INSULATING NEW ZEALAND

New Zealand Herald, Volume LXXV, Issue 22988, 16 March 1938, Page 17

INSULATING NEW ZEALAND

Sir, —Even if import prices remained unchanged when our export prices had fallen to half wo should still have to double the volume of goods we exported to meet our external interest charges. ]f, however, Mr. S. H> Drorngoole will look up the facts he will find that between 1928 and 1932 our export prices fell by 47 per cent, while during tjie same period our import prices fell by only 3.7 per cent. Thus our exports lost nearly half their power to purchase imports and Mr. Dromgoole's assumption that our exports must always have the same purchasing power has simply no relation to facts. The figures given on page 832 of this year's Year Book show in fact that, owing to the fall in the purchasing power of our exports, the volume of goods available for consumption in the Dominion fell by 33.9 per cent between 1930 and 1933. Restriction of credit mid wages cuts no more caused these losses than they caused our recent floods. No wages cut was made till May, 1931, and by 1931 our export returns had fallen by £2P,000,00Q. The measures taken by the lato Government to spread the vast loss that had fallen on tho Dominion wore only taken when farmers wero losing about £20,000,000 a year on tho local and export markets, while other classes were gaining whole millions through the reduced prices of farm produce. To say that the just spreading of tho loss caused the degression is like saying that the Napier earthquake was caused by the relief measures taken by the Governmeiib--'measures that were Intended to spread over the whole Do minion the ruinous losses that had fallen on a section of the people. Manurewa. J_. Johnstone,