MONDAY, SEPTEMBER 24, 1934. NATURE'S HAND.

Auckland Star, Volume LXV, Issue 226, 24 September 1934, Page 6

MONDAY, SEPTEMBER 24, 1934. NATURE'S HAND.

It is strange, but significant, that a drought which brought so much distress upon the farmers of the United States should be the means of brightening the outlook for millions of people, but this is the position disclosed in the' cable news to-day. Where all the efforts of governments failed to bring much relief from over-production, glutted markets and ruinous prices, Nature has supplied a remedy. Surpluses are wiped out quickly under the spur of urgent need, and for a reduced output the farmer finds himself paid double, treble and even quadruple the price. A rise of from 50 to 400 per cent above the low levels of a year or two ago is recorded for most of the leading crops, and money is stated to be "pouring" into the farming areas in such volume that the settlers in the recently stricken , States are enjoying their largest returns for a number of years. Not only are they getting the benefit of better markets, but they have in their hands millions of purchasing power which were distributed by the Government to save them from disaster. I

The United States is not alone in having experienced a serious drought. Canada, Great Britain, the countries of Europe, and, indeed, a great part of the producing area of the world, has been parched up. Britain, because of its position as an island facing the broad Atlantic, is comparatively immune from drought, and is in many respects as favourably placed as New Zealand for farm production, yet in the summer just passed many towns and cities were threatened with a water famine. Of food there was no shortage, but an unrelieved glut, due, of course, to the continued flood of supplies from every quarter. A drought affecting many countries at the same time would be expected normally to have somewhat the same effect on prices in Europe as in Amcrica, and under more normal conditions of trade prices in Britain should have bounded upwards. That they have failed to do so is the misfortune of the British farmer, who still has to rely on subsidies, and the Dominion farmer, who still has to accept low prices. To some extent both New Zealand and Australia have been able to offset poor prices by larger exports, but it is by no means clear whether they can continue to do this. On the one hand is the danger of restriction of imports in Britain. On the other is the possibility of further droughts. A dry season in Australia might benefit New Zealand. Through the depression the Commonwealth has been fortunately immune from droughts; it has had a run of good seasons when they were sorely needed. Can it count upon another?

„ LOWER INTEREST RATES. 0 With the steady fall in interest levels 1 local bodies are in the position to-day of '' being able to borrow at a lower rate than ever 1 before. The. latest indication, a loan of 3 £10,000 raised by the Otago Harbour Board at 3 per cent, shows a fall of at least threequarters of 1 per cent since the Loans Board announced a scale of maximum rates in May. There are several reasons for this cheapness of money. One is that new issues are scarce, and are eagerly sought after; another that ; banks and financial institutions can find only a limited outlet in trade and industry for the growing volume of investible funds; and still another that gilt-edged prices continue to rise in the investment market. The return on Government securities is now well below 3 per cent except on the longest-dated, and the downward tendency has shown no indication of having reached its limits. Last year, when conversion activities were launched, the ' Government made 4 per cent its objective and L fixed a limit of 4i per cent for local bodies, ' and those rates were thought at the time to be very favourable. A small part of the national debt in the hands of the public was ; formerly lower, but the average was close to 5 per cent, and on the local body debt it was a half per cent higher. Although the objective set by the Government here was thought, as in the earlier conversions of Britain and Australia, .to be the utmost attainable, experience has shown that it was moderate, and the same is true in local body finance. A FORGOTTEN BIRTHDAY. Saturday was the third birthday of the Coalition Government, and the Prime Minister forgot the significance of the date. It reminds one of a favourite device of the novelist and the playwright—the husband who is so absorbed in his business or his hobbies that he forgets the anniversary of his wedding day. His wife is disappointed, and is thereby made more sympathetic towards the lover waiting in" the background. It is not known hoAV Mr. Coates has taken this lapse of Mr. Forbes. Does he regard it as sign of waning affection, and. has he in consequence reproached his colleague in tile best style of the triangle drama 1 The identity of the lover in the background may be fi'xed according to taste. The Prime Minister, however, is apparently not at all perturbed by his forgetfulness. He can even joke about the Coalition. llow difficult these three years have been no one knows better than Mr. Forbes. On an anniversary like this congratulations rather than criticism are the order of the day, and it is fitting that the public should be reminded how extraordinarily arduous and strewn with obstacles never before encountered, the path of the Government has been. Even those who cannot conscientiously wish the contracting' parties many happy returns of the day will sympathise with them in their troubles.