The Press FRIDAY, OCTOBER 27, 1933. Reconstruction

Press, Volume LXIX, Issue 20997, 27 October 1933, Page 10

The Press FRIDAY, OCTOBER 27, 1933. Reconstruction

The annual report of the Federation of New Zealand Employers, presented at the annual meeting in Wellington yesterday, is notable for a number of interesting views and arguments, in developing which the executive has steadily tried to look forward and in a constructive direction. It may disappoint some readers to find that, with the declared aim of " framing a policy "... which will assist our " emergence from the difficulties that " confront us," the federation in its report makes only four suggestions at last, one of which is that its members should set up a research committee " to devote itself to the study "of current problems." But there is no need to be disappointed with a result which sets out basic ideas clearly, offers at least one striking and bold proposal for consideration, and leaves members themselves to respond to a lead and do the thinking which will produce " useful and " practical proposals." As for the principles laid down, the most interesting declares that higher export prices will not help New Zealand if internal prices and costs rise correspondingly. This is perfectly true, but, although so obvious, not always remembered. It means that the Dominion, probably for years to come, will have to keep on fighting costs down. They may rise in monetary terms; but the struggle will be to better, by degrees and without any slip, their relation to returns. On the other hand, it may not be strictly true that "we shall never j " restore our internal trade to a " state of perfect health until we are i " able to bring the -two prices [ex- ! " port and internal levels] together j " in their old proportion." The Do- j j minion may manage very well on a narrower margin, given greater I stability in commodity price levels; | and if international reconstruction is j not to prove a sad dream, it is in j , this direction that it will probably J 1 realise itself. Broadly, however, j the federation's contention is unquestionable and sustains every word of the warning about State expenditure'and over-taxed industry. As for the suggestions put forward, nobody will dissent from the view that trade between New Zealand and Great Britain and the rest of the Empire should be diligently promoted, or from the bearing of the remarks which lead up to it; and that the Government should pursue a modified public works policy, productive | of real assets and supported if neces- ; sary by internal loan, is now generj ally agreed. It may be hoped, also,; i that the federation will strengthen, . this part of the report by urging at j the same time the reform of public i works administration, which should I cease to be political. But the suggesj tion which gives the report an ; almost startling quality and should ' do more than anything else to liberate discussion is this: that the federation should carefully consider " the provision ... of some legal j "authority" to form trade associa- . i iions, the purpose of which would ' |be to "eliminate wasteful trade | " practices, with power to enforcej" compliance with the decisions of I ''.the majority concerned in j'• any case.'' "What is p.-o- ---! posed, of course, -only! ! '"consideration " of such a measure, i i and the scope of it is left quite in- ; j definite. " Wasteful trade practices " ! | covers anything from price-cutting • jto running redundant or ill- j organised or antiquated factory ; plants. The essential'point is that | the federation has in thi.s way j I opened up the whole, difficult, but! insistent question of industrial and ! commercial rationalisation, of the j issue as between laissez faire and j control, and is to be commended for j not shying away from its own logic about costs and prices. It is to be commended as much for recognising at once the central difficulty; that is, how to make the units of a trade or industry comply with a; rational policy; and it is to be commended, again, for declaring that, if such measures of control are justifiable or necessary at all, they arc so in the public interest, tg secure reductions in costs and to pass them on to consumers. If the effect were merely to eliminate competition and put up prices, " it would be much " better to allow the present unre- " strained competition to continue." In this single paragraph the report has prepared for members of the) federation a wide and important field I of debate, probably the most important it could have called them to; and the public will intently watch their working of it.