TRADE OF THE DOMINION.

Press, Volume LXIII, Issue 19144, 29 October 1927, Page 11

TRADE OF THE DOMINION.

"OUTGOINGS TOO HIGH." A review of the commercial and industrial position of the Dominion was made yesterday at the annual conference of the New Zealand Associated Chambers of Commerce by the president (Mr Win. Machin). "The cheerful optimist," he said, "is already commencing to chide those of us who have ventured to try to point out some causes of the rather unprosperous time our Dominion has been having of late. He is saying we must talk prosperously, and we shall be prosperous; possibly a paraphrase of the old saying that it is one thing to be poor but quite another to seem poor! Dominion Not Poor. "New Zealand is not poor! She is rich —both actually and potentially. No matter where we examine her state — her national income—"-her standard of Living, her wages, her comparatively small unemployment, her climate and soil, her exports, her imports —these are all important evidences in her favour. What other country can afford the luxury of a bank rate of 7 per cent. Seriously, what other country has 9uch a splendid trade? He who wishes to extol New Zealand can take any one of the factors I have named, and talk prosperously with safety. Therefore we can afford to tell ourselves the truth in quiet analysis of our condition, even if the rest of the world happens to overhear us, and the truth is that our Dominion income is a splendid one, but our outgoings, by comparison, are too high. Exports and Imports. "In three years our exports have realised £150!000,000; but our imports have cost us £148,000,000. In 1925 we were £5.000,000 to the good; in 1926, we were'over £3,000,000 to the bad; this year the tide is turning again in favour of our exports, which means an easier state of things. We are, however, still too prodigal! Both are overhead and our spending are recklessly disproportionate to our production. "This coming export season we are looking to our exports of wool and butter and meat, etc., to save us. We are also reducing our spending on imports. But on the prices we expect for our exports, we ought to be able to save money! It would be a great gain if we could keep our imports uniformly £5,000,000 to £6,000,000 below the value of our exports. What a happy thing it •mid be if we could rise to a level of production for export that would pay for all our imports, and also interest and sinking fund on our borrowings overseas! I am convinced this is not impossible by sound, co-ordinated effort. It is certain we must .either do this or bring down our internal expenses to more reasonable proportions; or perhaps meet the difficulty by doing both to some degree. Overhead Expenses. "Look at. our overhead! Take interest! The Post Office is offering o\ por cent, interest; the Public Trustee is offering 5\ per cent, for deposits, and is inducing withdrawals from the Post Office. Neither of these two institutions pays income-tax. But the banks do pa}' rates and taxes; and they are feeling obliged to charge 7 per cent, for overdrafts on best accounts, which is a big burden on all our industries-. "Then look at rates: In 1913 they averaged, 36s per head, and are now

nearly 80s- Consider taxation: In 1914 it was £5 per head, and is now £l2 per head of our population. Look at our national expenditure: In 1915 it was 17-J millions, and in 1926 34£ millions, with a growth of interest and sinking fund charges of from £3,000.000 in 1915 to 91 millions in 1926. "There are hundreds of small businesses and farms in the Dominion which do not and cannot pay while the overhead ft so high. The proprietor often works far longer hours than those who work for him, and tarries greater anxieties, and his' reward in many cases is less than that of a wage-earner. At the end of a }'ear he ruefully looks at a profit barely sufficient to keep him, and as he murmurs, 'ls that all for a year's work,' lie may get a Government demand for a land tax, only to be paid by mortgaging his capital. • • Production. "Look at production: Our exportable surplus in 1925 was 24 per cent, greater in volume than in 1914; but our population in that period had increased by 25 per cent. We have, therefore, barely maintained our all Tound production per head, even though butter saved us by increasing in volume in these eleven years by 124 per cent, and in value by over 200 per cent. We have spent a great deal of money in making comfort and luxury easier to get, and this in turn has made necessities harder to obtain and dearer, and in our difficulties we have been tempted to follow stronge gods! "We have tried a good deal of experimental legislation by extending Government into business, and liave not gained so much from it as we hoped. We have sought to stimulate secondary industries by- tariffs, and some have cast envious eyes upon Australia, where protection lias apparently done wonders; until a recent cold blast from none other than the Australian Tariff Committee lias confirmed our doubts of the efficacy of tliis policy. Control Legislation. "We have tried control legislation for some of our primary exports, but the recent unfortunate experiment of compulsory control, and price-fixing in the case of butter, now abandoned, has shaken the faith of the public, and 'control' and 'compulsion' in business are becoming discredited in favour of more freedom and elasticity. "What is the use of conning over these depressing things? It has its uses! We are learning. We need to learn that short cuts to prosperity are often illusory, but there are royal roads to it —old-fashioned roads well beaten by the feet of our forefathers. These old-fashioned and- tried ways are commonplace—like Xaman's cure!—too. commonplace to arouse the enthusiasm which accompanies the fascinating game of forcing the people into paths which they would not otherwise consider safe enough to travel. Straight Ways. "Listen to the sound of these unpopular and straight ways: More production! Less expenses! More savings! This sounds like plain fare instead of the banquet we all desire. "The New Zealand Bank deposits showed a decrease at the end of 1926 iff comparison with 1925, of two millions, and advances were £4 millions increased.—This means bank customers paid out. £6 millions more than they paid in during the year 1926. Hence an increased deposit rate and a 7 per cent, lending rafp. as a grim encouragement to borrow less and deposit more. "It is no use blaming the banks. The remedy lies with us all. Who can successfully fight the banks? But I would like to see them conquered by kindness. Suppose during next year everybody in Xew Zealand on the average genuinely prodnced more to the

value of 2s per week, and we saved the resultant £5 a year each and deposited the £7 millions with the banks. They would soon be pressing people to use the money for them at a lower rate of interest. "If a thousand men wanted to dig their gardens—in Bace Week—and there were only 900 spades available at that time, the price of spades would go up, but it would be a very different matter H there was a surplus of spades. So it is with money. "Then we might eut our expenses, our non-productive expenses and release money for productive work. This would restore trade balances and increase our savings—and decrease unemployment."