The Daily News WEDNESDAY, FEBRUARY 27, 1935. LABOUR ASKS “NEW DEAL,”

Taranaki Daily News, 27 February 1935, Page 6

The Daily News

WEDNESDAY, FEBRUARY 27, 1935. LABOUR ASKS “NEW DEAL,”

OFFICES: NEW PLYMOUTH. Currie Street. STRATFORD. Broadway. HAWERA. High Street.

There is nothing novel in the charges that President Roosevelt is losing his grip of public support in the United States, They have been common ever since the first pause in the economic uplift that followed his inauguration. It is, however, somewhat remarkable that the issue upon which a Democrat Senate has chosen to challenge the President is that of relief wages. Hitherto the chief complaints have been from those who considered the “New Deal,” and especially the working of the Reconstruction Finance. Corporation portion of it has put American private enterprise into a straight-jacket. Such critics admit that the need for the R.F.C. arose from the establishment by private enterprise of many hazardous and non-self-sustain-ing businesses under speculative and sometimes inefficient control. The R.F.C. was created by President Hoover, and its operations considerably expanded by President Roosevelt in order that advances of money for industrial purposes might .be considered rather from the point of view of the general welfare through the maintenance of, institutions capable of absorbing labour, than from the borrower’s ability to repay. The critics admitted that in adopting this course President Roosevelt followed, or led, a great national impetus, but they claimed that in doing so he was freeing mismanaged businesses from what had been the inevitable penalty of inefficiency, and by doing so would inevitably raise the cost of living and, in the long run, diminish the channels through which the unemployed might find work. They claimed, during the Congress election campaign last year, that the R.F.C. had given relief to certain forms of industry, and that the policy had led to jealousy on the part of others which had received less assistance; that ordinary financial institutions—recognising the artificiality of the values that had been maintained with government money—were still reluctant to make advances for industrial expansion; and. that farm credit and workers’ homes credit was rapidly becoming extinct despite all that had been done by the R.F.C. to preserve the,interests of the “small man.” The “New Deal,” according to these critics, was but a process of living upon the nation’s capital, and until this ceased and the idea of self-support in business enterprise became once more the philosophy of American economic life there was little hope of real recovery. As evidence of this the unemployment figures after 15 months’ experience of the “New Deal” were quoted. They totalled no less than 10,000,000 at the end of October, and it is this fact that may have led to unrest in a Senate of which the membership is a reflection of the President’s _ triumph at the November elections. Mr. Roosevelt’s reply to. his critics has been a call to private enterprise to do its share in development of the Republic’s resources. The State, he said, would do its part. Congress has been asked to provide £800,000,000 for expenditure upon relief works, but at rates of pay that will not make relief work more attractive than private employment. To enable private enterprise to pay high wages certain control of prices and competition has been part of the New Deal, and it was hoped would stimulate large-scale employment. Apparently the hope has not been fulfilled. The Labour organisations are therefore demanding full rates of pay on relief work, and the demand has received support from the Senate. This challenges the principle upon which State relief works were established, namely, that they would overcome an emergency while industry adjusted itself to recovery, but at rates of pay that would not be so attractive to workers of energy and initiative as those obtainable in private employ. The principle and the challenge to its application are not confined to the United States. There the experiment has been on a larger scale, and the accompanying aids to financial recovery considerably more spectacular than, say, in New Zealand or Australia. The two Dominions are endeavouring to find a way out of similar difficulties, however, and will watch with keen interest the progress of the great American experiment, . especially if political issues are to show their influence.