FINANCIAL DEPRESSION

Sun (Auckland), Volume IV, Issue 946, 12 April 1930, Page 10

FINANCIAL DEPRESSION

PROF. A. H. TOCKER’S FORECAST AUSTRALIA’S INFLUENCE Special to THE SUX CHRISTCHURCH, Today, j In an address to the Canterbury Advertising Club on Thursday, Pro- , lessor A. 21. Tocker, professor of ; Economics at Canterbury College, ex- . plained the business relationship between Australia, New Zealand and j England. lie predicted a poor year for New Zealand in 1930, followed by two years of gradual recovery. “We are not responsible for what is occurring in Australia,” said Professor Tocker, “but we are closely linked with her and we cannot help being proI foundly affected by the change that affects her She is by far the bigger j country, and we are inevitably affected more by her than she would be by us ” Many details about Australian banking tariffs had not been published. Referring to the tariff, he said that the raising of the exchange rate to 6 per cent, meant a 6 per cent, premium on goods from overseas, which ought to be effective if certain imports were prohibited and high tariffs put on others. Business men would assume that these changes were permanent, and they would make permanent plans to make the goods in Australia. in time, however, the tariff might come down, and they would then be left high and dry. The tariffs must ultimately be brought down, or Australia would be permanently saddled with expensive production. i “They can see as yet no evidence of ! recovery, no evidence that prices have | yet touched bottom,” commented, the i professor, speaking of overseas manu-

facturers. “England fears that low prices for raw material will lessen the purchasing power of the big body of consumers which buys her manufactures, and until that purchasing power recovers she cannot pay more for the raw material.” He quoted then a forecast from Harvard, America, stating that business activity bad continued to decline, although some recovery had been shown in January. Further improvements would be made easier by the lower bank rates in America and abroad, which would operate also to stabilise commodity prices. There was some improvement in unemployment, which, it was stated, would be alleviated by seasonal activity. “There is nothing particularly optimistic in those reports,” added Professor Tocker, “and orlimism or pessimism in New Zealand depends on optimism or pessimism in countries like these. Until export prices recover there is not much chance of recovery unless costs of producton are reduced, which is not likely.” He predicted a low level this year, a slight recovery next year, and a fairly good year in 1932. “This is not pessimism, ljut an attempt to interpret facts,” the professor reminded his audience.