3

8.—5

postponed and wool also was held up. During the year ended 31st March, 1922, all previous years' balances were cleaned up, and the shipping of the 1921-22 production was fairly well up-to-date. The safer figures to go on are the actual production in each year. The latest figures for the present season indicate that our production of butter will be much ahead of that of last year, and of cheese a little more. Meat will be about the same, and there will be a falling-off in wool. In considering these figures it must be borne in mind that the season just closed has been one of the best growing seasons experienced throughout New Zealand for some years past, and it is unlikely that next season will equal it. One of the best barometers of production by farmers is the importation of fertilizers, which for the last year shows a distinct falling-off. 18. The British Board of Trade prepares index numbers in which the average values of Britain's imports and exports are expressed in percentages of 1913 values, the index figura for which year is taken as 100. They are of such interest that we give them here : — Average Values as Percentages of 1913. r[ , , . Exports Imports. (Unit G o^"f d ° m 1920—First quarter . . .. . . .. . . 284 326 Second quarter .. . . .. . . . . 285 358 Third quarter . . . . .. . . . . 289 376 Fourth quarter . . . . . . . . . . 283 373 .1921 -First quarter .. .. .. ... ..220 334 Second, quarter . . . . . . . . 192 283 Third quarter . . . . . . . . . . 182 241 Fourth quarter . . . . . . .. 170 226 .1922 First quarter .. .. .. .. ..149 218 These figures show that, relatively, Great Britain is still receiving much higher prices for her exports than she is paying for her imports. During the first quarter of the current year the margin has widened further in Britain's favour, the difference being 69 points against 56 points for the last three months of 1921. The relative values of her imports and exports are really more favourable to Great Britain than the figures given would indicate. These, values are taken at British ports. Britain, however, brings in imports and sends away exports in her own ships, and freights are much higher than before the war. In New Zealand the position is the reverse. We export what Great Britain imports, and import what Great Britain exports. While the average value in NeW Zealand of our exports is no higher than pre-war values, the average cost of our imports delivered in this country is very much higher. The outstanding feature of our present trade position is the small purchasing-power of our products in the goods and services received from other countries. It is the purchasing-power of our products that governs our whole financial situation. Expenditure and Loans. 19, The following statement shows the increase in interest, sinking funds, war and other pensions, and ordinary expenditure, between 1914 and 1922 : — 1922. 1914. £ £ £ Total expenditure .. .. .. .. .. 28,466,838 11,825,863 Less — Interest and sinking funds .. .. 8,412,278 .. 2,887,981 War pensions.. .. .. .. 1,722,596 Old-age, widows', and miners'pensions .. 957,729 443,352 11,122,603 —; 3,331,333 Ordinary expenditure .. .. .. £17,344,235 £8,494,530 Increase in ordinary expenditure, £8,849,705 — 104 per cent. The following statement shows the increased borrowing since the 31st March, 1914 : — Public Debt apart from Sinking Fund. 1914 .. .. .. •• 99,730,437 1919 .. .. ~ .. 176,076,260 1920 .. .. .. .. 201,170,755 1921 .. .. .. 206,324,319 1922 .. .. .. .. 216,827,319 In addition to this local bodies are borrowing heavily, largely outside the Dominion, and are adding at a very rapid rate to the. annual foreign payments that the Dominion has to meet. The Committee emphasizes that borrowing, if continued at the above rate, will add, in four and a half years of peace, as much to our annual bill for interest and sinking fund as the whole amount payable in pre-war days. It would seem desirous, therefore, that until the quantity of the Dominion's exports is largely increased no money should be borrowed either by the Government or local bodies unless the expenditure of such money will certainly be'reproductive.