OTHER PAPERS’ OPINIONS.

Putaruru Press, Volume IV, Issue 165, 30 December 1926, Page 4

OTHER PAPERS’ OPINIONS.

THE TRADE BALANCE. The most important statement in the latest Bulletin (No. 23) issued by the Economics Committee of the Canterbury Chamber of Commerce is this—that there is at last “ some slight indication that the readjustments which are necessary* before we recover from the depression of last winter have already begun.” Although “ some slight indication ” is a very cautious phrase, there are many people who have not detected any indication of recovery- yet, or even of the readjustments that prepare for recovery. Indeed the Bulletin admits that those who look for hopeful signs in the usual places will not find them, or at least recognise them. They are not, for example, to be detected in the bank returns, even when these have been presented in “ a form uninfluenced by seasonal variations.” The Bulletin’s “ moving averages ” show that the excess of deposits over advances is about £4,500,000 less for the September quarter of this year than for the same quarter of 1925, but they do not and cannot show what this means in the Dominion’s general position—first of all because bank figures lag too far behind those of the trade balance to be read with them. There are also, in this connection, the further complications presented by our borrowings. If the Bulletin is right—it is a statement that is very difficult to check—in saying that our new borrowings during the past three years have probably exceeded our interest payments overseas, the volume of our imports will have been artificially maintained even apart from mistaken optimism. It does, however, definitely appear that when allowance has been made for such abnormal conditions as last year’s shipping hold-up and this winter’s period of unemployment there is less to worry us in our external trade figures than there was. Although it is almost impossible in such comparisons to adjust volumes and values, the fact that the trade balance was £2,500,000 less unfavourable for the year ended September than for the year ended June last cannot be quite explained away without some allowance for an increase in prudence. There are also other indications, a remark here and a dis-c-eoyery there, which, though they are too sporadic and uncertain to be tabulated, do yet convince most of us that economies and other adjustments have beguri. There can be few businessmen, and fewer farmers, who have not seen signs during the last three or four months that luxuries are being curtailed, not so much under the pressure of hard times as under the fear of them. Sooner or later those signs, if they are not quite deceptive, will be confirmed by bank returns, but we are entitled in the meantime to regard them as confirmation in advance of the trade returns, though not to a fuller extent than the Bulletin’s “ slight indication.” However, we can quite definitely say—and it is almost more cheering to be able to say it than to record a clear revival in the Dominion—that the settlement of the coal strike will be followed by a trade revival in the Homeland. Indirectly that will restore our trade balance here, though few of us will think of it from that angle only, and only the less thoughtful think of that effect first.—Christchurch Press.