WELLINGTON NEWS
WAS AND PRICES. (Special Correspondent.) WELLINGTON, March 18. The highest point reached hy commodities since the outbreak of war according to the British Board of Trade index figures of wholesale prices in the United Kingdom was in 1920, when the average was 307.3 (1913-100). while at the end of 1930 it stood at 108.9. Thus it will be seen that there was a tremendous drop during the decade, and this decline in values is being felt "by the whole world, and of all commodities, foodstuffs and raw materials have suffered most. Between 1913 and 1928 inclusive the production of foodstuffs rose by approximately 16 per cent., and that of raw materials by 40 per cent. This increase would not have been alarming had there been a relative increase in population, which was not the case, for the population over the period 1913-1928 inclusive increased by only 10 per cent. The increase in production could not be checked ; on the contrary it was (stimulated by the War, and later by the abnormally high prices that ruled during the immediate post-war years and up to about 1928. At the same time that production increased, the increase in population was checked, 'l'he War was responsible for the destruction of millions of men, who, under normal conditions, would have added to the population, naturally. With a check in the increase in population, and production of commodities increased abnormally, there has resulted a surplus of commodities; that is, the growth in the number of consumers lias not kept pace with the growth of commodities. One has been below normal, and the other has been above normal. That seems to be lli ( ' root cause of if be fall in prices which has been aggravated by tariff barriers and other matters. There is at the moment a maladjustment, or want of balance, between consumption and production, but that, of course, cannot continue for any length of time. Tile low pricey have caused a check to production, while the growth of population continues and the point, of equilibrium must sooner or later be reached. With some commodities that point lias already been readied and those commodities are beginning to react. The adjustment would be accelerated if the tariffs were lowered, or, in i|hc alternative, the War debts were cancelled. Mr F. C. Goodenougli, Chairman of Barclays’ Bank, in bis address to shareholders on January 20th, pointed out that Great Britain realised in 1922 that there was a groat difference between commercial debts and debts incurred between as the results of the War. Britain also realised that the. debtor countries could not discharge their Whir debts without insolvency, and therefore Great Britain generously undertook not to exacf from them more than she might have to pay America, and she cancelled £2,550 millions of War debt. For the current year to March 31st, Britain has received in reparations £16,390,000 and from the Allies on account of debt £17,709.000, or a total of £34,000,000 and she has paid the United States £33.000,000. The United Btat.es refused to fall in with the British scheme. Yet, although her Treasury vaults are choked with gold and she receives the huge l sums from Allied war debts, she is just ms fast in the grip of the slump as almost any other country. If the United States would accept for her War debts and for her overseas trading surplus, paymenit in goods or investment securities, the position would not be quite so difficult, but she bus shown, by itlie increase in her tariff, that ,she has no intention of goods, and she does not appear very anxious to I uid to foreign countries or to part with any portion of her huge stock of gold. Last year it lie monetary gold stocks of the.' United States increased by about £6O millions. The gold stocks held by the Central Banks and Governments of 45 principal countries of the world are approximately £2,233 million/s of which 381 per cent, is held by the United States, and only 7 per cent, by Great Britain, and yet the United Kingdom does a larger trade and a more extensive banking business than America. It was recently stated in a cable message that a virtual invitation to Australia, Germany and other countries to enter the American market for foreign loans was said to be seen in a New York banker’s statement predicting the resumption of foreign financial operations by W r all Street within sixty days. America may be willing to lend but foreign countries may not be quite so ready to borrow from her. The* Commonwealth 5 per cents., 1955, wd'e recently quoted in New York at 72, and a.t this price the flat interest rate is npiirlv 7 nor emit. Tn nnv pnpo the prohibitive tariff of th° T nitod States I makes borrowing in 'that country a j difficult matter for the debtor. I
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Hokitika Guardian, 20 March 1931, Page 7
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818WELLINGTON NEWS Hokitika Guardian, 20 March 1931, Page 7
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