The Matamata Record PUBLISHED MONDAY AND THURSDAY MONDAY, JULY 24, 1933. THE NEW HOPE.

Matamata Record, Volume XVI, Issue 1444, 24 July 1933, Page 4

The Matamata Record PUBLISHED MONDAY AND THURSDAY MONDAY, JULY 24, 1933. THE NEW HOPE.

THE reports of what i» taking place in the U.S.A. under the Industrial Recovery Act indicate the magnitude and complexity of the task that President Roosevelt has undertaken. He is meeting the crisis on the opposite lines to what was adopted in New Zealand. It is sought to stimulate activity by raising wages; in New Zealand relief was looked for by the reduction of prices involving the lowering of wages. The success of any plan must depend on the amount of support it will receive. In this respect President Roosevelt’s scheme has been launched rather auspiciously since it is receiving the commendation of Capital and Labour and apparent unity in welcoming it. But the temperament of the people is mercurial and therein rests -a grave danger. The problem that will confront the leaders will be whether the proposals can be kept in bounds, or whether the artificial inflation may lead to a similar state of affairs which terminated in the terrible crash of nearly four years ago. The position was aptly put by Sir Josiah Stamp in his broadcast on “ the mental and moral calibre of the American people”:

The great thing they have to fear is too high speculative activity, with its inevitable reactions. If hopes for the future dash frantically ahead of existing facts, then disillusionment may well have results too fearful to contemplate. The American psychology and ability to rocket ahead on the Stock Exchange are the greatest obstacles to the success of President Roosevelt’s programme. The danger. is clear that by attempting to force prices up too high the supplier may check demand, or that the rise should cause an overrapid breakdown of marketing, production and restriction schemes. If price increase and demand increase are balanced then a recovery may be effected without any great dislocation, and inconvenience or any reaction. Because the United States is a huge industrial nation, possessing the faculty for administration and for doing things rapidly it presents a field far more suitable for an experiment of this nature than probably any other country in the world. Its progress will be watched with the keenest interest, for so much hinges on the success.