BUSINESS CONDITIONS.

Hawera Star, Volume XLVIII, 20 June 1924, Page 4

BUSINESS CONDITIONS.

REVIEW OF NEW ZEALAND’S INDUSTRIES. Mr William Watson, acting-chairman oi tlie iiaiii; ot Aew Zealaim, reviewed the bus mess conditions in the Dominion in tne course <n his address at -the annual meeting this morning. JTouuce; ,s oi primary produce here have, on tne whoxe, experienced a fairly gooa year, thoueti weather conditions were not aitogetner favourable, he said. hi# severe losses made uy mercantile ileuses through over-importations in 1920 and 192 1 aire tilings of tne past, business now being conducted at profit-, though heavy losses of capital have still to be made good. It is believed that retailers have not done so well as, durliig tiie previous two or three vears, despite tne fact that extravagance is still rife. Stocks of goods on hand are said to he rather much in excess of requirements. The woollen manufacturing industry is feeling competition from abroad, consequently stocks are increasing and profits shrinking. Sawinillers and timber merchants have done very well, the demand foir timber being heavy and continuous. MEAT INDUSTRY. The majority of the meat freezing companies are in most unsatisfactory financial conditions. This is due largely to there being far too many works', particularly in the North Is'iand, to-under-capitalisation, to inexperienced management, and to iailure to build up reserves when times were prosperous. Although in several instances shareholders have lost all the capital paid up, it must be borne in mind that far too often shareholders were paid by their companies much more for theiir live stock than it was worth. Depositors with these particular companies lost their money; guarantors to the banks have also had to nay up, and even the secured creditors have suffered considerableHoss. Several companies are staggeiTug on under loads of debt, and it is difficult to see how they are to-escape liquidation unless: some satisfactory merger of interests can be arranged. During the season iust ending there has been strong competition from freezing companies and expoiters of sheep and lambs at remunerative prices to the producer, and at the prices paid it must be a difficult matter for the purchasers to make profit. The steady increase in wool values will help to some extent. Tile exceptionally dry season has been responsible for a large proportion of second quality lambs reaching ,the freezing works. The market for beef shows no improvement, and it is evident that our frozen beef cannot, at the present time, compete successfully will the chilled beef of tlie Argentine. WOOL MARKET. It is gratifying to note tlie great- recovery in wool prices which has taken place during the twelve months, with the demand for wool still unsatisfied. Although all qualities are wanted, the most sacisafctory feature is the strong demand for medium and coarse wools, and these comprise the bulk of the New Zealand clip. Another gratifying feature is the great expansion in the export of wool to the East, which, during the past- year, amounted to approximately 200,000 bales from Australia and New Zealand as compared with, say, 20,000 bales in 1914. Compared with values ruling twelve months ago, crossbred wools show an increase in value of approximately' 50 per cent, to 90 per me.rinos and half-breds 25 per cent, to 40 per cent. DAIRY PRODUCE. The position of the dairy produce market is causing some concern. Although, owing to weather conditions, the quantity exported so far this season is not as great- as last-, heavy shipments have reached England during the last few months, and have met with a poor demand at reduced prices. Mainly owing to the increasing quantities reaching the English, market from other countries, it is probable that dairy farmers will have to accept lower prices for their produce in the future, and this, of course, will lie reflected in land values in this Dominion. The Dairy Produce Control Boaird recently formed is expected to improve marketing conditions, or; at any rate, to see that the interests of dairy farmers are protected to tlie fullest possible extent. WHEAT SHORTAGE. Owing to the serious shortage in the wheat yield of the Dominion, the Government has arranged to make large purchases in Australia. Much as it is to he regretted that sufficient wheat is not produced in this country to meet our requirements, it cannot be expected that our farmers should grow wheat whilst their land can be put to more profitable use. This wheat purchase has intensified the acuteness of the exchange position between the Dominion and Australia. THE OUTLOOK. On the whole, I believe we may regard the immediate outlook with equanimity. Prices for some of our most - important products may decline, although during the coming season there should still he a considerable balance of trade in our favour. Many of our producers are carrying on under adverse conditions, but their competitors abroad are having trouble also. It must not be forgotten that the great majority of our settlers are in fair circumstances, and quite able to withstnd a fall in value of their assets and reduction in income. Had economy been practised during the years when phenomenal prices were received for our products there would lie less grumbling to-day over the burden of taxation and the difficulty of getting an adequate return on capital. We must look forward to a gradual deflation of land values as the cure for the worst of the evils from which we are at present suffering. Stabilisation at present values is out of the question. I would urge one and all not to lose sight of the very important fact that, economy in its wider sense is absolutely necessary to the Welfare and prosperity ol this country. We have in New. Zealand most things suitable to healthy life, but, unless our exports can he produced as cheaply as those of other countries, and unless we avoid excess of luxury in our imports, it stands to reason that, considering our heavy obligations, ultimate prosperity will not be ours. No one should idle or go slow in his working years, and the fertility of our lands should he carefully maintained. Me have cue of the finest countries in the world: let us keep it so by showing example to those who will inherit it after us.