THE CROSS ROADS

Western Star, 13 June 1933, Page 2

THE CROSS ROADS

It is an unfortunate fact that- New Zealand lacks almost entirely people of authority who ar© capable of putting before the mass of citizens a lucid, concise and balanced survey of our national economic position. At the present time New Zealand is faced with a situation which lias an import ant bearing on her future and one which ought to be fully set out for the consideration of every citizen. It requires to be explained without- the introduction of personal opinion or political views and an attempt will be made to do so.

For the last half century New Zea land lias, advanced along the lines oj developing her land resources in the production of agricultural and pastoral products for export. This process has been very successful, large areas ol country have been settled, towns established to supplement the production of huge quantities of dairy produce meat and wool. Factories have been set up to process products and transport facilities increased to handle the mass of exports and the commodities required bg, the rural producer. Until post war years no difficulties were experienced in regard to the' sale of our exports, but since 1919 markets have been gradually closed against us until practically our onl; market is now in Great Britain We . ar© now approaching the position, ii we have not already arrived, where even the British market for our exports is bound to be gradually closed. This situation has-arisen through the changing circumstances of world trade, every country in endeavouring to improve its economic circumstances lias adopted the policy of establishing barriers to overseas competition. It may be held, and probably rightly so, that chis policy in the long nm is foolish and productive of evil results, but that is not the point. Th e policy has been followed, it is in full force and at the moment there are no indications it will be abandoned; moreover it has been directed mainly afc Great Britain, our principal market for New Zealand exports. To meet this position Great Britain also has adopted the policy which has curtailed her power to sell in the world’s market and again it may be maintained the move has been wise or unreasonable, but adopted it has been and there is n© likelihood of an early reversal of the decision. Now in New Zealand it appeared tc be generally considered the change over from Free Trade to Protection would not he to our disadvantage, but the signs are now that, although foreign producers are to be the first point of attack, Dominion producers are not going to he left to enjoy them selves as formerly. Great- Britain aims at being more self-supporting and to achieve this is prepared to give first place in the British market to Home producers. It is not only the British manufacturer who is to he given organized protection, but the British agriculturalist and to a greater extent than we in New Zealand are at present aware. It is true the Ottawa agreement arranges a free and unrestricted entry into Great Britain, of Dominion products and it can be taken as a certainty that agreement will be faithfully carried out. but meanwhile British producers are being organized and assisted in very many ways to meet overseas competition and when tlie many schemes come into lull operation the results cannot help but lessen and. curtail tlie consump tiou of Dominion exports. Particularly does this apply to daiity produc©, which is the most valuable industry we have, employing 3s it does more labour than the production of meat and wool. On the expiration of tlie- Ottawa arraugemejit the British producer will be in a ositiou to claim, what he has already een virtually promised—a partly closed market for liis output against all :°mert. The objective of the recently "stflbhshed political policy in Great Britain is to bring about a system which will give the British producer i larger share in the British market ind correspondingly reduce that li e ld n the past by Dominion and forfeign suppliers. S 0 much for the political aspect of the matter, but there is another side to a more important one. The politician may endeavour to fob W up a policy or lie may abandon it, but he is powerless, to overcome or turn aside the economic factors which have appeared. Great Britain, in the ->ast has paid for imports by exports. I here is no other way in which imports can be' paid for and tb© fact is iiow that a diminution of exports is bringing about a lowering 0 f imports which is reflected in the”low level of prices f or New Zealand products in Great Britain. The price level in Grea; Britain for imports is an indication if the consumers buying power and that capacity to consume rests upon the ability to export. Faced with a large mass of surplus industrial populatioii Great Britain has no option but to get “back to the land” and no lohtical policy can stop that movement. Allowing present trade tenduicies persist it may be iu a few '"ears w e shall sec in Great Britain the movement to the policy of Joseph diamberlain and Jesse Collings of “three acres and a cow” in full "swing, to inter-Empire trading policy and no I jonds of sentiment can prevent such a | movement from having serious ndversciftect.s upon the New Zealand daii'vinir industry ‘ b

fhe foregoing briefly puts the position w e have to face, the question is iKj w ,’s it to be met? Are we meet ng it?

there are three lines D f attack upon his national problem ; it depends ]ar«eiy upon personal points of view and ndivulual interests as to which one will be considered necessary, but in lie long run it can be said with ertainty unless right courses arc now uiosen no individual will escape the lenalties which must follow lack of proper foresight to-day. We can, in the first place, decide ..hat we are going to maintain our uold on the British market. No doubt rids decision will find acceptance gen--rally, but the implications are serious. lo do so involves giving Great Britain -iiuiiar entry on to the New Zealand market with her manufactures to that ■v e expect to receive in Great. Britain •or our exports. It is not a quest ior ■f polities, but of sound economic practice. It is a question of keeping British factories going in order that >ur exports will lie required. It is a piestion of giving our exporters con mining power in order to keep British factories going and additionally them- > selves also. I t i s altogether impossible for exporters to continue puttmg m 20. s and taking out 15s; uljiistment of export costs must come * his adjustment, means that if exports 'i'o to bo maintained capital and 'alour working for export must be paid similar to capital and labour

working in other directions Land values must b© allowed tp rise for that purpose and while the present generation of producers, caught in an economic cul-de-sac, will carry on the next will not, they will escape, for there will be nothing to hold them. The Communist- policy in Russia endeavoured to keep their rural exports up with bayonets and have tailed; no power on earth can keep men working —producing and not consuming. To maintain our position in the British market then, involves admitting tlie British industrialist into ou:1s in order to afford proper remuneration to _ exporting labour and capital and the same time hold up the consumption of our exports. The second course open to us is to pursue a policy of becoming self contained. It is a legitimate policy and one which could be set out with much sound reasoning. By refraining from importing whatever can be pro duced in New Zealand we could with out question build up better conditions than exist to-day. But to do this means withdrawing a good deal of our population from agricultural and pastoral employment and swinging them' over to industrial production. It would he a policy, to us© terms very much mis-used ; of co-ordination, rationalisation and co-operation. It would mean increasing restraints upon importation and withdrawing aids to export; it would -lead to very marked changes in our national life and, although not necessarily a lower level of existence, certainly a very much simpler and less intricate state of society. , It hardly seems worth while to enlarge upon this idea. We have no advocates in our midst of this policy, although we have many who voice the ideal of being self contained, but count- upon the continuance of a large output of export's to finance their ideas of what ough to be done. The third course is just simply to carry on along the lines of our present administration. It is a policy of endeavouring to keep, as. its chief exponent put it, “on side.” W© exhort the exporter to prodHice more and then club him with staggering costs. When lie comes round he gets a reviver in ill© shape of a raised exchange and later on an uppercut from a sales tax and unemployment levy plus more raised costs. How he will be finished off is a matter for conjecture, but being on a farm is a very unpleasant business these times, not because of any danger of being put off, but because of the blows in preparation and where they will fall. Ou the other hand tlie “oil side” policy is carried on by taking with the left and giving with the right. It is a policy of no principle at all. It- means gathering in as much taxation S*f~possible, borrowing* as much a& possible and spending as much as possible in as wasteful a way as possible. It is this “on side” policy-of taking from Brown to-day and giving to Jones and to-morrow taking fiiom " Jones and giving to Robinson, and the next day going th ro ugli the process backwards, which is our real trouble. The fall in export prices and consequent problems—unemployment, unbalanced budget, depleted incomes, and various related factors are of very small account- compared to. the fact that w© are not shaping up to adjust matters. We are waiting some fairy god-mother ;to tkun up>._ with a magic wand or perhaps a sponge and wipe out our debts. What is wanted is a summing-up of our resources, our national position and of ou r future. The present- Government are the proper peopie to do that and if they understood their job and had a right appreciation of their duty they would lay th© whole matter in front of tlie electorate and take a decision. They will not do so; they prefer hole and comer methods instead, persuaded first by this interest and then by that. It i s rapidly becoming a question as to whether we are to govern ourselves in accordance with democratic principles- or b© governed by financial and manufacturing interests with the latest “out o*r work” interest rapidly coming to tlie tore. SUUM CUIQUE.