Hokitika Guardian & Evening Star TUESDAY, NOVEMBER 16, 1920.

Hokitika Guardian, 16 November 1920, Page 2

Hokitika Guardian & Evening Star TUESDAY, NOVEMBER 16, 1920.

THE FINANCIAL OUTLOOK. In the course of a review of the linancial outlook for the Dominion in relation to revenue and the liabilities which the country has undertaken, the Mercantile Gazette remarks that the financial outlook is indeed unfavourable, and may very easily develop into stringency. The strength of Government finance depends upon the ecoutmie'"conditions of the country, and these, if closely examined, are not very, promising. At the present moment there is considerable difficult}- in arranging drafts on London and British manufacturers shipping goods to Austral© da cannot negotiate their drafts, with The result that shipments are being delayed. This means that there will be a shrinkage in the volume of New Zealind’s imports, and while this cannot be itgretted because there has been con- |

siderable over-importation recently, it will affect the Custom's revenue, 'i l'o Government cannot afford to lose a penny piece of revenue, because notwithstanding Mr. Massey’s remarks on sound finance, the Government is squandering money. Then we iia/e ihe very serious position of wool. It is common knowledge that all grades of wool have declined in value, medium and coarse crossbred showing a b'g slump. Sixty per cent of New Zealand wool ds of the inferior quality, and the decline in the value of this class of wool is more than 50 per cent of the commandeer price. The income of wool growers, even if they decide to market 1 their wool at once, will be half of what it was during the past financial year. But it is doubtful if the wool can be marketed because of the enormous weight of wool that is available in the centres of consumption. Woolgrowers may find that they must hold their wool for a. considerable time through inability to sell, and that would give them no income, but rather involve them in increased expenditure Meat is in an unfavourable position also, because of the immense quantity that is available. Theirer was some hope that the United States would absorb a fair amount of lamb and light

weight mutton, but with the election of Senator Harding to the Presidency it would not be safe to build on this. In one of his election speeches the new President indicated that it would be necessary to protect the fanners of America. The income of the producers in the produce year which has just begun will be considerably less than what they obtained in the past season, and the revenue of the State from income tax will be less, and unless Mr Massey begins immediately to exercise drastic economy in the public service there will soon bo financial tension. Economy & the last thing that appeals to th© politician who prefers to yield to the demands of different elections for the expenditure of public money, even where such expenditure is wasteful. The worst feature of Government to-day is the interfer-

once of the State in commercial and industrial pursuits. (At the outset of the war Mr Massey rushed in and bought wheat in Canada, on which there was a substantial loss, which the taxpayers of New Zealand have since had to bear. Then we have had various pricefixing stunts, and quite recently there was the deal in sugar, a most disastrous one for New Zealand. The people are paying to-day for unrefined sugar, the same price that they were paying a few weeks ago for refined sugar and the prices to-day are double what they were earlier in, the year. The Government bought the whole of the sugar crop of Fiji, and it was claimed that if this had not been done the Colonial Sugar Company, would have sold its output at a higher figure than that paid by the Government. This can be characterised as nonsense. The Colonial Sugar Company has a monopoly of the New Zealand sugar trade,

and it Wbuld have sacrificed this market for a temporary gain. Supposing the company did sell its output to a foreign buyer hiid left New Zealand severely alone, our me rob an us would have got sugar somehow from somewhere and to-day with the slump in tli© sugar markets of the world, we could have imported sugar freely at much lower prices than the Government is now paying. What the Government has succeeded in doing is to preserve the Now Zealand market for the Colonial Sugar Company, while giving the Company a handsome premium for the privilege of doing so. Now-, the Government is going into a, building business and the timber trade, for we are told that a Government timber yard has been opened up at Miramar, Wellington, and that three sailing vessels have been chartered for the carrying of timber supplies and cement. This house building and lumber trading of tho Government is bound to prove a costly failure, like the other trading concerns of the Government Bureaucratic methods of management is wasteful and inefficient. The Wellington City Council started off some twelve months ago to build houses and the cost of these four and five-roomed, workers’ homes run from £1350 to £1750. Workers are no doubt earning good wages just now, but very few who undertake such a liability will be able to see it through and these houses are bound to be the proverbial “white elephant.”