THE OTAGO DAILY TIMES THURSDAY, SEPTEMBER 23, 1920. THE OUTLOOK AT HOME.

Otago Daily Times, Issue 18048, 23 September 1920, Page 4

THE OTAGO DAILY TIMES THURSDAY, SEPTEMBER 23, 1920. THE OUTLOOK AT HOME.

While the cablegrams indicate that the coal strike may yet bo averted, they also bring further confirmation of the economic difficulties which aro rapidly approaching. The talk of slump has within it an element of novelty, in view of the over-abundant supply of money available, and until it descends with all its far-reaching consequences the possibility of such a calamity as a real trade slump will be scouted. Thousands of working men and.women havo handled moro money than they ever expected to have, and much of this has been wasted. Multitudes of middle-class people havo become wealthy without much personal effort, simply because of a lucky deal during the war. The Government has wasted millions of the taxpayers' money, and has just increased taxation. Every class, as a class, has been wofully extravagant,. and the workers' position has been changed from one of penury and overwork to one of large recompense for his labour. By following a short-sighted policy of limiting their output they have increased the cost of living, while somu sections liavo also further stimulated rising prices byv the encouragement of frequent strikes. It was a great-opportunity for \yse ana constructive building, and though some of tho workers' leaders endeavoured to look ahead and prepare for the proverbial rainy day, the majority believed that tho sufficiency of the day was enough. The folly of wasteful living and time-killing was indulged in b> alt classes, but the direst effects following a slump in trade most surely and quickly overtake the wage-earning section of the population. Already an army of unemployed is growing to dangerous proportions, and on top of such a disaster, there is more talk of strikes. Serious dislocations of industry can have no other effect than to aggravate the position and increase the severity of the depression. The latest cablegrams indicate that high costs of production, in part accountable by "slow timing" and reduced effort, have helped to cripple some of the industries. One expert, writing in a London paper prior to last mail, said that tho causes of shrinking trade were: (1) Exhaustion of European markets; (2) high working costs; (3) dear money; (4) "excessive taxation; (5) American competition; and (6) psychological causes. This authority poiuted out that industries which a few months ago were in the happy position of refusing orders, and in some cases cancelling orders, were now closing up.r Industrial expansion required cheap money just when money had become dear, and, added to this, tho spendthrift habits of the Government and the uncertainty of tho limits of national taxation further complicated the position of trade. I hen, again, a number of prospective* buyers have signified an intention of waiting until prices come down. The cost of raw material, combined with high wage rates, are tha chief factors it, keeping up tho price, but the immediately possible solution does not appear to be a reduction in wages, especially ii such a l eduction means a lower standard of living. "What appears more sensible is a substantial measure of increased effort in production, which would lowei prices without lowering wages. This would, of course, involve a cessation of spasmodic strikes and a repudiation of canny." The suggestion that wages should depend on a man's powers of production rather than on his power of striking is at once sensible ana logical. The immediate'prospect is depi essing, but it may be reasonably hoped that the very pointed warning which has been given in the occurrence of, the partial trade slump will convey a lesson of dire results to follow if a change in methods does not tnke place. Tho trade barometer is always most sensitive, it ought not to bo found impossible to make the necessary readjustments in order to stabilise industry. The leading minds in the nation nfhstered the difficulties arising out the war. They ought to be able to cope with the problems associated with reconstruction and peace.