K.Z. INDUSTRIES.

Press, Volume LXVI, Issue 19916, 1 May 1930, Page 15

K.Z. INDUSTRIES.

lAFEGUARDING DUTIES ADVOCATED. JIANUFACTURBRS REPkY TO i reply to tn « Canterbury Chamber \t Cemm«»ce Bulletin No. 63 upon the of New Zealand factory -Hflaetion was issued at last night's S|tiag of tho Canterbury ManufacSw Association. It was as follows: The Department of Economics of 'fltftsftvr OoJUWcnw essayed to tell ♦wtasnufacturers ef the Dominion jitney should do in. order to become are deeply distrustful propagandists who hold Jita English Free Trade ideas of 70 *Jjrs- ago; who have learnt from books ' Ll not by experience; and hove no Mietlflat knowledge of manufacturing, &V Bulletin is. distinctly unsympathstic '*» manufacturers and fosters the idea that they, aa a body, are ineffi- ' cient and their factories mismanaged, .ad- 1 that in the primary industries slonc is to be found the solution of our economic problems. Production Table Criticised. -A table of factory production is siren and » analysed to show that of STthird iroup; consisting of manufac-tK**-SJTportion only iii engaged Son' manufacturing proper, ■"J""*** Sed from repairs, upkeep, etc., etc. fhU croup covers woollen goods, boots, sheSsfanT clothing, and »«■••»■;»« industries. Engineering » not mentioned. We may not agree with the writer's classification as when most cwriage and vehicle factories" are classed as "goods which from their Mture cannot bo transported between MUntries at all, or cannot be transi wrted profitably," but taking the flg- ! wet as given we find that they aroused to- depreciate the importance of the - artup. The argument, however, cuta both ways. The net production of this •roup is estimated at only 8 per cent, rfthe total Dominion factory production of £87,000,000, but it is admitted ■ that this despised 8 per cent, employs of the 82,000 persons enrtgwHft faetory production. The conIfiftteKt are obviously that:— - 1 " Jteif i* Wgb ti™ thiß percentage be Asmall percentage of increase will solve unemployment. ,' A still deeper lesson to be drawn ' 'from these figures is that there are too few ..persons engaged in actual wealth '' ' pWfduction. This has been pointed out if -fy. other writers and cannot be too f ;,Pt|(ettgly stressed. Our salvation lies in not in buying from other 'jjMeyttiea, goods whieh ean economically •Wmade in New Zealand. *' . Interdependence of Industries. *' rtnthef depreciating arguments ate 'Wed—that this small 8 per cent, group ' 2oWW>ttM benefit by restriction of ijftßfteito, -The Bulletin displays deplof.afrawant of knowledge of the inter- ' >dM»d*n*e Of eae business upon anewrVsind bow activity in one branch > '< belpa others ftOtt Which , drawn. How the boot--1 tanner, eto., etc., and ' :h *be ptoducts of one group subjected to competition -il||pftpoita, its production ean be "'"wKfreatly affected by them. . o™fc»t do rem«mberod that the value ■ ;J|industry to a country is largely to the amount ef wages >pK|M.'the resulting increase of pur-' 4o not'seem' to'rtaiise j H' ;m~Jmittor? truth—that the com- ■ £< dependent upon the I the workers' wages, :f sieartfm / tt which go int6 citeulation |\ as t»ating fur_*fr hi -aumXMmwr*' instead of tiaying I the whole com* i mimM'iveryOtoe feela the depression I whisk tomes from the drying up o« this Y ; eomttttolal ttfe blood. I", Ths iext Statement is that the colt h ' ef U|» »tote«*ldn to the $ per eeAt, £ be bomo by the «omm«n* {.. ftyat * Whrte. This w a fallacy bfcM} I von< theory and w»t on practie*, tm I . »Ws t* t>* Vig*r6ttily combated, fy : • understand the fallacy of tf»» pW*w i' ery ef the Free Tracers it ia f Mcessater I to distinguish betwefin imports which ': «ann«t tre locally produeed, had those [J. which- can be made in New Zealand. In K the former case, tho whole duty !•- i passed on to the consumer, In the latter. fi the overseas manufacturer tries to hold m his market and eats his price as h¥ i,:, «s possible, but when he cannot held | ■ the market it goes to tho local raanufao|i" turer whose tumevsr is thereby in|f, crease^.

P ; - ,X&«r«*»e« .Tttfßdter, £ Vis is. the A.fc.C, Of etfdnomies that i:i &ereaaa4 turnover Nsttltt in tower pro--I''.,/,potion costs, and cheaper prices to the i?%lMjt and it ia a pernicious falsehood SM «p say that by it t&e manufaeturer escpublJe. Jt if true that low £*a«« good* at* shut oat, but thil butts lea.it of *ll the werkM, When Wa» it letting, in fetuvfti regular wages. local Competition and the poself Jixflmtyi Of tho imported article regain't'Wi **• nwdwt »» W» i ß **** guarantee ''■iflp *«** i ptfc** wlll b* ke P* own - * n the safeguarding duties have a» immense suecess., Whoever 't»Y*MHuted, farde haj rcyive'd, and in - e>ery« esse the. eost to the consumer. ■„'*■ $M bejnj'eduead. The Bt. Hon. Stansaysi "If we are to eopo / ,"Jrtta. ttjMtsployment we must have a ftM*lpttfl.V|li safeguarding the coun- .- •'Safeguarding 'Wd***MMMIM boyond all orUiei «Wliyj|hl«ad where in which It &mm¥9**' ,t "*» »• owe haa **'«*- »uhJJ« been Increased." * iSWW*"* Winston Ohurohill saysr- , <H aafefnafdlng in the, Mlscrted industries to which j 'Sl^** 9ll ftpplied justifies Its extendi* -freely to industries of all kinds." , It > '.fe. *'B««oii»Utotlon.'' f/- the word mueh % 'SUK* **, fcti&y o ** ot cheap advice j«,./ *%t&e,ottof »!&," is not, as tho Bui- . 3%#pttw, a solution of our difflculi '-W'S 4ff ttflHstry cannot be rationalised VU a secure market is In F"'#v* W «K«» Morris says, "But ,- s** "•■' Wwufattwo* tan spohd th* »■'-" to 'tool up' for Jv *•*&»,. quantity production ho must k- «W»onable chance of Celling Pi " WMw-produees. In other words, the ■'* '.%£&&* Potential market, as assessed k£i 's**'Pft«t experience, decides the «1- ■« and selling priee of goods," J3j£' j-J I *•** *«r present fiscal system, mara* "M and the first action s''*2i2r* IrMI " M » n °oW' be to make the Sfi' 1 secure to>our*«»anufaeturjfifr .Jg*» ;? *t Vpresent * they dare not spend »» v 'SB?" ** *^ b development of lines knocked out by Importa"®"r * lth,r atiek* grimly *• * lM *''wWi W drop manufao* vmnSSfiS l *****<> ■&*&s J?«««r Vt r»ne»t th« Mo|f«nna wiß&J'B&m <*yt: "why i% shoald »7»n«. no matter how £ -S922!** Tr »<s« idealist he may be to Imagine that this eoua■V Z™flWl» tiflum U it* -' 4t*tt

policy from all other countries *n tho world passes our understanding. ~ "Farther," he says, for mo to belbve that any, Obaneeiwr while dUlgently searching for f« on the one hand, and for f» the other. will propose deUberatsiy, by the removal of the MeKenna duties, to throw away with both hands at one and the same time a substantial source Of revenue and a substantial source °* employment."

Generalities Condemned. The Bulletin states that the expansion of the primary industries in the P£ 9t has brought about an expansion of other industries, "but in the past ten years it appears to have been achieved by I lessening rather than increasing their demands for labour and for the products of other local industries." A proof, if proof were needed, that the primary industries are inadequate to meet the demand for employment and expansion. The Bulletin states that "in the large group of sheltered industries returns have in some eases been reduced by een local competition," and that "in many cases there has been little competition m prices," "The tendency has been rather to regard costs as rigid, to pass on high costs to consumers in high prices." Again a loose generality. We would, be surprised to find ft busi?iess of any sort in which there is little competition in prices, and in which high costs can be passed on. Manufacturers are accused of "looking for aid to Government where competition of imports baß to be met," where else should, they look fgr protection against unfair importations, and what do they gett The Government spends #451,000 per annum on the Department of Agriculture. On the De--partment of Industries and Commerce it spends £31,000 per annum, which includes a largo amount for overseas mail subsidies. When manufacturers ask for duties to protect them from low-waged countries and from dumping, they are ignored; and it is the doctrines of the academic economists that are to a great extent responsible for this shorts sighted policy. "Economic Sophistries*" Fortunately the good sense of the general public sweeps aside these economic sophistries, and, going straight to the root of the matter, recognises that a country becomes prosperous by national production. Speaking of the third group marketing goods in New Zealand in competition with imports, the Bulletin says: "They can expand by ousting imports from the local market or by developing our export trade," and that "their market might be practically unlimited could costs and prices be.reduced.sufficiently." If we are to "oust" imports without protection wo shall have to bring our workers down to a " peasant-coolie" standard of living. Surely this is not seriously advocated. A list of causes of high costs is given. 1. "Uneconomic organisations." The reply ia—Give us our nome market and we shall be able to perfect our organisations. 2. "High taxation." A thing whioh can be remedied by having a large favourable trade balance. 3. "Over-capitalisation"—This is rare in manufacturing industries,. It is said to be found largely in agriculture owing to inflated land values. 4. "Over-regulation and restriction" —Not, except in the fixation of wages, a vital matter. 5. "High transport and distribution charges"—These are in keeping with our standard of wages and living: and would be relatively leal if turnover were increased. Quality of New BeaUnd Work. Extracts from the Footwear Industry Beport art quoted. Without their eontext these .extracts seem condemnatory, yet the compilers of the report state definitely that this is not intended. Boot hate for .the.first time beenable to atate their cMe to a competent tribunal and have come through a searching enquiry with nothing to be ashamed of. The report says:— "With regard to the quality of the Work done » *fyw Zealand we may say that we are in no dottbt tfiat the highest quality work can be, and is being doae> in certain factories, The demand from the retailer appears to be the goverriing factor, and while the high-grade lad generally branded product is a true high-grade prOdtiet, other graded are madeto meettht demand and the competition fW>m abroad. /. "Little needs to be said in regard to the, improvement which could be confidently expected to follow from increased production and sale." "Not » Beflection." Referring to the paragraphs quoted in the Bulletin, the Footwear Beport states:«*-"I» their summarised form these may appear to be a serious indictment of the industry aa a whole. The com«Jttce, however, is of the opinion that, speaking in general terms, there is, in the olroumstlncep, more to commend than to condemn, and that those engaged in the industry deserve praise for their past and present endeavours to develop the industry in the face of extraordinary and frequent changing conditions. It is undoubted that the footwea* manufacture in tne Dominion has reached a high standard of quality anq that manufacturers quickly adapt themselves to ehanges. The industry is Sae ef the Oldest established in the dominion, and to the official, members of the committee the history of the trade reads almost like an epic story. Some notable successes have been Achieved but there can be no doubt that the majority have suffered severe huffetinga, fgd bar* carried on year after year gaining proflta for a time and then suffering losses. Neither the manufacturers nor th*. wdfkeri should, therefor©, regard this report as a reflection on tho industry, but rather tteat it aa it ia intended to be, as a series of constructive suggestions for the betterment of the industry aa a whole. "The unofficial members of the committee recommended a 8 per cent, inerease of tariff for five yoafs. They state 'the granting of thisj increased tariff would, it i 8 felt, enable the manufacturers to adopt the recommendations by giving them the necessary increased output, and, furthermore, would enable footwear made in New Zealand to be sold without increase in prices. l " New Board BuggestedThe footwear enquiry has been quoted at some length, first because it is the first occasion on which an industry has been carefully examined by a Governmental enquiry, second because the report deserved more notlee than has been given to it, and thirdly—because the industry has come through the enquiry with credit, and a rebuke is given to those who, like the authors: of tho Bulletin, belittle our manufacturers and state that the only reason for, their not being successful is their inefficiency. . All those who have had experience of trade know that with all the willing-, ness in the world it is net possible ™> carry out reforms dependent upon having sufficient turnover to warrant ' them, unless a fair pottioa of our home ■ market is secured, to the trades concerned. Sir George Julius gave us a formula under *hioh we could stand or fall upon ow merits at ■rtottatwj*' Ha •JM* "Adequately prtteot until they are established, When *stablifted, m point nt with east «*J»£**; produeed Under eheaper production J3J TC -HghtoMd SAfegtatdinij