WELLINGTON NEWS

Hokitika Guardian, 25 February 1931, Page 7

WELLINGTON NEWS

SLUMP AND THEORIES. (Special Correspondent.) WELLINGTON, February ‘22. The explanations and theories ior the world-uuie slump are numerous and the remedies are equally numerous, and in this welter of theories it is not surprising that the ordinary person is bewildered, in the House of Commons the other day Mr Winston Churchill, referring to the causes of the great economic collapse, said they could be described in one word, “Asia.” China was in a state of anarchy and India seething with unrest, whilst Russia contributed an economic factor stranger and more menacing than anything else. There is much in what Midi archill lias said, but Asia is noL the sole cause of the slump for there are many other contributing factors. The purchasing power of the people of Asia has contracted through economic causes, at the same time anarchy and unrest are further lessening the already impaired purchasing power. India is seething with unrest, and part of this unrest takes the form of boycotting British goods. If the people of China and India and Burma would cease from troubling and pursue their ordinary normal occupations the world’s trade with .the- 'Hast would revive. Russia is the victim of spectacular stunts by the Communist chief, Imt the whole of the people of Russia are being rationed in one way or another. The United States also holds the record for the highest tariff wall, and high as it' is, there is a demand, for France also holds a great amount of gold that is immobile. Botli these wealthy countries—the U.S. and France—are suffering with the rest ol the world. The unemployed in the U.S. are relatively as numerous as in the United Kingdom, and there is more actual poverty and hunger in America than in Britain. It is somewhat remarkable* that rich and poor countries should suffer alike, which to some extent shows that the causes of the world depression have not been fully diagnosed. It is useless blaming the shortness of gold or the lack of credit, in the face of the actual conditions prevailing in the U.S. There is no shortage of gold there and money and credit is in abundant supply and cheap, for the rediscount rate of the Federal Reserve Bank is as low as 2 per cent. The wants of the people of the world foi food, clothing and shelter are as great to-da.v as they were two or three years ago, and they would like to satis! v those wants, hut they are prevented from doing so by their respective Governments imposing in many cases prohibitive tariffs.

Thus restrictions are placed on in ternational trade, and because trade i

dull there is world-wide complaint. Products of the soil are accumulating because many markets are closed 01 restricted, and forthwith there goes up the cry of over production. It is not over production, but enforced undo competition that is causing so much trouble. The producers have wants to be supplied, but the” ""•■'not fill the’ l ' wants because they cannot sell tlmi; produce. Produce must lie sold t< buy produce. Of course so far as w< are concerned there is a market for al we can produce but the consumers o ! our produce have had their purchasing powers curtailed, and while they arc willing to take our produce, they can only do so at a low a price unprofitable to us on the basis of award wages. Obviously we bare to reduce our costs, and that it w'"o the Gov

eminent is aiming at in the economic proposals that are to tie submitted In Parliament next month. If the War debts were cancelled Europe would have more purchasing newer, and ii the tariffs were lowered alternation!' 1 trade would expand. Tlmro is identv of gold currency and credit to finance the world's trade.