AMERICAN SLUMP

New Zealand Herald, Volume LXXV, Issue 22969, 22 February 1938, Page 16

AMERICAN SLUMP

DECREASED PRODUCTION COSTS AT 1932 LEVEL TRADE AGREEMENT WELCOMED [by TELEGRAPH —rKKSS association] WELLINGTON. Monday "America definitely is in a major slump," said Mr. Graeme K. Howard, general.manager of overseas operations for General Motors, Limited, in an •interview to-day, He stated that motorcar production had dropped CO per cent and capital and consumer costs were at the level.

Asked what stops tho Government was taking to meet the position, Mr. Howard said there were many rumours in America of inflationary steps being taken, the exact nature of which had not been divulged. There was also a lot of talk about tho prospect of further devaluation of the dollar. It was not only tho motor business that was affected, but business generally was at a low ebb. Referring to increased unemployment, Mr. Howard said ono effect had been to end tho strikes which had been experienced in America during the last your. There was no doubt that if the present state of affairs in the United States continued there would be worldwide effects, as America was such an important consumer of the world s commodities.

One of the bright spots was the proposed trade agreement with Britain, tho culmination of which was being looked forward to by all sections of the community, not only because of the important relations with Britain that would be brought about, but also the important relations with the Dominions. There was no doubt about the friendly feeling that existed in America toward Great Britain.

The rearmament policy of tho President was generally welcomed, but it had not reached tho stage where it had had any marked effect oil the unemployment situation, lhcre had been a change in opinion in America in regard to neutrality legislation, and there was a feeling that it was likely rather to lead to war than to keep America out of war.