LINKED POLICIES

Otago Daily Times, Issue 27093, 30 May 1949, Page 5

LINKED POLICIES

BRITAIN AND AMERICA CONSEQUENCES BECOMING APPARENT SHADOW OF DEPRESSION NZPA—Copyright Rec. 9 p.m. LONDON, May 28. Professor J. D. Bernal, professor- of physics at Birkbeck College, in his presidential address to the Association of Scientific Workers, said some consequences of the policy linking Britain’s fate with that of the United States were now becoming apparent. Britain was now under the shadow of the threat of war and depression. The Atlantic Treaty was drawing off resources for military preparations which could have been spent on economic recovery. British scientists had a particular responsibility in seei:ig war a voided. Professor Bernal, stressing the need for reducing export prices, said a real co-ordinated effort .to bring science into industry would result in a marked immediate increase in productivity. Crisis Developing Lord Boyd Orr, former Directorgeneral of the United Nations Food and Agricultural Organisation, said in Ottawa on Friday that there were already signs of what may become another world economic crisis developing in the United States. Addressing a luncheon given bv the Canadian Government. Lord Boyd Orr said American agricultural and industrial prices were declining. “We cannot go back to another world crisis,” he said. “We must 'not. World prosperity for agriculture is the only road to peace.” Lord Boyd Orr urged the construction of a strong world food organisation to halt the spread of Communism. He added that if there were not bolder action -on behalf of farmers’ security and on behalf of the hungry there would be no stopping Communism. Advance Safeguards A Washington message says: A group of Senate Democrats have announced that they intend introducing a Bill to provide advance safeguards against any sudden nation-wide economic depression. The Bill seeks authority for the Government to take emergency steps to deal with unemployment by Federal grants and loans, a working partnership between the Government and business to expand production and plant facilities with Government incentive loans to private industry, and the stockpiling of plans for public works projects. American industrial production declined for the fifth consecutive month in April, and was still falling, the Federal Reserve Board announced today. The board’s production index for April was five points below the March figure, bringing it to the lowest level since July, 1947. Coupled with a similar decline in March, it marked the sharpest decrease since the war. Production Decline The production of non-durable gpods fell about 4 per cent, in April, chiefly because of marked in the textile, paper and chemical industries. Durable goods also declined 4 per cent. The board said that a major factor in the general production slump was a 3 per cent, cut in steel output. Business loans of member banks of the Federal Reserve Bank dropped for the eighteenth consecutive week, indicating that private industry was discontinuing expansion borrowing pending further clarification of the general economic outlook. The Commerce . Secretary, Mr Charles Sawyer, to-night advised American business men against “ illconsidered, frightened action in the current economic situation.” He said United States economy was very sound, in spite of the, substantial decrease in income in the‘first quarter of 1949, compared with the last quarter of 1948. This drop in income, he said, was “ a descent from, the high inflationary peak to what • might properly be described as a normal plateau.” Chemical Sales Declining sales of four key chemicals used by the country’s largest industries are being interpreted as indicating that no general business recovery is in sight at least in the near future, according to the New York Times. In one case, production of key chemical caustic soda was reduced 20 per cent. Other developments reported at the week-end as indicating continued recession include: Department store sales in New York during the week fell 14 per cent, and are expected to decline 10 to 15 per cent, below the present level by the beginning of July. Sales in the rubber industry have fallen so much that the Herald Tribune says industry has entered a readjustment phase “ which could see its end by closing 30 per cent, of the existing plant facilities." National Purchasing Association agents reported: “ The majority opinion of purchasing agents is that general business is still on the down side of the present cycle which started in November, and we are probably half-way through this cycle.”