WELLINGTON NEWS

Hokitika Guardian, 7 April 1931, Page 2

WELLINGTON NEWS

REVIVAL SUSPENDED. (Special Correspondent.) % i : < ■-* WELLINGTON, April 2. A month ago the world economic outlook was promising for many commodities had risen, the Stock Exchanges seemed in a more cheerful mood, the scramble for gold eased off. money rates in the northern Hemisphere were low, and eminent economists and observant business men predicted the early stages of recovery. There seemed to exist the will to recover, which is a very necessary concomitant oi sickness as most doctors will admit. At the moment, there appekirs to have been a relapse, and practically all the worst symptoms of the disease are again showing. Many commodities have slipped back to their old low level, others showing a. weakening tendency, there is a recrudence of political troubles, as for instance in India and Burma, the Stock Exchanges are perturbed, and the outlook at the moment appears very dismal. In our own case we have the fact that butter is again down to below the pre-war level, wool is inclined to be Unsteady, meat is low, and money'ls scarce and dear, while Stock Exchange securities, after a period of hoUyaiicy, are again on the down grade. It is difficult to account for this change in the outlook, hut at base -we believe that politics have been the cause. The errors of omission, and commirr.ion hv politicians are largely responsible for the set back. Tt is now about eight months since Sir Otto Niemeyor, qt the request of the Commonwealth Government, investigated the affairs of Australia and made his report. His advice was sound but unpalatable, and j£ was unfortunate for Australia that Labour Governments had control of affairs. Instead of acting on the advice of this eminent banker and showing a will to recover, Australia has gone- from had to worse, piling up deficits, swelling the ranks of the unemployed, imposing heavy taxation burdens, all for the purpose of maintaining that political will o’ the wisp, the standard of living. There appears to he some sort of rivalry between the Scullin Government and the Lang Government ns to which will propose the maddest schemes and .impartial will award'the prize to the Lang Government. : ■

i&hile Mr Lang wa f s confining ieconomics to local affairs, lie was not doing a great deal of harm, but now that he has decided to default the interest payment on foreign loans, he has disturbed a hornets nest and those hornets are bound to be iifd'escrinnnate ,in their stings. It is interesting at this juncture to see how Steadily the Labour Governments have j-uped the credit of Australia . *be Commonwealth 0 per cents, due i*HF W eae quoted on the London Stock Exchange towards the end of March last year at par, that is £IOO. Then they ffl'e quoted the other day at £77/10/-, uwfall of £22/10/-; New South Wales fc per cents., 1940, declined from £IOO 2/6 to £OS, a drop of £35; Victorian h.vper cents, 1942. fell £29/5/-, from £92/5/- to £63.( Tliese securities would have declined in any case during the past twelve months, but the shrinkages sjiown above are abnormal and are due to the sins of politicians. Now let us see how New Zealand fared during the twelve months. Last year our 6 per cents, 1936-51, were quoted in London at £lO5/5/- and they are now priced at £lO2/15/-, a drop of 50/- which' is quite normal. New Zealand’s credit stands high while Australia credit is at zero. The differences in the quotation for the New South Wales 6 per cifnts and New Zealand 6 per cents is £37/15/-, and that is the difference in --values fixed by those who invest. We cannot afford to jeoparise our credit in London, and the Prime Minister of the don, and the Prime./fMinister of the Dominion has taken the only possible j course open to him under the circumstances, unless lie wished to emulate Mr Lang, who has been aptly described aslthe "Mad Mullah” of Australian politicians. The worst feature of the default by New South Wales is that it will be many a long day before Australia /will be able to float a loan either or New York, except at usurious rates and' under rigid guarantees, Australia is in for an era of adversity which may be mitigated if the electors combine to send men of integrity and common sense into Parliament. It seems a very dark hour tor §tralin and New Zealand but, beje it appears so dark and dismal, s for that very reason we may : for a change. The events of th e past week or two are no cause for pcssisism, but call for action on the >s iwrt of men with good red blood coursing through their veins.