War and Finance.

Press, Volume LI, Issue 15453, 4 December 1915, Page 10

War and Finance.

The review of tho financial situation given by Mr Harold Beauchamp, tho chairman of directors of tho Bank of New Zealand, at tho half-yearly meeting of tho shareholders, held yesterday, was as ablo as most of tho previous deliveries from tho samo quarter, a.nd tho circumstances made it unusually interesting on this occasion. Wo aro glad to see that Mr Beauchamp drove homo tho lesson which wo have so often sought to enforce in those columns lately, namely, tho urgent duty of every patriotic citizon to economise and save as much 33 possible during the war, for the purpose of conserving our resources for the continuance of tho struggle, and to build up a reserve which will enable tho Empire to meet tho depression which is likely to follow tho war, and to do so in the best possible way, namely, by supplying tho capital which will be required to rc-establisli our trade and industries on the old footing, and to take full advantage of tho opportunities of extension by the opening of new markets, Mr Montagu, the English Financial Secretary to the Treasury, put tho matter very clearly and forcibly tho other day, when ho said

that there was no direction in which tho public could stint itself without exercising a beneficial effect on the national expenditure. ,lf it went without goods which were imported from abroad it lessened the amount to be sent abroad in payment. If it stinted itself by refraining from buying goods made at, Home, it set free labour to be used for the production of things required by t,V> Government, or for the production of things to be sold abroad. 110 laid down the broad principle that.

'•Tlio man who spends money on an article which lie can do without now, find docs rot set himself to mould his life so that he will he in a position to give up half his income—tho man who does not set that- ideal before himself is, in my opinion, not doing his duty in this .war." If any argument were needed to enforce this view, it was surely supplied whsn >Ir Montagu, speaking with lull knowledge of the facts, calculated that next year the deficit which the Chancellor of the Exchequer would have to meet would be £1,433,000,000. '•But,"' some may say, "this, no "doubt, is a sound policy and ,i neces- " sary policy for Britain, but •' is it really essential for Xew Zealand "which is doing so well, to restrict "private expenditure?'' The answer i- twofold. In the first place, although Xew Zealand is doing well, it is piling up debt at a rate at which we should all have stood aghast a couple of years ago; taxation has heavily increased, a.jd will increase still more. For our own protection, therefore, we should take advantage of our present prosperity to provide for the storms and buffets of the future. Hut we are also part of the Empire, and it is our duty to conserve our resources so as to do our part hi the war of the "silver " bullets.'' The time may corne, sooner than we think, when the Mother Country may find it nceessary to ask us to raise a war loan ourselves, instead of relying -wholly on the British Government. As to the duty of refraining, ?-s far as possible, from the consumption of foreign good?, Mr Beauehamp, r.s a banker, was able to make clear an important fact which we fancy has

13ot ynt dawned upon the "man in the " street.'' Ho pointed out that every purchaMJ of American goods, for example, by New Zealanders, has gone to swell the balance of tho hugo indebtedness of I/ondon to New York, and helped to intensify the exchange difficulty. That is perfectly truo. If a New Zealander buys an American motor-car, and it is paid for by a bill on London, it will give New York the power of drawing gold from Ivondon, and thus help to mako the exchange more unfavourable. In whatever way it'is paid for the ultimate result will bo as Mr Beauchamp has pointod out, so closoly interlocked is tho machinery of exchange. The whole speech is worthy of careful study, and wo hope the lessons it enforces will bo laid to heart.