AID FOR INDUSTRY

Dominion, Volume 26, Issue 149, 20 March 1933, Page 9

AID FOR INDUSTRY

Limited Guarantee Scheme BUSINESSMEN TO ACT Proposal to be Examined “AN INTELLIGENCE CORPS” Plans for restoring business and righting an industrial situation that has been-- progressively becoming worse, were discussed at a meeting of Auckland businessmen on Wednesday evening. After hearing details of a scheme for the stimulating of industry by a system of limiting guarantees, the meeting de- . cided to set up a committee to examine the proposal or any alternative plans for dealing with the situation. It is hoped to form a national reconstruction association to assist in the development of sound industries. ■After citing figures to indicate the growth in unemployment, the “freezing” of money available, the mortgage investments, and the swing from free to fixed deposits, Mr. J. D. McMillan declared that thereby was indicated a trend which could not be allowed to continue. He was convinced that a large part of the downward slide was due to fear. Private individuals were taking money out of industry; the problem was to get that money back into use. Taking the Lead. “I know of no business movement to attack this situation,” said Mr. McMillan. Either the Government or the businessmen would have to take the initiative. If the Government were relied on extra . taxation and possible borrowing mdst be expected. He believed the businessmen —the “intelligence corps”—should take the lead. A national impulse could come by one of three ways, namely, Government works, releasing new credits, or by a system of limited guarantee. He did not think any nation, and certainly not New Zealand, would succeed under the first proposal. The Dominion could not borrow at a time when it was'converting its loans because it could not pay the Interest The experience of the Hoover administration in the. United States also made the success of the second proposal unlikely. He considered the third proposal offered hopes of success. The belief that the old simple method of the guarantee offered the best solution of the problem of inducing investments in sound industrial enterprises was expressed by Mr. McMillan. The guarantee, he said, should be widespread; a few guarantees given here and there were valueless. Further, the guarantee should not pledge the future earnings of the nation, and any guaranteed project should first be thoroughly examined by a committee of business men. A National Fund. . The suggestion was made by the speaker that for three years a national ■ fund of £50,000 should be set aside to guarantee interest or dividends up to, 5 per cent, in selected industrial in--vestments. The money might well come, from the Unemployment Fund, for In, the way he suggested it would be ex-, pended to much better advantage than: £50,000 spent in relief wages. He calculated his scheme would stimulate £1,000,000 worth of investments, and that it would employ 2500 men at £4 a week against 666 men on relief wages. . x, * Mr. McMillan urged the formation of a national reconstruction association, with organisations in the main centres. A national executive would be set up to examine industrial projects and to recommend the manner in which the guarantee fund should, be expended. A long list of new secondary industries, which might be-started in New Zealand, was cited by Mr. R. Worley. He mentioned the manufacture of common salt from sea water, caustic soda and soda ash, tin plate, galvanised iron sheets from scrap iron, nails, bolts, and nuts, electric bulbs, fencing wire, paper, and numerous others, most of which would be entirely dependent on New Zealand materials. Several existing industries could also be expanded under the scheme. Motion Carried. The following motion, in the form finally approved, was moved by Mr. S. Takle and seconded by Mr. J. T. F. Mitchell: — “That this meeting resolves that immediate action on the part of businessmen in rebuilding employment is necessary, and that a general committee be set up to constitute an association designed to assist in developing sound industry, such committee to have full power to act and to add to Its numbers, the committee to comprise representatives of the Chamber of Commerce, the Rotary Club, the Manufacturers Association, the Importers' Association, the Employers' Association, the Central Progress League, the Karangahapc Road Business Promotion Society, the Agricultural and Pastoral Society, the Farmers' Union, the Economic Society, and Messrs, J. T.IF. Mitchell (convener), S. Reid, J. Fletcher, H. T. Goldie, W. J. Holdsworth, J. D. McMillan. F. Winstone, W. E. Lewisham, and S. J. Harlbutt.” * ,

In the course of a long discussion it was revealed that some of those present were not prepared to give unqualified support to the scheme advanced, but Mr. McMillan made it clear that he desired only to'have the general opinion investigated with a view to action being taken. It was claimed by Mr. Fletcher that the Unemployment Board already had £4,000,000, and all the powers with which it was proposed to invest the committee. He thought effort should be directed to getting the board to function. Mr. Takle: That is what the committee is for. The motion was carried without dipsent.