CHAMBER OF COMMERCE

Otago Daily Times, Issue 22258, 10 May 1934, Page 6

CHAMBER OF COMMERCE

ADDRESS BY MR A. 0. HEANY NATIONAL PROBLEMS DISCUSSED A general meeting of members of the Dunedin Chamber of Commerce was held last night to hear an address by Mr A. O. Heany, secretary of the Associated Chambers of Commerce, on “The Work of’ Chambers of Commerce in Relation to National Problems.” The chair was occupied by Mr W. H. Brent (president). The chairman introduced Mr Heany to the members, who welcomed him with a hearty round of applause. Mr Heany expressed his pleasure at meeting with members of the Dunedin Chamber. He had planned to come to Dunedin before this date, but illness had prevented him from coming down. That night he desired to say something about the varied W'ork of the Associated Chambers of Commerce. NEED FOR INDIVIDUALISM Mr Heany urged individualism os a forceful, constructive creed and system, under which the present habit of leaning on Governments would give way to the spirit of independence and self-reliance by the people. The speaker blamed State intervention for frightening capital, thereby restraining the swing of the pendulum to better conditions, and held that the encouragement of the capitalist would effect infinitely more than any economic experiment the State could attempt. The world was experiencing a wave of experimentalism. All kinds of economic expedients were being tried, the instance of the United States of America being probably the most outstanding, for the obscurity of its ultimate outcome as well as for its magnitude and boldness. In the meantime, as the Liverpool Chamber of Commerce pointed out in its latest report, the needs of the people were greater than ever, which was one of the fundamentals of trade recovery; but no matter whatermr the needs or whatever the anxiety of the individual might be, he was ruthlessly beset by limitations coming from a rigorous restriction imposed by the policies of Governments. Similarly the President of the British Board of Trade publicly acknowledged that the misfortunes of to-day were due not to private enterprise but to Stale errors. “ A policy that is ’being widely preached these days is economic planning—the conscious and deliberate direction by the State of economic activities,” said Mr Heany. “ Unfortunately, this spells further subjection to State control of the liberty, enterprise, and initiative of the individual. Indeed, it appears to mean more than that. Mr Bernard Shaw,, to whom a question was addressed whether a nation which had a capitalistic economic structure could plan its economic and social activities, answered no with apparent seriousness. So that the relationship is Socialistic, The dead hand of the State lias already proved to be a poor guide in matters which properly should be outside the functions of Government, and in the light ,of past experience there is need to view with the utmost caution any proposals for extending the functions of Government.” STATE INTERVENTION

In connection with New Zealand’s experience of State enterprise, the speaker proceeded to deal with various State undertakings in New Zealand over a number of years, such as railways, shipping, land development, kauri gum business, coalmining, life and fire insurance, legal business, irrigation, water supply and drainage, engineering and money-lending. He quoted figures to show that in many cases, despite advantages over private enterprise, heavy losses had been made, in other cases there were very poor returns despite the guarantee of the State as n backing, and there were prospects of further losses from certain undertakings. The benefits that were supposed to result from State enterprise had turned into taxes to meet losses and interest, a burden of debt, injury to private trade as employers and tax yielders, and the ignominious revelation that the State could not do as well as private enterprise, leave alone better. If by his works did one know a man, then the works of the State should be equally eloquent of its ability or otherwise. State intervention, legislation and regulation in matters of trade were at their best a necessary evil ami not a constructive good. The supporters of State intervention were the last to admit that the deliberate hedging around of private enterprise with restrictions had anything to do with the present prolongation of the depression, continued the speaker. In earlier periods of depression, production and trade had been less subject to control, while costs had been lower and more flexible, so that the pendulum had been able to swing again. To-day, higher and more rigid costs, allied to the fetters of State intervention, were doing a great deal to hold back the pendulum. What the next trade cycle would bring if the present restraints on production and trade were accentuated by conscious and deliberate direction of economic activities by the State would probably be a condition of chaos. UNEMPLOYMENT Dealing with unemployment, the speaker said the Unemployment Board was to be congratulated on its efforts to solve a very difficult problem, but its job was after all only to put into force palliative measures. It had to be remembered that the natural and economic corrective for unemployment was the roahsorption of unemployed into profitable industry, trade, and commerce. In preference to artificial measures, everything possible should bo done, by the removal of harassing restrictions by the State, to assist the restoration of profit to industrial and tommei'cial enterprise. A first essential was a reduction in the burden of taxation, which had already passed sate limits, and was seriously retarding industry and enterprise, and accentuating unemployment. Currency schemes were greatly popular to-day, said Mr Heany, and the Associated Chambers of Commerce had found it necessary to define clearly the attitude of the commercial community ou the subiect. Only harm could result from any such experiments in this country. It wag ridiculous to propose any scheme for New Zealand when the country was so completely dependent on sterling. What was to be _ the future international monetary policy? And what was to be the future monetary policy of England? These were the two paramount considerations that must affect any action by New Zealand in the matter. DAIRY INDUSTRY A subject of great import to which the associated chambers had given attention was the plight of the dairy industry, stated the speaker. The cry for increased production, added to the use of artificial props such as State interference with the exchange rate and with mortgages, had had its effect, and there had been an increased output of butter-fat, produced on an uneconomic basis. In order that the industry might be made an economic one, the maintenance of artificial standards would have to be abandoned, and the proper basis of values arrived at. Those producers who could not produce butter-fat at to-day’s prices could be assisted into alternative forms of production. There would have to be an exploration of these alternatives, as well us an investigation of alternative markets, while an urgent need wag to concentrate on quality instead of an quantity. There were good possibilities in the direction of a greater internal consumption of raw milk. Only by following such lines as these did there appear to be any prospect of avoiding all the evils of a quota and the consequent dislocation of the dairy industry, with further State control and the interference of Government departments. INITIATIVE WANTED

An unblocking of the avenues of trade, in order to facilitate the exchange of goods, was a vital necessity, while in New Zealand, ns elsewhere, taxation relief was one of the first essentials to industrial and trade recovery! Whereas State revenue from taxation in New Zealand in 1928-2!) was lli per cent, of the national income, the percentage rose in 1929-30 to 13J per cent., in 1930-31 tr 15J per cent., in 1931-32 to 17 per cent, and in 1932-33 to 19 per cent. —a steadily increasing proportion. Over £2,000,000 more wag taken by Government taxation in 1932-33 than in 1931-32. and that from a poorer public. In the year just ended the full year’s incidence of sales tax and gold export duty would go to swell still further the taxation receipts. As

regards local government taxation, in 1931-32 £5,500,000, or one quarter of the total expenditure, came from rates. In that year general and local government taxation totalled nearly £23,000,000, or 22i per cent, of the national income, which was a crushing proportion. Those figures were a compelling argument, it argument were needed, for a contraction of the activities of government, and they should be enough to silence suggestions for further State intervention, with its inevitable concomitant of steadily mounting, administrative costs. Private enterprise needed more freedom and “leave to do” in order that it might regain its resiliency and ret store conditions of prosperity. The job of to-day was one for private enterprise, not the State. Sir Ernest Benn was probably rather caustic in his statement that “when a politician says ho will help a trade, that trade’s number is up,” but his point was that political interference definitely added to overhead costs arid multiplied the official class. “The only way to restore prosperity is to give back again to the individual the opportunity to make money,” said Mr Heany. “ Capital, .which has been made timid' by State intervention in contracts, exchange operations, and so on. as well as by high costs and increased taxation, should be encouraged to function with confidence. However extraordinary and urgent the circumstances that may have argued the necessity for State intervention in such directions, the fact remains that capital has been frightened, and is seeking safe refuge. Until capital can be coaxed into applying itself to production with confidence, we will continue to stagnate. notwithstanding the claims of all sorts of currency schemes and other nostrums, popular when the body economic is sick.” , The speaker said that chambers of commerce were composed of practical men who had a duty on them to study and examine the problems of the day. and by their thought and energies to make their contribution to the betterment of national and local economy. They were trying to do that as for as the heavy calls of active business enabled them. They were not selfish nor self-seeking in their efforts, and they were greatly concerned with improving the conditions under which industry, trade, and commerce functioned, because prosperity was so dependent on the free running of the industrial and commercial machine. In face of unsound counsels, of course, there was the danger of falling into a purely defensive “anti” attitude, and chambers of commerce could do a valuable thing in advancing a definite and forceful policy of individualism for the whole, community, in order that the people might win to prosperity by efficiency and initiative, instead of falling into the bondage of a swollen State. After Mr Heany had answered a number of questions, he was accorded a warm vote of thanks.