THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. SATURDAY, 21st FEBRUARY, 1931. OVER-PRODUCTION.

Waipa Post, Volume 42, Issue 3263, 21 February 1931, Page 4

THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. SATURDAY, 21st FEBRUARY, 1931. OVER-PRODUCTION.

IT is significant that In three careful analyses of world conditions, which were made recently by leading authorities, over-production was given as the first of a number of causes of the widespread depression. Sir Arthur Salter, director of the economic section of the League of Nations, in two interesting articles which are contributed to the London Times, described the situation as an example of the paradox of general plienty causing general impoverishment. He added: " General over-production, the. economists say, is impossible—but on one condition: that there is a satisfactory system to secure exchange distribution and adjustment and that condition is not now fulfilled." Addressing the New York Academy of Political Science, Mr T. W. Lament said that the consensus of opinion ascribed the world-wide depression chiefly to the following causes: (1) Production out-running consumption, not only in many basic commodities, such as cotton, wheat, copper, rubber, silk, sugar, and oil, but also in many manufactured products; (2) efforts in many parts of the world to hold up commodity prices artificially; (3) the fall in the price! of silver; (4)>,the shifting on an almost unprecedented

scale of gold holdings among various countries; (5) current political unrest; and (6) the spirit of rampant speculation in certain countries, particularly America. The Economist pointed out that this diagnosis of the fundamental causes of the world depression found corroboration and amplification in the statement which was issued recently after a meeting in Paris, by the International Chamber of Commerce. The first of the causes set down by the Chamber was: " A general increase in productive capacity, which has temporarily outstripped the rate of increase in population and in the capacity of consumption." Putting aside the question of the relative weight to be attached to several factors which enter into the larger problem, the Economist directs attention to the facts that the authorities named agree in pointing to over-pro-duction as the predominant feature, and that there is also general agreement that this was due to the failure of the world to adapt itself adequately or with sufficient rapidity to certain changes in economic balance and structure imposed upon it by the course of events. Figures were quoted by Mr Lamont to show that in many commodities there have been large increases in the rate of production during the last year or two, which suggests that for some years hidden forces havte been gradually creating the crisis which has now been reached. Convalescence from the world's ills will be slow, because the real question is not merely readjustment, but the correction of oversupply extending over a wide range of agricultural and mineral commodities upon the value of which the purchasing power of half the world depends. The Economist's conclusion", after its survey of the position, was that no short cut in the way of concerted inflationary expansion of aggregate currency could save the world as a whole from the painful task of re-establishing the economic balance which it had lost.