FINANCIAL TROUBLES.

New Zealand Herald, Volume LXVIII, Issue 20969, 4 September 1931, Page 10

FINANCIAL TROUBLES.

SEARCH FOR REMEDY. DAIRY INDUSTRY'S PROBLEMS BURDEN OF INTEREST RATES. WAGES CUTS AND TRADE. [by telegraph.—special reported.] "WELLINGTON. Thursday. As the panorama of evidence showing the serious financial state of New Zealand is laid daily before the special Economy Committee of Parliament it is proposed to sit longer hours in disposing of the final witnesses and concentrating almost uninterrupted attention upon the task of devising a plan for economic reconstruction. During the two sittings to-day the committee heard the views of the dairy industry, as represented by Mr. W. lorns, chairman of the Dairy Produce Board, and Mr. A. Morton, chairman of directors of the National Dairy Association. Mr. W. Goodfellow, managing director of the New Zealand Co-operative Dairy Company, will appear on Monday to give further information about the dairy industry. Among the chief representations made by to-day's witnesses is understood to be a recital of the difficulties under which dairy farmers are labouring on account of heavy overhead costs. Desperate endeavours aro reported to have been made to reduce farming costs and align them with the consistently low prices of produce. The most pressing burden of all was stated to be the relatively high rate of interest that is still being paid by farmers whose mortgage obligations "are making prospects for this season exceptionally black. The committee was urged, when considering remedial economic measures, to consider the question of reducing interest rates upon farm securities and easing the strain upon the , already harassed dairy producers. Effects ol Wages Outs.

The Prime Minister, Rt. Hon. G. W. Forbes, stated during the day, however, that the picture of the situation, as painted by the dairymen, although very black, was not as bad as that represented by the sheepowners* representatives before the committee last week.

During this week the questions of wage rates and arbitration awards have come under the notice of the committee. It is agreed by the retailers, who were heard a day or two ago, that further salary cuts would be extremely inadvisable because of the inevitable restriction of spending power among the workers, who are already embarrassed by the 10 per cent, cut imposed several months ago. The employers' representatives, too, are reported to have acknowledged the inadvisability of fnrther wage cuts, though strong advances were made for greater elasticity in Arbitration Court awards, allowing wages and working conditions in certain exceptional cases to be determined by the state of a specific industry at the moment and not by hard and fast formulae established by the Court. l v This suggestion did not meet with the full approval of the Labour members, who feared it would lead to undermining the standard of living established for the worker by the arbitration system. Commercial interests, generally speaking, expressed a desire that wage reduction should not be overdone because of the inevitable reaction through the retail and wholesale houses and around the vicious cycle into the coffers of the State. Suggestions which were made on behalf of the Associated Chambers of Commerce during the week for a reduction in the size of Parliament and general Parliamentary reform did not progress very far, chiefly because the case was ill-prepared and delivered orally, with the result that the Labour members, by close cross-question-ing, established a counter-barrage upon this important point. Further Financial Evidence. Further financial evidence was given this afternoon by Sir Henry Buckleton, general manager of the Bank of New Zealand, who, it is understood, was asked to explain certain aspects of the exchange problem as it affects the primary produce exporter from this country. To-morrow views of economists will be heard. Professors Murphy, Fisher, Belshaw and Tocker will give evidence, and this will be supplemented by Mr. D. 0. Williams, who has been making a special study of farming problems at Massey Agricultural College. It is hoped that all of these witnesses will be disposed of tomorrow. The Prime Minister is hopeful that out of* the evidence of these economists will be derived some key to the solution of our major problems. "The problems with which we are faced are fundamentally economic," he said this evening, "and professors of economics should be able to give some useful evidence bearing upon the state of the national finances." The House of Representatives is being adjourned to-morrow so the committee may devote its whole time to its task, and a sitting will also be held on Saturday morning and again on Monday morning and afternoon. By Tuesday the Prime Minister expects the evidence will have been completed and that with a few days of careful and studied deliberation a report will be ready for presentation to Parliament about a week later.