distinctively a manufacturing country with unlimited capital and large experience in meeting competition. Business methods are slower than with us and so do not allow such rapid adjustment to new conditions. In some cases trade has been permitted to slip away; but they are now watchful of increasing competition on all sides and are studying the question in all its bearings, with more care than for many years. They will hold as much as possible of a business like this when it becomes a settled one. This will be when it is shown that the bicycle has come to stay and that its manufacture is an industry in which account may be taken of the same elements that enter into every other branch of trade.

In spite of this it is possible for our cycle-makers to find a good market here for some years for some proportion of their surplus product; and the important thing, it seems to me, is to use this opening for entrance into the larger and more important markets beyond. The people of the colonies are used to watch so closely for any signs in the mother country that probably the best recommendation for American cycles in Australia and South Africa would be the fact that they had made a place for themselves in England itself. I hope not only to see many thousands of American machines on the roads of England, but that this will enable our makers to send many more thousands into markets which they have not yet entered as serions competitors. This is not an unnatural course. Trade may first seek the most crowded marts and then, as it gains experience and clientage, make its way into others less crowded.

The most surprising element in this competition is that an enormous amount of American machinery and tools is already in use in cycle factories here. The tendency is to increase it, the admission being made everywhere, in the smaller as well as in the larger shops, that our machinery is better fitted for its work, and that its use insures a great saving of labor, as well as an improvement of the product in both quality and appearance. It matters little that some expert inquirers are asking what good result is to come from the heavy expenditure made for some years in establishing technical schools, if a country almost devoid of them is to demonstrate its superiority as a maker of tools. A great number of local bodies all over the kingdom have erected enormous buildings-the new one in Birmingham has cost nearly $400,000-have fitted them with every appliance for giving instruction in the trades of the district of which they are the centre, and have employed teachers and organized classes open to every apprentice and artisan at rates of tuition almost nominal. These have been the outgrowth of the recent competition from Germany, where technical schools are of long standing. It must be confessed that these institutions have been established in many places on a scale which, to a stranger, seems hardly to be justified by the use to which they are placed and the meagre results so far to be seen. I can but believe that our system of public free schools constitutes, after all, the best possible technical schools for a varied and complete industrial development.