Trade Information Bulletin No. 327.
Supplement to Commerce Reports.

Price, 10 cents.

INTRODUCTION

The Netherlands East Indies is one of the world's most important textile markets. Located near the Equator, these islands have a population of approximately 50,000,000, and they import cotton cloths to the value of between $40,000,000 and $50,000,000 annually. The United States shares but slightly in this trade, notwithstanding that many of our products are or could readily be made suitable. The one principal difficulty has been the developing of suitable agencies for distribution, but with careful study and application this problem can doubtless be overcome.

This report, by Assistant Trade Commissioner Edwin B. George, comprehensively deals with all the factors involved in the textile trade of the Netherlands East Indies. War and postwar conditions have brought about many changes both in the trade personnel and the character of the goods sold. In 1913 England and the Netherlands shared about equally in the cotton-piece goods trade of these islands, less than 1 per cent of the imports of cotton cloth coming from other countries. To-day Japan is making heavy inroads into the business in the gray and dyed goods, while England has the lion's share of the trade in bleached goods and prints and the Netherlands supplies the bulk of the cambrics. The last-named class is also feeling the competition of cheaper Japanese cloths.

The textile division of the Bureau of Foreign and Domestic Commerce, through reports from consular officers of the State Department and representatives of the Department of Commerce, is in constant touch with the textile markets of all countries, and will gladly answer specific inquiries from American manufacturers and exporters."

APRIL, 1925.

JULIUS KLEIN, Director.

COTTON GOODS MARKET IN THE NETHERLANDS EAST INDIES

The drastic economic changes which have occurred in the Netherlands East Indies during the last few years have left their mark on the character of the piece-goods trade in a number of important respects. The slump of 1920 and 1921 carried away the insecure pyramid of business which had been built up during the preceding two years and forced almost all of the import firms to go to the banks for extraordinary accommodations. Although many of the new and inexperienced houses failed, the banks supported the stronger organizations throughout the intervening period, in the belief that they would benefit sufficiently from the eventual revival of the piece-goods trade to repay the additional risk. The banks have perhaps saved themselves from heavier losses by this procedure. Even at this late date there are very few import houses that are financially independent, and at the time this protection policy was formulated a big percentage of them would otherwise have unquestionably gone under, taking the banks' funds with them. But it has made the reduction of the topheavy business structure of 1921 a very tedious and prolonged affair. As a result of it, more people are competing for less business than was the case in pre-war days, and margins of profits are thereby cut down. Financial Standing of Many Firms Affected.

Factors of this kind are the foremost explanation of the slowness with which both individual and community business is getting back to normal levels of turnover and profit. A few of the small new firms have managed to make themselves important, while other concerns which formerly did a big business and were regarded almost as fixtures have lost some of their connections and their market and no longer make satisfactory representatives. Therefore some of the names which American manufacturers were accustomed to regard as thoroughly reliable must now be eliminated from their lists, the recommendation of still others be qualified, and a few new ones added. The depression affected the buying power of individuals even throughout the interior. The well-paid laborers of the estates were discharged, the staffs of city houses were cut to a fraction, and values of practically all of the native crops, which had been bringing such astonishing returns during the months preceding the beginning of the depression, declined sharply. Business moved so slowly that during the period from July, 1920, to June, 1921, the textile import market was almost lifeless, and existing stocks, more than served to supply the needs of the year. A resumption of trade then set in, but the nave buying capacity was so depreciated that the general movement continued slow. It will probably require a settled period of export prosperity, balanced Government budgets, and lighter taxation on business to restore the piece-goods trade to the much-wished-for basis of a steady turnover at good prices.