"END IMPASSE."

Auckland Star, Volume LXV, Issue 126, 30 May 1934, Page 9

"END IMPASSE."

PLAN WANTED. DOMINION'S RESTORATION. SCHEMES FOR CONSIDERATION Several schemes designed to assist New Zealand's rehabilitation, including the decentralisation of the Unemployment Board, the reconstruction of- dilapidated bridge? and the resumption of slum areas, were reviewed by Mr. James Fletcher, managing director of the Fletcher Construction Company, Ltd., in the course of an address before the Auckland Creditmen's Club in Milne and Choyce's reception room to-day.

'•Until we plan and organise for better times, we will retain our 70,000 men on unemployment relief, and your business and mine will suffer or die from inanition," Mr. Fletcher declared. "To be effective, expenditure on relief should be such as to create the greatest reaction on trade, adding velocity to the circulation of the money. We suffer because money and assets have lost their negotiability, and they have become in a great degree frozen. Money has flown from its accustomed haunts of trade and business, and to-day seeks refuge in the vaults of the banks. From the stress of the economical storm it has taken shelter, not earing for the condition of those it was designed to serve so long as it keeps its own safety. "We <ro not exert the greatest influence on circulation of money merely by keeping men clearing weeds from streets, or by creating playgrounds that our workmen in distress must be too disheartened to make the most of. By creation of works of value to the community, and by paying workmen employed on such works a fair average rate of wage, we can influence the velocity of money. We can make it move. In my opinion, unemployment relief must be considered more on lines of paying fair wages for fair work." Subsidiary Boards. Mr. Fletcher suggested that the Government take immediate steps to relieve the Unemployment Board of all its detail work, by dccentralising the activities of the board and leaving the head office with the responsibility only for tiie major finance of the scheme. There should then be established four or five subsidiary boards, responsible for particular areas, and charged with the duty of ascertaining the number and class of men requiring employment in their area, and, finding for them employment suitable to their qualifications. The subsidiary boards should develop schemes of work, to be carried out at standard wages, and limited to projects of a non-productive nature, out which in themselves would improve conditions and mode of living. The boards would tabulate tiie class of workers with care and discrimination so that the farmer and farm worker would be given employment in their proper spheres, and hot" allowed to encroach on the activities of the skilled tradesman or even the general unskilled labourer. In such schemes of labour, works should be selected that would involve the use of our locally-produced materials, so as to produce a reaction from the expenditure of money. Materials should be used so as to bring back into employment the men normally engaged in the trade or business producing such materials, and an effort should be made to create business that would react from trade to trade, and from service to service. n Likely Schemes. Giving instances of the work subsidiary boards could develop, Mr. Fletcher referred to tiie hundreds of out-of-date wooden bridges in New Zealand, many so old as to be a positive danger to traffic, and asked whether it was creditable that such bridges still existed while there were cement mills employing only one-quarter of their normal staff; sawmills ready to produce boxing timber, and no business offering to warrant employment; gravel and sand pits awaiting business, and labourers wanting employment,; railways waiting to transport timber, cement, gravel and eand, and the railroad, engines lying idle in their sheds, with the railwaymen rationed for work; and coal mines developed to produce coal, but railways and cement mills requiring only limited supplies, and coal miners seeking relief and breeding discontent. Again, there were considerable areas closely settled that still required sanitary drainage and satisfactory water supply services. Was not the present the time to consider carrying out such necessary works? A comprehensive scheme for draining unserved areas would create a great amount of employment. Such a scheme would react to create business for the earthenware and concrete pipe works; would give employment to the cement mills; would have effect on the gravel and sand pits; would reflect in increased business for transport and for coal mines; would give heart to plumbers and introduce money at the point whire it would stimulate circulation better than any other means.

"We li.'ive lately had the experiment of a building subsidy, which was not without merit, and, in part, its effect was beneficial," added Mr. Fletcher. "In principle I rather felt it wrong. It was open to abuse. In too many instances it was made merely an avenue for cheaping of costs by interests that would have proceeded with their projects, subsidy or no subsidy." Removing Slums. The activities of the Unemployment Board should be limited to creating new business —not carrying part of the cost of normal business. Better than a building scheme might be a scheme lately submitted to him by one of my friends for the resumption of slum areas, and the rebuilding of houses by way of unemployment relief. It was proposed that the Unemployment Board provide a sum up to 20 per cent of its revenues (practically £1,000,000 a year), and to apply it in payment of cost of rebuilding houses in permanent materials on areas in the main citics at present classed as slum areas. The grants would be made where the local body was prepared to bear the cost of resuming the lands, and the cost of replanning and preparation of the areas for the purpose of the scheme, the aim of which was not to create competition by making available more houses, but to improve the amenities of the population by housing them in better and more sanitary houses and surroundings, and to improve the amenities of the city by removing any suggestions of slums or overcrowding. Moreover, employment would be created for the skilled and unskilled men, there would be a reaction on general business, and the circulation of money would be provided for. Approximately 3000 cottages would b© involved, and in terms of labour direct

and indirect, it would mean employment for a year at a wage of £4 per week for not less than 3500 men. In its reaction it would easily account for work for another 1500 men, say a total of 5000 men. Wage Levels. Another scheme submitted to liim, but ono concerning which he had reached no conclusion, was that all wage and salary cuts should be restored immediately, and that with such increase the present wages tax should be increased from 5 per cent to 10 per cent. The author of the scheme estimated that if the cut of 20 per cent in wages were restored, the amount of wages paid would approximate £84,000,000, giving a tax return at 10 per cent of £8,400,000, which would be supplemented by another £1,000,000 from the proceeds of the present unemployment charge of 5 per cent on incomc other than salaries and wages. The expenditure of that amount on schemes of relief, such as roads, bridges, drainage, housing, etc., would provide work directly and indirectly for 40,000 men at £4 per week, and the balance of the fund, with resulting tax received from wages, would pay for all materials necessary to carry out such works. In the opinion of tne author of the proposal the remainder of the .unemployed (other than unemployable.?) would by such an expenditure be drawn back into their ordinary vocations.

"Such a proposal would require thought," added Mr. Fletcher. "For one thing, the effect of a sudden increase of wages and salaries on a. large business sucli as my own would be disastrous, unless, of course, some compensatory provision could bo made. Where fixed contracts have been entered into on the basis of present wages costs, some compensation would have to be given. This would be necessary even if a statutory increase of, say, only two and a half per cent on wages were decreed. Still, such a contingency could be met by suitable provisions, if otherwise the scheme would rrive definite and speedy results. Anything to end the impnsse into which we seem to have drifted, so far as unemployment is concerned, may be worth while."