"REASONABLE ECONOMY"

Auckland Star, Volume LXI, Issue 122, 26 May 1930, Page 8

"REASONABLE ECONOMY"

t —— ; NEW ZEALAND'S BEST POLICY ECONOMIC CONDITIONS. ; "LITTLE CAUSE FOR ALARM." "Reasonable economy" is urged by th Department of Industries and Commerc in a review of the finance, trade an< industries of the Dominion for the firs quarter of the current year. One fact stands out clearly in th< department's bulletin—that almost with out exception the prices of New Zealand's principal primary products have beer steadily declining for some time, anc this has seriously reacted on the incomes [ of the producers and on the financial and economic condition-of the Dominion The trade balance and the banking figures are not as favourable as they were twelve months ago, but that is not entirely due to the reduction in the total value of the exports. It is due, in a measure to the greatly increased importations which occurred during 1929. New Record in Production. Yet while these two factors have seriously affected the position, the position itself is not serious. On the contrary, the bulletin states, the trade and banking figures are better than was anticipated, and, taking everything into consideration, they are satisfactory. Production in many lines—for instance, dairy produce, frozen meat and fruitis steadily increasing, and new records in productivity • and in quantities exported are being made, every year. While that is so, the department considers there can be little cause for alarm if prices fall no lower than they are at present, for the increases in the quantities of produce sold must, to some extent at any rate, make up for the .lower prices received. The remedy, indeed, seems to lie in the direction of securing a greater result from the expenditure of each unit of capital and labour; in other words, from a steadily increasing production both by more intensive and extensive means. Check on Importations. Again, the banks, by raising the bank rate, and by the restriction of credit facilities, have taken steps to reduce importations, and this must automatically follow, too, from the reduction in the purchasing power of the community, che-

" to the reduced value of exports. If it ~ were not for the rather complicated situation in Australia, and the effects that has on the policy of the banks in ,; New Zealand, the position here would be still more satisfactory. The outlook as regards prices for next season is impossible to foresee, but there are indications that the low level of prices in overseas market is stimulating consumption in many lines, and with increased demand, it is only reasonable to expect a cessation of the down-ward-movement even if not an upward turn in prices. The prices of some e primary products, too, principally w3ol, d are so'low' in relation to the prices of t certain manufactured goods that sooner or later, with the restoration of confidence in industrial conditions in overe seas countries, there must come a stimulation of demand and consumption, s i New Zealand's Manufactures. 1 With regard to manufacturing induss tries, more satisfactory features have 1 been observed. With the wider interest • which is being taken by New Zealanders r , in local industries, with a deeper r appreciation of the claims and the ''- merits of the products of those indusI tries, with a more generous measure t of support given to them by the buying • public, and, finally, by the continued application on the part of the.manufacturers themselves of more scientific methods of production, it is hoped that progress, necessarily slow, but nevertheless sure, will be exhibited in regard ' to a still greater number of the secondary industries when the returns of production for the year ended March 31, 1930, are published. The bulletin concludes: Finally,- « must be said that, while there does not seem to be justification for the pessimistic outlook held in some quarters, there is undoubtedly need for reasonable economy while the prices of the majority of' our principal primary exports are on the comparatively,low level which they have been experiencing for some time past, and until such time as our trade balance is restored to a more favourable position.