PRICE LEVELS.

Press, Volume LXVIII, Issue 20550, 19 May 1932, Page 12

PRICE LEVELS.

MR DOWNIE STEWARTS SUGGESTIONS. COMMENT BY "THE TIMES.'* (FROM oua OW* CORBESPONDEHT.) LONDON, April 15. Cabled information regarding the New Zealand Government's economy measures has 'provided a text for ft leading article in "The Times," which gays that the Dominion Government is resolved to shrink from no sacrifice in order to balance its Budget and pay its way. After outlining the measures to bo taken, the writer mentions that Mr Downie .Stewart "sees no hope of relief unless there is "a rise in the prices of New Zealand products, and he hopes that at the Ottawa Conference this problem of the price level will be considered from an Imperial point' of view. It might, he thinks, be possible by combined action to raise the general sterling price level of primary products, which is the only way in which the burden of internal debt can be lightened. As prices now are, he says, New Zealand can only meet her London obligations by severely restricting her purchases of British goods. "That," continues "The Times" writer, "is perfectly true. The catastrophic fall - of prices has doubled, or more than doubled, the real burden of external debt for all the primary producing countries, which is a disaster not only for them but also for the industrial .countries which supply their markets. Only the other day the Financial Committee of the League of Nations described this as the fundamental cause of the plight of the countries on whose financial difficulties it has been instructed to report. As an illustration it pointed out that Bulgaria had increased her exports by 80 per cent, in 1930, and again by 40 per cent, in 1931; yet their value in gold, and therefore as a means of meeting her external obligations, had fallen by 3 per cent, in the first of these years and by 4 per cent, in the second. And similar figures might be quoted for all the primary producing countries. They are the immediate sufferers by this inequitable increase in the burden of their debts. But their creditors hardly less severely not only by the difficulty Of collecting what is owed them but also by the resulting paralysis of trade. '' There is a faint hope that some remedy may bo found at the Lausanne Conference, but if the gold price level cannot be raised —it ia so far not even stabilised—the Ottawa Conference should seek means of raising the sterling price level for the benefit of the Empire, and of the many other countries which trade on a sterling basis. The desirability of raising prices is commonly admitted; the real problem, so far unanswered, is how to bring it about. Experience has shown that cheap money alone will not achieve the object in view."