RESTRAINT ON CREDIT

Press, Volume XCV, Issue 28179, 18 January 1957, Page 8

RESTRAINT ON CREDIT

Banker Reviews Effect

(New Zealand Press Association) DUNEDIN, January 17.

In spite of credit restrictions, business and public confidence in future trading prospects appeared high, Mr M. Y. Walls, of the Reserve Bank, Wellington, told the economics section of the Science Congress today.

“Turnovers generally have kept up, and there is increased efficiency in watching costs. Substantial falls in sales have appeared, however, in some firms and industries; but these are by no means wholly because of the credit squeeze,” he said. Many firms had ceased their tendency to overtrade and were making efforts to consolidate their business.

The effects of possible tighter trading conditions in the future would be felt more in the Auckland province than in the south of the South Island, Mr Walls said. The reason sprang from the apparent greater readiness of the Auckland businessman to change his business, take a risk, or seize an opportunity, compared with his Otago or Southland counterpart, “In consequence, the financial statement structures of some Auckland firms may, at times, indicate a greater tendency to overtrade and more instability than is shown in the accounts of

similar businesses in conservative Dunedin or Invercargill,” said Mr Walls.