WELLINGTON NEWS

Hokitika Guardian, 12 May 1930, Page 3

WELLINGTON NEWS

PROBLEMS FOR PUNDITS. (Special Correspondent.' WELLINGTON, May 10. World economic conditions to-day are Very, perplexing. Money is cheap in Europe and 'North America. In London and New York the discount rate for-, the-central banks is down to three per cent,, in Paris it is two and a half per -cent and in other. European banks the rates are low, yet With cheap money commodity values continue to decline. Generally cheap money has a stimulating effect on trade,, and*it. must be admitted that, money is now very cheap in most parts of the Northern Hemisphere and yet trade is languishing, commodity prices are falling and unemployment is rife. In the old days the industrial metals such as iron, steel, copper, zinc, lead and silver were regarded as reliable barometers of trade movements. If there was a good demand for the metals it was assumed that industries were active, but now the industrial metals with other. raw rpaterials and foodstuffs are depressed,. Ohe.can understand the fall,,in .some of! the mptals.., Tin; for instance is ' in' oyer, p roduction j .so are spelter a.nd lead, but oiie cannot understand.-tii.e drop in copper,, which at the end .of ( February \yas selling at £j69 ( 3s . dd,, for stqnciard copper oil spot,, that. is. tlio. casli price, while at tjfcje^tjuu.e ,-pf writing-the, price is d0wn,|,p,£49.;125, 6d„ 'a. j falT of .about £2O. per ...ton. in . six| weeks. America is tlie World’s principal'jh-pduper of .copper jtod tfyo, price of "‘the metal is controlled, fpL that country, yet the prices declines in a sensational manner. If we turn to other commodities most of them eyi'ilvf, the same downward tendency. Frozen meat has met with a weal, market for several weeks past and prices to-day are exceedingly lowy Butter dropped to about 122 s per ew't then recovered to 136 s and now is again on the downward track. It is perhaps somewhat fortunate for sheepmen /\v,oqi. is shoeing some recovery, j Wool has, lienplienpo 5 of -'’deeming "prices." and/ adnujj-; tedlv prices- are. loiy, enough;-£o. ' fin(she’d - pf pducts at| cheap, ralps, wlyieh. ’would Le/witliiWthe mejaffij of, yp.i}-. , kiinie.rs/ r ' T^e;'London ’iaj-gin on 'Tuesday,; .-are .tp . 'wijiies9 hfjnV values(;with .-ward; tfjewienoyk,. ! Ah /idy;aiicej. of,, ! pbr Tb -woiilel bpng, ; . ..iinai-kbt ■f'■ lot ol\-the wpoh poV 'be|jvg } .hefel-! T'h e ;. wool inarlyet. is realjy jtjife ?$“ . 'bright,"spqf ’fop‘ New Z6pWd . afid Australia. • But the problem ;i of cheap money and falling prices .remains for solution. -Why, - .not, tradeimprove . trade -, improves .prices of ,raw ma,-•teria-ls must, firm qp if. they do not acl y,a,n . Iffiv-ju v f W- All? kind., is .hcrpoijiiig.,Qf jppurse Rlieto:-.to-;a - .reaw -isoiylto ,thp .jprpsent ecpnojnic.;- condir %ye apejn^W l Tenons.: cpnfidenpp,- tji^> f .jW’qrld >oiver (J .->/JlK\e neat- - est.-.p.arali eU oiie -eanuiejvljist.P -,vas in .TSO^'Nefihllpwi? tb-e.. Bari'Wp -ypK%sis. • and? hr; -bank.’ fijujsbes. in .yApjjtralia. ....i'iQuajEpbvuar-y ,r 1 v ! ■ 1394 ■_the bgfijhbrate was d-edupefl ctu 1 ,3'r peF(..oei} I ti aij/jjotljree :to 2 1 per..,qp;iit.. i; yT'fei 5 i tiona.l niii?.imupi,ira-jie ofn.th&.tßhHk -of England. Money- at -2...per;:.eeiit wms very cheap, and in the open mar act bills were being discounted at 1 per cent and under, and many financial papers were wont to facetiously remaijk that “moiiey was a drug in the m-W-et.” The 2 per cent bank rate hehl\ from February 22, 1804 to Scptein’.Ver 10. 1896, a pe,riod of about 30 months, 21- years. There was then as now a lack of confidence and it took a long time for confidence.;, to recover. And it. must be reme-mberad-.that: in - was not' worried with the weird and-iwitberirg economics, of socialists. At took-24 years to restore?; confidence then, how , long will. it take to restore it, now? That is the, problem for the vpundits,-. but,the latter ; are saying. ; ;npthing. it is: the. politician, who is doing Things.. most,ly the wrpng things, and ,we are wondering- .why. .jthings: are as., they > are. The . : unemployed claim that they -are" entitled to weirk and . the . State must • fifidfthe ' work ; the l - union leaders backed ■by the Arbitration Court, declare that a man must not lie given work unless he is a unionist, and anyonje employing a unionist must pay award rates. This does not help to' restore confidence nor does it tempt one to engage in any new vntures. In Australia Prof. L. FGiblin, of the Melbourne University says: expenditure of borrowed money combined with good reasons and high prices for primary products brought repeated increase in wages, but with borrowing necessarily curtailed and prices of primary products at considerably lower rates the trend of wages, inevitably must be downward.” Money is cheap, credit is available in abundance,'' but 1 confidence is ..down to zero.. How is confidence to be restored, and who is to restore it? Surely not. the. Socialists.