WELLINGTON NEWS

Hokitika Guardian, 25 October 1930, Page 2

WELLINGTON NEWS

RECOVERY PREDICTED. (Special Correspondent). WELLINGTON, October 24. There is. no doubt that a few days ago there appeared to be a general improvement in commodity, values, for, lead, spelter copper, cotton, copra, jute, butter, cheese, and wheat showed some slight improvement, and : this seemed to..justify the predictions of some leading men in Britain and the United States that commodity values had touched bottom. It is quite a safe prediction to. say that the depression will!pass for that,is inevitable, because depression is not a permanent phenomenon any ’more than 'is prosperity. My • ; . !

A long continuance of either would be ruinous to humanity. . It seems that in a period of prosperity excess and extravagance become the rule, and this results in depression. The depression will pass in time, but it will be some time—a long time—for in the opinion of some authorities N.Z. has not yet felt the. full effects of the depression. That by the way. The slight improvement that has taken place in cornmodity values may not mean anything for “one. swallow does not make a summer,’/( On the other hand there is an equally/ true maxim which ,says “straws;,indicate, the direction of the wind,” anffi the slight improvement in values mnyffie the direct indication of a favourable turn of the wheel of fortune.'■fHV,vUyht:!.b,j; . ':/ r.J. Even if this is'the correct reading cf the improvement in values it would be well to bear':iii'mind that: during'thfi past twelve months the confidence of the business men throughout the world has been shattered, and before there can be any real, .recovery, confidence must be restored. This lack of confidence cannot last for ever and some group of business men will discern the time' when it will be safe to look for business expansion and regulate their operations accordingly and so set an example, that others will soon fallow. Prices must show steadiness that is there must he less of the fluctuations that have been so disturbing in recent months. That steadiness in prices must continue for: a'considerable time before business nif)pTwill realise ; that the danger of falling; IpfjeesHjhhs 1 ; passed - A much morq .intjeregtingj Ija'nff jsigh-' ificant featii.^i tif Tlife present' siriiiiiion is the repoitf|tlia.t the Uiiited treasury and Bankingj lea'ders are a draft plan fM;;# possible iti/aratorium on the allied the U.S. So far as it can be, seen Gesrmany, will need the siielter.,pf a moratorium,t and perhaps, some/pjkthe smaller European countries that aVe indebted to the U.S., but Britain and , France, and possibly Belgium will continue to cq>nply with their obligations. following the war it was suggested by Britain ; that if the U.S. would write off the debt incurred by Britain on behalf of her allies, she would write .off atf.equiv--alent amount of debt owing to her by the allies, but AmericaTsMrled at this, and that ended it. „ - : ■ \ }/ ,

It was held by many ..eminent men on both sides'of that a revision downwards of the war debts, sooner of later Shis, inevitable, • for owing to the fiscal‘policy of the TJ.S. her debtors were aShopeless position. The amounts duetto the JJ.S. by way of interest and &inldn^; ?! ffitnd_ on war debt is a very this can only be paid by the debtors by exports. They can send, goods to America, or to other countries trading with America, and thus find the withdrawal to pay their debts. The U.S. Congress in its wisdom has raised an already high tariff a great deal ■higher, which almost prohibits imports into the country. The debtors of America ■ cannot pay in goods .to. the full extent of their debts, only small-small extent, must, he paid ini gold, wln : ®' ; ''is h’ai)4ady‘ very scarce

The debtors have to sell more goods • somehow,-bind somewhere to find the money payable to the U.S, and are sacrificing goods for "the, purpose. They are furthermore buying; fis little as possible from the U.S., and Uncle Sam is finding his overseas trade contracting. The U.S.A. Budget is expected to show a deficit of about £40,(XX),000, and the cry of the unemployed there is very loud. As a matter of fact the United States is suffering from the depression that she has been instrumental in causing. If she would Mower her tariff, and lend more freely of her gold to the impoverished nations who need the metal for credit structure, the prosperity of the world 'will, soon , return. The, war debt. problem will loom very large presently.