MAN-MADE CRISES

Wairarapa Times-Age, 25 May 1939, Page 7

MAN-MADE CRISES

FARMERS’ UNION PRESIDENT ASSAILS GOVERNMENT Address at Interprovincial Conference COST BURDEN AND GUARANTEED PRICES DEMAND THAT EXCHANGE RATE BE FREED “Since I last had the pleasure of addressing yon,’’ said Mr Doyd Hammond, president of the Inter-Provincial Conference of the Farmers’ Union, al its opening today, “our economic outlook has been subjected to considerable alteration. On that occasion, you will remember, we' were facing the distress and difficulties of the greatest economic depression in history and were deeply occupied in well founded efforts not only for the rehabilitation of our particular industry. Since that industry is the backbone of this country, our efforts were for the welfare of the country as a whole. - While there might still remain in New Zealand some little disagreement on the methods adopted to withstand the effects of that world-wide economic blizzard, the fact stands out in bold relief that New Zealand, above all other countries, was the first to emerge once again into the sunshine of industrial stability with an enhanced reputation for a willingness to meet its obligations and to apply well tried practical remedies when faced with seemingly insurmountable difficulties.

“Today, I regret to say, we are facing another crisis—a crisis which has arisen out of a whittling away of those substantial results gleaned from the application of the policy which contributed to our rapid recovery from the economic depression. 1 cannot believe that your interest in your livelihood has failed to measure up to an appreciation of what has been taking place over the past three or four years, nor can 1 believe that you are not alive to the growing economic instability of the country in consequence of the application of a socialistic policy. We know that those who sought to wed this country to socialistic principles have been running blindly on, believing in the vision of Utopian economics that high wages were dependent on nothing but the will to create and issue the money, uiiti! the yawning chasm of the lie to this fantastic policy cast its shadow of threatening chaos, to cause a temporary halt in the dissipation of our resources. Where stands the farmer in this maelstrom of economic conjuring?

AN UNBALANCED POLICY. “Overseas prices, upon which the farmer and the country are so dependent, have sagged, while internal costs have soared,” Mr Hammond continued. “The Government had promised a balanced policy but in concentrating on internal costs —higher wages —has actually carried out an unbalanced policy and in this way has l created two different pounds —the pound in which the exporter, the farmer, is paid, maintained rigidly at N.Z. £125 to £lOO sterling and a £ with which he has to pay his costs of unknown value, but very much less in goods and services than the £ he receives overseas for his produce. The result from the operation of the two pounds has been to encourage imports and to deplete our overseas funds. The position in a nut-shell is that while the farmer is selling his produce at prices approximately 21 per cent above the 1914 level, he is called upon to pay general costs which have increased by more than 100 per cent in the case of hourly wages and by round about 50 per cent in many other items. Quite obviously such a condition of affairs cannot endure without doing irreparable harm to the primary producer. THE FARMER SQUEEZED. “It seems that the primary producer is being subjected to a slow squeeze, increasing progressively in magnitude. Already land is going out of production because second and third class land cannot be. profitably farmed when returns are not forthcoming to meet the high costs. All what is called marginal land must inevitably go out of production under any system of government which is bent upon a policy of artificially creating high wages at the expense of its primary industry which is dependent on overseas markets for the disposal of its produce. With land going out of production the sum total of our exportable produce must become less and the resultant situation will develop very rapidly into one of despair. TALK OF DIRECT ACTION. “As primary producers and as a section of the community having a substantial stake in the country, we must demand that the Government take steps to remedy the errors and omissions of its policy. By adopting import and exchange control the Government has, it appears, taken a step which will increase, instead of diminishing, our difficulties and the situation is likely to become so bad that primary producers will be forced to consider some form of direct action. In, Auckland province there are already proposals afoot for the adoption of a policy of direct action in order to bring about the removal of the many grave injustices suffered by the farming community. Not so many months ago the English farmer was moved to demand justice and a march on London quickly produced a large measure of success—further restrictions on the importation of meat from overseas.

“Surely the Government must realise the seriousness of the position. We know that a Royal Commission is about to be set up to investigate the deterioration of land problem and the farmers' position generally, and whatever the results of that commission and its recommendations, it is trusted that the Government in its endeavour to remove the many injustices suffered by the primary producers, will not provide remedies at the expense of the rest of the community. The impoverishment of the primary producer must inevitably produce suffering throughout the countryside and as I see the position today, our difficulties are such that unless prompt remedial measures are taken, that suffering is not so far off.” GUARANTEED PRICES. Mr Hammond went on to observe that the dairy farmer demanded a compensated price because his produce was commandeered, but the price he was receiving today has not enabled him to attain to that standard of living which was laid down in the Act. The Government’s own Advisory committee had recommended last .year a price which would recompense the dairy farmer for his costs, but the Minister of Marketing, who was also Minister of Finance, had refused to pay that price, a matter of |d per lb extra,

because he said that to do so. would wreck the whole scheme. Had the Minister ever said that the extra wages imposed by the Arbitration Court from time to time, irrespective of the ability of the several industries to meet these extra wages, would wreck any of the Government schemes? No, but they found that the Government had launched a loan with the object of raising sufficient money to help pay these high wages. Presumably under a socialistic regime it was not a case of justice for all but a case of spoils to the victor. The dairy farmer was not receiving the promised guaranteed price. How, then, could the sheep farmer be induced to enter into a guaranteed price scheme? 'What had he to gain? “I suggest to you, gentlemen,” said Mr Hammond, “that nothing less than a compensating price would be of any use whatever in face of the existing spiral of rising Costs. The guaranteed price scheme for dairy pro'duce has failed absolutely and other sections of primary producers who have been offered a guaranteed price should tread warily; otherwise they will awaken one morning to find that they have no further say in the disposal of their produce, nor the price to be paid for it. Shorn of whatever virtue the guaranteed price scheme possessed it stands today exposed as the excuse for the commandeer of all produce in the effort to realise the socialisation of production, distribution and exchange—a short step, then, to the socialisation of the land. “Primary producers, if you place any value at all upon the freedom you now enjoy, the right to work and to produce and the right to dispose of that produce to the best ends, you cannot longer remain impassive to the operation of a policy of undiluted socialism which seeks to destroy all enterprise and reduce all men to .the status of serfs.” FREEING THE EXCHANGE. A special committee representative of the Farmers’ Union and the Sheep Owners’ Federation, Mr Hammond continued, has recommended that the exchange be allowed to go free. Expert opinion estimated that with the exchange free it would rise to 140 s at least, and over a period of time would gradually adjust itself to a point having some reasonably constant relation to sterling. It was also recommended that the import control regulations be abolished, as they were definitely a serious hindrance to trade and could not help our peculiar position. Already there had been decidedly unfavourable repercussions resulting from this action of the Government. The Government had no doubt quite overlooked the fact that wool-growers taxed themselves with the object of encouraging the use of more wool and that by imposing import restrictions, the Government had threatened the consumption of wool, produced in New Zealand, overseas.

All along the Union had advocated that there must be a rigid control of all costs, but its representations had been ignored and now the Government found that it had to appeal to its own supporters to withhold any furthei claims for increased wages owing to the very serious difficulties which they knew it now faced. Before being returned to office, the present Govern - ment had among other planks, those demanding a free exchange and the abolition of the sales tax. The imposition of a fixed exchange and a sales tax were emergency measures, but on taking office, the Government refused steadfastly to interfere with either, presumably for the reason that both produced internally a revenue which enabled it to impose added costs on all sections of the community. THEORIES & FACTS. Repeating that the Government was ‘intent on socialisation, Mr Hammond declared that within three short years it had found that its theories had failed to withstand cold, hard economic facts. Its members had alleged that the great depression was man-made, but if ever there was a man-made crisis, the one New Zealand faced today was definitely in that category and the Labour Government must accept all the responsibility. “You have many remits to consider,” Mr Hammond observed in conclusion,

“several of which relate to the mailers I have mentioned this morning and I know that you will express in no uncertain . voice the view that primary producers must have justice and remember that no theoretical scheme of guaranteed prices will solve the difficulties facing this country today.” Mr Hugh Morrison (Wairarapa) thanked Mr Hammond for his splendid address.