The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FRIDAY, JULY 15, 1910. CAPITAL AND ENTERPRISE.

Auckland Star, Volume XLI, Issue 166, 15 July 1910, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FRIDAY, JULY 15, 1910. CAPITAL AND ENTERPRISE.

Tor the catue the* loett wmttlmtOm, For tie wrong Oct needs rahtimma*, Far the future i» the dfetonoa, lad tie good tiat uo on da.

The bank returns for tie June quarter are now before the public, andi certain important fact 3 contained in them, are being utilised by opponents of the Government in a manner that even .a. prolonged experience of Opposition -.--tactics would hardly have enabled us to •anticipate. As New Zealand knows to its cost, there is a certain section of the Opposition which, in its desire to discredit liberalism, is fully prepared to damage the country's financial reputation and injure it 3 prospects to the best of its ability; and the special feature of the bank returns that is now being exploited by members of the Opposition for this unworthy purpose is the evidence supplied as to the rapid increase of deposits during the last few months. The returns for the June quarter show that deposits have exceeded advances by over five and a-half millions; and we are invited by the Opposition to recognise in this vast accumulation of -wealth a convincing and infallible proof of the financial unsoundness of the country and the general futility and inefficiency of its Government.

When criticism sinks below a certain TniruTnum limit of rationality there is always some difficulty in meeting it with appropriate arguments; but it ought to be possible to convince even members of the Opposition that the interpretation some of them have put upon these particular facts and figures is really fatuous and indefensible. Let us go back for the moment to a period only twelve months ago, when the whole country was struggling through a financial crisis. The facts of the position were undisputed; money was " tight," the banks were "putting on the screw " all round, and the demand for financial assistance in all quarters was far in excess of the supplies available to meet it. All these are matfiers of puhlic knowledge, but the point to -which we particularly wish to direct the attention of our readers just now is that the evidence almost invariably cited to illustrate the financial and commercial depression through which we were then passing was the great increase in Advances and Discounts, and the corresponding falling off in Deposits, as shown in the Bank returns. The inference was sound enough at the time, as anybody with the least experience of business affairs might know. But now that the tide has turned, and the depression is over, now that Advances and. Discounts have once more shrunk to their normal dimensions, and money has poured into the banks, till Deposits exceed tAdvances by no less than our Opposition friends are still alarmed ami dissatisfied and apprehensive; and their latest exploit in the sphere of national finance is this ingenious attempt to prove that while the excess of Advances over Deposits last year was a sign of our financial instability, 'the excess of Deposita over Advances this year is equally an omen of evil and a portent of approaching financial disaster.

Considering the facts of the case, most intelligent people will be divided between wonder at the fantastic illogicality of the Opposition argument and indignation at the perversity that prompts men who attribute to themselves a large share oi public spirit to employ such an expedient as th» to the detriment of the country's financial credit and prestige. Wa can hardly expect to convince people so hopelessly prejudiced against any farm of fact or argument that can be construed as reflecting favourably upon Liberalism; but we may suggest that theire is a very obvious reason for this suilden and extensive accumulation of money on deposit in the banks. What, may we ask, was the primary cause of the financial "tightness" last year? Was ;it not the fall in the market values of tour staple products which brought dowm our exports at leaet four millions sterling bolow their normal level? And what has been the primary cause of our rapid recovery from the deplorable position into which the country had drifted a year ago? Everybody who has paid the least attention to the subject, from the Premier and the chairman of the Bank of New Zealand downward, agrees that the cause is the rise in our export ■values.

So vast are the resources and so marvellous are the recuperative powers of this wonderful little country, that within these twelvse months our exports have risen in value by something like five millions sterling, with the inevitable consequences eet forth in the bank statistics. How would it be possible for the large returns i wnich have come' (back to our producers to distribute .themselves easily and, rapidly through the ordinary channels of trade? And while these great sums, representing the rise in value of our staple products, are waiting the opportunity for productive investment, where should .they be found but in the banks? It is ludicrous to suggest that in a young and undeveloped country such a sudden influx of wealth could possibly find an outlet at a few weeks' notice, more especially considering the effects of the recent depression in narrowing and restricting the openings usually available for colonial capital. But it iB almost inconceivable that, under such circumstances, men of experience in public affairs should point to this sadden and temporary rise in the amount of our hank deposits as a proof that out-

financial and commercial prospects are unsatisfactory and depressing, and that moneyed men have lost faith in the country and its future. The Oppositionists!, who have used this puerile argument, may choose between-the imputations of extreme ignorance and hopeless prejudice; but -whichever alternative they prefer, they can hardly expect this ridiculous distortion of simple and intelligible facts to secure for them the respect and confidence of the country.