GREAT PROBLEM

New Zealand Herald, Volume LXXVI, Issue 23378, 21 June 1939, Page 15

GREAT PROBLEM

10,000,000 UNEMPLOYED AMERICA'S HEAVY BURDEN CHARGE ON LOCAL TAXES FAR-REACHING CONSEQUENCES [BV TELECKAI'H — OWN COIIRESJ'ONDENTj WELLINGTON, Tuesday "America's unemployment problem struck mo very forcibly and seemed to stand almost like a nightmare throughout tho country," said Mr. Lan Matheson, a past president of the Wellington Manufacturers' Association, at a meeting of the association to-night. Mr. Matheson returned recently from a tour of the United States, where ho studied manufacturing questions. Thousands of young people apparently had no prospects of finding employment. America was not yet "out of the sou])" and business had not recovered to the extent it had in Australia, New Zealand, or even Canada. "Between 10.000,000 and 12,000,000 people are still unemployed, according to a statement 1 was given on several occasions," said Mr. Matheson. "Reduced proportionately, this would still he approximately 100,000 in New Zealand, a figure we never reached, I did not fully investigate the unemployment relief system, but it works out something liko this. System ol Relief "An employee and his employers contribute to a fund hold by the Government in the name of that particular worker. Should that individual become unemployed, and comply with the necessary qualifications, he is paid an allowance during his unemployment, but only so long as his fund lasts. After that he becomes a charge on the city. As a result, the charges on local taxes have become terrific, and they have gono up to a point whero owners of homes and businesses are seeking to move out of the city area to save on local rates. "New buildings arc not being erected within cities. In Toronto I was told that owners were pulling down old buildings and letting the empty spaces for parking rather than continue to pay higher rates on the improved value. It does not pay to replace a building in New York. They say no more high buildings will be erected. I saw on Park Avenue a most valued business site on which a new one-storey building had been erected recently adjoining buildings of anything from 20 to 40 storeys high, the idea being just to cover tax outgoings, the owner receiving no return for the invested capital. Eflect on Manufacturing "This factor, together with the desire to get away from the highly organised unions in the big cities, has meant a tendency in recent years for the breaking up of the bigger plants," said Mr. Matheson. "Many factories are now to be found out in the smaller towns. "As regards manufacturing plants, one important general impression which remains firm in my mind is that it would be dangerous for any New Zcalander to assume that merely because some systems work successfully in industry in the United States or Canada those systems should be applicable to this country. America is a country which has been fully developed industrially for many years, and there is a background of service to industry which enables many things to be done that cannot bo done here."