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Progress, Volume XVI, Issue 5, 1 January 1921, Page 101

The Industrial Situation. Wage workers will be disappointed over the decision of the Arbitration Court to rescind its nine shillings bonus, and substitute three shillings, and we have symapthy with them. Wages follow rising prices, not create them, and it was some time after the inflation of the currency and other causes had diminshed the purchasing power of the sovereign before the wages of the workers were increased to make up the gap. Now, at the first sign of weakening, the wage worker feels the pinch, and we do not see how it is to be avoided, in spite of the fact that it is hard for some classes. The worst sufferers through the rapid advance in prices after war broke out were those who received a fixed income. They found their money scarcely able to go half as far in the shops as before the war, and there was no recourse to the Arbitration Court, for this “new poor,” as they have been aptly called in England, Some of these fixed incomes come from investments, and its looks as if the “new poor” with money out

at interest may now have their chance of the sunshine of prosperity, by way of higher interest, and an increased purchasing power. We are sorry that the Government, forced no doubt by circumstances, has permitted the banks to extend their note issue in line with their advances against wool, because this inflation of the currency by paper is one of the factors responsible for present troubles. Christmas, with its stimulus to business, is with us as we consider the economic position, but we fear that things during the coming year will not be as bright and prosperous as we would wish. Care and courage will be required if New Zealand is to get through 1921 without financial difficulties.

Trading Ethics. The enormous increase in New Zealand’s imports during the last nine months is now explained, and in a very unsatisfactory way indeed. To be frank, New Zealand traders have performed for the English manufacturer, that Stock Exchange operation known familiarly as “carrying the baby.” They had had stuff unloaded upon them at high prices, under a belief, strenuously upheld by all reports from the Old Country, that prices, instead of being likely to drop, were more likely to rise. Our traders, having been on short commons for years, were anxious to keep their trade going, and ordered really more goods than they could sell in the normal course, knowing that only a percentage would come promptly to hand. The fiction of high prices, etc., was well maintained by reports which came to New Zealand, the buyers for New Zealand firms apparently sharing in the misapprehension which was so suddenly cultivated. Then suddenly the goods came to hand, and many traders had difficulty in meeting the drafts, for with the arrival of the goods came the painful realisation that these orders, stimulated by reports of shortage and higher prices, had been the means of prolonging the Eng-

lish manufacturing boom. Prices have dropped, and large quantities of the millions' worth of recent imports will have to be sacrificed at a loss in New Zealand. Quite recently, the British Trade Commissioner in New Zealand declared that the trade depression in England was only temporary—a passing phase. Yet we find the Monthly Review, issued by Barclay’s Bank, in October last dealing frankly with what it calls in a large heading, “ The Trade Depression,” and later refers to quite frequently as “ the slump.” New Zealanders have learned an expensive lesson, and they have not yet got over its effects. Australians are speaking quite frankly about the same experience- Possibly there would have been no growl coming from this end but for the reiterated assurances from English manufacturers that things would be more expensive if their colonial clients waited. Orders were placed, delay occurred in delivery at the original price, and clients were advised that as the price had gone up in the meantime, the orders would have to be shipped at an advanced rate. British manufacturers are talking about a “ black list ” of firms which have cancelled orders. Our opinion is that a rather formidable “ black list ” of English manufacturers is being made up among the badly bitten merchants of New Zealand. This sort of thing has given many enthusiastic imperialists a bad taste in the mouth, and it is just as well to let our kith and kin on the other side of the world know what we are thinking about some of them.

English Trade Conditions. To show the position as it existed in England in October we quote from Barclay's Monthly Review of that date, as it deals with the reasons for the slump. “ During the past month,” it remarks, “ there have, unfortunately, been further indications of the approach of a period of industrial depression. Unemployment is increasing and many firms are either considering or have actually adopted short time. In the shipbuilding industry contracts are being cancelled, while there is. a falling off in the demand for textiles. In the iron and steel trade, foreign competition is becoming more evident, while the motor industry is in the doldrums. In the readymade clothing, linen, gloves, leather goods and boot and shoe trades also, there is a distinct reaction from the recent activity. This slump appears to be caused partly by the fact that, their most urgent needs being supplied, wholesalers, retailers, and consumers are abstaining from buying at present prices in the hope that goods will be cheaper- There is also the fact that prices are now so high that is some directions they have killed demand by compelling people to curtail their expenditures. The possibility of a coal strike is also an adverse feature. . . Exports to the Continent are checked in two directions. In the first place prices have, in twelve months, risen approximately 19 per cent. This is bad enough’

but in addition there is the high cost of sterling. One pound now costs a French importer 52 francs compared with 38 francs a year ago, while the Italian importer has to pay 83 lire against 41 lire in September, 1919. This position must, to some extent, affect both the willingness and the ability to buy. In these circumstances business men are faced with the problem -of reducing prices and cutting losses on stocks.”

Forestry Policy—Where ? The Forestry Department is advertising for twenty rangers and an impressive list of experts who will commence to draw salaries early in the new year. So it is evident that the Government intends to get to work on an active policy of conversion of our remaining forest resources. Meanwhile, the same Government is also anxious to keep up the building of dwellings at a good pace, but it does not tell the country what it is going to do in the way of ensuring a constant supply of timber for future requirements. New Zealanders accept the advice to conserve their forests, but tney will not readily swallow any expensive Department which exists to give posterity great advantages by reason of enforced self-sacrifice by the people of to-day. Like the village councillor, we are tempted to ask, What has posterity done for us?” So we hope that the Minister in Charge of State Forests will soon enlighten the country regarding his policy. Flaving set up a fairly large Department, he might let us know if it is to be solely responsible for State forests, or if the time-wasting and expensive policy of dual control over these areas is to be perpetuated. At present the dominant factor in con nection with the forests of New Zealand is the Lands Department, but the time seems ripe for placing the whole administration into the hands of the Forestry Department. But the most important question is what is going to be done to keep up the supply of timber for the people of to-day, and on what terms? It seems a pity that Parliament took so little interest in the large votes for the Forestry Department which were put through last session at the rate of about ten thousand pounds sterling a minute.

Cement Supplies. The high cost of New Zealand cement has greatly stimulated the importation of supplies from other countries, and we hear of big shipments to arrive at an early date ( from the United States. As the landed price is well in advance of what can be quoted by New Zealand works when they can get coal to produce supplies, we hope that the Board of Trade, in its praiseworthy endeavour to keep all the local works going during the new year, will be thoroughly supported by the official body having charge of the distribution of coal.