THE CRISIS

Hokitika Guardian, 3 December 1932, Page 6

THE CRISIS

CAUSES AND REMEDY. '(By X). As th € old .saying hag it, a good •deal of water has passed under the bridges since those days in 1928 when the late 'Sir Joseph Ward laid it ’down that t'he requirements of this country for land settlement and development would be 6even millions a ye%r for the followng ten years. A financial blizzard has since struck the world and old ideas and traditions have gone by the 'Joard. Things' have happened which the most pessimistic in those days could not have anticipated, and things have been done undel- the spur of necessity which would then have been considered utterly impossible. W< know now that we were then living ir the proverbial fool’s paradise ; that all our were inflated ; that the wealth we thought we possessed was for the most part more or less meaningly figures; .that .the much prized, and high priced freehold tenure was a delusion and a snare; that many of our assets were } ©ally liabilities ; that even “sanctity of contract” had its limitations when, contracts were- nc longer capable of fulfilment; aifd thaf taxation can be increased to a limit hitherto undreamed of. Rente, wages and interest have been compulsorily reduced, . and pensions and superannuations 'have also had a cut. 'This has brought ruin and distress \to many. The wage earneT has had a ten or twenty per cent, out in wages, and wlWt is infinitely worse has in thous. ends of cases lost his '.or her job, while those who had their money invested ir land, buildings, or industries hav*. lost from 50 to TOO per cent. The plitrh 4 of elderly men and women who have •seen the savings of a life time swept away is perhaps the most sad spectacle of all. As against this the cost of living has fallen to far below the 1914 leyej in many lijie.s, and property arid dand .are down to what they were 30 or 40- years ago. Perbap c th’a latter statement requires" qualification as it ds alleged n»»»y. farmers are hanging on to land they bought at inflated values, arid while they continue tf> do this no perraamont relief for their difficulties can be found. But speaking generally the deflation of the past two or three years has prettv well cancelled out the inflation of the preceding years, and we are in a bet ter position now to deal with th ( aptual requirements of the country.

And strange to say wo find that our actual requirements are practically tijiose laid down' by Sir Joseph War I’’ 1 ’’ in 1928. The necessity for increased land settlement in small holdings preferably bas been shown to be the opb' possible alternative to. existing conditions which™"are becoming intolerable Sir Joseph said that put "of the £7.ijOer yteafr required £6,000,000 would be for advances to settlers, and providing land for settlement; that the so expended would be im mediately reproductive and would br eventually returned under sinking fund provision, as had been the case with the loans raised by the Ballance-Seddon Government some forty years ago.

Had our borrowing policy in the past been confined to this purpose our position to-day would have been, very different/ We must admit however that the war’ forced us to borrow •at higher rates and under entirety different conditions; conditions under which adequate provisions for repayment could not be assured. In this 1 we only did our duty to the Empire and the world. But after the war, and with the full knowledge that the obligations the war had entailed would have to be met the Massey Government continued recklessly borrowing and spending, piling up a huge debt which was looked on apparently as negligible while the inflation boom lasted, but which now is a veritable millstone around our necks. When the change of government occurred there was a feeling of alarm at the increasing national debt, and Sir Joseph Ward in defining the requirements for the ten years • at £70,000,000 some £15,000.000 less than had been borrowed in the preceding ten years—emphasised the point that this would he required chiefly fop land settlement (reproductive) and the completion of public works in hand. Had conditions remained normal no doubt this policy would have been carried out. But as the financial stringency throughout the world developed it was made dear that supplies of borrowed money from overseas would be cut off. Thrown on our own resources our Parliament appeared able to do little but carry on an unseemly squabble as to which political party had been responsible for past extravagance. Only in the post year has there been an' united attempt by the two responsible political parties to work together and find some solution of our difficulties. While' they have been successful in maintaining the credit of the country by striving as far as possible to balance the budget under most adverse conditions and have fearlessly and without any regard to popular clamour taken drastic and most unpopular steps to onforee economy, they have not as vet solved the vital question as to how to bring prosperity hack to the country. It is no use waiting until our exports fetch higher prices overseas. We have little control over that, and beyond seeing that the quality of our products is maintained and thp marketing facilities are efficient we can only endeavour by increasing the volume of products and minimising cost to make up in some measure for decrease in values. Tf the present dcores-lon is to he •checked we must, have more, money in circulation, reduce unemployment,

and put more settlers on the land. If wo cannot borrow cheaply from overseas ; if we cannot raise an internal loan at low interest then what other course i,s open? I think the obvious course is gradually being realised, and will refer to it in a future article.