CRISIS IN PASTORAL INDUSTRY.

Timaru Herald, Volume CXXV, Issue 18619, 15 July 1930, Page 9

CRISIS IN PASTORAL INDUSTRY.

Help For Woolgrowers. REDUCTION IN SHEARING RATES. United Press Association—By Electric Telegraph—Copyright (Received July 14. 9 p.m.) MELBOURNE, July 14. Judge Dethridge, in the Commonwealth Arbitration Court announced a new award covering shearers and shed hands. He reduced wages all round approximately 20 per cent. The award will operate from midnight. The minimum rate for flock wethers, ewes and lambs is 31/6 per 100, the former rate was 41/-. The minimum rate for rams above six months is fixed at 65/- per 100. DEFIANCE OF ECONOMIC LAWS. AUSTRALIA’S DIRE PERIL. Professor Edward Shann, of the University of Western Australia has taken to task those politicians in Australia who imagine that fixed economic ' laws can be defied with impunity. He does not—but he could if he wished—assume the role of the prophet who “told you so,” for in 1927 he compared “the boom of 1890 and now,” when he stated: “I am not insensible to the big contrast between the late ’eighties and the present, in that we are enjoying good prices for wool and wheat. “But the level of world prices may not prove stable. “Wholesale prices have been falling steadily of late, and we cannot afford to mortgage every fresh margin of our living fund. “Falling prices and the cessation of overseas credit wrought a painful havoc on the living fund of Australia in the ’nineties. A like combination of circumstances would do so again. At present the balance for home-con-sumption or exchange, after meeting our overseas interest bill on the public debt, seems very buoyant. The incidence of the fall in prices has hitherto spared our staples.” But the professor’s warnings were unheeded by the majority of politicians; so, too, were those of other economists, of bankers and similar close students of the trend of economic events in Australia and beyond. The prices of Australian staple exports (wool and wheat) have heavily fallen; overseas credit has ceased—for the time being. Every word uttered by Professor Shann three years ago. The storm signs were plainly discernible to all, but (it seemed) the politicians. It has now burst over Australia and everyone is eagerly scanning the horizon and consulting the barometer for the slightest signs of improvement. But, according to Professor Shann, Governments, Federal and State, continue to attempt to “dispose of economic facts by manipulation.” Special reference is made to the Commonwealth Government's control of gold, and this, “at a time when every Australian bank is heavily laden with advances, and the exchange rate for London money is heavily against us and growing more so. In other words, we (Australia), have got into the state of credit-expansion against which a true central bank should have been at best a safeguard, at worst a source of relief.”

Perpetuation of the subsidy and bounty and other artificial stimulants to trade—at the cost of the consumers of all Australia—will land the country in further trouble, according to Professor Shann. He remarks: The gravest menace to our economy is that such increases in the local prices of our sugar, butter, and whatnot must affect nominal wages in all sheltered industries. They thereby lessen the competitive strength of our production for export. The process is already at work. The extra price per week for sugar and butter at Australian prices are an appreciable impost. It is to be inferred from Professor Shann that Adam Smith is an authority with whom politicians are not on speaking terms—even if they know that such a person ever existed. But it was this distinguished member of the most prolific British family who long ago warned statesmen of the danger of attempting “to direct private people in what manner they ought to employ their capital.” However those risks and greater risks as the Professor sees it, many Australian politicians take cheerfully, the results of their failure being borne by the community in taxes or other forms of impost.