NEW ZEALAND IN THE DOLDRUMS.

Otago Witness, Issue 3830, 9 August 1927, Page 13

NEW ZEALAND IN THE DOLDRUMS.

NO NEED FOR PESSIMISM. The Alexander Hamilton Institute offers the following observations in its latest monthly publication on conditions in the Dominion: — It is a trite remark that New’ Zealand’s business for the past 18 months or more has not been what it should, and, in accordance with the usual psychological tendencies at such times, the enforced quietness in trade has been magnified by a few into a disaster comparable only with the 1920-21 episode. It is undoubtedly true that the export prees of certain products of particular interest to New’ Zealand have not been as satisfactory as was expected, but, on the other hand, the export prices of certain other commodities, though of a lower range than a year or tw’o ago, yet have given a distinctly better average return. Take wool, for example. The average price per bale for the past season turned out to be a record, notwithstanding that the range of prices was considerably less than in the last few years. New Zealand is a wool producing country on an extensive scale. Accordingly she benefits. Again, although the value of exports have fallen for some months, yet, making allowance for the difference in money values, they are appreciably higher than in 1921. Even at its worst period, the banking position in 1926 was never in such a state as it was in 1921. Although deposits may have shrunk compared with a year ago, wholesale prices have also shrunk by 6 per cent., which offsets to some extent the decreased purchasing power. The cost of living has also fallen by a similar amount. Further, the addition to the cash reserves of the banks has been more than sufficient to offset any increase in advances, which may have been necessary. High yields from the threshing of wheat and oats have been maintained, and, although prices may be relatively low, yet a plentiful supply of wheat at low prices is a great deal better than a short supply at equally low prices, which, in certain circumstances, may very well be the case. A similar reasoning applies to the butter industry. The increase in the gradings for the Auckland province alone during the past season was approximately 20 per cent, over the gradings for the previous year. Despite the pessimistic propaganda, it is to be doubted whether the average price of butter for the season is 20 per cent, less than last year. If not, Hie aggregate returns from this course will be at least equal to those of a year ago. There still appears to be plenty of money for the purchase of motor cars for New Zealand is third in the world list of users. Presumably buyers ar « . pa Y ing . for tllese tai's- The recent tall in business was by no means violent, and taking all the factors into consider ation, was not in the remotest degree so severe as that in 1920-21. The most iawurable symptom of all is the absence of any sign of that hectic make-belief which is the bane of true prosperity.