Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-09-11
Move Is Made to Stop
Manufacturing Losses
BY HARDEN COLFAX,

A definite move to put the manu-.
featuring industry in better position
to stop it's heavy losses, with resultant
benefit to consumers of it's products,
was launched last week when the
Budget Bureau was asked to approve
an estimate of 500 900 for an appro-
priation to conduct survey looking
toward ''junling the junk"
Examination of income tax statis-
tics disclosed that two out of every
five manufacturing corporations oper-
ate at loss. That was the approx
mate. ratio in 1925, at least. for last
year the corporations returns to
Uncle sam disclosed 54,137 manu-.
featuring concerns with net incomes
aggregating $4,3S3 1857 900 and 34,537
such corporations with no net in
comes for 1925, but with deficits ag-
gregating $6S3,254,O0O.
Competition is growing more keen
The mortality rate of those manufac-
turers who cannot operate at profit
Is likely to increase, for they cannot
continue in business at a loss indefi-
nitely.
The consumer IS vitality interested
In this situation, for while COMPETE
ton with some firms selling at a loss
may benefit him through comparative
~ low prices temporarily. ultimately
balance will he struck And the
S6S2 ,254 900 deficit of manufacturing
corporations incurred In 1926 did not
come out of thin air--some one paid
or will pay.
For some months there has been
agitation In various lines of manu-
featuring production to have a study
made of conditions regarding over
capacity Of factories. In certain in
dustries oyercapacity is attributed to
the fact that machinery is never
thrown on the scrap heap until it is
ready to fall to pieces, like the one
horse shay. A factory, undermining
It's equipment, sells it's old machinery
at auction or otherwise, and it is
bought in at small fraction of its
original cost installed in another fac
tory and begins to produce in COM
petition with the mill from which it
came. Oftentimes the product of the
mill with second hand machinery is
sold at lower cost than that of the
modern mill, temporarily because of
n large investment in machinery, al
though the product usually is of in
.ferior quality.
In the end. this overproduction re-
suits in disaster to some firm or
firms, with consequent losses to in
vestors. to workers and usually an
advance in the prices of the product,
so that no one can be said to benefit.
X X X
While industrialists have been talk
ing over this situation, and bordering
what to do to bring out a clear pic
ture for all to view, 1t has remained
for woman to take the first action
toward getting such a picture painted.
Mrs. Edith Nourse Rogers. member
LOT Congress representing the fifth
Massachusetts district, last week
placed before Budget Director Lord a
definite plan, which she and many
with whom she has conferred be-
lieve will help.
This plan involves an appropria-
ton where the Department of Com
merce may employ qualified engi-
neers to study the equipment of the
factories of the United States and sub
NIT a report which will disclose con-
ditlons and point conclusions. The
work cannot he done in a year: there
are too many factories. Probably it
never will be necessary to inspect all
of them. But with 500 900 it is CAL
culated sample study could be made
by two or three engineers in localities
where conditions and types of indus
tries differ. 1t then would be possible
to measure whether the study should
be enlarged and continued.
Many manufacturers consider 1t adj
visa BILE to determine some of the fun
damental facts concerning deprecia-
ton and obsolescence of machinery,
NOT from the accounting standpoint,