THE Wairarapa Age MORNING DAILY. MONDAY, FEBRUARY 7, 1927. AN ADVERSE TRADE BALANCE.

Wairarapa Age, 7 February 1927, Page 4

THE Wairarapa Age MORNING DAILY. MONDAY, FEBRUARY 7, 1927. AN ADVERSE TRADE BALANCE.

During the calendar year 1926, the value of exports from the Dominion was less by close on ten millions sterling than in the previous year, while the value of imports was greater by over two and a half millions than in 1925. The favourable trade balance of about £2,800,000 in 1925 was considerably short of the sum heeded to meet oversea interest payments, shipping freights, insurance and banking charges and other items of external obligation. With an adverse trade balance for 1926 of over four and a half millions sterling, the position of course is changed considerably for the worse. Without indulging in pessimism, it certainly is wise to take full account of the fact that since 1922 a substantial trade balance on the right side has been converted into an unfavourable one. The big factor accounting for this change is, of course, a heavy reduction -in the returns on export produce, and although prices for some of our staple exports are at present exhibiting an improving tendency, it seems most un likely that they will get back to the level at which they stood when it was last possible to regard our balance of trade with equanimity. Reviewing the current trading returns the other day. a Wellington banker urged that they should provide a strong incentive to both individual and national economy. This counsel in the main may be strongly endorsed. There is the reservation to be made, however, that in a developing country like New Zealand, mere cheeseparing, and a determination to cut down expenditure at all costs may prove to be very poor economy. Throughout a great part of our population, no doubt, there is considerable scope for individual economy. We are a somewhat heedless generation, rather given to letting money run through our fingers. Where national development and the expansion of industry are concerned, however, undue limitations on expenditure would intensify the difficulties of our present economic situation instead of affording relief. Borrowing, whether by the State or by individuals, need not cause alarm provided the money is applied ’6 productive uses. For the last five years our national debt has shown an average annual increase of over £6,500,000. This is somewhat staggering, but it is largely accounted for by the fact that the present Government is committed to the policy of bringing reproductive works as rapidly as possible to the earning stage. This undoubtedly is a sound policy, and if it is successfully carried out no reason will appear for looking to the future with apprehension. In the figures of trade and in other directions, however, weighty reasons are to be found for keeping a watchful eye upon all investments of borrowed capital.