RECOVERY IN SIGHT

Press, Volume LXIX, Issue 20997, 27 October 1933, Page 16

RECOVERY IN SIGHT

SIGNS OF IMPROVEMENT IN TRADE ADDRESS TO CHAMBERS OF COMMERCE [THE PKESS Special Ssrvlce.'J WANGANUI, October 26'. "During the last few weeks continued signs of improvement in almost every branch of the trade and a consequent lessening of unemployment in Great Britain have occurred, and it can be accepted that prospects are steadily brightening," said the president of the Associated Chambers of Commerce of New Zealand (Mr A. S. .Burgess), in his presidential address to tne conference of the association, which opened at Wanganui this morning. "The conference meets this year," he added, "with distinctly encouraging trade prospects in evidence in Great Britain, and the trade improvement which has taken place I clearly indicates that recovery is under I way." I ] The position of Great Britain was ! particularly gratifying, said Mr Burgees, because the British Government had notably followed a sane and sound economic policy amid widespread radicalism, not excluding the American nation and the tremendous uncertainties that attend that country's experiment in state-controlled industry. Whatever might be the result of that experiment—and at present there appeared to be grave doubts as to the result—Britain's policy stood out as a bulwark of proven soundness in a world of perplexity. The proposals that had been made for the imposition of quotas on the meat and dairy produce of New Zealand were very disquieting, and if brought into effect would be a disastrous thing for this country. There was no doubt that the conditions brought about by the action of the Government in increasing the rate of exchange, while they might not have been responsible for the origination of the proposals for quotas on New Zealand dairy produce, had been a contributing factor in causing the British farmers to combine for the purpose of guarding their own interests, in view of the advantage gained by New Zealand producers in the British market through the depreciation of New Zealand currency.

Exchange Interference. The Associated Chambers of Commerce had fought interference by Government with the rate of exchange because that action was an interference with economic laws and was not in the best interests of the whole of the people, and the executive had not altered its views. The endorsement by the House of Representatives of Government policy in, this matter was not, in this case, a true reflect ion of the opinion of the country. It was quite evident that the primary producers themselves were not by any means unanimous on this subject, and evidence of the dislocation of trade was still manifest in the figures covering imports. "New Zealand wishes to secure a free and unrestricted market for her produce in Great Britain." said Mr |Burgess. "This is an imperative necessity and we should take every step possible in this direction by bringing our exchange back to normal and reducing tariffs. The Government should be pressed to give this matter the most serious end early consideration." Matters of great moment would be raised in the remits that would come before the conference, he said. They dealt with some vital considerations affecting the whole of the people. For any who looked to the deliberations of the conference to ofl'er some easy way out of the difficulties that confronted the country, whether by lavish government expenditure, by tinkering with the currency system, or by some other Aladdin's lamp method, there would be small satisfaction, however. The running of a country was no less a business than the running of any other commercial undertaking. The country could not ignore its overhead charges any more than could a business man, while it must also observe sound business principles. There was too great a tendency to regard the business of government as being divorced from considerations that aflected every other business activity.

Tlic Forthcoming: Budget. "We are heading by design for an unbalanced budget," said Mr Burgess, "and what has been conveniently described as a 'permissible deficit.' Our reserves are exhausted, the only reserve left being the taxable capacity of the people and this has come to breaking point. The powers of wealth-produc-tion by the people, from which source government revenue is obtained, are hampered on many sides by restraints imposed by the government on private enterprise, and we have a mounting general find local government debt and a gruelling tax and rate burden. As a business budget the national accounts can be squared only by cutting down national expenditure or by increasing the national income. The latter is by far (he harder course, since New Zealand is so dependent on overseas market prices for her produce, and there are to-day more sellers than buyers. is as inexcusable as undue optimism, and while wise spending is to be encouraged to the full and the return of confidence is of inestimable value, it would be foolish to hoodwink ourselves into believing that there is not a great deal still to be done in national economy." As for present-day tendencies in government, there was no avoiding the fact that the state was assuming an increasingly greater measure of control in those matters that bore on our getting a living, and the freedom of ihe private individual was being progressively curtailed. In view of the gigantic experiment in the United States of America, it was well that we should examine the position in New Zealand and consider the merits and demerits of interference by the state with private industry, trade, and commerce. In doing so, we must keep in mind a number of paramount considerations. Had this interference by the Government widened the fields within which private enterprises—individuals, firms, and companies—could operate? Had it kept avenues of employment open for the people, or opened up new avenues? Had it encouraged the initiative and enterprise of the individual? Had it improved the revenues of the state without resort to burdensome taxation? These points needed to be adequately dealt with in the conference discussions and a considered opinion arrived at. It was a matter of vital concern that the wheels of industry and trade should be enabled to revolve at maximum velocity, and ways to that end must be found. This was the only solution to our u#employment trouble. A great deal of time and effort had been given by the members of the executive, who have rendered willing service during the year. In an endeavour to bring different interest;-; of the country together for the purpose of reaching agreements on matters of national policy for the assistance of the Government, the executive took steps to convene a conference with other bodies, but owing to the fact that a date convenient to 11 could not be arranged, tin-: conference was indefinitely postponed. However, as a result of the thought given by the executive to subjects for consideration at that conference, some comprehensive remits were drawn up covering broad aspects of the economic position, and these would be presented to this conference in order that discussion may be facilitated. Central Reserve Bank. Speaking on the proposal to establish a central reserve bank Mr Burgess said that when the recommends-

lion was first made for the establishment of this bank it was .■stressed very strongly that such -i bank must be absolutely free from political control. Now in the bill before the House, of the 10 directors, six. including the governor and deputy-governor, were to be Government nominees. Originally it was recommended that advances to the Government should be limited to one-quarter of the estimated annual State revenues, but it was now proposed to increase this to onehalf—just double the amount recommended. Again, it wpi proposed that any profit made by the central bank from the taking over of the gold reserves was to be credited to the trading banks or be apportioned between those banks and the reserve bank. In the bill before the House this had been altered so that any profit made is to go to the public account. "It looks as if the Government is providing in this way for the huge loss involved from the high exchange rate, and this 'grab' would be an easy way to liquidate this loss," said Mr Burgess. "Surely no sane person would attempt to say that a reserve bank as now proposed would be free from political influence, and if it is not, then considerably more harm may result than good. "I will not weary you with any lengthy remarks about taxation." Mf." Burgess concluded, "except to say that thi.s chamber should, during the current year, bring all the pressure possible to bee.i- upon (he Government to induce it to provide some relief in the very near future. The country is staggering under a burden which has brought it almost to breaking point. One of the brightest spots on the horizon at the present moment is the relief being extended to the taxpayers by the Australian Government to the extent, in a full year, of something like .£7,000,000. Gestures of this kind help to restore confidence, and it is confidence that is required (o restore (he ■world."