EMPLOYMENT SCHEME

New Zealand Herald, Volume LXIX, Issue 21358, 6 December 1932, Page 6

EMPLOYMENT SCHEME

WORK AT GOLD MINING FOUR THOUSAND MEN GUARANTEE OF CAPITAL BY J. S. FLETCHER To claim that it is possible to put 40,000 men in economic work, to reduce the unemployment levy by sixpence in the pound, and save the Unemployment Board two millions sterling in from 12 to 24 months, seems a big order, yet if the claim were reduced by 'SO per cent ifc would be generally agreed that it would confer a tremendous benefit on the whole community. To put the matter in its proper focus, it is desirable to examine just what the present unemployment is costing in hard cash: —£3,Bso,ooo in special unemployment taxation, £1,000,000 in State Advances and soldier settlement loans (capital and interest). Local body contributions would add at least another £250,000, while to have 70,000 of our wage earners unemployed must be eating into our national resource® to the extent of several millions per annum. My claim is that it is possible to effect a most marked improvement on that state of affairs by putting men into production of a commodity in short supply, i.e., gold. It means first of all a change of outlook, and it demands that we think in terms of providing employment and not as at present, in terms of relieving unemployment. To achieve the above result I wish to make the following proposalslt is possible to put 4000 men actually in goldmining in Central Otago, Southland and parts of South Westland alone. To do so involves the provision of £1,000,000 for plant and equipment. I suggest the Unemployment Board should guarantee the interest at 4 per cent and guarantee the capital returnable in five years, should any of the ventures fail. Guarantee Upon Outlay The present position is:—4ooo men receive from the Unemployment Board 30s per week, or £300,000 per annum, and * much of the work is of little or no economic value. But £300,000 per annum equals 10 per cent on the £1,000,000 capital outlay required, plus £200,000 per annum, or £1,500,000 in five years. The shareholders would possess the claims, arw:l find the working capital and i the plant and equipment, but they would be guaranteed 4 per cent on their<outlay on the plant and equipment, and also that the capital for the plant and equipment would not be lost in the fiveryear period. The Unemployment Board would then put in a trust fund £300,000 per annum. Claim-holding companies would get the guarantee only after their proposals had been carefully examined. They must submit the records of their prospecting, and test hole drill results, certified by Government mining engineers. In return for the guarantee the companies would employ the men. But, having put 4(300 men in economic work at standard wages, there will be brought into employment another 6000 to supply them with food, clothing, shelter, transport, amusement, etc., so that tha Unemployment Board will not be called on to provide sustenance for these, so saying a further £450,000 per annum. This is based on a 3—2 ratio, though economists are generally agreed that one man in economic production puts at hast two others into work. The, position, then, is as follows: — 10.000 men wonld cease drawing 30s per week, or £750.000 per annum; 10,000 men would pay unemployment tax, £IOO,OOO per annum; total, £350,000 per annum, or £4,250,000 in five years.

Money Available The board would find, if the companies were not a success, 4 per cent interest, or £40,000 per annum, or £200.000 in five years, and capital fpr plant and equipment, £1.000.000;, total, £1.200,000, or a saving of £3,050. COO in the five-year period, if all the ventures tion, in return for the interest and capital guarantee, I would suggest that the companies and the Unemployment Board share 50-50 on all dividends over 4 per cent.

Where is the money? The fixed deposits in the banks indicate that- money is available. provided the investor had confidence in the undertaking calling for capital. Under the scheme suggested that is immediately forthcoming. A similar scheme for the West Coast on *• a smaller scale could be started immediately, while in the Coromandel-Thames area similar proposals could be carried out. mining the low grade ores, as is done at- Trail, British Columbia, and. in addition, producing sulphur fo.r fertilisers, as at Trail. .. Similar schemes, or schemes equally valuable in providing work, can be suggested. Financing Local Bodies It is realised, however, that work mus& lie found additionally until these HeW undertakings take up the slack, and the Auckland City Council is to be commended on its new outlook. I would suggest the following method of finance for local body schemes, basing it on a local scheme such as the Tamaki drainage scheme. The Drainage Board proposes to spend £50,000. Wages bill, including pipe making—S av, 60 per cent, a very low estimate —would total £30,000, or wages for 150 men for one year at £4 per week. The cost to tlie Unemployment Board of 150 idle men is £225 per week, or, £11.250 per annum. If the Unemployment Board guaranteed the drainage authority interest and sinking fund at per cent on the £50.000 for two years, the Drainage Board would save £3750 and would not require to increase or levy rates for the next two years, by which time we should be on the way out of our difficulties. This plan for local body undertakings is capable of immediate development. Ih9 gold milling and other portion would require legislation to set up a commission to whom all schemes would be submitted for examination before guarantees weie forthcoming. It is to be noted that standard wages would he paid instead of unemployment rates. The latter system spells ul-timate disaster, as men cannot pay rent and buy food, clothing, etc., so somebody must go short and the community pays in t' lo long run.