The Northern Advocate Daily “NORTHLAND FIRST” THURSDAY, JANUARY 26, 1939. Mr. Nash Explains

Northern Advocate, 26 January 1939, Page 6

The Northern Advocate Daily “NORTHLAND FIRST”

THURSDAY, JANUARY 26, 1939. Mr. Nash Explains

Registered for transmission through the post as a Newspaper

IN setting forth the ease for import control, the Hon. Mr Nash has,.as usual, given a lucid and informative survey of the situs* tipiij but Ins statement that he “regards it as a privilege to let importers know exactly what was in the Government’s mind/’ will be received with a certain amount of pardonable scepticism, in view of the fact that up till yesterday, although it was, several weeks since" the introduction of the licensing system, they had been given no i information other than a general outline of the procedure’they, would henceforth have to follow. Even nOAV they have not been told much. detailed points which, have been the cause of much perplexity and vexation, but a good deal more was no doubt elicited today during-’the cross examination to which Mr Nash agreed to submit himself. # Such information,; however, will perhaps not he really helpful, for Mr Nash’s survey of the financial position reveals that some contraction in overseas expenditure was quite inevitable. ; This means that importers, and perhaps many other businessmen, must resign themselves to a period of diminished business, and, in the circumstances, it will probably yield small consolation to importers to receive Mr Nash’s assurance that “he will do everything humanly possible to remove hardship, injustice, or anomalies that may

In tracing the Government’s reasons for resorting to import control, instead of some alternative method of correcting the drain in sterling funds, Mr Nash claims that the old procedure, which, by restriction of bank overdrafts, caused curtailment of expenditure and a subsequent reduction in imports, had the disadvantage of causing a reduction in wages, employment and spending power. It has yet to he seen, however, whether these highly undesirable consequences will not, in actual fact, result from the remedy the Government has now chosen. 4 , • ■ , So far, the community generally has not felt the impact of import restrictions, but if, as a result, there is a contraction in business throughout the community, it is hard to see how a reduction in spending power, and Consequent unemployment, can he avoided.

The fact is that, while under the old system natural .economic laws were allowed to operate, and adjustments, except in the 'period of 1931-84 when a world depression dominated the situation, were brought about without causing general inconvenience or a .dislocation’.of; business and employment, today those forces have been prevented from operating.

With.tremendous Government expenditure on Public Works schemes, arid the necessity of maintaining wages at a high level to 'meet the rise in living costs, prosperity in New, Zealand has been maintained during the past 12 months at an artificial and fictitious level. Eventually the true position had to disclose itself, and the Government can consider itself fortunate that the present “showdown” did not come until after the election.

Last year, Mr. Nash now admits, export values declined by £7,500,000. Has that decline been arrested? The falling off in production, and rbcent fluctuation in prices, on the" overseas market, give some reason for misgivings on this point. In the ordinary course of things, when the income of an individual is reduced, he “tightens his belt,” but this course does not commend itself to Mr. Savage and his colleagues. They, seek, instead, some magic formula which will allow the Dominion to have just as much fun on a small income as on a large one. Part of the formula is to make things for ourselves, lienee the Government’s sudden interest v in local industries. • But the practical difficulties are many, and Mr, Nash, as time goes on, probably has an increasing awareness of the magnitude of his task.

‘‘Only during' the last six weeks,” he says, “has the Government begun to see the ramifications of credit and currency. Thus the confusion attendant on import licensing has not been without its educational value.”