The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-06-20
BY BARROW LYONS
Times Special Writer

NEW YORK. June 20.-One of the
least discussed, but not least I'M
portant, results of MIRA abrogation
may be the release of industry from
restrictions against replacing old
machinery with new, and increasing
plant capacities.
Eradication of obsoleScence and
catching up with the latest labor
saving machinery present one OF
the most perplexing problems Amer
lean industry faces today. Obviously
the code restraints in this respect,
although tending to maintain en-
ployment and prices, were real I'M
pediments to the most economical
production.
Progress depends largely upon a
steady cheapening of goods through
advances in technical processes and
passing on to consumers the result
ing advantages. Progress was
checked in the pre-depression era
because a large enough part of the
gains was not passed on, either in
lower prices or higher wages. Prog
ress was checked during the depres-
sio1 by restraining technical adj
vance.
1t may even be that a part OF the
loss of foreign markets has been due
to growing obSolescence of American
productive plant and restraint on
technical change, rapid as it has
been.
Recovery, however, depends large
" upon increasing mass purchasing
power, which could be accomplished
most easily by loosing many ettl-
ciencies which have been held IN
leash. but which can cheaper goods
and stimulate purchasing.
A brief review of some OF the
available estimates along these lines
is enlightening. In a recent article
published in the magazine Steel
Arthur G. Mckee, an outstanding
technical authority upon steel plants,
estimated it would cost between ST.
600 100000 and $500 100000 IN the
next five years to modernlze the ma
tons steel industry.
In order that this may be accom-
plished. leaders in steel, before MIRA
was thrown out. urged renewal OF
the code with elimination OF restrlc-
lions upon plant expansion.
The American MachiniSt recently
completed a survey which showed
that the machine shops OF the
country we're more obsolete than at
anv time in the last ten years. It's
fve-vear inventory showed that
metal working machinery more tnan
ten years old in 1885 amounted to
IS per cent of the total, as com
nared with 48 per cent in 1880, and
Id per cent in 1925. This suggested
a total money expenditure OF So22,-
100000 in the next five years IL
obsolescence we're to be held only at
the present level.
A survey made of the industrial
power plant, exclusive OF central
stations. by the magazine Power
showed that manufacturers were
wasting SO cents of every dollar
spent for fuel because of obsolete
equipment. LII VIC iAOAA
industry. the efficient power plant
was put at only 10 per cent OF the
total In this connection, it was
nointed out that in the steel plant
which Henry Ford was building, al
most half of the cost would be LOT
electrical power equipment.
Confronted with such facts, II
seems probable to many that when
the flow of new capital into indus
trv again starts there is likely 10
be a race for modernization that
NAV dwarf all previous advances.
The very fact that industry may
be faced with a race for prolts
such as it has never before expert
enced. makes the problems of in
vestment most difficult. The I'M
known quantity involved in tech
nological advances held in aoey-
ance, leads investors to ask anxious
": What companies are likely to
be the most successful in the next
few years?
The same situation also leads
manufacturers to ask no less anX-
iously: What processes and methods
are most likely to win profits in me
race? The problem OF obsolescence
becomes both a dire threat and a
promise.