WELLINGTON NEWS

Hokitika Guardian, 19 June 1926, Page 1

WELLINGTON NEWS

DEPRESSED BRITISH TRADE. (Special to “ Guardian.”) WELLINGTON, June 16. The British Board of Trade returns for Alay are very depressing. Imports during the month declined by over twenty-three millions, exports by nearly 18.) millions and re-exports hy nearly £7.000,000 as compared with Alay of last year, and the volume of trade for tlie live months exhibits a decline of nearly 11.8 millions sterling. This contraction is due largely to labour troubles, hut whatever the cause, the fact remains that the purchasing power of the people has diminished ; that is to say New Zealand’s best customers are unable to buy as freely as in the ' past, and therefore prices have declined. British economic conditions must he reflected in New Zealand because our trade and financial relations with the Alother Country are intimate. About 80 per cent, of our exportable primary products are marketed in Great Britain, which is also the source of supply of our loan money, and our hanking system is practically centralised in London. We arc indebted to Britain lor.our shipping facilities and Britain does most of our insurance business. Our imports from Britain are larger than from that ol any other country. In view of all this it would he amazing it we did not feel the effects of the lessened purchasing power of our principal customers. We are feeling the pinch, for there has been a. sharp’decline in the prices we have been receiving for our produce, amounting, on fifteen principal items, in four months, to a drop of over eight millions ' sterling. That has caused a contraction in the purchasing power of the producers and through them, it is felt hy the whole community. The result is a contraction in domestic trade and unemployment which is likely to become worse before the spring. There is also a tightening of finance, and a disposition to husband resources, which is helping to make the position worse. There is apparent a feeling that the present slump will not be of long duration. Inn what reasons there exist for such a view, beyond the natural desire of everyone to take an optimistic view of the situation, it is hard to say. Recovery depends upon heavy borrowing from abroad, drastic reduction in imports, or a sharp upward movement in produce prices. It is difficult to sec where the Government is to borrow more money; the amount already borrowed will he. required to pay interest oil past loans, and it would he difficult to get any more money in Australia. Private firms may he able to borrow a little, hut that would not. go any distance ill bringing reliel. imports can and must he reduced, and it is certainly encouraging to find that the imports in April were less than in Alpreli and substantially lower than in April last year. Contraction in the imports will mean a emaller turnover for wholesalers and. retailers, who will he obliged to reduce their establishments to meet the changed conditions, and that would add to the volume of unemployment. A rise in produce prices can scarcely he expected, and we can consider ourselves very fortunate if there is no further fall. There is no easy road ol escape from the position wo are in, and our obvious duty is to face the position boldly, and by Vo-operative effort restore confidence and stability, hut that should not scare us. Labour wants Capital to make all Iho sacrifices, hill that is

a- position Capital cannot accept Labour must contribute its share towards the general good, FARM FINANCE.

A northern farmer, a pioneer of pumice land, lias, in a contribution to

ini Auckland paper, made some very striking comments on the costs of production to the farmer. He maintains that if a piece of unimproved, land anywhere in New Zealand were giicti to the average farmer he could not. under present conditions, improve it at a. profit. Apparently the cost ol doing so would run away uith the whole of the profit, and if some effective steps are not taken to remedy the situation he says we must he prepared t 0 see all second class lands go out of use and only the best and most favourably situated lands remain productive. A great deal of the trouble of the farmer arises from the fact that he sells what lie produces in the open market and in competition with the produce of other countries, and L->—-wliat he wants in a protected market. The goods required for his personal and household needs are protected hy high Customs duties, and the labour he requires is protected hy the Aibitration Court. The Court in fixing e basic wage, and in other novs gi\es rigidity to labour wages, and the effect of this will he seen when the wholesalers and retailers are obliged to curtail expenditure: there will he shortening of hands thus adding to the volume of unemployment. There cannot ho any general reduction in wages, hut the saving must he effected hy dismissals. A'et costs ol production must be reduced.