“GOOD EFFECTS.”

Star (Christchurch), Volume LXIV, Issue 935, 4 December 1933, Page 7

“GOOD EFFECTS.”

The Roosevelt Regime in America. NEW ZEALANDER’S VIEW. “ Recovery in America will be gradual. The people realise that and have put their faith in the President,” said Mr G. W. Skellerup, managing director of the Para Rubber Company, who returned to Christchurcn yesterday after a business trip to the United States and England. “ The President,” added Mr Skellerup, “is out to restore the internal economic status of the nation and is not worrying a great deal about exports, which represent only 5 per cent of the country’s trade. He is working hard for the restoration of the agricultural industries and is convinced that upon that restoration depends the return of prosperity. Already increases in the price of wheat, cotton and ordinary industrial shares have followed the launching of the N.R.A. plan.” About 90 per cent of the American people were behind Mr Roosevelt. His opponents were mainly the insurance companies and certain banking interests. Banking in America, Mr Skellerup said, was an entirely different thing from what it was in New Zealand, or in any of the nations of the British Empire. In America the business of the banks was not confined purely to banking. They dealt in the business of stock and station agents, brokers and in a sphere that was considered in the British Empire to be outside the legitimate duty of the banks. Speculation had left them particularly vulnerable when they had to call upon their reserves during the present depression. It was Mr Roosevelt’s policy to liquidate the frozen assets held by the banks by making advances of up to 50 per cent on the present-day valuation of these assets. Shortly after the launching of the N.R.A. it was found that the output of the American factories had been increased until their production was equal to the boom figures of 1929. However, production had outrun the buying power of the consumer, and it was then that Mr Roosevelt initiated his policy of dollar devaluation by increasing the buying price of gold. Exceptionally wide powers had been conferred on the President by Congress. He had authority to increase the price of gold to 41 dollars 30 cents if he considered it advisable. Selling Price of Wheat. It was said, Mr Skellerup continued, that Mr Roosevelt’s ultimate objective was to increase the selling price of wheat to one dollar a bushel. At that price there would be reasonable prosperity for the farmers. The price in America on November 16 was 89 cents, as compared with 47 cents a year ago. This was one of the good effects of the President’s scheme. Another was that cotton had increased in price from 6 cents to 10 cents. All ordinary industrial shares except railways had also increased, the advance being from 60 per cent to 100 per cent. The railways were suffering as the result of competition from motor and aerial transport, and it was impossible for ordinary economic action to restore them to their old earning power.