WELLINGTON NEWS

Hokitika Guardian, 1 October 1930, Page 2

WELLINGTON NEWS

agricultural depression kJfe . ' v . , (Special Correspondent). WELLINGTON, September 29. The'acute depression from which the world is at present suffering appears to be more agricultural than financial. It is the agicultural and ■ extractive products of the land that are depressed, for it is wheat, cotton, rubber,' jute, sugar, coffee, silver, copper, tin and lead to name a few that have receded in value, to below the cost of production. The finished products have not suffered to an extent, for it is the complaint in all countries that retail prices have no fallen relatively with wholesale prices of raw materials, and. the, same can be said with respect to foodstuffs. A certain lag is to be expected, but the lag has been prolonged unduly. When we come to examine the financial side of the probleni we hit up against the.economists’ • claim of a shortage of gold and its consequent appreciation, althtftigh it is ai factor in.the situation ; it is not the primary factor. The banks have ample, resources for financing trade and Com-, merce. It must be remembeed that in the immediate post-war years when New Zealand . ..wool was making 15d per lb, and; Now Zealand -butter, 185 s per .cp’t/^tlfe 'banks found it necessary to increase capital vosemrees, and prac-l tically every bank' in Australia and; New Zealand raised fresh oapital by the •' issue of sliarefi/firicjfthe' capital is still ■ intact!' With;': •' tlie /fall in:prices . of \ primary, producis. find, the restriction of • imports tjfe' capital that was necessary a few. years'’ a/o is not ‘ now wanted,that is bank capital find resources, if liquid, and it is believed tliey , .are,:;, more' than sufficient for . requirements.: In Europe bank rates are much lower, than they have been. .In France and Switzerland, in Ejurope and in New York, the discomfit, rate? is 2f per cent., it is'3 per cent, in London;,and one-,01:- two other'places' in Europe. There, are ample funds avail-, ahl§: for financing . world .'trade, but. trade, is held up by trade barriers, and-, furthermore the high prices ruling dur- ■ ing.tlfel'Wfilt foi/ Some years' after : tliq/var stimulated production, and now that .trade is , made difficult throughtariffs .and consumption' curtailed there is .ah accumulation of products giving the appearance of over production. There is no doubt that there, is an "excess supply of some commodities but not. of all. Tlie cost production in New Zealand at least is on the same scale or very nearly so as .when produce prices were', atj ilhigheftH ; /owe/priees'br .products' and stationery costs t»; of prMfiction the res.filtant joss is fall-.

• ing ■are tfierv egy'JbacklaOfl^. "oftthe" Coilfitly/ . v 'lt is not'just Or fair that thß loss should be borne by one party to production, and section rendered immune by legjltrati.on. No jip||p : |a; fobd' many people cher-' isbed . belief that tbe,' ; slump was a temporary ! affair,./-and that there would soon be recovery, chapter arc verse, being' given in-support’ of- their opinions. was ndt,/optimism but' / “os ori chism” .that ..were -responsible for these hoplrfttj^.-view's' for world conditions, not tialseriii into account. y : But the of a ‘ few months since to(sfj£anißhe4j'’ a4d : it: is now re- ‘ cognised'.produce, prices are likely, indeed/?certailar ; to go. lower. Wo are only just entering upon a new produce export year, i and the outlook at thmoment is that the; national income from exports will be - less than in the past season notwithstariding that there. may be smoke increase, in production, this must- inevitably. result,in .a shrink-, age of the wages 'fund. Next winter will see unemployment worse, than it is now ; unless prompt steps are . taken to mitigate the evil. Fortunately the em-, ployers have 'at last taken a decisive step and have asked the Government to amend;the Arbitration Act so that the Court;-may have, the power to alter awards, as was the position prior to 1925.,(This is a- very modest request, for in the- opinion of some sound men the ,Act should be done away with altogether.-;, However, the request to amend the Act is modest enough and unless something of this nature Ts put

in force the conditions will .became considerably worse. Some publicists have / been urging the Government to provide land for close settlement, and these means dairy farthing, but with the price, of butter down to 74s with every prospect of going lower, a. small farmer, if he got the-land for next to nothing, could not earn a profit with taxation and costs of production as at present.