The Southland Times MONDAY, DECEMBER 4, 1939. Prime Minister on Import Control

Southland Times, Issue 23990, 4 December 1939, Page 6

The Southland Times MONDAY, DECEMBER 4, 1939. Prime Minister on Import Control

P<T the second of his “fireside” talks last night the Prime Minister discussed the exchange and import restrictions, and what he said was far from being the model of fairness that might be expected from a man who finds it so easy to pass judgment on the writings and utterances of others. He did not, of course, accept the blame for the combination of foolishness, ignorance and delay which has necessitated imposing restrictions of such severity: the reasons why import control has had to be enforced were not mentioned. What Mr Savage did do was to attempt to make his hearers believe that the Government had adopted import restriction as the only alternative to cutting wages and pensions, of which, he said, the people of New Zealand had already had one “helping.” The implication of this and other remarks was that his Government had found itself in similar circumstances to those which confronted the Coalition Government of 1931, and was meeting its difficulties in a much more humane way. But no fair comparison can be made between the circumstances of 1931 and those of 1939. In 1931 New Zealand was the victim of a worldwide depression, whose causes and effects were entirely outside her control; her difficulties of 1939 are New Zealand-made and Labourmanufactured, and they follow four years of high export prices, which are still being maintained. If the Government had been content to move steadily along the path of economic and social advancement, as all New Zealand Governments, Conservative or Liberal, had done for 50 years before it, the Dominion today would be in a healthily prosperous condition, the culmination of four years of good prices. But the Government forced the pace, it ignored —and sneered at—expert guidance, and by the end of 1938, when conditions were totally dissimilar to those of the depression years, it had landed the Dominion in. difficulties. During the past year the difficulties have been accentuated, and today they are threatening many persons’ livelihood. The Government which has so often boasted how it would have dealt with the effects of the world-wide depression in New Zealand has shown what it can make of four years of prosperity. It is perfectly true that cuts in wages, pensions, guaranteed prices and other payments would be an alternative to import restriction, in that they would reduce purchasing power and, with it, the demand for imports. But there are other methods of easing the present situation outside, or within, the framework of import restrictions. The principal one is internal borrowing for repayment of the inflationary advances from the Reserve Bank which have been at the root of the whole trouble. There is evidence that the Government contemplated this step, or at least contemplated raising a substantial part of its requirements by loan, but apparently it was over-ruled by the party caucus, for the warnings uttered by Mr Nash and Mr Savage against too liberal recourse to the Reserve Bank in the present circumstances have been completely disregarded. The Government has continued to issue new money and the whole situation is becoming aggravated. There is no doubt that steps could be taken, short of cutting wages and pensions, which would improve the sterling position more rapidly than it is being improved today; and there is equally no doubt that import control, if it still remains necessary, could be administered in ways that would cause less hardship than the present too rigid system.