Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, FRIDAY, NOV. 25, 1932. GLOOMY PREDICTIONS

Poverty Bay Herald, Volume LIX, Issue 17946, 25 November 1932, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, FRIDAY, NOV. 25, 1932. GLOOMY PREDICTIONS

If is regrettable in the extreme that the Prime Minister, in reply to it deputation this week, should have deemed it necessary, in an attempt to emphasise his remarks, to take such si pessimistic view of the future outlook for the Dominion. Mis attitude is the more regrettable because it was unjustifiable, for nothing has occurred within the past few months to .warrant anxiety additional to that ol: the past year or two. Thcrfe are undoubtedly many difficulties to contend with, and it is almost certain that further problems will arise before anything ap preaching normal conditions return, but, for Mr. Forbes to bluntly state that next, year will be the most difficult in the history of the country, that extra taxation will be required, and that the Government may find it. necessary to enforce a furl-hei arbitrary reduction of interest, appears to be going altogether too far. Allowance, of course, must be made for the manner in which the Cabinet has been embarrassed by the threatened split in the Coalition ranks over the vexed question of exchange rates, ami it would almost seem Hint the Prime Minister has allowed his anxiety in this connection to cloud his better judgment. Another factor which apparently rankles with Mr. Forbes, as acting-Ministor of Finance, is the inability of the Government to raise adequate funds at 5 per cent.,-ov A per cent, more than the effective rate on previous issues. The attitude he has taken up is strongly suggestive of an attempt to stifle criticism, however moderate or reasoned it, might be, by magnifying the complexities of the economic find financial situation and conveying threats to those who have no other desire than to ensure Hint the Government is fully informed of all the facts Tieforc reaching decisions Mint might be of the utmost importance to the country. If circumstances have arisen that necessitate flic con-

templation of an emergency session ol' Parliament, early in the new year, with the possibility of further drastic emergency legislation, then all knowledge of them is confined to the Government, for, without in any way seeking to belittle the seriousness of the situation, .it can be stated definitely that there arc no publicly apparent indications that conditions have changed for the worse since earlier in the year. Mr. Forbes has described as the key to the whole situation the state of overseas markets —in other words, the outlook for exports. Significantly, the latest trade returns were published on the same day as the Prime Minister made his statement, and the fuel that they were the most encouraging for many months makes it all the more hard to understand Mr. Forbes’ attitude. The value of exports during October, usually a lean month, was almost equal to the corresponding month of the years before the depression, while the diminution of imports had the effect of causing a favorable balance, an unusual feature in October. Too much, of course, cannot be claimed from one month’s figures, but it is permissible, nevertheless, to assume that, notwithstanding the drastic decline in values, the current export season has opened favorably as compared with recent years. From the figures for the first ten months of the year, even more encouragement may be drawn, for it is shown that the value of exports increased by more than £2,000,000, while the decline in the value of imports was approximately the same figure, the improvement in the trading balance compared with last year being more than £4,000,000, and the actual surplus of exports over imports no less than £.12,000,000, a figure which leaves a substantial margin over the servicing of overseas loans and the meeting of demands for oilier invisible imports. Oil the basis l ol! lliese I'elnrns —and il must be remembered that they are I lie index of the country’s condition generally—it. might reasonably have been assumed Huti, while prosperity might still be a Jong way off, some progress had been made towards recovery, and it is particularly unfortunate that they should have been accompanied by the Prime Minister’s gloomy predictions. Moreover, it must not be forgotten that during the coming year the Dominion should experience a greater measure of benefit from the readjustments that have already been carried out, so that the task of effecting equilibrium will be approached from both ends. That the Treasury is experiencing hardship in securing adequate finance is understandable, for if cannot bo overlooked that the Government deliberately budgeted for a deficit, and, to make matters worse, jeopardised its prospects of borrowing internally by failing to keep faith with those who have financed its operations in the past. Now, in the one breath Mr. Forbes appeals for funds for the Government, and, in the next, says it might subsequently be necessary to repudiate part of the interest obligations. Gan it be wondered, in these circumstances, that the investing public is loth to invest in Government securities? Much of the existing stagnation in trade and industry —with its consequent reaction on the business of the State itself—is due to uncertainty and lack of confidence, not only in future trading conditions, but in the actions of the Government. If the public could be assured that the day of State interference was past and that the measures already adopted had provided a foundation upon which lo build for the future, there is not the slightest doubt but that an impetus would be given to every form of activity. The country is entitled to look to the Government for a lead in this direction, and it is to be hoped that with the return of the Minister of Finance there will be issued a clear statement of flic exact position and a more definite .indication of what is contemplated, of the prospects as revealed by his investigations in England, and of what further sacrifices, if any, will be necessary before the

people can feel free to embark upon the developments and undertakings for which there is no lack either of enterprise or capital.