DOMINION TRADE

Sun (Auckland), Volume II, Issue 483, 12 October 1928, Page 9

DOMINION TRADE

RELIEF FROM DEPRESSION PRECAUTIONS NECESSARY (Spet'ial to THE SUN) WELLINGTON, To-day. Though ho saw ’’unmistakable sigrns ol a return to prosperity.” Mr. I>. J. McGowan, president of the conference of chambers of commerce, had a word of warning to give to-day. “We should lay aside reserves in times of prosperity and consolidate against the adverse times which can be relied upon.” he said. *V e i look more and more to increased production. which is the only wav we can counteract the world-wide fall*in prices which appears inevitable.” S pea kin ~ of the trade c-t ook. he said: "An analysis of the ir.iue figures for the last live years, ended June 30, shows tlie one just past in particularly bright relief against the two-years of depression that preceded it. Taking the nine principal items of exports for 15)27-28. it is gratifying to note *hat the good season just passed, is due in some measure to an increase in production, and not entirely to a rise in export prices. They are lixed. like the prices lor other primary products, by factors of supply and demand of a world-wide nature. Wo can. however, bad seasons excepted, control the QuantityNproduced, and it is only by means of increased production that we can hope to bring about prosperity of a lasting nature, and to insure against the bad seasons which are inevitable. EXPORTS COMPARED ‘Comparing 1927-28 with 1926-27. it is particularly significant that our live principal exports, viz., wool, butter, cheese, frozen lamb and frozen mutton, showed tlio following increases in quantities: Wool. 1.1 per cent.; butter, 7.9 per cent.; cheese, 2.8 per cent.; frozen lamb, 19.6 per cent., and frozen mutton, 3.1 per cent. An increase of 90.6 per cent, was recorded for frozen beef, while tallow showed 57.9 per cent, and hides 5.6 per cent. The only decrease was in sheepskins* which declined by 5.0 per cent., chiefly because tlie year 1926-27 happened tc bo abnormally big year for this item. “Examining the values of these products, there is evidence that the 192728 season was doubly bountiful, in quantities and prices. Wool, our biggest export item in point of value, showed an increase in value of 28.4 i*»r cent., in comparison with 1926-27, butter 15.9 per cent., cheese 19.2 per cent., frozen lamb 22.1 per cent., sheepskins 10.4 per cent., frozen beef 101.2 per cent., hides 54.0 per cent., and tallow 42.5 per cent. A small decrease *»f 1.9 per cent, in mutton was the only one recorded. “Extending the comparison for quantities over the last five ydars, there are unmistakable indications that there has been a net increase in productivity in our primary industries over that period. Tlie nine series of figures considered' show the increases as lollow: Wool, 5.7 per cent.; butter. 30.6 per cent.; cheese, 5.9 per csr.t.; sheepskins, 15.0 per cent.; frozen lamb, 23.8 per cent.; frozen mutton, 36.0 per cent.; hides, 18.4 per cent.; and tallow, 36.4 per cent. “A consideration of the total trade in exports and imports, and tlie visible balance of trade during the last live years shows that the favourable balance in 1923-24 was almost doubled in the following year; then swung £12,372,346 in the opposite direction in 1925- The adverse balance of £5,820.855 in 1925-26 was reduced in 1926- to £978.605, and in 1927-28 was completely wiped out, and displaced by a favourable balance of £ 12,121.313. Within the short space of 12 months an upward turn in overseas prices effected an improvement of £13,099.948 in our trade balance. The trade balance at the end of 3 927-28 was a record for the June year in the history of the Dominion, with the exception of tae unusual year of 1921-22. These figures are unusually impressive, more particularly as they boar a close relationship to our volume of internal trade. An unfavourable balance of trade is the precursor of financial restriction, which, of course, recast on the physical volume of business. Business remains in a stagnant condition until a favourable balance provides the funds for relieving the financial restriction, and depressb>n gives way to buoyant conditions “The trade statistics since June show sustained improvement. Tho visible balance of trade for the eight months ended August 1928 was £14,182.641, against £ 6,»’.77.322 for the corresponding period of 1927. “There appear to be unmistakable signs of a return to prosperity in the near future. We have made a rapid recovery from the recent depression. The outlook is the brightest we have seen for a number of years. When fhe full results of the recent bountiful season have been absorbed, the additional purchasing power available should see increased activity in business circles/'