MONEY AND BUSINESS AFFAIRS.

Manawatu Standard, Volume LVII, Issue 275, 20 October 1937, Page 5

MONEY AND BUSINESS AFFAIRS.

MONETARY SITUATION. (By “H.J.K.”) , Tile monetary situation in the Dominion is quite satisfactory at the moment, but there are factors at work that may ultimately cause inconvenience. The rate of expenditure on private account continues on a high scale, but owing to the rising cost of commodities, the expenditure does not bring in any more goods than previously. But wo have yet to feel the effects of the proposed expenditure by the Goverment. The amount to be spent is large, and as the volume of expenditure increases commodity prices must rise, for money in relation to commodities would be plentiful and therefore more money will be given for commodities; in other words the cost of living must advance. The export season that has just commenced should prove satisfactory as far as volume is concerned, but whether the returns to producers will be quite as good as in the past remains to be seen. The standard of living in the Dominion will always be regulated by the volume and value of our exports. It is, therefore, obvious that any hindrance or impediment to the. full flow of exports is detrimental to the whole community. The attitude adopted by the watersiders is shortsighted and against the interests of the community. The attack appears to bo on the shipowners who are after all common carriers, and the servants of the public. They may, as the result of the tactics of the watersiders, suffer losses, but they would be justified in passing them on to shippers. The shipping companies threaten to raise freights, and they may have'' to do so in self-defence. The extra charges would fall upon the great body of producers, whose costs are high enough already. Farmers cannot pass on such charges and must themselves bear them. This causes restriction of their spending power, which is soon felt by the whole of the people. Troubles on the waterfront seem to be continuous, and politicians have not yet been able to devise a method which, will ensure steady operations in loading and unloading vessels. In Australia, where the waterfront has been a source of trouble for a long time, the Government seem to have overcome the difficulty by instituting a system of licenses. It may be advisable to take similar action here; at all events, it is important in the public interest that there should _be no delays or hindrances of any kind to the free outward movement of our primary products. The sale of these products constitutes the sole source of our national income. The boot and shoe manufacturers are feeling the effect of high costs and importations. When wages and salaries were raised stocks in the hands of retailers were normal. The increased wages caused a demand for fbotwear as for other commodities in excess of normal, and orders to local factories could not be executed quickly enough. The local factories worked at high pressure, but retailers could not wait, and increased their imports. Now they find that imported footwear can be sold at, or lower than the local products, and are therefore expanding imports. Thus the local factories are losing trade. They cannot compete Irecause their costs are rigid, and not reducible. From the statement made by the Prime Mjnister the Government is conferring with,.the British Government apparently with the view of varying the tariff; that is to say. the tariff cannot be altered without Britain’s consent because of thfi existing trade agreement. Britain may consent, but should she forgo some of her trade merely to help New Zealand.to maintain a!high and uneconomic level of wages ? This seems to be about the worst time to approach the British Government, because in the new session of Parliament which opens to-mor-row. the question of a levy on dairy produce is certain to come before the Imperial Parliament. Such a levy would have to be borne ultimately by the taxpayers of the country. With every advance in the living cost, the tendency is for the standard of living to be affected, for it is impossible to make a pound go as far as twenty-five shillings. ' Economists always differentiate between money wages and real wages. The former are the pound notes that the worker puts into his pocket at the end of a weeks work, and the real wages are the purchasing power of the pound. Forty years ago commodities were cheap, because wages and salaries were low, but the standard of living was just as good then as now. What is troubling now is the desire for sport, for-pleasure, and so forth. It would be both interesting. and instructive if statistics could be compiled showing the average weekly expenditure on the necessaries of life on the one hand and on the luxuries of life on the other.