ECONOMIC PROBLEMS

Wairarapa Daily Times, 18 January 1933, Page 6

ECONOMIC PROBLEMS

POSITION OF FARMER. MEETING IN WELLINGTON. WELLINGTON, Tuesday. .Economic problems facing the country in general and! the farming community in particular, were discussed at a meeting held to-day. The meeting was arranged by the New Zealand Farmers’ Union, but- invitations were extended to representatives of other sections of the community. Commercial interests were represented, and several members of Parliament, including four Labour representatives, were present. A comprehensive agenda paper has been arranged, and it is anticipated that the deliberations will last all day and possibly extend into to-morrow.

The president of the New Zealand Farmers’ Union (Mr W. J. Poison, 0V1.P.) presided. The main subject of discussion was the exchange problem, a motion suggesting that the rate should be raised to a point at least equal to that of Australia and Argentine competitors being carried by 35 votes to 7. Although the chairman said he thought it would be better to have the discussion in committee, it was decided, on a vote, to allow the reporters to remain.

Mr Poison, in opening the proceedings, said the object of the meeting was to assist the Government, which was distracted by many grave difficulties and which had all classes of the community to consider. They did not desire to go in for destructive criticism, although they naturally were mainly concerned with their own difficulties. Any plan they might evolve should be of benefit to the community as a whole. The farmers did not wishto suggest that any section of the community should be spoon-fed. He believed it would/be necessary to undertake further economies in New Zealand, andj that further economies were possible. He estimated that in the last few years the farmers had lost the staggering sum of £2'(X)'',ooo,ooo. He was aware of many small farmers in baekblock districts who were suffering to a greater extent than even the unfortunate ira- . employed in the cities. It was his belief that the people in the cities now realised that their recovery and prosperity depended on the recovery and prosperity of the farming community. ■Mr Poison went on to say that it was the British way to pay debts, but he was convinced that unless something were done to help the country on the road to prosperity, it would be necessary for us to compound with our creditors. If New Zealand did everything possible to help herself, then she ■could not be blamed if it became necessary to do that. It had to be remembered that any plan they could evolve could only deal with internal conditions; they were hopelessly unable to do anything to control external conditions. He suggested that there were four problems that could be dealt with: (1) High' interest rates. (2) The crushing effect of high taxation. (3) High costs. (4) The reduced purchasing and spending power of the community. Mr Poison said that if they could remove some of 1 those handicaps tliey would undoubtedly create employment in New Zealand. The position of the farmer would not be improved so far as the external markets were concerned, but his handicaps would be reduced, and he would be enabled to carry on until tkd, return of prosperous conditions. The first proposal submitted to the meeting was:—“That the exchange rate be raised to a point at least equal to that of Australian and Argentine competitors.” In moving this, Mr James Begg referred to the beginning of the exchange agitation, and said that to-day those who were demanding free exchange nine months ago were seelcing pegged exchange, while those who had advocated a pegged exchange were asking for free exchange. In his opinion, some arrangement of the exchange was absolutely essential. In Australia, with the existing exchange rate and the !Paterson (Scheme, butter exports were increasing by leaps and bounds, and the New Zealand producer was going to find it very difficult to keep up his exports in face of such competition. It might become impossible. Under such conditions the farmer was going steadily down, and in those cases where farmers were carrying on it was very largely at the expense of improvements and the welfare of the land. City values would inevitably come down to a degree equal to that of farming property, Mr Begg continued. The only hope for the city industries was a restoration of purchasing power for the farming community. The gap could be bridged by a process of wholesale unemployment, bankruptcy and suffering, ■but was it right to go through such a process, which might even upset settled government? The raising of the exchange to the Australian level would not put the farmer on his feet, but it would be some help to him. It would be only one of many necessary things, but it would be a big factor. Mr Begg said he was wholly in favour of a free exchange if they could get it, but free exchange presupposed free exchange of goods and services. The process of rehabilitation must be accompanied by a drastic reduction of costs and probably a further reduction in interest. Nothing could keep interest down until the Government refrained from borrowing and prevented local bodies from extravagant borrowing. In seconding the motion, Mr Maehin said that one of the most important reports that had been submitted to the Government was that of he economists, but unfortunately -the addendum of the New Zealand Treasury was more Widely read than the conclusions of the economists. Subsequent events had shown how puerile and short-sighted that addendum was. The Secretary to the Treasury had urged some other method bf overcoming the difficulties of the fanner, but that other* method had not been found yet. He did not think they had! any reason to be afraid of tackling the exchange. After some discussion for and against the motion was carried bv 35 votes to 7.—(F.A.) * i ;