With which Is Incorporated The Waikato Argus. THURSDAY, OCTOBER 23, 1930. INDUSTRY IN AMERICA.

Waikato Times, Volume 108, Issue 18157, 23 October 1930, Page 6

With which Is Incorporated The Waikato Argus. THURSDAY, OCTOBER 23, 1930. INDUSTRY IN AMERICA.

In addressing the American Bankers’ Association recently, President Hoover characterised the present economic depression in the United States as but a temporary check in the march of prosperity. Although, in his opinion, the depression is due in a large measure to over-production of raw materials in foreign countries, Mr Hoover is able to find comfort in the fact that the United States is a remarkably self-contained country and can, to a considerable degree, ignore world influences. America certainly is a powerful economic unit, but it is doubtful if she can free herself from foreign Influences to the extent that Mr Hoover considers possible, for investment, oredit and the distribution of raw materials and products have never been more international than at present. The factors which contributed to the growth of American industrialism contain weaknesses which may be responsible for the decay of the system. Mass production is generally regarded as the salient feature of American industry.. But a huge and continuous supply of standardised articles calls for a corresponding demand from consumers with standardised tastes. Up till the present time, this demand has been provided by the American population which has, on the whole, the uniform and uncritical standards of a new civilisation. However, uniformity invariably precedes individuality of taste, and, as the demand for variety increases, one condition favourable to mass production will disappear. The American salesman himself is tending to bring about this state of affairs by appealing to the love of novelty, and by forcing th& consumer to scrap a slightly-out-of-date but still serviceable article in favour of the latest type. This factor of salesmanship, obsolescence as it is called, creates a demand for novelties which cannot be satisfied by a continuous large output of standardised articles, by which mass production reaches its best results, but requires smaller supplies of constantly varying commodities. This kind of demand necessitates frequent changes of plant and processes'and so increases production costs. The antagonism between mass production and obsolescence is a problem, the solution to which must necessarily lie in some kind of compromise- Through large-scale production the American manufacturer sought to make the supply equal the demand, and so well has he accomplished this that he is confronted with the somewhat more difficult problem of making the demand equal the supply- America has a growing need of markets and consequently strenuous efforts are being made to increase her exports, and at the same time to restrict her imports and so protect the home market. The excess of exports is balanced by the purchase of foreign 'securities, the re-purehase of American securities held abroad, and the floating of loans, all for the purpose of increasing the purchasing power of foreign nations. This method of extending credit is becoming exhausted, and a decline in foreign trade seems probable. The importance of distribution has necessitated the exploitation of the domestio market.to the utmost. In 1850, 80 per cent, of the working population were engaged in producing and 20 per cent, in selling. In 1920 there were 50 per cent, in each class and the proportion of sellers was still increasing. It is estimated that house-to-house canvassing is increasing annually by 20 per cent, in an endeavour to dragoon the American public into buying what they have little need for. Purchases on the instalment system have reached such an enormous scale that, in the event of a prolonged period of depression, the results would be disastrous. The situation generally is fraught with dangers. The American per capita consumption and consequently the standard of living are high, and as Mr Hoover states, “ the whole system is more sensitive and the penalties of instability more widespread.” The fact that production and consumption have been slowed down to 85 per cent, and 90 per cent, of normal is therefore a serious matter. In the words of an American banker: “The factory system, which is built to produce millions, depends on those millions for profits- A relatively small decrease in production, it should be clear to all, measures, not the difference between excess profits and big profits, but the entire difference between profit and loss. It is a difficult problem we are facing—unique in history.”