WAR REACTIONS.

Auckland Star, Volume LXX, Issue 220, 18 September 1939, Page 4

WAR REACTIONS.

TRADE IN AUSTRALIA. REVOLUTIONARY CHANGE. PURCHASES BY BRITAIN. (Prom Our Own Correspondent.) ■i SYDNEY, September 14. i Spectacular rises in share prices on tli £ Sydney Stock Exchange are indicative o the new temper in which Australia is fac ing whatever may lie ahead. There is > T solid reason for this change. At the err 1 of last week it was reported that tli 1 British Government was purchasing Am tralia s entire wool clip and also our e.\ portable surplus of meat, butter, clu-est > eggs and canned and dried fruits. Th j newspapers have been en ilea vourincr t ' estimate how much this is likely to men: to Australia. The wool clip, for instance J will be more than .>,000,000 hales this son son, compared with an average of 2,000 : 7 bales when the clip was purchased dui Jn- the Great War. At the same averag price as was paid tor that clip the currc-n one will be worth another £20,000,000. As the prices at which Britain is pui chasing these products have not beei announced, it is impossible to estimat the gain to Australia, and in any cas there are very few Australians who wouii consciously seek to make a profit out o the war while British soldiers and sailor are dying in it. But Britain needs thes< commodities, and it is an undoubted lac that the mere announcement of their pur chase has revolutionised the whole eeo nomie outlook for Australia. In addition since last week it has been announcei that Britain is also purchasing our ex portable sugar, and the Prime Ministei (Mr. Menzies) made a much more im portant announcement When he stated tha the Federal Government was taking ovei the whole of the wheat crop. The "wheal industry, of course, with world prices a record low levels, has been hovering more or less on the ed<;e of bankruptcy, anc this emergency actioned by the Common wealth Government at one stroke ha< given it a tremendous lift. There are som< ;>0.000,<)00 bushels of wheat in Australia and, allowing lor local eonsiiniption, thi: will leave 000.000 bushels available foi export to Britain. Mr. Menzies has noi announced what price the Government will pay for the wheat, but it is certair to lie well al>ove the ruinous pre-wax world rates. i Boom in Industry. On the other side of this economic lif< 1 — secondary industries—Australia is in ; vastly better position than she was ii 1!)14. Even in 1919, after the end of tin Great \\ ar, 400 new products were boiii". manufactured in Australia, and in the lasl lew years there has been a tremendous development, so that Australia is becom ing almost as important a nianur'actui incountry as it is a food-raising one. A pari from the fact that m.,ny factories arc working two or three shifts on de-'enci orders, it is certain that the dislocation of international trade and increase ii prices UroiKrht about 1 >\- the war will givi a strong fillip to a further extension oi manufacturing; in Australia. Large foreign inaiiutaeturing houses are also more and more realising the advantages which Australia oilers as the field for investment in their activities, with its high internal purchasing power and its fortunate world position as the only country of much account where there is practically no risk of invasion. Government Watching prices. In this, at least temporarily, ro.-y economic outlook there is, however, one possible danger which will have to be watched—that is the danger that wartime profiteering will send prices so high as to check production and seriously reduce the standard of living of the people. Drastic plans to cope with this possibility have already been announced by the Commonwealth Government, and, in fact, are already .partly in effect. The Federal Minister for Customs (Mr. Lawson) has already proclaimed more than 70 commodities the prices of which have been fixed. They include many household essentials such ae hread, butter, flour, milk and a great variety of grocery lines. Price controllers will be appointed in each State, who will be assisted by advisory committees. The penalties will include imprisonment for substantial terms as well as fines arid the confiscation of foods and recovery by the Government of execs profits. Mr. Menzies has announced that no merry will be shown to "business men who see in the war an opportunity- t-» enrich themselves at the expense of the pi ill i lie. Xt> penalty is too Revere." he R "id. "Fines would not he suffi.r«nt lira use a profiteer regards them as a normal risk. Some Increases Allowed. rile intention is to keep prices round the level of August 31, but t<oine increases will obviously be unavoidable as the result of increased costs. It has been announced that the Government will endeavour to limit price increases to the operation of the following factors:—Increases in Customs and excise duties, in overseas prices of materials, in shipping freights, in Australian prices of imported goods because of the depreciation of Australian currency, local manufacture of necessary commodities formerly imported and now produced at higher costs in Australia, recovery of prices of exports under the stimulus of increased world demand. Iu effect these are very wide, however necessary, exemptions. W hat it amounts to is that the Government will endeavour to prevent a rise in prices by purely arbitrary wartime profiteering. Financial Problems. The outbreak of war and the necessity of preparing for three years of it have, of course, completely upset the budgetary position of both the Commonwealth and all the States. Thus, Mr Menzies, when presenting the Commonwealths record £102,000.000 Budget to Parliament, said frankly that it could bo regarded only as of an extremely tentative character, and under no circumstances as the Government's plans and programme for the year. The estimated small surplus of £24.000. he said, amid laughter, looked creditable, but had no reai existence. As far as New South Wales 1/1 concerned, it seems that the Premier (Mr. Man) had hoped to avoid the unpopular course or very heavy taxation increases to provide for uneinplovment relief and social services by securing fur- ! ther loan accommodation. Apparently Mr. Mail- argued, as manv are privatelv doing, that if untold millions can be conjured out of the public hat for the destructive purposes of war, three or four extra millions ought not to make much more difference. Mr. Mair, however, has ! found that it makes all the difference in the world whether the millions are required for guns or butter, and is now fared with the necessity of proceeding in the House with his taxation bills. "As against this he may reasonably expect that as the resnilt of the economic activity caused by the war there will be a slackening in the demands on the Government for the relief of distress. Petrol and Beer. Two important products which have been affected by the increase in duties to help to finance defence requirements are petrol and beer." Mr. Lawson has already announced _ that the oil companies and retailers will be allowed to pass on the ' increase of 1/1 a gallon in the petrol dutv, | but has ruled that it cannot be imposed until old stocks are cleared. In New • South Wales the brewers and the United ! License Victuallers' Association, which the brewers control, are taking an easy way out by reducing 13oz glasses to I2oz : and 9oz to Boz, and keeping prices as they' are. The Australian Glass Companv is : now working three shifts a day making the new glasses, which will be introduced on Monday. The increase in the excise is 3d a gallon. By reducing the size of beer glasses hotelkeepers will make an extra 5d a gallon on glasses of beer sold in the public bars. But there will be no change in the prices of bottled beer and the hotelkeepers claim that they will lose on 1 glasses which are not changed. rt will ■ be a new thing, however, in the history of the liquor trade if they come out of it I all on the wrong side. '