OPUNAKE TIMES Speaks for the District. FRIDAY, JANUARY 18, 1935 PARADOXES OF THE DEPRESSION

Opunake Times, 18 January 1935, Page 2

OPUNAKE TIMES Speaks for the District. FRIDAY, JANUARY 18, 1935 PARADOXES OF THE DEPRESSION

Some of the paradoxes of the depression have remained with us, as a doubtful legacy from the years of adversity and hardship. During the last few years the people of every country have become familiar with the slogan of poverty in the midst of plenty, and in producing countries people have found that apparent wealth of goods is but a hollow mockery when translated into terms of exchange. Production of the world’s food supplies have never been so generous, yet hundreds of thousands have lacked the bare necessities of life. This paradox is one which, through State aid, has been largely corrected, but another paradox remains to be solved before a complete recovery can be said to have commenced. Confidence is said to have been restored—and there has been very definite evidence of a return of confidence during the past two months—yet capital is not being set to work as rapidly as it should. New Zealand presents several contrasts which furnish, each in its own sphere, illuminating comment on the state of affairs. Unemployment is, according to reports, diminishing, yet men are seeking employment in vain in .private enterprises where reasonable wages and salaries may he expected. At the same time certain employing industries, notably primary production are affected by a shortage of the type of labour required. At a time when there is a call for employment there is nearly as much idle capital as there was in the depth of the depression. The Government has, it will be generally admitted, carried the relief of unemployment as far as it can advisably do. The rest is and must he left to private enterprise, hut private enterprise is unconscionably slow in getting under way. The question arises as to where tlie responsibility lies for the large amount of idle capital. The hanks say that they cannot find employment for money. This is true to some exteut because the demands for capital to promote employment are not such as to provide satisfactory propositions for trading banks. Where money is required to be set to work at present is in the starting of new industries or new businesses. These require fixed capital or long term loans. Neither outlet appeals to banks, which aim to provide short term loans to existing business rather than to tie up capital in bricks and mortar or in fixed loans. On fhe other hand, private investors are showing a natural timidity in regard to embarking in new ventures. If is possible that the recent inquiries into certain aspects of company promotion have contributed towards this “freezing up” of file stream of investment funds. However, it has been recommended that a bureau should be se{ u)) for fhe purpose of advising investors, and examining the merits of new prospectuses. Acfion of this kind is urgently necessary if the volume of money in circulation is fo be increased. Last year closed on a healthy note with a great increase in the velocity, though ppt necessarily in the quantify, of money in circulation. What is essential now is to devise means of attracting more capital into circulation, and anything which is designed fo safeguard investment commends itself" as a necessary first step.