RECOVERY PLAN

Taranaki Daily News, 2 April 1934, Page 8

RECOVERY PLAN

AIMS OF IROOSEVELT IDEAS NOT REVOLUTIONARY. AUSTRALIAN ECONOMIST’S VIEW.

“President Roosevelt is endeavouring to initiate some degree of control in industry in the United States on lines that Australia adopted 30 years ago, but it will take him and his successors at least 20 years to establish the idea that minimum standards should be guaranteed by public control,” said Professor D. B. Copland, who returned to Melbourne from London recently by the Orient liner Orsova. “Although this idea may be a revolution , in American industry, it is nothing new in Australia,” he added. Professor Copland, who is dean of the Faculty of Commerce and professor of economics at the University of Melbourne, has spent nearly a year abroad, accompanied by his, wife and daughter. During his world tour he made a study of the financial and economic problems in Great Britain, France, Austria and the United States. Professor Copland said that with regard to that part of the National Recovery Act dealing with hours and workers’ conditions two important facts had to be borne 1 in mind. It was as much a long-period reconstruction measure as a plan for immediate recovery. In the second place, during 1932, wages fell in some industries to a point where reputable employers were being undercut 1 by those who frankly indulged in sweating, and workers’ conditions in some cases were appalling. It was to remedy these conditions, and to establish a reasonable minimum wage, that the codes had been formulated.

WAGES BELOW 1929 LEVEL. As a general rule, however, the wages fixed were still far below the 1929 level. There, was a widespread belief in the doctrine of consumers’ spending power as a means to recovery, consequently too much was expected of the codes. In some cases shorter hours had increased industrial costs and delayed recovery.

“In considering the monetary and exchange policy of the United States,” Professor Copland added, “it is important to distinguish between internal and external problems. Contrary to the belief of those who fear compulsory currency depreciation as an additional source of international disturbance, the American authorities hold that it is open to other countries to fix a price. of gold comparable to the present American price. “President Roosevelt and his advisers are not concerned ,so much with this external problem as with their own internal troubles. They did not depreciate the dollar in order to get an advantage in trade. Their object is to fix a value for the dollar that will make the internal debt structure in the United States tolerable to the debtors. The overwhelming majority of people believe that the value of the dollar can be so fixed. In other words, they propose to offset the disastrous deflation of recent years by lowering the gold content of the dollar. This is the first article in their creed.

“The second article is a compound of new spending for public works and the liquidation of existing debts. The former of these is to be attained by an expenditure of two billion dollars on Federal public works. The ordinary programme of the States and the municipalities has practically ceased. Mr. Roosevelt is merely providing a programme of public works . during the period in which' the finances of the States and municipalities will be rehabilitated. This works programme, relative to the wealth and population of the United States, is no greater than is at present being undertaken in Australia. Both the admirers and critics of Mr. Roosevelt would do well to bear this point in mind.” Much British criticism of the American experiment, said Professor Copland, centred round the effect of the codes on industrial costs; With a better understanding of the long-term objective of the President,, this criticism had been considerably modified in recent months. Britain, however, was frankly sceptical of the capacity of President Roosevelt to depreciate the dollar.- Provided President RooseVelt was determined to carry out his policy; there had never been any doubt about his ability to undervalue his currency. .

FAVOURABLE REACTION. When a country attempted to maintain an oyer-valued-currency, there was every ground for scepticism. Much more harm had; been done by attempts in this direction during thip depression than by efforts to under-value the currency, which could not fail, provided the country concerned announced prices for gold at which it was willing to buy and sell freely. The United States was a great. creditor country, and the cheapening of the dollar would, on the whole, react favourably on the rest of the world. “People in the United States are filled with a tremendous interest and enthusiasm for the manner in which Australia attacked her problems during the depression,’’ Professor ■ Copland concluded. “They are hungry for information as to what the people have' done in Australia. To-day there is a. remarkable contrast between the active busy city '■ of London and the relatively dead, lethargic New York, which is just the reverse of the conditions which prevailed during my last visit eight years ago.”