SUPER-TARIFFS

Evening Post, Volume CX, Issue 144, 16 December 1930, Page 11

SUPER-TARIFFS

AND DEPRESSION

PERPETUATING THE UNFIT

TOO MANY TINY UNITS

A protectivo tariff and prosperity eneouiuged secondary industries in Australia. Many small manufacturers got j into business. Then came depression. la many cases —though not in allsmall factories cannot manufacture to advantage. They miss certain advantages of big scale production and output. In prosperity their chance was aot good. In depression it is bad. depression has brought with it superv&riQsru, and it is foared that the latter will prolong the life of unhealthy manufacturing ventures, making the Iwrt state of industry worse than the firU Advocates of rationalisation, ineludiig Professor D. B. Copland, urge that, by amalgamations, co-ordinations, etc, Australian secondary industries should be reorganised on a basis of larger and healthier units; or at least that something should be done to remove the crushing overhead cost of over-equip-ment. The Australian consumer cannot carry plants capable of a production far exceeding his consumptive needs. OVER-EQUIPMENT. While there arc sixteen glass factories giving an "added value" return of £1,593,000, an added value of £2,----162,000 iv the agricultural implement industry carries 155 factories. And while eleven wire-working factories are equal to an added value of £1,144,000, the boot industry, for an added value of £.4,751,000, keeps up 354 boot factories. These are Professor Copland's figures. Of the 354 factories, only 57 employ more than 100 hands each. These.s7 employ 10,795 hands out of n tot/il of 19,954 hands for all Australia. According to one writer, the Australian boot and shoe industry is overequipped by many thousands of pounds' worth of plant, and the story of blighted hopes is written in disused machinery. Failures have not been few, and It is believed that others are inevitable. The tragedy of this colossal waste is that not only the boot industry, but tho whole community suffers. A multitude of small businesses deprives both the larger manufacturers and the consumers of the benefits of tho seduced costs which result from mass production. The story has its beginnings in the •war years, when the Australian Imperial Force needed boots, and in the years after the war, when there were unprecedented amounts of money in circulation in Australia. The war is over, but the tariff remains. There has boen full opportunity for the ambitious. Occupants of subordinate positions in boot factories blossomed out overnight as manufacturers on their own account. EASY STARTS ON CREDIT. To establish a factory required little more than the enterprise of the traditional two men and a boy. Machinery was obtained on the easiest possible terms, credit was given by suppliers of Taw material, and tho new manufacturers were willing to work for the equivalent of a salary or less. They had nothing to lose, and a world, or some of it, to win. When all went well they made a living; when they failed their stocks were thrown upon the market at impossible prices, underselling the larger manufacturers. A host of small independent producers is still in tho market. There are so many and so much plant that the machines of the great factories run part-time, and work below capacity while overhead costs rise proportionately, tho foundation of the business becomes uneconomic, and money lies useless in plant and buildings, or vanishes altogether. Few, if any, plants are Tunning constantly at full capacity. Industrial depression has served only to accentuate a position which was becoming untenable of its own defects. There are 354 factories for a very limited consuming market, yet it is estimated by experts that two or throe of the large factories working at full capacity could supply the demands of the whole of Australia. The rest is economic waste. The number of manufacturers will inevitably be reduced by sheer inability to carry on, but a far-reaching reorganisation of the industry is required if under protection it is to be anything but a wholly artificial structure sustained in indifference to the economic laws of the community by which it is protected.