ECONOMIC PROBLEMS

Dominion, Volume 24, Issue 144, 14 March 1931, Page 13

ECONOMIC PROBLEMS

Recent Publications BOOKS REVIEWED (By Prof. B. E. Murphy, M.A., LL.B.). The Industrial Situation in New Zealand, by F. W. Rowley, 1.5.0., H. H. Tombs, Ltd., Wellington.—s/6. According to its sub-title, this work deals with the Industrial Arbitration system, unemployment, and other industrial problems of the Dominion to-day, and possesses considerable value iu that it has been written by the late head ot the Department of -Labour, who has been associated with that Department almost from its inception. It is therefore interesting not only as being a study from the inside, but as embodying the views of a cultured and humane man on our industrial problems. Though written in an unsystematic way, it is a valuable supplement to the works already existing on New Zealand industrial conditions, which are almost without exception . the production of professional economists, and deserves a wide attention in circles interested in industrial problems. With the actual proposals advanced by Mr. Rowley we have little personal sympathy; and speaking generally he does not seem to have worked out the final implications of some of these proposals, or considered where, if they were adopted, they would lead us. The first dozen chapters deal with the historical evolution of the Department and our labour legislation. This part is not contentious. Mr. Rowley next proceeds to a consideration o£ the unemployment problem; and, like most others, is more successful in diagonising causes than in prescribing remedies for what lie quite accurately describes as the worst blot on contemporary capitalism. Like most officials, and most New Zealanders for that matter, he has an excessive belief in the power and responsibility of the Government to solve industrial and economic problems. It is not the job of (he Government, except in au avowedly Socialist community, to do anything of the sort. Unemployment is a problem of industrial maladjustment, and the job is up to those concerned in industry to locate and remove the causes. Mr. Rowley’s suggestion that employers should not lie permitted to discharge employees without compensation or lengthy notice seems to us most dangerous, anil calculated to bring industrial business to a standstill, and furnish employers with n direct incentive to keep their staffs nt the minimum. Incidentally, it would raise costs and prevent a reduction in living expenses, an urgent need at the present time. ,On the other hand, his suggestion of a stabilisation scheme for industry has not received the attention it deserves, and is worth investigation; and, generally. the summary of constructive suggestions given in chapter XIX is wed worthy of study. . Mr. Rowley’s views on the Arbitration system are of considerable importance, and stated quite imparl inly: He is inclined to stick to the existing system ot wage fixation, which in any case is in general lino with his other suggestions, and the only major alteration he ’would introduce would -be the appointment of a representative of the public. If. however. his minor suggestions were acceded to, there seems little need for a public representative: indeed, it nay reasonably be held that the judge at tie present time represents the public interest, and the only result would he additional complication. In later chapters Mr. Rowley endorses the principle of profit-sharing, and has some pertinent observations to make on the. relations between politicians and experts in n democrat it - community. The broad tendency of'ihe innovations •suggested by Mr. Rowley would be an increase of the socialisation policy that has been dominant in tin’Dominion for ■the past 1 thirty years ; • n;id while , many will sympathise with this view,- there is

a growing portion of the community that would prefer to see us retrace our steps. Second Interim Report of the Gold Delegation of the Financial Committee or the League of Nations. In its first interim report of last September this sub-committee of currency experts dealt with the present and tutuie prospects of gold production, and pursuant to promise has now reported fuithe on the distribution of gold holdings in the world to-day. This report' is of great interest and value, but somewhat complex in content and reasoning, so that lay readers will find it far from easy reading, ine delegation points out that before the war gold as the international money distributed itself mainly, though not entirely, by the automatic action of economic causes, but that the war and post-war developments considerably upset these comparatively .smoothly working arrangements, though they consider that, given time and the absence of obstructions, the Pre-war system will gradually restore itselt, as in fact it is tending to do. The report makes it clear that non-econ-omic factors of a political character have to a considerable extent determined the movements of gold in recent years, while the extension of the so-called gold exchange standard, under which some countries keep their ultimate reserves, not in gold at home, but in gold paper on a few important centres, has tended to accumulate gold in those centres, increase their responsibilities, and make them both anxious to attract gold and unwilling to release it. The adoption of this system severs the connection between gold movements and the price-level that formerly existed, or at all events makes that connection much less certain. The delegation desires to see the goiu standard maintained, betause, as it points out, it brings the participating countries into the circle of world economics, in a direct manner. To preserve this system the delegation desires that national monetary authorities should be free to pursue a sound credit and banking policy without political interference, and that central banks shojild work in the closest possible collaboration, while gold should be conserved from circulation by paper substitutes, and the utmost economy in reserve requirements and gold movements should be exercised. - It is plain that the delegation feels that the gold standard is imperilled, by recent developments of gold monopolisation, and wishes to sec the pre-war gold system on an international basis as far as possible restored. Tn this view they are in line with the best financial thought today. A gold standard, even with its defects, is normally better than a managed standard: but unless gold functions substantially ns it did in pre-war times, and particularly if it gets unduly scarce, there will be a movement, to depart from it that may grow too strong to resist. “The’ Gazette,” Commercial and Financial Review for 1930, Montreal. This is n comprehensive economic survey of the progress of Canada for the year indicated, covering every branch of economic activity, trade, banking, insurance, transport, and certain other activities such as power development, immigration, and tourist traffic. As is perhaps to be expected it is a trifle on the optimistic side, and inclined to “boost" rather than impartiality in survey, Canada is; however. a 'Wintry of . great resources, and its credit, as shown, by bond quotations on the New York market, is rated high. It is suffering from, over-development, and from the world depression in the wheat market, but otherwise is in ns sound a position, on external indications, ns any of the “young” countries Hint hnvo in recent decades been itceeleraling development by extensive borrowing for the purpose.