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The New Zealand Railways Magazine, Volume 5, Issue 3 (July 1, 1930)

Surgical Work in Industry

Surgical Work in Industry.

Development Company, the registration of which was recently announced by the British Government. British banks and big financial institutions are the shareholders, and the face value of the shares is a fairly good indication that they will not be gambled on the Stock Exchange. What, then, is the purpose of this peculiarly capitalised company? Primarily schemes of reconstruction in British basic industries. An industry may suffer from over-capitalisation (too many companies, too much dead capital, or both), from an insufficiency of efficient plant, from an excess of inefficient plant, and from a lack of organised policy. The purpose of the new company is not to come to the rescue of the distressed companies individually, but to help them in groups if they come forward with a group scheme of industrial reconstruction or reorganisation or “rationalisation” (blessed word!) that, through its economies, technical merits, and courage in de-watering watered capital accounts may win the approval of the Bankers' Industrial Development Company.

* * *

No State guarantee, the British Government explains, attaches to this company. It exercises no veto power upon schemes of “rationalisation”—let us call it R. for short—other than those