OCR Text |
Show JL. U U THE CITIZEN fib HiMhBStiEM During recent years, various cities have devised plans and inaugurated campaigns for the encouragement of industrial development, but while some of the undertakings have been more or less successful, in most instances they have failed to produce the desired result, due in a large measure to a lack of understanding of the economic factors which control the production and distribution of commercial products. It is not the purpose of' this article to criticise any of the methods employed, nor the results obtained by such undertakings, but rather to point out some of the factors which have been , 'responsible for the growth and trend of American Industry, and by a frank discussion thereof to endeavor to create a greater interest in the establishment of factories in Utah, in order that the consumers in the Intermountain States and in the foreign markets of the Pacific may be served in a more economic manner than is possible with shipments from the Atlantic Seaboard. As time goes, it seems but yesterday that every factory and industrial establishment in the United States was beseiged with orders from all over the globe and at prices theretofore unknown, but owing to the rapidity with which the industrial world is regaining its equilibrium, the time is fast approaching when the American producer must meet the challenge of keen and intelligent competition in the foreign markets of the Pacific, which should be served by factories located in the Western States. The great war unconsciously liberated the creative genius of American Industry and that genius, like a huge ball rolled and gathered in momentum until it reached a point in speed and production never before dreamed of ; a production the volume of which .can best be characterized by stating that, at the close of hostilities, the output of a single day was surpassing that of a hundred years of any preceding age. Race Against Time During the entire war, every economic law of civilization was sacrificed in the race against time, as production and more production became the constant cry of those whose lives would have been forfeited had their appeal remained un- - . answered. That was the incentive which transformed the United States into the greatest industrial nation the world has ever known. Old established industries doubled and redoubled the capacity of their establishments and newer and greater factories sprang up like mushrooms over night, time was the essence of expediency and in the mad scramble for greater (production, all thoughts of the future were cast aside, and the location of a factory in relation to the economic distribution of its product was given but little consideration. Under those conditions, the United States took over the industrial burden of the world and through financial and other ties, became intimately associated with, and definitely committed to, a policy of foreign trade extension a commitment the fulfillment of which is now necessary to the maintenance of its own industrial and commercial prosperity. Having accepted that leadership, together with its responsibilities, the United States has 'OUunicd a position from which it cannot well recede, either with dignity to itself or safety to its industrial and commercial life, for while its financial resources are far greater than those of any other nation, its industrial independence is not so well established, due to the fact that , 8 wfljMIQ' By Theron H. Tracy Managing Director Utah Industrial Development Association OMto Industry is not dependent upon full capacity Editors Note: The Citizen solicited this article from Mr. Tracy in order to obtain thorough discussion of Utahs possibilities industrially. He has written into it the broad aspect of industry, and with the widespread effect of the possibilities of power arising in the Boulder dam problem, the story of Utahs potentialities holds added interest. its productive capacity demands a larger outlet than that offered by its domestic market. At the present time the nations of Europe are endeavoring to adjust their economic problems in a manner that will enable them to reach across the Seven Seas for trade and commerce; and for a similar reason, the industrial and commercial interests of the United States must adjust their own activities on the basis of more economic distribution, even though it necessitates the transfer of established institutions from one section of the country to another. 14 Billions Increase From its earliest beginning to the latter part of 1914, the growth of American Industry had consistently kept pace with the growth in population; but when the wheels of European Industry began to revolve solely in the cause of war, American manufacturers were compelled to supply the world with its finished products and as a result, the total volume of production increased in value from approximately twenty-fobillions of dollars in 1914 to over sixty-tw- o billions in 1919. The face value of those figures show an increase of thirty-eigbillions, but after adjusting the 1919 production to the purchasing power of the dollar in 1914, the increase was approximately, fourteen billions. But even the latter represents a tremendous gain and while at the present time, there is no cloud on the horizon that would indicate a drastic change in that condition, the fact remains that, in 1923 the productive capacity of American Industry was some twenty-seve- n per cent greater than its output. With the production stated, however, labor was fairly well employed and at wages which allowed the worker a margin of profit beyond that of a mere existence, and from that regrime has evolved a standard of living that has become an important factor in our industrial and commercial life. By demanding goods and commodities heretofore beyond the purchasing power of the wage earner, labor has become a valuable contributor to the prosperity of the nation by keeping the wheels of additional industries turning, in order to meet the demands created by the new standard of living. It would seem that the period mentioned was one in which industrial conditions were almost ideal, the marginal surplus of. productive capacity having been great enough to provide for any contingency, and the output of sufficient volume to maintain a steady and economic standard of production; but in view of the fact that nearly six per cent of the product was exported and that the population of the United States is constantly increasing, a greater ciTort should be made to increase our foreign trade, in order that a satisfactory balance between population and employment may Iks maintained. ur ht Exports Must Be Built Under the circumstances mentioned, it is quite obvious that the prosperity of American output, there is, however, a danger point below which production cannot drop without creating a condition of unemployment that would result in an increased cost of manufacture, a decrease in the purchasing power of the wage earner and a disintegration of the moral fabric of our industrial life a danger point that can only be avoided by increasing sales in Foreign Markets. This assumption is not the result of theoretical conjecture, but of some reasoning, based" on investigation and analysis of conditions as as they exist in fact, rather than in theory for example, in 1923 the total value of the United States Exports of manufacturers including finished and products, amounted to some $3,624,769,000. To produce that amount of commodities, required the services of some 615,500 employees and the expenditure of approximately in payrolls, that being the number of persons employed and the salaries and wages paid by the manufacturers, and does not include those who were engaged in the production of raw materials nor in transportation and other lines which participated in the production and distribution of the products. As an illustration of the relative importance of foreign trade to the prosperity of the country at large, it may be stated that a decrease of 25 per cent in the volume of exports for 1923 would have resulted in the enforced idleness of some 112,900 persons and the loss of attended payrolls amounting to over $141,576,000, and that condition would have represented only the first stage of industrial depression. The second stage would have quickly followed in the way of suspended operations by industries engaged in supplying commodities of life and comfort for the 112,900 workers who would have become inactive in the first stage a retrenchment that would have meant the loss of employment to some 18,400 persons and a payroll of approximately, $23,150,000. The third stage of depression would have resulted from the decrease in tonnage movement, a reduction that would have compelled the railsemi-finish- ed $838,-946,0- 00 ways to dispense with the services of some 106,-00- 0 employes and the discontinuance of salaries 0. and wages amounting to approximately $175,-500,00- The total loss in those three stages alone would have eliminated the services of some 237,-30- 0 employes and over $340,226,000 in payrolls, but by carrying the analysis through to its final stage, these figures would have undoubtedly doubled, in addition to which would have been of the paythe loss of the commercial turn-ove- r. roll dollar which, it is estimated, changes hands on an average of, at least, five times during the year. Markets Can Take More The purpose of this estimate is not to create the impression that American Industry is facing such a condition, but to accentuate the point that the sale of American products in foreign markets is an important factor in the prosperity of the country. In contrast to that condition, an increase of twenty-fiv- e per cent in the export of manufactured products would produce a result directly contrary to that cited. As a matter of fact, the Foreign Markets of the Pacific are of sufficient magnitude to absorb increase in our a great deal more than a 25 ( Continued on page 5) I ' i i i' n, i f i |