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to meet our external interest obligations in any year, with the possible exception of the year 1928. The following table, showing the total declared values of imports and exports since the year 1920, is of interest in this connection : —

The average annual balance of visible exports over imports for the ten years 1921-30 was £3,817,722. It is interesting to compare this figure with the corresponding average for the prosperous years 1914-19, when the average favourable trade balance was £9,936,987 per annum. The actual favourable visible balance of trade during the year 1930 is probably somewhat less than the amount shown in the foregoing table (£1,914,778). The normal addition of 10 per cent, made to the valuations of imported commodities to cover freight, insurance, exchange, &c, was probably not sufficient to cover these items in the later months of 1930, in view of the adverse movement in the exchange rates on London towards the end of the year. New Zealand is particularly dependent for its prosperity on the state of its overseas trade, the external trade per head being higher than that of any other country in the world. Our remoteness from the great markets of the world and our lack of readily accessible commercial mineral deposits have been, up to the present at least, insuperable handicaps to the development of manufacturing industries on a large scale, so that we are particularly dependent upon our primary produce. The prices realized for this produce in the markets of the world are therefore the final factor determining whether the Dominion is to be prosperous or otherwise, and, to a very large extent, causes completely outside our control regulate these prices. Better marketing methods and increased advertising can help, and, indeed, in recent years have helped very considerably in maintaining prices, while strict attention to quality is essential if we are to hold our place in these markets in the face of increased foreign competition. Much has been done and much remains to be done along these lines ; but, while the relative level of the prices we receive as compared with those received by other primary-producing countries depends largely on our own efforts, the general trend of prices in the world's markets is dependent upon economic conditions over which New Zealand has very little control. During a period of falling prices increased productivity can assist, and has assisted very materially, in maintaining a favourable trade balance. During the past few years the volume of our production, both primary and. manufacturing, has increased very considerably. There is, however, ample evidence that prosperity has not increased in sympathy with this increased productivity, for unemployment has been an acute problem for some years past, and, in view of the importance of the price factor in the economic situation recently, it is expedient at this stage to consider in some detail the extent of the fall in prices. Recent Movements in Export Prices. The following table shows the movement in the export prices of the principal items of produce exported from New Zealand since the year 1925. In view of the interest attached to comparisons with the pre-war period, these index numbers are computed on a 1914 base, the average export prices for that year being equated to 1000 : —

Export Price—Index Numbers.

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_ Year. Imports. Exports. Balance of Exports. £ £ £ 1920 .. .. .. .. 61,595,828 46,441,946 15,153,882* 1921 .. .. .. .. 42,942,443 44,828,827 1,886,384 1922 .. .. .. .. 35,012,561 42,726,249 7,713,688 1923 .. .. .. .. 43,378,493 45,967,165 2,588,672 1924 .. .. .. .. 48,527,603 52,612,711 4,085,108 1925 .. .. .. .. 52,456,407 55.262,272 2,805,865 1926 .. .. .. .. 49,889,563 45,275,575 4,613,988* 1927 .. .. .. .. 44,782,946 48,496,354 3,713,408 1928 .. .. .. .. 44,886,266 56,188,481 11,302,215 1929 .. .. .. .. 48,797,977 55,579,063 6,781,086 1930 .. .. .. .. 43,025,914 44,940,692 1,914,778 I * Excess of imports.

(Base : Average of prices during the year 1914 = 1000.) Month and Year. Meat. Wool. Hides Skins, Miscellancous . All Groups produce. and Tallow. combined. Yearly. 1914 .. .. 1000 S 1000 1000 1000 1000 1000 1925 .. .. 1460 1712 2028 1893 1619 1702 1926 .. .. 1359 1441 1300 1723 1506 1377 1927 .. .. 1325 1365 1387 1680 1438 1366 1928 .. .. 1418 1394 1748 1814 1373 1520 1929 .. .. 1404 1469 1552 1732 1415 1456 1930 .. .. 1163 1352 I 915 ! 1335 1292 1144