The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. FRIDAY, JANUARY 12, 1934. SOARING AND FALLING.

Auckland Star, Volume LXV, Issue 10, 12 January 1934, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

FRIDAY, JANUARY 12, 1934. SOARING AND FALLING.

For the cause that lacks assistance. For the wrong that needs For the future in the distance. And the good that ice can do

With wool prices rising at every sale to new high levels, and butter touching what appears to be rock bottom, the question is whether New Zealand will gain as much in one direction as it is losing in the other. This is the only country in the world where wool and butter have much the same relative importance. Indeed, so close is the balance held that a rise or a fall of a penny a pound in either the one or the other means a gain or loss of £1,000,000 to the people of New Zealand. The arithmetic could not be simpler. If wool should average little short of 1/ a pound for the season, and this seems a reasonable hope, then the wool cheque should approach £12,000,000. The return for butter, although abnormally low, should not be substantially lower than for last year, and there is ground for expecting that the country as a whole will show an increase, perhaps of several millions, for the leading staples of its export trade. The benefits of this probable improvement, however, will not be spread evenly over the Dominions, for the dairying industry is concentrated mainly in the Auckland province, and the recovery in wool means much more to the South than it does here. Last year butter accounted for £7,372,000 out of a total export of £11,721,000 from this province, and represented more than two-thirds of the Dominion's butter shipments. Nothing could illustrate more forcibly that Auckland's prosperity depends on the cow and that the province is raally one huge dairy farm. Although Auckland is severely hit by the slump in butter, it should be borne in mind that the sheep-farming areas of the South have had their day of trial, and were plunged much earlier into difficulties. When the dairy farmer was still getting fair prices for his product, wool was virtually unsaleable; indeed, for nearly four years the sheep farmer lived under a cheerless sky. It was strongly felt, as it is being felt to-day of butter, that there was a combination of buyers on the other side of the world against the producing countries, and memory recalls the anxiety of some European buyers of wool lest there should be an attempt in Australia and elsewhere to force up prices. Events are proving that competition still rules in the wool markets of the world, and that the suspicions of only a short time ago were groundless. It may be that the competitive factor is as powerful in the butter world as in the wool. That the market has .been deplorably weak —at times demoralised — and is still held down by heavy imports into London, can be readily admitted j but if the producers at this end could see the organisation at work which is to-day handling nearly twice the quantity of New Zealand butter than before the slump, and more than three times the quantity of Australian, they might be readier to agree that the forces of demand and supply are as active in. determining the level of prices as ever they were. The root of the trouble lies in the dislocation of the world's butter trade, throwing on to, Britain a larger share than ever before. While in Europe there are countries in which the people have to pay 3/ a pound, those same countries are ready to sell to Britain for less than 1/, and they are doing it. The main solution, then, is more freedom in trade.