RECOVERY POLICY

Southland Times, Issue 22131, 27 September 1933, Page 11

RECOVERY POLICY

PRESIDENT ROOSEVELT FEATURES SUMMARIZED A FUNDAMENTAL CHANGE -(By T.C.L.-No. 16.; In the preceding articles an attempt has been made to explain the principal features of Franklin Roosevelt’s epochmaking industrial recovery policy. Only casual examination will have shown how complete and coordinated is the policy and how absolute and unprecedented are the powers that have been given the Administration. Virtually, the President is in (the position of a dictator, and in the greatest democratic country in the world, a country which has always prided itself upon its rugged individualism and initiative, there is general agreement that the course followed is practically the only one open to save the country from collapse. As has been shown, when the new President took office the country was in the throes of a bank depositors’ panic. It forced sound and unsound banks alike to close; it forced commodity and securities exchanges to suspend; it caused the industrial structure to totter, and it brought on paralysis of the economic life of the whole people. The new President was swift to act to meet the emergency. He issued two proclamations, one declaring a bank holiday and placing an embargo upon the withdraw! and export of gold; and the other summoning Congress to meet in four days. Then came from the Brain Trust new measure after new measure, all designed, not only to meet the emergency that had arisen, but to put the country back on the rails of permanent recovery. They touched practically every interest in the national life of the country, some lightly, some indirectly, but others heavily. They were audacious in conception; they struck right across all the principles and methods so dear to the heart of a nation that had under them expanded and prospered—up till 1929.

Balanced Social State. A perplexed and disturbed people watched the introduction of a farm Bill which its sponsors frankly admitted aimed at a “balanced social State”; of legislation to regulate hours, wages and industrial production; to coordinate the railroads; to put the banks and financial houses under Government control; to make available fox - public enterprises the huge sum of £660,000,000; to carry out a great scheme of industrial control in the Tennessee Valley; to place an army of youths who had been wandering and menacing the countryside into reafforestation camps; besides making other departures that never had the sanction of America’s political or economic text books. No Government had ever introduced such vast changes and none had been given such overwhelming support by Congress. Nor had a policy received such general support from an electorate. It was an amazing transformation. Before the advent of Roosevelt the people were in blank despair; they felt that nothing could be done to save the country—things had reached such a desperate pass. Then after Roosevelt’s spectacular action of closing the banks and calling Congress together to consider and authorize measures designed to overcome the economic crisis the people felt that in Roosevelt they had discovered another Abraham Lincoln in their hour of need. Wherever one goes in America—and the writer travelled over 18,000 miles, north and south, west and east—one found, even amongst the most ardent Republicans, a profound belief in Roosevelt and approval of his judgment and actions. It is true many doubted the outcome of the measures, especially those relating to inflation, but they held any action just now was worth taking, fox’ things might result as planned and hoped for, and if they did not, well, conditions could not possibly be worse than they had been before. People Back At Work. The proof of the pudding will be found in the eating. Already 2,000,000 people are back at work, and it is hoped another 7,000,000 will be absorbed before the end of the year. That will account for more than half of the unemployed, and if this is accomplished it will be a justification for the Government’s programme. Confidence is returning, and business is picking up everywhere. All are hopeful that things will turn out according to plan. That the “New Deal” policy will effect a permanent solution of the country’s economic problems is not claimed or expected. The measures are designed primarily to place the country on to the economic rails again and give it an opportunity to live and develop along new lines.

The technocrats have claimed that a new situation has arisen as the results of the rapid advance in the mechanisation of industry, and that no matter what is done it is impossible to re-em-ploy more than half of the present unemployed. They have issued figures and statements in support of this contention, but their accuracy and soundness have been questioned, and to-day the technocrats, vzho previously received a favourable hearing, are now generally discredited throughout the States. A Cardinal Feature. , The Administration, however, has made the reduction of hours of industry a cardinal feature of their industrial recovery policy, so that more people may be employed. It is recognised that the effect of shorter hours without a corresponding reduction in wages will mean higher costs, and so authority will be given in the codes of the industries and businesses to increase prices so long as the increases are justified and no monopolies are created. The Administration believes that with proper organisation and rationalisation it may be possible for industry to get along without increasing prices to the community. The feeling of industry, however, is that all costs must advance from 10 to 20 per cent. Only practical working will show who is right. There is one feature of the policy, however, that must make for success and smooth running and is regarded favourably by business and industry. It is the arranging of a standard of practice and the elimination of pricecutting and unfair business methods. For the first time the public will be represented in industry. Hitherto industry itself has had absolute control and determination though labour has often made itself heard. Now the Administration determines before passing a code what is fair practice, what are fair charges to the public, and what the remuneration and conditions of labour should be. It is an important and revolutionary development that may have reverberations throughout the world. President Roosevelt describes it as “a partnership between Government and industry, not partnership in profits because the profits would still go to the citizens but rather a partnership to see that the plans are carried out.” Days Of Laissez-Faire Gone. In America the fact is generally accepted that the days of laissez-faire conduct of business are over. It is no longer “every man for himself and the

devil take the hindmost.” Co-operation is the essence of the “New Deal,” and if industry, labour, ox - capital will not co-operate voluntarily, then the Government will force their co-operation. These words of the President in his recent speech to the United States Chamber of Commerce are significant: “I ask that you have the vision to lay aside special and selfish interests, to think of and act for a well-rounded national recovery. Each and all of you in your own units and in your own industries are but integral parts of a great whole, and our national economy must be expressed in terms of the whole rather than in terms of the unit.”

In the past America has gauged the value and position of its citizens from the material success they have gained. To-day that measure has been discarded in favour of a basis of worth and service to their fellows and the community. It is an awakening to realities that has been brought about by failure of the old standards in a time of grave crisis and great suffering.

It must be conceded that America can experiment in this and other ways without much harm resulting to her trade and industry, for the reason that she is practically self-contained, possessing every raw material product she requires for manufacturing with the exception of rubber, and every foodstuff with the exception of tea and coffee. She has an enormous internal market in her 48 States, and normally exports only six to 10 per cent, of her total products and manufactures. If prices of commodities advance it is certain that the customs tariffs will also advance. That will mean a virtual shutting out of foreign goods, at tire same time effectually preventing war debts from being paid, because they can only be paid in goods or services or gold, and there is not sufficient gold to go round.

Conditions Different In Britain. Britain is situated quite differently. She has to rely upon the world’s markets for more than half her output of manufactures, and if she were to follow America and reduced hours and increased prices, she would, in competition with her European and Japanese competitors, lose her entire trade. Similarly in this Dominion, we are dependent for our very existence upon the English market, and if we reduced hours of work and increased wages the producers would be unable to compete with their competitors. However, there are features in the American plan, particularly regarding rationalisation and regularisation of industry, and a revised and enlightened attitude towards labour in industry, that both England and New Zealand could study with advantage. The working out of America’s plans for industrial recovery, it is certain, will be followed with intense interest and sympathy throughout the British Empire, for a rehabilitated and prosperous America will exercise a profound influence on the affairs and fortunes of tile rest of the world. (Conclusion.)