“STRANGE GODS”

Otago Daily Times, Issue 23858, 12 July 1939, Page 4

“STRANGE GODS”

ECONOMIC TRENDS VAUNTED STANDARD OF LIVING ATTACK BY FARMERS’ PRESIDENT a EFFECTS OF LAVISH SPENDING (Special to Daily Times) WELLINGTON, July 11. "In the economic field there is a marked tendency to run after all sorts of strange gods,” said the Dominion president (Mr W. W. Mulholland) in his address to the annual conference of the New Zealand Farmers’ Union to-day Paper is more important than production, full stomachs than freedom, and self-sufficiency is better than the ships of the world bringing the treasures of the world to our doors. Farm production is a back number. Why trouble about such a humdrum thing as bread, when we have brand new and up-to-date factories turning out scooters, bolts and bricks, carpets and corrut gated cardboard? Effort is scorned, and the honest worker is a fool. Why worry? Prosperity is everywhere. Bank notes in unheard of millions, sales tax and totalisator investments breaking all records!. December 5. 1938, saw the acknowledging to the world that we have spent our substance in riotous living. And now the representative of the prodigal has gone Home to see if he can get a few million husks, "In, four years we have spent the value of four’ years of record exports which the farmers provided mainly and nearly £38,000,000 from our reserves overseas. The value of our exports for me past four years shows that we have spent over £270.000,000 of overseas credits in the last four rears.

“High Standard of Enjoyment”

"What is this vaunted standard of living, anyway? Is it really a high standard of enjoyment, or merely a high standard of spending? We are apparently eating rather less bread, have not much increased our consumption of butter, while we are definitely eating less mutton and lamb than during the depression years. Since 1934 we increased our production of woollen piece goods from 2,200,000 yards to 2.300.000 yards in J 937, but we increased our imports of silk by 30 per cent, in the same time. Our consumption of beer had increased from 9.606.000 gallons in 1934 to 16,604,000 gallons in 1937, and no doubt still more in 1938. In 1934 we used 56.000. gallons of petrol, but In 1937 tne annual consumption had risen to 82.000. gallons, while at the same time we imported motor vehicles to the value of £5,000,000 and spent more than another £250,000 on importing perfumery and toilet preparations. Our totalisator 1 investments ’ in 1934 were £4.645,000. but in 1937 our ‘standard of living' had nearly doubled and amounted to £7.201,000. Our standard of spending has been enormously high, trulv a spend-thrift career. “Amidst all this tremendous prosperity, on December 5 last the Government suddenly threw up its hands and declared that we were sinking and that in order to meet commitments it was necessary to take the extraordinary and drastic measures of complete Government control of all overseas exchange with its accompanying export and import control. • “ It has been frequently stated that this position was due to low export income, to over-importation, and to a flight of capital, but the facts are that in 1938-39 exports were valued higher in New Zealand .currency than at any .time before the’ depression. and that, while the price of wool in particular had fallen somewhat, prices were not at a low level. We had set out to follow the new. romantic, and very attractive idea 'of spending our way to prosperity. Instead, we had spent our way to the verge of bankruptcy, which is much the more usual course of events. The huge Government expenditure, the high rates of pay. particularly on public works, the increasing of wages, pensions, etc., regardless of the financial implications—all these measures had combined to bring about a considerable depreciation of the Internal value of our currency. To such an extent, indeed, had its purchasing power been reduced that in April of this year, according to calculations based on the Government Statistician’s index figures for retail prices, it took £6 Os 4d to buy what could have been purchased in 1934 for £5. And the huge increase in taxation only indicates a part of the inflation of costs and of currency that was brought about. Enormous Expenditure “The enormous Government expenditure, partcularly that part of it which was financed by means of advances from the Reserve Bank resulted in putting into circulation currency for which there were no goods available in New Zealand. It was inevitable that, not being able to obtain the goods their pounds entitled them to in New Zealand, and being able, in any case, to obtain more goods overseas for their pounds because of the maintenance of an artificial value for our currency, people bought their pound’s worth where they could get it. and continued to do so until the present decline of our sterling funds forced the Government to prohibit them. "The huge expenditure on public works v/as one of the main contributing factors. It was supposed to be undertaken for the purpose of relieving unemployment, but actually this huge waste of money has contributed very largely to our present unemployment problem. Money spent by Gov ernment is sterile. Money spent by private enterprise turns over and over again, growing like a snowball.”