WELLINGTON NEWS

Hokitika Guardian, 27 July 1927, Page 1

WELLINGTON NEWS

NEW ZEALAND ECONOMICS (Special to “ Guardian. ) WELLINGTON. July 25. At tiie International Economic. Conference held in Geneva in May last the documentation included problems of the world’s economic position from the jHiint of view of different countries. The New Zealand economic position was dealt with by Professor James Hight, of Canterbury Cnivcrsity College, the New Zealand member of the conference. In describing the present position he says: “Great prosperity came to New Zealand during the period of rising prices, from 189(5 onwards; she is a. debtor country, and, owing to the pronounced lag of the rate of interest behind the general level of prices her interest charges grew less in proportion to the profits from her exported products; moreover, the prices of the goods she sold abroad rose higher than iho prices of the manufactures she had to buy. Her unexampled prosperity stimulated land speculation, which became extreme during and immediately after the war; there developed a fairly general expectation that prices would continue to rise and that Iho maintenance of a high level of export prices was all that was necessary to secure tile means of discharging the financial obligations of the Dominion, public and private. A class ot specula tors arose; public borrowing and private extravagance were stimulated. Speculation and reliance on certain schemes for maintaining high price levels have resulted ill considerable loss to individuals and partly account for a real net loss of Government control and regulation of private businesses Ixigun during the war, and since carried further, has resulted in a certain outweighing of public administration and, besides increasing the ratios of civil servants to the total employed population (11 i>er cent.) and the general debt and burden of taxation, has probably had some part in the reduction of the real output per head. Between 1915 and 1925 the number of public employees (state and local bodies) increased 37 per cent, from 57,719 to 75),073, compared with an increase of only 18 per cent, in the general population. At the present time the chief obstacle to an increase in the rate of production is the disparity between the costs of producing and marketing the staple exports of the Dominion and the purchasing power of the buying markets. Costs can he reduced by minimising, with due regard to efficiency and projrje.ss. the machinery, inconvenience aml expense of State or associated control aiul limitation, and hy improvemeat in the technique and organisation of the industries concerned. Great hopes are centred in co-operation in production credit and marketing. Cooperation has been a conspicuous success in organising the dairy industry within New Zealand and it has recently been extended to the regulation of the export trade in meat, dairy produce, fruit and honey.” LONDON WOOL SALES. 'fire fourth of the series of Lomhm wool sales closed last week, and although the opening prices for some -rules of wool were not maintained at the close, generally the closing rates were from par to 5 )>er cent, higher conmared with the closing rates ol the Mav sales, and to that extent the position is satisfactoi \. It ’ s .7’. erallv agreed that the competition throughout the series was spirited, especially on the part ot Continent, operators, and the tone was excellent, ;,nd this is all to the good. here no doubt about wool being m demand. H is wanted by all consuming nations, but the costs in Yorkshire are above those of Continental Europe, and Li adford has heeu very anxious to keep down the prices of the raw material. The demand for the finished product is lacking and this is due to the impoverishment of the people. It is stated authoritatively that the widespread under employment of machinery In the wool textile industries of most countries has been duo to general causes such as the reduced proportion of the domestic budget spent on clothing, direct and indirect effects of impoverishment following the war, and the unprecedented reduction in the quantity of wool clothing ill ladies’ wear, etc. Tt is significant that similar depressed conditions prevail in free trade England as in the highly protected industry id’ the I'll itod States, and increasing the tariff barriers will not help to improve matters. There will presently he increased interest in iho wool market for the wool selling season in Australia is to he opened in Sydney on August 29th.