SOUTH AFRICA

Manawatu Standard, Volume LV, Issue 43, 18 January 1935, Page 6

SOUTH AFRICA

The steady improvement in South Africa’s economic condition, noted more than a year ago, continues, and at the opening of the Union Parliament the other day gratification for this was expressed by the Governor-General, the Earl of Clarendon. The setback which agriculture received, however, in the way of depressed prices, and worst of all, a severe drought which resulted two seasons ago in wholesale failure of crops and enormous stock losses, has not been entirely overcome, and the aid which the State invoked for the relief of farm mortgagors requires to be continued. The bugbear of unemployment, which no country has escaped, is being coped with by State-aided schemes and further legislation involving this subject is contemplated. South Africa’s greatest asset has proved to be her enormous output of gold and the substantial rise wliich the price of that commodity has shown in recent times. lor a year or two when the gold price began to soar little or no notice was taken of this as an avenue for taxation by the State, but gradually the importance of it was borne home on the legislators and while other countries were seeking new devices for increasing their Exchequers South Africa had one presented to her as a golden opportunity. As a result of the country’s departure from the gold standard and the increased price of gold the profits of the mining companies grew enormously—it was estimated at one period that the total for 1933 would be more than double that for 1932 —£14,700,090 —and in the year,just past there has been every favourable tendency for a continuation of that condition oi prosperity. Faced with the necessity of imposing fresh taxation amounting to FT,700,001) on top of a Budget deficit of oyer £2,000,000, the Government imposed a tax on gold mining profits and this and other measures adopted have proved entirely successful —so much so that in the last Budget a substantial surplus was shown. The State’s view was that the additional profits from gold should not be regarded as necessarily belongingto the shareholders of the miningcompanies, and without going into the economic ethics of the subject it can be said that the movement in gold prices has proved a great windfall to the Union. At the price at which the precious metal is quoted today the country that has an abundance of it has a very comforting pillar upon which to lean. Upon how long that high price continues may depend the necessity for the Onion taking other steps to adjust its financial condition.