The Timaru Herald THURSDAY, JUNE 16, 1938 IS “PUMP-PRIMING” EFFECTIVE?

Timaru Herald, Volume CXLIV, Issue 21064, 16 June 1938, Page 6

The Timaru Herald THURSDAY, JUNE 16, 1938 IS “PUMP-PRIMING” EFFECTIVE?

If the prevention of business recession is as easy as some of the theorists now active in New Zealand would have the country believe, no time should be lost in communicating their ideas to one or two of the great trading countries of the world, which are destined to play an increasingly important part in determining economic trends. For instance, the United States. If it is true that a solvent for the economic troubles of which the world seems heir, is known to the Socialists, then a grave disservice is being rendered humanity by refusals to go to the help of the United States, more particularly, in face of the fact that it is generally agreed that the growing gravity of the internal situation in the United States can be ascribed to; 1. The uncertainties to business, produced by the threat of new and drastic regulatory legislation, providing Federal control of hours and wages, together with the imposition of onerous restrictions on corporations doing inter-state business. 2. The barriers to business expansion produced by Federal tax legislation, including particularly the undivided profits tax and the capital gains tax. 3. The dangerously large proportion of national income being collected in taxes to defray the expense of government. 4. The intrusion of government into relations between employer and employee. 5. The need for liberalising some of the existing laws and regulations covering the flow of capital.” In the viewpoint of the United States Chamber of Commerce, these are the fundamental causes of business recession; indeed, it is even claimed that the future of American industry will be determined by the policy being pursued by the President. Mr Roosevelt, on his part, sought to discover a solution of the economic ills of the United States by asking Congress to add more than £1,500,000,000 to the national debt of the country this year, for the sake of recovery. Businessmen of all shades of political opinion are beginning to ask the question : How many more billions could the President not add to meet recovery by using the power of his office for conciliation. As one writer says: “The President has not done a great deal about promotiing the co-operation of which he speaks so" often.” Generally speaking the American people who are faced with grave business recession, would welcome a certain solvent for their difficulties, but they would not tolerate more fantastic remedies for their ills, because already their taxation has increased enormously, while it is being realised that after all, the President’s monetary remedies have accomplished little but add to the indebtedness of the nation.