PRICES AND UNEMPLOYMENT

New Zealand Herald, Volume LXIX, Issue 21249, 1 August 1932, Page 13

PRICES AND UNEMPLOYMENT

Sir, —Unfortunately for the theories of your correspondent "Balbus" prices fell first and unemployed figures rose afterwards. Thus in 1928, when our national income from overseas was 56 millions, there were only a few "uneniployables." As export' prices fell so our unemployed increased. A reduction of working hours from eight to six will undoubtedly be necessary in the future to avoid overproduction. The scheme advocated by "Balbus," however, is nothing more or less than a redistribution of the national income, as no industry can possibly afford to pay the safne wages for less work. Surely "Balbus" realises that most industries and businesses are employing large numbers of their staffs on parttime. In fact his scheme is being put into operation all the time while he is dreaming. The report of the Macmillan Committee on finance and industry clearly explains how the maladministration of gold (due to war debts and tariffs) has resulted in a decrease in purchasing power. It also explains how the drop in prices has resulted in additional burdens on the debtor countries, such as New Zealand. In short, New Zealand's prosperity is so inextricably bound up with export prices that little good can come from any action but an attempt to restore those prices to their 1928 level. Facts First.