INDUSTRIAL SURVEY OF THE WORLD

Hokitika Guardian, 12 January 1929, Page 8

INDUSTRIAL SURVEY OF THE WORLD

OUTLOOK IN AMERICA A NT) CHINA. PEACE ESSENTIAL FOR BUSINESS Dr Alberto Pirelli, president of tlio International Chamhor of Commerce, was recently the guest of the Afancliester Clnimher of Commerce. -Mr W. E. Thompson, wlio presided, proposed the health of Dr Pirelli, whom, he said, they were delighted to honour as a representative oif Italy, as an international peacemaker, a memher of the Dawes Committee on Herman .Reparations, and a prominent industrialist. Dr Pirelli, responding, said he had loved his country from boyhood, and was proud to he a British manufacturer— ('laughter')— though it was brought home to him when be looked round that room that an angel in heaven was nobody in particular. (Laughter.) As president of the International Chamber of Commerce, he went on, it was possible to acquire a great wealth of economic experience, and, out of that experience he would like to speak about some of the most strikin' phases of recent economic development in the world.

A.MERICA'S RAPID DEVELOPMENT. First of all be would like to refer to the new economic standards which wore being established in the United Ftutcs. During and since the war the development of American manufacturing and banking had been unprecedentedly rapid. Two-thirds of the banking recources of the world were held bv the United States hanks—about 66 billion dollars out of 86 billion dollars. While the population had increased in the last 26 years by fif) per cent., inT'stria! production bad increased by 300 per cent. In the last seven years, while industrial production bad in'•roased by one third, the number of workpeople bad dropped by 84 nor centand the electric power installed per bead of workmen bad inoresned from 3} to 4.) horse power. The l nited States contained 6 per cent of the world’s population, which possessed today SO per cent of the automobiles existing in the world. 00 per cent ot the telephones and telegraphs, 33 per cent of the railways, while they also consumed 36 per cent of the electrical power produced in the world. American exports, too, had increased in the last five years in value by one billion dollars and in volume by 40 per cent.

All this bad bean possible in a country which, although it covered only 0 per cent of the world's area, was a land so fertile, and possessing so rich a subsoil that it produced 70 per cent of the oil, 60 per cent of the wheat, and of the cotton, 60 per cent copper and pig iron, and 40 per cent of the lead and coal output of the world. The purchasing power of tlu* 120,000,000 of flic United States citizens was to-day greater than of the 400.000.000 of Europeans. On the other side, it had to he pointed out that in America, while costs ot production had been reduced wherever it had been possible to organise mass production, and to rationalise industry’, high wages had rendered extremely expensive all production which was not standarised, and any service of a special character. The cost of distribution was still high, notwithstanding attempts made in new directions, such as the mail order houses .and the extension of chain stores and departments stores.

Agriculture was a source of serious concern. Capital naturally sought the more remunerative industrial outlet : labour was equally attracted by higher industrial wages. A leader in A median life predicted to him that the day was not far distant when the States would have ceased to export foodstuffs, a development which would naturally have vast reprecussions upon tlu* rest of the world.

As to the relations between Europe and the United States. Dr Pirelli went on to say that he found on a recent visit that American business men were not unsympathetic, and were openminded, and responsive to reason. He was not unduly pessimistic about tin* double possibility of the Old Europe and the new America finding, after a period of readjustment, a satisfactory outside outlet for their output. r lho f lue of the mystery lay in the rise of the standard of living ol large sections of the world’s population which lmo hitherto remained at an abnormally low level. Past experience showed that even the industrial expansion of new countries had not decreased tbier imports of manufactured goods, although they had made a new choice ot imports. Sometimes, also, new scientific discoveries played a big role m economic history. The essential thing for the business world was to have peace and progress, and here, white they might do much by combined elort, they were faced by certain problems which had been more difficult than others. Two of the more important of these were Russian and China. Experience h M d imoved in Russia that a heavy penalty followed any disregard of foreign obligations. Bolshevism in Russia was discounting the future h.v .attempting to buy on long-term credit for its requirements lor immediate consumption. It was producing at a high cost ni home, and buying from capital accumulations and on credit' from abroad, ft was was not creating new wealth il'or future development. The country appeared to have 'fallen hack to the initial stage in the process of capital accumulation. Foreign trade had fallen from 8.51 dollars per head in 1913 to 3.05 dollars per head in 192 G,

the lowest figure of any important country in the world—lower, even, than that of China. The world had been able to do without Bolshevik Russia much more than Bolshevik Russia speared to be able, to do without the usi of the world. Having said this, bo was sure be was voicing the opinion of the business world wlien be said it was to be hoped that the economic policy of that country would evolve in such a way as to allow business to lie sale and tree. Only then would tin* world be in a position to give a helping baud to the Russian people. THE CHINA .MARKET. As to China, bo was looking forward to important developments there. There were a tew signs that law and order might once more begin to prevail in that great country. It was the duty of every man to do bis best to strengthen those elements of economic peace in China and to support that circle of Chinese business men who were endeavouring to carry out a measure of settlement and rcconstinotion in their own country and to maintain the high standard of business integrity for which the average Chinaman liad in the past been so famous. Tlie benefits would be mutual. China, was the great potential market of the world. There were at present only two miles of railway to every 100,000 inhabitants, anlv about 10.004 miles rf roads, and less than 20 ° motor cars. .Foreign trade bad lately averaged no more than about 16s per bead of the population. The standard of living of the people was extremely low. If mutual iid^national trade between China and the rest- of the world could' be made safe the Chinese iwoukl rise to become a great and rich people, and the rest of the world would find a new remedy for some of its current suffering.

Speaking finally of certain work done t, y the International Chamber of Commerce, Dr Pirelli said that when the craze for Protection was at its highest the Committee on Trade Barriers threw the whole weight of the Chamber's influence into the scales and materially helped to stop the movement and set it in an opposite direction. It held itself in readiness to take similar action again should tKd be necessniy. But every sound principle ..was subject to limitation in its practical application. Excessive Protectionism' was detrimental even to the country applying it; it increased the cost of production amd decreas'd! the standard of living. But absolute Free Trad*would ruin the economic labric of many nations. Tb" lesson was one of moderation and of toleration.