PRICE RECOVERY

Poverty Bay Herald, Volume LV, Issue 17236, 16 April 1930, Page 15

PRICE RECOVERY

| BETTER YEARS AHEAD | ATTRACTIONS FOR THE VISITOR | EFFECT IN DOMINION. 2j Explaining the exact business relation--3 ship of Australia, New Zealand, and 8 England, and interpreting Australia’s 8 present unfavorable position, Professor 8 A. 11. 'locker, of the chair of economics 5 fit the Canterbury College, in a luncb- « eon address before the Canterbury Ad- ! vertising Club, predicted a. poor year in 5 New Zealand in 1950, followed by two 5 years of gradual recovery, i After dealing with the financial relat- ’ kinship between Australia and overseas countries, the speaker continued: “Wo are not responsible for what is occuring oi Australia, but we are closely linked with her, and wo cannot help being profoundly affected by any change that affects her. She is by far 'the bigger country, and we are inevitably affected more by her than she would be by us.” Many details about Australian banking and about Australian tariffs had not been published, continued Professor Tocker. Referring to the tariff, he said that the raising of (lie exchange rate to 6 per cent, meant a 6 per cent, premium on goods Irom overseas, which ought to be effective if certain, imports were In lie prohibited, and high tariffs put on others. Business men would assume that these changes were permanent, and thev would make permanent plans to make the goods in Australia, but in time the tariff might come down, and they would ilion be left high and dry. The. tariffs must ultimately be. brought down or Australia, would be permanently saddled with expensive production. HIGHER TARIFFS. Personally. Professor Tocker said, ho did not think that the rest of the world would approve Australia’s action in raising tariffs. Throughout tho world to-day there was a. good deal of depression following the Stock Exchange collapse in tho United States, similar to tho depression which, followed the Knickerbocker Trust collapse in 3907. Professor Tocker quoted from an English financial authority which stated that the depression was shown in the United Kingdom in reduced exports of manufactures, and in n more than seasonal increase in unemployment in very many industries. Tho difficulties were increased and recovery postponed by the renewed fall in commodity prices. Tho troubles in overseas markets had become more acute, and difficulties were arising in the financing of exports. Another adverse factor was tho continual stagnation in international lending. With these developments it was not practicable to suggest a date by which improvement would be realised. “Wo can sep ns vet no evidence of recovery, no evidence that prices have yet touched bottom.” commented tho professor. “England fears that low prices for raw material will lessen the purchasing power of the big body of consumers which buys her manufactures, and until that purchasing power recovers she cannot pay more for the raw material.” TTe quoted then a. forecast ; irom Harvard, U.S.A.. staling that busl- , ness activity had continued to decline, } although some recovery had been shown , in January. Further improvements would he made easier by the lower hank rates in America and abroad, which would operate also to stabilise commodity prices. There was some improvement in unemployment which, it was stated, would lie alleviated hv seasonal activity. LOW LEVEL THIS YEAR, “There is nothing particularly optimistic in those reports,” added Professor ( Tocker, “and optimism or pessimism in y New Zealand depends on optimism or v pessimism in countries like these. Until s , export prices recover there is not much w chance of recovery, unless costs of production are reduced, which is not (_ likely.” Ho predicted a. low level this year, a slight recovery next year, following in 1957 by a fairly good year. “This p is not pessimism, but an attempt to / interpret facts,” the professor reminded c his audience. ,