THE COMING YEAR

Press, Volume LXV, Issue 19815, 31 December 1929, Page 9

THE COMING YEAR

Outlook Satisfactory Messages from Leaders and Makers of Opinion New Year messages from the Prime Minister and other representative figures of the Dominion agree that the outlook is y not so promising as at the beginning of 1929, owing principally to the lower values ruling for primary products, but suggest that there is nothing to fear if we exercise prudence and increase production from the land.

RT. HON. SIR JOSEPH WARD, Prime Minister. Another year is just closing, and I avail myself of the privilege of extending to my fellow-citizens my cordial good wishes to one and all for a happy and prosperous New Year. May I say how very deeply I have appreciated the kindly sentiments which have been extended to me in the indisposition which has unfortunately overtaken me during the past two months. I am deeply sensible of the generous consideration and sympathy which has been shown to me by all sections of the community, and I rejoice in a hope that in the near future I shall be able to take my accustomed place actively amongst you. I think we may look back upon the year now closing as having been a successful one from many points of view, and that the Dominion has proceeded on its march of progress, especially towards that restoration of prosperity and employment which is so essential to the ■well-being of our people. Our national trade figures disclose a healthy position, although there has been a decrease in the value of exports owing to the decline in prices in external markets. Our banking returns give no cause for any undue anxiety; on the contrary, they show healthy monetary conditions and ample funds for the financing of our primary produce. The Government has, since it came into office, been called upon to handle finance questions on an extensive basis, both in regard to our overseas debt maturing and in finding money to earry on and promote those undertakings necessary for the country's progress such as State advances, land settlement, and public works development. It must be a matter for congratulation that these large financial transactions have been successfully carried out, especially as the State Advances Department has thus been enabled to take its proper part in meeting the requirements of settlers and home-builders. It is also a source of satisfaction that the money required for this latter purpose has been raised locally in New Zealand. The completion of the largest overseas debt transaction of the Dominion in November last was a noteworthy event in the country's financial history, and its successful operation was favourably commented upon by authorities in London as an indication of the high credit of the Dominion and of our sound finance on progressive lines. Just a word concerning our manufacturing industries. It can be said that during the year these have enjoyed a greater degree of industrial activity than they had experienced for some time, and it is the intention of the Government in the coming year to devote close attention to their interests and welfare. Business conditions should also show the improvement which has been manifest in our trade and commerce. While prices of our primary products, particularly wool, have unfortunately experienced a decline, it is to be hoped that with the exercise of care and the maintaining of the high quality which has characterised New Zealand's products in the past, combined with improved marketing facilities, the returns from our staple exports may soon recover. While there is no ground for pessimism in regard to the future, yet it may not be out of place for me to sound a note of caution against uneconomical expenditure. Industry and thrift are just as essential to-day as they have been in the past. I have a high sense of pride in the achiever ments of our country, and I am certain that the future holds for New Zealand still greater development both commercially and industrially. The energy and virility inherent in our population will always stand to the Dominion, and with prudent administration we need have no misgiving regarding its progress in the years to come. I sincerely trust 1930 may bring to all our citizens a full measure of prosperity. SIR HAROLD BEAUCHAMP, (Financial Authority.) At the outset I would observe that after a long period of fat years it seems more tlian probable that 1930 *ill be a comparatively lean one. This will be brought about by the steady and persistent fall in the values of practically all the primary products in which this Dominion and the Commonwealth of Australia are interested. It has been estimated that after taking into account the increased volume ot the exports of both countries, the total value for the year ending 1930, compared with that now closing, will amount to no less than £45,000,0 o £50,000,000. The immediate effect or this will be a shortage of funds m London for the payment of exports Great Britain to Australia and ~ e Zealand and an appreciable drop m tne remittances arising from the rea is - tion of produce. Happily New Zea a is in a better position to face these adverse conditions, inasmuch as w * one or two exceptions our exports ior several years past have greatly ex teeded our imports, thus pro\ ic l in £ , a ample margin for the payment o in terest, etcetera, on our oversea o iga tioas. In Australia, on the contrary, there has been an adverse trade for a considerable period. So acu e the position become in the Commo wealth that bankers have been forced *ery reluctantly to ration their tomers, or, in some eases, to tell frankly that until there be an improvement in economic conditions the} can not provide funds in London tor tne payment of imports. Unless tha 3 provement takes plaee there e partial hold-up of trade within the near .future. For the reasop I h ave banks in the Dominion havc been able to furnish their customers with all ffioney required by them for legitima enterprises. For the quarter ending cember 31st the banking returns wi 1 »o doubt show a substantial increase advances, a moderate increase feed deposits, but a fallings® ™ the amount to the credit of current a eouate. The last-named, I tmnK, w

| due to depositors being tempted to invest their loose cash iu debentures issued at an attractive rate of interest, say 7 to 8 per cent., and in shares issued by new companies. As an indication of the financial ease in New Zealand, it may be mentioned that there is scarcely a single gilt-edged investment that 'will to-day yield more than 5 per cent. The financial stringency in Australia has brought about a marked decline in prices of popular shares and attractive stocks, but this is not surprising when one considers that some of the largest and wealthiest lending institutions in that country are now demanding 7 per cent, interest on first-class mortgages, and 6 per cent, on debentures issued by public bodies. In New Zealand public bodies are still borrowing at 5£ per cent., and mortgage money is procurable at from 6 to 6i per cent. Having regard to the financial exigencies of Australia, it is possible that the Australian banks represented in New Zealand may be compelled to shorten sail somewhat. That would occasion some inconvenience, as these banks do, I estimate, about 35 per cent, of the total banking business in the Dominion. In the present circumstances the position would not be improved by the establishment of new banks for these, in the matter of the London cover, would be no better off than those now engaged in the banking business. Indeed, in respect to accommodation generally, I claim that traders and others in Australia and New Zealand enjoy far greater privileges than those in any other part of the world. To sum up: Although it cannot be said that the financial barometer points to set fair, I am confident that if we take our courage in both hands we need have no apprehension as to the immediate future. All we have to do is to import fewer articles of the luxury class, work a little harder, and live less extravagantly. That applies to all classes of the community. Further, let us strive by all means in our power to avert strikes, unhappily so prevalent in Australia, by maintaining good relations between Capital and Labour, whose interests, after all, are identical. If we can accomplish these things, I feel that the people who are privileged to live in the brightest gem that adorns the Imperial diadem will have what I wish them with the utmost cordiality—a happy and prosperous New Tear. SIR GEORGE ELLIOT, Chairman, Bank of K®w Zealand. I am pleased to send through your columns a message conveying to your readers my sincere wishes for a happy and prosperous New Year. May they, as all of us, endeavour to realise that happiness and prosperity for our own country can be best attained by a loyal and practical co-operation with the Motherland now in the throes of a struggle to find ways and means whereby she may meet and conquer the grave menace of foreign trade competition. PROFESSOR J- MACMILLAN BROWN. Chancellor of the University of New Zealand. A New Year is the natural budgeting time of those who have studied contemporary events in the light of history: they look backward as well as forward, and in measuring the significance of the past try to see what it foreshadows. We are now far enough from the close of the war to get it perspective, and it is easy to see that it was a general shake-up of the nations not merely i the Occident, but in the Orient it threw out of balance the industries, the commerce, and the markets of the world, nor does equilibrium yet appear on the horizon. We realise this in Australia and New Zealand as we see the prices of our stable products still tend to fall, and that at a time when we are least able to bear the financial disturbance on account of the growth of ment, the habit of extravagant expenditure and that of borrowing lavishly to supply the wherewithal. This is not a mere transient phenomenon but like its twin a century ago after the Napoleonic wars will take at least two generations to see it throug^h. The wars meant the destruction o our surplus wealth, the accumulation of the thrift of several generations, and the destruction of the youthful talent and energy that would be needed to replace it. As a substitute we have to find new methods and some new form of productive energy. A hundred years ago steam took the place of human handwork as now electricity is taking the place of steam. This is oije of the main causes'trf unemployment; it throws ou* of gearing artisans who £ aim easilv adapt themselves to the change. the machine-breaking of early * ast tury was not so mad as it seemed, the workers had found out their tr ? e It was well past the middle of the centurv before the financial, commercial, and industrial world was stabilised. But there is one consolation in sue a time of crisis; nations cannot go to war at every gust of patrioticpassion; thev must have money and stable fin ance. At present the only nation that can afford to go to war ls the l J n te j States, as it has got all the State* of Europe yoked to its treasury. It mll be fome generations before the world can afford a great war, unless by some chance the communistic oligarchy oa Bussia should gain wealth. For the most XX source "of great and exhausting wars is a new propagandist rehgion; and the Soviet, though it b ® antagonistic to all forms f«ith- in has really invented a new faith Marxian Communism with Lienm as Mahomet, it believes that it has got a real prescription for the it has set out to convert the world to its creed that not thrift, the real maker of man, but the destruction of thrxft will make man prosperous and happy. And so fierce is its faith in propaganda that if only it could somehow secure wealth sufficient to keep its nitioned long enough, we should have

MR W. J. POLSON, M.P., President, New Zealand Tanners' Union. While we may exercise our prerogative and grumble sometimes, the farming community has just passed through a comparatively good year marked by higher production, good values, and better methods. This year's outlook i 3 not so bright. Wool, meat, and butter have dropped in value. Less money will circulate and with higher taxation many farmers will feel the pinch. Several circumstances contribute to these conditions —international financial dislocation, fierce competition, tariff barriers, and so on, but the most serious of all is the increasing use of substitutes. We have artificial wool to-day as well as artificial silk and artificial butter. Margarine is now deceiving the palates of great numbers of people. The counterattack against these formidable competitors must be through increased production to make up for lower values. The New Zealand farmer has seriously tackled this problem. Encouraging proof of this is to be found in the reeently published year's review by the DirectorGeneral of Agriculture. Fertilisers and more scientific methods will enable us to carry on in the future as successfully as in the past, so as a farmer's representative I may join in the season 's felicitations confident that while the coming year may not be so prosperous as the last, the future, with average luek, holds as good prospects for the farmer as for the commercial and industrial community, provided all sections pull together, appreciate one another's problems, and fulfil our mutual obligations of citizenship, with a realisation of the importance of co-operation between town and country to the wellbeing of the State.

the greatest religious war that the world has ever seen. And students of historv know that religious wars are the fiercest, most cruel, and most prolonged. If the Russian oligarchy succeeds in its brutal aims, and converts the peoples of inner Asia we shall have the added horror that Europe suffered from Attila, Zenghis Khan, and Tamerlane. But it does not seem reasonable to expect a Marxian oligarchy to accumulate wealth enough for a prolonged war; for whilst assuming that it is the heir'of all the rights and properties of Czarist Eussia, it repudiates its debts, and the most persuasive and forcible propaganda will fail to bring men who see the moral of that to make unsecured loans to such a government. Nor will it ever be able to get the peasants of Eussia to accumulate funds when it so patently discourages thrift. None the less will its propaganda keep on disturbing the political, industrial, and financial equilibrium of the world. With such a prospect before us we should trim our sails to meet the storm that is manifestly ahead of ue. If the prices of our produce are going to be permanently lowered we shall have to lace the situation, else we shall lose our markets. We shall have to produce more cheaply, and that can be wholesomely done only by improving our methods. We must improve our pastures by scientific application of fertilisers." We must improve our breeds of sheep and cattle, and so on. We must increase our use of any new power for the production of which few countries in the world are so well fitted as New Zealand. We must introduce or invent new machinery and new and more profitable methods of applying it to our primary industries. And for all these purposes we must have efficient and unstinting research, and that can only come from better education. We have not yet fully realised how much the prosperity of our country depends on education. Our pioneers came out saturated with belief in education; but it was only in education such as the Homeland had developed early last century. The competition of other lands and the loss of old markets during our absorption in the war have at last awakened England to the need of improving and broadening her educational system, and we have to follow her example. And we have* much to learn in the British Empire especially from the United States and Germany; we can learn how to get at markets from the former, and how to reconstruct our industries and make them more scientific from the latter. MR C. P. AGAR, President of the Associated Chambers of Commerce of New Zealand. In my opinion the greatest need for the incoming year is a reduction in the interference with ordinary business activities. To this end the Associated Chambers of Commerce are from the inception of the New Year extending the organisation and increasing the staff, with a view to being much more closely in touch with Government and other authorities on behalf of the producing and business interests of the country. The extension of the organisation is being made, not because a closer and more active effort will benefit a section of the community, but because it is recognised that freedom for the efforts of private enterprise and business are necessary for the continued success and prosperity of the community as a whole,' The outlook, while not so promising as for the past season, is quite sound, and, provided importations are kept within reason, the prosperity of the Dominion should continue along sound lines. The reduction in values, however, has not been balanced or equally spread over the community, as prices and wages, etc., do not bear their comparison with pre-war levels. This state of affairs will possibly result in a continuation of unemployment until the economic values of commodities and labour are adjusted. While it is the desire of everyone to see the Dominion developed, the position of the primary producer must be carefully watched and safeguarded, as it must be recognised that the land forms the basis of our national wealth.

In my judgment there is no need for pessimism, and the country, free from too much legislation and interference and with taxation on sound and economic lines, may look forward to the future with confidence.

What appears to be needed is less susceptibility on the part of the people as a whole to the inevitable fluctuations of trade balances. When the country suffers a slight depression everyone, including business executives, becomes nervous and pessimistic. Then conditions improve and almost immediately this is followed by a violent swing in the opposite direction until a wave of optimism again upsets the economic balance. What is necessary is a slower response in spending the resulting income from good years, which will automatically provide the steadying influence on the wave of depression. -