SUDDEN REVERSE

Rotorua Morning Post, Volume 2, Issue 392, 29 November 1932, Page 7

SUDDEN REVERSE

; conditions in u.s.a. I PLUNGED FROM HEIGH.T OF PROSPERITY INTO DEPRESSION. CONTRASTS WITH ENGLAND. In "Th'e Listener" Mr. S. K. Rawcliffe reminds his feaders (or informs them, if they never knew) that the prosperity of America's seven fat years was not evenly spread. It could be called a steel-autqmobile-electrieal-building prosperity. But it could not he called a rural prosperity, nor yet a textile prosperity. Even during the seven years — "seven amazing years" — following the shallow slump of 1921, the wool and cotton. industries were in constant distress, with miserable wages. "The farming population was becoming poor." Coalmining was in chaos, and the eollieries were often battlefields. j A section of industry rose to heights , far beyond the resources of the wh'ole ; of industry, ,and the top of the pdle of prosperity was hig encugh to hide the narrowness of its f mndations — until Wall Street values broke in Octoher, 1929. As an Englishman he compares the American. and the British experiences: "The American experience is different • from ours mainly in this. We have been enduring hard times for more ' than ten years. Th'ey were plunged from ,a height of prosperity into the pit of depression within a few months or weeks. Britain is a small and manageable country, with a unified National Government. .The United States is a vast continental territory, j with forty-eight State Governments, and a population of 120 millions made up of people from all the countries of Europe. We have to remind our- j selves that the American national | task is of enonnous difficulty, far 1 greater than any other, except that of Russia." One-third Ou^ of Work. The Northern Hemisphere is now into winter, and the President of the' American Federation of Labour, Mr. William Green, estimated that this winter the United States will have thirteen million people out of work. "It is calculated that there should he in the U.S.A. a total of forty mdllions of people, as the census reports say, gainfully employed. Mr. Green's figure — and it is not the high'est we have had — means that nearlyi one-third of the employable population is out of work, making with their dependants a terrifying total of more than thirty millions in need of relief. "But what about unemployment benefit? America, as you lcnow, has no system of national insuranee; how does it deal with the', enoraious task of giving relief to ten or twelve millions out of work? So far this has been done hy means of private charity, special funds, relief committees formed Dy the Mayors, and funds provided by the local and State Governments. The American people have been very generous in these ways. Dole without Insuranee. "And here is a point which is of special interest to all British people visiting the United States. American people are often not well informed about the methods of relief adopted in their own country. They think of England as a country of the dole, and until their own unemployment became so serious they looked upon the system of public relief with disapproval or fear. Most of them, I am sure, do not know about our national insuranee, with the workers' regular contribui tion; nor,_rather strangely, do they knoW how large a part of the relief in America comes out of public funds — that is, out of taxes. In other words, they have not realised that ( they have had a dole system without any form of workers' insuranee. The present outlook is very serious, because in most of the cities the relief funds ara used up and the authorities cannot hope to raise very much hy more special appeals. There is no doubt that taxation for relief will have to he increased. "Until this year the Federal Government in Washington has not made frants for relief from the national exchequer. President Hoover was dead against it. He held te the view that each city and State must take care of its own unemployed. But this is now changed. Congress voted a large sum (ahout £400 million sterling)' for purposes of relief, and much of this is now heing applied. But all thoughtful Americans admit that in1 a winter of widespread distress it does not go very far." Mass Production v. Tariff. greater the inflation. The Americans, The greater the prosperity, the after ths war "gloried in their plenty .... Priveately, and in all public enterprises, they threw money away with both hands." In. New Zealand millions lie idle in railway material. In America the idle or frozen millions are in all sorts of material. Huge plants must work or ruin their owners. But how can they sell the products oversea if the United Stataes will not buy from oversea? And how can they sell at home when one-third of the employable population is idle ? "Mas production came upon America too suddenly." Th'e mass production thought broke in upon protective tariff thought. The two proved ineompatible. "Mass production in the American scale demands an expanding market outside the country's own bordefs. for its surplus products." America, in short, increased the industrial steam pressure and hut off the saf ety valve. It was thought that a safety valve might ha found in everincreasing wages, producing constantly rising internal purchasing power. Workers were to be paid more so that th'ey could buy the products of their own mass produetionproduets which the poor foreigner could not pay for. Did this plan suceed? Mr. Green's figures seem to say No.