LOANS FOR WAR CHARGES

Evening Post, Volume XCI, Issue 92, 18 April 1916, Page 7

LOANS FOR WAR CHARGES

MR. BEAUCHAMP OPPOSES LOCAL BORROWING

EFFECT ON MONEY MARKET.

(BI TELEGRAPH.—SPECIAL TO TUB POS.T.)

AUCKLAND, This Day.

A view emphatically opposed to New Zealand raising internally loans • for financing its share of the cost of the war was expressed yesterday by Mr. Harold Beauchamp, Chairman of the Bank of New Zealand, who is visiting Auckland. "I am of opinion that it would be inadvisable to raise a large loan for war purposes in the Dominion," declared Mr. Beauchamp, "and I think we should confine our efforts for the present 'to the raising of moderate sums for the carrying on of public works and avail ourselves of the offer made to us in the early -part of the war by the Imperial Government to provide necessary funds for the carrying on of our share of the war. If for example what one would consider the moderate sum of five million pounds were raised in this Dominion for .a war loan it would have an immediate effect on the money market and would probably cause an increase in the rate of interest by half or one per cent., which is not in the interests of the trading community nor of the Government of the Dominion at .present. As the last banking returns show the Government is in an exceedingly strong position, but as Sir Joseph Ward has already pointed out every shilling will be required in the near future. Our safety lies in maintaining the present strong position." Mr. Beauchamp was asked if there were any special circumstances to account for the fact that the issuing of Australia's two big war loans had had no appreciable effect on the smaller financial transactions affecting the farmer and others contributing towards the development of the country (as pointed out by Mr. Dennison Millar, governor of the Commonwealth Bank recently). Mr. Beauchamp replied that Australia was carrying on her finances upon a somewhat different basis from New Zealand, inasmuch as the Commonwealth had undertaken "the whole of the note issue and notes had been issued to the extent of over 40 million for financial purposes. Against this the Government was holding a certain proportion of gold but many financiers considered that the rate of issue had to-day assumed such proportions which might give rise to some anxiety. "We in this country have contented ourselves by ■ making notes legal tender," concluded Mr. Beauchamp. "But against our issue we have to hold pound for pound in the shape of gold bullion and Government securities, so that I maintain the conditions in Australia are not the.same as they are in the Dominion." ■ . .