WELLINGTON NEWS

Hokitika Guardian, 23 December 1930, Page 2

WELLINGTON NEWS

THINGS WILL BE WORSE.

(Special Correspondent).

WELLINGTON,. December 22

Two Ministers of the Crown, the Postmaster-General (Hon. •>.-,. B. . Donald) and the Minister of Health (Hon. A. J. Stallworthy) have recenty expressed opinions which are by no means new Or novel, but coming from such sources they will no doubt receive considerably more attention than if those /Opinions were voiced by the man-in-thelfreet, although the latter holds the same opinions. The Hon. J. B. Donald stated that lie believed next year would be harder than the one through which we are passing. There can be no doubt on that point. In support of this we may quote the view, of the Chairman (Mr A. Strang) of the Gear Meat Coy., that there is “no immediate prospect of improvement, nor even reasonable certainty that the phenomenally low prices of the past year can be accepted as the limit of the fall in realisable val-

ues.” That 1931 will be a very difficult year for New Zealand and Australia admits of no argument. It is quite apparent and yet the effects could, have- been minimised had we taken drastic measures at the outset. :M. such measures were taken even now .we oould soften the blow. The Postmnster-General said timet “people were looking to the Qov» ernment to make matters right, but no matter what the Government did, it cannot do by itself. ..The P^P 1 * W U9t do their part.” The thinking section of the oommum ity do not believe that the Government can put matters right, for we are suffering, from economic and not political interference. The people are ready- and willing to co-operate with the Government, hut they can make no advance in that direction until the political . obstacles are removed. The outstanding political hurdle is the Arbitration Court and its awards, and preference to unionists. ' - When the Government removes this artificial political obstacle and gives the people the chance of tackling the economic problem, thereywill-.be revival of optimism, courage, , and confidence. When all sections of the community are removed frem political shelter, and everyone is free to do his or her bes„ at the best wage obtainable then the wheels of industry will begin to move..

The Government, and only the ..Government, can remove the political obstacles. Produce prices are at or below pre-war level, while retail prices are well above that, and award wages still higher. When retail prices and wages approximate to the pre-war level this would bring the .standard of living to the pre-war level, and who is there • hold enough to declare, that the prewar level standard, wn* poor and inferior P , ’ It was quite nn good as tfie present Standard, for although "there would be a reduction in money wages there would he no reduction In real wage? for the reduoed wage would go as far as the inflated wage does now, Sonm people are scared regarding 'rents and interest, thinking that they \yiH U&t fall with the fall in wages, Rents are inflated because wages are inflated and when money wages fall the inflated rents must go down. As a matter of fact the downward trend has begun. Wellington has always been a high rent city,. but- even there rents are easing and there ary plenty of houses for rent. What > happening is that families unable to pay high rents are herding and sharing the rent. The untenanted houses will not be allowed to remain empty- very long, and the landlords must reduce rents to attract tenants, and the same is certan to happen to mortgages inter- . ests. Mortgagees do not want the properties, and it would pay them to J l ®- duce interest and give the mortgagors the chance to carry on. In any case it would be better to get some income rather than to have a dead weight property on one’s hands and no income. Some mortgagees will be compelled to foreclose and foreclosure would standardise the value of the class of property. There will be plenty of property sold for the amount of the mortgage or even less, and this would set up a new and more reasonable standard of value of real estate. The deflation movement is progressive and not simultaneous, and all the deflation movements tend to reduce costs which is the objective of the present economic situation. Costs must be reduced, and the first point of attack is the Arbitration Court, and until this is done the people are handicapped and cannot co-opernte or lend anv assistance in the process of inflation. The attack must be made by tile Government for it is a political matter. When that obstacle is removed econom. ie laws will operate and depression pass on to recovery, and recovery will pass on to prosperity.