WELLINGTON NEWS

Hokitika Guardian, 2 July 1931, Page 6

WELLINGTON NEWS

STILL DEPRESSED. . (Special Correspondent.) WELLINGTON, June 30. It is quite obvious that no one so far has nailed the cause of the depression, for the markets are still depressed. It is true that Stock Exchanges and Bourses responded promptly to Hoover one-year moratorium, and some commodities advanced, but the latter do not seem to be able to hold the gain. Stock markets are powerfully influenced by international politics, and the Hoover Plan is very much politil'ftlG The continued dullness of the commodity markets is very disappointing. Towards the end of March there were very strong indications that wool wa y on the upturn, and the position appeared so good that the Statistical correspondent of the Financial Times (London) gave it as his definite opinion that wool was on the road to recovery. During the past two months, wool prices have been steadily receding, and at tli© fourth of the series of London wool sales due to, begin on Tuesday next, July 9th, it is expected that wool will show a decline- of 10 per cent. Those who have followed fhe movements of the Bradford top market will not he surprised at this. Butter too lms weakened, and the same can he said of most other commodities including the base metals. The continuance of low prices for commodities and particularly the primary products, makes it clear that industrial countries cannot improve their position. What is keeping prices, down? It must be remembered that even at the current low' prices, it is not easy to do much business, for most people are buying from hand to mouth.

A good many pople blame the. gold standard, and the alleged scarcity oj ! gold, for all our troubles. But gold is not now scarce because the nations have ceased .scrambling for gold; furthermore, money rates are low in the principal monetary centres of the world. I here does not appear to be any lack credit, but there is a great lack of confidence. It is difficult to say when confidence will return and the currency cranks are rather helping to prolong this want of confidence. There have been many proposals for providing a substitute for gold. Thus some economists professed to have discovered that wheat would lie much more reliable than gold as a basis for currency • in Australia wool lias been suggested, and in the Dominion the national wealth is suggested. Indeed, there is a petition before Parliament praying that a special committee may be nppointd to hear the discoverer of thi« special system expound his .views. Even if the suggestions’ djf any one of

Mir currency cranks is acted upon, til at Mould not improve matters. The cause of the depression is deep-seated and seems to he due to the fact that the nations are unahlc to trade with one another. The people are anxious to trade, hut they are prevented from doing so hy the politicians who in turn appear to he under the control vested interests. In the hope of many sound business men of world reputation War debts and high protection- tariffs ru‘e the basic'cause of the world’s present day troubles.' It is an unfortunate fact that the greatest eredieor nation and the same time most highly protected, is the United States. if America would abandon ore or the tlier, the conditions would improve and the proof of this was amply demoiir strated in connection with President Hoover’s one year-plan moratrrium for war debs. There was it prompt response in practically all markets, although it was short lived. It is seen now that Ameriac has offered no more than a private creditor would have done for a debtor in distress. it wa.s officially stated that America’s attitude towards war debts had not changed .which means that at the expiry tjf a year, the debtors must resume regular payments. There* is no prospect of America altering her tariff unless of course, the. Democrats come into power. wince debts must he paid to America, and trade with America is impossible, producers must expect a continuance of tew prices, and regulate production costs accordingly. A good deal has been done in New Zealand aiid other countries in this respect, but a good deal remains to be done. The only hope is that the United States may suffer so seriously because of the slump that she will realise the necessity. r? c elnnging her attitude to the rest of the world. She must abandon isolation.