The New Zealand Times. TUESDAY, OCTOBER 16, 1923. PAST AND FUTURE

New Zealand Times, Volume L, Issue 11651, 16 October 1923, Page 4

The New Zealand Times. TUESDAY, OCTOBER 16, 1923. PAST AND FUTURE

Mr Massey, at San Francisco, spot© pleasantly of our past finance and hopefully of the future. The chief feature in his reference to the former was the recent remission of taxation. It impressed his audience, a gathering of business men, rvho could appreciate its full significance. To them, it would appear that New Zealand is a real “chip of the old block.’’ Only more so; for while, like the Mother Country of the Empire, fully meeting the groat war obligations, the Dominion, unlike Great Britain, has found it possible and feasible to reduce the taxation on which this financial result so largely depends. Mr Massey’s short review was, therefore, an advertisement of great value to the Dominion, which it presented as the one State in the world in the fortunate position of being able to meet the formidable burdens of the day, while actually reducing their pressure on the people. The American business mind will he quick to realise the exceptional extent and elasticity of the Dominion’s natural resources and the courageous industry of its selfreliant population. As to the last, Mr Massey did not leave the conclusion to the imagination of his hearers. On the contrary, he gave them some interesting details of the great industry of our people. The popular verdict here will probably find expression in the phrase, “That was the stuff to give them,” and he gave it in the right way, just telling off the heads, of the advantages secured—income tax reduction, land tax reduction ("half the tax knocked out’’), tea duty abolition. He added that he had staked his political career on this reduction, which, he felt, would lead to the prosperity of a people producing at the highest rate per head in the world. It was unnecessary to refer to anything like “a fly in the ointment” ; such, for example, as the widespread dissatisfaction over one aspect of the income tax reduction, because of its benefit to people who were in no need of relief. That point i 6, of course, without interest to the Americans, who cannot be expected to understand the political details of the small but prosperous State keeping the flag so honourably flying in remote islands of the great Pacific. To New Zealanders, of course, they are supremely interesting. Therefore, as the subject has come to the surface again, we take the opportunity to repair an injustice we unwittingly did in a recent article to the Liberal Party led by Mr Wilford in Parliament. That party was not responsible for this particular reduction, which we have called the “fly in the ointment.” On the contrary, it resisted it strenuously, making many attempts to, defeat its objects in many ways. The Parliamentary Liberals were on that occasion true to the Liberal principles and traditions.

Speaking of the future, Mr Massey was hopeful. He made it clear, after his reference to the finances, that New Zealand had turned the corner, and he may probably be regretting that tho figures giving the result of the halfyear ending September 30th last could not have been before him when he wns speaking in San Francisco. Had they been available they would have made definitely plainer the recovery he announced. Whether this pleasant state of things will continue is a matter for not too pleasant speculation. Thencontinuance, and the increase in the prosperity coming in their train, may very well be glanced at as probabilities by any speaker reviewing the position of this country during his travels abroad. This Mr Massey did, as ho was entitled to do. The possibilities, however, are not by any means certainties. Tho continuance of our latelyestablished prosperity, which we are now enjoying, depends on two factors These are the reconstruction of Huropean industry on the pre-war scale, and the economic results of the Imperial Economic Conference. These are, it can be more than discerned, alternatives. Of course, if both were certainties, recovery and a broader system of Imperial preference than now exists, tho prosperity of the Dominion would he greatly assured. But they are really alternatives. Both concern markets, and markets are the only basis on which our prosperity can continue. We have to consider these alternatives with some anxiety. There is in the matter of reconstruction, so far ns its chances are recorded from day to day in the fluctuations of tho mark, some sort of hope in tho steady progress towards victory of the new German Chancellor, Herr Stresenmnn. Fighting for return to natural economical bedrock, lie has defeated von Stinncs, the champion of capitalist reaction of the worst kind. If lie wins through, the reconstruction of Germany on sound lines—sound for all the world, the only possible soundness, for there is, ill fnet, only one soundness —German trading will be assured. And when Germany is stabilised, the rest of the uprooted world will follow. If he fails-—and we have to recognise that he has a formidable task before

him—the only course for the British Empire is to fall back on itself, and create within itself the markets which must take the place of those lost by the ruin of Europe. lie can only watch the progress of these alternatives. Yesterday we published a hopeful account of business restoration in England, which seems to imply that the new Chancellor may win through to victory in Germany. Leaving that prospect , uncertain as it is, of course, we consider the ideal of a self-con-tained Empire. At the outset we are confronted with the fierce, almost ferocious, onslaught of the British free-traders on the scheme of Imperial preference. Before this onslaught the oversea representatives at the Conference are, it is evident, discouraged. Thus it is evident, facing facts fairly, that both the alternatives on which the continuance ox our prosperity, relying on foreign markets, depends, are uncertain, both in rather disquieting degree. It behoves all interests in the Dominion to cultivate prudence, postponing all joyful hopes. To keep heading for progress is good, and a decision not to be altered. But we must be prepared for an adverse tarn of the wheel of Fortune. For the moment, we can rejoice in the stability shown by our finance. But that rejoicing must he tempered with a determination to hold all financial gains of our Treasury to meet any evil situation that may arise through failure of markets.