WELLINGTON NEWS

Hokitika Guardian, 7 August 1928, Page 4

WELLINGTON NEWS

OVERDONE BUSINESSES

(Special to “ Guardian.”)

WELLINGTON, August 2

In tlio older countries of the world, hut particularly in the United States, Germany and Great Britain, the need for eliminating unnecessary competition. of reducing overhead charges and producing in mass have been recognised, and the remedy has been tound

in amalgamation, or merger, and such terms are'now in common use. General Motors, which is one of the big corporations of the United States, aicording to a recent cable message, made a very handsome profit for the year ended June 30th last, and this was obtained not by exercising the methods of the old American combine and squeezing the highest prices out of the public, but by mass production, by the. elimination of waste and in other ways it has been able to oflcr its motor ear at lower prices than lormGcncral Motors has no monopoly hut has to face the competition of Henry Kord. the Chrysler Corporation, and others in American and foreign competition in addition. The Imperial Chemical Industries, Ltd., which was formed by Sir Alfred Mond (now Lord Mclchct) has a capital of £i0,000,000. Nine separate companies were amalgamated, and the combine holds the controlling interest, in JO other concorns, some in various parts of tno world In Germany the dye industry is operated l.y a huge combine and there are quite a number ot other combines. In the retail trade there are what is known as the chain stores in America and they cover the retailing of various commodities. In England there are the multiple shops, and the Union Cold Storage Company run by Yestey Brothers, which owns some thousands of retail shops for the sale

of meat. _ . At the Co-operative Congress held m England a month or two ago the president referred to the growing competition from manufacturing and retailing combines, and the growth of municipal trading. He anticipated that there would he keener competition and more determined opposition from manufacturers and traders, and to meet these a scheme of nationalisation and amal-

gamation within the movement was suggested with the view of reducing the number of societies to half the existing number. In New Zealand it is apparent tlmt a quite different view is hold and since the close ol the war theic Infs been a mushroom growth of retail

shops. The “ Mercantile Gazette ” of a recent date dealt with this matter under the caption of “ Excess Businesses,” and the paper remarked: “If one chooses to walk along Lambton Quay, Wills Street, -Manners Street, Cuba Street, and Courtney Place and some of the side streets the observer could not help being impressed with the number of retail shops. lhere are drapery and mercery stores in plenty, confectionery shops are to be met with every few yards, there are book-shops in excess of requirements, and drug stores to serve double the population - ami so it is with other descriptions of goods, all small retail shops, all pacing heavy rentals, and other overhead charges which in the end must he paid, by the customers.

There are a few empty shops in Wellington as elsewhere, hut the number is bound to increase because property owners are providing retail shops in excess of requirements. There are to > many distrihutors*in practically every branch of retail selling, and this is not good for the community, although the keen competition may have a temporarily good effect. II the manuinctu*iog side is examined it will ho lotmd that there also is inflation.

lii the opinion of many people we have too many woollen companies, too many clothing and boot factories, too many Hour and timber mills and otbei manufacturing concerns, some doing farily well, while others are working at a loss. Overhead charges, high labour costs, excessive, taxes and rates, heavy transport and other charges are having a crippling effect. It seems inevitable that manufacturers and traders in New Zealand must seriously consider the desirability of nationalisation and

amalgamation. With joint stock companies of a like nature this should riot he a difficult matter except for the lact that the vested interests of directors will prove a big hurdle. To bring about amalgamation in the retail section vvili tequire the ingenuity, resources and enterprise of a Napolean of finance. 1 eiliaps the process of weeding out the excess number of retailers in the Dominion will be through the Bankruptcy Court.” At the I'artneis Union Conference it was decided to urge the. dairy farmers' to bring about an amalgamation ol co-operative butter and cheese factories in such districts where such amalgamation would serve to lessen the overhead charges and stop the, unnecessary multiplication of cream lorries passing and rspassing eaeli other.