The Timaru Herald THURSDAY, NOVEMBER 15, 1934. TELL-TALE LABELS.

Timaru Herald, Volume CXXXVIII, Issue 19957, 15 November 1934, Page 8

The Timaru Herald THURSDAY, NOVEMBER 15, 1934. TELL-TALE LABELS.

Mr Knmsny Macdonald's confession 11ml lie will never forget liis feelings when inmiedinlely after the war, lie visited the Dardanelles and saw the broken, discarded Turkish guns pointing towards the shore, on which British, Oversea, and Allied troops “hong on so long by their eyebrows.” “On those guns,” declared (he Prime Minister,

“were brass labels bearing the name of a British armament firm.” Mr Macdonald on his part, however, declares that no practical politician would countenance State munition factories, but lie favours the adoption of the British licensing system. It is plain, however, that plans for the control of the traffic in and manufacture of arms have completely broken down in connection with the Chaco dispute, involving the military activities of Paraguay and Bolovia. This conflict has been going on intermittently for nearly five years, and it is obvious that the combatants are being furnished with munitions of war despite the promises of many countries not io assist in the prolongation of a futile and devastating campaign by supplying arms to either side. It is interesting to mention, in view of the disquieting news from the Chaco territory this morning, that the two countries involved in armed warfare are bound by the Covenant of the League of Nations 1o settle their disputes by pacific means. Moreover,, members of the League of Nations are pledged to tackle the problem of the traffic in arms; indeed, one of the major problems that from time to time comes before the Disarmament Conference is the control of the traffic in arms and the private manufacture of munitions. Article S of the Covenant declares that:

“The Members of the League agree that the manufacture by private enterprise of munitions and implements of war is open to grave objections. The Council shall advise how the evil effects attendant upon such manufacture can be prevented, due regard being had to the necessities of those Members of the League which are not able to manufacture the munitions and implements of war necessary for their safety.

“The Members of the League undertake to interchange full and frank information as to the scale of their armaments, their military, naval and air armaments, their military, naval and air programmes and the condition of such of their industries as are adaptable to warlike purposes.” Mr Ramsay Macdonald admitted in his speech at Southampton that the menacing unsavoury competition of private armament firms, but lie confessed himself as being opposed to State owned munition factories; nevertheless, the League of Nations, of which the Prime Minister is such a strong supporter, makes the definite suggestion that the influence of the League of Nations furnishes the machinery by which the control of the manufacture of arms could be substantially tightened up in the hope of ending the tragic struggle which is sapping the life blood from two warring countries who are obviously blind to their own national interests. The Commission of the League of Nations that was sent to the Chaco last year in order to endeavour to bring to an end the war between Bolivia and Paraguay returned to Europe without achieving tangible results. The draft settlement it proposed to the parties was not accepted without reservations by either side. The Bolivian suggestion for further negotiations led to an exchange of views between the two countries under the auspices of the Commission, which made it clear that their serious differences of opinion still subsisted, and that the chances of success for the negotiations were so small as not to warrant the further presence of the Commission. But although the efforts of the League of Nations failed it is quite certain that if the nations enforced an embargo on the export of munitions to war, the conflict in blood-sweared Chaco would come to a conclusion within a very short time.

NOTES OF OPTIMISM. One of the most interesting contributions to contemporary discussions on the internal problems confronting New Zealand, was made at the opening of the annual conference of the New Zealand Manufacturers’ Federation in Wellington yesterday: The shorter working week must be at least patiently examined. . . New Zealand manufacturers must avoid the dangers of over-capitalisation, particularly in the multiplication of the number of factories. . . the Government does not desire to force its attentions upon private enterprise, but is often compelled to do so by “industry calling frantically for help.” . . . New Zealand should insist on a high standard of general education. . . New Zealand has no reason to be ashamed of the steps taken for economic adjustment. These and other points were made by the Minister of Finance in his heart to heart address to the assembled manufacturers. Of particular interest, however, was the Minister’s reference to the signs of improved economic and industrial conditions. The net revenue of the railways, for instance, during ilie last three years (up to March 31, 1934) increased by £397,000. For the

first two years the increase was obtained by reductions in expenditure. Last year it was obtained by an increase in revenue, the net increase being £235,000. “If we examine the Post Office Savings Bank returns,” Mr Coates pointed out, “we find the same tendency. For the year ended September, 1933, there was an excess of withdrawals over deposits of £279,000. For the year ending September, 1934, Biero was an excess of deposits of £2,934,000 —clear indication that the consumer has more money at his disposal.” The Minister remarked that factory production showed a steady increase, and exports reached a very much higher figure, while the unemployment situation disclosed a substantial improvement. The totals actually fell away during the winter months, when a seasonal increase is normally expected. The quarterly comparative figures for the numbers assisted by the Unemployment Fund are:

Dealing with the banking returns, the (Minister of Finance pointed out that the banking turnover for tlio first 10 months of 1933 was £400,000,000, and for the same period of 1934 £503,000,000. This increased turnover of bank deposits represents, tlie Minister insists, greater business activity. This is also reflected in the average amount on current account from month to month. The average for last year was a little over £18,000,000. For this year it averages over £22,000,000. Mr Coates said it should also be noted that since August bank advances have increased. Dealing expressly with tlie activities represented by tlie conference, Mr Coates said:

“In New Zealand there are many manufacturing lines where we should be able to produce as cheaply and efficiently as the older manufacturing countries. We have or can train skilled labour, we can purchase the best of machinery, we have fairly cheap power, in certain cases we can import the necessary raw or semimanufactured materials, and, what is most important, we should have a right of national appeal for articles manufactured in New' Zealand for the New Zealand market.

“The consumer is king. This is the keystone; the New Zealand manufacturer has at his command a market of at least 1,500,000 persons—all consumers. This is your opportunity. Adam Smith, the economist who has so much influenced the thinking of the last century and a-half, truly said that division of labour was limited by the extent of the market. It behoves the New Zealand manufacturers to adapt their industries to fit at least the home maiket.

Manifestly no address to a representative section of the internal life of tlie country, would be complete without reference to the relationship between the State and individualism. “Nowadays,” said Mr Coates, “from all sides we wear the complaint of too much Government in business, as though the Government desired to extend its activities.” He emphasised that the Government does not desire to extend its activities, but that any Government intervention in business life is brought about by pressure of the circumstances themselves. “In many cases,” added the Minister, “the industry itself frantically calls to the Government for help, and is thankful when any assistance is forthcoming. For instance, last year when the Government announced that it would accept the responsibility for doing something to rehabilitate the dairy industry, there was a sigh of relief. But this year, after a Royal Commission had reported on the subject and the Government proposed taking the necessary legislative action, there was a public outcry that the Government was interfering again. The public’s memory is short.” Mr Coates reminded his hearers that “it is always circumstances that force the Government to take action, and the ends to be served are always those of the public interest.” The Minister’s speech will be read with intense interest from end to end of New Zealand, and if general agreement will not be accorded all his conclusions, at least it can be said that Mr Coates ought to lie heartily commended for the optimistic notes that prevailed throughout his addresse, and the capable way in which he marshalled the facts he placed before the country with such convincing lucidity.

1933. 1934. June . 69.523 60,633 August .. . 72,966 62,451 September . . 75,134 61,469