WHAT EXPORT PRICES MEAN

Hawke's Bay Herald-Tribune, Volume 81, Issue 60, 3 December 1937, Page 4

WHAT EXPORT PRICES MEAN

A great many; more than the wool-growers themselves will have been awaiting with something like anxious interest the results of to-day's Napier wool saies, hoping that perliaps there might be some appreeiable improvement on the priees realised at Auckland last week-end. Although the downward trend of selling values at both London and Australian auctions had forewarned New Zealand pastoralists of a very distinct easing of bids as compared with those made last season, the majority were probably not quite prepared for the average decline of somewhere about 40 per cent. that actually occurred. .This was shown by the exceptionally large proportion of the catalogues that failcd to reaeh sellers' reserves. JVriting only an honr or so after the opening of the Napier sale, the only information available is that the earlier offerings had met with a slightly more cheerfu] reception, but with only a very modest indication of buyers' limits expanding. By the time this reaehes readers' eyes they will have the advantage of reports on later catalogues that will give them' some better idea as to how the market has shaped generallly. Most folk scanning he price lists will doubtless regard them lightly as being matters of concern for the sellers — and probably in many, if not most, cases their creditors — alone, That, however, is a very narrow and mistaken view to take, for the priees realised for our export produce, whether it be wool, mqat, butter, cheese or fruit, are matters of very great moment to the community as a whole. In fact ,it may be safely said that the real prosperity of the country qnd its ability to maintain an acceptable standard of living for its people depends very intimately upon the volume of the stream of sound fertilising money that the realisation of our exports brings into the' country, No turning on of the taps at the Reserve Bank, or at any otlier source of tbe "national credit" of whieh we hear so much, can make good a shortage in the outside funds that are to be had only in cxchange for the consumable commodities the country can produce for folk on the other side of the world to buy. And it may also be said that when this "costless credit" is introdueed in any great amount, then it must inevitably liave the effect of reduced the purehasing power even of the good money that has had the backing of marketable products. That has been proved time and again whcnever and whatever Governmerits have started tinkering with the national currencies with a view of creating an artificial appearance of prosperity. Any really serious fall in the seiling values of any of our staple exports is inevitably reflected sooner or later in thc spending power of the cominunity as a whole, for through innunierable and oP.en unrecognised ehannels, big and little, the proceeds of the sale of our exports circulates in every direction. Nothing Mr, Nash or any of his colleagues can do in the way cf "insulating" us is going to protect us lastingly from the consequences of substantial reductions in the selling value of our exports on oversea markets, and for our wool, oi course, the buyers who come from abroad constitute our oversea market just as much as if it was being offered in London. Even Mr. Nash has to acknowledge that this costless credit of his does not enable him to get along without taxation, of .whieh he has during his first two years of office collected an extra £10-million or so from people of all classes. Yet the Government still goes merrily along almost daily inereasing the outgoings from the public Treasury, tlie latest instance being an, extra £371,000 a year for the Civil Service, whieh may be thoroughly well deserved but will still have to be extracted from the taxpayers' pockets, while the number of those in the public service is being very materially ihcreased. Thus further taxation looms up in the offing, while reductions in incomes from exports would, of course, make it all the more difficult to carry. However, we may hope that, as the selling season adVances, wool priees will improve, for it is said that the "statistieal position" is such as to give some faip prOmise of this, if only the international sitqation in the Old World could be placed upon some more rational and friendly footing. Fortunately priees for our other chief products are maintained on a fairly favourable level. Nor is it to be forgotten that even those current for wool are a good deal better than they were when we first began to emerge from the depression, but then, of course, the purehasing power of the £N.Z. was a great deal higher than it is now.