The Grey River Argus WEDNESDAY, November 30, 1938. NEW ZEALAND’S TURN.

Grey River Argus, 30 November 1938, Page 6

The Grey River Argus WEDNESDAY, November 30, 1938. NEW ZEALAND’S TURN.

A big step forward industrially was the description given the Government’s plan for more production, by the Minister of Industries and Commerce yesterday when he opened the conference of the Manufacturers’ Federation. He announced the setting up of a Central Executive of the Bureau of Industry in order that special attention may be given to- the question of increasing national production. During the past gem eration, the Dominion has gainegl the reputation of exporting per capita a greater quantity of foodstuffs than any other country in the world. Thus there may be those who- imagine our production should, or must, indefinitely, expand mainly or only along that line. Hon. Mr Sullivan, however, yesterday gave an authentic indication of something quite otherwise. “It is now many years,” he said, “since our sister Dominion, Canada, grew into a great industrial nation. Australia took its great step many years ago. It is now the turn of New Zealand.” It is, of course, commonly recognised in this country that Canada and Australia have long utilised their fiscal powers in order to launch their secondary industries. Yet the result has not been to give New Zealand scope in supplying their markets! with primary produce. . Our trade balances with both of those Dominions are so unfavourable that they suggest e a study of the causes of the disparity- Most causes are largely to be found in the fact that a more balanced internal economy has been developed in Canada and Australia., A London banker, Sir. G. Paish, has just fulminated against that policy in a speech.he made in Canada, but his dire .predictions of the evil's of protection will leave Canadians cold, for they are as loyal as Australians to the ideal of •. maintaining and increasing their manufacturing industries. The' bankers thrive, no doubt, upon international exchanges, though it. is.through a rake-off in marginal charges that penalise alike the producer and the consumer " AVli at he might quote in support of his contention that free trade is the preserver of peace is the fallacy of. over-production. American wheat, for instance, has so. expanded in quantity that the surplus is nearly as great as ever, and the prices are. the lowest sihee 1933. This is due both to

large hold-overs last year, and the growing this year of the second largest harvest on record. - Sir G. Paish doubtless laments, like Americans, the absence of any feasible plan of transporting such food surpluses to needy portions of the. gio be. But the very difficulty illustrates a truth that is coming uppermost in the science of economics. The fundamental economic question to-day is'why a country should become only the poorer as its production of real wealth is greater. The reason is, first,, the fallacy of making a. means into an end, and .taking the token, .(money,) a.s a .reality.- The transportation of produce has beppine- so costly, when all costs are reckoned jin,; including; the ,put. of the bankers..and. middlemen,,.that the values thereby consumed are

becoming economically excessive. We may, under a mass marketing scheme, and under some degree of preference, fail as yet to realise this, but checks on returns will duly drive home the truth of the matter in time. In no country is railway transport, for instance, so self-supporting as it used to be, whereas charges are generally on the up-grade. It is likewise with sea transport to a certain extent. Yet the dectum still is proclaimed that things should be produced where they can be most economically produced. That, however,, is a belief which has led to the very problem of over-production. It has in fact led to the production of economic goods in areas where they cannot be consumed, and and from which the transportation of such goods to areas where they are needed for consumption is becoming economically impossible or. increasingly difficult. When th’e British market presently is made more available for American exports, the Dominions are. sure to feel the pinch. Thus we soon may have to recognise that pastoral production may be increased" to a point, where it is not economic production. Economic production is simply the making of. goods available for human eon. sumption, as distinct from creating a glut or surplus. It is useless taking coals to Newcastle, and equally so for several new countries to rely on one old country to use all of their primary produce, let the surplus grow to be ever so great. There has. evidently been o\;er-planting of wheat in several countries, and inadequate planting in others. The point to be recognised to-day ri? that it has experimentally been demonstrated that things should be produced where they can be most economically consumed. If there is a substantial growth, therefore, in New Zealand y secondary industry, t will mean an increase of population, a greater proportion of the people engaged in manufacturing and an increased demand for our primary products. But it also will reduce the necessity of importing so . much, and of sacrificing what we do produce in order to, pay for the imports. The difficulty of payment for imports is just now exemplified in a reduction of-over, sea. credits. It would thus appeal, as remarked by the Minister, that New Zealand’s turn has come to follow other Dominions in becoming more of an industrial nation,