Hokitika Guardian & Evening Star THURSSDAY, DECEMBER 2nd., 1920.

Hokitika Guardian, 2 December 1920, Page 2

Hokitika Guardian & Evening Star THURSSDAY, DECEMBER 2nd., 1920.

THE ADJUSTMENT PROCESS. Yesterday a reference was made to . trading conditions, and the economic position governing prices. As bearing on the matter and showing how adjustments come about, a late New York letter gives an interesting example of the process. The American experiences will have Their reflection here for the same economic laws hold sway everywhere. It is interesting to note the swing of the financial pendulum in tho United States as an example of—the experience we are hardly likely to escape when a stringency takes place. The writer says:—Credit conditions are beginning to adjust themselves with the result that a number of small men, who engaged in various lines of business Jon too small a capital and who expect-; ed to swing large deals, have been wiped out. This means that, business ( is beginning to get back to normal, although the process is a slow one. Au- | tnmn goods are now being exhibited in the shop, The prices are apparently lower than last fall, but it does not seem as if they will get down, much lower. There is quite a demand for English goods, especially clothing. It ' is the toboujr situation that is, the cause of the greatest uncertainty as to tlie future. To judge by the frequent ' strikes for higher pay, in spite of the | fact that most of these workers are already getting well paid, it would appear that the peak of high wage's has not yet bfcen reached, or rather the peak in some lines, and the demand in others, which, however, is not praotical to grant.. It simply means that while labour continues to insist on higher I wage* the cost of living to the people at large cannot come down, because the cost of labour forms the largest item of all, and it must eventually fall upon the consumer. Still, the fact remains that industry, credit, prices and, generally speaking everything else, i? trying to get back to a more normal, level, and even labour will eventually i undergo some liquidation. While prices are ! admitedly working towards a readjust- | ment, pre-war prices are nowhere in sight. The repeal of the excess profits tax and the sur tax on incomes is recommended as a relief to business. People are now disposed to economise after one of the most, limitless eras of exr travagance we have ever-experienced, and the resistance to unreasonable prices is having its effect. High prices themselves had their own part in this recession by first automatically checking consumption. '>Sb' very untoward things have followed. We see many staple products of standard commercial lines at a standstill, if hot worse, as regards markets and prices: Some of these conditions are reflected attitudes of more careful buying combined .with a more or less exaggerated feeling, in some quarters that old prices were on. the road back, according to one banking official. This same authority says that extravagant buying by the customer and frenzied marketing by the retailer and wholesaler to supply the demand developed a wide practice of ordering twice as much as needed from about three times the firms usually purchased from. At the first suspicion of less buying a flood of cancellation orders descended upon the industries, which had based their programmes on orders on hand. This question of order cancellation is one of the most serious problems confronting industry to-day, and -perhaps accounts for the market condition of even staple lines of production. A reduction of the credit level to a more normal basis is, therefore, regarded not only as evident, but imperative, and, despite the criticism of the banks that have been limiting credit, it is found that the desire of the banking interests to check credit expansion is the wisest policy to pursue under present conditions.

It is impossible to read the foregoing experience of a national trading concern, without realising wliat a delicate affair the trading machine is. It is almost ultra-sensitive, in that it responds to every wind that blows, favorable and unfavorable. Trade is founded distinctly on credit, and credit draws its source of power from capital. There we have the financial fabric as it stands to-day. Without money to pay for goods, credit is exhausted quickly, and

6dce. credit stops, the trading ffiafihiM | ceases. The manufacturer and the pro- ( ducer feel' the pinch first, hut it falls back eventually on the consumer) ‘who must pay all the time he will have the goods. Tlie economic situation can- i not he governed by any temporary palliatives. 'lt is the volume of trade itself which makes or mars the position, in that supply and demand are brought into responsive operation. One is complementary to the other, and working conjointly they are the essence of sound business. War times called for goods, itWespeotive of cost. The conditions were unnatural, and when they eased the world found what a dislocation of trade there was. The extravagance of war times has to be made good, and the world has to “carry on” as well meantime. There is the natural supply and demand requirements of to-day to be met and the un- ‘ natural period to be paid for also. This suit is not unexpected, and until the economic situation is dealt with reasonably the discomfort of the overlapping ! will be felt. Lessened production, shorter hours, and higher wages, can out aggravate the living conditions of the 1 masses., and as capital grows scarcer the position will be accentuated because , it is the one factor which can keep . the trading machine running smoothly, j It is a fact that substantially less money will return to this country for its 1 exports, and we are paying out more and more for The .Govern- i ment and the people have got to de- . i , c ide what steps they will take to counj teract this growing deficiency in money to carry on nationally and commercially short of borrowing . and increasing ..taxation. Obviously there must he rc- .. trenchment and curtailment and it ) j should begin betimes.

The Argus in a further reference to the ' forestry question, rather than to the j abnormal cost of the Forestry Department, reiterates a good deal which has been said before, as well as detailing something of the obvious, but is again silent on the tremendous cost to the country which is to be Imposed directly and indirectly on the people. Incidentally it asks why not criticise other departments, and on this point the extravagance in departmental expenditure in this country has been dravn attention to frequently. But that point does not help the question. which our contemporary would seek to side step. It seeks also to condone its own reversal of line of criticism by the assertion that the Minister has changed and not the Argus. It is news to us.to learn that Sir Francis Bell would haul down his colors so readily. The forestry policy is far from being developed yet, j and when it is, millers, labor and public alike will find it irksome. In deference to public opinion there has been some concession regarding export privileges, but they are privileges rather than a right, and it takes ( more than reason at times to get the privilege. Also, the privilege to export is merely temporary, and the volume is a falling quantity. Likewise what are to be the , restrictions regarding export in the ; licenses to cut issued by the Forestry j Department? They will lie of the nega--1 tive character mainly, excepting greater I pressure than mere local reasons aro 1 pressed upon the Governiment. With ! tliie Minister, 'forestry control is a 1 “fad,” as the Argus said on a former occasion. And to quote the Argus further when it took this question up originally : “The trend of the proposal may lead to confiscation. The astounding feature of the Minister’s attitude was that he appears to realise fully the effect of his proposals.” Exactly so,, and Sir Francis will not retreat lightly from his objective—the bureaucratic control of the industry. When that period arrives we shall not be surprised to see the Argus change its tune again. As the Argus said last year “the only remedy is a strong public opinion,” and in calling attention to the great extravagance of the Forestry Department we are helping to mould that opinion for the public cannot be fooled all the time. It is one thing to draw a glorious picture of what can be done, and quite another thing to submit the cast when the same is if not prohibitive an altogether undue burden on both industry and public. That is the point at issue, and the lArgus fails to justify it in anything but general terms, which are word painting without the facts.

The formal observation of Provincial Day yesterday calls to mind the early explorers who fearlessly invaded the fastnesses of the forest clad country, anil o’er-leaping the snow clad Alps, found a jfathwjiy by tprtupus river-bed to the pcean bpapii pf pur western shores, Westland- has reared monuments to its early pioneers, The best known is the obelisk which now stands on Sea View Hill within the cemetery grounds overlooking the town of Hokitika, Originally this monument stood where the South African memorial now stands at the intersection of Weld and Sewell Streets, but as it was said to interrupt traffic it was moved to its present situation, Later the clock tower was reared in its place. It is rather a pity that a monument such as (the obelisk should he placed where it is. It has a message to every living generation which passes this way, and it might well he in a more conspicuous place. Some day, perhaps, a more prominent location will be found for it in keeping with the importance of the lives of the men it commemorates to .the succeeding generations. The monument hears four names —all notable for their pioneering work, and in which service they laid down their lives in the performance of their duties. Henry Whitcombe, road surveyor, was drowned in the Teramakau river in May 1863, while doing pioneering work. Charlton Howitt, explorer, was drowned in Lake Brunner in Sept. 1863, under circumstances lately recalled in the columns of this paper. George Dobson, road-engineer, was murdered on the Groymouth-Arnold road (close to the present town of Dobson), in May 1866. Charles Townsend, Government agent was drowned in the Grey river in October 1868. A monument also marks the i site were Dobson was murdered,, and the spot map bn seen from the railway passing up and down the Grey Valley. That monument, like the local one here, fs in need of some attention from the authorities in order that those who inspect these memorials will recognise that the deedß done in the flesh by these men and their sacrifices are not for|otten. Provincial Day might well be made an occasion when some Bpecial re-

apcct should be shown to the men who have gone before* and whose memories those monuments of granite are intended to perpetuate. When Westland celebrated its fifty years jubilee in 1914 shortly before the outbreak of war, it reared a memorial to the memory of the pioneer gold-miners who led the way towards the recovery of the millions of pounds’ worth of gold which the labour of the miners produced. That memorial - occupies a central situation, and is greatly admired by those who inspect it. The inscriptions on the stone bearing on tbo pioneer life of . the miners are, much read, and often visitors may be seen copying down the words of the couplets. This memorial, also, is deserving of more care than it is receiving for the flower-beds are ovengrown, arid portion of the ornamental fence is damaged. Hokitika has yet another memorial to a Very worthy pio-

neer—the statue of Richard John Seddon. As mentioned yesterday, Mr Seddon was a member of the first Provincial Council of Westland, so that his

memory is specially associated with the anniversary marked yesterday. They had to blaze the trail for those who came after, and now when we see Westland on the high road to prosperity we must recognise how well they planned and what a superstructure is being reared on the foundations they laid in the days of fifty-years and more ago.