DOMINION TOPICS

Dominion, Volume 32, Issue 72, 17 December 1938, Page 1 (Supplement)

DOMINION TOPICS

Half-Truths. If comparisons are to be made with other countries, it should be borne in mind that in few countries tire the railways protected against road competition to the extent that they tire in New Zeailand. The Minister of Railways, Mr. Sullivan, also suggests that, in its attempt to improve the financial position of the railways, the Government was faced with a choice between cutting wages and salaries and rai-ing fares and freights. Once again this is only part of the truth. What makes the financial position of the railways particularly disturbing at the present time is not merely the rapidly dwindling imingin between operating expenditure and operating revenue, but also the enormous increases in the interest hill on account of lines now nearing completion. The greatest of these new lines—the final section of the South Island main trunk —will probably show an operating deficit in addition to increasing the interest charge. If the Government were frank it would admit that its railway construction programme is one of the factors which have led to higher fares and freights. —"The Press,” Christchurch. An Internal Ixian.

Details of the internal loan to be issued by the Government in ini* near future will be awaited with n good deal of interest, since it will be the first time that the present Government has tested the market, and the first loan, other than for conversion purposes, that has berm floated for many years. The Government already has authority to borrow this year approximately £14,500,000 for various public works, but parf of tlieisum, no doubt, has been secured by the customary procedure through the Post Office Savings Bank and other State departments. It has become clear in recent months, however, that these channels were drying up. and much of the present financial difficulty of the Government has been caused by the policy Of Inflation, which Ims resulted from excessive borrowing during a rime of prosperity. All available funds have been exhausted and. in addition, i early £9.()(>O,(MMI has been provided bv rhe Reserve Bank. To increase tin- extent of State spending by raising further loans from other'sources would aggravate the situation which it is now sought to remedy, and for tliL reason il is necessary that step* -liould be taken first of all to liquidate the liability Io the Reserve Bank. —"Poverty Bay Herald.”

Too Far and Too Fast. Had it been explained that the intention of New Zealand was io trade as much as possible with its best customer. it is probable Dominion stocks would have received an even less severe shock. It. is notable that the later comments are not so apprehensive as the first. It is recognized, for instance, that anxiety regarding New Zealand’s ability to meet its overseas commitments has been eased. It is. however, the evident opinion of most commentators that New Zealand is venturing too far and too fast, ami is undertaking financial obligations beyqnd her capacity. And it has hern q notable feature of the Government's recent statements that it has not the slighest intention of scaling down the dangerous rate of public expenditure.—“Waikato Times.”

Unnecessary Pin-Pricking. Though seven days have passed since New Zealand was plunged into the confusion of a bolted and burred currency control, unnecessary pin-prick-ings continue to'eause anxiety and uncertainty. Allowance has to be made for the time-lag that is inevitable before finance and commerce can operate smoothly after the reorientation of last week, and the public is ready to lie patient and to co-operate. Yer. it expects. With justification, 'that the normal needs of New Zealanders who desire to travel overseas should be.exempt from snagging red-tape regulations. It is financial dictatorship run riot that demands headquarters approval for the transfer of bona fide travellers’ funds overseas: even the smallest sums require the august agreement of 'Wellington. A letter of credit apparently has become an object of deep suspicion to tlie gpnrdians of New Zealand's overseas funds. —“Taranaki Herald.”

Our Overseas Debts. The present Government, Mr. Savage declares, has set out to pay overseas debts, not to increase them. A more honest or less evasive critic, of “criticism” would have admitted that past Governments had similar ideas. The Coalition Government, for example, did not. increase the public debt. Net indebtedness per head of population was £l7B at the end of March. 1935. after having varied between £ISI ami £193 between 1931 and 1934, during which period the economic slump bad exaggerated the need for the utilization of borrowed money. The amount of Lon-don-domiciled as well as of Australiandomiciled debt was reduced during the Coalition’s' last term. \and skilfully managed conversion operations contributed substantially to the easing of the country's overseas interest burden. Since the present Government took office the total of not indebtedness has actually risen, despite the ingenious efforts of the Minister of Finance, in his last financial statement, to show that the contrary was the case.—"Otago Daily Times."

The Shortage of Tradesmen. A point which may be investigated by Hie Government is that there are some trades capable of being learned in less than the usual five years. If some reduction of the apprenticeship period in suitable eases could be introduced it. is possible that lads would deem it worthwhile to embark on a skilledtrade career rather than to take what may seem the easy way out by claiming. at shorter notice, the impressive remuneration offered in this country for unskilled work. The rivalry afforded by unskilled labour today has already been pointed out by Hie president of the Dunedin Manufacturers' Association (Mr. C. V. Smith), who, in commenting on the latest Government legislation to control trade and increase production, drew attention to the large numbers of tradesmen still employed on public works. These men's services, he significantly remarked, were essential to manufacturers, and if the workers could be brought back, by compulsion. if necessary, it would have the double effect of increasing production and at the same time reducing public works expenditure. This is still another point which would bear Ministerial investigation.—Dunedin i “Evening Star.” |

Conflicting Statements.

It is not easy to reconcile who; the Prime iMuister has said about producing in New Zealand as much as possible of what the country consumes, ami Mr. Nash’s belief that the volume of imports need not necessarily be reduced. Both intentions cannot be given effect. The" Minister of Finance links his forecast of imports kept up to present levels with tlie hope that his Budg.-t plans, depending heavily on the yield of Customs duties and sales tax. wiil not be disturbed. It is a great deal to expect. Unless the abrupt stoppage of capital movements proves sufficient to ri veise the downward movement of overseas funds—and there is no evidence that it will—there must lie a restriction of .111-' ports. In that event Customs and sales tax revenue is certain to fall more ;imu the sum of £858,000 allowed for in :'ue Estimates. This seems inovitabb- if the plan is to march as has been indicated. In addition, import trade, vexed at present by -uncertainty, and deCiiied presently to lie shackled by ted 'ape, may shrink under these alien conditions, without any direct restriction — “New Zealand Herald.” The Apprenticeship Problem.

In 1928 the total number of apprentices in all trades exceeded the figure of 10,000 which is regarded as sufficient to meet the country’s normal, annual requirements.' After falling to 3329 in 1935 and 3552 in 1936. the total had reached 7916 by April of this year; and it is gratifying to learn from Mr. Armstrong that the number stands today at about 9000 and should, at the ei ’ of the present school term, reach 10.000—for the first time since 1928. The Minister apparently hopes to make the total substantially greater, ami it seems that this will be necessary before the shortage can be overtaken. Before proceeding to consolidate and amdnd the existing faws; be intends Io invite discussion of bis proposals by representatives of the workers ami the employers, for he is anxious to give satisfaction to both parties. It is certainly a ease where con-mltatiou -houid be valuable.—" Southland Times.” Public Confidence.

The Prime Minister lias issued an appeal to the people for co-operati, n in effecting the Government's policy, and for the iii.-iiiiteiiance of a tone of optimism. Il is obvious from statements made by various Government members of Parliament, ami by members ->f the Labour Party writing lo the newspapers, that an organized effort is being made to stimulate a spirit of eo-opera-tion. ami engender a feeling of optimism. The majority of the electorate endorsed ‘ the present Government's policy, and there is considerable merit in the request that even those who oppose the policy or fear its conseqmmees should give (be new programme a-fair trial without unnecessary obsl rm 1 ion. But whereas it is quite true ‘hat people in the mass may accelerate a trend towards economic depres-iiii by undue pessimism. Mr. Savage can hardly expect those who disbelieve ii- his policy to turn volte face ami believe the opposite.—"Taranaki Daily News.” Fundamental Issues.

What the “Economist” says about controlled exchange is what New Zealand critics have been saying. As au expedient to tide over present difficulties, control may be all right, but as a policy and a form of insulation, it may become an evasion of fundamental economic issues. The situation that has to be met Ims been brought about' by excessive spending in New Zealand, ami it will not be rectified by the measures now in hand unless as a matter of policy the Government brings expenditure within reasonable, bounds, or, iu other words, unless the Domiuion balances its spending, both government and individual, against production. Though there may be temporary casual bursts of good prices to mitigate or disguise the danger, it will remain as a fundamental economic penalty to lie exacted whenever the government of the day follows the course that has brought about the present crisis. As the "Economist” says, the success of control depends less on the effectiveness with wliicn it is worked than on the manner in which the economic problems are tackled. —Christchurch “Star-Sun.” ’ Our Best Wool-Buyer.

In. 1937-38, Great Britain’s retained imports of wool from Australia. Argentina, South Africa, New Zealand, Uruguay, and other countries were 569,000.0001 b., the equivalent of 1,896,600 bales. Yorkshire has been responsible for a large number of the higher prices obtained from the spinners' wools submitted this season, and has been a generally strong factor in the sale of well-grown merino and crossbred lots. It is, therefore, worthy of note. in giving credit where credit is due, in view of the inclination to overlook the importance of English operations during the New Zealand wool-selling season, that at the Christchurch wool sale yesterday competition was animated at the start of fhe sale, most of the bidding coming from Continental and Bradford buyers, America and Japan were minor factors in the market, and Germany operated to some extent. —Timaru "Herald.”

This Atmosphere of Uncertainty.

The new regulations affect directly everyone iu New Zealand who is engaged in industry and commerce, all exjwrtei’s and importers in Great Britain, Australia, and the United States of America who have dealings with New Zealand, all investors here and abroad who have money in New Zealand stocks and shares, and all New Zealanders who wish to travel or to remit money abroad. At the moment their main anxiety is not the regulations themselves or the financial and economic disequilibrum of which they are a symptom, since the present crisis has been foreseen by everyone who has watched the trade and banking statistics. Their main anxiety is the atmosphere of uncertainty which surrounds the policy of the Government. Till that uncertainty has been removed, business transactions will tend to be on a day-to-'dtiy basis and a return to anything approaching normal conditions will be impossible. The difficulties confronting the Government will not be underestimated, and it will not be expected to have a ready answer to the many questions which the regulations and the explanatory statements accompanying them leave unanswered. —"The Press,” Christchurch.