Wairarapa Times-Age FRIDAY, AUGUST 4, 1939. INDUSTRIES AND RECOVERY.

Wairarapa Times-Age, 4 August 1939, Page 4

Wairarapa Times-Age FRIDAY, AUGUST 4, 1939. INDUSTRIES AND RECOVERY.

t A WARNING that exhaustion of the, Dominion’s sterling balances in London must eventually affect all classes 01. the community and that the Government’s “stop-gap” remedies would only accentuate the position in the long run, was the essence of an address by the Hon W. Downie Stewart at the annual meeting of the Dunedin Chamber of Commerce. As a former Minister of Finance and Customs and one who brought to bear upon the administration of national affairs an exccp tional ability, fortified by extended study and experience, Mr Stewart speaks with an authority that is all the greater since he is very far from being a bitter political partisan. In accusing the Government of extravagant over-spending and an over-expansion of purchasing power, which have led not only to excessive importations and the depletion of London balances but to other results, including rising costs for farmers (and indeed for most other people), further taxation, rising interest rates and a fall in the prices of Government stocks, Air Stewart manifestly is on firm ground. Many thoughtful and dispassionate people will agree with him that the Government has blundered unwisely in cramming on more canvas when it had been warned on all hands that it ought to shorten sail. That being said, it may be permissible to suggest that Mr Stewart has gone further than the facts and possibilities of the situation warrant in a somewhat sweeping condemnation of the development of secondary industries in the Dominion. As he is reported, he said on that subject:— The greatest danger of all is that this hothouse development of secondary industries must mean increased costs and further burdens on our all-important . export industries. Our exports must compete in world mark ets. If they get a bad setback, it is quite certain that our secondary industries will not flourish. That this country depends vitally on its export industries is not, of course, in dispute. Of the goods consumed from year to year in New Zealand, about forty per cent, on an average, are imported. We rely on our export industries for the means of paying for these imports and of meeting debt and other liabilities overseas. To this very considerable extent we are dependent as a community upon our export industries and, as present experience demonstrates, it is a very important condition of stability and prosperity that we should maintain-a sufficient surplus of exports to enable us to meet our obligations of every kind in London as they fall. due. It may be noted in passing that while over-importation and a “Hight of capital” have both contributed to the current exhaustion of London funds, the restriction of imports to the level they had attained in 1935-36 would, in itself have made a difference of some £N.Z.47m in the balance of the Dominion’s London funds. That it is necessary to maintain adequate funds in London is not for a moment to be questioned. But what then are the fundamental facts relating to the development of secondary industries in New Zealand? It is surely not in doubt that the Dominion and its people will be most advantageously placed when all available labour is applied as fully as possible to the production of goods or to other useful services. The volume of our external trade is not here in question. We can do nothing else with export returns than pay debt and other charges overseas and buy imports. Until,' however, the whole of the available labour of the Dominion is advantageously employed, it is surely open to us to improve our economic lot by opening, up new branches of industrial production. The alternative is to maintain a part of our working population in actual or veiled unemployment. At present we have a great deal of labour that is not effectively employed. In. the House of Representatives recently, for example, the Minister of Labour (Mr Webb) stated that, apart from six thousand physically unfit men getting unemployment benefit under the Social Security Act, thirteen thousand men were provided for under different schemes of subsidised employment. This by no means exhausts the tally of workers who might be more effectively employed. In the nature of things, additional production by the expansion of industry, particularly where the alternative is relief work or the payment of subsidies on unproductive enterprise, ought to add to the available resources and prosperity of the people of the Dominion. In the extent to which the expansion of secondary industries is adding to the costs of export industries, defective methods evidently are being used, but an enlargement of useful production in a given community cannot in itself make that community poorer.