THE NORTHERN ADVOCATE Registered for transmission through the Post as a newspaper. FRIDAY JULY 15, 1949. Scrutiny Of United States Depression Reports

Northern Advocate, 15 July 1949, Page 4

THE NORTHERN ADVOCATE Registered for transmission through the Post as a newspaper. FRIDAY JULY 15, 1949. Scrutiny Of United States Depression Reports

A bos been said with truth that a great deal <rf unnecessary dorrs' and loss sustained by individuals and communities alike may be traced to uninformed and ill-advised rumours. The law of suggestion is so powerful that subtle hints dropped at opportune moments may wreck homes, financial institutions and nations themselves.

On the other hand, the need for issuing early warning of trouble the approach of which is beyond reasonable doubt, is an obligation which cannot be neglected by those whose duty it is to watch world affairs and interpret as far as can be done the significance of faraway happenings. It is these considerations which make onerous and perplexing the line of conduct which responsible guiders of public: opinion should take when the possibility of an impending financial depression or other trouble is being mooted. Confidence in existing'institutions is of supreme importance, and nothing should be allowed unnecessarily to undermine it, a fact which calls for circumspection on the part of all who have power to protect the integrity of the institutions concerned.

There is need for recognition of these obligations and responsibilities at the present time, when a combination of circumstances, legitimate and illegitimate, may wreck world stability if they are given freedom to work their will. For some time there have been heard suggestions that the United States is either suffering a depression or is about, to undergo such an undesirable experience. The ordinary citizen in. New Zealand cannot be expected to sift the wheat from the chaff in this connection, his sources of information being limited, which is calculated to make him a victim of suggestions that just as the United States was the first country to enter the world slump which followed the 1914-18 war, so the development of an American slump may be expected to have the same world-wide repercussions following the great war recently ended. It is true, apparently, that there has been some recession in prices in the United States, but-it should be understood that this does not necessarily indicate a "slump” as that term is generally understood. However, as has been said, the law of suggestion is so strong, and humanity so prone to pluce the worst construction upon rumours that a radio broadcast by President Truman is distinctly timely. The President declared emphatically that the United States is not in a depression and that there will not be one if the right course is fol-

lowed. Mr Truman was no doubt justified in stating that “some people, for political purposes, would like to have a depression,” and he was certainly on the right course when he called on the nation to "prevent selfish interests from driving the United States into the ditch.” That the President’s warning may have application outside the limits of the United States will be gathered from a London cable message which says Russian radio broadcasts show that Soviet propagandists have seized upon reports of a trade recession in America and the current AngloAmerican currency difficulties. For a considerable time, the London message says, Russian official propagandists have been telling the Russian people and Soviet satellites that the Marshall Plan would collapse as a result of a slump in capitalist America; they are now loudly proclaiming that a slump has arrived and are jo.yfuly saying: "We told you so.”

The significance of the Soviet claims is self-evident, and it should be noted by responsible authorities in democratic countries, where it is most desirable that steps should be taken to meet any new conditions which may develop as a result of an inevitable movement away from the high prices obtained on a seller’s market.

So far as unemployment in the United States is concerned, it, should be remembered that there is normally a large number of people out of work, though in comparison with the huge population of the States the number may be regarded as small. In July. 1947, the number of unemployed was 2,239,000, while in February of this year the Commissioner of the Bureau of Labour Statistics, Mr E. Chague. said the figure of about 2.000,000 was "about as low as ; t could get in the country’s economy,” and that “not until unemployment reached the total of four to five millions and was sustained for some time would there arise an unemployment problem requiring action.” In June It was reported that one in 15 of the workers was drawing unemployment compensation, and that a nation-wide survey found that 48 cities were issuing unemployment compensation to 2.075,000 persons and that 325,000 more were asking for similar benefits.

The Administration has explained that these figures by no means give a true picture of unemployment for only about 33.000.000 of 58,000,000 American workers are covered by unemployment insurance. In view of these circumstances and the United States Administration’s plans as outlined by the President, suggestions of coming disaster should be given appropriate reception.