THE CASE FOR LOCAL INDUSTRY

Sun (Auckland), Volume III, Issue 648, 27 April 1929, Page 9

THE CASE FOR LOCAL INDUSTRY

protective tariffs and PRIMARY PRODUCERS A resume of an address delivered by G. Mills Palmer, one of the delegates representing the Auckland Manufacturers’ Association at a conference with representatives of the Farmers’ Union on Monday, February 18. WITHIN comparatively recent years many countries which previously were almost entirely primary producers have made rapid strides in industrial activity, and in a very short period have reached the stage where they are not only able to supply their home market, but also are exporting their surplus manufactures, and competing abroad in the markets of the world. Canada, South Africa, Australia and. at an earlier stage, the United States, have all developed on these lines, and in every instance have been enabled to do so by means of a protective tariff, and a recognition of the basic principle that to foster industry in a new country, with a comparatively small demand, it is essential that protection be afforded from the crushing effect of established organisations overseas, where very much greater capital and output permit of temporary. artificial reductions in price which can be put into operation at any suitable time and maintained until a local competitor is driven off the market. The industrial expansion of these new countries has automatically increased their populations out of all proportion to the growth which could have been anticipated from purely agrarian pursuits, and in doing so has created huge home markets for primary pro uce. This, in turn, has reduced the export quota of such countries, and has not only opened the way for the development of fresh lands, but, by curtailing the supply to European markets, has raised th® general prices of farm products enormously and enabled the farmer all over th® world to adopt a very much higher standard of living and general well being. A protective tariff Is a necessary incentive to the establishment of a new industry. It is not sufficient to be able to compete against the current imported price of an article in order to guarantee that the capital invested in a new business will not be lost. It almost invariably happens that when local competition is felt the price of the imported article is immediately reduced below that point at which it would have been sold had similar tnanfactures not been started in this • ountry. The would-be manufacturer therefore requires some reasonable assurance that he will be protected against this unfair competition, as he c*annot be expected to risk his capital, time and energy merely in order to produce a temporary reduction in the price of the imported article, which will immediately be raised to its former rate as soon as he has been crushed out of existence. This is not a question of theory, but is an established fact all over the world. There is no likelihood of reduction in prices without competition, and there will be no local competition of any consequence if the New Zealand manufacturer has to face, unaided, the organised forces of large overseas industries. Once the industry is duly established in the country there will be no lack of internal competition for the husiness which, in itselt, would automatically tend to bring down prices to the lowest point consistent with the standard of living adopted by the country as a whole, and I think it can be safely asserted that in most cases this price has proved to be lower than that which would have ruled had the market been entirely left to the importer. It is often urged by professors of Economics and other academic theorists that an article should be manufactured only at those places where it can most economically be produced and distributed to the consumer. This is of course true in theory. The fallacy of the argument lies in the fact that at the present time the world is not economically a component whole, hut is divided into a great number of countries having different standards, different laws and separate control. We in New Zealand have no voice in the control of any country except our own, nor can we alter the conditions and standards of living existing elsewhere. However, we certainly do not wish to reduce our standards to those of, say, India. Japan, or even Germany. If. .hen. we desire to maintain a higher standard than these countries, it is clear that we must be prepared to pay mo-e for our commodities. In any tase, the reduction in the price of an article does not necessarily mean that there will be any ultimate benefit to the consumer. The interests of the farming community and the manufacturers, are, as a matter of fact, really identical, since no class can permanently benefit at the expense of another. Free trade in this country would merely tend to reduce the standard of living in the towns, and would ultimately increase unemployment in industry to such an extent that the local market for produce would practically collapse, throwing the surplus on to the European market, and automatically reducing the price there. This, of course, w r ould in turn react to the detriment of the farming community. We want the market—market for Produce, for manufactures, for capital and for. labour. This and this alone will provide prosperity in a country. a nd it is by assiduously cultivating and building up our market, and not by cheap labour and free imports, that the lot of the people as a whole will be improved.

A HUGE BUSINESS

CHEMICALS, MEDICINES AND TOILET ARTICLES One of the foremost of the great industrial and commercial concerns of the Dominion is Messrs. Kempthorne. Prosser's New Zealand Drug Company. Tho company controls several large and well-equipped plants wherein medicinal products such as tinctures, #l * Se nces, compound tablets, pills, etc., as well as household, toilet and proprietary preparations are manufactured on a large scale, by a complete And up-to-date plant, under the direction of highly-qualified experts. From the standpoint of local indusfciT. the products of the company’s factory are of prime importance, as their manufacture and sale afford employment to a large number of men and women. These goods cover a wide scope, ranging from toilet articles to veterinary medicines, and are in most cases, such as ‘Extract of Malt” or Clfe Salt, marketed under registered trade-marks—the device of the “Kiwi” or the letters “K.P.” High standard of quality has obtained for them a wide sale throughout the Dominion. In its extensive operations, the company is not surpassed in magnitude by any industrial concern of similar character south of the line, and its sucress and progress has ever been coincident with the prosperity of New Zea-

TAUMARUNUI BRICKS WINSTONE’S HAVE UP-TO-DATE PLANT WITH HUGE CAPACITY There is something enchanting about I the phrase “Build in Brick.** It once conveys the impression of solidity, beauty, endurance and character. There is a quiet dignity about a brick structure entirely lacking in lighter and more temporary forms of construe- } tion. Messrs. Winstone. Limited, in then endeavour to render efficient service !•* the home-builder, have developed on*' of the finest* brick works in the South i ern Hemisphere. Sixteen years ago Taumarunui blur papa rock was tested to ascertained it> qualities as a roofing tile and brick making material. The first test carri«'«i i-ut proved conclusively that this pap rock burned to a beautiful dark ter cotta, and it was decided to extend • the tests to ascertain the practicability of establishing a roofing tile and brick factory. Taumarunui. which is situated in the centre of the North Island ot New Zei* i land, is particularly favourably located ; in that the product of manufacture can ,] be supplied at a minimum cost to »n> | portion of the North Island. MIXED BISCUITS VARIED SELECTION IN LOCAL BRAND An excellent variety of mixed biscuits to suit all tastes is sold by the 1 well-known biscuit manufacturers. Hudson’s, in their ‘ Empire’’ brand as- ! sortment In one tin they have gathered io i getlier no less than 14 different kinds I of biscuits sweet and plain, fanev j and chocolate —but so carefully has the j selection been made, and so accurately , has the public taste been judged that | the mixture can be regarded as one of the best on the market. Certainly from the quality of the individual biscuits themselves can they I be regarded as of outstanding value, for every kind of biscuit turned out by j the great Hudson factories in Dunedin has been thoroughly baked, and I watched until it is “done to a tram I The result is a fresh, brittle, biscuit, and one that is most enjoyably palatable. Among the different kinds of bis- ■ cuits included in Hudson's “Empire” | assortment there are dainty Opera ' Wafers, Princess, Shortcake. GingerI nuts and Oat Wafers among the plain ' and sweet biscuits, and Chocolate I Fingers and Chocolate Honey Drops in the chocolate division. In the class of sandwiches and creams there is a great | variety, which includes Nut Creams, j Ascot Creams. Cream Sandwich, also j Fig Bars, Date Bars and Raspberry Gems —in all a varied selection that ' would grace any table and tempt any | palate. N.Z. MADE SHOES DOUBLING THE LOCAL FACTORIES 1 "If every New Zealander bought nothing but New Zealand-made boots there would be twice the niimber of boot factories employed in this country! This startling fact was pointed out ' by Mr. C. W. Coles, of the large Auckland boot and shoe manufacturing company, G. A. Coles and Co., Ltd. In the last year for which figures are available, 1,405,831 pairs of boots and shoes, children’s shoes, and slippers were manufactured in New Zealand, while 3,137,472 pairs were imported. Over 80 per cent, of the New Zealand manufactures were of adult boots and shoes. If all those 4.000,000 pairs of boots purchased by New Zealanders had been made in New Zealand there would have been twice the number of our own people employed in the process, twice the number of openings for our own boys and girls leaving school, and twice the amount of New Zealand leathers used. These advantages seem too obviously desirable to be mentioned, yet New Zealanders continue to neglect the boots made in their own country. The reason cannot be that the New Zealand boot is an inferior product, for Coles can say of their well known “Patriata” and “King Cole” lines that they are made of the finest New Zealand leather, worked, by the same type of machinery used overseas, handler by well-trained New Zealand labour and continually kept up to date wit! the latest ideas by new machinery patterns, and colours from the groa ! world centres. KEEPING STEP “ROSLYN” WOOLLEN MILLS REFLECT PROSPERITY OF N.Z. An excellent example of the growth of a New Zealand manufacturing industry is seen in the great Roslyn Woollen Mills. Utilising New Zealand virgin wool and New Zealand labour, the growth of the mills has kept step with the prosperity of New Zealand. The mills were established in 1871*. and as the quality of the goods turned out continued to find the favour it merited, further additions were made from time to time. In 1902 the mills were practically doubled by the erection of new buildings to house the needs of the worsted and hosiery plants. Further additions became necessary to cope with the demand during the war years, and to-day Roslyn is able to supply all parts of the Dominion with its well-known rugs, flannels, blankets, knitting yarns, tweeds, worsteds, hosiery, underwear and knitted goods of ail varieties. In 1882 a clothing factory was opened, and as the call for New Zealand made goods became strongr:. other factories have been added. At ; the present time there are in Dunedin, lin addition to the above, establieli- • ments for the manufacture of straw : and felt hats, boots and costumes, anl in Auckland for clothing and shirts; j also in the latter city the same firm I manufactures the well known Le Roy “Excelslor‘” oiled coats, together with ' horse, cow and rick covers. That the warehouse side has not been neglected in favour of manufao ' turing is shown by the fact that tli** firm (a limited liability company sin«-e j 1900) has large warehouses in all the main centres of the Dominion. an i permanent sample rooms in many oi the smaller towns.