BRIGHTER PROSPECTS AHEAD.

Taranaki Daily News, 2 April 1921, Page 7

BRIGHTER PROSPECTS AHEAD.

OUTLOOK FOR THE DOMINION. The future prospects of New Zealand were discussed by Mr. J. B- Condlifte, professor of economies at Canterbury College, in a lecture under the auspices of the Canterbury Chamber of Commerce.

“I believe the present low prices are unreal, and only temporary,” he (aaid. “The prospects ahe id are very much brighter than they seem at the present moment. I, for one, see no cause for pessimism in regard to the future of New, Zealand. . While realising the dangers in the future, we ought to take a Long view, and not let them obstruct our perception of the cheerful prospects ahead.” The present situation was merely the aftermath of the boom. It was only a realisation of the waste of resources in the boom period, and entailed a somewhat painful writing down. In the boom period the danger was over-op-timism. The danger now was pessimism. Confidence was the one thing needed to stave off the crisis of the moment. There was likely to be a considerable shortage of animal products for years, and we in New Zealand would probably be the most fortunate people in the world. The question would be asked: “Can Europe pay?” All the lessons of experience showed that it would be able to pay. The demand for the Dominion’s products next year would be very much better than the demand this year. “I don’t take much account of this present crisis, which will pass away quickly,” said Professor Condliffe. “The difficulty for us will be in the period when we have to face falling prices for, say, 10 years. After the Napoleonic wars prices fell for a much longer period than that.” It would be foolish to deny that that was a serious position for New Zealand. The prosperity of the Dominion during the last 25 years had been based on rising prices. Falling prices would produce a serious crop of difficulties. Reduction in wages would be attempted, and workers would not take that without a struggle. There would be a certain amount of unemployment. They should provide against it, and be prepared to meet it when it came.

The rate of interest had not yet started to fall—in fact, it was rising fast. It would not fall until the scarcity of capital in the world was overcome. The world had been living above its income, and until income was increased, expenditure reduced, and a margin of capital established, capital would be scarce and prices wodld fall. A borrowing country like New Zealand depended a great deal upon the rate of interest, and the position would be difficult. In the next three years thirty-

nine millions of debt would have to be renewed. It was going to be very difficult to get the money. That was the worst part of New Zealand’s difficulty, and was something that had to be faced. The Prime Minister would find his sources of revenue shrinking and the expenses going up- There would be only one way to get over the difficulty, and that was by economy in the first place. Economy would have to be very strict, and somewhat ruthless.