The Gisborne Herald. IN WHICH IS INCORPORATED “THE TIMES." GISBORNE, THURSDAY, NOVEMBER 3, 1949 U.S. RECESSION NOW OVER

Gisborne Herald, Volume LXXVI, Issue 23092, 3 November 1949, Page 4

The Gisborne Herald. IN WHICH IS INCORPORATED “THE TIMES." GISBORNE, THURSDAY, NOVEMBER 3, 1949 U.S. RECESSION NOW OVER

'JMIE latest authority on monetary and trade policies to warn the dollar countries that the only way out of the present currency tangle is for North America to import more goods to enable other countries to pay for United States and Canadian exports is the deputy-Govcrnor of the Bank of Canada, Mr. Gordon. In a message received yesterday he said that if substantial progress was not made in the reduction of tariffs, “I believe the consequences for our North American way of life will be far more serious.” .Not long ago the British Foreign Secretary, Mr. Bevin, issued a similar warning.. If a change is to be made the factor that! will bring it about will be the economic health of the United States. For most of this, year we have been told that the United States has been experiencing a trade recession. The latest information, however, is that most American economists are agreed that the recession is now past. If it has run its course it was a fairly tame affair compared with the slumps of the early ’twenties and ’thirties. The worst feature was and still is unemployment, which stands at about 4.000,000, but much of this is reported to be seasonal and not long and continuous as formerly. There has been no distressing trail of bankruptcies and no failure of confidence in the soundness of the nation’s economy.

Unemployment has hit mainly luxury trades but for, most Americans, it is reported, life has become more pleasant than during the feverish years of inflation. At long last it has become possible to get a scat on a train without recourse to bribery; waiters in restaurants and shop assistants are more polite. Many economists believe that a new and healthy spirit of competition, dormant during the lush war years, limited the length and intensity of the recession. Management has had to do some hard thinking and planning and labour, although still restless in some industries, is beginning to realise that a fair day’s work for a fair day’s pay is the only sure way of getting any pay at all. There are conflicting estimates on future trade activity. Government and most private business experts, however, believe that production during 1950 will be about 80 per cent above the 1935-39 average. The output of motor-cars, it is thought, will be only slightly below the present high level; steel will continue in heavy demand; building will remain active in most parts of the country; and the textile industry, which suffered considerably during the recession, will continue to show a moderate improvement. The volume of money in circulation is tremendous. Population is increasing rapidly. Government spending, particularly on defence, foreign recovery programmes and extended social security measures, will help to keep business active temporarily at least. Early next year the Administration will pay out 2,800.000,000 dollars to war veterans. Most economists expect prices to drop slightly until stabilising at about 147 per cent of the 1926 average, compared with 152 per cent at present. In these conditions there seems to be little that is compelling towards worth-while tariff reductions. Opposition may even be stiffened as a result of the advantage, through devaluation, now enjoyed by British exporters in dollar markets. This still does not alter the fact that the United States especially will ultimately need to buy as well as sell, in roughly the same proportions, to keep her present position in world markets. That is the key to future international trade and prosperity.