Evening star., 1933-02-01
AMERICAN PLANTS
IN CANADA ARE HIT.
Increase of "Empire Con-
tent" by Britain to 5O%o
Ks Blow to Factories.
BY MERWIN H. BROWNE.
eciaI Qispatch to The Star.

OTTAWA, Ontario, February J..
(N.A.N.A.).-A blow which will stag
ger American branch plants manufac-
turing nearly 80 commodities In Can
ada, and which may result IN the
transfer of many of them to England,
has been dealt by Great Britain IN
raising the empire content" stlpula-
ton from Is to so per cent for goods
from empire countries seeking prefer
ences in the British market.
There is little doubt, it is believed,
that the British action, effective April
/, was directed solely at the United
States, due to the tremendous influx
into Canada of Branch factories seek
ing to avoid high Canadian tariff rates,
and at the same time gain entry to the
British market.
Death Knell Of Many.
Undoubtedly, the British hope to
force the use Of more Canadian Labor
and materials in goods brought into
Great Britain from Canada. This WI.
and the comparatively few American
branch plants in Canada such as the
two huge automobile concerns which
already use more than so per cent OF
Canadian labor and materials in their
product. But it will almost sound the
death knell of many American branch
plants here which will not be able to
make a profit if they add another rs
per cent to their amount of Canadian
manufacture, and which will be shut
out Of the British market if they do
not. The Canadian market alone is
not large enough to keep many Of these
plants going.
The net result, in the opinion Of
those well versed with the situation,
may be the return to the United States
Of many plants which have been hav-
ing a difficult enough time under
present circumstances, and the estab-
lishment in Great Britain OF plants to
serve the British market.
Thus, 1t is not at all improbable
that the new British tariff tinkering
may have an effect reverse from that
intended. and that instead of stimulat-
ing Canadian labor and the use of
Canadian materials, Canadian industry
will suffer through the withdrawal of
American branch plants.
The Canadian view. as expressed in
the Canadian press, is that the Ameri-
can branch plants will Immediately
employ additional Canadian labor and
material and make plant additions to
meet the new requirements, but this
Is recognized as being in conformity
with the Canadian policy of encourag-
ing American factories to locate in
the Dominion.
Capital Outlay Too Great.
Several American branch plants have
indicated, however, that the capital
outlays which would be required to in
stall new machinery in Canada to
manufacture some of the items affected
would be too large to permit them to
profit by such action.
American branch plants for some
years have been encouraged by both
Dominion and provincial governments,
boerds OF trade, industrial commissions,
tho larger chartered banks and the
principal railway systems to establish
manufacturing plants in Canada: But
they have endured special duties on
raw materials they import. Now the
way for them has been rendered even
more difficult by the British action,
which was discussed at the Ottawa
Imperial Conference and Is an out
growth Of that meeting.
Two OF the most important items af-
fected are automobiles and typewriters.
The two largest automobile concerns
are already above the so per cent en-
pire content requirement, but there are
many more American concerns, those
doing only assembly work in Canada,
which have been placed In a. difficult
position.
This applies also to American branch
plants here producing pharmaceuticals,
cosmetic and toilet preparations. Many
Of the chemicals are merely brought
into Canada from the United States
in bulk form, and packaged here. This
will not meet the British requirements.
Other Manufacturers Hit.
Other American manufacturers In
Canada who will be unable to meet
the British requirements because Of the
additional expensive machinery re-
Quired will be those producing ma
chinery and scientific apparatus, certain
types OF electrical apparatus, cutlery,
tools and parts, gauges and measuring
instruments and cash registers. They
are all included in the British list.
Other products whose manufacturers
will either have to make the added
investment or content themselves with
the small Canadian market, which is
about the size of New York State, are
glass and glassware, pottery and clay
products hollow ware, certain iron and
steel products, aluminium, copper, lead,
tin, zinc and alloys, implements, boots
and shoes, leather, transparent cellu-
lose wrappings, arms and ammunition,
locomotives, aircraft, rubber manufac-
lures, brooms and brushes, machine
betting, sporting goods, toys and musi-
cal instruments, clocks and clock cases,
fountain pens and pencils.
(Copyright, 1888. by North American News