THE AMERICAN EXPERIMENT

Press, Volume LXIX, Issue 20997, 27 October 1933, Page 7

THE AMERICAN EXPERIMENT

PROVISIONS OF RECOVERY ! PLAN i LABOUR RULES FAMILIAR IX DOMINION I I [.THE PRESS Special Service.] WELLINGTON, October 26. "Although the circum stances of the two countries are so widely different, it is interesting and valuable to compare the situation in New Zealand with that in the Unite J States of America because the experiment being tried out there has been quoted as an example we should follow," states the annual report of the New Zealand Employers' Federation, which reviews in some detail the principal provisions of the National Recovery Act. The labour provisions are interesting because they are familiar to New Zealand, the report adds. Perhaps even more interesting than the labour provisions, however, were the provisions under which industries might be regulated by those engaged therein and the regulations imposed compulsorily upon minorities who might be opposed to them. "Clearly we have nothing to learn from the labour rules because we have had them for many years," states the report. "The regulation of trades by trade organisations under a code enforceable at law has been put forward in New Zealand before, but has not been carried into effect. The Timber Efficiency Bill promoted in 1929 by the Sawmillers' Federation contained the same principles, but it did not become law. "Two outstanding features of the American experiment are (1) the compulsory reduction of working hours with the object of absorbing more workers in industry, and (2) the stimulation of production in anticipation of increased demand. "As to the first, it does not appear that the aggregate man hours worked in industry will be decreased, but that the idea is to spread the available work over a greater number of persons. The wages so far fixed under the codes are about 60s a week (on par exchange), an exceedingly low rate, in fact so low by comparison with the high rates formerly so much advertised in the United States as to show very clearly into what a desperate condition American industry had fallen. "As to the increased production in advance of the demand there is already an outcry for currency inflation to secure its consumption and perhaps before this report is read there may be some clear indication as to the fate of this part of the plan. Delaying: of Price Increases. "In his statement of June 16, President Roosevelt: said: 'We cannot hope for the full effect of this plan unless, in these first critical months, and even at the expense of full initial profits, wo defer price increases as long as possible. If wo can thus start a strong, sound, upward spiral of business activity our industries will have little doubt of black ink operations in the last quarter of this year. The pent-up demand of this people is very great, and if we can release it on so broad a front we need not fear a lagging recovery. There is greater danger of too much feverish speed. But already the press messages tell of increased prices for everything except farm products, and of costs being laired against the primary producers. "In the National Plan the export trade seems to have been ignored entirely probably because while the exports' of the United States never!

amounted to a largo proportion of her production the volume of exports at the time of the passing of the National Recovery Act had shrunk so much as to be insignificant by comparison with the possibilities of increased internal demand. ''As it was, one country, France, apparently feared a future dumping of American surplus goods produced under the stimulus of the National Recovery Act and raised her tariff wall in anticipation. What the end of the great American experiment will be no one, particularly at this distance, can say. The immediate effect appeal's to have been to render worse off tlum before everyone who was in employment when the new act came into force by reducing his wages and increasing his costs, but to provide some employment for large numbers who before the passing of the act were incapable of finding employment. . "The President frankly admits the plan to be an experiment, but, lie states, if it fails, ho will try another method, and he will keep on experimenting until success is attained. Interesting l Experiment. "The whole world must be watching the experiment with the keenest desire to sec it succeed, for if it does, the world will bei'.efit. If it should fail all nations will feel the repercussions more or less. In New Zealand, of course, due regard must be given to our export trade in any national plan because our greatest need at the moment is to restore the purchasing power of our exports in respect of other classes of goods and services within our own country. An earlier reference has been made to the need for a further effort to lower our costs and so assist to bring our internal prices into line with our external prices. It is as well to note' the methods which have been adopted so far and the extent to which they may be pursued."