ECONOMIC PROBLEM

New Zealand Herald, Volume LXX, Issue 21480, 2 May 1933, Page 10

ECONOMIC PROBLEM

OBSTACLES IN AMERICA VAST • UNEMPLOYMENT Some of the obstacles which confront the United States in the effort for international economic recovery were outlined by Mr. W. H. Hemingway at the Auckland Rotary Club's luncheon at Milne and Choyce's Reception Hall yesterday. The president, Mr. T. U. Wells, presided. Mr. Hemingway recently returned to Auckland after spending ten years in the United States and addressed the Rotary Club last week on American problems. He supplemented his address yesterday at the special request of members. The complications of the American banking system, which had no real form of unified control, constituted a serious drawback, Mr. Hemingway said. It did not enjoy the confidence of the American public, and recent withdrawals of gold had not been due so much to the action of foreigners as to Americans themselves, Mho, through lack of confidence in the banks, had been seeking to build up private reserves. The operations of the Reconstruction Finance Corporation, formed to advance up to 75 per cent of the value of certain "frozen" assets held by the banks, might conceivably leave the American taxpayer with a heavy burden. The corporation had been described as a "paradoxical form of Communism working in the interests of capitalism." The United States had 11,000,000 unemployed, Mr. Hemingway continued, and in New York alone, relief organisations had to provide food for 359,000 families daily, in addition to-increased production from fewer workmen, there was another problem introduced by the scientific production of materials which "lasted a life-time." It was estimated that if the United States could suddenly go back to the conditions of the boom years, there would still bo about 6,000,000 workers who could not be absorbed. Hopes were held out by the possible establishment of a number of new industries, but as most of theso would damage existing industries littlo improvement could be anticipated at present from this source.