Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, DEC. 17, 1934. SECONDARY INDUSTRIES

Poverty Bay Herald, Volume LXI, Issue 18582, 17 December 1934, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, DEC. 17, 1934. SECONDARY INDUSTRIES

Those who. have found occasion to criticise the unnecessary interference by the State with the activities of industry will derive some consolation from' the general tenor of the address of the Prime Minister to the Dunedin Manufacturers' Association. A few days previously Mr. Forbes had staunchly clef ended the action of the Government in deciding; to set up a commission to exercise stringent control of agriculture, and at first glance he might appear to be inconsistent in that manufacturers should be left to their own devices to work out the salvation of their various businesses. The two cases, however, are not parallel, because action in regard to agriculture was necessitated by the conditions imposed by the British Government, whereas the pro!) lems confronting secondary industries are of internal origin. The proposals for industrial reorganisation emanat ed from the Manufacturers' Federation. They have much to commend them, but there will be very general agreement with the view of the Prime Minister that Government; regulation should be avoided, if possible, and, if it is not possible, then the measure of interference should be kept to a minimum, On the whole, New Zealand's secondary industries are efficiently operated, there is no undue protection, and no exploitation of the public or of the workers. There is, nevertheless, room for improvement in every direction, and much could be achieved by co-operation on the linos adopted in Great Britain, where what is termed the rationalisation of in dustry has been proceeding apace, i! is of the utmost import a nee to remember, however, that net ion in Britain has been on a voluntary basis by the industries themselves. The Government has only entered into the question indirectly and by conducting negotiations with other countries. In New Zealand the State has always played an important part to the. extent that it has imposed protective tariffs, but it has already laid it down that in future protection will be granted only to those industries which are conducted efficiently and arc catering adequately for the needs of the public. It is not the function of the Government lo make the industries efficient, nor even to give to any organisation power to enforce it* decision upon industrial units. The average businessman to-day fully realises the value of co-operation, as is evidenced by the number of Irndiassociations already in existence, and it is probable that more would be los! than gained by any attempt to make co-operation compulsory instead of voluntary. From the public point of view if is most undesirable that anyhing should be done which might have the effect of eliminating the healthy competition and individual effort that have been responsible for irogress in the past. Nor would it be wise to encourage the rapid development of any specific industry, or to foster the establishment of new ones, for success in this sphere is dependent, not upon spectacular displays,

but upon slow building on solid, foundations. The expansion of existing industries no doubt is possible in many cases, and there is much to bo gained by co-ordinated effort, by Iho elimination of wasteful competition, and by'combined research work. In this way many of the existing problems could be solved, and without any need for intervention by the Government, although it might be conceded that ultimately, when industry itself had done, all that could reasonably be expected of it, there might be reasonable ground for some form of State assistance. The matter of launching new industries opens up a much wider issue. It is clear that; if our exports of primary produce arc to be restricted there will need to be some readjustment of the balance of economic activity, but it is doubtful whether it would be as beneficial to launch out in now directions as to extend operations in thise industries that are already well established and of proved efficiency. Mr. Forbes mentioned that in Great Britain there had been a decline of employment in the older staple industries and considerable increases in the newer ones, but it does not follow that similar conditions would obtain in this country,.which lias not the same natural facilities for manufacturing enterprises. Another aspect, and perhaps the most, import ant, is the possible effect of industrial development on the balance of overseas trade. If has been said that secondary industries must be fostered in order to compensate for ihe lo.ss of export markets, but. this immediately raises the point Hint, under present-day conditions of trade, we cannot sell our produce unless wo are prepared to take manufactured goods in return for it, and every extension of our secondary industries lessens our need to buy from overseas. The Dominion has already had some experience of quotas, and is likely, unfortunately, to have more. The Prime Minister has linked with quotas the possibility of trade by barter. It is not likely that the direct barter system will become popular, but it is not greatly different from the method adopted by Britain of agreeing to accept certain imports in return for a guaranteed export trade, and it is in this direction that New Zealand should find some possibilities of protecting her markers. "We could, for example, bargain for u better butter quota by guaranteeing, in return, to purchase all our motor vehicles from Britain, or for more favorable consideration for our meat by prohibiting the importation of radio sets from foreign countries. The present indications arc that international trade will develop more and more along these lines, and for this reason New Zealand will require to exercise great care in .encouraging new industries. The question for consideration is whether it would be more profitable to expand our secordary industries, or to use imports of manufactured goods as a weapon for bargaining for better marketing facilities for our primary produce. The problem seems to demand more than anything else economic planning on Empire lines, as advocated by such British statesmen as Sir Henry PageCroft, "The sooner we start making arrangements with the Dominions on the lines on which each of us is going to develop, the better it will.be," he said only last week. "A survey of Empire, resources, with a view to complementary production on the most favorable lines should be undertaken immediately." The logic of this attitude is difficult to answer, but if it is accepted it opens up a very much wider field than the mere reorganisation of industry within, the Dominion. The main issue, perhaps, would be whether Great Britain should continue her present policy of reviving agriculture, or whether it would be better for her to rely more upon the Dominions for her foodstuffs and to sell them manufactured goods in return, Her present attitude is driving the Dominions into secondary industries and killing her own export markets, but the time may come, and probably will, when she will deem it wise to reverse this process. Because of this, New Zealand, while taking all steps to make her industries as sound and efficient as possible, should hesitate before committing itself to any policy of extensive industrial development.