B.—3

REPORT. INTRODUCTION. 1. The limited time at its disposal enabled the Committee to deal only with the more urgent questions arising from the effort to readjust the economic activities of New Zealand to the new conditions resulting from the severe depression. These questions, which are the immediate concern of the Dominion, we examined from several points of view as thoroughly as the time and data at our disposal allowed. The more the conditions affecting each are analysed the more numerous appear the factors that go to influence a very complicated situation and the more clearly emerge certain considerations, such as the dependence of the prosperity of New Zealand on world conditions. Each economic fact, even in a country such as ours, of relatively simple economic structure, is the result of the action and interaction of ail intertwined set of factors. The rapidly increasing complexity of the problems renders the formation of any judgment peculiarly difficult even after careful analysis since the factors combining to produce a given result are constantly changing in different ratios to one another and in different directions and may be supplemented by entirely new factors. 2. Moreover, forces governing economic processes are always so numerous and interwoven with one another that no adequate discussion of any practical problem, if it is to be of use, can be presented in a form free from a certain complexity of argument inseparable from the complexity of the data and the forces at work. There are various aspects of the same problem to be considered ; distinctions must be drawn between immediate and ultimate results, between direct and indirect effects, between money and the realities it measures, &c. A treatment of such a subject as foreign exchange, for example, necessarily demands some brief preliminary exposition of elementary facts and principles, if a discussion tracing the nature and the effects of the various policies possible is to be followed with full understanding. 3. We have made no specific recommendations in this report, our function being to attempt to collect and assess the facts relevant to the critical situation of the Dominion and trace out as clearly as possible the effects of different courses of action so as to assist the Government in deciding between different competing policies that may suggest themselves. 4. Care has been taken to examine only the economic aspects of the questions mentioned in this report, and, whilst necessarily confining itself to those questions which are of most practical importance at the moment, the Committee has refrained from examining them from the point of view of politics or political expediency, or in any way other than that leading to economic readjustment in the national interest. 5. The report falls into more or less clearly marked divisions. We cannot hope for success in treating any disturbance of social conditions unless we know the causes that brought it about and its essential nature. Therefore the earlier part of the report (Sections I to VI) discusses the causes and the nature of the economic troubles afflicting the Dominion. The next section attempts a general discussion of the problem of remedies and ultimate adjustment. The following five sections develop this problem in detail. 6. The Committee feels it necessary to stress the point that the discussion of the means and methods of adjustment should be considered as a whole and due attention given to the fact that in most cases its findings cannot be taken and applied in isolation without regard to the implications and conditions specified in the Report. 7. The Summary in Section XV is a resume of the chief conclusions found by the Committee in respect of the various methods of adjustment it has examined. These, of course, are based on the data and the arguments of the text in the main sections, but none of them can be properly understood, interpreted, or applied without careful reference to the detailed treatment of the topic in question to be found in the text itself, with the appropriate limiting conditions and the many related conclusions that cannot be even hinted at in a summary. 8. The statistics used in the text and tables in the appendix have been supplied and checked for the most part by the Government Statistician. They are part of the official statistics of the Dominion, and therefore as accurate as can be obtained. It is important to note that in respect of statistics, particularly in cases like index numbers of changes in rents, wholesale or retail prices, cost of living, and wages, care must be taken to note the exact meaning of the particular figures used as a basis or assumption at the outset of the argument. 9. It is also important to note that when the Committee uses figures by way of illustration—-as, for example, a particular per cent, in respect of exchange—the use of such figure should not be interpreted as a suggestion that it be adopted in practice.

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