AMERICAN PROSPERITY

Hawke's Bay Tribune, Volume XVII, 8 December 1927, Page 4

AMERICAN PROSPERITY

all the rest of the civilised world is just now looking with somewhat envious eyes upon the United States as an industrial region in which great material prospers! y is being enjoyed. Many, too, have been the “missions” from various countries that have gone there in the hope or ascertaining the sources and causes of this prosperity and ol being able to adopt the methods unU means that have led to it. Among the latest resulting reports to be issued is that made by Sir J. Joyce Broderick and Captain A. J, Pack lor the British Department of Overseas Trade. This states that American national wealth increased Irom 88,000 million dollars in 190 u to 355,000 million dollars in 1920— just about a quadrupling in quarter of a century. On the basis of 1913 dollars, the “real” national income increased from 38,162 million dollars in 1919 to 46,392 minions in 1926. Measured in material output, the totals of leading industries compared with those of 1899 are estimated as being: Iron and steel, 2io per cent.; chemicals, 317 per cent.; nonferrous metals and products, '306 per cent.; textiles, 100 per cent. Shipbuilding showed a decline of 11 per cent. During the last generation, however, the number of workers has grown only by some 50 per cent. Before the war nearly 235,000 unskilled and 120,000 skilled foreign workers entered the United States every year; the figures at the present time are, through the quota arrangement, limited to 14,000 and 46,000 respectively. There is no special evidence ot greater individual skill or individual efficiency amoi-ig American workmen than among those ol oilier industrial nanons. The increase in production is; a result ol the declining labour lorce during the war years uud post-war years, lor it leu to an improvement m emciency oi management, accompanied by what is termed the progressive mechanism of industry, the scrapping ot obsolete machinery, and greater concentration in production. With regard to the wages movement tlie widespread idea that American employers pursue a policy ol increasing wage rates with a view to increasing the purchasing power of the employees is erroneous. The regulation ot wage rates has responded rather to the law of supply and demand. Strikes and industrial disputes have occurred every year since' the war, being more frequent in 1920-22 while the country was still suffering from the shock oi postwar price deflation, and they still conutinue to be one of the normal phenomena of American industrial life. Owing to the sustained general activity during the last five years, howeveer, the wage question has given rise to lower industrial struggles. The working population has noted that large output and high earnings have probably become mutually dependent, while employers have recognised more clearly than ever before the importance of the purchasing power of the wages ol their employees when the great bulk of the goods they manufacture are sold on the home market. Statistics show that the profits of large industrial corporations have tended to increase with the size of the concern, while those of the smaller, businesses have been small for the most pint, or in some instances have

vanished. The keenness of internal competition reduces the margin of profit in each transaction, rendering a large volume of business necessary before a good return on capital can be earned. There are indications of still more intense competition on both domestic and foreign markets. The report states that already a noticeable decline is taking place in industrial and commercial activity year and in the early months of this year, and many manufacturers are from the high levels attained last beginning to turn an inquiring eye on the high level of industrial wages. A period of depression would undoubtedly give rise to a vigorous canvassing of the possibility of a general wage reduction. Some anxiety is felt, also, as to whether American manufacturers will be able to maintain their export business after European competitors recover their full commercial stride.