WELLINGTON NEWS

Hokitika Guardian, 2 July 1930, Page 2

WELLINGTON NEWS

•PRICES; WAGES AND POLITICS

(Special Correspondent.)

V WELLINGTON, June 30

These, three items, stand out with distinction in 'the .discussions and conversations everywhere. The crash in commodities is now generally accepted as a loot. ' At first it av as thought that the fall was temporary and that there would be a recovery in the course of a few months. That belief has gone by the board for commodities refuse to show any signs of recovery. Bankers seem to have been the first to sense this and knowing that there will be tremendous ' call on the. .banks for accommodation they took- early measures to conserve their resources' and the shareholders of several bafiks . had to. be contested with smaller dividends, the latest of such institutions to reduce the dividend is the National Bank of New. Zealand. Last week it was announced that the directors had decided to cut out the-bonus of 2 per cent the reasons given being the general economic situation and . the world-wide fall in the value of commodities. The shares of the bank promptly declined, and it comes very hard on those investors who paid as high as £6 9s for the shares in the expectation of the ■usual dividend. But the directors-cf the bank cannot be harshly criticised for their action, on the contrary they are to be commended for facing a distasteful duty. It must be remembered that the directors of the National Bank of-New Zealand are located in London, the nerve centre of the financial world, where world conditions ure ' mirrored with great clearness. If the fall in commodity values were only' a temporary matter bankers would not have readily incurred the. criticism and displeasure of shareholders. The world-wide tall in commodity values has iwt' been unexpected. Eminent economists have repeatedly informed us that the world has entered upon a period of falling pi ices, and because it is so. uncertain whether prices have reached their lowest point that trade and commerce are depressed. Everyone is buying from hand-to-mouth and everyone is buying as little asi possible. b'hab keeps business dull. And there is some warrant for the feeling of uncertain- | tv. When after the previous, crash oil | the New 'York Stock, Exchange wheat prices sagged growers were advised to hold their wheat as prices would advance. After the crash of a fortnight ago prices again receded and wheat is selling in Chicago and Winnipeg at a price lower than the pre-war figure. It is this decline in a world-wide commodity that .is causing some people to believe that the set-back, in wheat will react on other, commodities, How- ! ever, as prices rifle now our .woo], meat and. dairy produce and other export products do hot yield muon profit if any, and it is now being realised by the community that it,is imperative to reduce costs of production. The problem of the costs of production must (be increased and the physical , costs, of production, that is ■wages, must be lowered. -When the wage problem, is considered it is at once recognised that the Arbitration Court is an obstacle, and it is refreshing to find one man courageous enough to refer to the. matter. Mr M. E. Lyons, representing the Canterbury A. and P. Association at the annuai meeting of the Royal Agricultural -Society, a few days ago, said: “When we divorced production from wages we' made the greatest mistake this country ever made,” and that is only now being realised. Mr Lvons said emphatically: “The Arbitration Court must go. The Civil Service must be cut down.” This is easily said and honestly it ought to be done, but where will there he found a politician in the whole of the Dominion to tackle the problem. The fact of the matter is that politicians outside the Labour ranks are afraid of the political Labour Party. There is no chance of the Government ' of t'o-day or to-morrow abolishing the Arbitration Court, and it would be cruel to dismiss men from the Civil Service now, but it would not be unreasonable or unjust to lower the salaries all round in order to prevent dismissals. .As to the Aeration Court some of its powers must be curtailed, particularly the power to order preference to unionists. Retrenchment in the'shape of salary and wage clipping is imperative and inevitable and Parliament should set the example and pass a Bill lowering - the salaries of members to £3OO to take effect after next election.