Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-29
u. S. MILLIONS TURN.
WHEELS IN CANADA
Branch Plant Development Is
Shown in Report by Secre-
tary Lamont.
BY JOSEPH A. FOX.

A single dot on a Department of
Commerce trade chart dating back to
| 1860 marks the start of a historic MI
! grafton from the United States. That
year a manufacturer of medicinal and
pharmaceutical products stepped across
the border and established branch
plant in Canada. Since then hundreds
have followed him and the investments
of United States gold in that country
have climbed high into millions.
Today there is nearly as much Amer
lean money lubricating the wheels of
industry in the border dominion IS in
| all the rest of the world combined.
The industrial life there is real cross
section Of that of the United States.
This commercial invasion of Canada
predated by Is years the introduction
of the first American industry into
Europe. For some two-score years the
movement was negligible; then 1t began
| to gain momentum, and though at
times there have been recessions, the
! last 20 years-particularly the post
, war era--have seen never-ending
migration that reached new heights in
1929 and 1890.
Report by Secretary.
| The whole subject of American
branch industry is treated in report
| to the Senate by Secretary OF Commerce
Lamont In this tie following conclu-
sions were set down with regard to
| operations in Canada:
| The basic reason for development
| there rests in the fact that branch
plant overcomes tariff barriers, not only
| in Canada, but in Great Britain and
/ parts OIL the empire where Canadian
products get preferential treatment.
Linked with this are the factors Of
! eliminating transportation dif1culties
and of popularizing American products
! by manufacturing them under the Ca
madam flag.
The difference in wage levels is not
: enough to be figured
On the subject of American tariff is
| this general observation:
Since the products of many OF our
| branch factories abroad are American
sspecialties, 1t is reasonable to assume
that in cases in which the foreign
| tariff is the principal factor in the es-
| adjustment of an American branch fac
| tory a more flexible tariff policy on our
part might in some instances have re-
! lieved the pressure by obtaining favor
able tariff treatment fog the American
product.
whether it would have proved ef-
! fective in the case CT new countries
like certain British dominions where
the desire for industrial developments Is
cardinal economic policy may be
doubted"
What this branch pant development
| actually amounts to in dollars and
cents is difficult to appraise. Its eco
nomic effect en- industries in the United
! States also is hard to ascertain def
! nitely, partly because it has not pro-
crossed far enough and partly because
of the inherent technical difficulties,
Secretary Lamont said. The report is.
, valuable. however, as indicating
trend, he added.
Manufacturers Questioned.
This report, compiled in response to
a Senate resolution, took in all Ameri-
can manufacturers who were ques-
toned on the extent Of their foreign
| operations.
1t covered the status at the end of
| 1929 and showed 524 plants in Canada,
i with a value of $40, 500, 900. The
report excluded pulp and paper fac
! tories, smelters and petroleum re-
f1neries. These we're construed as being
not in competition with American in
y.
primarily to the superior raw material
or power resources OF Canada. To
| have included them would have added
about 1873 plants valued at S725, 600, 900.
I The branches and their value were
set out roughly as follows: Metal prod
ucts, $88, 900. 600; motor vehicles, $69,-
OOO. 900 machinery. s68, 000,0 600; electric
and phone equipment, $S5 600, 600; food
stuffS, 100000; lumber and prod
ucts, s5l 900. 900; rubber, SAT. 900;
chemicals, S44.50o,000; miscellaneous
manufacturing, S38.50O000 textiles, in
Guiding clothing, SIC ,0000 900, and stone.
| clay and glass, $3.500,000. There was
also an investment of $S43, 900 in leather
products.
These are the latest figures that the
| Department Of Commerce has. In 1881,
on the basis of an unoftlcial check on
,, trade publications and other sources OF
Information. the opinion is expressed
that not more than so American
branches were established in Canada.
This would be the same number In
4 2q and would be tantamount to an
increase in view Of the disturbed man.
cial conditions last year.
Statistics in Conflict.
In conflict with the statistics from
the Commerce Department, however,
House of Commons recently by Premier
! Bennett. when the new Canadian tarln
was under debate.
premier Bennett, entering general
discussion on foreign industry in Cana
da. said that on January l, le3O-tne
same Deriod covered by the commerce
reDort-there were 1923 American
| "branch, subsidiary and afhliated firms
| concerned with manufacturing or pro-
| duction" in the dominion. He placed
the capital investment of these at ST.
239, 900, 900. -.
| statement to incorporate those concerns
excluded from the Department OF COM
merce report, the capitaiizatons Ile ems
| would run close together, but there Stlll
| would be "wide discrepancy in the
number of plants
premier Bennett further said that
since August, 1880, there had been
marked increase in the number OF con-
Germs coming into Canada, and among
these he listed "A as of American origin.
He grouped them as follows: Eight
dealing in vegetable products, such as
food and rubber; in animal products,
8 in textiles, 8 in wood and paper. 20
in iron and steel, IL in non-ferrous
metals, 3 in non-metallic minerals, 3
in chemical and allied products, mining
and 2 miscellaneous.
Hinder iron and steel were included
four automobile concerns, the nature of
whose operations was not given, and
one plant for truck assembling.
other Statistics Given.
Still another set of statistics comes
from a leading American trade publi-
cation, which puts the number OF