INDUSTRY TODAY

Evening Post, Volume CXX, Issue 134, 3 December 1935, Page 13

INDUSTRY TODAY

ECONOMIC POSITION

NEW METHODS NEEDED?

"At the commencement of our depression, our policy was to reduce costs of production in order to lessen the margin between costs of production and selling prices. Costs were considerably reduced but did not sufficiently reduce the margin to give a profitable return. Now there is every prospect of costs being increased to the 1929 level with probably no further prospects of increased' selling prices beyond what they are today, and it is a question as to whether today prices will' be maintained. If they fall, unless we are careful it would appear that the scheme has failed." These comments were made by the president Colonel W. D. Holgate, at the annual meeting of the New Zealand Coal Mine Owners' Association today. CONSUMPTION CAPACITY. "No doubt the cause of our general depression in prices," he continued, "'has been brought about, by science and machinery, both in the first and -second industries,' to such an extent that it is doubtful whether there are sufficient people to consume the output even under normal conditions. As an example, twenty-five years ago Canada used to bring in close on 100,000 men for harvesting. Today, through the use of modern machinery they do not require any. Another example: In 1712 Newcombe built the first steam engine of 7J h.p. Compare that with the last large ■ turbine erected in Chicago last year, of 300,000 h.p. Taking j a man's energy at one-tenth o£ a horse.- j power, that plant alone, running continuously, could give out nine million times a. man's energy. -

"Similar advances have been made in almost every industry. Lord Melchett stated when addressing a meeting of 'shareholders of the Imperial Chemicals in 1930 that in fifteen years' time, on account of science, machinery, and fertilisers, we would be' growing more food than the world could consume, and in that time-the same would happen through science in manufacture. Lord Melchett only made one error, that being making the period fifteen years instead of six.

"England and her Dominions today are solvent whilst" the rest of the world, through the same cause, is unfinancial. If we-are to carry, on, the problem has to be solved. That is why I advise caution-against increasing" the cost of production.

-.-• ""We cannot admit that either England or her Dominions have recovered until such. times as the greater por-. tion of the.unemployed are utilised at a.fair rate of pay on productive industries. It would appear that our old methods of sustenance and economics are failing us and some other method of rationalisation of industries, and probably our money system, will have to be adopted."