Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-17
BRANCH FACTORIES
BECOME PROBLEM
Establishment of Plants in
Foreign Lands Declared
Natural Economic Result.
BY JOHN F. SINCLAIR.
Special Dispatch to The Star.

BY JOHN F. SINCLAIR.
Special Dispatch to The Star.
NEW YORK, December 17.-Should
large American corporations establish
branch factories outside the United
States for the production of goods?
This problem has now become a real
one in the United States, although many
manufacturing branches of American
corporations existed in foreign coun-
tries long before the war.
In the field of agricultural machinery,
sewing machines, shoe machinery, heat
ing plants, telephones and cash registers.
American plants in foreign countries
have done a big business for a genera
ton.
Branches recently have been estab-
lished in other lines, particularly those
of automobiles and of automotive sup
plies.
Henry Ford, who formerly employed
thousands of American workmen, max
ing tractors in the United States, now
produces tractors in Ireland. Fordsons
needed in the United States are brought
from Ireland. OF course, there is no
duty on them-agricultural machinery.
Other nations are doing the same.
British companies in the United States
IIldllu1dCCuIe IdyUIl, ldILH LldCtluleIy
and gasoline: German factories in the
United States are turning out chemi-
Gals, rayon and electrical machinery;
French companies go in for more deli
cate articles-like dresses and perfumes;
Belgian firms specialize in glass and
chemicals; while Dutch firms are in the
dairy business, margarine particularly.
But why branches in foreign coun-
tries? The reasons vary: To avoid preju-
ogn nc inn do To
costs of distribution to consumer mar
kets. To get behind tariff barriers. To
fit into national defense programs. To
meet national patent law requirements.
To obtain cheaper foreign labor, al
though this is not the controlling factor
In most cases. To meet a keener COM
petition.
OF course, the tariff is at the base of
It, The British Empire preference sys-
tenn attracts many foreign industries to
Canada and Australia. Canada has
more American branches than any other
country. Europe is second.
The Department of Commerce, after
study of the question, believes that
such move is a natural economic re-
suit following closely the precedent
established in Europe" and that Amer
lean foreign branch extensions will con-
tinue.
Col. William j. Donovan, in an ad-
dress before the New York Board of
Trade this week, took his stand against
America following the European bust
ness practice of allowing fixed prices
and allottin" territories"
For America field of economic
competition-such practice would take
the country back 80 years. he declared.
The colonel championed continue
Of flNA frVIcf IoHrr
in order to preserve competition and
personal initiative in the state.
The existence of the Sherman anti
trust law is one of the elements that
have enabled America to achieve the
position that it occupies today in in
dustry," said this former Assistant
United States Attorney General.
DR.. H. Parker Willis, editor of the
New York Journal of Commerce, is
more critical of the Sherman antitrust
law. He believes it should be changed
when it interferes with natural business
growth.
THE antitrust law was not written
by some divine finger upon tablets OF
stone. 1t was written by politicians
upon the surface of water, and has
changed in its Interpretation as the
water itself has changed. Nothing has
been stable about it except the exist
come when that ought to be ellmi-
mated" he declared.
Members of the National Economic
League were asked for suggested
changes to improve administration of
justice in the United States.
Business is vitality concerned in this
whole matter of speedy and equitable
justice.
The four suggestions which received
the highest vote we're:
% To give more power to judges in
inStructing juries.
90 To work out a better method OF
selecting judges.
80 To require higher standards for
admission to the bar.
"a To give fewer than IL jurors
power to return verdictS in both civil
and criminal cases.
Outstanding Americans who are
members of the executive council: John
Hays Hammond, Charles NJ Schwab,
William Allen White. James Rowland
Angel, Roger w. Babson, A. Lawrence
Lowell, David Starr Jordan, George w.
Wickersham. Nicholas Murray Butler
and Edward A. Filene.
With the alarming increase in the
business of the racketeer the pointed
suggestions Of the National Economic
League are worthy of attention.
Chicago has the reputation of being
the "racketeer" city, but recent reve-
lations in other cities, like New York
and Philadelphia, show that the pro-
feSSion of the "racketeer" has been built
up largely because of the laxity in the
administration of law in other parts of
the country.
For many years now the diamond
industry has been prosperous. 1t is
only in recent weeks that there has
been any perceptible let-down in the
business.
lawsuit, filed this week, brought
by the United Diamond Fields of Brit
ish Guiana, Ltd. against IL members
of a syndicate accused of attempting
to control the world production of dia-
mondS, brings out the fact that now
80, 500 men, who have been employed
in 145 diamond establishments through
out the world, are idle. with subs6-
ouent wage loss of about $400,00U
weekly.
In this case the defendants are
charged with having entered into an
agreement with the British Guiana
concern, which gave the syndicate con-
troll of the diamond output.
When the diamond slump took place
the syndicate is said to have sold
many diamonds that did not come from
British Guiana, SO that the mines OF
the British Guiana concern were forced
to shut down and hundreds OF men
were thrown out of work.
The retail sale of diamonds is not
affected by this situation.
(Copyrght, 1929. by North American News
paper Alliance.l