"DUMPING."

Southland Times, Issue 14632, 24 January 1911, Page 4

"DUMPING."

Reference has frequently been madA to the systematic dumping of goods, more particularly into countries which are not protected by tariffs. There are different phases in dumping operations which are worthy of mention. For instance a manufacturer in Canada may find at the end of a year that he has a considerable amount of stock which is unsaleable in his own country, and in order to rid himself of it he exports it across to England and sells it for what it may fetch. This may be described as an accidental kind of dumping. Then there is the case of a manufacturer who deliberately dumps goods into a country for the purpose of underselling his rivals with the view of reaping a bountiful harvest when he has achieved his purpose of killing competition. This form of dumping has been adopted by various American Trusts, and in one way and another is not unknown in New Zealand. Dumping also occurs in connection with the mammoth manufacturing concerns which operate in countries with large populations in a different way to those which have been previously mentioned. It is a well-re-cognised fact that a factors’ working full time, and with its operatives and machinery extended to their fullest capacities, can produce goods at a much lower cost than if operations are carried out spasmodically, or if the machinery is not being utilised to its fullest extent. The working expenses have to be met whether the factory is working full-time or not. Accordingly, a company in, say, Germany may find that under the most favourable conditions a ton of goods can be manufactured with profit at a cost of 15s per ton, but that a slackness in the Home market will only allow the factory to work half-time which will increase the cost of the production of a ton of goods to 20s. Instead of reducing its output, the company turns out the maximum amount of goods it can produce, and sells the half required for local consumption at 18s per ton. The other half is dumped into, say, England and sold at 12s per ton. The manufacturer thus obtains the price that is required to make the business pay. And more than that, by

working full time the home consumer has been saved 2s per ton and the local operatives, instead of working half-time, are employed the whole year round. Also, by exporting at a low figure to a foreign country, the chances are that rival manufacturers may receive their industrial quietus, and the way is thus paved for a future profitable export trade. Dumping has often been discussed and described as a passing phase, but it is an oft-re-curring one, and it is only by the imposition of a high tariff that it may be effectually dealt with, that is outside absolute prohibition, which is a difficult, if not impossible, method of dealing with the evil. The pessimistic utterances which are frequently made by New Zealand manufacturers and others in regard to the manufacturing industries of this Dominion seldom contain any reference to the question of dumped goods, but it might be found, if the matter were probed to the bottom, that a small country like New Zealand, where Trust organisation and methods are, comparatively speaking, a minus quantity, lends itself admirably to the dumping of the surplus products of more highly organised industrial countries.