Trade Outlook Promises Well

Sun (Auckland), Volume II, Issue 377, 11 June 1928, Page 16

Trade Outlook Promises Well

RETURN TO PROSPERITY MINISTER’S OPTIMISTIC SPEECH The future of New Zealand, according to the Minister of Health, the Hon. J. A. Young, is not as black as people are inclined to paint it. He states, on the other hand, that there is manifest a spirit of healthy optimism which makes him believe that the country will soon return from its temporary depression to its former prosoerity.

In reviewing the trade situation of the Dominion, Mr. Young said before the Commercial Travellers’ and Warehousemen’s Association on Saturday evening that, although the war concluded some years ago, we were still facing the aftermath, and the trying conditions experienced during the past few years were merely an example of history repeating itself. In 1907, the then Premier, Sir Joseph Ward, was faced with deflated values, the cause of which was directly traceable to the depression following the Balkan War. There was then for the first time in the history of New Zealand an adverse trade balance, and the check upon importations of bullion affected circulation with the result that Sir Joseph Ward was forced to carry out drastic retrenchment.

There was again a substantial adverse trade balance at the close oi' the Great War, and Mr. Massey was confronted with serious problems in 1922. Reduced expenditure was found to be imperative and salaries had to be reduced throughout the public service on the eve of the general election of that year. DIFFICULTIES AHEAD The country was still faced with the difficulties of imaginary land values and depreciated currency. Interest had to be payed upon loans raised during the war, while a huge expenditure was necessary for the redemption of debts and for pensions payments which would have to be met by the country for many years yet. All this had to be provided from the pockets of the people through various channels of the State’s revenue. The great problem was that wartime debts were incurred at greatly inflated price-levels, whereas to-day debts were being met on an entirely different standard of values. As an instance of this change in values, the Minister quoted the prices for farm stock which the Government was called upon to pe.y during the war. Thousands of head of cattle had to be purchased for the military camps, but, whereas the price of a bullock was then about £IS to £2O, it had fallen by about one-half to-day. This meant that two bullocks had now to be raised in order to obtain what was once the price of one. The only possible salvation lay in increasing the productivity of the country to make up the difference. THE SILVER LINING The trade outlook was brighter, the Minister went on, and the effects of the recovery were already being felt. The adverse trade balance for 1927 was over £2,500,000, exports being valued at £45.682,000, and imports at £48,192,000. This meant there was less money for investment purposes,

and free circulation was restricted considerably. There was immediately a marked tightening of the pursestrings of the primary and secondary producer, which brought about unemployment and hardship in many directions The cities at once experienced the full effect of the depression, and large numbers who were unable to be maintained in employment on farms drifted to the urban areas. The excess of exports over imports at March 31, 1928, amounted to £10,542,000, a remarkable figure in the circumstances, as the recovery during the year was equivalent to about £13,000,000, Exports last year totalled £54,962,000 and imports £44,419,000. New Zealand had improved her external trade to an almost unbelievable extent. The trade balance with Great Britain had been improved by £5,729.000. with Australia by over £1,500,000, Canada £1,725,000, and the United States £1,567,000. TRADE WITH U.S.A.

“It is gratifying to find the Dominion had been importing less goods from the United States,” the Minister said. “The United States has always been ready to sell goods to us and unwilling to buy if she can possibly avoid it. The difference between the British and American trader is that the former will both buy and sell, that is, trade in the true sense of the word, but the American will not buy if he can help it. “There was a feeling at one time that the centre of the world’s money market would shift from London to New York. There is not the slightest possible prospect of that occurring today." The Minister was thanked for his address, and tribute was paid to the spirit which he had shown in inspiring the people with confidence in their own affairs.