INDUSTRIAL DEPRESSION

Auckland Star, Volume LIX, Issue 36, 13 February 1928, Page 17

INDUSTRIAL DEPRESSION

APPALLING UNEMPLOYMENT.

A BAB POSITION IN SUMMER. PROSPECTS FOR THE WINTER. (By CROESUS.) No. 3. The reoent distressing revelations regarding the prevalent unemployment, even in the height of summer, make it unnecessary to apologise for pursuing the subject, for it is the burning question of the day, exceeding in national importance all such matters as party politics, and even the prolonged drought. Admitting the truth of the generallyaccepted doctrine that the direct cause of the present depression, which brings with it the inevitable unemployment, is the disturbance of the normal relation between imports and exports, it is most humiliating to reflect that those who have the roobt power to restore the balance are doing practically nothing towards that end, except to talk about it. Even of that there is not very much, beyond continually assuring the public that the corner has been turped. As for the measures to alleviate the distress caused by unemployment, these are about as effective as if we tried to get rid of mosqultos by inventing new cures for their bites, instead of going right back to the cause, and destroying them at their source. Not quite, for some of the measures taken are actually more likely to aggravate unemployment. On the contrary, no work is likely to be permanently effective in promoting prosperity unless it aims at restoring the balance between, imports and exports, and keeping them balanced, for New ■Zealand is so similar in its trade to the operations pf one great farm that the only safe course to take is the course that a mortgaged farmer would take, under the varying conditions of prosperity and depression. Just as it has been seen in a former artiele that a farmer's sales must at least exceed his purchases by the extent to which his annual interest exceeds his fresh loans, go the coitntry's exports must exceed its imports by the amount at which its interest and other external obligations exceed the new loans raised. That amount naturally varies from year to year, but at present it is probably nearly £4,000,000 a year, go that the Dominion barely held its own during 1927, while doing little or nothing to' cover the deficit in 1920 and the latter part of ,1925, which has brought on all the trouble. The very basis of nation! prosperity is that the external accounts must balance. What Would a Farmer Do? Faced with a reduced income, as New Zealand was in 1920, a provident farmer would immediately take stock of his position, and as he could not instantly increase hia sales, he would decrease his purchases, cutting his coat according to his cloth. Among the many things that he would not which New Zealand did in one form or another-— would be these. He would not delude his family hito the belief that all was well, encouraging them to spend as in times of prosperity, but would take , them into his confidence, and secure economy. Having limited cash, he would hot select that particular year to .buy a bettor, motor car on time payment, nor even a billiard table, piano, gramophone, or wireless set. These would all have to wait till finance was easier. He would not choose that year to take his family to the city for a week's racing, requiring his wife and daughter to bedeck themselves in furs for which he could not afford the ready cash. He would not build a new ballroom, nor construct a new drive to the house and a fountain in his gardens.; Theje or a do?en other things need only to be enumerated to illustrate the folly of the national policy of the past two years, for all these activities* more or less legitimate in themselves, could quite easily be postponed, and yet have been carried out. While unable to engage additional labour (immigrants), he would not keep his former workmen idle, nor even his son an extra year at college, but all would redouble their efforts to increase the productiveness of the farm, every available shilling being spent in wages and materials, to that end. A year or two of that policy, with needless luxuries reduced' to a minimum, and he would soon be able to resume his ordinary spending on its former scale, while remaining free and independent in the meantime. What Has #he Country Done? No less an authority than Sir Harold BeaUchamp candidly admitted, or rather boasted, only a few days ago, speaking as chairman of the Equitable Building and Investment Company: "We have discontinued making advances to farmers, and are now confining operations to loans mid properties in Wellington and suburbs/' If other financial institutions were equally candid, they would have to say the same thing. That is to say, juat at the Very time wben more production is v° anted, in order to absorb the, thousands who are now unemployed, and obtain the returns \yhicii would bring prosperitj and still more employment, the fountain of money formerly'flowing towards broad acres is purposely diverted at its source, and given a new outlet in the city, which cannot help attracting thereto still more of those Jvho are at present employed upon the laud. Could any policy be more certain to hamper the development of a young country which is calling out for more settlers, and more capital to finance them, instead of this accelerated drift to the cities! And yet nobody can blame Sir Harold and his co-directors, nor the scores of other directors who are .carrying out exactly the same policy, for capital is very like labour, in that it goes where the most comfortable return is in sight. But the pity of it! The whole thing is wrong, for money should be attracted to its old outlet, developing the land, and that is where statesmanship would come In. At present nearly every legislative enactment tends, directly or indirectly, to make the city man's path easier and more profitable, while making tbs farmer's path harder. Is it any "wonder that financiers prefer to lend in the city? That is the first thing that. Wants altering, and must be discussed more fully, with a view to finding a remedy.