THE OTAGO DAILY TIMES FRIDAY, MARCH 7', 1013. THE BALANCE OF.TRADE.

Otago Daily Times, Issue 15706, 7 March 1913, Page 4

THE OTAGO DAILY TIMES FRIDAY, MARCH 7', 1013. THE BALANCE OF.TRADE.

Tub discussion at the sitting of the Dominions Royal Commission at Wellington on Wednesday concerning the indebtedness of New Zealand, considered in relation to the external trade of the country, touched a question of distinct interest. Mr Mabin, president of the Wellington Chamber of Commerce, put the position very bluntly before the Commissioners when he indicated, on the evidence of the iigures, t-liafc the country is not paying its way. The point is that for a year or two past the exports from New Zealand have rot exceeded the imports into the country to an extent.that covers the sum which has to be„ found annually to meet the interest 011 the external indebtedness, national, municipal, and private, of the dominion. Mr Mabin assumes that the interest bill may be approximately said to be £5,000,000 a year. This is probably an over-statement of the case. But even if the interest charge does not amount to more than £4,500,000, the balance of trade is not in favour of the dominion to the degree neccfisary to provide for the payment of this sum. Tlio trade returns fluctuate in a remarkable manner, bo much m that a year in which the excess of exports over imports is large enough' to admit of the payment of the charge upon, the indebted-

ne.-s of the.country may be followed by a year in which there may bo no appreciable excess of exports at, all or, as in ISOB, the imports may actually -be larger than the exports. For this reason it is probably undesirable -that- the returns for any ono year should be considered without reference to the returns for other years. But even when this is done it is apparent that for some few years past the country has not paid out of it-s exports the amount of the interest charge. The following table, which shows the value of the imports and exports (specie being excluded in each instance) for a series of five years, will make this plain: — Imports. Exports. 1807 £16,539,707 £20,061.641 1903 17.247.162 16,075,205 1903 14.617.462 19,636,151 1910 16.748,223 22,152,475 1911 18,732,608 18,980,185

Hie net excess of exports over imports in these five years was or an average of only a little over £2,600,000 per annum—less by a very considerable amount than sufficient to meet the interest bill. The figures for last yeaT, though they were considerably more favourable than those for 1911, showed that the excess of exports over imports was not eqnal to a million sterling.. In these circumstances it is evident that the country is not paying the interest on its indebtedness out of the goods it exports. To Sir Edgar Vincent it seemed extraordinary that the returns should fluctuate so much as they have done. The explanation lies to a large extent, of course, in.the variability of the market for the products of the country. The value .of the export of wool in 1908, for example, was Jess by t\yo and a-quarter millions than in 1907, although the volume of the eiport was practically the same in each year. That it is highly important that New Zealand should increase her exports to the utmost of her ability was recognised by members of the Commission, and it is with the vie\V to the achievement of this object that the need for the settlement of the unoccupied lands of the dominion is so generally realised. Concurrently with this, however, it would be a prudent policy that would place some check upon importation. Unfortunately, as a consequence of the almost unbroken prosperity -which the dominion • has enjoyed for many years, or has seemed to enjoy—for it is hard to say whether a system of lavish borrowing has not caused the measure of prosperity to appear to be even greater than it has been—a spirit of extravagance has taken possession of tne community and has manifested itself, as the olwirman of the Auckland Chamber of Commerce pointed out, .a few days ago, in the expenditure of large sums of money upon imported luxuries. While it should be the aim of the dominion to increase its exports, a curtailment of its imports would materially contribute towards that readjustment of its finance which is really necessary. It is to be observed at the same time that some of the deductions that were drawn by members of the Dominions Commission from Mr Mabin's statements are not justified by the circumstances of the case. We need not demur to Sir.Rider Haggard's interpretation of the trade figures as meaning that " the position is not sound," but Mr Lorimer's assumption that the country is not solvent is one which certainly calls for some protest. T.he mere fact that a country which is in process of development may, in a colloquial sense, be "not paying its way" for a year or two does not by any means imply that it is not solvent. A country's solvency is, to be tested surely by reference to its assets and its resources, and when the members of the Dominions Commission have had the time to consider what these really are they will' not be led by a temporary trade symptom of an unfavourable kind into the belief that the public creditor has any cause for anxiety or that the dominion does not offer excellent security for the investment of capital. Mr Lorimer and his colleagues will no doubt be convinced before t.hev leave New Zealand that the country is not only perfectly solvent but that her prospects are exceptionally bright.

THE SHORTAGE OP FARM LABOUR. The evidence given by Mr J. D. Hall before the Dominions Royal Commission as representative of the Canterbury Agricultural and Pastoral Association presents points of interest which the farming community will doubtless appreciate. His reference to the shortage of labour in the country merits particular attention. Mr Hall has placed his finger upon what is undoubtedly one of the main causes of this shortage. The monotony, of country life unquestionably tends to drive labour into the citie3. This circumstance is one at which nobody need be astonished. Mr Hall has suggested that, public officials, specially trained, should be appointed to organise useful recreations for t.he instruction and amusementi of the people in the country with the design of making their lives more attractive. ' It is impossible to suppose that private individuals can create conditions which will involve an abolition of the "grcyncss" that was I correctly enough said by Mr Hall to be characteristic of country life in general. Nor is it easy to see how, in districts where population is widely scattered, the State can do anything really effective to increase the'attractions accessible to rural workers. The encouragement of recreation would none the less he a step towards producing a spirit of greater contentment with country life on the part of young, active men who have a natural yearning for a congenial atmosphere in which to spend their leisure, and in their own interests their employers would do well to bear this in mind. Probably, however— and this is a point which Mr Hall duly emphasised—it is the nature of tho accommodation provided that causes a chronic shortage of labour on many farms. The employers should readily see that it is a short-sighted policy on their part which condemns those who work for them to dwell in quarters that contain'llo suitr able provision for, the comfort of the occupants. Small farmers can hardly bo expected to provide cottage 'accommodation for their employees, but on farms of moderate extent it would be entirely in the interest of the settlors, mcst of whom are in prosperous circumstances, if they were to supply married couples with suitable dwellings, 011 the easiest of terms, where they might bring up their families. The stipulation of which unfortunately some-, thing has been heard, that married couples seeking form situations should have " 110 encumbrances," . ought to be completely abandoned. What is desirable and necessary, in the interests of the dominion as a, whole as well as in the interests of the farmers who complain of the shortage of labour, is that the employees on the farms of New Zealand should be attached to the soil, and that they should he provided with homes for themselves and their children until, as their circumstances improve, they may be enabled to secure farms of their own. Sucli an arrangement would offer the most

practical remedy against the difficulty of securing labour in many rural districts, and against the less which these districts are always sustaining in the drift o£ their young people to the centres of population. The State itself might advantageously extend its recognition to a plan of this kind. It is satisfactory, therefore, to know that there seems some prospect that the desire of the Government to provide farm labourers with small holdings, thus inducing more labourers to go into the country districts and giving them a chance to become "independent settlers, will be expressed in a practical form. The Farmers' Union in the Auckland district has evolved a scheme, which it has brought under the notice of t.he Labour Department and the chairman of the Land Purchase Board, for the setting aside by the Government, under the system of the purchase of lands for settlement, of Email holdings of from five to thirty acres, with suitable cottages thereon, in districts that require labour, and for the workers upon the fulfilment of certain conditions being given the opportunity of occupation with the right of purchase. The scheme seems to have favourably impressed the departmental representatives with whom it has been discussed, and probably the inquiries which the Farmers' Union .has undertaken to institute, with a view to supplying the Government with specific information in relation to several points of importance, will show that there is no serious difficulty in the way of the adoption of the proposals. These assuredly go in the Tight direction.