ECONOMIC INQUIRY

Dominion, Volume 24, Issue 291, 4 September 1931, Page 10

ECONOMIC INQUIRY

Primary Industries BURDEN OF INTEREST “Problems for Economists” BANKS AND EXCHANGE (By Our Parliamentary Representative.) The Special Economic Committee of Parliament proposes to sit longer hours in future to dispose of the final witnesses and to concentrate almost uninterrupted attention upon the task of devising a plan for economic reconstruction. During the two sittings yesterday the committee heard the views of the dairy industry as represented by Mr. W. lorns, chairman of the New Zealand Dairy Export Control Board, and Mr. A. Morton, chairman of directors of the National Dairy Association. Mr. W. Goodfellow, managing director of the New Zealand Cooperative Dairy Company, will appear on Monday, giving further information about the industry. Among the chief representations made by yesterday’s witnesses is understood to be a recital of the difficulties under which the dairy farmers are labouring on account of heavy overhead costs, which are stated to be out of proportion with low produce prices. The most pressing burden of all was state,d to be the relatively high rate of interest still being paid by farmers, whose mortgage obligations are making the prospects for this season exceptionally difficult. The committee was urged, when considering remedial economic measures, to consider the methods of reducing interest rates upon farm securities and of easing the strain upon already harassed dairy producers. Wage Level Question. The'Prime Minister, Rt. Hon. G. W. Forbes, stated during the day, however, that the picture of the situation as painted by the dairymen, though very black, was not as bad as that represented by the sheepowners’ representatives before the committee. During this week the questions of wage rates and arbitration awards have come under the notice of the committee. It is considered by the retailers, who were heard a day or two ago, that further salary cuts would be extremely inadvisable, because of the invariable restriction of spending power among workers who are already embarrassed by the 10 per cent, cut imposed several months ago. The employers’ representatives, too, are reported to have acknowledged the inadvisability of further wage cuts, although strong advances were made for greater elasticity in arbitration awards, allowing wages and working conditions in certain exceptional cases to be determined by the state of the industry at the moment, and not by hard and fast formulae established by the court. This suggestion did not meet with the full approval of Labour members, who feared it would lead to undermining the standard of living established for the worker by the arbitration system. Suggestions which were made on behalf of the Associated Chambers of Commerce during the week for a reduction in the size of Parliament and general parliamentary reform, did not progress very far, chiefly because the case was delivered orallv, with the result that the Labour members, by close cross-questioning, established a counter-barrage upon this important point. Further financial evidence was given yesterday afternoon by Sir Henry Buckleton, general manager of the Bank of New Zealand, who, it is understood, was asked to explain certain aspects of the exchange problem’ as it affects the primary producer. Views of Economists. To-day the views of the economists will be heard. Professor Murphy (Wellington), Professor Fisher (Otago), Professor Belshaw (Auckland), and Professor Tucker (Canterbury) ‘will give evidence, and this will be supplemented by Mr. D. O. Williams, who has been making a special study of farming problems at Massey Agricultural College, Palmerston North. It is hoped that all of these witnesses will be disposed of to-day. The Prime Minister is hopeful that out of the evidence of these economists will be derived some key to a solution of the country's major problems. “The problems with which we are faced are fundamentally economic,” he said last evening, “and the professors of economies should be able to give some useful evidence bearing upon the state of the national finances.” An erroneous impression might be gathered from the reference in yesterday's issue to the line of evidence said to have been tendered by witnesses representing the manufacturers. It was understood that these witnesses had expressed the opinion that additional protection was the most effective means of placing New Zealand industries on a sound footing. Such it seems was not the case. The manufacturers, generally speaking, do not advocate additional protection, and they did not indicate any desire before the Economic Committee for a general raising of tariff walls.' Such concern as they displayed in this connection appears to have been confined to the possibilities of uneconomic and unfair dumping by foreign competitors designed to cripple or crush local industries. This the/ regard as a matter which might require, and certainly deserves,. the attention of the Government in given circumstances.