King Country Chronicle. Tuesday, August 19, 1930. COST OF PRODUCTION.

King Country Chronicle, Volume XXIV, Issue 3192, 19 August 1930, Page 4

King Country Chronicle. Tuesday, August 19, 1930. COST OF PRODUCTION.

During the hearing of a case before the Arbitration Court at Wellington last week, Mr Justice Frazer said: “It is a question of enabling our own people to meet external competition on fair terms. We know that our foreign competitors are adopting the most up-to-date and economical methods of manufacture and if we do not follow their example we are only making our own difficulties greater and heading for the bankrupty court. ... On the other hand if we can cheapen our cost of production and so reduce the price of the finished article to our consumers we shall build up a bigger trade and -give more employment for an increased number of workers.” No one will question the fact that the true solution of the problems brought about by low values and unemployment can only be solved by lowering the price of production, but there are many phases of this matter which touches every setion of the community. While one of these involves the revision of wages and hours of work there is also the question of values in other directions. Land values in this Dominion, in both town and rural districts, arc altogether too high, and before stability can be assured this inflated value throughout the country must come down. So far as farming lands are concerned there has been some deflation during the last few years, but even now these values are on too high a scale. It is contended by the mortgagees—and there are few farms in the Dominion, large or small, that do not carry a mortgage—that they advanced the money on these properties, and that they have a right to recover that money. Legally they have right on their side, but if sacrifices have to be made in the general readjustment of our economic position, rendered necessary by the world-wide drop in prices, it is unfair to ask the workers and the primary producers to bear the whole of the burden. While lower wages and better service might help in the general stabilisation of the country, more than this is necessary before it can be said that the Dominion is in a position to successfully compete with other countries in its primary products. If a mistake has been made by farmers in paying too big a price for their lands, the same mistake has been made by lending institutions and investors who advanced the maximum amount on inflated valuations. Where a farmer has a substantial equity in his hold-

ing and is able to cai*ry on with lower values for his produce, he will have to cut down his own valuations and bear the loss himself. When there is no such equity, however, and a man is just holding his own under a heavy mortgage, the only hope for him is some relief in the way of a reduction of his liability. It is unfair—and even impossible—to make the workers take over the whole responsibility of stabilising the economic position. Capital must take over some of this responsibility. If the workers realise that capital is willing to help in this way, it would do much to draw the two sections together and co-operate in the general rehabilitation of the Dominion’s financial position. Even in the cities and towns land valuations are too high. These high valuations have been, brought about by speculation, in the same way as in the case of rural lands. It is this speculation which is largely responsible for the present depression in business circles, and the penalty of overoptimism during the boom period has now to be paid. There is no need for pessimism for the future provided there is a whole-hearted desire on the part of every section of the community to co-operate one with another in stabilising conditions of trade. With Labour and Capital pulling one against the other, however, the position will go from bad to worse. For the last three decades Capital and Labour have been wrangling and fighting. Labour has won in so far as the rights of the workers are concerned. Having gained those rights it is time that Labour cried a truce, but Capital must go a long way before it can be said that it has met Labour halfway in a whole-hearted attempt to work in the interests of the country for the mutual benefit of both sections. If Labour is to cut its losses by lower wages and longer hours, Cauital is surely called upon to make some sacrifice.