THE FUTURE OF MONEY

Evening Post, Volume LXXXIX, Issue 144, 19 June 1915, Page 4

THE FUTURE OF MONEY

The Chairman of the Bank of New Zealand (Mr. Harold Beauchamp), in his address to proprietors ,of the Bank yesterday, modestly disclaimed any prophetic insight ; nevertheless, he drew some interesting deductions as to the future, based upon material furnished by the past and present. He was forced, he said, to the conclusion that money values are likely for the present to remain high. It is hard to reconcile this view with the fact that the banks, as at last quarter, were overburdened with money — on current account. At the moment there is an uncanny cheapness of money, for with the greatest war of the world in progress and its issue still in doubt present rates are undoubtedly low. The demand, too, is not at all keen; not because it is not wanted, but because even now, after nearly twelve months of war, people hesitate to commit themselves or to be committed to undertakings involving the borrowing of large sums of money. As Mr. Beauchamp says, there is no reason to anticipate a substantial drop in money values after the conclusion of the war. The enormous waste of war, on the contrary, must be paid for, is being paid for, and it can bring back nothing. To local bodies the Chairman of the Bank gives warning that London is likely to turn the cold shoulder upon applications for loans for a long time to come — after the war is over. This, then, is as plain a hint as can be expected that economy in expenditure must be exercised now. New works, possibly some urgently needed, that cannot be undertaken out of revenue will have to wait. No doubt some money will be available, but at what price? Given sufficiently attractive terms any sum can be obtained j but it seems quite clear, as Mr, Beauchamp points out, that money on the old terms and conditions for local bodies will not be available in the immediate future. The bright spot to which the Chairman could not but point are the ruling high prices for all New Zealand's primary products. But, the war ended, a fall in values all round is by no means unlikely. Such a contingency should be provided against now ; nor Bhould it be overlooked by the Government, if it is its intention to impose war taxation during the coming session.