WELLINGTON NEWS

Hokitika Guardian, 30 January 1931, Page 7

WELLINGTON NEWS

EXPORT DUTY ON SHEEPSKINS. (Special Correspondent.) WELLINGTON, Jan. 28. What awful blunders politicians make when dealing with economies is illustrated by what recently occurred in Australia. In the closing h oUl 's of the recent emergency session of the Commonwealth Parliament, the Act-ing-Prime Minister made an announcement to the effect that the Ministry had placed an export duty of id per lb on sheepskins in the wool. The reason given for imposing this duty was that it would, stimulate the fellinongering industry in Australia, and give employment to some HOP men in addition to those already engaged in treating sheepskins. The number of sheep slaughtered in Australia is approximately 13.500.000. and adding the skins recovered from natural deaths makes a total of about 20.000,000 spins to he marketed. The imposition of this tax led to the immediate stoppage of sheepskins sales in all centres. Buyers of course reduced! their prices hv the amount of the export duty, while representatives of some of the most important French buyers were not permitted by their principals to enter the market.

It was stated that the French Consul had suggested a retaliatory duty on Australian wool, and that the Mazmamet Chamber of Commerce, the members of which imported ovejr .30,000 halos of Australian sheepskins Just, year, passed a resolution not to operate in the Australian market while tHe duty remains. It was reported in the Press that the Acting-Prime Minister assured exporters that collection of the duty would not he enforced, hut as the decision rests with Parliament traders were unwilling to accept risks. The National Bank of Australasia, in referring to this matter in its Monthly Summary of Australian conditions, says; “As both the wool and the i-oan,« —i.o., untanned sheep pelts—the duty on some of the shorter wool skins, entirely extinguishes the pelts. Also it is reasonably certain that these shorter skins, even if they were handed to local fellmongers, free of cost, could not he treated at current wage rates without, lnss being incurred. In the meanwhile, the sales are held up, and there has followed the discharge of many engaged in buying, classing, packing and transhipping skins. sd that instead of an additional 1.100 men finding unemployment, there has been an addition to the number of unemployed.

British fellmongers have decided to support French fellmongers, and have instructed their representatives not to attend tlie sales until tlie export duty is removed. Thus it will he seen that a political remedy for an economic: jl! almost invariably results in making the disease wor s o. That is the' case with our unemployment legislation, for we find that instead of curing unemployment there is a very substantial increase in the number out of work, and some observers of the situation are inclined to the opinion that the unemployed will continue to increase week after week and may reach 25,000 before the winter begins.

Tliirt looks very much like a pessiimMie view, but all the same a good many people expect to sec expansion, and insist that the diagnosis of the disease has been wrong. The Unemployment Committee, on whose recommendations the legislation “was based, made the mistake of assuring that nilemployment was a social problem entirely, which it is not, for it is only partly so. It is contended that the duty of society is to care for the unfit the maimed, the halt and the blind, but the able-bodied must shift themselves for their trouble is economic, and directly due to the depression. This latter condition of our economic life, and therefore the precedent set up by declaring unemployment a social problem may have unpleasant reactions when normal prosperous conditions are restored; No one can doubt the passing of the depression, mid keen observers already note that the foundations for recovery are being laid. The easing of money in the Old World is one of the indications of the setting of the foundation, and the TO per cent, wages cut is another. Other foundations will be laid, and ultimately we will slip from depression to recovery, and then to prosperity. The process may be, and probably will be, slow, but nevertheless it already has begun. If politicians would help on a basis of enconomics instead of polities, the recovery would come much sooner than now fieems probable.