MR NASH'S MISSION

Wanganui Chronicle, Volume 83, Issue 166, 17 July 1939, Page 8

MR NASH'S MISSION

FRANK COMMENT “NEW ZEALAND CANNOT STAND THE PACE” SHOULD RECOGNISE FACTS The opinion that “under the Savage programme New Zealand has tried to go ahead too fast,” she “cannot stand the jece,” and should recognise it now, is expressed by the editor of the Financial News, London, in a long article published on June 26. “There must be mt.ny countries today whose Governments would like to give their peoples immunity from the shocks and horrid jars of a world which is too much with us,” says the Financial News. “They would dearly like to avoid alternations of prosperity and depression, to be secure against damaging changes in world prices, to raise the standard of living of old and young by measures of social security and the like. Unfortunately, despite the courteous examples* of the totalitarian States, it cannot be done, and least of all by a country situated as New Zealand is. The objection is not merely that New Zealanders, virile and likeable people as they are, are much too gentlemanly and kind hearted to begin, as totalitarian defaulters do, by cheating their creditors. What is really more to the point is that New Zealand, more than almost any other country in the world, has built u;v her economic system on the basis of overseas trade.’’ What is the Remedy? After discussing the outstanding features of the Dominion’s economy, the writer goes on: •Mr. Nash has been quite open about the difficulty which the New Zealand Government is experiencing in burning the candle at both ends and the middle as well. It is an open secret, however, that the authorities in London have asked, as a prelude to any help they may give, that New Zealand should bring forth fruits meet for repentance. The difficulty is that Mr. Savage will not give up his guaranteed price schemes or his extensive social programme. Instead, he proposes to reduce imports into New Zealand. The reply of British interests is that even if this is a remedy at all (it may be and it mayn't), it is one which, from the British industrialist’s angle, looks almost as bad as the disease since Britain happens to be the largest exporter to New Zealand. On top of this comes the Japanese forward policy, which selfgoverned countries in the Pacific naturally do not like. To rearm and maintain the full Savage programme and pay debt interest and find £17,000,000 to repay the maturing 3i per cent, loan in Londort on January i 1 is frankly a task beyond human acI complishment. A Compromise I ‘ What is the answer to all this? A.s i I with most British problems, its best | solution would jrobably be a com-] promise. This its not the time when | : a divergence of view between a Do- j minion and Great. Britain should stand ;in the way of that Dominion's defence policy. Without prejudice to ■ any other matter which the two countries may have between them, ! New Zealand should be assured of I whatever assistant e is necessary for her arms requirements. If she can raise it in London, on her own responsibility, so much the better. And while the British Treasury cannot guarantee a New Zealand conversion loan of £17,000,000, it equally cannot deny the facilities of the London capital market for an issue to that end. | “On the other hand, the authorities i would be on firm ground in insisting that New Zealand, having made her ■ | words that she should offer the British I investor a sufficiently high rate of in- - est t him for the adI alt lona 1 risk factor involved as a result of New Zealand’s policy in the last three an I a-half years. That ; rate of interest may be 5 per cent, or more even for a relatively short-dated • stock, particularly if some additional j millions for rearmament are tacked lon to it. And the British Treasury is I a doubly interested party, since it does ■ not want the market spoiled for its 'own defence borrowing by the exist- | ence of large masses of undigested I New Zealand stock. The Import Question. ; “For the rest, it docs not seem in 1 an;, case that New Zealand can main- • tain the recent volume of her im- . ports, including imports from Great Britain. Whether she continues her 1 import restrictions or whether she devalues her currency, the result will be ' the same. If she does not cut her coat according to her cloth, the eventual i result must be default on her overseas I obligations, however strong her resolution to the contrary. The kernel ot the difficulty remains. Undoubtedly, i under the Savage programme. New | Zealand has tried to go ahead to fast. She cannot stand the pace. If she were to recognise that fact now, it might be immriiately in the interests of her creditors, but it would be ultimately in her own. The moral seems clear: and the logic of facts may force on New Zealand a decision on which our own Government has no power to i insist, but can only advise.”