TRADE AND PRICES

Press, Volume LXVI, Issue 20025, 5 September 1930, Page 12

TRADE AND PRICES

REASONS FOR LOW LEVELS.

PROFESSOR GREGORY'S VIEWS.

[THE PEESS SpecUl Service.]

WELLINGTON', September 4,

Professor Gregory, who accompanied Sir Otto Niemeyer to Australia, is having a very busy time in Wellington since he arrived from Sydney on Tuesday. His hours have been crowded with receiving callers and making calls, nevertheless he found time to give an interview on topics of economic interest.

He was asked what significance was to be attached to the comparatively easy rates for money in London, with its continued 3 per cent. Bank of England rate. His view was that the relatively low price of mojiey was largely attributable to the trado depression. Trade has been very bad in the United Kingdom he said ever since 1928. The rates for money went up in the early part of that year, to be followed towards the end of the year by the Hatry incident in London and the collapse of the New York Stock Exchange. These tw'o events produced stagnation in the money market and in the business world, ar.d accentuated the trade depression.

Commodity Prices. As to markets which so vitally concerned New Zealand primary producers exporting to the United Kingdom and elsowhere, Professor Gregory was asked if prices of commodities were low because of over-supply or under-consump-tion. He replied to the effect that there certainly had been over-produc-tion in some types of raw materials, for there had been quite an erroneous idea prevalent throughout the world that it was short of many such products. The stimulus of high prices immediately following the war led to increased production in many materials—copper, tin, wheat, and so on. Production of these had been rushed, but if prices had not fallen because of the general depression they would in any case have been reduced. Wheat in particular was described as unstable. There was a certain amount of under-consumption to be reckoned with, too, as was to be expected when trade was bad, but trade depression had undoubtedly accelerated the inevitable decline in commodity prices.

Post-War Rehabilitation. Professor Gregory was asked if he thought the needs of post-war rehabilitation had now been satisfied. "More than satisfied," he said. "Generally speaking, in a very large part of the world, including Great Britain, there has been an enormous amount of re-equipment and modernising of plants, also the introduction of speedier and more economical farming equipment, tractors, for instance, together with the increased use of artificial fertilisers. All these have mad© an enormous difference in production and increase of yields. Factories also were re-equipped, giving far greater outputs in loss time than before the war. The post-war reconstruction phase, as it appears to me, is definitely over. There has been a considerable increase in the world's productive resources since the war, and the world has moved ahead very much faster than it was moving In 1013 in its production." Marketing, especially so-called "organised marketing," was referred to, Professor Gregory being asked who, after all, had the last word, the seller or the buyer. "There is no question about that at all," he said. "The party who has, and must have, the last word is the consumer. As I see it, it appears to me that the next few years will be a buyer's market for everything."

Consumer Credit. Consumer credit or the hire-purchase system of trading was touched upon. Professor Gregory would not approve or condemn the system. "It is all a question of degree," he said, "and a question of what one buys. There is nothing wrong with the principle in buying a house, and sewing machines have been bought on that principle for I don't know how long. Undoubtedly the system stimulates the consumption of luxuries and quasi-luxuries,' 4 and in such cases leads to extravagance on the part of some purchasers under that system. If the instalments aro within their means, then the system may be quite useful. It all depends upon the individual and upon the management of that class of business, but it is a system to be used with discretion. Its success rests with the business men themselves. ''