WARNING SIGNALS

Timaru Herald, Volume CXLIV, Issue 21052, 2 June 1938, Page 8

WARNING SIGNALS

Business “ Worried ” I Trends in Dominion To-day “ Should Look to Future ” Contending that although New \ Zealand was to-day prosperous, j the note of wanting sounded by j some businessmen against lavish public expenditure was timely, Mr Ar O. Heany, secretary of the Associated chambers of Commerce of New Zealand, who addressed the South Canterbury Chamber of Commerce at its annual meeting last night, said that due regard j must be paid to the future. “My 1 remarks,” said vlr Heany, “are I not meant as an attack on the present political party in power in New Zealand, but they indicate I some of the reasons why business, ] in the midst of prosperity, >s I worried and sounds warning ■ signals.” Individual businessmen, company directors and others, who had sounded a note of warning from time to time about the lavish public expenditures m New Zealand to-day had been accused of calamity-howling and wilful obstructionism when the fact was that con- i ditions were prosperous, business had j improved and the people were enjoy- ! ing better times, said Mr Heany. What I was the explanation for their apparent I stupidity in advocating something I that would deprive them of profits? I There was nr doubt that there was plenty of money about and business I was better, but businessmen looked a ' little further than that, and asked themselves whether the country was really getting back to work, conserving and employing capital, producing new goods and forging ahead on a stable basis, or whether the stimulus of to-day was largely artificial through the deliberate redistribution of existing income which took from one and gave to another, and which did not | add to our income. Enormous public expenditures by political agencies were dissipating potential wealth. These spendings were what businessmen called overhead, and were not productive expense. The money had come from productive effort but it was not being re-employed in the same way. Before the war taxation took 2/4 in the £ of the country’s production, whereas in 1936-37 it had gone up to 5/5 in the £. In other words, there was to-day more governmental overhead and less capital left for private enterprise with which to experiment in new enterprise, providing new jobs. Worth of “Marble Structures” “A factory with a handful of employees is of more national worth than the marble structures of political agencies,” said Mr Heany. Industrial workers were being required to pay the wages of the charwomen and filing clerks that represented excessive governmental activities, which produced nothing that could be traded. Thousands of men had been drafted on to public works undertakings and were then described as being in full time work and so were considered to be happily disposed of. at the same time as the basic primary ’ dustries of the country were crying out for man power and facing the tide of rising costs. The country was short of many thousands of houses, but private house-building and ownership had been so discouraged by latter-day additions to legislative restrictions and deterrents of earlier years that the only notable activity in this sphere was the present attempt to fill the need by publicly built houses for renting, which was hopeless as a means of filling the nation’s need, and which destroyed British tradition of home ownership. The commerce of the Dominion was impeded by dilatory work on the waterfront in some ports, and goods were having to be overcarried and returned over many miles. New Zealand was oeing told that the eyes of the world were upon it but perhaps it was not altogether in the way we would * like, continued Mr Heany. New Zealand might well have a look overseas—at Sweden, for instance, which had decided to institute a long-range progiamme of public works for a period of ten years, and ro build up. out of surpluses, a strong cash reserve which could be drawn upon whenever it became necessary io stimulate employment. This was a scheme the principle of which had been approved by the directors of one cf the banks in Australia, in spite of the present healthy business conditions in the Commonwealth. As it was. New Zealand was more or less acting like a man who was spending the cash value of his life insurance policy which he had turned in. These remarks, said Mr Heany, were not meant as an attack on the present political party in power in New Zealand, but they indicated some of the reasons why business, in the midst of prosperity, was worried, and sounded warning signals. Businessmen did not as a rule mn their concerns on all cylinders w’thout making wise and adequate financial provision at the same time for petrol to get them home again when their tanks ran dry. One responsible officer of an organisation of workers had hailed the present social insurance proposals of the Government because he said that the community, secure in the knowledge that its old age was provided for, could go ahead and spend all 4 ts income. That was a meretricious argument: what about thrift which was essential as a source of capital for necessary development in production and industry? Other Side of Picture On the other side of the picture, said Mr Heany, businessmen had a duty to give leadership and to live up to the obligations which their position in the community placed on them. They, too. must needs exercise caution in regard to acceptance of the theory nt “priming the pump” bv great expenditures of public funds, and by State assistance and intervention. If they themselves acted rightly and followed what was true, then it was for them to let the people know the truth As those to whom was entrusted the conduct of business, it was their duty

to correct errors of public opinion and to show the nation what the business world was trying to do in their administration of industry and the direction of commerce, and to show that the profit system was the best for the whole community. Mr Heany congratulated the runani Chamber on being one of the most solid provincial Chambers of Commerce in the Dominion. On the motion of the president <Mr F. Darroch) and Mr J Anstey. Mr Heany was accorded a vote of thanks for visiting Timaru and for his address.