DEFLATION

Hokitika Guardian, 29 January 1930, Page 8

DEFLATION

AUSTRALIA AND NEW ZEALAND. .SIR, BENJAMIN FULLER’S VIEWS. CHRISTCHURCH, January 27. “Taking a world-wide outlook, fl should certainly -say that money will he easier before the end of 1930. We are settling down gradually after the inflation period, which followed the Great War, and all economic facts indicate that such deflation is inevitable.” In these words, Sir Benjamin Fuller, head of the well known theatrical firm, summed up his opinion of the economic position in Australia and New Zealand at the present time when interviewed by a representative of the “Press”.

“ I do not pose as and expert in finance,” he ivas quick to add, “but my observations necessarily are comprehensive, as our company controls £3,000,000 capital. “In Australia, and New Zealand this deflation which has become so evident in the other hemisphere is being stayed off as long as possible,” he continued. “It must come, however. In Australia we have our present trouble between the miners and their employers, and what is it that the former are fighting for? It is the principle of not working an hour longer, and not accepting any reduction in wages It is a dispute which would have been ended long ago instead of dragging over months, as it has done, if it were not for the fact that other unionists and even Government servants, both Federal and State, are as sisting in the present resistance of the miners by monetary support. They are all concerned in the defending of the principle I have outlined and they realise that if the miners capitulate other labour section will be the next to share a. .similar fete.

FAITH IN AUSTRALIA. “This defence of high wages has not been confined to Australia, and 1 am not one who adopts the pessimistic view that it will shake Australia’s credit, as has been suggested. I have every faith in Australia and the progress! of her prosperity is certain. The present dispute is a setback, but it will be overcome.

“The deflation period on the other side of the world has shown more results up to date, and a better basis of wages and prices is meaning more stable prosperity and a lower cost of living. “In America to-day, too, a slump is being experienced, and it is none the less real because America tries to hide it, and that to fairly gpod effect. In the last few years America has paid very high wages to skilled workmen, but the trend towards lowering the basis of these is being felt and is increasing, so that a reduction is certain. The mass production of American goods, and the ‘dumping’ in Ehgland and in the Continent has been a big factor in making markets for the United States, hut England and the Continent to-day are arming themselves against the American invasion by increasing tariffs. In the future America will have to reciprocate for the advantages she has in 'other countries by taking goods from those countries herself and not Inputting up very high protective tariffs herself.

SUPPORTING HOME INDUSTRIES

“One thing I would like to stress in regard to New Zealand and Australia,” Sir Benjamin concluded. “We must support our own industries. If everyone did that there would he nothing to prevent the tw r o countries going ahead by leaps and bounds. As an example of this I -would point out our ow'n policy. We erected a store in Sydney and though we could obtain overseas steel at low'er cost, we chose the Newcastle product, as it was Australian. That is not mere sentiment, but is sound economically, as it keeps the money in the country, and the country and its people ultimately reap benefits of such a policy.”