Manawatu Daily Times Cause and Effect

Manawatu Times, Volume LV, Issue 7296, 5 August 1930, Page 6

Manawatu Daily Times Cause and Effect

Australia is paying a bitter price for her past economic sins, and New Zealand might do well to study cause and effect as illustrated in the sad example set by its nearest neighbour. Professor Giblin, of the Chair of Economis in the University of Melbourne, has been telling in simple language the facts of the economic situation that has. arisen in Australia, and showing how its problems can be solved.

He begins in the most elementary way by exploring the relation between wages and production, and the bearing of this on industry and employment in countries which, like Australia and New Zealand, necessarily depend upon unshelterable export's. The first fact is that if wages go up "faster than efficiency," the cost of the product must go up and prices be raised, so that the real value of wages is lowered. The second fact is that "higher wages in the sheltered industries . . . "mean lower wages in the unsheltered industries."

Because the sheltered (and the protected) industries in Australia have been paying high and higher wages, "the wheat "farmer for the last year or two has not been getting the basic "wage for his labour.” If sheltered wages go up, the cost can he passed on; but the passing on is not interminable. "In the “end all the increase in wages in sheltered industry is passed "on until it all falls on unsheltered industry. The amount that "so falls will be roughly the amount by which real wages on "sheltered industries were raised."

While production favoured by natural and other advantages may bear this more or less easily, production operating on a bare margin of profit can only be extinguished: “You get unemployment or poverty in the unsheltered industries; and "unemployment in the sheltered industries must follow in its “train. This unemployment you can see round you to-day.” Why we do not do without unsheltered industries and concentrate on the sheltered ones, is a rather innocent question. The general answer is that workers can get more in sheltered industries only because unsheltered industry stands the cost and therefore receives less.

Sheltered industries can only pass costs on and round, wages and prices constantly evening up at higher levels. But in the particular form that most concerns Austi’alia and New Zealand the answer is that both Dominions "must have a great “deal of unsheltered industry because we must have large "exports’’ : exports to pay for loans and to pay for imports, which we cannot do without and which nothing else will pay for. Now when organised wages have risen in prosperous times to what Professor Gibling calls the “upper limit”—the maximum which production can uphold—and of course other costs with them, then any considerable setback, such as a fall of prices, brings losses and a reduction of income which can be endured only “by sharing it all round.”’

To develop greater efficiency is, of course, to offset the loss, but gradually; and until that process is complete, unless there is a fall in wages to “share the loss all round,” there will be unemployment. In Australia, which has been living on more than it has earned, there can be no recovery without a fall in real wages. It must be understood that, “in general, the wage “that can be paid in unsheltered industry should set the limit “in sheltered industry also.” As the two exhibit greater disparity, econoniy is more and more dangerously dislocated; and the attempt to readjust it by bounty and tariff and other interfering aid only worsens ill consequence by postponing it. When production is embarrassed by excessive costs, there is only one cure for its distresses: a decrease in costs and prices, “passed “right through to the export and other unsheltered industries, so “that they can stand up. to the increasis# competition of other "countries,”

Twenty head of stock were impounded oil Palmerston North streets during July, returning in fees £1 12s 6d. The City ■ Council is inquiring into the necessity for public conveniences at Terrace End. To-morrow’s meet of the Manawatu Hunt is cancelled owing to two point to point steeplechases being held during the week. A. tender of £392 has been accepted by the Palmerston North City Council for tho erection of the pumping station in connection with tho artesian bore near tho hospital. Mr H. B. Free wrote to the City Council last evening asking for the provision of a lethal chamber for dogs and it was decided to provide one at the pit in Albert street. His Worship the Mayor of Poston, Mr M. E. Perreau, will tell the Citizens' Lunch Club what is to be expected of the port of Foxton. Mr M. A. Eliott, of the Wellington Harbour Board, presides. The Southbound Main Trunk express was 20 minutes behind schedule time yesterday morning when it arrived in Palmerston North, tho delay being caused by heavy weather during the run through the King Country. A lady visitor to tho Dannevirke public library, which owes its origin to Andrew Carnagie, writes to say that “tho selection and convenient classiiication of tho books and tho arrangements of the news room, give evidence of tho hidden hand of a genius in the management.” Yesterday marked the sixteenth anniversary of Britain’s entry into the Great War against Germany and her allies. The armistice was tabled in November, 1918, but it was not until August, 1921, that tho struggle was officially terminated by the ratifying of tho Peaco Treaty by the respective Governments. The abattoir return presented to the Palmerston North. City Council last night, showed that for last month cows slaughtered were only a few ahead of bullocks. Details were: —Stock slaughtered—Cows 214, heifers 35, bullocks 195, calves -15, sheep 1671, lambs 425, pigs 134. Stock condemned: Cows 21, sheep 5. Fees received £252 16s Bd.

In response to a request from a ratepayer, tho City Council recently instructed t’-j engineer (Mr J. R. Hughes) to report upon tho cost of reforming and tar sealing Albert street from Te Awe Awe to Iliaka Streets, a length of If chains. The street is a bus route and the engineer’s cost of tho work i? £350. The council decided to proceed with the work. After leaving Johnsonvllle on Sunday evening tho Northbound night limited express was delayed for a space the stoppage being called by startled passengers when the carriages were wobbling badly after a swift run through some winding cuttings. The wheels of tho front carriages wore subjected to examination—passengers having declared they felt a jolt and seen a showier of sparks from tho rear platform of tho second carriage. The inspection revealed nothing and the express proceeded without, further delay. The practice of drivers of carts driving over the grass plots which some residents go to great pains to keep, in front of their residences, was referred ■to by Cr. J .Hodgens at the City Council meeting last evening. He added that in certain streets whore these lawns were not kept, a similar practice was being adopted to save horseshoes, so ho had been informed. The result was a quagmire which residents were complaining about. As some of the oarteTS were reported to be in the city’s employ tho engineer was asked to look into the matter. In Cuba street, Palmerston North, between Bangitikei street and G-eorge street, there are twelve culverts on the south side only three of which can be used as cart entrances. On the north, side there are four entrances, one of which is not being used. In Coleman place there axe two crossings which do not serve any entrance. The City' Council instructed, tho engineer last evening to consult with the owners in regard to their removal as under the present registrations cars are not allowed to pork in front of culverts and these unused crossings are causing a waste of parking space.

The Wellington Rugby Union, in a communication to the Manawatu Union states that the match between the Manawhenua and Wellington representatives to be staged as the curtainraiser to the final test on Saturday will commence at ,12.30 p.m. To fulfil the engagement Palmerston North and northern members of the combined fifteen will be required to leave Palmerston North by the 6 a.m. train on the day of the match, Horowhenua members boarding the, train at Shannon at 6.35 a.m., and at Koputaroa at 6.40. While Foxfcon players will join the train at Levin at 6.55 a.m., Hui Mai and Otaki players will be picked up at Manakau at 7.10 a.m. owing to the iraia. not stomjiug at Otaki.