Evening Post. THURSDAY, MAY 27, 1920. PRODUCTION AND PUBLIC WORKS

Evening Post, Volume XCIX, Issue 125, 27 May 1920, Page 6

Evening Post. THURSDAY, MAY 27, 1920. PRODUCTION AND PUBLIC WORKS

From the point of vievy--of monetary values, the record of New Zealand exports placed before the Provincial Conference of the Farmers' Unions by the Minister for Lands, Mr. Guthrie, is a very fine one. It shows that in 1919, as compared with 1910, wool had increased from. 8 millions to 19 millions, frozen meat from 3 millions to 9 millions, butter from 1 million to 3 millions, cheese ffbm 1 million to 7 millions. And "general trad© over the same p%riod showed an increase of 44 millions." Admittedly these are imposing figures, but if the test were quantity instead of value the result would be less imposing; and while we have no desire to detract in any way from the optimistic picture painted by the Minister, yet it is worth while to remember that the value-increment that has fought for our exports in recent years may not always be on our side, and is, in fact, already in slight retreat. It consequently becomes more than ever necessary to increase the quantity of production as well as the value; or, alternatively, to discount shrinkage in value by increase in quantity. If the Minister's figures as tq( appreciation of exports are striking, his figures as to local loans are staggering. During the war the Government raised in New Zealand the sum of 79 millions. Mr. Guthrie correctly remarks that if, on 4th. August, 1914, anyone had had the temerity to suggest drawing on the local loan market to this extent, he would havo been scoffed at.

Figures in pounds sterling are no more an exact index of the greater productivity of the New Zealand loan market than they are of tho greater productivity of New Zealand soil. Allowance must be made for the currency-increase in the former case just as for the price-increase iii the latter case. According to recently published information, notes in circulation increased from £1,900,000 in 1914 to over £7,000,000 five years later. Credit has expanded rapidly on a- very large scale, and* future expansion may not be in proportion—unless, perhaps, in inverse proportion. It certainly would be of great value to have both production and credit, as they stand to-day, accurately charted, but the cartographer would have to work through some other medium than pounds sterling. In some respects, the war-time discovery of the possibilities of the local loan market was like the discovery of a gold-mine. No one previously suspected its richness, but when its capacity was revealed it was drawn on rather copiously, and while everyone knows hew much was taken out, no one is quite sure how much gold is left. Yet it is in what remains, rather than in what has been abstracted, that the value of the gold-mine lies. Those 79 millions of local loans, to which Mr. Guthrie points with pardonable pride', concern us not only from the standpoint of principal but from the standpoint of interest. Perhaps it is the interest that interests us most. A redeeming feature is that this part of the annual interest bill is a family affair. New Zealanders owe it to themsslves.

In addition to the 79 millions borrowed in New Zealand, 26 millions were borrowed iv Britain, making a grand total of 105 millions borrowed by' New Zealand during the war. Less than onefifth of it would have completed the unfinished- railways in New Zealand, find probably Mr. Hiley's railway improvements scheme as well. A moiety of it would have bought out all the big estates that are needed for closer settlement. Yet if there had been, a politician with sufficient decision to have raised in 1910 or 1911 a 25 millions loan, he ■ would have been accused Of having out-Vogeled Vogel.. It is so easy to be critical before the event, and to be wise afterwards. Twenty-five millions wisely sunk in public works before the war would have- been equal in reEultto at least fifty millions similarly expended to-day. Instead of that, the country has expended 105 millions as war-time expenditure alone, and has the public works money still to find. A consideration of these things is invited not for any purpose of crying over spilt milk. There 'has been no spilling of milk; by means of the war expenditure—the Empire's as well as her ownNew Zealand saved every drop of her milk, also her butter and cheese, her wool, and her meat. That is to say, Ehe has saved, and has enhanced, the assets on which she will raise the loans 'and levy the revenue of the future. The real lesson to be learned is one of thankfulness combined with caution. A wise Government would 1 now set about discovering the practical limits of its credit in the loan market, J>avtieularly the local market, and the practical limits of its taxing power (concerning which a special investigation has been suggested); it would then estimate its borrowing and its revenue, and would cut its expenditure, including public works, to suit. If the financial investigation were net on foot now, the whole programme might tw put before Parliament next session, instead of being reserved for tho third session as election bait. Concerning public works, tho paramountcy of hydro-elec-tric is admitted, but otherwise the order of precedence is unsettled, and tho country hr.s before it r.o real programme whatever.