DEPRESSION SEEN AHEAD

Wanganui Chronicle, Volume 83, Issue 118, 22 May 1939, Page 8

DEPRESSION SEEN AHEAD

GOVERNMENT’S POLICY BLAMED • i RETAILERS ON IMPORT CONTROL “It seems the height of irony that, while the Government and its protagonists are still boasting about what a wonderful spell of prosperity we are enjoying under Labour's beneficient rule, and how the spending power of the masses is again increased by the advent of Social Security on April 1, it is deliberately imposing famine, or war, or depression conditions on the people, and preventing them spending this supposed increased purchasing power on the goods they desire to buy by an absolute prohibition of the goods they demand," states the New Zealand Draper, Clothier and Boot Retailer, in an article on the import restrictions. "It was a favourite remark of our Prime Minister's during the slump that depressions were ‘man-made’ and unnecessary, and on assuming office he assured the country that Labour had a plan for ‘insulating’ us against the influence of future depressions beyond our shores,” the article states. “There has been no depression or slump outside New Zealand since Labour assumed office, so that the working of the mythical ‘insulation’ system has yet to be tested. "Prices of our products overseas are still at a satisfactory figure, and our national income from that source has not declined enough to cause the slightest grounds for a slump here, but by the manner in which the Government is imnlementing its new economy, and raising impassable trade barriers around our coasts against goods in exchange for our exports, which are the common, every-day requirements of the people, is fast creating a new depression here of the first order, and the alarming position which is developing was plainly told to the Prime Minister by the large and representative deputation from our federation, which has met and set before him without exaggeration or false emphasis the facts which our traders are now called upon to face. “Retrenchment Likely.” "It must be obvious that if overseas supplies are cut down by over onehalf our retailers’ turnover will suffer proportionately, and that means a drastic measure of retrenchment if not closing down for many of our shopkeepers. Wholesale dismissal of shop assistants, office and workshop staffs will be forced on us, and that means unemployment and distress for many breadwinners, who will be illfitted to take up new jobs for which they have no training, and forcing them on to Social Security benefits will mean driving them to poverty point. Their loss of spending power will affect the turnover of other trades, and so we will find again that vicious circle of progressive unemployment and reduced spending which is such a painful feature of trade depressions. “The present indications are that, instead of our being insulated against outside slumps we will be cut off from enjoying the prosperity which other Empire countries are now experiencing, and he plunged into a slump of our own creation which a rational and statesmanlike policy could avert. Drain on Overseas Sterling. “In replying to our deputation, the Primo Minister said that the Government. refused to cut wages or reduce the high standards of living it created. But our retailers have never favoured a wage-cutting policy when they are fully aware that their turnover and volume of trade depends on the earnings of the people, and it is difficult to see how the new standards of living are to be maintained if the goods and supplies which constitute those standards of comfort and living are unprocurable. "Mr. Savage also said the funds in London must be restored, but is is clear from the fact that the restrictions on imports already imposed have so far failed to check the drain on overseas sterling, that the Government must seek elsewhere for the cause of that depletion, and may find it nearer home in its own lavish expenditure rather than in our very moderate importing of what our people have come to regard as household and personal necessities.

"Until the true source of the drain on London funds has been located (and it is obviously not due to our now restricted imports for retailers) it is impossible to suggest the effective remedy, and the panicky manner in which the Government has rushed into shutting off the normal and natural supply of goods to our people is likely to do far more harm to the community here than benefit, to sterling funds overseas.”