WELLINGTON NEWS

Hokitika Guardian, 6 June 1930, Page 2

WELLINGTON NEWS

UNITED STATES CONDITIONS

(Special Correspondent.)

WELLINGTON, June 5

The United States is suffering with the rest of the world from the prevailing depression and that depression lips been caused by the blundering of the Federal/Reserve Board of the United States in its monetary policy, at all events that is the opinion of• that eminent Swedish economis Mr Gustav Cassel. He holds that the United States holds practically absolute power over the welfare of the world. Since the close of the war America has been the ultimate arbitrator of whether trade was to be good or bad. Professor Cassel considers that the slump of 1920-21, as well as tlie present crisis, are due to .the . inability and incapacity of tlie Federal Reserve to regulate and conduct its monetary policy. However, if the United States has caused the present depression it is suffering with the rest of the world.

The general level of industrial trade activity in the United States in April Was still far below that of a year.. earlier. The unemployment situation was reported to be less acute in some cities, though it was not clear yet that a genuine nationwide improvement had been effected. The most encouraging developments were the increase in construction contracts, the greater strength of commodity prices and the continued ease of monetary rates. 'These conditions, as reviewed by the “Guaranty Survey,” were not alone sufficient to warrant the expectation of a return to high levels of business activity in the near future.

The increased finances of commodity prices had not lasted king enough to demonstrate whether it could be regarded as mor e than a monetary reaction. The same might, be said of 'tlyiviirShiclj 'M : cbnstr'uctiph, iiyitli the •added’ -qualification - ! that;;, the residential tyuildlhg ruif'i deterniiue tlie general course of •activity -' had not' yet-' shown cpnclus-irt?,-/'signs. of - revival. 1 ' Easy money wbu-ld'fjn. all, prpbabilit-vj-last for some time,*'-but the influence Of this. factor was-.mainly negative.' ■An abundance of -funds for bpsipess purposes would ,stimulate, trade recovery when the time was ripe for such a development butYit’. could" not by itself-go very far towards converting depression into expansion.

,■ Tlib'i jnpst optimistic forecast • consistent; with conservatism was that tbeV.yyOrsU was probably over, and thalt;' 'Coming months were ’ likely to «how a gradual and probably irregular improvement. The depression had •.already continued long enough to ■indicate that the high levels of production 'attained last year generated a more unsound commodity situation than appeared on the surface. The collapse of stock prices undoubtedly aggravated conditions to. some extent.

BUTTER STABILISATION SCHEME

Tile annual report of the Australian Stabilisation Committee, covering a statement of the receipts and disbursements of the butter stabilisation scheme for the year ended December 31, 1929, shows that during the period the export bounty* has been 4id per lb with a levy, of lfd per lb the pecuniary gain to dairy fanners having been of an extensive character. The receipts. for the period .including . brought forward amounted to £2,151,537. The amounts of bounty paid on butter exported, was £2,117,192. Administrative expenses amounted to £10,353, tout interest amounting to £7066 was received on money placed at fixed deposit. Disbursements amounted to £2,129,546 and the balance amounting to £21,990 lias been carried forward to meet any further claims for bounty on butter manufactured but net shipped prior to December 31st last. •

The report claims that the operation of the scheme has resulted in a greater confidence in the stability of the industry. Dairy farmers have been encouraged to devote greater attention to improvement of herds, conservation of fodder and fertilising of pastures. .Other primary producers have extended their operations to dairying, the result having been reflected in increased production in nil States. Those engaged in the industry- voluntarily subscribe the levy for the payment of tbe export bounty, thus enabling the terms of the agreement with the-manufacturers of butter to' be carried out. The Committee is confident that the continued support of . those in the industry is assured because any attempt to interfere with the scheme will be disastrous to dairy fanners throughout Australia.