MR ROOSEVELT AND THE DOLE.

Manawatu Standard, Volume LIV, Issue 307, 24 November 1934, Page 6

MR ROOSEVELT AND THE DOLE.

As part of his programme to provide economic security President Roosevelt has outlined a scheme of unemployment insurance in which he hopes to profit by the lessons of other countries and their mistakes. It is proposed to build funds under Eederal and State co-operation—not by taxation—with the money held and invested by the Eederal authority. The aim is to avoid mingling insurance with relief and to keep out of unemployment insurance every element that is actuarially unsound. Other nations have become, so u§ed to the American style of doing things in a big way that Mr Roosevelt’s ambition in this latest phase of his policy will occasion no surprise—but there may be real surprise if he manages to carry it out. In the brief cabled report there is no mention of how the scheme will work, but, as to the lessons of other countries, the President will have abundant experience to work upon. The American system “is not charity,” he says. Great Britain attempted in the first stages of unemployment insurance to make it actuarially sound. The contributions from industry and the individual were designed to ensure this; but they had to be raised, and eventually the State, although it had- arranged to supplement the contributions by a definite sum, found that it could not keep pace with the drain on the money, and under the Labour Government gradually the Exchequer was called upon to advance enormous amounts until the State’s contributions rose to millions that eventually became recognised as almost irrecoverable. In short, what was designed to be an insurance scheme proper became mingled with State charity. Whatever methods are adopted by the United States Government, it can be said that the latest move is an important political stroke, for the provision of unemployment insurance is a subject that has been given much consideration by the Eederation of Labour, which has at last realised the necessity for some such scheme. President Roosevelt has made way for co-operation between organised Labour and the State to test out a mammoth form of relief insurance that touches the imagination; but it should be noted also that the cabled message adds the words of the President: “Our first task is to get the economic system to function so that there be greater general security.” This may be interpreted as one of the issues involved in making the insurance scheme actuarially sound at the beginning. If a general improvement in the economic condition does not go_ hand in hand with the innovation, it is not difficult to imagine how severe the strain of the financial contributions of the State, industiy, and the individual will be.