The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, AUGUST 9, 1930. THE UNEMPLOYMENT PROBLEM.

Hokitika Guardian, 9 August 1930, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, AUGUST 9, 1930. THE UNEMPLOYMENT PROBLEM.

It is (something more than a coincidence that the cable columns lately supplies information of attempt's being made to grapple with unemployment in three widely separated cen- . tres—in Germany, in Italy and in Australia. Unemployment, in fact, is now a world-wide disorder, and the United States and Britain are as severely afflicted by it as Germany or Italy, or, for that matter, Australia or Now Zealand. Evidently a condition of things which manifests itself so plainly in all civilised .countries at the same time cannot he duo to purely local causes, and its occurrence everywhere must be traceable at least , in part to the operation of farreaching influences operating simultaneously throughout the world. Many economists have now come to the conclusion that the limitation of opportunities which wage-earners are now facing everywhere lias been occasioned largely by the substitution of automatic labour-saving devices for man-power. In America it is now admitted that unemployment in the mechanical industries is largely to he. attributed to this displacement of “killed labour. But it- is a historical fact that men and women were superseded by machincrv on a relatively larger scale during the Industrial Revolution in the earlier portion of the nineteenth century, and this substitution was accompanied not only by a constant cheapening of the oust of production, but bv a continual enlargement of markets and an expansion of the demand for goods which meant more regular employment and the prosperity of workers and employers alike. Why do we not observe the same influences operating in the same way now? In attempting to answer this question the Auckland Star goes on to say that it must lie remembered that the success of all industry and the prosperity of all who participate in. the work of •production depend on the demand for goods. When there is no such demand, production must cease, and il the demand decline's, the selling price of the commodities must tend to fall. Rut a fall in prices of necessity means the limitation 1 of the production of goods, the withdrawal of capital from

industrial investments, and conpcquent dismissal of hands or refusal to employ them. Tims we.reach the conclnsipn that widespread unemployment will always fo, low a general reduction in the demand for gpoiip. But the demands for goods must always be expressed in terms of money, and when there is relatively little money in circulation goods cannot easily he sold. The logical outcome of all this is that extensive unemployment has frequently been due to a reduction in the amount of the world’s currency, and therefore generally to pronounced diminution in the production of gold. The process of reasoning which is followed has been frequently employed of late by economic and financial experts, wlio connect the steady growth of unemployment everywhere during the past ten years with the comparative falling-off in the world’s gold supply. One unfortunate inference that mcfst be'drawn from xhe.se arguments is that the present epidemic of unemployment cannot be easily or quickly remedied. Jt is still passible to attribute' the depression of world trade to the 'breakdown of the world’s- commercial relations due to the Great War, and the continued isolation of Russia. But the most general, and probably the most potent, source of the unemployment evil is this relative scarcity of gold. Happily the machinery of modern finance can be utilised by international! cooperation in siicli a way aS to economise, and even to “ration,’’ the amount'of gold available for the world’s uses. And while we are awaiting the application of these remedies and such help as the new International Bank can give, we may console ourselves with the reflection that neither Italy nor Germany, nor Britain nor America, seems vet to have devised any better means than those Trendy put into operation by Australia and New Zealand for alleviating unemployment.