RECOVERY SCHEME

New Zealand Herald, Volume LXX, Issue 21578, 24 August 1933, Page 9

RECOVERY SCHEME

AMERICAN EXPERIMENT EFFECT ON CURRENCIES DEPRECIATION PREDICTED LESS PROFIT IN INDUSTRIES By Association—Copyright (Received August 23, 7.5 p.m.) BANFF, Aug. 22 Depreciation of other currencies was indicated as a result of the operation of the National Recovery Act in the United States if the Act was to be moderately successful, 6aid Professor T. E. Gregory, professor of banking in the University of London, during a discussion of the measure by the Institute of Pacific Relations this evening. Professor Gregory declared that Canada would inevitably be affected by the success or failure of the programme. If the desired effects were produced in the United States, the Canadian dollar would have to be depreciated, and other currencies would

be affected in sympathy. The speaker said the National Recovery Act constituted an attempt to increase wages and shorten hours. Considering one industry at a time, said Professor Gregory, it might be successful, but if every industry did the same thing, the net result to the community as a whole would be that no change would have been effected. Further, he contended, the success of the scheme would narrow the margin of profit in industries. If it did not it would be of no advantage to the consumer. Therefore general purchasing power would not be increased. In the opinion of the professor the net result would be that the National Recovery Act would play no part in the long run in the recovery of the United States. CHICAGO MILK TRADE GOVERNMENT FIXES PRICES SELLING AND BUYING CHICAGO, Aug. 17 Great importance is attached to the Chicago milk agreement and the Court fight over its constitutionality. America for the first time freezes prices and guarantees profits, and later developments may mean the fixing of prices of milk and similar commodities on a national basis. Chicago dealers to-day were compelled to buy niilk at a fixed price and sell at a fixed price.

Under this arrangement most of the ( independent, cut-price dealers in the j city are expected to disappear. } This is a sample of what can be done under the licensing provisions of the Agricultural Adjustment Act and the National Recovery Act. About 75 per cent of Chicago's milk is handled by the five large companies in the Chicago Milk Dealers' Association, sometimes called the "Milk Trust." That group buys from the Pure Milk Association Co-operative, controlling the output of 18,000 farmers. The independent dealers have bought from 2000 other farmers and, secretly, from some of the cooperative members. It is stated that they paid the farmers as much as, or more than, the trust did, although they sold at 6* cents, as against nine cents. All was fairly well until 1932, when the farmers, losing their markets for other products, began to pour in additional milk. Consumers, hard up, welcomed the cut prices. The organised industry had also to under-cut, so the co-operative farmers received less.