DEPRESSED TRADE

New Zealand Herald, Volume LXXV, Issue 23011, 12 April 1938, Page 13

DEPRESSED TRADE

THE UNITED STATES GOVERNMENT CRITICISED TAXATION AND HIGH COSTS Strong criticism of the Roosevelt administration in the United States was made by prominent American business men who are making a world tour on the German liner Reliance, which arrived from Melbourne yesterday. Important reasons for the present depressed economic conditions in the country could be found in the legislation introduced by Mr. Roosevelt although it was admitted that, in spite of tho opposition of the commercial and industrial community, the President would be re-elected to-day by the masses should an election be held. "The recovery in the United States from 1932 to 1937 occurred with unsound fiscal policies encouraging, if not actually forcing, the increase in public and private debt," said Mr. G. M. Loeb,

a partner in E. F. Hutton and Company, one of the largest firms on the Now York Stock Exchange. " The normal setback in business following these gains has thus seemingly turned into a full-tide depression, due to lack of faith by business men in Washington. The situation, of course, has been made even more acute by world-wide 1111sett lenient. " Over-buying of goods in the fear of inflation or in the fear of shortages due to labour troubles has been a major factor," Mr. Loeb added. " Taxation designed to redistribute wealth rather than to collect revenue forced overpayment of dividends, and the paralysis in American capital markets largely due to new and untried security laws made replenishment of weakened financial situations impossible." In general, he added, the low price of American shares in Wall Street reflected the social changes now under way. No one knew where they would stop. The recovery in the week-end was due to the defeat of the Roosevelt Government reorganisation plan, together with reports of new spending amounting to 4,000,000,000 dollars.

Similar views were expressed by Mr. W. Kindy, of St. Paul, Minnesota, president of an extensive chain of optical supply stores. Besides referring to heavy and increasing taxation and the over-production due to fears of inflation. Mr. Kindy said a further factor causing depression was the slump in the building trade, more especially in regard to domestic building. Many more dwellings were needed, but these would not be built while tho costs of materials and labour were so high. " The trouble is that there is no cooperation in United States industry today," he added. "Labour does not trust capital and capital does not trust labour. Capital feels that it is on the defensive. Labour thinks it can get everything but finds that with increased wages commodity prices rise proportionately and it is no better off. So there is an agitation for still higher wages.

" What we need are labour organisers with a larger viewpoint who will see the need for 8 co-operation between capital and labour so that a point of contentment can be arrived at," Mr. Kindv said. Capital was always willing to sign agreements with labour as to conditions of employment, but time and time again labour had not honoured its pledges and had torn up the agreements within a few weeks of their making Jn its activities labour had received the tacit encouragement of both Mr. Roosevelt and Miss Perkins, the Secretary of Labour.