THE OTAGO DAILY TIMES SATURDAY, JUNE 24th, 1933. WORLD CONDITIONS

Otago Daily Times, Issue 21988, 24 June 1933, Page 10

THE OTAGO DAILY TIMES SATURDAY, JUNE 24 th, 1933. WORLD CONDITIONS

The chairman of directors of the Bank of New Zealand devoted a considerable portion of his speech at the annual meeting yesterday to a consideration of the problems that are under discussion at the World Economic Conference. It was not unreasonable or surprising that he should do so. The actual fact is, as Mr Gibbs said, that “our Dominion affairs and difficulties are so inextricably interwoven with other nations’ troubles, and so largely hinge on their emancipation therefrom, that we cannot hope to see daylight here till the darkness is dispelled on the other side.” No country in the world can live unto itself alone. Even the United States, powerful nation though she is, has discovered this. But it is equally true that, in existing circumstances, New Zealand is, as Sir George Elliot observed, entirely dependent on the .goodwill of Great Britain for her material progress. The market for nearly 90 per cent, of the produce

that is exported from the Dominion is found in the United Kingdom. The fact that our imports from the country that is our best customer amount to less than 50 per cent, of the total leads Sir George Elliot to question whether New Zealand has a legitimate claim for preference in the British market until such time as we drastically change our policy. Tariff policy throughout the world is at the present time in the melting pot. It is inevitable, if the resolutions of the Ottawa Conference are to be faithfully honoured, that greater access to the New Zealand market must be afforded to the British manufacturers than has been granted to them in the past. At the same time the general trend of discussion on the subject of trade barriers encourages the hope that the products of the Dominion will not be excluded in future, as they have been by prohibitive tariffs, from foreign markets. Restrictive tariffs constitute a serious barrier to the expansion of world trade and to the expansion of production. They have contributed, moreover, to an intensification of the depression from which the world has been suffering. Most of the statesmen who are attending 1 the World Economic Conference are seized with a sense of the importance of securing that there shall be greater freedom of trade. <■ But there is the concurrent need —which touches the question of monetary policy—of raising the price level of primary products and thus enabling the producers to secure a remunerative return for the fruits of their labours. Mr Gibbs quoted yesterday the recommendations of a committee of the London Chamber of Commerce on the subject, and quoted them with approval except in so far as they relate to a monetary system that is not applicable to the conditions of a country like New Zealand. “If concerted policy,” the chairman of the Westminster Bank says, “ proves able to initiate a rise of prices, this s!iou|d provide some effective stimulus to general recovery, for the purchase and holding of stocks by manufacturers all over the world are now at a minimum and the process of replenishing them will start at the moment when business men believe that commodity prices are on the up grade.” Another banker, however, —the chairman of Lloyd’s Bank — observed recently that before the desired increase in the price level can be realised, a factor outside the purely economic sphere must come into play. “ Something must occur to induce the owners of this increased purchasing power to put it into use. Some spark must re-ignite the torch of hope, some outstanding event or accumulation of events must strike v man’s imagination and persuade him that the darkness is past and the dawn is at hand, that the depressing influences by which he has been held down so long have been removed, that trade is now on the upward turn, that now is the time to extend, and that if he does not buy to-day he will have to pay more to-morrow for what he requires.” The World Economic Conference must be relied upon to supply this spark which will re-kiudle hope and inspire the confidence that is essential to a general revival of industry.