REMEDIES OF COALITION

Taranaki Daily News, 1 September 1933, Page 9

REMEDIES OF COALITION

EFFECT OF POLICY MOVES MR. E. A. RANSOM AT BY-ELECTION AID TO PRIMARY PRODUCERS. LABOUR STRONGHOLD ATTACKED. By Telegraph—Press Association. Christchurch, Last Night. The Hon. E. A. Ransom, Minister of Lands, entered the campaign in the byelection for the Lyttelton seat by delivering a speech in support of the Coalition candidate, Mr. F; W. Freeman, tonight., He spoke in the Lyttelton Labour stronghold, but was given an excellent hearing. The crowd was goodhumoured and those members of it who did interject occasionally found the Minister rather more than their match. At the conclusion of the meeting a vote of thanks to Mr. Ransom was carried with acclamation. Mr. Ransom discussed the causes of the country’s financial difficulties and the measures taken by the Government to meet the Situation. The immediate cause of the country’s financial ills, he said, was the loss of national income through the decline in prices of primary produce. Taking the 1928 prices as a basis the loss up to. the end of 1932 was £67,200,000, made up as follows: 1929, £2,300,000; 1930, £13,700.000; 1931, £24,000,000; 1932, £27,200,000. But notwithstanding the fall in prices the value of exports was beginning to improve as a result of increased production. During the year ended on June 30, 1933, butter prices declined 13 pei* cent., cheese 11 per cent., lamb 9 per cent, and mutton 5 per cent., but the value of exports increased by £2,800,000. By this increased production the restoration of prosperity was assured as soon as prices recovered. The prospects of the wool industry were also very bright. There had been an important rise in prices and stocks were much lower than for some time. ’ DECREASE IN PRICES. The depression . developed in 1929-30, and since then economic adjustments’had been: 1930, £260,000: 1931, £1,360,000; 1932, £4,320,000; 1933, £3,550,000; total, £9,490,000. As cheap money was regarded by all economists as an essential element towards recovery the Government had set out on a campaign to bring down all interest rates. Reductions in interest on the public debt had secured a net gain to the budget of £570,000. Interest on mortgages and rents . under leases had been reduced 20 per cent., .with a minimum rate of 5 per cent. By! arrangement with the banks overdraft rates had been reduced from 7 per cent, to 5 per cent. The exchange rate had ■ been raised from the 10 per cent, fixed by the banks to 25 per cent, at the instigation' of the Government. The Dominion as a primary producing country was in a very serious position during the closing months of the last financial year, and some action was necessary to prevent disorganisation and disruption of the primary industries. The Government took counsel with three of the Dominion's ablest economists, whose advice was that raising the exchange rate was the only safe course to follow. The Prime Minister held the opinion that exchange was a matter for the banks. Mr. Forbes was not a man to change his attitude readily, but after examining the position from all angles he. agreed with the Cabinet that a rise in the exchange rate was the right course in the circumstances. The- value of the higher exchange policy to the primary producer for the past seven months was £3,200,000 on a 15 per cent, basis and £5,280,000 on a 25 per cent, basis. LABOUR PARTY’S PLAN. The Labour Party’s declared policy of guaranteed prices would involve making provision for £20,000,000 annually until prices recovered. This approximated to the cost of the Great War. Contrary to the arguments of opponents of high exchange the cost of living had not increased since the exchange was raised. The actual decrease in the cost of living was 11 per cent. Mr. Ransom declared that Mr. Howard’s statement that the Labour Party was never, invited to join the Coalition Party was mere juggling with words. The Labour Party was invited by the Prime Minister through its leader and other representatives of the United Party committee to join a national Government. After long and numerous sittings of the committee no progress was made and the Prime Minister announced that he had decided either to form a National Government for .all parties in the House or dissolve Parliament and appeal to the country. Mr. Holland informed the Prime Minister that his party would not . join a National Government. Mr. Coates asked for time to consider the question, and' after three days announced that he was willing to join a National Government during the period of the country’s crisis. Mr. Holland again said his party was unwilling to join, as it was impossible to form a National Government of all parties. Negotiations were then entered into by the United and Reform parties to form the Coalition Government.