TRADE REVIVAL

Rotorua Morning Post, Volume 2, Issue 418, 30 December 1932, Page 4

TRADE REVIVAL

One of the most encouraging signs of a lift in the depression comes to us from our nearest neighbour, Australia. There may not yet be much evidence upon which to build up the theory of a trade revival, but it does not seem altogether unreasonable to hold that the Commonwealth is showing signs of a healthy recovery. The statistics recently made available indicate that for four months there has been a noticeable increase in commercial and industrial activity. Heartened by this concrefe evidence, the Commonwealth Government, in an official statement, promises further taxation relief soon, provided that the revenue position is maintained. The investigation conducted by the Statistician's Department reveals that the improvement is especially noticeable in New South Wales, Yictoria, and South Australia. Described as the most heartening news since Australia was first affected by the depression, the report states that employment has increased in all States except Queensland. But it is not in Australia alone that we are able to detect a brighter note. In the quarterly review of Messrs J. H. Schroder and Co., the well-known merchant bankers of London, there is the cheering opinion expressed that the "decks have been cleared for a revival." Cheap money and the sacrifices and patriotism of the British ataixpayer and investor have brought down the rate of interest, so making many enter-

prises possible and profitable | that were formerly outside the 1 pale of practical business. While ! economists and politicians have been talking, ancl with good reason, concerning the desirability of raising commodity prices up to something like the level of 1928, says the review, producers of food and materials have attacked the problem from the other end, and have in many cases brought down the cost of production to an extent which not long ago would have been regarded as incredible. The consequence is that many of the primary producers are now within sight of being able to work at a profit ; and a comparatively slight rise in commodity prices would enable them not • only to buy manufactured goods more freely, but also to set about improvements in their equipment, which would stimulate those industries which turn out machinery and construction goods. The review admits that at first sight, it is certainly true that the fall in prices of materials has put primary producers especially the farmers, in a desperate position, that the result has been a steady accumulation •of visible supplies of the principal commodities, and that production has still continued in some' cases to exceed demand. The other side of the picture is that while visible stocks of commodities are still high, there are practically no stocks in the hands of retailers, who have heen livipg from hand-to-mouth during the past few years. As soon, therefore, as it was realised that production had heen reduced, and that visible 'stocks were not being increased, traders and retailers iwould begin to fill up their warehouses and shops, visible stocks would become largely invisible, and the statistical position would justify a continuance of the rise in prices. It is evident that while a rise in prices to the 1928 level might be desirable from the point of view of debt contracts, a much more modest advance would, in view of, the great reduction in production costs, enable producers to make a living and to find a margin for expenditure on the equipment and machinery which, duririg the lean years, th.ey have

3een forced to neglect. The increased orders obtained by Bri;ish firms have, by reduction of overhead charges, brought down the costs of other articles, and ;here is every sign that British industry, so soon as exchange restrictions have been removed and ipjternatjopal trade revives, will follow the iead of British finance, the restoration of which ias been the most remarkable feature of the past quarter's history. s