CAPITAL’S FLIGHT.

Star (Christchurch), Volume LXVI, Issue 20454, 6 November 1934, Page 5

CAPITAL’S FLIGHT.

Americans Buy British Bonds. FEAR OF CHANGES. (By PAUL MALLOX). WASHINGTON, October 8. A forbidden subject of considerable concern on the inside is the invisible flight of capital from this country. It is quite well known in the topmost financial circles that certain wealthy people have been purchasing foreign securities lately in increasing quantities. It is known specifically that there has been big American buv,ng of British bonds and Canadian stocks, chiefly those of gold mining companies. 1 here has been a notable tendency among trustees of big trust funds and estates to seek such outside investments. The extent of these operations cannot be estimated accurately, because they do not show' up anywhere in records, except vaguely in the settlement of international balances. The reason for the movement, of course, is timidity regarding the possible redistribution of wealth and inflation. What can be done about it remains to be seen, but for the present, it increases the inside pressure on the Administration for permanent stabilisation, a balanced budget, and all the other things that the Conservatives have been howling about. One thing tfiat probably wfill be done about it is that, after the Congressional elections, the Administration will enter into another economy wave. The basis for such a retrenchment movement, already has been fixed up quietly backstage, in the thus far secret preparations for next year's budget. That budget will be made public after the first of the year, and the dope is that it will contain some sharp cuts. The idea is to eliminate free-handed Government, curtail the volume of waste, and put things on a more business-like basis, meeting only the bare relief requirements. This will not be enough to balance the budget, but it will allay fears and suspicions.

Thirty-hour Week. The drive for the thirty-hour week is getting hotter. It is bound to be the biggest thing at the coming session of Congress. The original idea was worked out by the New Dealers as a compromise with the thirty-hour week agitators in Congress. The Administration is fast getting back into that original predicament again. It may have the thirtyhour week rammed down its throat unless- it works out a reorganisation of the N.R.A. on a compromise basis which wfill block the Labour enthusiasts. The highest New Dealers have shown some hesitancy about taking the big thirty-hour jump all at once. They would like to approach the thing gradually by first establishing a thirty-six-hour programme to see how it works out. Statesmen, employers and Labour leaders all prattle about the thirtyhour week in general terms. They are I purposely ducking the basic issue, which is whether workers are to be paid the same for a thirty-hour week as they are being paid now for forty hours or more. Any bystander can see without looking that employers are not going to grant the 25 per cent wage increase which would be involved if they paid as much for thirty hours’ work as they now pay for forty. Indeed, if you pry inside the N.R.A., you will find that the real truth is that very few existing codes now have a flat forty-hour provision. In virtually all codes there are many exceptions (skilled workmen, etc.) and, furthermore, allowances are made for peak and tolerance production periods. Also, many codes have no overtime provision. Virtually no code provides against wage cuts where the work week is cut. It is only natural that employers will use these loopholes to keep their total labour expenses down. They would not last long in business if they didn’t When forced to increase wages for one type of worker, they are able' occasionally to make up that loss on another type of worker, not covered by the code. N.R.A. insiders never may admit it, but they have statistical proof of many instances in which the pay of skilled workers has been cut by industries working under the codes —N.A.N.A. Copyright.

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