COAL STOCKS DWINDLING

Chronicle (Levin), 1 July 1949, Page 5

COAL STOCKS DWINDLING

Sydney Facing More Power And Transport Cuts Received Friday, 11 a.m.^ , SYDNEY, July 1. Coal stocks in the city are dwindling. and further poweh ahd tl'ahSport restrictions are impending. The Australian Gas and Light Company, which supplies ihost of Sydney's hotels, can keep producing gas for ten days. There ' is enough cohl to Coh'.inUe the production of electricity at the present irate and. a minimum supply can be kept going indefinite'y with oilrftred fmijaces. j The skeleton steam train services can con inue for a fortnight. 1 Altogether about 200,000, tons of. 5 coal is waiting near sidings and ports. This i'nelUdes 20,000 tons in railway trucks on the Cessnock line and 16,000 tons stacked . at Cullen JBullen in the west. These amounts were menlioned by the Pfime Minister, Mr.' Chifley, in the HoUse of Representatives when he ahnounced that the Goverhmeht was considering lifting the • coal if the emergency continued. i The Cessnock coal can be moved as soon as the floodwaters Subside as the SoU' h Maitland railway employees are not on strike. j The Federal and New South Wales Governments are prepared to act if the strike looks 1ike continuing a long time, but they must mobilise sufftcient trucks and men

■ ; O and Mr. F. P. "Wal-sb and tlie other negot.iat.ors will have difficulty in securiny a price increase this time. Danish bntter wa* snld at. 321s 6d compared with the NeAv Zealand priee of 235s.' D'anish has uow been reduced to 271s 6s. Under the long-term agreements an annual variation; (ur> or down) of 74 ner eent is rtermitted Und the "most yjp c-h. X ew, , Zeal an cj coul d hope for is tlius around 253s a cwt. Some people honed that a formula might be found.to increase it exren furthp.r but Under pres°nt circumstances informed cireles in Wellington eonsider New Zealand wiU be lucky to be granted even the- 7| per cent. The price which New® Zealand receives for her dairy producejs of fundamental imnortance to the . whole Dominion. If it is> not increased then the farmers' stabilisation funds will be rapidly depleted because the present guaranteed price is higher than the selling price of the product overseas. Althougli Government circles have long since ceased to expect vofes from the farmers in the mass, a depletion of those funds would have serious political repercussions. But this is not the only problem facing the Government. The terms on which New Zealand trades have been going steadily against her. The prices of her exports have not risen equivalently with the prices of imports. .New Zealand 's stabilisa-' iion policy has not been supported by a similar policy affecting the prices of British exports, and nnless prices fall rapidly in Britain, a continuation of last vear's price for butter would prejudiee New Zealand 's import programme. It is therefore considered likely that Britain will agree to some increase in the present price of 235s a cwt. However, it is tiiought that there will be terms attaching to such an increase and the question of the devalua tion of sterliAg must crop up. Such a "onrse might temporarily solve Britain 's financiar problem bv discouraging imports and encouraging exports. She would, in faet, put herself in the same position > as did New Zealand in 1933 when the Tate of exchange was increased. But whereas such an action might please the United States, ivt would have serious results for New Zealand. There is already some resistence to saies of New Zealand butter in Britain. Devaluation would mean either, a price increase to the British consumer or higher subsidies and it is already felt that subsidies at their nresent level are too high. Devalua'■icn might mean a removal of subsidies on both butter and margarine and with a price difference of over ls a Jb between them, the oUtlook - for New Zealand bufter would be grim indeed^ It is regarded as unlikely that de-

vMuation will cone about yet. What ;s more likely. is that the Dominions and others in the sterling areas will bc asked to .limit their imports from Britain — that is, frecze their credits — and -o enable Britain to sell anore to dolhiT arefes. Such a course would impose a great strain on New Zealand 's own economv because long-delayed capita1 expe.nditure would be further deluved if imports from Britain vrcre restricted .Britain will have to suffer a Cut ir real- living standards and if we ir$eud to stand by her then we, too, shall probably have to accept one. Some radical and surprising nioves are afoot and New Zealand' and the Commonweaith will soon face serious , problems. '