Taranaki Daily News. FRIDAY, JANUARY 7, 1921. PRODUCTION AND DEVELOP-

Taranaki Daily News, 7 January 1921, Page 4

Taranaki Daily News. FRIDAY, JANUARY 7, 1921. PRODUCTION AND DEVELOP-

hi his New Year’s message, the chairman of the Bank of New Zealand (Mr. Harold Beauchamp) again stresses his contention that only by ‘‘working harder, producing more, and spending less on luxuries to which we have accustomed ourselves in the halcyon days of the past,” will it be possible to make good the leeway lost during the war. The soundness of this view is beyond, all dispute, and is completely confirmed by such a reliable and independent authority as Mr. R. W. Dalton, British Trade Commissioner, whose business it is to closely watch New Zealand’s movements in the interests of the traders of the United Kingdom. No student of national affairs can read Mr. Dalton’s recent report on the general conditions existing in the Dominion without being convinced that he has accurately diagnosed and fairly stated the reasons for New Zealand’s prosperity, and the policy necessary to ensure a continuance of that , prosperity, together with the development essential to the future welfare of the country. In summing up the position, Mr. Dalton emphasises the fact that the Dominion’s past and present prosperity is. due largely to war conditions, and he rightly insists on the importance. . jgjng fully taken into

account in anticipating the immediate future of the country’s economic growth. Mr. Dalton impresses on the people of the Dominion several very important matters they are apt to overlook, but which are needful to bear in mind if they are to fully realise the exact conditions which exist, and although he discloses no features that are not already patent to all careful observers, he deserves credit for pointedly bringing these matters into public notice, for they have a potent influence on the future welfare of this country. Population, lie says, has not increased to any great extent; flocks and herds show very little, if any, increase; public works have been at a standstill; means of communication are no better; there has been little development in means of production to give a better output; new land has not been broken up; a phenomenal rise has taken place in land values based on returns of prices obtained during the war and involving heavy mortgages, so that if a slump occurs the land purchased at these high values may become unprofitable to the owners. Yet, despite these drawbacks, the Commissioner sees no cause for pessimism, as the population is slowly increasing, and the Government has committed itself to an active policy of public-works, the vigorous prosecution of which is absolutely essential if the development of the country in the future is to keep pace with the prosperity of the past. The only important factor which Mr. Dalton omits is that of industrial unrest.- On this point Mr. Beauchamp remarked: “There must be greater co-operation and a better understanding between capital and labor. By the adoption of such a policy the financial equilibrium in this Dominion, so highly favored by nature in the matter of climate and fertility of soil, would be speedily restored.” There are, however, other factors besides the industrial problem which seriously affect the financial position, which at present is admittedly serious. The pressure brought to bear on Home manufacturers and exporters by the banks caused them to unload stocks with feverish haste, their order files being closely searched and goods sent to the Dominion in such large quantities that the Dominion’s adverse trade balance for the eleven months of last year amounted to over thirteen millions sterling, of which over eleven and a half millions accrued in the last five months. This serious position ean only be remedied by curtailing importation, but it may also entail selling at a sacrifice, as the banks in the Dominion are also restricting advances, and this may result in forcing sales of goods while prices are falling. Money has not only become much dearer, but is in short supply, thus further affecting the adverse. exchange rates. Unfortunately the situation, instead of beiug relieved by Government action, has been intensified by increasing the note issue—already far too greatly inflated. The injury that may result from a reekless financial policy may be extremely serious, and it is time to discard the weakness of following the line of least resistance, which can only result in sinking more. deeply into the financial quicksands.