DEBT AND PRODUCTION.

Auckland Star, Volume L, Issue 199, 22 August 1919, Page 10

DEBT AND PRODUCTION.

j (To the Editor.) Sir, —In your article on the above, on j August 10, iv waich you quote Mr. | -\iai=ccy as saying that our war debt I amounted to practically £Iou,OUO,UUO, ' and urge that a realisation of this should sink into tho public mind, you [ make a further statement which 1 think is likely to disguise the seriousness of the situation as follows: "Our exports rose from £23,000,000 in 1913 to £33,000,000 in 1910. .. . This development took place in a period of exceptionally high prices, the continuance of which cannot be counted upon." The increase in the value of our exports as indicated by the figures quoted was an increase in value only, and not in volume; in fact, a less quantity was exported for the larger figure than for the smaller, and consequently the rise , does not represent "development"' at all; | it is all due to higher prices outnide the j Dominion, and none of it due to in- ! creased production following iipon development within the Dominion. The 1910 Year Book, in an article on prices, 1915-1910, states: "The actual ! quantities exported fell below the total for 1914, and would, if sold at that year's prices, have fetched £53,93(5 less, instead of -which they 'brought in £4,254,229 more." At that time the debt had not risen much above £100,000,000, and, quoting the Year Book again: "The amount of interest which New Zealand must pay in each year is paid by the export of domestic produce. ... In times of rising prices I fewer bales of wool and carcases of mutton must be shipped each year to dis- ! charge this obligation." It appears, I therefore, in that year, with a debt of ' j 100 millions, the increase in value of ■ exports was about sufficient to pay in- ) j terest on the debt—that is, at 4£ per I cent. | Now, however, the debt is doubled, ] i and, as you remark, "the continuance of i I high prices cannot be counted upon." We I have now to export about nine million | pounds' worth of domestic produce with | | which to pay the interest on our debt. \ and in times of falling prices, such as I you seem to expect, and many people j have good reason to hope for, not fewer, but more bales of wool and carcases of mutton must be shipped each year to discharge this obligation. Increased prices for produce has, however, resulted in increased prices for land, and that tends to check development. You urge the need for immigration, and presumably you want farmer immigrants. 1 agree with you, but land in England to-day, within two hours' train service ot London, with good roads, good schools, and good doctors close at hand 18 selling at £20 per acre less than land ot a similar quality in the Waikato, which is ten hours' train service from Auckland, and has indiiTerent roads few schools, and fewer doctors, and, under these circumstances, it is hardly likely that we shall get the immigrants we require or that they will settle here for long if they come. Increased production is, no doubt, necessary, and it ought not to be difficult to brin°- it about, but present indications are that the financial institutions, and not the producers, would benefit.—l am, etc. TOM BDOODWOR.TH.