THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. THURSDAY, 26th MAY, 1932. DEFLATION AND HARDSHIP.

Waipa Post, Volume 44, Issue 3182, 26 May 1932, Page 4

THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. THURSDAY, 26th MAY, 1932. DEFLATION AND HARDSHIP.

WHATEVER degree of concern may be manifest in this country to the happenings in Sweden, it is an apt conclusion that much greater and considerably more personal interest is centred on the trend of events within this Dominion and throughout the Empire of which it is an inseparable part. However, the Swedish position is worthy of more than passing concern. It would appear that a most interesting innovation in that country is -subject to trial at the present time, and the progress is being watched by the rest of the world. A correspondent to-day would have information as to the circumstances which prompted the Swedish Government to adopt the new price index" basis in the cuiTency. One factor stands out clearly—Sweden experienced a greater deflation in all values than this country has ever known and the degree of hardship, even of privation was considerably more searching and widespread than has recently caused so much concern in New Zealand. Of the new currency, very little that may be accepted as dependable is available. So many different vei'sions-have been given that it is by no means easy to determine just what is being resorted to as a basis for the currency system and, more important still, to discover whether the advantages are really as alluring as'some would claim .them to be. Very certainly, time has not tested the permanency of the benefits claimed by the strongest advocates. As recently as on March 13th of this year the London Times reports the holding of a special meeting of the Swedish Cabinet; at its conclusion the Prime Minister, Mr C. G. Ekman, announced it had been decided to summon a special session of Parliament for midnight on March 15th. The Government was asking the House, he said, to rush through a proposal granting a moratorium to certain companies and private firms. The holding of a special midnight session for such a purpose and at such short notice suggests at least that the Government is facing difficulties and it prompts the thought that this or any other country could scarcely with safety accept the Swedish method as ;an established success. Only time can serve to prove its value as a corrective for the difficulties which have wrought such havoc in world commerce during recent months. As concerns New Zealand, however, we cannot escape from the realisation that the export trade, on which all internal circulation is based, has declined from £56,000,000 to £35,000,000.1 It is folly to blame the Government for this rapid and startling decline. It brings

us ali face to face with the imperative necessity for deflation within our own land. No matter how we may revolt against it, deflation is forced upon us. Though we may differ with the incidental steps taken by the Government in its emergency, we cannot, in all fairness, hold the Government responsible for factors which have operated in our markets and forced the decMne in the value of our commodities. Had the Government not faced its unpleasant and equally unpopular responsibilities, accepting internal deflation as inevitable, would not the whole of the Dominion's enterprise in farming, in merchandising, and in the professions, have rushed headlong- to bankruptcy? It is true that the seriousness of the position demands the thought of every organised and individual citizen. But blaming the Government will serve little purpose. Moreover, it can be assumed that the corrective will not be found in any foreign land.. Generally it is to John Bull that this country will look for sound and sane leadership. So far as Sweden is concerned it can be remembered that 1918 did not proI duce a legacy of huge war debts; also •, that Sweden is an entity rather than a unit in what constitutes an Empire, J We in New Zealand are not exactly similar in the comparison with such countries as. Sweden for these very reasons.