Insulation Policy

Poverty Bay Herald, Volume LXV, Issue 19758, 12 October 1938, Page 16

Insulation Policy

Sir, —There is one point in "C.P.H.'s' letter to which I would like to refer. It seems to me that he falls into the common error of assuming that when export prices fall there is a corresponding decline in the price of imports and that, as a result, there is no reduction in the quantity of goods which can be exchanged. This, however, is not the case. If "C.P.H." will refer to the Year Book (page 755) he will And that the value of exports dropped from 106 in 1929 to 56 in 1933, or a little more than 47 per cent. During the same period, the price of imports dropped from 86 to 78, or less than 10 per cent. This means that imports which would have cost £IOO in 1929 could be bought in 1933 for £9U but the value of New Zealand exports, with which the imports are paid for, had been reduced from £IOO to £53; we had £53 with which to pay for goods costing £9O. The consuming * power of New Zealand, so far as imports are concerned, is the value of its exports, and no system of manipulation can alter the fact that if export . values decline we must accept less oi the good things of life which come from overseas. GISBORNITE.