LOW PRICE OF MONEY.

Auckland Star, Volume LXI, Issue 210, 5 September 1930, Page 9

LOW PRICE OF MONEY.

DUE TO TRADE DEPESSIORN.

ENGLISH PROFESSOR'S VIEWS.

TRENDS IN INDUSTRY.

(By Telegraph.—Own Correspondent.)

WELLINGTON, Thursday,

When asked by an interviewer what significance was to be attached to the comparatively easy rates for money in London, with, the continued 3 per cent Bank of England rate, Professor T. E. G. Gregory, associate of Sir Otto Niemeyer, the English financial expert, said his view was that the relatively low price of money was largely attributable to trade depression. Trade had been very bad in the United Kingdom since 1929, and then the rates for money went up in the early part of that year, to be followed toward the end of the year by the Hatry incident in London and the collapse of the New York Stock Exchange. These two events produced . stagnation in the money market and in the business world and accentuated the trade depression. In reply to a question if prices of commodities were low because of oversupply of under-consumption, Professor Gregory replied to the effect that there certainly had been ov e r-production in some types of raw materials, for there had been quite an eroneous idea prevalent throughout the world-■ that it was short of many such products. The stimulus of high prices immediately

following the war •led to increased pro-

. • duction in many materials, copper, tin, wheat, and so on. Production of these had been rushed, but if prices had not fallen because of the general depression, they would in any case have been reduced. Wheat in particular was described as unstable.

Under-consumption. There was a certain amount of underconsumption to be reckoned with also, as was to',.be expected when trade was bad, but trade depression had undoubtedly accelerated the inevitable decline in commodity prices. He considered the needs of post-war rehabilitation , had now been more than satisfied. "Generally speaking, in a very large part of the world, including Great Britain, there has been an enormous amount of re-equipment and modernising of plants," he said. "There is the introduction of speedier and more economical farming equipment, tractors for instance, together with the increased use of artificial fertilisers. All these have made an enormous difference in production and increase of yields. "Factories .also were re-equipped, giving far greater outputs in less time than before the war. The post-war reconstruction phasej as it appears to me, is definitely over. There has been a considerable increase in the world's productive resources since the war, and the world has moved ahead very much faster than it was moving in 1913 in its production."

"Organised Marketing." Marketing problems, especially "organised marketing," were referred to Professor Gregory, who was asked who had the last Avord, seller or buyer. "There is no question about that at all," he said. "The party who has, and must have, the last word is the consumer. As I see it, it appears that the next few years will be a buyer's market for everything." ■ Consumer, credit, or the hire-purchase system of trading, was mentioned, but Professor; Gregory would not approve or condemn, the system... "It is all a question of degree," he said, "and a question of what one buys. There is nothing wrong with the principle in. buying, a house, and sewing machines have been bought on that principle for I don't know, how long. "Undoubtedly the/ system stimulates the consumption' of luxuries and quasiluxuries, and in such cases leads to extravagance on the part of some purchasers under,that system. If the instalments are within" their means, then the system may be quite useful. All depends upon the individual and upon the management of that class of business, but it is a system to be used with discretion. Its success rests with business, men themselves."