THE MOST PRESSING PROBLEM.

Hokitika Guardian, 16 November 1921, Page 1

THE MOST PRESSING PROBLEM.

PRICES OE PRODUCTS. SCEIIAI. TO (It VltniAN. WELLINGTON. Nov. IC, At home the most difficult questionnow lacing us are lirstly. w hether there is ahead a long period of low prices for our primary industries, and secondly, if so, what are the best steps to take to adapt our industrial and economic machinery to such a position, .Mr E. Sliailcr Weston, the President of the New Zealand Employe, s Federation, said in his address at the opening of the annual meeting of the Federation There are many signs that our primary producers will have to steel themselves to meeting low prices for a time. Great Britain is our main customer. To feed her putmlntion she is dependent almost entirely upon international trade. In thi- she has to face the competition of Germany and Belgium in a like position,; and the United States | whose mauiifai t iiici - have the advantage of a rely huge and closeK pro-

t:c;cd in,on market. Hot inl-Tnali-nial trade i- based lii-tly ml illl, - ■ lln ti. mil I tiidil. and ,loudly i- limited b\ the puic!insiug puv.ei ol tile various nat i:. 11 -. ;■ 111 1 by !’. uilliih. . .Illi extent (if the want- tint <aii ia, i.,cni'i Ivfs -apply. I ntenuU ioua I en-dil depend' entirely upon the -lability of exchanges, political seen lit v aild nhsenee of labolli unrest. The mnhiliti of the European nation.- to inaiainio (he gold -tandard. political and social nuresf in Central and Eastern Europe, and the inflation of their currencies l,v using the printing press as a method ot raising loans, mean the loss of these two u--ent in Is.

T'ne real impove, islinfeiit in the belligerent countries through the war has become clearly apparent now that the tie! it inns prosperity due to increased national borrowing and the feverish postwar demand for certain commodities irrespective of their co.-t. have disappeared. and this combined with the heavy taxation has decreased the purchasing power of all communities. Russia, thiough internal dissensions,, is no longer a eustoiuei lor an'thing. A.pact Irom tins, dune >ht " " many

nation- were tens’d to piodoee pa n own supply of mainline! ttt'eil at tides. Everyw lieie local industries ret rived a great impetus. The protection alloided by the war was more cifeclivc than any tarill. In New South Wales and in South Africa, for example, big iron winks have either sprung up or are approaching complet ion.

Although Great Britain is at last again desirous anil able to supply her old markets, she is brought up everywhere against a harrier of higliei protection tarill’s. WliiKt the scope for inlet national trade in niaiiuliu turd articles is thus limit-cd. the capacity of Great Britain, Germany, Belgium, the United States and to a les.-er drgiee certain other nations, to supply lias increased. Owing to the war, the organisation and plant of factories have been improved and the number and size of factories ineicased. Consequently, there is and will he, a much keener competition among the great manufacturing nations to supply a less demand and the inevitable icsult will lollov.

little or no profits ami low wag**. With divot Hritain's putehasing power thus lowered, she eimnot pay hi eh prices lor liei I'ooil supplies. Her only hope of inn into in i lie her present population is the importation of lootl at the lowest possible pi iees. New Zealnml" will consequently have to accept lower prices for her meat, huttei ajid dairy products. Moreover, the extraordinary demand lor most primary products durinp; the war has led to developments all through the world. Large meat works, I'm example, were established at Nanking oil the \nngtse- Kiane, also in liiar.il and at .Mauritius. South Africa ami I'ganda are expanding. Kngland is the host and safest customer in the worlil and every sellei tries the Knglish market tils}. I'nless, theielore, we (lie aide to establish a demand for our products based on their s|X‘cial qualities, competition with others, combined with the decicased purchasing: pouet ol dreat Hritain, will mean lower prices. There is a possibility ol our New Zealand lamb and butter making a special market for t hem -eh vs. hut it will he a difficult task to do so and setting U)> the necessary distribution inachineiy will mean some years ol hat'd work. If our primary products are to letch lower prices, then this will mean lower wanes for farm labour. and smaller profits fin the farmer. The inevitable icsiilt must follow of lower prices lor our secondary industries and ieduced want's lor I licit workers.

The l.aboiu leaders contend that it Inch wanes are maintained, the purchasing power of the people will eon[iutlc at a Inch level, the public will he able lo pay high prices, and so lone as these high prices continue, the manufacturer and the distributor will come 1,, no harm. ITidouhtedly llicie are advantages if high prices and the consei|iient liieh want's eotthl he maintained. Such a position eases the burden of stall' and private indebtedness: il takes less produce lo meet payments ol iiitciesl and principal. I nlortiiiiately. how evei, there is a radical weakness in this aieumeilt. New Zealand is not a self contained community producing all its own wants and not producing more than it requires for its own consumption. The primary industries depend upon foreign markets to absorb a large part of their output. The price ohlTiincd for this part lixes the price for the home market and lor the whole. | have shown that Knglaml can pay only low prices for her imports and tlmt New Zealand farmers will thus have to accept low prices for tlieii produce. Their purchasing power will in turn become limited, and ,hence our secondary industries most lower tlieii tones to create a demand. Kven il a high proactive tarilf enabled the secondary

industries in New Zealand to meet the intense competition of the great manufacturing nations, which, as T hate shown, is inevitable, their sole market is New Zealand. If the great poition of otti community receives less money for (heir products, they will have less to S|>end and In-nee prices miisl be cut. Personally I desiie and any thoughtful employer should desire—to see wages maintained at as high a standard ns is eeomimieally possible. \t the same time, we an- at the beginning of an era of low pricis. Evet)wliere throughout the world. piLc.have fallen, some products already are on the pre-war level, others are approaching to it. The consumer ev.iywhere has struck. Naturally his aim is not to bwv until the bottom has been readied. Everywhere the business man who thinks, recognises the position. There will In- no great revival of trade until prices of all products have reached a level which everyone recognises will prove a stable one. Everyone is determined not to buy now if there is a chance that in the future a fall m price will make the present purchase a loss.