WELLINGTON NEWS

Hokitika Guardian, 24 January 1930, Page 2

WELLINGTON NEWS

TIMES NOT ; ABNORMAL. (Special Correspondent.) WELLINGTON, Jan. 20. A good many people fancy that times are abnormal because there hag been a - drop, in produce prices, because mopey ,is tending .to become dear and because there is difficulty in borrowing in London! The times are not abnormal, but > quite the reverse. jA.B a prominent Melbourne banker recently remarked; “We* have been Jiving in 'abnormal 1 times, 'and are now getting back to normal conditions.” ’ The War brought about abnormal conditions throughout the world, and those 'countries which faced the facts as soon as the war. was over have already got down to basic stability again," or are making substantial progress along the road to that goal. Germany’s heavy load of debt did not cause its population to wring its hands in despair and do nothing. It began to work the harder' and it can be said to the credit of Germany, that it has met its obligations under the Dawes p|an of reparations. With commendable' promptitude, ;an’d no doubt it will continue to do «q under the amended Young Plan. ' Immediately ' the war Praifice cpnimeuctid to set its house in order.and unemployment- tOrday is one of . its iiaii problems. Tho way - in whicii Britain Is paying its debt is an object legsqn to the world, Aujstralia and New'Zealand, which have postponed 1 and postponed facing realities are now deluding themselves 1 with ,the belief- tpat, they are passing through abnormal times. The times were abnormal when added to huge borrowing oUr export products brought high prices and the two together made up an- abnormal and fictitious prosperity. Now borrowing abroad on the-huge scale of the immediate post-war period is

dffiieult and the high prices of produce are falling hack to normal. Before the war if 'we borrowed two or three miftionW sterling" we thought we had &one the limit but now six. or seven 'millions sterling seems to have become a regular thing. Before the war/we were glad to accept Tl3s to 114 s per cwt for butter, now if prices; drop -any lower than about 150 s we will be told that the price was below the cost of production, and the same th'ing.is occurring in respect of meat- and wool. No one thinks of referring to- inflated land values, or inflated labour values. These have got to be adjusted somehow in the near future, and economy in public administration must be enforced if taxation is to be within the ability of'the taxpayer to meet.

THE POSITION OF COFFEE.

Coffee, like tea, sugar, rubber, cotteii, tin :*nd a variety of other-prim* ary products is suffering from overproduction and. falling prices, and the the price : has createda difficult ‘ situation in Brazil. Coffee growing 'is . the -greatest ...industry of the dountrv, marketing' there is . governed .by. a , controlling body.. The record crojp of 'Brazil was in 192728, apd 'this .wae followed by a sharp full/, in .bbtput. Prices advanced iVi '1928, and (the advance again stimulated production. The estimated output for 1929-30 ' was larger than that of any previous year, with the exception of 1927-28. Prices' have ' declined since February .in October and November the&jfaU was fairly violent. It earried •■’the quotation to a local level which represented the lowest point reached, in six years. The controlthe Brazilian Deable to influence the prices as long as the statistical position was favourable to growers,' but. in carrying out its policy itVwna nOqessary to have held back a portion of siipplied from the mar-' ket. Consequently there has been a considerable expansion in unsold stocks/and ; the carry-o.ver at July 1

lasF was estimated at '10,000,000 bag 9 which was nearly . equal,, to, the whole of the Brazilian crop i&f. 1928-29. Since then the, quantity has increased to 15,000,000 bags, with a further gain in sight, The position in which the growers find themselves illustrates the danger attendant on the employment of artificial meaures to establish a desired price level. ' If there is excess production a restriction of output in special ■ circumstances may be available, but it is necessary to take care that as a consequence prices will not reach a point which may bring about a shrinkage,; in consumption or serve r s an incentive for other countries to increase plantings. In no country has ; fcontrol proved in any degree successful.