WELLINGTON NEWS

Hokitika Guardian, 3 January 1929, Page 2

WELLINGTON NEWS

HOPES AND PROSPECTS. rSrEciAi, To The Guardian.] WELLINGTON, January 1. The year 1929 has been ushered in by the conventional joy hells and with the usual noise both vocal and instrumental, but at the back of all there are hopes that the New Year will bring to each community its full measure of prosperity and happiness. In New Zealand the new hopes for the new year are in some degree associated with a new government, and those who appear competent to judge the personnel declare that man for man the present Government is superior to the one displaced, at all events the men new to Cabinet responsibility are animated by a keen and praiseworthy desire to serve the country to the best of their abilities and because men judge the present Government to be stronger and more efficient in administrative, capacity to the party it has succeeded, confidence which is essential to' progress, is returning, and confidence is what we have been lacking for some time past. The new year sees prices for all our primary products on a remunerative basis, and .there is the additional favourable factor that the output of produce for export this season will show a substantial increase on that of the past season. If the year 1929 closes undeithe same favourable conditions under which it dawns for the Dominion then 1929 will be the record prosperous year experienced by New’ Zealand. While this seems to be the prospect held out for us by the new year we must not overlook the conditions are made o* marred by world conditions. And world conditions will on their face look exceedingly good there are elements existing which may easily develop toto adverse factors and mar our rosy prospects.’ In the teivyears which have elapsed since the great war Europe has made very substantial piogress tow’ards recovery. If we look at the debit side of the great war there is to be noted the wholesale destruction of wealth, inflation of currencies, impoverishment of nations, decay of many basic industiies and almost universal unemployment. The period has been aptly described as ten year’s struggle for Europe and ten years of speculation and prosperity for Europe’s creditor, the United States. Lord Mclchett, the head of the huge Imperial Chemical Industries, and who is a close student of industrial conditions, in summing up his view’s on postwar recovery in various counti ies oi the world, declared that the corner had been turned. Britain had recovered very largely her w’orld position, and while the old supremacy in world commerce has not been entirely regained there had already been achieved a definite supremacy. The chief and important tendecy of British industry is towards rationalisation, which means scientific organisation of industry and the balance of prodaction to consumption. According to Lord Molchett, the tendency is likely to result in the organisation of the World into three' economic' units—one, the United States of America; second, the United Economic States of Europe; third, the British Empire. Industrially politically, and financially, the tendency will be towards co-operation. There are two main factors that menace the steady and serene flow of trade and commerce. The first is German reparation, which has yet to be solved, and it would be scarcely fair of the Allies to keep the Germans in suspense as to the ultimate amount to be paid in reparation. How the settlement When arranged is likely to affect the United States, and what it will lead to in trade rivalry are all problems of serious import. Then there is the menace that arises from the insensate gamble on the New Yok Stock Exchange. The news from that quarter lately has been very meagre, the latest being that call money was at 8 per cent. , The break in prices that began on December 7th has had serious effects m Europe, and the Bank of England has had to part with a considerable amount of gold. If the drain continues the Bank will be forced to raise the discount rate, and if that happens money Will be dear in London and the level of commodity prices will recede That is how we may be hit, A week ago it was expected that the Bank would raise its rate but through a fortuitous incident this was avoided. Unless the gamble in New York has been kept going with American funds dear money in Europe cannot be avoided.