THE New Zealand Herald AND DAILY SOUTHERN CROSS. TUESDAY, JANUARY 3, 1922. THE PROMISE OF 1922.

New Zealand Herald, Volume LIX, Issue 17979, 3 January 1922, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. TUESDAY, JANUARY 3, 1922. THE PROMISE OF 1922.

Thh New Year in New Zealand opens on a note of cautious hope. Times have been difficult, they are still difficult, and they are likely to remain difficult for at least the first half of 1922. Yet there are substantial grounds for hoping that a year hence these difficulties will have passed into history, and that the economic progress of the Dominion will be all the more rapid for the temporary check. It is not amiss at this threshold of the year, when the spirit of holiday lures most of us to a few days' respite from daily toil, to reflect that the fundamentals of New Zealand's prosperity have been in no wise weakened by the calamities which have befallen the world. Misfortune has scratched the surface of our complacency, but it has done no irreparable injury to our credit, our productive capacity, or our powers of recuperation. Our natural advantages are so great that nothing less than the collapse of civilisation could make our case irretrievable. Our troubles, are, indeed, but the reaction from the disasters which have overtaken those less fortunately circumstanced. We know nothing of famine or even of impoverishment in the sense in which it is understood in Europe. The evenness of our climate, the fertility of our soil, and our wealth of water power remain with us as the fundamentals of our national wellbeing, and it would be sheer ingratitude if in a season of uncommon luxuriance of growth we should permit monetary conditions to blind us to the superb natural advantages which these fortunate islands enjoy. It would be folly if our New Year musings did not breed a resolution to exploit these advantages more fully than has been possible in the past. New Zealand was one of the last countries to feel the effects of the world-wide depression. It would therefore be over-sanguine to expect that we should bo the first to recover. It is, however, entirely reasonable to draw comfort from the revival which is already taking place in other countries, the more especially as our adversities are external rather than internal. It is particularly important to us that the United Kingdom, our principal, in some lines our exclusive, customer, should be showing symptoms of economic convalescence. The purchasing capacity of the British people is a factor of the very greatest importance to New Zealand, a factor beside which even the accumulations of meat, wool, and butter are of small significance. Indeed, the accumulations, where not due to restraint of trade under a misguided food control policy, are due to the diminished purchasing capacity of the British people. The coal strike, with others of less intensity, and the dislocation of British trade by the war and still more by the impoverishment of European customers, are the factors which have most powerfully operated to reduce the demand for our products. In these days, when foreign trade is the barometer of the international sky, one must scan far horizons to estimate even local prospects, and it is because the international outlook is steadily improving that one has confidence that 1922 will be a better year for New Zealand than 1921. The'success of the Washington Conference will not only assist economic convalescence by relieving the world of the cost of Dreadnoughts, but in encouraging confidence and reviving hope it should prove a moral asset of very great value. What the disarmament resolutions are to the world in general the prospect of Irish peace :is to the British Commonwealth in particular, presaging the same relief from an overwhelming anxiety Mid the same freedom to concentrate on peaceful development. The economic reconstruction of Europe will now proceed more surely and more swiftly, and with it will come a keener demand for the foodstuffs and raw materials New Zealand produces in such abundance. Indeed, we may gain a temporary advantage from the circumstance that European countries will recover more quickly than Siberia, our competitor in some exports, which has felt the paralysis of Bolshevism, and a permanent advantage from the circumstance that industrial countries must show a vast expansion of production if they are to pay their debts, while no commensurate expansion of agriculture is in sight*

But if the coming year is to fulfil its promise New Zealanders must show stronger qualities than patience in awaiting a revival of trade. Some of the factors in the present depression are beyond our control, others are well within it. The high level of taxation is an avoidable evil which everyone deplores and which can be perpetuated only at the risk of killing initiative and hampering the development of both primary and secondary industry. Private and public economy are both essential at this crisis. The limitations of the individual purse have long ago imposed private economy—the falling-off in totalisator investments at the holiday race meetings is one of many signs of this—but it is unfortunately necessary to repeat at the beginning of 1922 that public economy has scarcely yet begun. This is the weakest point in our national organisation. Taxation has become punitive and exhausting, and the first condition of economic recovery is that it should be reduced. Economy of a rigid order will make possible a very substantial reduction, but for a fuller measure of relief the Dominion is dependent upon the enlargement of its tax-bearing resources, upon the utilisation of more land, the production of more foodstuffs, and the reinforcement of its man power by immigration. Economy and development should be the political slogan for 1922. Neither is sufficient without the other, but in conjunction they offer relief from all our economic ills. If the Government and people of New Zealand have sufficient self-discipline to excise extravagance and waste, and sufficient courage to mobilise the natural resources of the country, the future will not be in doubt. When every allowance is made for present embarrassments, the position of the country is far sounder than it was 35 years ago. A previous generation, faced with the necessity for retrenchment, won for the Dominion many years of prosperity. The present generation must not give the historian occasion for saying that it did less.