GUARDING AGAINST LEAN YEARS

Dominion, Volume 22, Issue 75, 21 December 1928, Page 9

GUARDING AGAINST LEAN YEARS

SCHEME TO STABILISE PROSPERITY POLICY OF AMERICAN PRESIDENT-ELECT

Presented as part of President-elect Hoover’s programme for stabilising prosperity, a project for the creation of a State and Federal construction reserve fund of 3,000,000,000 dollars (£600,000,000) to do for labour and industry what the Federal Reserve has done for finance in the United States, was set forth before the Conference of Governors at New Orleans on November 21 by Governor Ralph O. Brewster', of Maine. Governor Brewster stated that he offered the plan at the request of Mr. Hoover, as an authorised exposition of a part of his programme for the reduction of unemployment. As outlined by Governor Brewster, the procedure provides for the co-operation of Federal and State Governments in controlling construction work for the public good so “that a reserve may be prudently accumulated in time of plenty against the lean year that is to come.” Under the proposal public authorities would store up a reserve of construction projects equal in cost £o two years* normal expenditure on improvements ancLrelease this reserve at times of unemployment. Such a fund, Governor Brewster said, would be one of the best forms of insurance against national panics. “In requesting the presentation of this project to the Conference of Governors,” said Governor Brewster, “Mr. Hoover emphasised the importance of establishing co-operation between Federal, State and municipal Governments in accordance with the proposals outlined at the time of the unemployment conference in 1922. “With' an annual expenditure of 7,000.000,000 dollars (£1,400,000,000) upon construction, America is in a position to stabilise prosperity to a most remarkable extent. Public authority spends more than 1.500,000,000 dollars (£300,000,000). With this we are here primarily concerned. ‘‘Private business will soon follow such practical demonstration as the Government may make. This may apply not only to construction but to the renewal and extension of capital facilities of every sort. “It is the considered recommendation of the one who has received the overwhelming mandate of the American people to guide and guard their progress in the next four years, that a construction reserve may prudently be accumulated in time of plenty against the lean year that is to come. . . “This involves simply the provision or the necessary funds or credit to be released when indexes shall indicate, the need, and such designation of projects as may commend itself to the authority concerned.” Insurance Against Panics. “The creation of such a construction reserve may not be a cure-all, but it certainly will alleviate our ills. In some measure it is possible to do for employment what the Federal Reserve system has doue for finance and with equal advantage to the country as a whole. “Picture the approach of an economic crisis with unemployment threatening on every hand. The release of 3,000,000,000 dollars in construction contracts by public and quasi-public authorities .would remedy or ameliorate the situation in the twinkling of an eye. Federal indexes are already becoming available .hat remove the problem from the domain of speciation or opinion and place the need upon a basis of simple facts. “No centralisation of authority is proposed, but merely the creation of a condition by concerted action that shall make possible a remedy that will appeal persuasively to all. Follow the, flow of those 3,000.000.000 dollars to the contractor, to the labourer, to the material men, to the factory, to the factory emnloyees, to the merchants, to the farmer. It goes like the house that .Tack built and unemployment is at an end.”