ENGINEERING AND ECONOMICS.

Press, Volume LXIII, Issue 19137, 21 October 1927, Page 13

ENGINEERING AND ECONOMICS.

TO THE EDITOB OF THE PBESS. gi r> —i have read your subleader appearing in this morning's Pkess under .. the above heading, a number of times, in a hopeless endeavour to fathom your reasoning. "When Mr Galbraith quotes, and even stresses, the outstanding advantages of using, New Zealand produced materials in his v proposed ■ roading scheme, he is undoubtedly right, and does not deserve the sarcastic conrnent that "it is sad so excellent an engineer should be such a strange economist," with which your article concludes. It would be interesting to know by what extraordinary process of reasoning you arrive at any contrary opinion. Without wishing to pose as an authority on advanced economics, I assert that the common-sense viewpoint is, certainly that expressed by Mr Galbraith, and one has to go no further than your leading article, "The Trade Eeturns," appearing immediately above the article referred to, for. confirmation of this. A small country like ours is dependent upon a favourable trade balance for comfortable financial conditions. Directly we spend more (on imports) than we earn (in exports), like the individual we become "hard-up." To bring Mr Galbraith's views down to a simple formula,, it applies as follows: My household requires,- say, £o worth of potatoes in year. If these are bought from America, neither myself nor New Zealand has any further interest in the £5, although I get the potatoes. I could buy from ' the local potato-grower, and the £5- would remain in local circulation. Or, on the other hand, if I use my available backyard and grow them" myself, I still get the potatoes/the- £5 is still available for local circulation,- and my finances are £5 to the goodAfter all, the finances of a.country are similar to the finances of an individual, and every pound we can avoid spending (on imports) by using, local materials,, is a clear gain of that £ 1 for local circulation.

Mr Galbraith is to be congratulated upon stressing this in his report, and were-these facts more widely recognised, New Zealand would soon become more self-contained; would soon be able to shoulder its own loans; and. would not be continuously "sailing so close to the wind" that every little set-back,in the value of primary products brings in its train periods of depression as at present.—Yours, etc., C.C.D. October 20th. [We refer to this letter in our leader columns.—Ed., The Press.]