WELLINGTON NEWS

Hokitika Guardian, 22 January 1932, Page 7

WELLINGTON NEWS

DEPRESSION PASSING. (Special Correspondent). WELLINGTON, January 20. There are many indications that the slump will end this year. This is not a, prophecy or a forecast hut a deduction based on current events. Last year there were many forecasts, especially by American authorities, and early in the year Air Roger Babson, who predicted the New York Stock Exchange slump of 1029, wrote to President Hoover stating that he would not be surprised if there was not an actual shortage of labour in the United States in the autumn. This should have been fulfilled in October or November, but it was not, and as everyone knows, unemployment in the United States if almost as serious as it is in any country. Conditions are different this year. The slump which began in 1929 gathered momentum and reached its peak last year, which was a terribly trying one for Europe. A slump, cannot, like Tennyson’s book, run on for ever. It must wear itself out, and that is apparent ill Europe. The fundamental causes of the depression are now reduced to three factors, reparations, war debts and high tariffs. The first and second are inter-related, and if reparations are reduced or cancelled so must War debts. In face of the determined opposition exhibited by France there does not seem to be much hope of any variation of reparation payments, but it would be a mistake to abandon hope. Britain and Italy are in favour of modification, that means two against one. Germany has stated quite frankly that she cannot pay reparatons, and supposing she does not pay. what then ? France would probably occupy the Ruhr and the Germans would thus he invited to indulge in reprisals. A great nation cannot be coerced without fireworks following, and although there is not likely to lie any declaration of war, vet there may he hostilities, perhaps sporadic, as has been the case in Manchuria. If France and Germany are involved in strive, will Italy remain quiescent? Mussolini has rattled the sabre on many occasions, and if France is otherwise engaged she may get a blow from this unexpected quarter. But nothing so serious need be anticipated. and in the end the the reparation problem will he arranged on an amicable basis. Tlmt matters will right themselves is indicated by the movements in the markets which show that quite a number of commodities have advanced while many show insignificant. Punctuations compared with last month and also compared with a year ago. Last inofttlt cotton was selling at 4.80 d per Hi; this iiidntii it Stood at 4.94 d. Rubber bas remained steady at 44d per lb. jtlte at £2O/7/6 pt;r toh is 11/3 lower than it Was last thodth, Which is just a normal price fluctuation. A year ago jute was selling at £LS per ton, so that there is a rise of over £o per ton compared with a year ago, which must be proving very beneficial to India. Copra a year ago was £l4 19/- per ton, it is now quoted at £l4 There is practically no change. Wool, which is a world commodity, is selling at better prices t’ an it was last month or even a year ago. Most- ol the metals show firmness. A year ago tin was quoted at just over £l2O per ton. while the price is now over £142. Some of the advance is due to restrictions of output. These movements show that- the fall in prices has been arrested, or in other words the slump lias run its course. Commodity prices may not show much improvement, but the tendency will be upwards. "Wlnit is needed now is world can fide nee and that may germinate after the Reparations Conference next Monday. Li the meanwhile New Zealand must go through the mill like Australia, and recovery in the Dominion will follow on recovery in Australia. We are justified in being a little optimistic regarding the immediate future.