OPTIMISTIC VISITOR

Southland Times, Issue 22215, 6 January 1934, Page 9

OPTIMISTIC VISITOR

REAL IMPROVEMENT IN TRADE. TARIFFS AND EXCHANGE RATE. Signs of greatly improved trade, not only in Australia and New Zealand, but in Canada and South Africa as well, and even further afield, have been noted recently by Mr George F. Davis, chairman of Davis Gelatine (Australia), Ltd., who commented on the changing conditions to a representative of the Christchurch Press on Thursday, Mr Davis is pleased to find that there has been a continued movement towards real optimism in business circles in the Dominion since his visits three and six months ago. “It is certain that trade conditions in Australia have improved,very much in the last three months,” said Mr Davis. “I know of many firms which in that period have had a turnover equal to what they received in 1929. In December the general retail trade was the biggest since 1928. "The general feeling is confident — possibly too confident in my opinion, for many of our troubles are not yet adjusted. However, I think the spirit of optimism will help to end the depression. Actual distress in Australia is decidedly less than it was, and the higher prices realized for wool have created the impression with a great many persons that their troubles are over.” Change for the Better. In New Zealand also Mr Davis observed a considerable change for the better between his visits in June and October, and again between October and December. In June the deepest depression seemed to characterize the general atmosphere—a far blacker mood than had ever afflicted Australia. In October business men were beginning to be hopeful, wondering whether after all there might not be an improvement. Now, however, the process had gone further, and a lively optimism was abroad. To one who had visited the Dominion at regular intervals the three stages had been quite plain to see. But Mr Davis thought that there was some justification for the assumption that the improvement in trade was more widespread than Australia and New Zealand. Not only in these two countries, but in South Africa and Canada, where his firm was also established, the last three months’ sales had exceeded the sales of the corresponding period for the last three years.

Industry and Government.

His firm was already extending its works in New Zealand, and was likely to extend them substantially if the tariff question was settled satisfactorily, Mr Davis continued. The tariffs of a country were an important consideration for such a business, as they affected the security of the capital invested in it, and that security was not solely a matter of the volume of trade. Generally he thought that industry was likely to be a very favoured security in the near future, because most governments were realizing that when industry got into difficulties unemployment was the natural result. Mr Davis favours a high exchange rate. “There is no doubt that the high exchange rate has helped Australia to get out of the depression much more quickly than she could otherwise have done,” he said. “Apart from stimulating local industry, its effect has been invaluable in preventing the country from spending beyond its resources.” Discussing other activities of his own firm Mr Davis referred to the receipt of the contract to build a sloop for the Australian Navy at the Cockatoo dockyards, which it now owned. He was proud of this, for the sloop would be the first warship for the Empire navies to be built by private enterprise outside of Great Britain. At the dockyards which his firm had taken over nine months ago, nearly 700 men were employed, and the construction of the warship would mean the employment of another 325 men for a year and nine months. If this shipbuilding work continued to develop it would probably mean the start of new heavy engineering industries in Australia.