Evening Post TUESDAY, JULY 4, 1930. DANGER OF A SKID

Evening Post, Volume CXXVIII, Issue 3, 4 July 1939, Page 8

Evening Post TUESDAY, JULY 4, 1930. DANGER OF A SKID

When a heavy vehicle te running fast downhill and brakes are applied suddenly there is a danger of skidding, and if the skid is on a narrow corner it may be disastrous, If there is a long line of heavy vehicles, all running fast and some attempting to Out in on a road full of bends, the! sudden stoppage of the line and the disastrous possibilities of skidding aro multiplied many times. Some of the drivers may not see the. trafiio officer^ signal, some may ignore it and try to get ahead in the line, some may have to choose between collision with the vehicle ahead or a bump from the vehicle following and some may find that the brakes, unused for a long time, are defective, This is the position of New Zealand when the Minister of Finance signals a halt in price and . cost increases, There must be a halt, or ot least a check to speed, if the procession is to take the dangerous bends ahead; but the drivers are all more familiar with the accelerator than the brakes. In fact, they have been warned that the brake is dangerous to use. All the traffic officers they have seen on the road so far have signalled "Faster! Faster!*' The objection of the dairy industry to a stoppage illustrates the difficulties, but not all of them. The dairy industry at least recognises the danger of rushing ahead and agrees with the Minister of Finance that there should be a halt. The industry's objection is that it has been left behind, that its return has not kept, pace with costs and thai, if jt halts now, it will be in a permanently unfavourable position, It demands, firstly, an opportunity to recover its position and, secondly, evidence that the halt will be applied all along the line, Can the Government comply with these conditions? Not unless its cost-halting policy is made much wider than at present, It must bo understood that costs are not a simple factor, Direct and easily-seen charges may, indeed, be tho least part of costs, That is why the direct method of stabilisation, even when successful, may not provide a complete solution of the problem. For example, labour on the farm is only a part of the labour cost, of dairy farming. There are, in addition,, the labour costs in fertilisers, in farm implements, in transport, in rates, in taxation. And ■even these are not all subject to direct control. An intensified demand for labour in some other direction may increase costs without an actual advance in wages because labour is in short supply and rates above the award-must be paid and overtime worked. If the Government, in pursuance of an insulation policy, increases the demand for labour of certain classes, costs are raised both by the labour shortage and by the substitution of goods made in a highcost country for goods imported from a more highly industrialised area. There is another factor—not yet operating directly on the farming industry but likely to do so soon if steps are not taken quickly to chock the trend. This is interest. By overspending, the Government has exhausted the cheap money and credit resources of the country. I Already it has had to pay a little more to obtain its loan requirements, and it has had to agree to local government borrowers paying a little more. In time the rise in interest will reach the farmer. The Government sees, now that a cheap money policy cannot be carried on unless the demand for loan funds is regulated by the supply. But this cannot be done unless the programme of works is also regulated, and ordinary Stat© expenditure kept reasonably within the bounds set by revenue, What is the position at present? A halt is called g and stability demanded. But all the influences are against it. Government commitments demand more revenue, rather than less. Government policy has ended the cheap money period. It has depleted sterling funds and enforced a hurried expansion of domestic industries which cannot possibly be achieved without an advance in costs.

It has set in operation all the forces which tend to force-, costs upward. Now that tendency cannot be corrected by applying a check at one or two points. The dairy industry response to Mr. Nash's appeal proves that beyond question. Stability is needed; but it can be obtained only by complete revision of the whole Government policy of expansion,