Poverty Bay Herald. PUSLISHED EVERY EVENING. GISBORNE, FRIDAY, APRIL 13, 1928. RATIONALISATION OF INDUSTRY

Poverty Bay Herald, Volume LIV, Issue 16622, 13 April 1928, Page 6

Poverty Bay Herald. PUSLISHED EVERY EVENING. GISBORNE, FRIDAY, APRIL 13, 1928. RATIONALISATION OF INDUSTRY

The future of the British Empire rests upon the Empire’s trade. That is a truism which is being more and more clearly recognised by. statesmen at Home and in the Dominions, as well as by the great manufacturers, merchants and banking houses, and as a consequence of such realisation there is being brought about a gradual transition —a transition from the old policies of cut-throat competition, and the so-called free play of economic laws, to a new era of co-.opcrarion, regulation of output, and unification on a national and Imperial basis. This process of transition has. been aptly termed “rationalisation,” and an English writer explains that rationalisation is simply the uso ot the best brains and co-operation. It is the very latest phase in the national evolution of industry. Cut-throat competition amongst ali thc warring tr;ibcS.of commerce,'he, declares, isiis/dead .as the feudal system. '' The old" order 1 of things when every manufacturer was out to beat his neighbor and to hustle him into liquidation if possible, when your neighbor’s profits were supposed to be your losses, has gone. Amalgamations, which we sec sprouting so vigorously in the fields of industry, are but one step, a very important step, in the process of rationalisation. By bringing the whole of an industry in all its branches, raw material, manufacture, research, sales distribution, and finance, under central control they facilitate the full use of scientific methods which is the essence of rationalisation. The old trusts aimed at profits and high prices; the modern combine aims at service and efficiency. It is simply .the logical result of the scientific outlook in business, and as such it is its own justification and defence. It is the last word in scientific and organisation and it is the finest instrument which the best business brains of the! Empire can use for furthering the interests of the Empire’s industries. Explaining the benefits following the amalgamation of big businesses, the writer points first to finance; a large scale company with a large reserve and vast resources can obtain its capital for extension and development at a much cheaper rate and with much great facility than the smaller concern. Then wo have the question of raw materials; the big combine is in a much better position to secure cheaper markets and to guard against exploitation; often it is the actual producer of its own .raw materials, as when steel firms own collieries, iron-ore mines and limestone quarries. All this makes for economy and efficiency. Coming to actual production, we find that modern plant and equipment pften demand the expenditure, of. mil-, lions of capital, and are constantly being superseded and calling for replacement. Only a big organisation fitted for large-scale production can afford to lay down such plant and to keep it up-to-date at the lowest possible cost. Then again, the combine can attract the finest technical and administrative brains to its staff and afford them ample scope and .opportunity. In modern industry the part played by research and new inventions is ever-increasing, and this is one of the very strongest arguments in favor of the new movement. The last link in tho chain is distribution and here the large-scalo concern has a very obvious pull. Indeed many modern fusions are formed simply for the marketing and selling side of tho industry. It is claimed that on the labor'side the big company can afford to give its work people better conditions, more security, and a generous provision of welfare and recreative activities. Business combines arc but one step towards rationalisation. Another aspect is the control of world markets and the stabilisation of prices. Stabilisation is one of the crying needs of industry to-day, and is constantly called for by leading economists. IJnre : stricted production without reference to the needs of consumption is archaic. It results simply.in violent booms and slumps with industry tossed on the gigantic waves of alternate prosperity and distress. It is the aim of rationalisation to oil over and smooth down those waves and to provide industry with a level fair-way for its advance. This brings us to the question of the Imperial cartel as a final step in the evolution of British industry. The chemical industry has given a lead to the Empire in this direction with a huge organisation formed with the avowed and definite purpose of concentrating on Imperial trade and holding for Britain the trade of- the Empiro in all chemical manufactures. It was only by tho combination of great capital, energy, and resource that this could bo accomplished in view of the formidable foreign competition >by European and American cartels. “Looking at the world to-day,” says the -writer, 1 ‘ we find a new re-grouping and rc-orientation of forces taking place. On one side of .the Atlantic is a rich and enterprising country with immense natural resources, no lack of brains and vitality, intensely materialistic and highly efficient. Though almost the size of a continent it has free trading within its borders and lias the whole of a vast home market sheltered behind mountainous tariffs. Already one of the Dominions, Canada, does a greater volume of trade with that country than with Britain, and there will always bo a force of trade gravity drawing thorn to a closer rapprochement, Tho United States is one great economic group. On the other side of .Die Atlantic wc have gradually forming another economic group, the projected European Customs Union. Faced by severe competition from tho. United States, Ihe various countries and nations arc being driven to sink their prejudices and animosities and merge their interests in an economic ajlinnce. This second world grouping, ” the European Customs Union, has becomo almost a fetish with business men on the Continent. Amid all these contending forces, what is to be the position of Britain? On tho one hand she is being urged and cajoled to join tho European complex; on tho other is the possible policy of isolation. Either of those alternatives would mean sacrificing all that we gained and all that we bled for in the Great War. There is only one policy for Britain and that is the policy of Empire. Standing alone she would bo swamped by the other world

groups. Joining any one of them she would fatally weaken the ties of Empire and throw away tho trump card in her hand. As a component part of the British Commonwealth of Nations, however, she could face world competition without a qualm. In raw materials and national resources the Empire is predominant, oil being practically tho only one in which site is at present at a. disadvantage. The Empire has a huge preponderance in rubber, nickel and jute; she leads in gold and tin, and lias ample supplies of other minerals. Her coal resources are enormous; in foodstuffs she produces 27 per cent, of the world’s supplies of wheat, in rice (3G per cent., in cattle 53 per cent, and in sheep 51 per cent. An equally encouraging talc is told with other commodities of all kinds. The Empire .then is easily the world’s greatest economic group. Nor is she behind in brains, vigor, push and technical ability to develop her resources. She has an undisputed reputation for justice, sporting spirit, and administrative ability. All that is needed is full economic co-operation. How that can bo secured is ior the business men and industrialists of the Empire to work out.” To achieve success it will be necessary to proceed by the modern road of rationalisation. Much as wo dislike the word “combine” and the practices of combines in tho past, there can bo no doubt that the times demand greater cooperation in industry, greater research and scientific practice, greater organisation in marketing, if Britain and (he Dominions are to, hold their own in the strenuous commercial struggle which is to. decide the destinies of fiat-ions.