WELLINGTON NEWS

Hokitika Guardian, 8 June 1928, Page 3

WELLINGTON NEWS

-M ASS PRODUCTION. (Special to '* Guardian.’’) WELLINGTON, June 7. -Mass production as a means of reducing cost and raising wages is an American invention, and the business men of the United States have become obsessed with its possibilites. Other countries have been induced, to adopt tbe system and it has been taken up to some extent, but the system lias its limitations, and beyond these limits it becomes an economic menace. The Americans have gone ahead on the theory that operating costs could he greatly reduced by mass production.which at the same time would furnish full employment for labour at high wages, thus creating the buying power necessary to dispose of their products. This theory was held up to the close of last year, and many recognised financial and industrial leaders confidentially predicted that 1928 would see even greater activity and prosperity than any heretofore witnessed.

Now. in Wall Street, in Washington, in every financial and industrial centre throughout that country, it is beginning to be realised that someth lug little understood bail been going on in recent years in American industrial life which hi oiv is having a widespread effect. Until very recently it was generally believed that there was no over-production, no unemployment, and that the industrial activities of recent years would continue indefinitely. The cause for the sudden change is disclosed in the. industrial unemployment statistics of the United States Labour Jlureau at Washington. The figures giving the expansion that occurred in the years 1923 to 1927, inclusive. in the output of various industries, together with the changes that have taken place in the meantime in the number of employers, show that in the oil industry the production increased by 81 per cent and employment decreased by 5 per cent ; in tbe tobacco industry production increased 53 per cent, and employment decreased by 13 pet* cent; meat pack iug .showed 20 per cent and 19 per cent respectively; bituminous coal I per cent and 15 per cent; steel S per cent and 9 per cent; cotton mills 3 per cent and 13 per cent ; agriculture'lt) per cent and 5 per cent.

The number of employees in the lumber industry decreased by 21 per cent, and the shoe industry by IP per cent. It is explained that the industrial leaders borrowed money on easy terms, enlarged their plants and created excess production fneilitos to the point where there was intense competition to keep them fully employed in order to get a low cost. This led to price-cut-ting, which, in turn, led to more ami improved machinery to get down costs-. According to the United States .Minister for Labour in ten years flic population bad increased by 20.09(1.(100. and to supply the needs ol this larger population on the basis of the 1919 production would not take 110 men lor every 100 then employed, but. instead, through the use of ‘the machinery the nation's needs arc being met with < per cent less workers. According to Mr Phillip /Snowdon there arc those who maintain that the remarkable general prosperity of flic last six years has been largely artificial and that the causes of it arc weakening in their effects.

i ne reduction in the costs ol production, it is said, have been carried as far as possible for the present, and the upward trend of wages cannot continue. The intensive system of buying on the instalment plan lias mortgaged future earnings. So long as wages can be maintained and employment, assured. a erash of these mortgages may be averted, but o depression will test lho economic soundness ol this policy. There is a conflict of expert opinion on the condition of the mass of the wageearners. Professor Irving I* isher recently joined issue with those "ho maintain that, the prosperity of the United States is not only the greatest of any nation ever known, but also the most evenly distributed. From all accounts production can be carried to t lie danger point.