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Hokitika Guardian, 23 July 1930, Page 4

Tn a well-considered study of the financial depression affecting the Commonwealth, a financial writer says the situation is forcing a review of economic conditions most reluctantly upon some politicians, and move particularly upon those who represent organised labour, which hap become political. There i,s therefore a disposition .to avoid measures to cleft! with the basic cause of existing difficulties—which i,s mainly industrial. Excessive governmental borrowing and extravagant expenditure of loan money during the past ten years, special tariff duties to encourage oversea firms to establish branch secondary industries here, and consequent introduction of foreign capital on enterprises which really do not produce new wealth, as they cannot compete in the export nialrket, created an artificial industrial buoyancy on which wages have been arbitraril.f fixed by arbitration courts and industrial tribunals. Public extravagance eneburaged private extravagance wrick up to a year or two ago was assisted by high prices realized fc,r primary exports—particularly wool and wheat. Despite higher and still higher Customs duties, the average worker was provided by wage fixing authorities with money to buy goods over the tariff wall. This could not continue indefinitely and the not unexpected has happened. Economy in loan expenditure has become imperative. At the same time, the drop In the value of legitimate income from exports of 'primary products this year is estimated at over £40,000,000. So'" far steps have not been taken to any material extent by responsible politicians to reduce basic expenditure—the cost of production. This would involve a drastic reorganisation of the existing system of compulsory Industrial arbitration, and the uneconomic system of wage fixation. This was the issue on which the Federal elections were fought in October last, when the Labour Party Was returned pledged not to disturb, the existing system of compulsory arbitration. Tim process of deflation is therefore all the more complicated. It is evident, however, that under pressure of economic conditions the present arbitrary system of wage regulation must collapse under the problem of growing unemployment.