SLUMP PASSING.

Auckland Star, Volume LXII, Issue 228, 26 September 1931, Page 9

SLUMP PASSING.

CONFIDENT OPINION.

NEW ZEALAND'S PROSPECTS.

HIGHER PRODUCE PRICES

MOMENTOUS CHANGES IN BRITAIN,

Two outstanding reasons for believing that there should in the near future be better trade conditions for colonial produce in London were given to-day by Mr. H. T. Merritt, president of the New Zealand Associated Chambers of Commerce, in an interview. Mr. Merritt said: "In my opinion there is every.indication that the slump is over. Although there probably will not be a very rapid return to prosperity, still the situation, as it has developed in England in the last few weeks, shows every promise of better markets for New Zealand produce than there have been for some time. "There are two outstanding causes. The first is the almost unanimous trend of opinion in Great Britain in favour of a universal protective tariff. When we find that the well-known Labour leaders are veering round towards protection, it appears that a change in the fiscal system in Great Britain is not very, far distant; so much so, that if an early election were held, I think it would result in the return of a strong tariff Government."

Danish Fanners Lose. * The second outstanding "cause for optimism was the fact that the suspension of the gold standard in Great Britain was tantamount to the imposition of a tariff on foreign importations. Taking, for example, the rate of exchange between Copenhagen (Denmark) and London, it was seen that tbat had fallen 18.18 kr. on September 17 tc 17.50 kr. on September 24, and it was still falling. Danish exporters of produce to England were, therefore, receiving appreciably lower returns. New Zealand, because her currency was based on the sterling exchange standard and not on gold, was on the same footing as England, and her produce had risen in value as against that of Denmark. Another factor that should help New Zealand was the ability of foreign buyers to obtain more of > our produce for the same amount of money. To take the case of France as a buyer of New Zealand wool, she would now have to expend only 98.50 francs for £1 sterling, as against 123.96 francs on September 17.

Appreciably Higher Prices. "So, to my mind, there is every indication that both Australia and New Zealand can expect appreciably higher 1 prices for their main products," said Mr. Merritt. "Although the sharp rise in the value of our exports may not be sustained, it is going to have the effect of creating a "spirit of confidence and optimism in the future. When buying once becomes active and the wheels of industry commence to revolve it will be hard' to stop them;' r: '""

"The indications at the present time in England are that industry has received a sudden revival, which inevitably will mean a great reduction in the amount, of unemployment and is sure to augur for increased prosperity in' New_ Zealand. No one will grudge the primary producers the added advantages they will receive, as we feel that the whole outlook of New Zealand depends more or less on the prosperity of . the farmer." „

Warning Against Speculating. Mr. Merritt sounded a warning against any tendency to speculate in expectation of a boom. Such an event, he said, was still a long way off; but he sincerely held the opinion that the return to prosperity in New Zealand would be quiet and consistent. Incidentally, the inevitable result would be a rise in prices ot nearly all commodities, with the exception, perhaps, of food, of which there was still a large surplus quantity avail- £ able in the world. As regards manufactured goods, there had been restricted buying the world over during the past twelve or eighteen months, and there was not a plentiful supply. With the prices of raw materials rising the markets for finishe products were sure to harden. "We should now insist with all the influence we can bring to bear that Great Britain grant preferential # treatment to New Zealand products said Mr. Merritt, in conclusion. _ It is probable that if Great Britain a tariff system in the near future she will speedily return to the gold sta dard, as the tariff alone would sufficient to adjust the trade balance.