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Hokitika Guardian, 21 May 1932, Page 4

Thk London “Times'' commenting on the New Zealand budget proposals •says that the Dominion Government appears resolved to shrink from no sacrifice in order to balance the nccou 'ts and pay its way. It says the Hon. D. Stewart «ens no hope of relief nroles l ,* there is a rise in prices of Nt'-.v Zealand product*, and he hopes that at the Ottawa Conference this problem of the price level will be considered from an Imperial point of view. It might, lie thinks, be possible by combined action to raise the general sterling price level of primary products, which is the only way in which the burden of int/wnal debt can lie lightened. As prices now arc, lie says, New Zealand can only meet her London obligations hv severely restricting her purchases of British good.®. “T'k:t.,’’ ront/'iuois the writer, “is perfect l • true. The catastrophic fall of prh 's has daihlcd, < r more than doubled, the real burden m their external debt for all the piimnry producing countries, which is a disaster not only for them but. also for the industrial countries which supply

their markets. Only the other day the Financial Committee of the League of Nations described this as tile fundamental cause of the plight of the countries on whose financial difficulties it has been instructed to report. As an illustration it pointed out that Bulgaria had increased her exports by 80 per cent, in 1930, and again by 40 per cent, in 1931; yet their value in gold, and therefore as a means of meeting her externa] obligations, had fallen by 3 per cent, in the first of theue years and by 4 per cent, in the itecond. And jsilinilar figure's Jniglit be quoted for all the primary producing) countries. -They are the immediate- sufferers by this inequitable increase in the burden of their debts. But their creditors .suffer hardly less severely not only by the difficulty of collecting what it owed them butagio by the resulting paralysis of trade. There is a faint hope that some remedy may be found at the Lausanne Conference, but if the gold price level cannot be raised—it is so far not even stabilised—the- Ottawa Conference should seek means of raising the sterling price level for the benefit of the Empire, and of the many other countries which trade on a sterling basis. The desirability of raising prices is commonly admitted; the real problem, .so- far unanswered, is how to bring it about, Experience has shown that cheap money alone w'-’l not achieve tile object in view.”