BUSINESS IN U.S.A

Hokitika Guardian, 27 December 1930, Page 7

BUSINESS IN U.S.A

THE CAUSE OF DEPRESSION.

(By the President of the Royal Dutch Petroleum Company.)

America has the doctrine of high wages. That is an excellent thing. High wages are something we should all strive for, But like every other good thing in life they must be paid for. And Americans do not seem to be willing to pay—to take the consequences. They have tried to raise wages by artificially dealing with ftlh© labour supply. They have tried to make labour scarce, and therefore) high. They have done this by means of the immigration law, which keeps European labour out of their country. But they have had to supplement the process with the machine. For they cannot have high wages without reducing production costs in other ways. This means the machine; and in its turn mass production. Mass production means the recurrence of periods of overproduction and hence unemployment. America has overproduction because her whole vast industrial organisation is so immense that, unless it is controlled by some central force, it gets out of hand. They caitnot curtail production, therefore, through central control because of their anti-trust laws, and they produce a surplus because their markets are not sufficiently large to absorb all that they make.

Unprofitable Foreign Markets. America must have more markets. But where will they get them ? They think hey can build them up abroad. They already Lave a big market abroad. But can they build it sufficiently big to take care of this great surplus which they produce? Amercans will find they cannot. Foreign markets are not so profitable for them. The most profitable market is at home. They cannot expect to find all those new customers they need in Europe. Now I know Americans are very well pleased with their immigration laws. They point with pride to the manner in which they have cut off the supply of cheap labour from Europe. And yet I think they, will do very well to look this matter over again. They imagine they are shutting out competitors of their own labourers. But they should remember an immigrant is not only a worker; he is also a consumer. When he arrives in the United States he begins very soon to buy things. He buys clothes and shoes and food at once for himself and his whole family and these purchases make business for American merchants and the producers of those articles and their workers, and they, in their turn, can buy motor cars and gramophones and washing machines, and what not. Americans thought they could keep the foreign worker out of their country ; that if he were in America now he would be swelling the tide of unemployment. Have they stopped to think that he may he helping to increase the number of their unemployed just as effectually as if he were in their country ?

Now let’s look at the picture frankly. They shut their door on the immi grant. He remains in Europe. Hr cannot come into American factories hut American factories can go to him How immutable the laws of trade are They want to get rid of the immigrant as a labourer, but they want to keep him as a customer. They want tr manufacture goods in America and sell them to him in his own land. But it doesn’t work out that wav. There are too many other factories in the problem. One of them is the tariff. Americans have taught the) European producer how to use the tariffs So now he is experimenting with it—adding little tricks of his own. America will let in only a small number of Czechoslovakian labourers. Very well Czechoslovakia will let in only a small number of American motor cars. In other words, all the European countries are building walls around their countries. The American manufacturer cannot lift the goods their labourers produce over those walls. But there is nothing to prevent this American manufacturer from building his factory inside those walls. American Factories in Europe.

The result is that all over Europe you see American factories —hundreds of them. And who is working in them? Why, those very European labourers Americans thought they could keep out of their factories! See what they have done. They thought they would get rid of Europe’s workers as labourers and hold them as customers. They have accomplished precisely the opposite result. They have got rid of them as customers and have them as labourers. They are working in their factories abroad and when pay day comes they spend their wages in the stores of European, not American merchants.

Look at your oil industry, shackled at every turn, hampered and limited hv Federal and state laws. The laws of nature operate to keep the natural ens and the petroleum of vour country flooding out from your soil. The laws of trade operate to urge every individual producer, spurred on by the royal tv owners, to keen pumping and boring for oil. The od flows out in a (Huge. The oil industry is overwhelmed by over-nrodijption. Many producers operate at a loss. Meantime vour oil supplies are depleted. Tips rap be prevented in only one wav—hv the oil men getting together and arrrepin'f to control product-ton.

But if +hev do this you have a law which will put them in jail. Some dav mu will find out that you need aB this precious oil flint you have wasted.