The Daily News WEDNESDAY, APRIL 14, 1926. THE ECONOMIC SITUATION.

Taranaki Daily News, 14 April 1926, Page 6

The Daily News WEDNESDAY, APRIL 14, 1926. THE ECONOMIC SITUATION.

The facts and figures concerning the Dominion’s trade returns, as presented 'by our Wellington correspondent in Tuesday’s issue, to use his own expression, “make very unpalatable reading,” and justify his concluding assertion that they point very forcefully to the development of “a serious economic situation,” and if not faced boldly and intelligently it may become very serious. In order to place the most favourable aspect of the returns before the public he makes a comparison of the figures relating to the actual produce year commencing on October 1, so as to avoid taking in parts of two seasons. The figures for the'‘first five months of this produce year, to the end of February 7, show exports of flie total value of nearly 20| millions sterling against over 26J millions for the corresponding season of 1924-25—a contraction of £6,147,589, while the Imports for the same period show an increase of nearly two millions, making the portion as follows; Exports km 'by -.isxmw 6,147,539 topoxte more by wj.-Y, 1,936,734 Adverse Wmce ow»xz»rr 8,184,273 The full significance of these figures is demonstrated by, the fact that in the five months of 192425 the exports exceeded the imports by nearly 5j millions, while

in the five months of 1925-20 the imports exceeded the exports by nearly 2% millions, a result upon which the comment is madoi “A change, and a very significant one,” Bearing these statistics in mind, special interest attaches to the remarks recently made to a Press interviewer by Sir Harold Beauchamp (ex - chairman of directors of the Bank of New Zealand), a recognised authority on New Zealand finance. On many occasions Sir Harold has pronounced Impressive warnings against expenditure on anything other than absolute essentials. It is not surprising, therefore, to find him expressing gratification at the note of warning lately given by the Premier (Hon. J. G. Coates) in regard to the necessity for strict economy. It will be noticed Sir Harold considers that if strict economy is practised there is no dou'bt “we shall be able to weather the financial depression which appears to be looming on the commercial horizon,” thus'practically endorsing the serious view of the situation as emphasised by our Wellington correspondent. Referring to the large drop in exports and rise of imports for the eight months ending on March 31 last, Sir Harold draws attention to the fact that motor-ears and accessories were responsible for an increase of no less than a million sterling compared with the corresponding period of the preceding year. It should interest the public to learn. that the totalisator is regarded as an excellent financial barometer in New Zealand, and that it has reflected the big drop which has occurred in exports. It is, «of course, well known that a falling off in the value and volume of exports brings about a decline in the purchasing power in certain branches of trade. While objecting to be classed as a pessimist, and claiming that he is really an optimist. Sir Harold conceives it to be a duty to point out dangers “through the riotous extravagance one sees in the country.” In this extravagance, he says, so many people find it difficult to bear what they describe as the high cost of living, which he prefers to describe as “the cost of high living,” a phrase that more correctly describes the situation. In referring to the practice of people with limited incomes purchasing motor-ears for joy-riding, on the instalment system, Sir Harold suggests the somewhat drastic remedy for this species of extravagance by means of the exclusion of motor-cars from the Chattel Securities Act, thereby compelling sellers to insist upon the greater part of the purchase money being paid on delivery, instead of being spread over a period of years. While Sir Harold has nothing new to say relative to the cost of production, he again stresses the fact that the producers are suffering therefrom, and the inordinate prices' paid for all classes of farm lands, though there is at the present time an adjustment being made in land values which ought to ameliorate existing conditions. At the same time, he considers that values now ruling for primary produce compare favourably with those of pre-war days, the outstanding need being to bring down land values to a reasonable figure, whereby relief would be given to many farmers in difficulties so as to permit of their making botli ends meet. On the other hand, Mr. W. Pember Reeves, as the result of a fairly complete tour of observation in his recent revisit to the Dominion, sees no cause for panic over the present adverse balance of trade. Although many farmers were in trouble, sixty per cent, of them are doipg very well. He considers that in due time the embarrassed settler will cease to be a factor in the country’s life, and that the’sub-division of good land and raising the standard of farming will double the present volume of production. In this view he is doubtless quite justified, but there must also be exercised the strictest economy.