The Guardian And Evening Star, with winch is incorporated the West Coast Times. MONDAY, OCTOBER 20, 1930. AMERICAN INDUSTRY.

Hokitika Guardian, 20 October 1930, Page 4

The Guardian And Evening Star, with winch is incorporated the West Coast Times. MONDAY, OCTOBER 20, 1930. AMERICAN INDUSTRY.

In addressing the American Bankers’ Association recently, President Hocver characterised the present ec-nomic depression in the United States’as but a temporary check in the march of prosperity. Although, to his manner of thinking, the depression is due in a large measure to over-prod u..tion of raw materials in foreign, counties,, Mr Hoover is still able to fincj. comfort in the fact that the United States is a remarkably self-contained.jcpuntry and can, to a considerable degree, ignore world 'influences. America certainly agrees the Otago Times, is a powerful economic unit, but it is doubtful if she can free herself from foreign influences to the extent that Mr Hoover' 5 considers possible, for investment, cr clit and the distribution of raw materials and pro* ducts have never been more international than at present. The factors which contributed to the growth of American industrialism contain weaknesses which may bp responsible for the decay of the system. Mass production is generally regarded as the saljept fear ture of American industry, But ft huge and continuous supply qf stanch ardised articles call for a. corresponding demand from consumers with standardised tastes, Up till the present time, this demand has been provided by the American population which has, on the whole, the uniform and uncritical standards of a new civilisation, However, uniformity invariably precedes individuality of taste, and, ns the demand for variety increases, one condition favourable to mass production will disappear. The American salesman himself is tending to bring about this state of affairs bv appealing to the love of novelty, and by forcing the consumer to scrap a slightly out-of-date but still serviceable article in favopr of the laitest type. This factor of sftlemansbip, obsolescence as jt is called, creates a demand for novelties which cannot be satisfied by a com tinuous large output of standardised articles, by which mass production reaches its best results, but requires smaller supplies of constantly varying commodities. This kind of demand necessitates frequent changes of plant and processes and bo increases production costs. The antagonism between mass production and obsolescence is a problem, the solution to which must necessarily lie in some kind of compromise. Through large-scale production the American manufacturer sought to make the supply equal the demand, and so well has he accomplished this that he is now confronted with the somewhat more difficult problem of making the demand equal the suoply. America has a growing need of markets and consequently strenuous efforts are being made to increase her exports, and -at the same time to restrict her imports and so protect the home market. The excess of exports is balanced bv the purchase of forcing securities, and re-purchase of American securities held abroad, and the floation of loans, all for the purpose of increasing the purchasing power of foreign nations. This method of extending credit is becoming exhausted, and a decline in foreign trade seems nrobalde. The importance of distribution has necessitated tire exploitation of the domestic market to the utmost. In 1850 89 Dor cent, of the working population wore engaged in producing and 20 per cent, in selling. Tn 1920 there were 50 per cent, in each class and the proportion of sellers was still increasing. It is estimated that house-to-house canvassing is increasing annually by 20 per cent.

American public into buying what they in an endeavour to dragoon the have little need for. Purchases on the instalment system have reached such an enormous scale that, in the event of a prolonged period of depression, the results would be disastrous. The situation generally i, s fraught with dangers.. The American per capita consumption and consequently the standard of living are high, and as Mr Hoover states, "the whole system is more sensitive and the penalties cf instability more widespread.” The fact that production and consumption have hern slowed down to 85 per cent, and 90 per cent, of normal is therefore a serious matter. In of an American hanker: "The factory system, which is built to produce millions, depends on those millions for profits. A relative.lv small decrease in production, it should he clear to all. measures, not the difference between excess profits and big profits, hut the entire difference between profit and loss. It is a difficult problem we are facing—unique in history.”