The Gisborne Times PUBLISHED DAILY WEDNESDAY, MAY 24, 1933. WHAT CAUSED THE VICIOUS CIRCLE?

Gisborne Times, Volume LXXIII, Issue 11952, 24 May 1933, Page 4

The Gisborne Times PUBLISHED DAILY WEDNESDAY, MAY 24, 1933. WHAT CAUSED THE VICIOUS CIRCLE?

lii his address at the Rotary Club on Monday, Mr. J. Pearce Luke, \ ice-president of the Associated Chambers of Commerce, dealt very interestingly, if not always convincingly, with various aspects of the economic problem as it affects tile Dominion. ..His survey of the root causes of the trouble was reafly far from complete and he iailed to, got right/down to bedrock... Ndhody could, of coursp., successfully' contest Ids/;. that/!for a- lo.Ug, past,, there. lias . been far too much State interference °‘in private eiiter-

prise lirtliis" country, t. Where many'* willrj^in. Issue with him,,.; howpver,; is ,ijf that lie was too prone to lay Hie blame on effects •_ rather than upon causes. The statement that the oniy people who could bring about prosperity in any ..country* were tlib people themselves can' hardly be held to be. a truism, .If .hc_ iihcl said' that ho country could be-' come prosperous unless it assisted in every Way ill its power to that end, it would have been much nearer (lie mark. The whole truth of tlio. matter is that no nation cun to-day live unto itself. Nor was Mr Luke fair in suggesting that high wages hud been such a treineudous, factor in creating the depression. It [s no doubt a fact that many workers, during the so-eullcd “good” years, drew more in the shape ol wages out of industry than, industry could afford to pay. But he should, have supplemented that remark by stating that many employers drew more out of their businesses ' than was warranted. What may fairly bo said is that inflation of land values, for instance, was a much greater curse than high wages. And Air, Luke cannot suggest that it was the workers who forced up land values! But let Mr. Luke toll his own story. He went on lo strdss bis belief that what had been wrong was

that wages were fixed on the basis of the social aspect, and that the economic basis was Jolt out <4 consideration' altogether. If one probes the mutter further, however, they will End that all the blame should net be placed oil the workers alone. This whole trouble Hi regard to wages arose on account of the development of a false standard of prosperity for which successive governments and local bodies were mainly responsible. If this State ■and the local bodies bad not borrowed extravagantly when prices of primary produce wore high, things to-day would have been very different. The raising uf wages at such a time was, of course, . inevitable in connection with the viciou* circle which developed, otherwise the workers would nut have been able lo earn sufficient to make a living. Even to-day the cost of living is far too liiah, as a result of. the heavy Customs and ether taxation which requires to be met owing to the State and the local bodies having ever-borrowed in the past. There can, however, bo full agreement with Air. Luke in his contention that, to-day, the people me not permitted full scope for the display ~f initiative, envruy. and enterprise. In every possible way. tile Government should encourage' all forms of enterprise. Irksome restrictions should at once he removed. Under high taxation no country has ever prospered 4o 'the extent that it should be done. It is easy also to agree with Mr. Luke that this Dominion' requires some greater measure of balancing of industries. Assuredly, it is not possible for this country to progress upon the returns from the primary industries uloji:;. Essential it m also lluit it should maintain secondary industries that.can supply some of its .needs at reasonable prices. In utiler Avoids, it is not possible for everybody to go on the land °r to be connected with those activities which are associated with the transport, marketing and distribution of the fruits of the soil. When Air. Luke suggested that the industries of this Dominion had been killed and were to-day “as dead as the dodo,” it will he agreed that he overpainted the picture ol the stress that prevails in that regard. On every hand to-day, those in control of industries should realise that most of them lacked vision. As was the case with the State and the local bodies, they did not foresee that times might not always remain good. Put in. another way, they emitted to provide sufficiently heavy 'reserves to enable them to face with complacency any “lean period which might come along. As compared with Mr. Lukes doleful story, the remarks which l'ollo,wed by Air. Hall were, it will be agreed, a much-needed antidote, for he stiuek another note which was quite cheering without being overdone,