FRENCH PASS

Nelson Evening Mail, Volume LXIV, 22 January 1931, Page 10

FRENCH PASS

FARMERS’ UNION MEETING

SERIES OF RESOLUTIONS (From a Correspondent.) At a meeting of the French Pass branch of the New Zealand Farmers’ Union a resolution was carried unanimously urging that the Public Works Department continue the formation of the new road to Croixelles to Elaine Bay. _lt was pointed out that the construction ol’ this would be an immense benefit to the settlers of the lower Pelorus Sounds and would also open up a tourist route that would be unequalled m New Zealand. A large gang of men was already on the spot with all equipment engaged in the construction of the Rai-Croixelles road, which was nearing completion. Other work would have to be found for these men shortly and the proposed road would provide the work without shifting them to another district, which would be a very costly business. The people of the Sounds, it was stated, had been paying rates and taxes for seventy years and practically no public money had been granted in return because no local body had been formed to maintain roads, etc., on completion. Such a body has now been 1 formed and a strong case could be made out for the extension of the road. The length of the extension would be about eleven miles, and an easy grade could be maintained throughout. NEW VALUATION It was also decided to request the Valuation Department to undertake an immediate revaluation of the whole of the Sounds County. The present valuation was probably the oldest in the Dominion, having been made in 1914. It was therefore obsolete and in many cases most unfair.

A motion by Mr R. J. Turner that the Post and 'Telegraph Department be asked to inaugurate a weekly mail service for Admiralty Bay was withdrawn for the time being, Mr Turner explaining that the Dominion’s affairs had taken on a very much worse aspect since ho had forwarded the motion to the secretary, and it was now unlikely that the Department would grant such a request. Air R. J. Turner moved, and it was adopted, that the chairman (Mr G. Webber) should go into the question of the formation of an unemployment committee for the French Pass district. He said that a certain amount of unemployment was in evidence locally; and he also explained the benefits that farmers could obtain from the subsidy on wages. The bulk of the subsidy was now going towards hedge-clipping, etc., in towns, and farmers should claim their share. He said by a mutual agreement between employer and employee the Act was being “got round.” This drew some severe criticism of both the tax and the draftmanship ot the Unemployment Act from other members.

Mr Webber agreed to go into the matter and will furnish a report at an early date. ADDRESS BY MR LEOV A short address was delivered by Mr H. Leov on the farmers’ troubles and their causes and possible remedies. A very wide field was covered and all the vital points in economics were dealt with. He said that the farmers the world over were in a bad way, and that there was one and only one cause which was fluctuating prices. Land appeared to be too highly valued, but who could say definitely if this was so? Who could say whether wool, for instance, would average 4d per lb for the next ten years or whether it would average Is 4dV If the former, an ordmarv sheep farm would be valueless, while if the latter it would pay at even boom valuations. Even the most expert valuer could do no more than guess at values. The future could not be accurately judged by the past, l'or the present values were unquestionably too high, but mortgagees would not reduce mortgages because they had no guarantee that values would not rise again. In the meantime the farmer was poor, and the whole world was also poor as a consequence. In sketching the course ot events during the last twenty years it was said that- the war had brought about a great shortage of goods.ot aJI kinds, bringing a natural inflation of values, which was made worse by inflation of currency, which could have been avoided in three ways, the simplest being an extension of the commandeer which was applied to colonial produce. At the end of the war the shortage was acute, and hut for the commandeer prices for primary products would have reached veiy high levels. A combination of thrift during the war and bad management after led to accumulations of all commandeered goods, notably wool. These accumulations were thrown oil the market in mu, i'.rcatimr a panic which caused a huge drop in prices. It was soon apparent, however, that there was still a geneial shortage ill spite of these accumulations .uid by 1927 prices had again reached very high levels. This created alarm m financial circles at Home and a vigorous campaign for the short emg of currency was commenced. Trade was dull England at that time and all the chanmen of the leading English banks declared that a shortening of the currency or as it was called, a return to a gold standard, would herald a return of industrial activity. This was done in 1025. The immediate result . was a sharp drop in commodity prices in but the shortage of products sucln as wool, meat, and butter still persisted mid prices of these again rose in spite of the fall in the general price level which the return to a gold standard had brought By 1928 so great had been So fall in the general price level that the world commenced a wait and attitude which had resulted in e P rt ' sent slump. The slump was there foie the psychological effect of the fm ‘ due to - the return to a gold stanrlaid aggravated by overproduction of wheat and by gambling in stocks in Ameaui. -STABILISING PRICES

The world’s chief need is to put the farmer on his feet again, _ and this could only he done by stabilising prices Could this be done? _ He was - nhaticallv of the opinion that it could It had been shown that by shortening Hie currency prices were forced down, why not expand the currency again and force prices up? This was the idea of ;n American l’rofessor of Economics, one Irwin Fischer, and was an idea which was gaining ground the world over, to expand and contract the currency as prices rose or fell in order to keep them stable. Would it work? There were many noted economists who held that it would, but there were many who opposed it. The latter were divided into two classes; those that hold that- if inflation was commenced it eoiml not he stopped and would have 10 m continued until it would take a ‘'artload of notes to buy a loal ol bread. I he other school held that it would make no difference at all; that the supply of goods ruled the value of money ami not I he reverse. There was “something rotten in the State of Denmark.” ft could not lie both of these. Regarding the first, how did England manage to achieve the impossible by deflating in 1925? Regarding the latter, why did these people resist inflation if it made no difference? Money had been raised in value artificially, and must be low-

crcd artificially. These slumps were getting worse and more frequent. They caused more worry than wars. Surely it was time to try to prevent them'? When Fischer’s scheme was put into operation the world would have had its last slump. Regarding its application in New Zealand, while it would be better to stabilise at present prices than not at all a great many adjustments would have to be made, and it would be far more simple to write down the value of the New Zealand pound to the average value for the twelve years prior to 1928. This could be done by working exchanges. It was regarded as a matter for congratulations when the rate of exchange was in our favour to the extent of one shilling in the pound, that was, when goods sold in England for one pound we were paid out 2is. Why not make it 25s to the English pound, or 30s for that matter or whatever the drop in values required. This would cause all imported goods to rise in price and would therefore put an automatic brake on imports in times of depression. The hanks were trying to keep imports down by shortening credits, but did not have complete control of the situation. It was imperative that we should have a favourable trade balance. The value of the pound would fall, but it would not affect the worker a great deal as his main items of expenditure and rent would remain the same, as would New Zealand goods such as bread, butter, meat, etc. RATES OF WAGES The speaker was emphatically against wage reductions. That was not the way out, and would only make things worse. There was a cry for a lower standard of living for Now Zealand, for Australia, for England, for the world in fact. Surely it was apparent that with goods accumulating and a large portion of the world’s population unemployed it was obvious that a higher standard and greater consumption was necessary. Men like Lord Inchcape talked of over-production. This was only a surface conclusion and would not bear the least inspection. There could not be general overproduction until everyone got as much of everything as lie wanted. How many people in the world got as much milk or butter or meat as they would like. Not one in a hundred. Even in New Zealand, “a land overflowing with milk and honey,” the great majority have to economise in these things. The whole world was going without things that the millions of unemployed were willing to make. Money had the world by the throat and it must be shaken off. France was prosperous because the inflation there had freed the farmer and the manufacturer of the mortgage burden. This, however, was straight out inflation such as is being recommended in Australia. This was dishonest and not to be recommended here, hut was not so dishonest nor so disastrous in effect as the deflation policy of England. France could not remain prosperous indefinitely in. the midst of such widesrpead depression. It had always been recognised that money had an advantage in trade. In earliest Biblical times there were laws against high interest rates. These were useless. It was the money itself which would have to he tackled. The world had been tied to gold and fixed currency for long enough. The idea of hoarding the world’s most beautiful metal in vaults by the thousand tons in order to have a measuring-stick for currency would be laughed at a hundred years hence. It was being said in England that she had doubled her debt to America when she returned to a gold standard. She had, but her debt to America was 909 millions (since reduced). while her loans amounted to 12,000 millions, which were also doubled, so that she got the best of the deal. This had a sinister aspect. The colonies had borrowed largely from England during the inflation period; in fact the great bulk of New Zealand’s debt to England had been incurred then. She had borrowed inflated money and was being demanded gold money in return. Would, the Empire stand the strain? New Zealand was alright, but there were ominous creakings from across the Tasman. If Australia cut adrift the blame could be laid entirely at the door of the English gold advocate. England’s loans were a doubtful asset. They could only be repaid in goods. No matter how her industrialists forced down prices her debtors must produce goods still more cheaply in order to find a market in England and repay the debts. Finance and industry had clashed and finance had won all round, but she could not live on finance alone. That loans must he repaid in goods was given as the chief reason for Britain s free trade policy. She would be foolish to tax food and raw material in spite of what is being said about Empire preference just now, but protection was bound to come. It was not, however, the simple problem that most people helieved- It was impossible to forecast the result of a change in the fiscal policy. An appeal was made to members to try to get a grasp of world problems. There was a common superstition that only a few almost supernatural beings, chiefly Jews, were entitled to hold an opinion on economics. This was not so. Anyono of ordinary intelligence could soon get a complete grasp. There was no i -mystery about it. Iho average man was inclined to make a boast about his ignorance of these tilings. Let it he remembered that al the chairmen of the big banks promised an industrial revival with a return to a gold standard; but it had had the reverse effect, uas their judgment at fault or was it a deliberate move to raise the value ot money? Which ever way it was we could no longer put. any faith in the utterances of these peoplo, . hut must think of a way out of the mess we were in for ourselves. Fischer’s scheme offerocl a simple and easily applied solution. Its successful application in New Zealand would almost certainly result m its adoption throughout the Empire. It would put everyone on one side, all incomes, salaries and wages would rise and fall together as the price level m the world’s markets fluctuated, but there would be no disorganisation and its consequent unemployment and misery. The world would have taken ?- big step forward. A resolution uiging the adoption ot this scheme had been carried at the Provincial Executive meeting at Havelock and had been forwarded to the Dominion Executive for consideration. It was thought that it would be well discussed there and would receive the attention it deserved. Once the scheme became known it would certainly take on. The whole lock, stock and barrel of the world’s commerce was controlled by banking. Everything depended on the policy of the world’s banks, which were, controlled by a few people, these people ruled the world and they were making a mess of it. When this was generally realised there would be a change and the world would go forward to better times than ever before.