ADDRESS AT NAPIER.

Waikato Times, Volume 113, Issue 18851, 23 January 1933, Page 6

ADDRESS AT NAPIER.

BY GOVERNOR-GENERAL.

ECONOMIC PROBLEMS CONSIDERED OPTIMISTIC NOTE SOUNDED NAPIER, Saturday. Tlie Governor-General, Lord Bledf-s-oc > gave an address to the Napier Chamber of Commerce to-day. Lord Bledisloe took as his text what lie described as two unassailable propositions—lhe unavoidable and Interminable economic interdependence of all ihe civilised nations of the world and Ihe similar interdependence throughout the world of agriculture, industry and commerce. His Excellency referred to the paralysis of world trade as affected by stagnation in the flow of monetary ■gold. “ That the whole world should be faced with bankruptcy and social upheaval through the unavailability of the particular metal chosen, as a matter of convenience, by civilised people for facilitating commercial transactions between nations and Individuals is unthinkable and grotesque,” he remarked. “ particularly if such unavailability be due, not to Its serious world scarcity, but to the process of hoarding, ooupled with the artificial interruption of the free flow of goods and services whose value it is Its function to represent.

The Monetary System. “ For over a century there has d®-» veloped an economic system which is essentially international and which has rendered possible a simultaneous rise both in population and in the standard of living. This system is in process ■of destruction, and unless it is restored either tlie population of civilised countries or their standard of life must materially decline. Its restoration would appear to involve the establishment, by definite international agreement, of an international monetary system which will serve the essential requirements of world trade. “ This in turn seems only likely to toe secured subject to certain conditions: (1) A rise in the general level of commodity prices throughout the world; (2) a reasonable settlement of reparations and war debts; (3) the removal of fiscal and other Impediments to the free international exchange of goods and services by which means alone International debts can be paid; (4) the discontinuance of the hoarding of gold; and (5) due economy In the use of gold or whatever be the future medium or media of exchange, so that the volume of currency and credit may keep pace with the growing volume of production and trade.” Pointing out that since Britain’s abandonment of the gold standard gold prices had continued to fall while the level of sterling prices had risen 4 per cent., Lord Bledisloe said that the producing classes in the sterling area had been able to compete in outside markets to a far greater extent than gold-standard countries. The sterling area was much better off economically than-the rest of the world and its position would be further improved If sterling prices rose more into harmony with sterling costs. Great Britain had facilitated such a rise as from last April by rendering money readily available at the lowest possible rates of interest and by using every endeavour, pending the International Eounomic Conference, to facilitate the purchase of her goods by tlie primary-producing countries of the sterling area—a process more essential to the economic salvation of New Zealand than to that of any other part of the world.

Stimulating Enterprise.

“ Sufficiency of cheap money in any country can do much to stimulate internal trade and promote enterprise," said His Excellency, “ but harmonious international co-operation and the free Interchange between nations of commodities and currency will alone restore industrial equilibrium. "There is said to be over-produc-tion to-day, not only among manufacturers, but also, and particularly, among primary producers,” Lord Biedisloe, continued, in dealing with his second proposition. “If the monetary medium of commodity exchange were plentiful and the law of supply and demand were allowed freely to operate there would be no appreciable over-production of food or tho raw material of clothing. " if there were a plentiful supply of gold (or whatever might be the token or medium of world commodity exchange), and if In the absence of national tariffs, bounties and cartels, cheapness were allowed free play, local surpluses would flow naturally to where there is a scarcity and would be bought freely with a plentiful currency," said His Excellency. “The extraordinary factor —particularly marked on the Continent of Europe—is that with the fall in the open world market prices, the demand has not increased, as it inevitably would have done under normal conditions and universal freedom of trade. But for man-made impediments imposed in supposed national interests, tha cheapness of food would have increased its consumption and facilitated the absorption of the world’s output."

Clogged tho Wheels. Similarly, •there was said to be nO actual deficiency of gold, but the aggregation of over 00 per cent of the normal requirements in the coffers of two nations reduced commodity values in terms of gold and clogged the wheels of international exchange. "International readjustment is pressing and inevitable unless economic adversity and a serious lowering of the general scale of living are to become normal, instead of temporary, world factors, and this needs to ho recognised and aeled upon at the forthcoming International Economic Conference. Such readjustment should dispel from Hie mind of efficient and alert primary producers the bogey of overproduction and the fear of their occupation becoming' permanently unprofitable. “So great is the variety of soil and climate and so abundant is the sunshine in Hi is nature-favoured country," concluded Lord Biedisloe, “lhat there should be almost endless scope when normal world conditions return for its primary producers lo meet all the requirements of the British market from time to time, and to supply commodities which would leave some profit to the producer, if not in one direction, then in another.”