The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, AUGUST 20, 1930.

Hokitika Guardian, 26 August 1930, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, AUGUST 20, 1930.

A SERIOUS CRISIS,

The seriousness oi : the Australian financial crisis was brought home to most folk by the cabled news of last week, giving particulars of Sir Otto Niemeyer’s address to the Conference of State Premiers and Ministers at Melbourne. The revelation confirmed much that had been published before, but the authoritative remarks seemed to bring the whole position more directly into line ft was, a critical overhaul of the national finances from one acting, as it were, as the bailiff, but benevolent bailiff bent on assisting to extricate the country from its entanglement of debt. The groat banker in applying remedial methods, adopted what was obviously the economic action to take, The States have to set their houses in order, by economy and some attention to sound finance. In other words, Australia is not to go on living above its means, but to come down to stern realities and not only subsist on its revenue, but save from that income to meet its world indebtedness and meet its obligations honourably, The whole situation seems to present a scene of general bankruptcy, with the intention of urgently retrieving the position. Austuilia has been living too high. The boom periods left a desire for their repetition, and they were re- j pen ted artificially on borrowed money. Adequate provision was not made fo repay the interest and sijffdng fund, and so chaos insued. "The trouble has been that with the inflated times, everything was allowed to soar unduly. The standard of living and Working alike went to extravagant, lengths The country lips been living beyond its resources to pay for the excess, and the inevitable crash lias come to pass. The same exnerienco has overtaken the individual who has lived not wisely but too well, and the day of reckoning has arrived. In the case of Australia, the situation (s not hopeless. ft is a groat country with groat possibilities, ami setting the flnanooß in order, will quickly recuperate. But there must bo no half measures, and no shirking. Certainly flic State and Federal Governments are taxing the noonle up to fho hilt, but that has been largely with the object of maintaining a very expensive administration and a well propped up condition of labour. The taxation cannot ho paid much longer for the purposes it is being raised, and as a consequence economies will lie forced on the administrations, AU kinds of economic

experiments have been tried in tho vain endeavour to right the position, but causes arc more at home, and a more intimate search within must be made to reach the right causes. High tariffs, high wages, short hours, all have combined to increase costs, and the dearness of living has robbed the people of frugal ness or thrift.. Australia has now to face lean times to meet national obligations. But the chief call upon the administration will lie economy within. The plight of Australia is a lesson “ for New Zealand. Quiet- times are' pervading the 'Dominion, and with the prices of commodities depressed below old values on which the country flourished, there must be a sharp decline in the degree of prevailing prosperity. New Zealand should take note betimes of the world situation in general and Australia in particular. There is just as urgent a call her© as anywhere for strict economy ancl the avoidance of wasteful expenditure. It is better to temper expenditure at this juncture generally, than to adopt a severe dislocation suddenly under severe pressure as .Australia has to do. New Zealand produce is more likely to increase than decrease, ancl this of course is helpful with a Tailing market, but prices in many cases are now sub-normal with little prospect of an early rise. Because of that fact, less money wil 1 come into the country, and there will he decreased facilities for internal trade. The quiet times at the moment are probably symptomatic of the carefulness of the individual who is exercising thrift for fear of the darker days ahead. We hope this is true, he-, cause it is a reasonable meet difficulties abend, and the country must do something likewise to tide oyer the prevailing financial stringency now so generally world wide.