DOMINION’S DIFFICULTIES

Otago Daily Times, Issue 21215, 22 December 1930, Page 10

DOMINION’S DIFFICULTIES

THE GOVERNMENT’S DECISION, AN EXPERT DIAGNOSIS. A MORATORIUM UNDESIRABLE. (Special to Daily Tikes.) WELLINGTON, December 21. The Acting-Prime Minister (Mr E. A. Ransom) issued the following statement covering several important decisions made by the Government:— ' “ Gove ™ment has had under consideration the general position of the country in all its aspects, and while it recognises the grave difficulties of the situation, due to circumstances and conditions perhaps unprecedented in the history of New Zealand, it deprecates. any attempt to exaggerate the position or to stampede the country into hasty and ill-considered solutions. In the first place on two questions that have excited discussion in the press and at conferences, and even elicited tentative pronouncements from public men, namely, the fusion of political parties and the formation of a National Cabinet and the early summoning of Parliament, Cabinet feels that these are matters that must the return of the Prime Minister, y 7 " O is entitled to a dominant voice in their determination so far aa his Government and political party are concerned. “ Then in regard to the demand for an immediate assembling,of Parliament Ministers do not consider this step either necessary or wise at this juncture. I have recently announced the view of Cabinet, and the Prime Minister has definitely declared from England that a moratorium is undesirable. These views are supported by the State Loan Departments, which provide nearly one-half of the total amount of finance for fanners, and who say that there is not at present such a pressure from their clients as would justify the application of a moratorium, even if that kind of remedy were de* sirable, which they emphatically deny. The Government, thinking that a diagnosis of the condition of each section of industry was necessary and that it should be carried out in a sane and practical way, has as a beginning approved of the setting up of a committee of experts in the dairy industry which would determine the extent to which that industry is embarrassed, and sug- ' Sfrt the form of assistance required. The trouble may be far greater than is realised, or much less than general statements- make out. It is recognised to he serious enough owing to the severe fall in the price of dairy produce, but the perturbation of many dairy farmers rather he in anticipation of the effects upon their finance and holdings of the slump in prices than in consequence of extreme financial pressure applied by mortgagees. The committee suggested to investigate the condition of the dairy industry will consist of men who are intimately the position of the dairy farmers in their respective districts. The Department of Agriculture is getting into touch with men whose names have been suggested. The committee will he asked to meet in Wellington early in the New Year, and to carry out their investigations with all despatch. It is hoped that on the Prime Minister’s return the actual position with Cabinet recommendations will be ready for action. “Those in the pastoral industry have made no direct approach to the Government for assistance. The. Government took the precaution a month ago to consult with the - Government directors pn the Bank of New Zealand, who advised that not only was a moratorium undesirable but unnecessary at present. The Government gathered that although banking figures showed the strain on the resources of all banks, accentuated in cases by the greater financial difficulties of Australia, all possible steps were being taken to maintain -the strength of mercantile firms and station agents to support land owners and to assist farmers where they had exercised care and-economy in the management of their farms. “The Government recognises as well as the heads of financial institutions and business men that farmers .who overreached themselves in the purchase ,of estates or in expenditure, and have had difficulty in normal times in meeting current obligations will experience extreme hardship. It is prepared to meet delegations of each branch of industry which should be ready to state its actual •and detailed difficulties, and its suggestions for the minimum assistance required of the State. “ The position Of the public finances is appreciated by the Government, and has been the subject of the closest scrutiny and consideration. Revenue has fallen in a much greater ratio than expenditure, due to the same causes that have affected all branches of industry, and more especially the primary industries. The charges on the Consolidated Fund can not, within the financial year, be short ened to the extent that will take up the ' decline in revenue, owing to the heavy rigid annual outgoings for interest, pensions, and special permanent items that are the accumulation of a- generation of Parliamentary and Government action. “ In the annual appropriations for services the first overhaul of the depart' 1 ments made ; last month at the earliest available moment after the close ol the session revealed the extreme difficulty in the face of 'sectional demands fay institutions and the public in cultailing, deferring, or cancelling the expenditure of items voted by Parliament. Economies proposed in certain departments, such as defence and working railways, will, not be materially effective within the financial year.”