WORLD DEPRESSION.

Auckland Star, Volume LXII, Issue 4, 6 January 1931, Page 4

WORLD DEPRESSION.

IS BOTTOM REACHED? ABSORPTION OF RAW MATERIAL. Many people are asking themselves when the world-wide slump in. commodity prices is going to end, and when the slow process of recovery is likely to begin (says the London "Financial Times"). Some authorities assure us that the bottom of the trough of depression has already been readied, and that henceforward a steady revival in commodity values and in business activity can confidently be reckoned upon. But after the disappointing and disquieting experiences of the past year it would obviously be unwise to assume that nothing can prevent a steady and sustained recovery in the consumption of basic raw materials or in the purchasing power of the peoples of all countries. As the British Federation of Industries reminds us in its quarterly forecast, nothing can prevent the coming winter from being a period cf difficulty in countries where the ranks of the unemployed are rapidly being swollen by fresh recruits. But when seasonal depression in most industries comes to an end, as it should do in the early spring, an improvement in world conditions may reasonably be expected. The velocity of the economic recovery will depend upon several factors, such as the capacity of an impoverished world to absorb at present unwanted surplus stocks of raw materials. It is at least one excuse for hopefulness that the abnormally low prices such as rule at present provide the' best and most powerful stimulus to an increase in the demand for goods of every description. Another cheerful feature of the situation is the prospect of a continued fall in long-term rates of interest. Cheap money, the Federation of British Industries recalls, was an essential element of the industrial revival in the last dccade of the nineteenth century.

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