AMERICA’S NEW POLICY

Manawatu Times, Volume LIV, Issue 7270, 25 September 1933, Page 9

AMERICA’S NEW POLICY

The Features Summarised A. FUNDAMENTAL CHANGE THE LAISSEZ-FAIRE POLICY. GIVES WAY TT. CO-OPERATION. (By T.C.L.—No. IC.) In the preceding articles an attempt lias been made to explain the principal features of Franklin Roosevelt’s epochmarking industry recovery policy. Only casual examination will have shown how complete and coordinated is tho policy and how absolute and unprecedented are the powers that have neon given the Adminstratiou. Virtually, the President is in tho position of a dictator, and in the greatest democratic country in tho world, a country which has always prided itsolf upon its luggod individualism aud initiative, there is general agreement that tho course followed is practically the only one open to save the country from conapee.

As has been shown when tho now President took office tho country was in tho throes of a bank depositors panic It forced sound and unsound banks alike to close; it forced commodity anu securities exchanges to suspend; it caused the industrial structure to totter, and it brought on paralysis of the economic life of the wholo people. The now President was swift to act to meet the emergency. He issued two prolamations, one declaring a bank holiday and placing an embargo upon the withdrawal and export of gold; and the outer summoning Congress to meet in four days.

Then came from the Brain Trust new measure after measuro all designed, not only to meet the emergency that had arisen, but to put the country back on the rails of pormauent recovery. They touched practically every interest in the national life of the country, some lightly, some indirectly, but others heavily. They were audacious in conception; they struck right across all the principles and mothods so dear to the heart of a nation, that had under them expanded and prospered—up till 1929.

Balanced Social State. A perlexed and disturbed peoplo watched the introduction of a farm Bill which is sponsors frankly admitted aimed at a “balanced social State”, of legislation, to regulate hours, wages and industrial production; to coordinate the railroads; to put the banks and financial houses under Government control; to make available for public enter prises the-huge sum of £660,000,000; to carry out a great scheme of industrial control in the Tennessee Valley; to place an army of youths who had been wandering and menacing the countryside into reafforestation camps; besides making other dopartures that nevor had the sonction of America's political or economic text books, No Government; had ever introduced such vast changes and none had been given such overwhelming support by Congress. Nor had a policy receivocl such general support from an electorate It, was an amazing transformation. .Before the advent of Roosevelt the peoplo wore in. blank despair; they felt that nothing could be done to savo tho country—things had reached such a desperate pass . Then after Roosevelt’s spectacular action of closing tho banks and calling Congress together to consider and authorise measures designed to overcome tho economic crisis the peoplo felt that in Roosevelt they had discovered another Abraham Lincoln in their hour of need. Wherever one goes in America—and the writer travelled ovor IS,OOO miles, north and south, west and east—one found, even amongst tho most Republicans a profound belief in Roosevelt and approval of his judgment and actions. It is true many doubted the outcome of the measures, especially those relating to inflation, but they hold any action just now was worth taking for things might result as planned and hoped for, and it they did not, well conditions could not possibly be worse than they bad been tiofore.

People Back at. Work. The proof of the pudding will bo found in the eating. Already 2,000,QU0

people are back at work, and it is hoped before the end of the year. That will account for more than half of the unemployed, and if this is accomplished it will be a justification for tho Government’s programme. Confidence is ioturning, and business is picking up everywhere. All aro hopeful that things will turn out according to plan. That the “New Deal” policy will .effect a permanent solution of the country’s economic problems is not claimed or oxpocted. Tho measures are designed primarily to place the country on to the economic rails again and givo it an opportunity to live and develop along new lines.

The technocrats have claimed that a new situation has arisen as the result of the rapid advice in the mechanisation of industry, and ■ that no matter what is done it is impossible to reemploy more than half of the present unemployed. They havo issued figures and statements in support of this contention, but their accuracy and soundness havo been questioned, and to-day tho technocrats, who previously received a favourable hearing, aro now generally discredited throughout the States.

A Cardinal Feature The Administration, however has made the reduction of hours of industry a cardinal featuro of their industrial recovery policy, so that more people may be employed. It is recogiused that the effect of shorter hours without a corresponding reduction in wages will mean higher costs, and so authority will be given in -tho codes of the industries and business to increase prices so long as the increases aro justified no monopolies aro created. The Administration believes that with power organisation and rationalisation it may be possible for industry to get along without increasing prices to tho community. Tho feeling of industry, however, is that all costs advanced from 10 to 20 per cent. Only practical working will show who is right. There is one feature of the policy, however, that must make for success and smooth running and is regarded favourably by business and industry. It is tho arranging of a standard of practise and the elimination of pricecutting and unfair business methods. For the first time the public will be represented in industry. Hithlo industry itself has had absolute control and determination, though labour has often made itself heard. How the Administration determines beforo passing a code what is fair practise, wuat are fair charges to the public, and what tho remuneration and conditions oi' labour should be. If is an important revolutionary development that many have reverberations throughout the world. President Roosevelt describes it as “a partnership between Government and industry, not partnership in profits because the profits would still go to the citizens but rather a partnership to see that the plans are carried out.”

Days of Laissez-Faire Gone In America the fact is generally accepted that the days of laissez-faire conduct of business are over. It is no longer ‘ 1 every man for him®cl£ and tho devil take the hindmost.” Cooperation is the essence of the “New Deal,” and if industry, labour, or capital will not co-operate voluntarily, than the Government will force their co-operation. These words of the President in his re cent speech to the United States Chamber of Commerce are significant: “I ask that you have tho vision to lay asidc special and selfish interest, to think of and act for a well-rounded national recovery. Each and all of you iu your own units and in your own industries arc but integral parts of a great whole, and ournational economy must be expressed in terms of the whole rather than in terms of the unit.”

In the past America has gauged the value and position of its citizens from tho material success they have gained. To-day that measure has been discarded in favour with a basis worth and service to their fellows and the community. It is an awakening to realities that has been brought about by failure of the old standards in a time of grave crisis and great suffering.

America Can Experiment It must bo conceded that America, can experiment in this and other ways without much harm resulting to her trade and : industry, for the reason that sho is practically possessing every raw material product sho requires for manufacturing with the exception. of rubber ,and foot-stuff with the exception of tea and coffee, She has an enormous interim market in hor 4S States, and normally exports only six to 10 per cent, of her total products and manufactures. If prices of commodities advance it is certain that the customs tariffs will also advance. That will mean a virtual shutting out, of foreign goods, at the same time effectually preventing war debts from being paid, because they can only be paid in goods or service or gold, and thero is not sufficient gold to go round.

Conditions Different in Britain Britain is situated quite differently. She has to rely upon the world’s markets for more than half her output of manufactures, and if she were to follow America and reduce hours and increase prices, she would, in competition with her European and Japanese competitors lose her entire trade. Similarly in this Dominion, wo are dependent for our very oxistenco upon the English market, and if we reduce hours of work and increase wages the producers would be unable to sompete with their competors. However, there are features in the American plan, particularly regarding rationalisation and regularisation of industry, and a revised and enlightened attitude towards lobour in industry, that both English and New Zealand could study with advantage. The working out of America’s plans for industrial recovory, it is certain, well be followed with intense and sympathy throughout the British Empire, for a. rehabilitated and prosperous America will exercise a. profound influence on the affairs a.nd fortunes of the rest of the world. (Conclusion)