WELLINGTON NEWS

Hokitika Guardian, 2 January 1931, Page 2

WELLINGTON NEWS

ANOTHER. YEAR BEGINS.

(Special Correspondent)

WELLINGTON, Jan. 1. The year of grace 1931 has dawned and what it has in store for us no one can tell, but at least we may hope that the immediate future will give signs of improving conditions. But. we must -not expect - conditions to change without any effort on our part, and such' efforts as we do make must not be actuated by political motives [but should .be based on sound economics. So far we have allowed matters to drift, and in this we appear to have followed rather closely in the footsteps of Australia, and like her our conditions have gone from bad to worse., -Everyone is ready to admit that something must be done, but everyone cannot take the initiative.

There must be a lead from some authoritative source. Let us look at our . position on the natal day of new year. All our primary export products are .at low levels, with not the remotest chance-of any , improvement. The farmers' a-re experiencing conditions that might almost be : described as disastrous. From this has sprung a whole battalion of other troubles. Domestic trade ;is . in a very poor state, turnover is small and profits: diminishing and' both' retailers and wholesalers also are feeling the pinch. The building't ra de is at a standstill and all connected with this basic indiistry are suffering, f ! Carpenters and plumbers, joiners and bricklayers, real estate agents and conveyancing lawyers all find their incomes, salaries and wages reduced. The, joint (stock companies are earning less and are unable to pay tiie usual dividends thus lessening spending power.

With all this we have unemployment steadily increasing and with over 11,000 workless we have reached a record that is very distressing. There are some poop ie who m ainta i n th a t the number .of unemployed.. will , incfeaiae; rather-; rapidly and i these expect to see • the 'number swell to' 25,000 or more, certainly an increase of 2000 in the week ended December 15 tends to support that view.

ft .is impossible to. allow matters to/drift without expecting soinotuuife serious. We are dealing wun um>iu■pioyincut,, an.u' it is a, aoruvm-g cuniiiiunwary oil our methods in' tins respect tuat ’..UiieilipiOy ilieilt snoniu 111■ci'hase.- ■ Appai'ehtiy .Wi6 : problem ; has not' • been tuunieu • in a proper ' way. However the pohitiou is oncoming so ' adiite' , i : tna|4 'hpinAtiurig'■ nliis'c Ge uoiie and: done quickly -an-u. witn ' tne determination oi saving the s.np irotn oumping up against -rocks. Dark as it appears at tne uawn of the - newyear,-/ keen oosvrvers -will be able to discern those iia-ie streaks winch im-part;-Silver lining to uie dark ciuuds. HiFltsb among these is the lace- tnav the principal money markete of llic world, are hi control ol abundance of funds for snort term and gilt-edged

investments. 1 riiateu thus it perhaps conveys very little to the average observer, butt lie will appreciate the -point when it is stated that lor the riouth African-loan oi £5,<aA)JaX), issued about the middle of November last, the subscriptions totalled £70,009,000 ; according to a report in the “Financial Times”- (London).

In Erance the bank rate is 2% per cent, -arid the Bank oi j?‘ranee is so loaded, with gold that it us, really m a quandary, how to reduce the Hoard. In Isew York, in spite of breaks on thti Wall .Stree-u E a change, numerous bank failures, a mg: unemployed list, wheat and cotton at low levels, yet call money on the New York Exchange hides at 2 per cent and it is said that money is a drug in tlie market,. v'TJiq Bank of England rate was reduced on May 1 last to 3 per cent and that rate has ruled ever since, notwithstanding the usual heavy demands in the European autumn. If something unforeseen does not happen it is q|uite probable that the rate will be reduced to 2£ per cent some time this month, and later to 2 per cent.

The effect of cheap money .must necessarily be to stimulate trade, and that is one of the probabilities that we may reasonably look for. At present those who hold, the funds are lacking in confidence, which can be understood; but that will ipass away. Another favourable factor is.that several commodities appear to have reached bottom and to ;be somewhat stabilised, and other commodities are bound eventually to be similarly affected.. Thus, although the New Year breaks darkly,- the silver lining is there. It is up to us to do our best to have the silver lining extend our way. It means hard 'work and sacrifices, and that is within our capacity.