WELLINGTON NEWS

Hokitika Guardian, 8 March 1929, Page 2

WELLINGTON NEWS

H EOKGA NISI NG INJ) USTH V. (Special To The Guardian 1 WELLINGTON, March (>. A wonderful amount of reorganisation has taken place and is taking place in respect of British industries, and quite a number of new industries have been developed, the most remarkable of the latter being the artificial silk industry. The older industries oil the country and particularly those associated with engineering have been very much depressed since the war. but in these industries and the eon! and cotton industries there have been many changes and developments making for hotter trade. Quite recentlDorman, Long and Co., the builders of the great harbour bridge in ' Syd ney. and Bolcklow, Y T aughan and Co. another firm manufacturing henvy iron and steel goods, have amalgamated, and the firms of Vickers. Vickers-Armstrongs and Vickers-Met-ropolitan have amalgamated their wagon and carriage business with that of Cammed. Laird and Co. Towards the end of January a big colliery mer ger was arranged in which eleven Lancashire companies and their subsidiaries were involved, and a big merger cif cotton interests and many others have recently been arranged. There was a time when the announcement of a merger would cause alarm because big concerns were thought to be monopolies and a menace to the public. On our own Statute Hook there is an Act which prevents mergers in certain industries, but the Act was passed many years ago. Now the trend for the merging of interests is to reduce costs. In connection with the coal merger referred to above the advantages claimed are increasod financial strength, unification of management and control and the attainment of greater efficiency and economy, greater facilities and resources for scientific and technical research, the organisation of one selling agency, thus reducing overhead charges, and eliminating wasteful competition and multiplication of retail offices, wharves anil depots, besides other advaij tages. The trend now is distinctly towards combination in business’, and it is be ing adopted throughout •• Europe and America, for it is now recognised tlial a common purpose to produce the measure of consumptive needs, as opposed to unrestricted production, and at as low a cost as possible, combined with well directed and active aggressive salemanship must benefit customers. workers and those who provide the capital. State interference is seldom a panacea for industrial ills Trade thrives and can only prosper byindividual initiative and untiring effort. An authority on business amalgamations- contends that there num merous resultant advantages among others, better utilisation of buildings plant- and machinery by concentrating a production in the best equipped workers and doing away with the others. Economy by reason of less float ing capital being required by the com bine than when operating separately Purchase of material on a large scale and upon better terms. Conebntiation oif the work of buying and tin placing of this in the hands of those of most experience and skill. Maintenance of selling prices at a fail and just level, thus obviating the undue and uneconomical cutting of price which occurs when a number of firms engage in excessive competition. Economy in advertising expendituio by avoiding the excessive expenses which a number of competing businesses have to incur in self-defence. Economy in distributing expenses, as, for example distributing in greater bulk. Advantages arising from the general pooling of experience and brain power to the benefit oil the "hole combine. Saving in general overhead expenses by curtailing the administration expenses of all the businesses concerned. The probability that a large undertaking is better able to weather financial nnd industrial storms than are a number of smaller undertakings. Greater financial strength and better opportunities of raising money on favourable terms when required. Greater market ability on the Stock Exchange of the shares of a large company than those of small one. • It is contended that these amalgamations are the inevitable result ol the joint stock system. The only dif fere lice between the joint stock com panics of the last century and of the o-reat combinations of to-day is one of magnitude and not of principle. Tin* purpose of a trust is to produce the maximum the market will bear, ana the volume of consumption depends upon the price. Therefore it pays a trust to produce largely where there is „ constant and large demand and to sell cheaply where there is a. potential market to develop.