DIFFICULT YEAR

Evening Post, Volume CXXVIII, Issue 131, 30 November 1939, Page 15

DIFFICULT YEAR

MATERIALS SHORT

MANUFACTURERS' PROBLEM

PRESIDENT CANDID

The development of manufacturing in llic Wellington Province is well exemplified by the membership figures quoted in the annual report of ihe Wellington Manufacturers' Association presented at the annual meeting last nights In 1933 the association had a membership of 216; today the. names of 438 active manufacturers appear on the membership roster. Referring to the difficulties under which manufacturers are operating today, difficulties attributable Substantially to an increased demand for New Zealand-made goods in the face of restrictions placed on the importation of finished goods from overseas, the report of the general \ committee stated that a serious position had been reached in regard to raY materials. ' '

"The acute position brought, about by the liquidation of London funds, followed by import control and the. rationing of overseas credit, had, prior to the outbreak of war, resulted in stocks of many imported raw materials essential to manufacturing being at a record low level," stated the .'report. "Now, with the restriction on/normal trade due to the introduction of a system, of export control in those countries on which New Zealand normally draws for raw materials, the position has reached a stage when the council views the future with grave apprehension. , ....■' y "While realising that the Government is powerless to grant credits for the importation of raw materials in excess of the funds available, the facts have to be faced that licences now being granted on the basis of 1938 are insufficient to keep our factories fully employed, and that, without an immediate easing of the position, a drastic falling-ofl; in production with its resultant reduction in staffs is unavoidable." The president, ' Mr. W. H. Stevens, spoke of the same difficulties in his address to the members, of whom there was a very good attendance. . Five or six years ago, at the end of the depression. New Zealand was able to build upr—certainly at the cost of internal stagnation and suffering— ■London/funds amounting to over forty millions sterling, said ,Mr. Stevens'. Then the present Government'secured, office and adopted a policy of spending which, in conjunction with other influences, resulted in our exchange funds being dissipated in about. four years. '. ■ • . '. .'•' THE MAIN FACTORS. "As the result of an extensive pror gramrhe of public works, railway and' public ! building expansion," he '■'■continued, ■ "great ...sums ..of., overseas j money' were spent in the importation of materials and plant; hours were shortened and wages increased, and such a state of false prosperity was created that .the. public developed a taste for expensive) imported goods—added to which was the fact that many individuals and firms, obsessed with the belief that their capital would be safer out of New Zealand than in it, materially added to the .Dominion's difficulties by transferring their liquid assets over-: seas. '■■''..;■■.-. '. '•■ ' *■'■

"The cumulative effect of these three factors—heavy Government, expenditure on public works and buildings, the artificial demand for expensive imported goods, and the flight of capital from New Zealand, is. that we are today faced with a return to that condition of internal stagnation and suffering which existed in 1931-32.

"What a different story we would have had to tell today if Mr. Sullivan •f-whose sincerity of purpose anu genuine desire to help New Zealand industries is unquestioned—had been able to persuade the Government to encourage the spending of even a part of that forty million pounds on plant and material for' our - manufacturing industries," said Mr.: Stevens.: . ,

During the first three years of office of the Labour Government production .costs increased to such an, extent that manufacturers were in many cases unable to compete with imported goods, and although pressure was brought upon the Minister of Industries and Commerce, he was unable to secure action designed to save the situation: importers prospered and manufacturers languished, while exchange funds dwindled. :

After the last elections actiori was | taken to protect the London funds, but the horse had already left the stable; the badly-conceived import control regulations were introduced through sheer necessity. Recognising that the only, way to keep New Zealand's overseas economy on an even, keel was by developing our =■ own secondary industries, manufacturers were given practical encouragement and a measure of protection. ,-'■ ■ ; i PROMISES OF RAW MATERIALS. i Assurances had been given by the Prime Minister and other members of Cabinet that there would, be no diffifculty over securing. licences and oyerrseas finance;:, £px 'plant,'afid : materials, and manufacturers' had/responded fully to the rap;pe^r;.;aftJd vtKe" -slogan . "Let's : Build -a ■'■l^gtion>-!'/r'-'':'i>:j-."'-V c :'.','■ V.:.. "'. ;' ' ■• : /-:TIKS'';BL9W: FALLS; :;''< '•That was only about- twelve months ago, and so great has been :the .progress that in such 'a 1 shtoi't time .the; wheels of industry are. turning-'-at -a rapid, rate, ■making products: ■in ..wonderful variety to fill the , deniands Of a discerning- pi*blic,,'? > t said/ Mr.. Stevens. "Then- pomes the. .greatest blow of all,i" We are informed,? in ;spite of definite: Ministerial'protnises/tp the con-, trai-yV that in ' future "we] will be unable- to secure licences '. and • finances to 'cover the importation of 'raw materials necessary to'meet,the increased demand for the products of • our factories; and; that we can have only thei same':, 'quantities-, of .materials as we j.used. in. the .first .half v ;of ,1938—the j period duringrwhich our' industries, were -.-.not. functioning jat' .normal capacity/ .and '.before. -New.: Zealand's real manufaqturing, activity commenced.

"Onn account of senseless delays, deliberate^ or .otherwise, in 'the granting of" inittoi-f liceiice^ .through 'tlie present cum.petsphle'.irh'pbrt,' system, ; s'tbcks are depjletfed .and in many cases,output is already,„ restricted 'arid- staffs,v, reduced," stated' ;Me. .Stevens.. ".."Stocks of manufactured', goods, in. the shops and warehouses'' are- not^.sufficient:" the- public are clamouring supplies •of necessary article's 'which we are1 "unable to supply for the want of raw materials and the great sums of money which the manufacturers have spent in plant and buildings in response to the Government's call are in jeopardy and are building up overhead which will be a