ECONOMIC SLUMP IN AMERICA

Press, Volume LXXIV, Issue 22375, 12 April 1938, Page 16

ECONOMIC SLUMP IN AMERICA

VISITING BUSINESSMEN BLAME GOVERNMENT OVERPRODUCTION THROUGH FEAR OF INFLATION ■ [TBI PUSS Special Service.] AUCKLAND, April 11. Strong criticism of the Roosevelt Administration in the United States was made by American businessmen who are making a world tour on the German liner Reliance, which arrived from Melbourne to-day. Important , reasons for the present depressed economic conditions in the country, they said, could be found in legislation introduced by Mr Roosevelt, although it was admitted that, in spite of the opposition of the commercial and industrial community, the President would be re-elected by the masses should an election be held. "Recovery in the United States from 1932 to 1937 occurred with unsound fiscal policies encouraging, if not actually forcing, an increase in the public and private debt," said Mr G. M. Loeb, a partner in E. F. Hutton and Company, one of the largest firms on the New York Stock Exchange. 'The normal set-back in business after these gains has thus seemingly turned into a 'full-tide depression because of lack of faith by businessmen in Washington. The situation, of course, has been made even > more acute by world-wide unsettlement. Overbayinc and Taxation

"The overbuying of goods in fear of Inflation.or in fear of shortages due to labour troubles has been a major factor," Mr Loeb added. "Taxation designed to redistribute, wealth rather than to collect revenue forced the overpayment of dividends, and a paralysis in American capital markets, largely due to new and untried security laws, made the replenishment of weakened financial situations impossible." In general, he added, the low price of American shares in Wall Street reflected the social changes now under way. No one knew where they would stop. The recovery in the week-end Was due to the defeat of the Roosevelt Government reorganisation plan, together with reports of new spending amounting to 4,000,000,000 dollars. Similar views were expressed by Mr W. Kindy, of St. Paul, Minnesota, president of an extensive . chain of optical supply stores. Besides referring to heavy and increasing taxation and over-production through fears of inflation, Mr Kindy said'that a further factor causing the depression was the slump in the building trade, more especially In domestic building. Many more dwellings were needed, but these would not be built while the cost of materials and labour were so high. Trouble In Industry

"The trouble is that there is no cooperation in United States industry tox day," he added. ''Labour does not trust capital and capital does not trus.t labour. Capital feels that it is on the defensive; labour thinks it can get everything, but finds that, with increased wages, commodity prices rise proportionately, and it is no better off. There is agitation for still higher wages. ■ ■ .. "What we need are labour organisers with a larger viewpoint who will see the need for co-operation between . capital and labour, so that a point of contentment can be arrived at." Mr Kindy said that capital, was always willing to sign agreements with labour about conditions of employment, but tune and time, again labour had not honoured its pledges and had torn up the agreements within a few weeks of their making. In its activities,labour had. received the tacit encouragement of both Mr Roosevelt and Miss Frances Perkins, Secretary for . :■•■ .. -, :■ ■', ■• . ■'■■: ■<■■ .