WELLINGTON NEWS

Hokitika Guardian, 7 May 1930, Page 2

WELLINGTON NEWS

LONDON CRITICISM OF AUSTRALIA.

(Special Correspondent.)

WELLINGTON, May 5

Slome London critics have expressed favourable opinions of the steps taken by the Commonwealth Government to deal with the difficult financial position in which Australia now finds itself, but it is evident that those who acept the- revisions which have been made in the tariff as a drastic necessity do not realise the significance of the super duties and import prohibition. . The “Investors’ Chronicle” declares that the present .difficulties ft) Australia must be regarded as primar-

ly the outcome of Labour “economics’' high wages, ever increasing tariffs and a high standard of living have necessitated continuous borowing, not always for productive purposes. During the last l 6 years, says the “Chronicle”, the Commonwealth has paid to stockbrokers and to the British Government about £67,000,000, and in the same period her overseas borrowings have amounted to £125,000,000. The Australian States have paid interest roughly amounting to in the 10 years and have borrowed £129.’000.000 to enable them to so. The remedy for the existing state of affairs adds the “Investors’ Chronicle,” is hardly to he looked for from a Labour Government. Hoisting the tariff may reduce imports but it will certainly not increase exports rather the reverse, since the difference betwen intrnal and world prices at which wool and grain must be .sold will become still wider; Apparently a reduction of costs or o. wages is not to be entertained. The true remedy, it adds, is indicated in the report otf the Auditor-General that Government expenditure should be reduced to bring annual costs within revenue. With respect to readjustment of wages “Industry and Trades” the official organ of the Victorian Employe; s’ Federation, states that what is now a period of depression and decline will shortly become a castrophe if

the Labour/Governments, both • State and Federal, continue to pursue their 1 reckless course. It adds that one expedient aftei another is being' adopted to avoid the inevitable readjustment of normal vases to the new level of national' income and to our industrial efficiency and production. ' Costs of pro-

duction and distribution must comedown and that means, inter alia. wng r es—not real wages hut normal wages

NEW YORK SPECULATION

The New. York Stock Exchange has made repeated efforts since the crash of October last to work up another' •.‘bull” maVkei, ImUhas failed on each Occasion for the effects of the great crash are being felt all round, All the high-fnlutin nonsense that many American business men know how to broad cast in a very attractive manner has not saved the country from the'perils of unemployment. Scientific discussion is however, one of the things they do really well in America and light has been thrown on the speculative collapse of last autumn by the discussion that took place at the American Academy, of Political Science. At, a recent' meting of this organisation the subject discussed was “Business, Speculation and* Money.” Professor Hollander of John Hopkins’ University who opened the discussion, alluded to the panic as refusing to fit in with any of the conventional rubrics. There was no exhaustion of credit nor loaned-up banks ns in 1893, no curency famine, no collapse of commodity prices, no bank crashes, no undue absorption of liquid capital into fixed forms and no. mania for bubbles, in ifact flotations were of an extraordinary high order, both as to quality and sponsorship, and the most active speculation centred in “blue-chip” issues. The interest of the economist, according to this distingnshecl exponent of the sc'ehce, lies in ch : stineu°shing those elements in our financial and industrial structure which operate on human nature as it is, produce or make possible such lapses into economic barbarism, as gross in their way as negro lynchings. Throughout the length and breadth of the United States neople of all classes proceeded on the theory that agares in sound could be advantageously bought at any price without regard to earnings or nmsnects. This is the primary cause of share, b-oms on all exchanges only it is called capital appreciation by the operators.