WELLINGTON NEWS

Hokitika Guardian, 26 February 1926, Page 4

WELLINGTON NEWS

NEED FOR. CAUTION. (Special to “ Guardian.”) WELLINGTON. February dll. Tile retiring president (Mr A. A. Martin) of the Auckland Chamber of Commerce, lias joined the small band of business men who have rightly directed attention to the extravagance that has become such a feature of public and private life in New Zealand. He stated that the finances of New Zealand required the most careful guidance and the Prime .Minister has said the .same thing but the extravagance continues just the same. It is quite true that there was a great tendency to live up to the limit of financial capacity; indeed almost a tendency to exceed that limit, both in national and private life, and .Mr .Marlin thinks that this should he apparent to the deep-thinking commercial men. The difficulty here would lie to find the •' deep-thinking ” commercial men. So few of our business men study the trade returns or the available statistics and it is doubtful whether manv of them could dodueo

the facts from the statistics if they did examine them. The hig city papers reflect the ‘•deep-thinking” that Mr Martin refers to. The commercial col - limn.-, of the metropolitan papers are an eyesore, and what little commercial news is given is merely pi stimulate

advertising or to comply with the ' lerms of an advertising contract, j Commercial facts and figures which by some remote chance displease an ad-1 vertiscr is excluded from, the ‘‘oom-j mereinl” column. Had the city papers j catered for the “ deep-thinking com-j mereinl men. a great deal more would j have been said about the reallv dan-.

gerous financial position into which the country Inis been drifting. But Mi-j Martin will find, as others have found that preaching the gospel of economy, and of caution and prudence earns for the preacher the title of “pessimist."

and a good many, if not most business men no doubt dislike to he thought pessimists even I hough the circumstances may warrant them taking a pessimistic view of the situation. The repeated warnings of prominent men of tin- need for caution mav eventually have some I'lfect Inn I here is no education a.s effective as experience. Foilin' past 25 years, except for a break in 1020-21, this country has been revelling in prosnerity, and the young generation has become enured In extrava-

gance. .Mere preaching will not make them realise the possibilities of tomorrow and the dangers that lie ahead. I They prefer to carry on and take tinrisks. their slogan being. '‘Don't trouble trouble, till trouble troubles you.” Of course there are more prudent. cautious business men. both old and young, who realise the importance of weighing carefully the posibilities of the situation before incurring financial liabilities-which might lead to emhar-' rassnienl. ItUTKII AND CHEESE. The Loudon butter market, is slow and the cheese market is quiet is (lie description given of the markets in the | latest eahle message. The price of butler has been fairly well maintained! during the past six weeks nt about I 17 ns per ewt. notwithstanding heavy! arrivals, and this lias been aecom- j plislicd by withholding supplies. That' means flail artificial methods have been use;l lo maintain a high level of value and the effect has been to check j coiisiiinplion and accumulate supplies. I The right price for a commodity is the price that will move the goods and keep the market clear, am! artificially; high prices have flic opposite effect.! There must he a considerable quantity 1 of stored New Zealand and Australian, butter carrying additional cold storage and insurance, and which detorioi-at.es. t hrough being held in store, must pro-; setiliv he marketed and the slowness of

the market is an. indication that tltc wholesale distributors arc conversant with the tacts. ;iml realise I hat the accumulations must hf released presonlI.v to avoid tho serious competition of t'l'osdi ('outiliciilul supplies. Tin 1 avtificallv high price engineered l>y withholding supplies will lie ail ineentive lor Europe to send every ounee of Indter to the London market. Last year Germany proved a great factor in clearing the mark'd. but Germany will be tumble to purchase as freelv this

inason beeanse tbe economic condition' in Germany are ilcplorablc wit'll heavy taxation, two million unemploy-

ed and a scarcity ol floating; credit. Until r and cheese like all other commodities must lilitl ibeir level ol prices through the laws of sttpjily and demand. Hie!, prices chock consumption and low prices stimulate it. Stabilising the prices of any commodity is an impossible task. Fluctuations are inevitable and an economic necessity, otherwise wo would not know what commodities were in short snpplv so that capital and labour can be turned on to producing them.

DEPRESSED AtEAT .MARKET. WELLINGTON. February 21. Lit'l week there was again a further drep in all glades of frozen and (billed meat, except two lines marketed at Smithlield, the exceptions being light and heavy Xow Zi-aland lamb, selected brands which showed an improvement in value and were (pioted at 10;,'d widen was a slightly better price than for light weight C'niitorburv lamb. A year ago Xew Zealand lamb was selling at 12;|d so that there has been a very substantia! fall, and the limit of the decline has apparently not been reached yet. ('oimimiits on tin l market situation show that tiie demand for Xew Zealand lamb .has not improved notwithstanding the drop in values, on the contrary the market showed a tailing tendency. The mutton market was reported weaker with a poor demand and the market for beef was nominal, there being no demand. The steady down tendency of the meat market H diflieiilt to understand. It was stated the other day that hoteliers were making huge profits through

charging the consumers excess prices on Irozen meat, ft was also stated that the Food Council was about to hold an inquiry into meat prices. Most popple would have thought that the Meat Control Hoard would have sonic

explanation in give to the producers o : the matter. What is causing the irozen meat market to be so depressed? It sttrolv cannot be excess supplies for the figures for 102.» show that over Mi.ooo tons less meat was delivered to the control market as compared with 1921. Tbe strike of British seamen and bold u;> of vessels here and in Australia induced some speculators to make heavy purchases in Loudon in the expectation of lug profits owing to the certainty of shortage. But the speculators instead of making a big profit realised a ‘heavy loss, in some

eases from 6s to 2s per carcase of lamb. The fall in meat values is general and Australia and the Argentine are having the same experience as Xew Zealand so that exploiters and combines and monopolies cannot be blamed for the present situation. The explanation appears to he that the pound sterling is now on a gold basis and buyers naturally expect to secure 20> worth of goods for the L\ We as sellers are wanting them to accept 16s to 18s worth for the pound as they diet prior to the restoration of the gold standard, and the buyers refuse. The prices of all commodities and services must conform to the gold standard, must stand up to 20s in tiie £. In

other words the prices of the inflationary period arc over. ' WHEAT AND OTHER POOLS. The wheat growers of the United States and Canada have set in motion an ambitious scheme to effect a world’s wheat pool. Canada is supposed to have a. perfect system of pools, and so has the United States and Australia and the Argentine, and they are to ho drawn into the scheme and then the milleniniii for the wheat growers. These world wheat pools arc for the rcgularisation or stabilisation of prices which, it is stated, in the long run will not only benefit world producers of wheat, but also consumers. These combinations invariably seek to impress the consumer that they are animated by a feeling of benevolence towards him. The consumers will not benefit, hut the consumers will in the end he obliged to smash the pools. Rcgularisation of prices means adjusting values so as to yield the greatest margin of profit to the members of tin- pool, and that will necessarily involve exploiting the consumers. High pi ices will cheek consumption. Continental Europe will thrive on rye and potatoes, and the consumption in Britain will In- cheeked. While on the cLI-.er hand the high prices will stimulate protection, and Russia. i[ is said, will he in about two years, producing up to the pre-war standard, that is about half a billion bushels. When stocks accumulate as they certainly would under any pool scheme for holding up tin- prices then the pools will he smashed. Producers and manufacturers of everything everywhere expect to get the prices for their commodities that were ruling when the nations were working the printing presses overtime, turning out mountains of paper money. The inflationary period has about ended and we have got to get back to real values and the transition is not relished by those who have anything to sell. The view that commodity prices can lie stabilised is a fool notion because fluctuations ami flexibility in prices of commodifies and services and everything else are of high economic value, otherwise we should have diflieulty in determining wlmf things were scarce, -o that capital and labour could he sot to supply those things that were scarce.