INDUSTRIAL CRISIS

Wanganui Chronicle, Volume 79, Issue 18, 22 January 1935, Page 5

INDUSTRIAL CRISIS

SIGNS OF PASSING MANY PROBLEMS AHEAD EMPLOYERS’ VIEWS “It would be optimisti'c to say that we have yet emerged from the most serious crisis in the industrial history of New Zealand, although there are some signs of its passing,” says the president of the Auckland Employers Association, Mr J. S. Dawes, in a circular letter to members of the association. “Industry is by no means on a firm or prosperous footing as yet, and while the world demand for our primary products is curtailed, and the prices fluctuating at a low level, we cannot rely on any market or permanent improvement. Every country is now becoming more and less dependent on its importations, and each country is adjusting its •currency values according to its new requirements. If we realise the inevitability of this it will save much useless ari sometimes acrimonious discussion. and enable us to turn our attention to the essential steps to be taken to meet these changed conditions. Old conditions have passed never to return again, possibly fortunately. as they led to an era of inflation and extravagance from which we are now suffering, and must continue to suffer the aftermath. “On the Border-line”

“Whether the low level that prices have now reached is abnormal or not, we have to adjust our production costs to them, or cease producing. When in 1932 it was found that the national income had fallen from 150 to 90 millions, it appeared that absolute disaster was inevitable. Cost of production in all lines was left far above market value of the articles produced. That position has since eased somewhat, owing to the drastic steps that wore taken, but most businesses are now hovering on the border-line between profit and loss, and many employers realise that a slight additional increase to their costing would find them on the wrong side. That investors realise this is apparent by the reluctance to invest money in industry, even though nearly all other avenues for investment are practically closed. Confidence in Industry “The Erst object to be attained is to revive confidence in industry,” continued Mr Dawes. “The main factor which would tend towards this would be the feeling that there had dawned an era oT closer and more sympathetic co-operation as between employers and wage-earners. As the conditions in New Zealand threatened disaster rather than stagnation, and as it really appeared that the more thoughtful section of the workers recognised as fel-low-workers the organisers and controllers of industry, an amendment was made by the Government in the Conciliation and Arbitration Act, the effect of which was that no award should continue binding on industry unless the details had been agreed to in conciliation. This compulsory conciliation, as it has been called, was, and is, an atI tempt to bring employers workers together, and the result has. on the whole, up to the present, been satisfactory, in so far at least as it has enabled many industries to struggle on which otherwise would have had to close down, *ind kept some thousands of workers in employment who would otherwise have swollen the ranks of *he unemployed.

The Exchange Rate “ There arc many problems facing us, some of which, appear almost insoluble,” added Mr Dawes. “I do not wish now to refer specially to the problem of unemployment. The problem is a world-wide one, and its permanent solution depends on factors which it would take a series of articles to set out. The problem of currency and exchange has been discussed ad nauseam—intelligently and otherwise. Whether it was wise deliberately to depreciate our currency could be debated indefinitely, and as two different sections of employers —the. commercial and the industrial—are bound to hold diametrically opposite views, as they do on the question of tariffs, there is little prospect of agreement. Since the establishment of the State Bank, the question becomes immaterial, as inflexible economic laws will determine whether our currency will further depreciate or whether it will even tually come closer to parity with sterling.”