BANKERS' TASKS

Ashburton Guardian, Volume 50, Issue 125, 8 March 1930, Page 9

BANKERS' TASKS

TWO SEASONS' FINANCING. DIFFICULTIES IN AUSTRALIA. Much of the difficulty which confronts the banks in their daily operations at the present time is due to their being expected to finance simultaneously two sequent events (says the "Sydney Morning Herald".) With the extension of the wool sales and the consequent restriction of offerings, they are still largely carrying the costs of the pastorahsts in growing that wool. The same pastoralists they are financing to cover, the cost of growing and gathering the clip of next season. In all cases where the proceeds of wool have not been received in London, the banks where accommodation has been given are carrying the cost of two seasons' wool. In the normal course of events the proceeds of a greater part of the wool clip would have been received in London, and the money would have been available for financing the coming clip. Normally too, there would have been a great deal of wheat sold abroad, but this year farmers have been selling so slowly that very little wheat has been shipped out of the State overseas; at most 1.500,000 bushels, including wheat in the equivalent of flour, out of an exportable surplus of at least eleven mill lion bushels. The wheat-money comes back much more quickly than the wool money, as it is mostly on .a cable transfer basis, whereas wool is in three months' bills. Normally London funds would have ben nearing their peak. As it is, London funds are still declining, with a consequent embarrassment of bankers and Governments. As with wool so with wheat : the last harvest is still being financed as well as the preparation for the harvest of Novem-ber-December next. Producers who are relying on thenbankers, and who have not disposed of their produce, might in these cir-. cumstances ask " themselves whether they are justified in still holding, in acting the part of speculator with woduee which is partly their own and partly that of the people lending them, money, for whom the banker is the intermediary. That a realisation of their produce would be for the rood of the country there is no question. The primary producer owes something tto the country. He would be more apt to acknowledge his duty were other sections of the community who owe just as much to the country, to show an intention of lightening the burdens which pi-ess on the primary producer through an inordinately high tariff and an industrial" arbitration system making his costs while he has only realisations at low world prices with which to meet those costs.