New Zealand and the War

Manawatu Times, Volume 64, Issue 279, 25 November 1939, Page 8

New Zealand and the War

CONDITIONS REVIEWED New Zealand’s war organisation is taking shape with commendable rapid-_ ity, Aloreover, our economic assistance* to Great Britain should prove much stronger now than in 1914-18. These were tho conclusions reached in a review of economic conditions in New Zealand by Air. R. W. Gillespie, president of the Bank of New South Wales, at the general meeting of shareholders in Svdncy yesterday. For our policy of exchange control, he did not show the same enthusiasm, reminding his audience that New Zealand had the “doubtful privilege” of being the first member of the British Commonwealth to adopt exchange restrictions in so rigid a form. ‘‘ At present when war noeds may require the control and diversion of resources to meet tho essential requirements of tho Allies, some usefulness may be found in exchange and import control; but it is desirable that eventual relaxation o t the restrictions should be kept in view. ’ ’ Export Control. There is some danger, added the Bank’s president, that export control, associated as it is with the general policy of fostering secondary industry ‘‘will result in industrial expansion on a basis of costs and prices which will undermine the profitability of agricultural and pastoral pursuits.” At the moment, however, seasonal conditions, following a severe winter, are improving and satisfactory pastoral and agricultural production can reasonably be expected. This forecast is all the more welcome because of the decline in rural output last season. Owing to unfavourable climatic conditions, dairy production fell by 13 per cent, during 1938-39, and there would probably be a substantial deficit under the guaranteed price scheme. Total export income fell by 6 per cent, and there was a markedly unfavourable movement in tho balance of payments. Conditions in Australia. Mr. Gillespie also discussed conditions in Australia. He suggested that Australia was entering the war with a strongly organised economy and that planning in the face of future Uncertainties was made easier by Britain ’3 arrangements to purchase commodities at a fixed price. During 1938-39 the gold industry had been helped by the high price of gold, and gold displaced wheat as Australia’s second most valuable export. Australia’s most important industry, wool growing, enjoyed a fair season. Buyers had been encouraged by low prices which probably made less profitable the substitution of artificial fibres. Since the depression Australian secondary industry has developed rapidly. Between 1931-32 and 1937-38 the number of men employed in factories increased 66 per cent. ‘‘The cucccssful manufacture of aeroplanes in Australia,’’ said the speaker, “is not only an important contribution to defence, but marks a great stride forward in Australian engineering progress.”