THE OUTLOOK

Hokitika Guardian, 14 August 1930, Page 8

THE OUTLOOK

RETURN. TO PROSPERITY

FACTORS ON. WHICH IT. DEPENDS. . CHRISTCHURCH, August 12. , ,“Pro.vi(led we. are careful tiie present is a time in which we may look forward to the future with confidence, saal Mr G. Lawn, acting-Professor w. Economics at Canterbury College yesterday, summing up the economic situation in New Zealand before members of the Canterbury Advertising Club. ; lie contrasted the current depression witli tliat of 'fifty yeans ago, and de-v blared’that two of the vital factors on which this country’s return to prosperity depended were the improvement and stabilisation in the world prices oi raw materials and. a decrease in the costs of production by more efficient methods. The president of the Advertising Club (>if J ( . J. Staples) was in the chair. , The trade depression of the ’eighties' said ]\lr Lawn, was the worst in New Zealand’s history j it was much more serious than that existing to-day. That was a period of decline in world prices of raw materials following on a reckless: borrowing policy and the failure of the Government to make full use of inatei ial. resources.. The year 1879 was the/ blackest in. New; Zealand’s history. It: viras estimated that' there had been 700 unemployed in Christchurch who had become very restless; relief depots and soup kitchens had been established • single men on public relief works had been offered 3s 6d a day and married men a shilling extra. Between 1873 and 1880 the Colonys trade had been almost stationary. ■ ■ 1 i “THE EXODUS.” Then there was the period known a> the “exodus” when 1400 people a month out of a population of 600,000, had . left these shores for other lands. Anyone living, in New Zealand at. that.", time would have felt that the country was down and out, but to-day we could see how the Colony had cliriibed out of that trade stagnation into times of .everincreasing prosperity. •: What factors contributed towards this, change ? First, from 1895 onward? came ft period of rising prices throughout' the; world. This was r. predominant factor in the economic situation -in- any country and one, »to which New "Zealand,, being a big importing and exporting country, wa? particularly susceptible. Then came improvements in our methods of production, refrigeration, and the introduc tion of the cream separator and milking machine—al Imaking for an in crease in the per capita productivity. .

LESSONS FROM THE PAST. if, added Mr Lawn, the past naci one lesson to teach u's, it was the value ol building up reserves in times of prosperity for'use in times of depression. A period of prosperity was a time for getting out of debt; not of getting into it.’, This applied just as much to publip bodies as to individuals. This was noticeable in ‘ the relief . of unemployment, for no provision had been madt for it; in the good times. New. Zealand to-day, was’ also suffering from too much, borrowing, in. the past—both public and'private; WORLD. PRICES. Turning to the present situation, Mi Lawn named as one of the most powerful factors in it the changing world price's of raw materials, for on these to a great extent, depended the futurt Of what , was going to happen to them there was no, clear indication, it was uncertain whether they would go on falling whether they would be stabilised at present rates, or whether they would take a trend upwards. Some forecasted that prices had reached rock bottom and would now begin to go up again, but would this be a “steady arid constant improvement or merely a temporary fluctuation? It was reasonable to prepare for a further period of low prices. ' V'-".... .Another element in the situation wherein lay great possibilities was the lowering of the cost of our own production by more efficient methods. How to reduce the cost of our per unit production was the problem of the day.' There were signs that this was'being attacked m our primary industries. ’