THE STATE OF TRADE.

Otago Daily Times, Issue 19204, 21 June 1924, Page 14

THE STATE OF TRADE.

MEAT COMPANIES’ DIFFICULTIES. THE OUTLOOK FOR STAPLE PRODUCTS. Speaking from the chair at the annual meeting of the Da:.k of New Zealand yesterday, Mr W. Watson sard: Producers of primary products here have, on the whole, experienced a fairly good year, though weather conditions were not altogether tavourable. The severe losses made by mercantile houses through o er-impcrtations in 1920 and 1921 are things of the past, business now being conducted at proiit, though heavy losses of capital have still to be made good. It is believed that retailers have not done so well as during the previous two or three years, despite the fact that extravagance is still rife. Stocks of goods on hand are said to be rather much in excess of roquirements. . . , , . r , The woollen manufacturing industry is feeling competition from abroad, consequently stocks are increasing and profits shrinking. Sawmillers and timber merchants have done very well, the demand for timber being heavy and continuous. That this country, with its abundant coalfields, should have found it necessary to import no less than £624,649 worth of coal from Australia last year is most disappointing. Unfortunately, the tactics of the coal miners in recent years have scared investors and money-lenders, and, consequently, little money is likely to be invested in coal-mining ventures. The majority of the meat freezing companies are in most unsatisfactory financial conditions. This is duo largely to there being far too many works, particularly in the North Island, to under-capitalisation, to inexperienced management, and to failure to build up reserves when times wore prosperous. Although in several instances shareholders have lost all the capital paid up, it must be borne in mind that far too often shareholders were paid by their companies inucli more for their live stock than it was worth. Depositors with those particular companies lost their money : guarantors to the banks have also had to pay up, and even the secured creditors have suffered considerable loss. Several other companies arc staggering on under loads ol debt, and it is d'dncult to see how they arc to'escape liquidation unless some satisfactory merger of interests can bo arranged. During the season just ended there has been strong competition from freezing companies and exporters for sheep and lambs at remunerative prices to the producer, and at the prices paid it must be a difficult matter for the purchasers to make profit. The steady increase in woo! values will help to some extent. The exceptionally dry season has been responsible for a large proportion of second-quality lambs reaching the freezing works. The market for beef shows -no improvement, and it is evident ' that our frozen beef cannot, at the present time, compete successfully with the dulled beef of the Argentine. It is gratifying to note the great recovery in wool prices which lias taken place during the last 12 months, with the demand far vyool still unsatisfied. Although all qualities are wanted, the most satisfactory feature is the strong demand for medium and coarse wools as these comprise the bulk of the New Zealand clip. Another gratifying feature is- the great expansion in the export of wool to the East, which, during the post year, amounted to approximately 200,000 bales from Australia, and New Zealand as compared with, say, 20,(XX) bales in 1914. Compared with values ruling 12 months ago, crossbred wools show an increase in value of approximately 50 per cent, to 90 per cent., merinos and halfbreds 25 per cent, to 40 per cent. The position of the dairy produce market is causing some concern. Although, owing to weather conditions, the quantity exported so fur this season is not as great as last, heavy shipments have reached England during the list few months and have met with a poor demand at reduced prices. Mainly owing to the increasing quantities reaching the English market from other countries, it is probable that dairy farmers may have to accept lower prices for their produce in the future, and this, of course, will be reflected in land values in this dominion. The Dairy Produce Control Board recently formed is expected to improve marketing conditions, or, at any rate, to see that the interests of dairy farmers axe protected to the fullest extent possible. Owing to the serious shortage in the wheat yield of the dominion the Government lias arranged to make largo purchases in Australia. Much aa it is to be regretted I that sufficient wheat is not produced in this country to meet our requirements, it cannot be expected that our farmers should grow wheat whilst their land can be put to more profitable use. 1 his wheat purchase lias intensified the acutoneas of the exchange position between the dominion and Australia. Country lands have not changed hands to any great extent, vendors' ideas of value still being much in excess of these of prospective buyers. Unimproved or partiallyimproved bush lands are not easily disposed of. not only because of the present excessive cost of improvements, bat also because of did 1c Itics of l nancing such propositions, lenders being extremely shy of that class ol security.

In several districts in the North Island, improved bush country, unless well handled, has a pronounced tendency to develop rubbishy growth, and experience has shown that, apart from that disability, th<* quality of (ho pasture deteriorated a few years after it has first been sown. Where the plough can be used, that diffic Ity ran be overcome by its esc, and by liberal manuring. Many deserving and industrio'.'e settlers who took up rough bush land without possessing the necessary capital or credit to complete the required improvements and to adequately stock their properties have born obliged to abandon their holdings after years of battling against adverse conditions. There is no question that considerable areas of land thrown open years ago by the Government for settlement under various leasehold tenures on what were at the time considered reasonable terms, should never have been grassed. In view of the greatly increased cost of improvements. it would bo but fair that there should be not only a rouision of the rentals of such properties, h”t also that an occupier should bo allowed to relinquish any unimproved portion of the property, provided the latter area is large enough to support a settler when improvements can, if over, bo effected at a reasonable figure. The settler who goes out into the wilderness to carve out a home fo? himself is ent’tled to every consideration—in a groat many cases it would nav to let him have the land for a mere trifle, subiect to his uoaHnor satisfactory improvements within a reasonable period, hut he should not have the v’ght, save in exceptional cases. to sril out.

As a rule, unimproved hush country should be handled onlv bv men of amnle means. On the other hand, some 20 years ago considerable areas of improved land were leased on terms which have enabled the fortunate lessees to transfer at a handsome profit after allowing for the capital expended on improvements. It is desirable to sound a note of warning with regard to city and suburban properties, which in some centres have changed hands at such high prices that, whether the occupiers ho owners or tenants, the rent charges are necessarily so great that success in business is rendered very difficult. Op the whole, T believe we may regard the immediate outlook with equanimity. Prices for some of our most imnortart products mav decline, although during the coming season there should still be a considerable balance of trade in our favour. Many nf our producers are carrying on under adverse conditions, but their competitors abroad are having trouble also. It must not be forgotten that, the great mnioritv of our settlers are in fair circumstances. and ouite able to withstand a fall in value of their assets and reduction in income. Had economy been practised dnrinn- the years when nhenorheu.al prices were received for our products, there would he less grumbling to-day over the burden of taxation ansi the difficulty of getting an adoouate return on canital. Wc must look forward to a gradual deflation of land values as the eure for the worst of t'’e evils from which we are at present suffering, Stabilisation at present values is out of the question. T would urge one and all not to lose sight of the verv important fact that economy in Its wider sense is absolutely necessary to the welfare and nrosperitv of this country. We have in New Zealand most tliipgs suitable to healthy life. but. unless our exports can Ire produced as cheaply ns *v,r,ce rf othe" countries, and unless we avoid excess of luxury in our imports, it st.-nds to reason that, considering our heavy onligations. ultimate prosperity will not be ours. No one should idle or eo slow in Pis working nears. and the fertility of nnr lands should be carefully maintained Wp have one of the finest countries in tho world; let ’u keen it so bv showing example to these who will inherit it after us.