ISSUE OF CREDIT

Evening Post, Volume CXXX, Issue 105, 30 October 1940, Page 8

ISSUE OF CREDIT

COUNTRY'S STABILITY

WHERE DANGER LIES

A WARNING NOTE

Impressions he formed as a result of his association as a member of the committee of the Economic Stabilisation Conference were given to the Dominion Dairy Conference today by Mr. W. W. Mulholland, Dominion president of the New Zealand Farmers' Union and a member of the Dairy Industry Council. Probably, Ulr. JVtulholland said, the most significant thing about the report was the fact that 14 men besides the chairman, seven of them representing labour union organisations; signed their names to a report pointing out the gra-e danger to New Zealand's stability from any further issue of Reserve Bank credit. From the statements made to the I committee, Mr. Mulholland continued, it seemed obvious that correction lay along two lines. The shortage of goods should be made good as far as possible, and that meant undoubtedly in the industries affected that longer hours should be worked. There were .in connection with many of our most important industries supplying consumer goods possibilities of considerably increased production if longer hours were worked, and the whole committee was in agreement that that should be done where practicable and where the results would be beneficial. At the beginning of the conference there seemed' to him to be quite a marked air of hostility towards farmers and farming, but as time passed there was a distinct improvement in that regard. The hostility was not deliberate, and was not confined to the members of the. committee; it seemed also to run through quite a few of the officials who were examined. SHORTAGE OF GOODS. It had been very early impressed upon members of the conference that we were facing a shortage of consumer goods in New Zealand if consumption was going to be maintained at the rate which had obtained over the past few years and especially with war needs superimposed upon ordinary civil consumption. One of the factors responsible was insufficient labour. It had been astonishing for him to find that labour for secondary industries was actually decreasing and was in short supply, when there were still thousands of men on Government schemes and even on sustenance. On top of the actual shortage of. goods there was an excess of purchasing: power. Mr. Mulholland said that before the sittings of the committee concluded it had become evident to him that it was impossible to finance the present scale of Government expenditure for purely domestic purposes and to finance the war effort to the extent that we should be doing by means of sound finance. Again, in this connection, there was unanimous agreement on the part of the committee to recommend the Governnlent to examine the position with a view to scaling down its domestic expenditure; mGHTT BIG "MIGHT." The impression left on his mind was that while it might be possible—and it was a mighty, big "might"—to finance this year's Budget on sound financial lines, it would be utterly impossible to finance a similar Budget again without using many more millions from the Reserve Bank.