WELLINGTON NEWS

Hokitika Guardian, 26 January 1931, Page 7

WELLINGTON NEWS

FLUSTERED AND FRIGHTENED

(Special Correspondent).

WELLINGTON, Jan. 22

From most of our leading men, politicians and others, we have been gratuitously supplied with a number of “don’ts”. “Don’t be pessimistic,” “dont be downhearted” and don’t get into a panic” are some of the “don’t” advices that have been handed out to the people, but in spite of all this people are beginning to get more pessimistic and to lose heart. There are now over twelve thousand unemployed, and according to some authorities the number of workless will increase during the next few months, and we cannot afford to be philosophical over such a prospect. At the moment there appears to be an attitude of resignation, our party politicians are suggesting panaceas that will not help us much if at ail.

Be;ore the war, while there were occasions when there were unemployed, the problem presented no great difficulties, but now we seem incapable of finding a solution. The workless are becoming restless and impatient, which is always a dangerous symptom, and politicians are floundering and frighten, The latest proposal, and it emanates from the Reform Party, is that there should be held a national economic conference representative of primary producers, manufacturers, importers, fhvnjncial institutions and wcrkers to arrive at a reduction.

Th(r suggestion carries its own cori* damnation, for the conference would '>• < c conflicting interests, and the dt oision of the conference, if there is It decision, must be on the lines of ccmi= promise. Jn politics, compromising is inevitable, and may work," but not in economics—compromise is impossible. There must be definite action in ecucomics for a definite purpose and result. What can wo and what must we do just now to start the germ of recovery operating? The facts of the situation are obvious. We are suffering from malaise in our export industry. Our exports consist as to about 95 per cent of primary products. The bulk of these products, probably about 80 per cent, can be sold only jn Great Britain, arid against intense competition, that is those primary products must be sold in the open market at whatever prices the buyer fixes. Just now those prices are exceedingly low, lower in most cases than in prewar days. Dairy produce was the first to reach the market, and the droping prices gave concern to those intimately associated with the industry, but others just looked on, expressed regret and went on. The wool came on the market and the ruinously low prices that were offered and accepted caused some impression, and now with the fall in our third great export industry, frozen meat, the realisation of the dire straits into which our export industries have entered, has penetrated even to the careless individual, the man-in-the-street. The export industries supply the country with purchasing power and spending power, The services we render foreigners, such for instance as showing them our scenic resorts ami thermal wonders, bring i n additional funds, but it is in om* export industries that we have to rely to pay for imports, the interest on our outside debts, etc. The income from those export industries is now about 30 per cent lower than they were a year or two ago, but our commitments remain about the same.

If the low prices ruling for oup products is just a passing phase of a world-wide depression then obviously it would be unwise to take any drastic steps, But the low prices have come to stay, at least for some time, perhaps two or three years, and therefore we cannot afford to sit still. We must do something, and that something must be based on economics, and not on politics. What can we do and what must we do? At present prices farmers are not earning enough to meet their current and normal obligations. What we must do is to bring costs of production into line. In August last, Sir Otto Neimeyer told Australia that she must bring her costs down to the world level. Australia has evaded doing so. and the Commonwealth and the States are in a semi-bankrupt condition. Socialists will of course assert that farmers pay very small wages to those working for them, which may be true enoughj but the products of the farm must be transported to the seaboard, and the farmer has to bear the transport charges, handling charges, etc., which are as high now as when butter was selling at 180 s per cwt, cheese at 80s, crossbred wool at 13d per lb, and frozen lamb at 13d per lb. Between low prices for his produce and high charges for getting his produce to the market the farmer is between the devil and the blue sea. All responsible men are ready to admit that costs must be reduced, and the initiative in this matter must be taken by the Government. There is no need tor any conference or consultation, the Government has but to make use of the Board of Trade Act and suspend all awards of the Arbitration Court, and abolish all favouritism as regards work, that is there must be no preference, no legal preference to anyone. If that were done we would soon find the true level in the cost of production.