IN FOUR YEARS

Southland Times, Issue 25343, 23 July 1935, Page 6

IN FOUR YEARS

Two points raised by Mr Marchant in his letter, in addition to his reference to the connection between the unemployment registrations and wages cuts, remain to be dealt with. One is his request for evidence that farmers in New Zealand are in a better position than they were in four years ago. It might be argued that in the matter of assets or cash balances farmers four years ago were better off than they are now, but then they were going into the depression and their assets were dwindling in value. The introduction of the high exchange rate gave relief to the primary industries, and the men engaged in meat and wool later received the advantage of a lift in prices, which were enhanced in value to them by the exchange rate. Dairy farmers were not so fortunate, but through the legislation passed last session they have been given opportunities to secure relief under their mortgages, and the Mortgage Corporation has been established to assist them financially. The dairy farmer to-day has a brighter outlook than he had four years ago when the clouds were banked

in front of him and he was facing an economic blizzard which had not-yet reached the high point of its severity. The Labour Party’s monetary policy has not been presented with sufficient detail to permit a searching examination of the course it will pursue, but it appears that the scheme it proposes involves a managed currency somewhat on the lines of Professor Irving Fisher’s plan, and most economists agree that this plan is inflationary in character. Many schemes for increasing purchasing power have been evolved, but though they have been presented with a wealth of persuasive verbiage they have been round ultimately to involve inflation, and if inflation is the basic principle the effect is to reduce real wages by promoting an increase or a hardening of prices. In the United States the application of inflationary measures, through the distribution of large sums as relief payments has not solved the problems for the masses and to-day, in spite of all that has been claimed foi* the National Recovery Act, the workers are severe critics of the Roosevelt policy. It is absurd to suggest that New Zealand could have remained untouched by the economic storm, but the Government through the measures it adopted, most of them necessarily unpopular, succeeded in affording some protection to the vital primary industries and in assisting them to survive. It should be noticed that the British financial people, who are severe critics, have been favourably impressed by the manner in which the Dominion has weathered the storm, and they have given expression to their opinions in the reception they gave the recent New Zeaffind loan.