WELLINGTON NEWS

Hokitika Guardian, 4 August 1930, Page 2

WELLINGTON NEWS

CONDITIONS. (Special Correspondent.) < WELLINGTON, Aug. 1. ..That'New. Zealand .and Australia, with the rest of the .world, are suffering .front economic', depression, is too > painfully obvious. But why are we suffering? Why are such commodities as wool, cotton,, rubber, tea, sugar, and wheat selling at low prices, or as some have it below the cost of production ? It can be admitted that production has increased, but the world’s population has increased also, and'in . relation to population and the steadily iniproving standard of it is the question whether there is any over production of commodities. What is causing commodities to accumulate, and giving the; impression that there is over., production? The answer seems to be that consumption is not keeping, pace ,with production, and this suggests the question is the lag in consumption voluntary ? It would be scarcely fair to say that it is. voluntary for that would be stulifying human nature,, for everyone desires, to live as comfortable as means will permit; The lag in consumption is undoubtedly involuntary, that is the people are beings forced to consume. Hess, .because, • hjr artificial' methods prices are being raised to levels beyond the purchasing power , of, .the people. The artificial • method 5 by which this is accomplished is ;ihe niisuse of the Customs House. Onb important outcome of,the Great War has been the regeneration of small nations and the map of to-day is a very different one than what it was.- in 1913. The spirit of nationalism has seized these small nations as well as most of the big ones, and they desire to become self-contained. The new policy is to sell as much as possible outside and buy as little as possible

from outside, that is export more and import less, ■ and this sonorous platform slogan of the politicians lias been carried so far that it is becoming progressively difficult for the exporter as well as the. importer, and the interchange of goods is held up; trade is dull-, and depressed, unemployment is pronounced and the standard ’ of living ! is, .'lowered. „ We refuse to buv. wheat from Australia,' jiand; Australia refuses to buy Ne.v|rj Zealand .butter. Both countries ar'6 ! supposed to be protecting their nationals at -least that is the politicians’ -contention, but what sense is theye' : in it/ i-Tf both countries traded moi;eiftieelyj.;both would have the incentive to increase production of commodities that could be marketed freely! locally and abroad would make for increased employment all round. There is on the face of it no over production of! commodities, but there is artificial restrictionf-bf the consumption of commodities and that is causing the trade diilhidss. '

It is useless expecting any immediate change in the protection policy into-.which the world has drifted ip rec’bnt years.' Britain is endeavouring to continue the old time and sensible policy of free trade, but cannot stand rtp alone. Britain must safeguard her industries, and when the day arrives that Britain closes her free markets td:"the dumping of foreign goods the nations of the world will eagerly enter into reciprocal trade bargains which would put British trade on some equality with others.

Some schools attribute the drop in values of commodities to the growing scarcity of monetary gold, and to the fact that much of the world’s gold is sterilised in the United States and Prance, for during the past three years both countries have added very largely to their stocks of gold. Theoretically this is correct, but this difficulty will be overcome now that the International Settlement Bank is in operation. Commodity prices even at their present low levels would not be unremunerative were it not for the high costs of production. New Zealand salted butter is selling to-dav at 138 s per cwt, while in July 1914 . the London prices was 118s', and profitable to the producer, now it'scarcely yields a profit at 138 s; 1 ' because costs are based on a selling of 1655, which was what we were receiving a year ago. It we could get back to the production costs of July '1914, or even with costs slightly more', the producers would earn a profit or'income which.would .be spent in the Dominion. But costs cannot be reduced for the Arbitration Court bars the way and there is the slogan “Standard of Living” which is a fetish and a fallacy. In Australia the Scullin Government has refused to'reduce a overhead expenses of Government, nevertheless wages are going down in Australia. Tn offices, shops and factories work is being rationed, that is for many of the workers lay off for one week in every four of five weeks. Theoretically that is n°t reducing wages, but actually it is reducing wages and the standard of living. Somehow we prefer ostrich ism to looking facts in the face.