WELLINGTON NEWS

Hokitika Guardian, 30 August 1927, Page 4

WELLINGTON NEWS

PRODUCE AND WORKER.

(Special to “ Guardian.”)

WELLINGTON. Aug. 20. At last wo have had au effective criticism of the Arbitration Act and an emphatic protest against its operations, and in doing this Mr H. A. Ackland, President of the New Zealand Sheepowners’anti Sheep- breeders’ .federation has rendered special service to the primary producers of the Dominion. It is the disparity between the export prices and the internal prices that is the root cause of the depression and of unemployment. The trade figures of the Dominion lor the ten months to the end of July showed that the exports contracted by about two millions sterling following up a contraction of seven millions during the previous year. The primary producers have seen their incomes contracting ever since 1925. while their costs have tended upwards generally, or at best have remained at the 1925 level, a level or basis set by

tlio Arbitration Court. Because of this lessened income it is popularly stated; that tiio purchasing power of the com-, niunitv litis contracted. That is only partly correct. The wants of the community are just as great and just as varied as they were two years ago, but; they are unabi'e to fully or even partly i satisfy those needs, because the general level of values is beyond their means. I 1: is necessary therefore to adjust 1 prices to the level that will send commodities into consumption. Hut the price level cannot be lowered because of the dictum of the Arbitration Court. The more the operations of the Court are examined by the light of economic results the more vicious and menacing it appears, and -Wr Ackland was justified in referring “ to the very grave danger to the primary industries which lias resulted from the gradual creeping out of the Court activities to where its awards have become a direct charge on the producing capacity of tlio land.” The high or inflated wages inflicted by the Court aro passed on from one section to the other through high price levels until they reach the. primary producers where they remain a dead weight on the man on the i'and. J’einove this harden and lighten his taxa-. tion and the fanner will again he seeking to get the most out of his land. The lino of attack must be directed against the liigli eost of production, and if this attack is pressed forward, then the functions and ’character of the Arbitration Court will ho radically changed. The parties must he given facilities to settle disputes, and conciliation is hotter than compulsion. However, the Government has promised amending legislation and the country now awaits this with some curiosity and not a little eagerness. POST OFFICE SAVINGS HANK. The clauses referring to the Post Office Savings Hank contained in the Finance Hill are in many respects satisfactory. Prior to 1920 the maximum deposit was £f>oo that woui'd be accepted by the Savings Hank, but in that year the maximum was raised to £.IOOO and the rate of interest also was raised, if not then, certainly shortly afterwards. The reason for that movement was that flu* Government was in need of loan money, and thought, to fill its requirements through the Savings Hank. In this they were rather disappointed. for in the past five or six years the withdrawals have exceeded ! lie deposits. Furthermore, the deposits at call necessitated the holding of big amounts in a liquid state. The Savings Hank was thus obliged to restrict its investments. The limit of

the deposits is to he gradually reduced from CSOOO to the old maximum, and this is a move in the right direction. The Government hopes, however, to square matters by securing a larger volume of fixed deposits, and so currency certificates are to he issued for one, two and live years at compound rates of interest at 4J, 5 and of per cent. A person who takes up a currency certificate for one year really I .faces bis money at fixed deposit for that, period at II per cent interest. Private institutions are offering a hotter rate than tin’s and furthermore! the interest is payable half-yearly, fn reph to a question the .Minister stated that the Associated Banks had always protested against the .£SOOO maximum deposit, and they are certainly justified in doing so. The trading hanks

have a special function to perform for. the Dominion. .Tt is their business to finance the overseas trade, and to|

foster the industries of the countries. If we examine the balance-sheets of our industrial such as woollen anil freezing, sawmiliir.g companies and many other concerns.

“ hank overdraft ” will lie found to bo n very prominent item in the liabilities. To do this financing at a reasonable rate there must be a free flow of deposits to the banks.