TRADE DEPRESSION.

Otago Daily Times, Issue 20702, 27 April 1929, Page 14

TRADE DEPRESSION.

THE CAUSES EXAMINED. AWARDS TOO INELASTIC. LACK OF CONFIDENCE IN NEW GOVERNMENT. (Special to Dailv Times.) AUCKLAND, April 2G. The existing trade depression was discussed to-day by a representative merchant who had several reasons to offer for the anomaly of dull trade persisting in the face of record exports and a huge favourable trade balance. “ We have experienced the most trying year since the war,” he said. “We have had to hold large stocks against falling prices, and the remnant of those stocks has had continually to be sold at a loss. This has all made for restricted profits. The turnover has barely been maintained,’ and profits are decreasing. The lack of elasticity in awards has made it impossible to reduce the overhead to meet the situation. “ Recently I have studied 10 balancesheet*, and in each case the profit was lower than it was last year. On the one hand, there is the effect of the depression, the fall of prices from which the trader had. no escape, and on the other an overhead fixed largely by award wages.” This merchant did not speak as a man who desired to see wages forced down at all costs. His contention was that there should be some elasticity in awards to meet the fluctuations in the volume and profit of business. The consequence of the present situation was, he said, that adult unemployment was increased. Merchants were often faced with a rise iu wages for a youth for no other reason than that he had liaiFa birthday. At certain ages increases were provided for in awards, and sometimes the only course was to discharge a young man who might have been carried on at a wage lowe r than the award for the meantime, and fill his place by a boy. “As a matter of fact,” he said, “ and I am not a pessimist by nature, a number of city concerns are congratulating themselves if they have been able to conserve their capital without paying a dividend. “There is a political aspect to the matter. Unfortunately the Public has not gained sufficient confidence in the present administration to make it loosen its money. One of the great mistakes if the Government has been to pay full wages for relief employment. The result is plain to those who are observant. With the knowledge that work will ba found for them on public works at full rates of pay, many men are not hustling for themselves, and some are leaving jobs to get - relief work. The whole of the lower stratum of labour has thus been disturbed, and the effect goes far in the trading world, “ Yesj country buying is good. It is better than it was this time last year, and accounts arc being settled more promptly. It is the town trade that is causing trouble. There is no buoyancy in it whatever. The cities appear to be top-heavy for the productiveness of the country at present. They cannot find occupation for all who want it. In the cities there is a slow awakening to the fact that in the country then, is a steady and sure living, but many shrink from it because it involves the sacrifice of certain town luxuries to which they have become accustomed. Yet there is. plenty of money in the banks; so much, indeed, that business men are a little anxious that the banks may find employment 'or some of it outside the country.”