OUR EXPORT TRADE

Manawatu Standard, Volume LIII, Issue 243, 11 September 1933, Page 4

OUR EXPORT TRADE

IMPORTANCE TO DOMINION. MR COATES’S~STATEMENT. CHRISTCHURCH, Sept. 10. The relationship between iNew Zealand’s export trade and the general economic life of the Dominion was stressed by the acting-Prime Minister, Rt. Hon. J. G. Coates, when discussing the plight of the primary producers in the course of an address at Opawa last evening. Mr Coates said it could not bo over-emphasised that the prosperity of New Zealand depended on good prices for its products in overseas markets. In the past prosperity and depression in this country had been reflections of price changes in export products. Mr Coates also showed what the advance in the exchange had meant to tire Dominion.

“It has often been mentioned, and it cannot too often bo stressed,” said Mr Coates, “that New Zealand exports more per head of population than does any other country in the world. People know this is a fact, but they .do not realise its implications. It means that if the export price falls, the local price falls also ; it means that not only has the net return fallen with 40 per cent of our production—the amount exported—but also that the return from local production has fallen also. . “If the price of primary products falls then the primary producers have a much less claim to wealth. That means that we cannot exchange "these claims for as many imports as befoie, unless the price of imports has also fallen. This is New Zealand’s loss. I repent that when farming is prosperous New Zealand is prosperous. When farm returns do not cover costs then the industry and trade of New Zealand languish.” Mr Coat os said that a comparison by the Government Statistician between July. 1914, and May, 1933, showed retail prices (all groups), 27 per cent, higher; wage "rates (March), 37 per cent, higher; farm costs, 25 per cent, higher; general export prices (including timber and gold), 26 per cent, lower; export prices of butter, cheese, meat, wool, 29 per cent, lower. These figures put the position of the New Zealand primary producer in a nutshell.

Farm costs were 20 per cent, higher than in 1914, despite reductions of several kinds, while the return to the farmer was 29 per cent, below that of 1914. Tlia.t was the gap that the Coalition Government had endeavoured to close, and had materially succeeded in making the position far better than it would have been if the Government had not made various legislative adjustments. The following was an illustration of wlrat price changes between 1928 and 1932 had meant to New Zealand. Through falls in price levels since 1928 New Zealand producers had lost on their exports alone £67,200,000, made up as follows (calendar years): —1929, £2.300.000; 1930. £13.700.000; 1931, £24,000.000; 1932. £27,200.000. National income over the last four years had dropped by £150,000,000 (in round figures).

FALL BEYOND CONTROL

“No further explanation is needed for the fall in Government revenue and the present extensive unemployment,” said Mr Coates. “The catastrophic fall in export prices was beyond the control nf New Zealand, for any regulation of supplies that New Zealand might undertake would be offset by increases from other countries.” The action taken by the Government

to bring about an increase in tire rate of exchange was defended by Mr Coates. He said that events had proved the correctness of the judgment of the Government. Without the exchange increase those engaged in primary industry would have been flat on their backs. Mr Coates gave c.n illustration of the effect of changing monetary standards, comparing tlie New Zealand currency values with those of sterling and of gold. It had, he explained, to be remembered that tlie price of gold changed from day to day. The export value of Now’ Zealand produce for the seven mouths ending July 31, 1933, instead of being £26,000,000 in New Zealand currency, would have been - £21,000,000 in sterling, or £14,000,000 (approximately) in gold. It would be seen that tiie Government's policy lmd increased export values. Compared with sterling values they had been increased in •seven months by £5,300,000, because ,of the exchange depreciation ; this has gone to the primary-producing industry.

The following illustration was somewhat nearer home. He would show from the Government Statistician’s figures (the ones for gold were his own) how tlie returns to the individual farmer had been affected. On butter the latest available figures showed that the return to tlie producer in New Zealand currency was B£d per ll>. In sterling this would be 7d and in gold 4jd. Similarly with lamb (first quality under 3611)—figures for May of this year), the return to the producer per lb in New Zealand currency was 4RI; in sterling this was 3d; in gold it would be 2d.

“For the same reason as England went off the gold standard, New Zealand depredated her currency on tli'e sterling standard,” said Mr Coates. “In view of present costs, there can be no question which is the more preferable standard to be on. Primary production is the economic life-blood of New Zealand, and, if this is stagnant, the country cannot survive.”