RIFTS IN THE CLOUDS

Rotorua Morning Post, Volume 1, Issue 164, 4 March 1932, Page 4

RIFTS IN THE CLOUDS

Amid the atmosphere of gloom which has becgirte iptensitied during the past week or two as a result chiefly of a better realisation on the part of the public of the direct and iinniediate consequences of governmental economy measures which have long been demanded of the Government, and which circumstances have at last forced upon it, sueh signs pnd_ portents as there are of better times ahead are apt to escape notice. When conditions are in any way abnormal one of the average man s greatest difficulties is the preservatidn of a due sense of pronortion. When things are going well, they are too easily seen

in an unduly rosy light, and when they become difncplt, the ditnculties are too often needlessly magnified. Thus are booms and : slumps made. And just as warnings are seldom heeded during ; a boom, so are signs of hope overlooked when depregsipn rules. ; This is because it is extremely difficult to see things whicji are ; near at hand in proper perspective. At the moment the Govern- . ment is strenuously engaged in efforts to justify the extremely . ^drastic measures which it proposes as a fneans of curing the Oominion's economic ills, while the Opposition with equal Yehemence opposes and condemns them. The net result is a, spate of depressionistlc talk from both sides of the House which it would be extremely dangerous to accept at its face value. To deiiy that the situation is difficult, ev.en dangerous, wo'qld ]ie yvorse than i'oolish; almost — but not quite — as foolish as to admit that if is hopeles's, as some seem inclined to do. _ In any attempt to arrive at a just appreciation of the economic position and prospects, the preservation of some sense of proportion and perspective is essential. This involves a constant realisation of the chief causative factors, both internal and external. Externally, the pbvious factors are the world-wide losS of economic equilibrium, resultmg in a f all in prices, and the drying up of the sources of loan money. Internally, the chief causes, apart from those which are affecting all countries more or less equally, are extravagant expenditure of borrowed money, excessive cost of Goyerpineut, and the unavoidable lag between the fall in prices and the redqetiQii Qf production costs thereby made necessary. Obviouslyj recovery cannot be expected until these factors have been either corrected or eliminated. Of the external factors named> the second is only an evil because the country had neglected to prepare for it. That it was bound sooner or later to arise has always been as obvious as it was inevitable, and the failure of past Governments to prepare to meet it when it came amounts to.nothing less than a shameful neglect of duty on the part of their members, mdividually and collectively. That the world-wide econpmic bUzzaim, though it was possible to foresee, was not so easy to guard against, is proved by the fact that not one country has escaped its consequences. The internal factors named are $11 due in their genesis and development to external conditions. Whgn mqney was to be had for the asking, the temptation was great, and the vote-seeking politieian not the man to resist it, and With plenty of easv monev available, extravagance of all kinds becanie almost

unavoidable. Now, however, the day of easy oversea loans has passed, and nothing but a determined effort on the part of the whole community can restore the necessary balance between public income and expenditure. This entails saGi'ifices which al} must share and the Government's right to govern will depend largely upon the manner in which it performs its duty of diSr tributing the burden. The other problem-^the bringing of production costs into a more just relation with markef values as, of course, nearly as susceptible to external influencpg f or it£ solqtion as in its creation, and here there is happily a brighter picture to paint. Conditions in Great Britain, the Dominioh's fihief market, almost completely govern export price levels, and signs of recovery at Home increase almost daily. Whereas as recently as last August it was necessary for the British Governmenkto go cap in hand to foreigners for large credits to avert disaster and an unprecedented budgetary deficit this yeqr app'eared inevitable, to-day the Old Country is able to repay Amefica no less than £30,000,000 five monfhs befqre due date, apd h Budget surplus of £10,000,000 is cqnfidently foreGast. . ^Thig has heeu achieved by the courageous sharing by the British people as a whole of the common burden under ihe guidance of a wise Government. As a result the corner has been turned and a steady, i if slow, recovery may be expected. In this the people of this Dominion may share, provided only that they follow Great Britain's example and set their own hpuse in prder. This, we believe, they are at last determined to do, and it is not, therefqrp, undqly optimistic to claim that, provided a sense of proportion is pTeserved, growing rifts in the clouds are disceriiable to justify hope J and fottify courage.