Evening star., 1935-06-09
BY ALBIN F.. JOHNSON.


r attending the nineteenth an
nual conference of the In
ternational Labor Office, will
be confronted with some arresting
facts as to the social consequences
of the depression when they begin
the debate upon Director Harold But
lers yearly report next week. Based
upon exhaustive study of the labor,
financial, industrial and social situa-
tions in every country of the world,
the report skaters many hitherto
sacred orthodox economic theories. 1t
covers every aspect of the present
world economic situation. according
to latest available official and un-
Official reports and statistics and will
undoubtedly precipitate heated de-
bates between workers, employers and
government representatives who are
here in full force. For the first time
both the United States and Soviet
Russia. now members of the I. L. o.,
are represented with full delegations,
while Japan and Brazil, who withdrew
from the League, are maintaining
their relations with the Labor Office.
Only Germany, among civilized ma
tions, is absent.
Among the conclusions reached by
Director Butler and his expert ad-
visers on financial, economic and So
cial questions are:
ID That. while 1884 saw distinct
advance over 1888, world recovery is
still superficial rather than funda-
mental. Advances in some countries
are counter balanced by losses in
others and world opinion has not
acquired confidence in the new eco
nomic system which is emerging.
~ Only seven countries-Aus-
tralia, Denmark, Germany Great
Britain, Japan, Norway and Sweden
have less than twice as much unem-
ployment today as they had in 1929.
Five countries-Belgium Czechoslo-
Vakia, France. Holland and Poland
suffered more severely in 1884 than
in the two previous years.
Depreciation Aids Recovery.
go Countries which deprecated
their currencies have started along
the road to recovery, while those which
have kept their exchanges at parity.
with one or two exceptions. are faring
badly. In other words inf1ationary
policies have brought relief, while de-
f1ationary policies have proved futile
In haltlng the crisis.
a. Public works programs. except
where undertaken on a gigantic scale
have had no important results either
in reducing unemployment or stimu-
lating general economic activity.
81 Reduction of working hours,
which is gaining headway in many
countries. furnishes only partial
remedy for unemployment, but is be-
coming recognized as an inevitable
and indispensable economic reform.
80 Reduction of wages. as a means
of cutting costs. has served to increase
rather than ameliorate unemploy-
ment. Def1ationary policies, effective
in the past, no longer are applicable
to modern conditions.
90 Social insurance-for old age
sickness, unemployment, etc.-instead
Of being destroyed by the dogged per-
sistence Of the depression. has on the
contrary been given new impetus.
80 Practically all the progress thus
far made against the depression has
been the result of national effort and
limited to the national field. Before
recovery can become general and
world wide, international action must
be taken to stabilize currencieS. re-
move trade barriers and dissipate ex-
listing political uncertainty
Chonoo in Eonno,,,;n
"One of the revelations, and an
outstanding lesson in the present de-
preston, says Butler, lis the pro-
found psychological change that is
coming over economic thinking. 1t
has been brought home to every peo-
piles. every government and every
group-Whether conservative or rad
ical, democratic or dictatorial in COM
plexion-that the present scarcity is
due not to any failure of nature. but
to a human failure 10 make products
OF nature available to those who need
them. 1t is therefore expected that
governments devote The same energy,
ingenuity and attention to the pro-
vision Of the elementary needs of
food. clothing and shelter on a civ
ilized scale as to the provision of air
communications, wireless services and
elaborate systems of national de-
fense."
In analyzing unemployment and
monetary policies, Butler arrives at
the conclusion that the countries
which are seeking to keep their ex-
change at parity are faring decidedly
worse lin 1934 than those which
resorted to depreciation or revalua-
ton"
Japan, which deprecated early.
clearly shows the pest employment
record among industrial nations to-
day. Sweden is making remarkable
advances with combined cheap
money policy and public works pro-
gram. Exports are increasing rapidly
and unemployment is disappearing.
Other countries which are profiting
by deprecated currencies are: Den
mark, Finland, Norway, Portugal.
Britain. Canada. Argentina. Mexico,
Brazil, Chile, Australia. New Zealand.
China. India. Czechoslovakia and the
United States.
Defiati0n Unsuccessful.
Switzerland, Holland, France, Italy.
Poland and to a certain extent Bel
gium before her recent devaluation of
the franc, have all found def1ationary
policies more or less unsuccessful in
combating the depression and unem-
ployment.
Wage reductions. one OF the favorite
methods of lowering production costs
and combating previous depressions,
have resulted in growing unemploy-
ment and increased industrial stag
nation wherever tried, it is contended.
THE experience of the last IL
months confirms the deductions made
on last years observations, that the
reduction of costs, mainly at the ex-
pense of wages, has not ameliorated
unemployment. but has, on the con-
trary, increased it," says Butler. Pros
perity of industry is intimately bound
up with wages and salaries which now
represent by far the largest propor-
ton of the aggregate purchasing