WELLINGTON NEWS

Hokitika Guardian, 22 January 1929, Page 8

WELLINGTON NEWS

CHKAP MONEY AND WORK LESS. [Special To The Guabdian.] WELLINGTON, January 19. Two remarkable items of news wero published bv the newspapers last'week which appear to bo antagonistic, and so peculiar as to merit more than passing attention. The first item is that the Wellington City Council which has . 1 hitherto been obliged to pay 0} percent j if or loans obtained locally, has secured £20,000,000 at 0} per cent and at par. j This money was obtained over the counter, and so the Council is saved commission and other incidental charges. The other news item was a report from j Dunedin, the -Mayor of that city stating that the unemployment problem was j causing him great concern. The Officer in Charge of the Labour Department in ( Dunedin stated that the number of unemployed had increased by 30 to a total of 300. It cannot be denied that there are unemployed in all centres. We are in a very peculiar position at the present time. There is undoubtedly plenty of money in the country and the experience of the Wellington City Council shows that capitalists are anxious to lend their money even at a low rate of interest than has been current provided that they have safety. Wellington City debentures would ol course be absolutely sale. With plenty of money at a cheap rate there should be almost a boom in the country, at any rate that has been the experience c.if the past, yet there are people who cannot find employment. The position is peculiar. For some securities in respect to which lenders feel safe there is plenty of money available, but capitalists appear shy of investing m new enterprises, especially in those necessitating the employment of labour, and if this is a correct diagnosis of the prevailing economic conditions then it is probable that unemployment will continue with more or less intensity. The post-war slumps were due to inflation, and while inflation has been more or less eliminated in numerous directions, wage inflation continues, and this seems to be the root of the unemployment problem. Timid ano •spasmodic attempts have been made to adjust wages, but as this question is largely mixed up with politics, our politicians have shown no normal 'fortitude in dealing with the subject.. Ihey have subscribed to the slogan of the labour agitator “ not a penny off the pay,” and so unemployment remains to mystify some people. The theory that wage reductions, or, as it is more correct to say. squeezing out wage inflation, will not harm the community, but prove beneficial. IF. say worker Jones is now earning £»> per week, with which lie is able to buy certain measure of the necessaries and comforts of life, what difference would it make to worker Jones if he could purchase the same measure ol the necessaries and comforts of hie with £.l less, that is £5 per week. In practically all enterprises about 80 per cent of the costs go in wages and salaries. Unfortunately this question is far too closely associated with politics. which makes it somewhat difficult to deal with it from the economic However,' it must be admitted that inflation not alone in respect of wages, but with commodities and services also exists, and it would be interesting 1 a commission of professing economists was ' officially authorised to examine into- the matter and report. However, there is a prospect that the unemployment trouble will ease considerably, at all events it is not likely to be as severe in the coining winter as it was . in the last. The easing will he due to the increased operations of the Advances Office. A greater volume of money is to lie advanced to farmers and homo builders and the activity thus engendered will be beneficial all round. A adwav and other public works are being pushed forward so that a fair amoum of skilled and unskilled labour will •" employed and the increased circulation of money arising therefrom will stimuli, to domestic trade, and there should ■follow an increase of imports. The greater trade activity may induce capitalists to overcome their timidity and lack of confidence and kiunc 1 cud into profitable enterprises. here should be activity in the building trade during the next twelve months, and as a natural result there should be a welcome revival in the timber milling industry, and a whole army of carpcm tors 'joiners, plumbers, and scores of other trades will he busy. It must be remembered that wo are experiencing another profitable season, with profits piling up. and this cannot go on without so me use being made of the accumulated funds. How to create confidence is the fundamental factor in the present position.