THE WAR AND FINANCE.

Auckland Star, Volume XLVI, Issue 144, 18 June 1915, Page 7

THE WAR AND FINANCE.

» REMARKS BY MR HAROLD BEAUCHAMF. FAB-eiGHTED ACTION ol' TTIE LMLLKIAL GO\ IiKXMJiNT. I tltj Telegraph.—Special to "Star.") WELLINGTON, tliis day. At t.he annual meeting ~f ihe Bank of Xew Zealand at Wellington t-day. the . hitlrnnin. Mr, Harold Ileau.-bamp.' alter siating ih.-.t HU member- ot the bank st.uTr. bad joined the Expeditionary Force-. :t ii.l arrnngenn-nlr. w.-re being made i..r more men to go by employing -tut.-,; tint tlcrm.ut currency in samo.i lias he-Ti lately super-.-.ie,l by British tn.l a br.iiK-h of the Bank of New '/.eaItin.l has been e.-t iblished at Apia, the principal town of Herman s.im.u. The Hank of Xew Zealand had eontri l.tlte.l directly to the varums relief funds Ci.n.Vi. and bad also remitted moneys of viirioiis relief oignnisntions t" London free ..f exchange, equivalent to upwards of fl.SllO. When is added lo this the halfpay allowed to all our ollicers on active service with the forces, and which at present amounts to some iiT.soo per annum. it would be seen that the institution was making a large contribution for war and relict purposes. 1 Great and profound economic changes . have occurred in euii«.c.|iieiii-e of the war. land ti> ..tie ould as yet l'.i.i.tiv estimate tie f.ir-re.i.liing rll'ects of the titanic struggle Ihe ni-a-uics a.lopled by the British 'lovcrnment t" meet the linanciiil d.'.li.-u'.tics pre, ipitated by Ihe \\ ar ha ! ; r 'V.-.l , i, lite whole elTlvtive. and had i.-o;ie far I ' ;i.— '.st in m.iiiit linini! the pre i lilinci:,-.' • I Loud -it a- tile woild'- great linttne ,1 vet:tie. Whilst other .■'.uutriiv h id foillld it ne.-s-ary to proll.hii the oxpori of 2o'.\. Itrittin had prrseive.l its trad.'.i'tu -md maintaine-l throughout 'i tree poll market, except, of course, for cxp,.rts to eii.-ti.v st.ifs Recognisinc tii- important part which finance must II iv ; t, the war. the British I .'overnir.ent It id determined to e.-inscrvc British linau- . i.tl r.-our-e, t.. the utmost extent po---ib'e. iti order . at the supplies for vvar purpose* tnav he available. a<= and when rejtrri-d. W.th th.it en! in view, it had pnrtva.lv taken control of all new i-init.il 1-,-t-s ;ti Greit Rrit tin. by pr-' i t'. it n. is-ue shall be made that has re ln-i-n previously apurovel .if by the Tre.isiirv. Th - r.-Mi'at ion. it will be at once seen, close, the London in-ir.ey market t" all is-ues of .-apital on account of undertakincs uti.-'-.ntiect.-.l with the Br,t'-''i I-.-iit'Tf-. an.l to t'nose even within •'te Rri.i-h E.-np.ire thit are not : ti close 1 association with Imperial inter.--ts. Th<-re-ull is that the vast stream of credit ] con-tantlv fiowine to 1.-0n.1.m from Brit lated there as in a financial reservoir. 1 the outlet of whi.-h i- controlled by the ■Rr t : s'i Government. In this vviv. sup tdies of tint i-.-enf-nl sin-w of war ~. ~,..v _ a-,. n-siirrl not only fir the T , ri .:. h K-nt-'re --.-If. '".it .'-" f "r 1.-i M,- The fieilitv w ; ' i wh'ch all n 1i mf ... fat 1 i fo' 1 --' "'■"' '' r.if-(l-t.-t'iiitin-T .is fir as the Bn'-'i Ow. m ' pr' r cent to n 1 fie tinder 4 per cent, i 5 ~ ~,,. .. ~-.,:-e,..,-,- to the effectiveness .11 the tr.. i.lire- ad,.: ted ai-d to th ntir. ~'e.i ~r.-n-.-t'i ml soon.ln M British , r.'.l t in these credit -h-ik.n- tim.-. vfter ii'.lii.lini: to the economic did- ,.,,!,,!,.,. villi. Ii must 1 aiised by the diversi .f -li'-h vast .„„..,mt- of capital ■ from industrial purposes to the work of destruction, and declaring the universal Ironiidence of the nation in the final issue. 'Mr B.anehanip paid a tribute t" thi' work j accomplished by the Navy. Although '_~,,-,. | ( ~ses had. of course, occurred, the total was in-iL'tiiliiiint when compared 'with the iitr-'rcgale wtilings. Ip to the I,- nt the Kaipara, nnd the Tokomnni were the only New Zealand Bhips that J had been sunk by the enemy. The British Government, in tbe early i days in the war. established a Govern- ' ment insurance bureau. This had ;hi en of the greatest assistance to shippers :to and from all parts of the British Empire. I: had enabled them to obtain full cover for all their shipments at reas .liable rates. It was questionable who- : th.T. without it. underwriters would have been abb- to meet the demands upon them. ' It: any case, the rnt-s for war risk would 1 . ro'.i.-iiilv li.-.ye been almost prohibitive.

Th u.cn-ui r- vvhirli it was found ncces- j sarv lo adoi,l in this Dominion, viz.. the : notes le-.-al tender proclamation, the projhibitioh of gold e.\port. and the Mort--.'iiees Intension Act. were still in nperuiion. and likely to be continued until the ,d...r* ot li.c war at any rate. , The lastnamed Act had. unfortunately, proved -'•:,.'.-.vhat unsatisfactory. Designed p.imarily for the protection of mortgagor* against possibly unjust ' ar-1 nrl.itrarv action by mortgages. il' bid no doubt" been of n.'ieh service in prcventinc hardr'.tin to mortaagors. whose liabilities were ir.nturiiia and who were unable to make provision for tlif-m. It had enabled them to carry on their mortgages at the rate ot inter.-st piuvided in the mortgage deed, i,.;d had Hi that way no doubt assisted to keep down ti.e value ol money f.n mortgage purposes, whi-h runs to-day at from ',' to i) p.-r cent per annum. But the Act had lieen taken advantage of by quite a I number of mortgagors, who, being in the enjoyment of a low rate nf interest, had whilst possessinu the means to discharge their liabilities, claimed the protection of th- Act ami utilised their available funds in lendiiiL' on mortgage themselves at |~i'!:,-r rites ~f inter.-t. This was. of t.,'ir-.0. a perversion of the benefits conferred by the Ait. and it was understood ihtit. in th- 'inning Parliamentary sosM.'.n. th- matter would receive attention at 11;- hand- ol" the Government. I It wns not at nil certain that tlic | „,, ~,,,-,,,- in such ,-*,•-< were not ' ~ier "i-i-i.ti ' thetti.-i-lves. m that those rt -b . are bonalide claiming Co; proteeItioti of the Act vverr wire in i.'-'ing •■■". 'Tli.-i-i- ivas n. reason tt. anticipate that | i .-iili.--.uiili.il drop in money value* would .'til-:.- place after the conclusion of the I Kli .. v.,( a few in a position to judge .I t .,-',. th- view that there will then he In! ill further nppr.i-iH.tio.., and his (Mr. ; |-„. : ,-.i,-iampV.i "'Wi opinion "tis that .thos,. alio are rearranging their mortrage liabilities, is th, .v mature. on tinbeCt terms possible, are a,ting with a | events will ftillv justify. Money values are likely, for the pre-,-,-nt io remain comparatively high. It was true that, in the meantime, there iIno shortage of money; but this was s|'ar;e|v o.yin;: to the tact ihat enterprise .! is stagnant, and tiiat trade generally in r running in much restricted channels. When the future i» more assured, the supplies of floating capital will probably be quickly absorbed, and money may become scarce.

LOCAL BODIES' LOANS. { With the closing of the London money J market, that fertile channel of supply of our local financial requirements ha.become absolutely seaJed. and. for the information of those local bodies- who may have schemes of expenditure in prospect, Mr. Bcaiti-hjimp stated that, apart from Ihe uncertainty of the war's duration, it wa.s. in his opinion, exceedI'mgly unlikely that, the London money j market, even after lilt- t-crmimution of | hi.-tilitiit--. would become favourable for the issue of loans for some time. The demand loi capita.l to make good the destruction that h.i-d been wrought by the vv.tr would be enormous, and the sotirciv of supply would, to Mini- extent, ibave run dry. In any .tie.-, when LonI'l'itl loans again be-..tne pos-iblr there is hoiiml to be a great rti-h for applications, and this naturally iv.ill result in I lt-iuli-rt. demnndiiii; higher rubes tliun those which in recent yens they have I I.e. ti ready to accept.