AMERICA'S NEW POLICY

Press, Volume LXIX, Issue 20989, 18 October 1933, Page 7

AMERICA'S NEW POLICY

FEATURES SUMMARISED A FUNDAMENTAL CHANGE ((rreu_Lr iror.tK rot t-iv rnr.?.s.) LBy T.C.L.! XVI In the preceding articles an attempt has been made to explain the principal futures of Franklin Roosevelt's epoch"iwking industrial recovery policy. Only casual examination will have shown how complete and co-ordinated « the policy and how ■■'•••-jlute and unprecedented are the powers that have given the Administration. Virtually, the President is in the position of a dictator, and in the greatest democratic country in the world, a ttUntry whici: has always prided itself \upoti it s rugged individualism and 'initiative, there is general agreement lha t the course followed is piT.ctieallr '■"e only one open to save the country fl 'om collapse. As has been shown t'uat wlwi the new President took oflice th.o country ''as in the throes of a bank depositors' , ? aß ic, Ti forced souur: and unsound alike to close; it forced com-j fuxilty an fl BPC , n .jtj,.. s exchanges to I 3>eud; it caused the industrial ; wucture to totter, and it brought on walysis of the economic life of the i Sf People. The new President was Km to act to meet the emergency. cIL ued two Proclamations, one deZ®s a bank holiday and placing an upon the withdrawal and jWt of gold; and the other summontVongress to meet in four days. j«lea came from the Brain Trust. d.,)J? le ,° lsUre a£ter new measure, all RtaF ed not on lv to meet the emerc2 that had arisen, but to put the 85 baek fi " lhe ™» s " { T, JUn+i ~ rccovei "- v - ' l,,c, y touched S'wlly even interest in the kW lif(> oi ' the country, some keavii s ° mc "'directly, but others c tttin Tlae >* audacious in coniheT, •' ,lley --fni'.'k right across all ..""Ocipie, an( j mpthtids so dear to i

ithe- heart of a nation that had under I them expanded and prospered—up till | 1.929. | Balanced Social State. A perplexed and disturbed people watched the introduction of a Farm Bill which its sponsors frankly admitted aimed at a "balanced social State"; of legislation to regulate hours, wages and industrial production; to co-ordinate the railroads; to put Ihe i banks and financial houses under Government control: 1o make p.vail- ! rhlc for public enterprises the huge | sum of £660,000.000; to carry i out a great scheme of industrial eon- ! (Vol in the Tennessee Valley; to place 'an ?nnv of vouths who had been wanidering and menacing the countrywide i into reafforestation camps: besides J making other departures that, never i had the sanction of America's political | or economic text books. i No Government had ever introduced such vast changes and none had been given such overwhelming support, by Congress. Nor had a policy received such general support from an electorate. It was an amazing Transformation. Before the advent of Roosevelt the people were in blank despair; they felt that nothing could be clone to save the country—things had reached such a desperate pass. Then after Roosevelt's spectacular action of closim; the banks and calling Congress together to consider and authorise measures designed lo overcome the economic crisis the people felt that in Roosevelt they had discovered another ' Abraham Lincoln in their hour of [ •need. Wherever one goes in America i -and the writer travelled more than ' i.".000 miles, north and south, west and i east—one found, even amongst the, j most ardent. Republican:-, a profound j ; belief in Roosevelt and approval of I I his judgment and actions. If. is true manv doubted the outcome of the measure?, especially those relating to i inflation, but they held any action] ' iusf; now waj worth taking, for; hunt's might result as planned and; hoped for, and if they did not, well ■. conditions could not possibly be worse than they had been before. People Back at WorkThe proof of the pudding will be found in tne eating. Already 2,000 000 people are back at work, and it is hoped another 7,000,000 will be absorbed before the end of the year That will account for more tnan nail of the unemployed and if this :.. accomplished it will be a justification for the Government's programme Co,fidence is returning, and ton s is nicking up everywhere. All ate hopeful that will turn out ? ccordmg to plan.

' That the "New Deal'' policy will j effect a permanent solution of the j country's economic problems is not ; claimed or expected. The measures are designed primarily to place the country on to the economic rails again and give it an opportunity to live and develop along new lines. The technocrats have claimed that a now situation has arisen as the result of the rapid advance in the mechanisation of industry, and that no matter what is done it is impossible to reemploy more than half of the present unemployed. They have issued figures and statements in support of this contention, but their accuracy and soundness have been questioned, and to-day j the technocrats, who previously I received a favourable hearing, arc now • generally discredited throughout the : States. I A Cardinal Feature. i The Administration, however, has I made the reduction of hours of ! industry a cardinal feature of their i industrial recovery policy, so that, more people may be employed. I! is recognised that the effect of shorter hours without a corresponding reduction in wages will mean, higher costs, (and so authority will be given in the ' codes of the industries and businesses j to increase prices so long as {he in- | creases are justified and no monopolies j are created. The Administration j believes that with proper organisation i |and rationalisation it may be possible} 1 for industry to get along without, in- ' (creasing prices to the community. The i i feeling of industry, however, is thai: all costs must advance from lt.l to 20 : .per cent. Only uractieal working will ! show who is right. ' There is one feature of the policy.} ■ however, that must make for success! and smooth runninjj and i.s regarded) favourably by business and industry. ] It is the arranging of a. standard of j practice and the elimination of pricccuttintr and unfair business methods. For the first time the public will be represented in industry. Hitherto industry itself has had absolute; control and determination, though Labour has often made itself heard. Now the Administration determines before passing a code what is fair practice, what are fair charges to the public, and what the remuneration and conditions of labour should be. It is an important and revolutionary development that may have reverberations throughout the world. President Roosevelt describes it as "a partnership between Government and industry, not partnership in profits because the profits would still go to the citizens, but rather a partnership to see that the , plans are carried out.'' |

; Days of Laisscz-Faire Gone. In America the fact is generally accepted that the days of laissez-faire conduct of business are over. It is no longer "every man for himself and the devil, take the hindmost." Cooperation is the essence of the " New Deal." and if industry, labour, or capita! will not co-operate voluntarily, then the Government will force 1 heir cooperation. These words of the President in his recent speech to the United States Chamber of Commerce are significant : "I ask that you have the vision to lay aside special and selfish ink-rests, to think of and aci for a i well-rounded national recovery. Each ' and all of you in your own units and in I your own industries are but integral i parts of a great whole, and our national j economy must be expressed in terms of ! the whole rather than in terms of the ; units" In the past America has paused the i value and position of its citizens from I the material success they have gained. j To-day that measure has been disi carded in favour of a basis of worth j and service to their fellows and the j community, ft is an awakening to realities that has been brought about by failure of the old standards in a time of grave crisis and great .suffering'. i America Can Experiment. It must be conceded that. America can experiment in this and other ways without much harm resulting to her trade and industry, for the reason that: she is practically self-contained, posse s.-in;; every raw material product .she n.quires for manufacturing with the except ion of rubber, and every food-,-tu'l with (he exception of tea and; coffee. She has an enormous internal market in her 40 States, and normally exports only six to 10 per cent, of her total, products and manufactures. If prices of commodities advance it is certain that the customs tariffs -will also advance. That will mean a virtual shutting out of foreign goods, at the tame time effectually preventing war debts from beeig paid, because they can only be paid in goods or services or gold, and there is not sufficient gold to go round. Conditions Different in Britain. Britain is situated quite differently. She has to rely upon the world's markets for more than half her output of manufactures, and if . she were to follow America and reduced hours and increased prices, she would, in competition with her European and Japanese competitor?, lose her entire trade. Similarly in. this Dominion, we are dependent tor our very existence upon the English market, and if we reduced hours of work and increased wage-

the producers would be unable to compete with their competitors. However, there are features in the American plan, particularly regarding i-stionalisation and regularisation of industry, and a revised and enlightened attitude towards labour in industry, that both England and New Zealand could study with advantage. The working out of America's plans for industrial recovery, it is certain, will be followed with intense interest and sympathy throughout the British Empire. for a rehabilitated and prosperous America will exercise a profound influence on the affairs and fortunes of the rest of the world.