WELLINGTON NEWS

Hokitika Guardian, 10 September 1930, Page 2

WELLINGTON NEWS

THINGS NEEDED.

(Special Correspondent,)

WELLINGTON, Sept. 8.

There is no doubt that-a , good jnany business men—and the dumber is increasing—vi evv the . economic Outlook with a good deal of '.itnnebesSnr-y pessimism. Admittely the economic conditions are unsatisfactory, and so they are in niostpoouhiries, : blit-that does not warrant; anyone in ~ New Zealand wearing a shroud of gloom. There is nothing so bad for (lepression as depression, and the sooner that people shake off that feeling of depression the sooner will ,we be able to get on the (right road leading - to prosperity. Let us examine what we all regard as the depression. Now it cannot bo denied that the productive capacity of the country is in no way impaired, on the contrary," there is reason to believe that the output of primary products, such as butter, cheese, wool and frozen meat will show ’ some increase .this season as compared with the last. There is no need to be despondent about the volume of production; nor is there any reason for being depressed about the marketing of our products. We produced more produce last season than in the season before and the bulk of it has ;been sold,/'the little that has not changed hands was due to the producers deciding to hang on rather than sell. Thus on- the two essentials of the volume of ■ production and marketing we stand in infinitely better (position than the industrial countries. Britain has to search -for new markets, for jier Competitors have practically drived ,hei* out of her old .markets, but* mark*, et is assured even for our increased production, and the .fly in the ointment is that our customers have not now the wherewithal to pay us the, high prices they gladly paid a year or two back.

It is nccesspry . for ns to realise that oor customers cannot pay more than they are doing now for our produce, unless by some miracle their purchasing power expands, and miracles do not happen these days. What then are we to do? Boards and pools cannot force the consumer to pay more, while subsidies and .'bounties hurt the producers, for such doles must eventually come out of the Consolidated Fund which, .is built up from taxation. Our obvious job is to endeavour to make a profit even at the low prices that our customers can afford. Of course it will be. said thgt prices are below the post of production, and the customer replies that he is giving as much ?'p he can afford, and the cost off production; is no concern cd his, and - neither it is; it is our job. Since we are certain that we cannot get better . prices than those ruling now, and that even those prices may go lower, We must set about to reduce the costs. This of course is a difficult ,as well as an unpleasant job, but it must ibe recognised as an inevitable task. Let us not forget that in July, 1914, the month immediately preceding the outbreak of the Great War, New Zealand butter was selling in the London market at 118 s per cwt. It is obvious that price was a profitable ohe to us, we were prepared to go bn .producing at that price and evep at a lower price, but the war upset the normal trend of the market and inflated prices was the inevitable result. The mistake that we all made was in assuming that a new era had dawned, that the pre-war economic laws must be scrapped, and we believed that high prices had come to stay. It is no:/ twelve years since the war ended and it has taken that period of tin e to squeeze out inflation and we are now very nearly back to normal ■so far as the prices for our primary products are concerned. If butter was a payable proposition in 1914 with the price at 118 sit ought to be pay am? with the price a.t 125 s other things being equal. But other things aVe not equal. The Arbitration Court has stepped in and taken charge of our. wage system rendering it inelastic and introducing such

•ms as "cost of living” and “stan-

dard of living” to confuse the man in tlie street. We must reduce costs of production, and that means to some extent reduction of wages. That cannot be done except by consent of flic Court or by breaking the law, both of which a re. mostly and irksome, and costs are being reduced by dismissing hands. An all-round reduction of salaries and wages would be more economic than creating unemployment,