Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-15
Should Industry Stay at Home?

/ in American shops is brought about by
the much higher percentage of mechan-
| ical contrivances available per worker
which calls for an orderly, exactly
maintained tempo of operation. In Ole
| World plants, on the other hand. with
a relatively higher degree of individual
craftsmanship, he possibilities OF
strictly regimented procedure are nat
llrally more limited. All Of which
means that when the American CAPT.
talist assumes that he can go abroad
with the complete paraphernalia ano
policy Of his whole organization, he is
| likely to encounter some rather un-
pleasant experiences.
TranspIanting Philosophy.
In a word, it is far from a simple
matter to transplant a whole industrial
philosophy, so to speak, from one en-
vironment into another which is to-
tally different and in many important
respects basically at variance with that
prevailing in the homeland This does
not mean that it cannot be done
There are many instances of conspic-
uous success on the part OF reSolute
American executives and shop foremen
who, by diligence and patience, have
been able to inculcate in large numbers
of foreign workers an entirely new
spirit of factory endeavor. But it new
ertheless is a problem of the first mag
nitude and one which cannot be solved
with an of finland. snap judgment. Its
possibilities should be most thoroughly
scrutiniZed before final decisions are
reached.
Viewing the pros and cons of the
whole branch factory movement briefly
we may, first of all, enumerate those
aspects which have a favorable feature
/. They undoubtedly do stimulate the
export of American industrial ma
chinery. Even In the depths of the
world depression last year. our sales
in this line abroad exceeded 1920 000,-
600, as compared with S49,000000 in
1910. Of course, it is impossible tc
indicate just how much of that total
went into American-owned branch
factories, but there can be no doubt
that in any event the example set by
American plants abroad was a potent
force in stimulating the purchase OF
American industrial equipment
2. The basic American policy of bet
ter wages has gone abroad with these
branch factories and in turn undoubt-
edly has stimulated a betterment OF
living standards and general buyine
power, not only within the personne
petitors Many examples could readily
be cited to prove the helpful reactions
of this development upon exports Of
various American specialties-phono-
graphs, radios, motor cycles, canned
goods, dried fruits and other luxury
and semi-luxury items. the purchase oil
which has been made possible by this
lift in wage rates. The age-long socia,
stagnation of more than one industrial
community throughout the world has
been thoroughly shaken by the arriva
of some American branch factory.
8. When foreign tariff walls have
been so prohibitive as to wipe out en-
tirely the export of the finished Ameri'
can product to given market, thu
establishment of a branch factory
there has at least salvaged some profits
for the owners Of the given organi-
cation.
Large Market Opened UP.
4. Furthermore, the advantages &C.
cruing to the branch factory often ex-
tend beyond the boundaries of the
country where it is established The
best illustration of this is in the case
Of our very large industrial participa-
ton in the up-building of Canada
Preferential duties favoring all indus
tries within the British Empire have
enabled those branch plants to builC
up very substantial trades with Aus
tralia, South Africa, India and tho
other dominions and dependencies
This has opened up a very large marke
which otherwise might not be accessible
at all to the home plant in the ITnitec
States.
While it is too early to pred . II
| terms of tariff protection, the il jults
of the national victory in the recen
elections in Great Britain, there j!
enough evidence to show that some
American industries are considering
the possibility of using branch factories
as a means Of retaining their position
in the British market under a protec.
ZIONIST regime. Since British protection
is very closely tied up with Imperial
preference. it may also. bring about q
further development OF branch fac
tories in some of the dominions, partic-
ularly Canada.
S. Another conspicuous savin {
achieved through the branch plant is ir
connection with the problem of trans
portation already referred to. This APP
plies not simply to the shipment OF
knock-down machinery, motors and Sc
forth, but also to commodities which
deteriorate sharply in transportation
Consequently we have branch factories
scattered around the world manufac.
turing American confectionery, ice
cream, beverages, chewing gum ano
many similar lines.
6. Lastly we must recognize frankly
the admitted advantage of the branch
plant as means Of avoiding much OF
the excessive nationalistic propaganda
now being leveled In many cotntrie:
against all foreign products. Cam
paigns are carried on with consider
able intensity to induce the consum-
ers in each case to buy native" prod.
ucts This situation has had not a lit.
tie to do with the opening upeof Amer
lean factories abroad. One illustration
| of this situation Is the aggressive ad.