A Warning Heeded

Southland Times, Issue 23678, 29 November 1938, Page 6

A Warning Heeded

“There are a lot of half-pie economists telling us why our credits overseas are disappearing,” said the Prime Minister—in anything but ministerial language —during an interview in Wellington last week. Whether or not the economists are “half-pie” (they include some distinguished thinkers and men of affairs), there can be no doubt that they have been saying nothing less than the truth, and the Government’s recent statements on the need for expanded production show that the warnings, although unwelcome, are being heeded. Mr Savage has spoken in general terms of a “new

deal” which, on analysis, seems to be an appeal for a greater output by productive workers and an extension of secondary industries. At Christchurch the Minister of Industries and Commerce spoke frankly of “difficulties” that have to be faced, and explained the drop in overseas funds strictly in accordance with the theories of the despised economists. “One way to face the problem,” said Mr Sullivan, “is .... to build up our New Zealand industries to create more goods and produce more New Zealand articles.” And in Westport the Minister of Mines announced a plan for clearing thousands of acres of potential farm lands by the intensive use of machinery. The most encouraging aspect of these and similar ministerial statements is the way in which they provide evidence that the Government recognizes the economic dangers now looming ahead. It is not unfair to remind our readers that these dangers have been freely predicted as the inevitable result of a policy which hitherto has placed expenditure before production. It can be added that they are dangers which should not have to be faced after three years of a prosperity probably unparalleled in the country’s history. But it can be said also that all reasonable people will welcome the signs of a constructive approach to the problem of declining production, and that the majority of those who voted against the Government at the General Election —and would vote against it again—will be ready to co-operate in the attempt to achieve a balanced economy. The alternative to orthodox economics at this stage is inflation, financial experiment and the use of desperate remedies of control and manipulation. New Zealanders have no wish to encounter the methods of fascism. The Prime Minister’s “new deal” appears to be still in the embryonic stage, and it is scarcely necessary to point out that there will be difficulties other than those of an economic kind. It is one • thing, for instance, to clear thousands of acres ready for farming: it is quite another to find the prospective settlers or the farm labour, particularly while farms that have been cleared and cultivated for generations are going back in productive capacity for lack of rural workers. The important fact, however, is that the Government has turned aside for the time being from unpractical theory and is at last facing realities. That the change comes just after the election instead of before it may not be surprising. The fact that it has come even now is a sign that will be welcomed hopefully by those who have watched the trend of events since Labour first came into office.