WELLINGTON NEWS

Hokitika Guardian, 18 August 1930, Page 3

WELLINGTON NEWS

DROUGHT AND WHEAT

(Special Correspondent.)

l% ■ • WELLINGTON, August 15. The hot, dry weather experienced in most of the States of America will involve the United States in the expend- ! itiire of many millions of dollars, and it is not unlikely that the American drought of 1930 will be known as the “Billion Dollar Drought.” The United States must prepare for very heavy losses, and it is not unlikely that America will be forced to import food j stuffs on a large scale, if so Canada should benefit greatly. It is just possible that the American wheat harvest has been garnered, or at least a good portion of it, and although wheat prices have ascended sharply, it does not follow that there will he a shortage 'of breadstuff’s. One of the prinIcipal factors contributing to the low prices ruling for wheat in the last season has been the demand from Europe.

: 1 -Many European countries harvested especially good crops in 1929, and this unade them almost independent of imports. The extent to which the demand fell away is disclosed by final 'figures j for shipments of wheat a.nd s flour .to Europe in the cereal year I cpicled . July 31, 1930. The total shipi mopts .to ■ Europe from the exporting [countries of the world amounted to 58,820,000 quarters, compared with imports by Europe of 87,983,000 quarters in, ,1928-2 9, and 82,724,000 quarters in-1927-28. Shipments to countries- -outside' Europe were also small at 15,805 quarters. Total world shipments of wheat in 1929-30 amounted to 74,625,000 quarters compared with 116,015,000 quarters in 1928-29, and 101,806 quarters in 1927-28. Prices for wheat in the last cereal year were forced down by the pressure of heavy stocks in exporting countries, and the position was much aggravated by the unusual lack of demand from Europe. This season it is probable that there will be better demand, as France and Italy, which reported heavy crops ihave. fh'cm4.'reported serious losses ahd will- probably buy. ,wheat steadily. very large stock of wheat?; available; especially in. North Amelia)! ap-d -ihe lujorld crop ‘is;.likelv to .jfeljiiiffJh’ in of requirements. assuming- 1 ,, that; :HHe ! ’ United:} States 'sechred’ jtlie: hulk- of ;thp [wheat Wop hei|ffrei lit* was ■effected;bhe; hot'blajst; - : U-It ha,s {heen ; estfmaibcl • that' -t-lje harvests l of tjie principal wheat' j growing, countries .ifl tim cereal’year ]930-31 will amount to 511,000,000 quarters. compared with a production of 486,000.000 quarters last year. Even if the United States is not short of wheat, it will he short of other foodstuffs and raw materials which that country will ,be forced to import, and if that turns out to "ho correct there should be a general improvement in commodity prices, and the countries indebted . to the United States will have an easier time meeting interest payments.

ESCAPE TO PROSPERITY

Mr J. B. Brigden, now Director o' the Queensland Bureau of Economics in his recently published book “Escape to Prosperity,” discusses a basis for a line of action calculated to keep : Australia from her, present difficulties. He emphasises that this is not the turn? to increase uncertainty and reduce confidence further, when the economic situation has already done these things; to destroy the supports on which any production rests, even if by removing them other production is relieved; to bicrease expensive supports (subsidies by consumers or taxpayers), or taxation, or any other shock to production generally; and for public borrowing out of reduced income, when current production needs the lowest rates possible, and all the equipment income can pro- > vide for its increased volume.

Equally important, ; / he contends, that-this is not the'time-to destroy either business of labour confidence. Drastic and extreme measures any sort will reduce confidence somewhere. Because these truisms are relative, Mr Brigden believes that something of each can be done in some degree, for searching for and cutting oiit the most expensive kinds of waste, and by searching for and imposing so far as is necessary, the least harmful taxation. Mr Brigden adopts as a keynote of his “ways of escape,” a j broad spirit of compromise. He defines three main and fundamental tests of measures to attack the difficulties.

Will the, proposed action open or leave open the way to lower costs and recovery; will it, on the whole, make for recovery, despite some costs; and, will it help the, situation, now? There are no [sure answers to these questions, he admits, but the way of escape can come only through their application. He stresses the need for courage to sacrifice theories based on a narrow range of facts and to get down to a broader basis of facts, and asserts that hard thinking is wanted even more than hard work.