THE LABOR MOVEMENT

Evening Star, Issue 17928, 25 March 1922, Page 13

THE LABOR MOVEMENT

[By Veteran.]

Brief contributions on matters with reference to the Labor Movement are invited-

UNEMPLOYMENT.

The question of unemployment has of late been very often under discussion in Parliament and in the public Press, and many theories have been advanced for its pi'evontion«lar its cure. Some of our politicians have seriously stated that there can be no prosperity in this country until wages are considerably reduced j others have stated that what is wanted is more and still more production. In tho month of February, 1921, there met at a dinner party in London a number of merchants, financiers, and employers of labor, who discussed the question of the country’s industrial paralysis and the question of a remedy. The first speaker, a merchant, said that trade depression and unemployment were the result of natural laws, and had occurred every ten or twelve years for the past century, and were unavoidable. Another said that the crisis was tiie result of the war, and that unemployment was inevitable and irremediable. A third, a financier, said the trouble was the direct consequence of currency inflation, A fourth attributed the cause to the unreasonable demands of Labor. “ We must first reduce wages,” ho said, “and so bring about a fall in prices if we are to escape from tho present morass into which the Government has driven us by its foolish panderings to Labor.” Another declared that the Government was responsible by retaining so many restrictions upon trade since peace was declared. The last member of the party to speak was Mr Arthur Kitson, a large employer of labor and the managing director of the Kitson Empire Lighting Company, and a man of extensive commercial and engineering experience. Mr Kitson said : “ Not ' one of tho reasons so far urged for our industrial woes would stand even tho most superficial investigation, and consequently the remedies suggested were not only worthless, but foolish. . . . The war left tho world with a vast shortage of goods of every description, and consequently no sooner had the gums ceased firing than orders began pouring in from every quarter of the globe. , . . Now enterprises sprang into existence, and tho demand for money and credit for productive work grew proportionately. Every condition favorable to a long period of prosperity existed. . . . But now let us sec what happened just about twelve months ago—viz., March, 1920. After this brief period of prosperity the country was startled by the sudden announcement by the Chancellor of the Exchequer that the Government hadi ‘ set its heart upon gradually deflating the currency,’ and he called upon the bankers to assist him in restricting credit. The bank rate was increased to 7 per cent., and the game of squeezing industry for the benefit of bondhoiders'and money-lenders commenced. It was no mere coincidence that the trade slump started the very day this amazing speech of the Chancellor was published. Realising that this deflation policy meant tie slaughter of all values, the destruction of all enterprise, a drastic fall in prices, and wholesale bankruptcy, the country tok alarm and played) for safety. No ono cares to buy goods on a falling market. Orders began to be cancelled! Stocks were offered at prices below cost. The public demand com-

mo need 1 to slacken. Many workmen wore put on short time, whilst thousands more Were discharged'. And with the decrease in wages the public ability to buy goods also decreased. The idea that a policy of this nature could) be undertaken without a disaster to trad'o and industry, that deflation might be proceeded 1 with so gradually as to do the country no harm, could only emanate from a mind wholly ignorant of trade commerce and history.” Mr Kitson maintained that industrial and social conditions would necessarily grow worse until this policy of credit contraction was reversed.

As a result of his speech Mr Kitson was challenged to publish a solution of the problem. The challenge was promptly accepted. The editor of ‘ The Times Trade Supplement ’ acceded to a request to give publicity to his views. Mr Kitson wrote a series of six articles, which were duly published in ‘The Times. 1 These articles have since been published in a book called ‘ Unemployment: The Cause and a Kennedy, 1 together with a criticism by the city editor of ‘The Times. 1 I have just read the book, and) would l recommend it to everyone interested) in the question. In the meantime I can give only two or three quotations from it. One is; “The ability of the public to buy goods depends upon, (a) the quantity and rate of flow of purchasing power into the public’s pockets) (b) the prices at which goods arc offered 1 . . . . Unemployment is the in-

evitable result of our present economic system, which fails to distribute sufficient purchasing power to enable the public to purchase goods as fast as they are produced and as they are needed. . . . A rational system would offer employment so long as labor is essential for producing goodls, to supply the wants of the employees as well as the general public. . . . What the average consumer wants is to secure a larger proportion of all the goods ho needs. He can only get this either by a fall in prices whilst receiving the same income, or by receiving a larger income whilst prices remain the same. Further, to enable the public to buy ail the goods offered, to bo able to sell goods as fast as they are produced—which is the ideal condition for employment and trade prosperity—there must be enough money circulating with which the public can _ purchase. ... By gradually replacing the wages system with a system of dividends by giving a share to each and every member engaged in an indurtrv in that particular undertaking, the evils now resulting from unemployment would disappear.”

Mr Kilson sums up by giving the following fundament.",! truths upon "which his proposals are based; “(1) Opportunities for employment are created by and are proportional to the effective demand for goods. (2) The effective demand for goods is dependent upon and proportional to the amount of purchasing power in the hands of the public. (3) Purchasing power is distributed l in the form of wages, salaries, and dividends in the process of making and producing commodities. (4) The amount of purchasing power so distributed is insufficient to buy more than a small proportion of the goods so produced. ’ * (8) _ Until and unless the amount of purchasing power distributed to tho buying public is increased sufficiently to enable them to buy the total volume of goods produced at the prices offered, these periods of trade stagnation will recur from time to time,” It will be seen that Mr lutson does not believe that a reduction of wages will bring about a season of prosperity, but that it will reduce the purchasing power of the consumers, and thus make things worse instead oLbetter.

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FINANCIAL BURDEXS.

Some weeks ago quite a mild sensation was caused amongst the reading public by a letter from the Welfare .League in tho papers commenting upon balance-sheets of several English trade unions, which showed good credit balances. The inference to bs drawn was tho fact that union members were paying too much to their unions. I have a- very fair knowledge of the financial position ot most of our local unions, and can state that there arc not many- labor organisations in tho Dominion that can present to their annual meeting such globing balance-sheets ns the ones quoted by the league. Tho fact is that the average unionist is not careful in money matters, and will cheerfully and recklessly vote tho funds of tho union away to any- financial .appeal that comes along. As an instance of the number of appeals that do come to a union in a month, I might mention that one union this week had appeals for funyicinl help from the Russian famine relief fund, an appeal for aid to the dependents of tho victims of the recent scaffoldimr accident, a donation to expense of sending a delegate to Parliament to oppose ;bo amendments to the Arbitration Act, from tho Dunedin 'Assistants’ Union for aid to a sick member, from the Workers’ Educational Association, and the Labor Representation Committee for election purposes. Six financial anneals in one mouth. ‘ henever a Trades Hall.is being built in the south the unions in Auckland are importuned to lend a helping hand; our own Trades Hall was financed in Auckland. Each union in Auckland has had posted to it from Greymouth a number of art union tickets to Ire sold in aid of “Labor’s Machine Fund,” while another consignment of tickets from the’Wellington Waterside Workers’ Union Band art union is to hand, requiring to be sold by May 20. Individual members are expected to buy the art union tickets, but the six financial appeals arc to the funds of the unions. The wonder is, not that the union has such a small credit balance, bub that it

has any credit balance at all. Every union should cultivate a more self-reliant spirit, and help its own needy members. During the last quarter I know of one little union of sixty members in Auckland that lias collected from employers and workers within its own industry upwards of £6O for assistance to the families of two distressed members, and they refrained from troubling the oilier unions about the matter.—“lndustrial ’Tramp,” in the Auckland ‘ Star.’ * » « ■» WHY PRODUCTION HAS CEASED. Production has ceased, not because men’s needs have be««a supplied, but at the time when they are most urgent; not because there is any shortage of raw materials or of the machinery with which to transform them into the finished product, not because men are unwilling to work, hut be--causa those who control the supply of raw materials and own the machinery* of production and distribution aro unable to collect what they term “an adequate return upon investments,” and have decreed that the wheels of industry shall stand .still, and that men and women and children shall perish of cold and hunger rather than that tho work of the world shall proceed without yielding them tho toll that as masters oh the bread they are in a position to exact. —‘Painter and Decorator.' * * * * WORKERS’ SHOP PAYS PROFIT. CO-OPERATIVE VENTURE RETURNS A PROFIT. A 6 per cent, dividend was announced by tho glove factory which was opened by the G-lovo Workers’ Union of Chicago some fourteen months ago. Tho venture was started on a small scale with a dozen or so workers, largely as an experiment, and despite the business slump it hue kept operating steadily without shutting down a day. At the directors’ meeting the first annual report showed the shop had cleared enough to pay 6 per cent, on tho capital invested. “ We are quite dated,” said Miss Agnes Neston, of the Women’s Trade Union League, “We feel quite an interesting showing has keen made. Last year was one of the worst in the glove business. But despite the bad year, the co-op. shop kept going steadily seven and a-half hours a day, without losing a day. Good business management is the key.”