Dominion Industry

Sun (Auckland), Volume IV, Issue 1020, 10 July 1930, Page 27

Dominion Industry

ITS PLACE IN PROSPERITY

Development is Important

jH New Zealand today, the essential lesson is that it is in--1 cumbent on New Zealanders to protect their finances and markets irom flooding- by foreign products, simply by adhering completely to unfailing support of the manufactures of the Dominion. Industries and agriculture go hand in hand. New ZeaIniiders must recognise this and endeavour to foster such development. And the Auckland Winter Exhibition gives a practical example of the close bonds between farm and factory.

It seems trite to emphasise that every pound spent on an article of New Zealand manufacture means that the monev remains in the Dominion to swell the finances of the people, and not out of the Dominion into the

nurses of foreign competitors, who are strengthened in building marketinj walls detrimental to the producers of this country. That is an axiom, but New Zealand

Manufacturers have been compelled to impress its truth on the community for years past. Under the influences of good publicity and propaganda, the Public is being led to break down the considerable barriers of prejudice and to develop faith in the quality of New Zealand manufactures. All these points will be stressed by jne Industrial displays at the Winter Exhibition. In them a significant story told, a story of hope hnd increasing Promise for the manufactures of the dominion. It is ridiculous to believe •hat the population of New Zealand is h°t snfflcient to support our manufacThe most obvious truth at the Present time is that New Zealand’s Manufacturers are only beginning to •MVelop the marketing field due to “Wn in the population of this country. Auckland occupies the leading posi- }, h In the number of factory estab‘Whments in New Zealand. While the uomfnion total in 1915-16 was 3,786 i ,I hat for Auckland 1,336, the figures ■U 1927-28 were 5,166 and 1,576. Since •hen industrial development has been Maintained, but it Is safe to say that jh® manufacturers are striving with pur P° se in 1930 than in the past. ~ •he number of establishments, furduns not fully indicate the indus:F lal strength of New Zealand, for aar ® is always a tendency for an v*nshment 1° widen its avenues of Production internally. MORE factory employees af Ttl * aver age number of employees n a , factory showed an upward trend hfv v 925 ' 26, but > since then, there nrn. . n declines and it is for this »i - n employment, when unemployment is such a problem, that ..Pmnufacturers are working eara |v, y j Auckland accounts for about of ,°* iiie Dominion total number n«.,-^ ployees - 80 it is especially iniioin ®/ or the public of Auckland to hompletedy in the efforts to adWce manufacturing. , w A' ne ® the amount paid In • via ha ® tr ehled. Inflation was 4 h “‘et after the war and, since decline of 1921-22, the amount '"ereased steadily.

A supply of cheap motive power is essential for industrial development and hydro-electricity can be of tremendous assistance to industry. For that reason the anxiety of Auckland manufacturers, since the failure of

Arapuni, to receive an assurance that electrical power in a sufficient degree will be given Auckland, New Zealand’sleading manufacturing centre, can be appreciated. A sound indication of the progress of New Zealand industry is given in the figures for the value of the products from factories. Products of manufacture are valued at the current selling price of the goods, but, in agricultural industries such as dairy produce and frozen meat, a basis of value is in the prices realised in overseas markets. The gross value of products includes the cost of raw materials, general rises in which have been apparent in the past few years. While the gross value of products was £77,000,000 in 1923-24. the figure was almost £88.000,000 in 1927-28. In these figures, the share of the provin cial district of Auckland has grown from a third in 1923-24 to rather more than that proportion in 1927-28.

. PART OF ADDED VALUE New Zealand’s factory manufactures obviously occupy an important position in the financial transactions of the Dominion. They represent a field which can be encouraged, with advantage to the country with such a large amount of money paid for New Zealand goods and on the employment of New Zealanders, simply by consistent support of New Zealand manufactures. The added value of a product must be considered in judging the strength of industry. It represents the value added to the materials operated on in the processes of industry, and, though not impervious to pr ce fluctuations, it. indicates the volume of production. In 1906. the added value of products was £9,700,000; in 1927-28, it was more than £32,420,000 —an increase of about 230 per cent. It is'still increasing. Auckland has contributed the largest proportion of the total, a percentage bordering on 35, for several years past. New Zealand industry can be iudged from the value of its fixed assets— the value of land, buildings, plant and machinery. For years past there have been steady rises (tho Dominion total was £45,500,000 in 1923-24 and nearly £64,700,000) in fixed assets, with the Auckland figurerather more than a third of the total.

In capital Invested, public companies, have worked on a slightly higher percentage of loan capital than private concerns. From 1916, the paid-up and the loan capital of private companies has been consistently in excess of the subscribed capital, while public com panies have, on only a few occasions since 1911, had the use of paid-up and loan capital in excess of the subscribed amount. Dealing by publicconcerns within the margin of sub scribed capital is due, possibly, to the fact that such companies, in comparison with private companies, are some what at a disadvantage in securing extra capital, and so keep larger sums of uncalled capital available for emergencies. DECLINE IN TRADE RATES To offset fluctuations in the markets for agricultural products, New Zealand will undoubtedly reap great benefit from strengthened manufacturing industries. One must recognise the significant story told in the of overseas trade in the past year. Wool prices declined 45 per cent.; skins, tallow and hides, 2S per cent.; dairy produce, 17 per cent.; meat products, 4$ per cent.; and the average for all exported commodities was a decline of 15 per cent. This has been a severe blow to the finances of the country and, for the year ended March 31, 1930, imports exceeded exports by

£1,000,000. The effect of this has been a decision by the Government to show scrupulous regard for expenditure, and a tightening of finance will be the inevitable result. Had New Zealand not spent such heavy sums in supporting foreign manufacturers, a sane relation between imports and exports would have been maintained and the Dominion would not have been faced with a considerable deficit. The argument that the fall in the prices of agricultural produtes was not expected is no support for the heavy expenditure on outside manufactures, when New Zealand has yet to give full support to the manufactures of this country. It is perfectly evident that the agricultural producers would have been protected by this national spirit in a time of stress. The serious position of unemployment would have been relieved; money going out from New Zealand to foreign countries would have been spent on the industrial products of this country. • The decline in the prices of agricultural products actually more than balanced the effect of the increased production of- recent years. Authorities expect that, there will be a substantial decline in the imports New Zealand should benefit considerably from the rising tendency in prices, too, but it remains evident that periods of depression can be alleviated considerably by consistent support of the products of industry. Commerce and industry are already heavilytaxed, and it is interesting to present the opinion in this respect of the president of the Auckland Chamber of Commerce, Mr. Malcolm Stewart, that ‘‘an imposition by the Government of an addition to the already heavy burden of taxation must, inevitably delay- the recovery which might otherwise be expected with the approaching summer.” This view that taxation should not be increased has been supported by the immediate past president of the Chamber, Mr. H. T. Merritt, who observed trade conditions on his recent visit to the United Kingdom. INDUSTRIAL PERCENTAGES In the North Island, those engaged in industrial work represent 10.17 per

cent., or the largest division of the population occupied in employment. The percentage in agricultural production is 10.14. In the South island, the industrial work percentage is 9.63, and that of agricultural production 11.25 In industrial, transport and communication, commerce, public administration and professional pursuits, the North has ratios above those in the South. Of persons classed as “gainfully occupied,” 43 per cent, reside in Auckland, Wellington, Christchurch and Dunedin, and industrial workers in these centres of population represent 13.7 of the employment total. Industry is playing its part, and it will do so to an even greater extent. A useful guide to business activity is in bank debits. These showed an increase at March 31, 1930, over those for the previous year, and, in general, the various indications of business prosperity suggest that the rise in volume of internal purchasing power has expressed itself solwly in internal trade expansion. Instead of land speculation and over-expansion of business, there have been a deflation of laud values and a much slower demand for goods than the increased volume of purchasing power would seem to warrant. In view of the high degree of unemployment in New Zealand, increasing instead of diminishing, one of

j the most pressing tasks is an accurate analysis of economic conditions to reveal methods of alleviation. In the past two years farming methods have improved, there has been an absence of serious industrial disputes (a position where New Zealand has had n tremendous advantage over Australia), and there are indications of growing public interest in the elimination of waste and the advance of technique in production and business organisation. REVIVAL ANTICIPATED And so New Zealand has as its immediate problem the acute position of unemployment. Business leaders appear to anticipate a revival of trade which will be of the utmost benefit to agricultural producers, and, should the Improvement be maintained, to land development. On this, it is interesting to note that, for the year ended March 31, 1930, the value of mortgages regie tered had increased 18 per cent, on the figure for the previous year, and mortgages discharged 'increased 12 per cent. Land transfers increased 4 per cent, in number, but there was a decline in the total of money involved. Is there any reason to doubt the worth of industrial development in New Zealand’s progress? In effecting a safe trade balance? To relieve unemployment? To be associated to advantage with agriculture, and, indeed, to present an extended- market for raw materials? Above the problems of depression and unemployment, the stimulation of manufacturing industries rises as a spire of hope. ‘‘Buy New Zealand-made Goods” is the slogan one will see at Auckland’s Winter Exhibition, side by side with satisfying displays of agricultural quality. In public esteem, the New Zealand skilled worker stands with the farmer. Their united efforts should be able to open fields for employmeni for the unskilled and semi-skilled workers who have such a considerable place on the unemployment lists of New Zealand. It is the duty of New Zealanders to buy their own manufactures in preference to foreign articles.