DOMINION’S FINANCES

Dominion, Volume 19, Issue 44, 16 November 1925, Page 10

DOMINION’S FINANCES

LOCAL BORROWING URGED

DAIRY EXPORTS PROBABLY £20,000,000

VIEWS OF SIR HAROLD BEAUCHAMP

In the course of an interview at Auckland, Sir Harold Beau champ sounded a pleasing note regarding the Dominion's finances and future prosperity. No country, he said, had assisted farmers to sucli .an extent as New Zealand. He did not favour the institution of an agricultural bank. He urged the raising of loans within the country where possible, and predieted a record year for the export of dairy produce. New Zealand, he added, would always show its inflexible opposition to Communism and Sovietism.

By Tblegbai-ii—Special Correspondent Auckland, November 15. The present financial position in New Zealand and its relation to world conditions were subjects dealt with by Sir Harold Beauchamp, in the course of an interview. The lifting of the embargo on the raising of loans in London was also referred to by Sir Harold. It would be followed no doubt by numerous applications for money in the world’s centre. It had to be remembered, however, that England to-day was no longer the big creditor nation that she was in pre-war days, and the amount of the savings of the people did not approximate to what it did in those earlier times. England had to discharge large claims for domestic liabilities. the payment of the dole was an instance. Since its inception payments, he understood, amounted to '£300,000,000, or more than the amount of the National Debt prior to the war. Further, if there was a revival of English industrial conditions, there would be a corresponding demand for monev for development purposes, and that would leave less for investment in overseas countries. I “Public bodies in this country will sooner or later have to apply the soft pedal. In recent years they have raised large sums for carrying out numerous schemes, which will be remunerative or otherwise. The raising of such vast sums by municipal and public bodies is having a prejudicial effect on taxpavers who reside in various rating area's, and this is having an effect on land values. I refer particularly to residents in country . districts who are called on to contribute rates and payment of interest on monevs borrowed for investment in artificial harbours, where in some cases nature never intended such harbours to exist. Locally-raised Loans. ‘‘ln carrying out all necessary public works, especially those contemplated by the Government, I should like to see the loans for such work raised locally. For such accommodation we might have to pay a slight increase in the rate of interest, but this would be retained and circulated, among our own people, 'and not remitted abroad, as would happen if we looked to London or elsewhere. Monetary conditions in the Dominion, said Sir Harold, were on the whole distinctly easy, and those entitled to legitimate accommodation had practically no difficulty in getting what thev required from banks and other lending institutions, to say nothing of the vast sums loaned to the farmers and others by the Government advances to settlers and others. The onlv people who were insistently clamorous for a State or Agricultural Bank were those who were not entitled to accommodation on account of the poor security which they were in a position to offer. “I claim,” he said, "that no country in the world has assisted farmers to such an extent as New Zealand through the State Advances and other lending institutions. Think cf the millions that have been found byfthe State Advances Department during the last few years, and compare them with the advances which could be made bv an agricultural bank, wth a capital of a few hundred thousand pounds.” v Popularity of Debentures. Financial ease was generally reflected in the daily Stock Exchange quotations. An examination of quotations showed that there were scarcely anv shares, of a popular company which would yield more than 5 per cent, at ruling prices. That, no doubt, was largely-, the reason for the popularity of tax-free debentures and inscribed stock bearing interest at per cent. It was the return which the large investor could get from that form of investment which was preventing him from applying to any great extent for the New Zealand Government loan, now on the local market. That Joan bore interest at 5J per cent., and after deduction of tax would only , yield £4 ss. 3d., per cent., against a return of £4 15s. on tax-free bonds, including redemption. “Whilst we cannot look lor particularly high prices for wool this season, we mav anticipate much better rates tliatii those which ruled in pre-war days.” sad Sir Harold. “The market in this connection will be tested by the wool sale in Wellington, when approximately 10,000 bales will be offered. Ravine regard for the stupendous losses sustained bv the majority of freezing companies through having paid for stock on the hoof last season, prices greatlv in excess of the parity of London values, we mav anticipate that these companies will operate most cautiously in 1925-26. At the same time I have heard of several contracts which have been made for Jamb for delivery in 1926 round about 275. 6d.”

Bright Outlook for Produce. “The outlook for butter and cheese, particularly the latter, is most encouraging. Several English houses have fixed contracts for cheese on a basis of Old. per lb., f.0.b., a highly remunerative figure. In a recent cablegram it was pleasing to ncte that New Zealand butter topped Danish by a shilling a cwt.” Sir Harold added that he would not be surprised if the exports of dairy produce for 1925-26 approximated something in the vicinity of £20,000,000. "On the whole,” concluded Sit Harold, "I think the people mar anticipate a happy and prosperous New Year. What pleases me most is the thought that the Prime Minister, the Hon. J. G. Coates, will be able to form a strong, able, and progressive Ministry, and with the assistance of a substantial m.-i--ioritv, will be able t<» legislate for the benefit of all classes of the communitv-.” Sir Harold said that in common with a great many other people he war, extremely gratified at the results of the general election, which meant the return of the Reform Party bv such an overwhelming majority. Nobody, be thought. anticipated such a result. No

doubt the unexpected happening was largely due to the sympathy displayed bv the Labour party with the seamen on strike and its advocacy of the “usehold" policy in New Zealand. There was a large and increasing number of freeholders in towns, cities, suburbs, mid country, and naturally all of them would vote against the adoption, of such a principle as that contained in “usehold.” He had noticed the growing strength of the Agrarian Party., and in that respect the country was differently situated from Australia.

. New Zealand’s Future. “For manv years past,” continued Sir Harold. “I have expressed the opinion to friends in England that it is only a ciuestion of time when New Zealand will become one of the most conservative countries in the British Empire. In the use of the term •conservative’ I mean the country’s respect for the rights of property, and its inflexible opposition to Communism and Sovietism in every shape and fprm- M -