ir, H»N> 267
their relatively inelastic h«nu. market a^d ,j luucr price in the
relatively elastic foreign market*. Whilst British export trade with
undeveloped foreign countries had artually in,-reaped by the end of
the period reviewed, it wa« nc\erthriks* losing snmnd in these
markets. Britain herself, under open market conditions, was also
subjected to the impact of the discriminatory export prices of
organized industries abroad.
Not only did the British home market increaw* mnrv ^louly than
those of some foreign countries, but there \\ a> a fall in the amount
of real savings in this country available for investment abroad.
These foreign investments mainly took the form of exported capital
goods fabricated of iron and steel so that there mu>t ha\e b**en a
diminution in our power to export. In the period following the
European War the country was, moreover, having to offer less
amounts of capital goods for our essential supplies of raw materials
and foodstuffs.
Whether the relatively high cost of transport was a factor outside
the control of the iron and steel industry may be debatable, but
it was certainly a handicap.
So far as general monetary considerations are concerned, there
have not been found any adverse factors affecting British industry
relatively to foreign countries up to the War in 1914, but after it
the depreciation of foreign currencies, and particularly the over-
valuation of sterling on the return to gold in 1925, not only had
a depressing effect on British industry, but seriously handicapped
our export trade at a time when economic nationalism was rampant.
Taxation and social charges, although the latter were imposed
earlier in Germany, were higher in Britain than in competitive
countries and constituted a burdensome item in British industrial
oncosts, yet their removal would have depressed productivity still
further. British industry also suffered relatively to her competitors
in the assistance accorded by the banking institutions in regard
to long-term investments, and particularly in the financing of
export trade. British banks were financial and commercial rather
than industrial in outlook and, in fact, took little interest in the
long-term financing of industry until collapse was imminent, and
then only covertly. Nevertheless, the large joint-stock banks, as well
as the merchant banks, have interlocking directorates with industry,
so that there could have been no real difficulty in obtaining fresh
capital had there been a promise of profitability.
While, therefore, certain domestic factors external to the industry