HELP FOR INDUSTRY

Hawke's Bay Tribune, Volume XXIII, Issue 81, 17 March 1933, Page 13

HELP FOR INDUSTRY

BUSINESS MEN TO ACT LIMITED GUARANTEE SCHEME. AUCKLAND PROPOSAL TO BE EXAMINED. Auckland, March 16. After hearing details of a scheme lor the stimulating of industry by a system of limited guarantees, a representative meeting of Auckland business men decided last evening to set up a committee to examine the proposal or any alternative plans for righting an industrial situation, which, it was agreed, was progressively becoming more acute. It is hoped to form a national reconstruction association to assist in the development of sound industries. The meeting was convened by Messrs T. U Wells, S. Takle, S. J. Harbutt, J. T. F. Mitchell and A. M. Seaman. Mr Wells presided over an attendance of 80, and the principal address was given by Mr J. D. McMillan. After citing figures to indicate the growth in unemployment, the “freezing” of money available for mortgage investments, ami the swing from free to fixed deposits. Mr 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 as due to fear. Private individuals were taking moneyout of industry; the problem was to get that money back into use. GIVING A NATIONAL IMPULSE. “1 know of no business movement to attack this situation,’’ said Mr McMillan. Either the Government or the business men would have to take the initiative. If the Government were relied on extra taxation and possible borrowing must be expected. He believed the business men—“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 tho United States also made the success of the second proposal unlikely. He considered the third proposal offered hopes of success.

GUARANTEE OF DIVIDENDS. The belief that the old simple method of the guarantee offered the best solution of the problem of inducing investments in sound industrial enterprises wa s expressed by Mr McMillan. However, the guarantee 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.

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 investments. The money might well come from the Unemployment Fund, for in the way he suggested it would be expended 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. 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 iu which the guarantee fund should be expended. NEW INDUSTRIES SUGGESTED. A long list of new secondary industries, which might be started in NevZealand, was cited by Mr R. Worley. He mentioned the manufacture of common salt from sea water caustic soda an<J 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 ho expanded under the scheme. The following motion, in the form finally approved, was moved by .Mr 8. Takle and seconded by Mr J. T, F. Mitchell“ That this meeting resolves that immediate action on the part of business men 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 I numbers, the committee to comprise ■ representatives of tho Chamber of ■ Commerce, the Rotary Club, the Mnnu- : facturers' Association, the Importers’ Association, the Employers’ Association. the Central Progress League, the Karangahape Road Business Promotion Society, the Agricultural and Pastoral Society, the Farmers’ Union, the. Economic Society and Messrs J. T. F. Mitchell (convener). S. Reid, J. , BMohefi, H, J,

worth, .1. D. McMillan, F. Winstone, W. E. Lewisham and S. .1. Harbutt.” NOT BOUND TO ONE SCHEME. 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 question 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 Table: That is what the committee is for. The motion was earned without dis-