TRADE REVIEW

Evening Post, Volume CVII, Issue 145, 20 June 1924, Page 4

TRADE REVIEW

A BANKER'S CONCLUSIONS

MORE ECONOMY, LESS GRUMBLING

A NOTE OF WARNING SOUNDED.

After quoting ■ figures relating to the imports and exports of tho Dominion for 1923 and 1924, Mr. William Watson, Acting-Ohairman of the Bank of New Zealand, to-day referred to the business conditions -in tho Dominion. He remarked that producers of primary, products have, on the whole, experience!* a fairly good year. +hough weather conditions were n. aether favourable. The s severe losses mada by mercantile houses through over-importations in 1920 and 1921 were things of the past, business now being conducted at profh, though heavy losses of capital had stil! to be made good, It was believed that retailers had nod donoeo well as during the previous two or three' years, despite the fact that extravagance was stili rife, Stocks of goods on hand were said to be rather'much in excess of requirements. The woollen manufacturing industry • was feeling cempetition from abroad, consequently stocks are in, creasing and profits shrinking. Sawmillers and timber merchants had done very well, the demand for timber, being, heavy and continuous, v "That this country with its abundant coalfields should have found it necessary to import no less tt than £624,649 worth of coal from Australia last year is most disappointing, said Mr, Watson, "Unfortxinately, the tactics of the coalminers in recent years have scared investors and money-lenders, and, consequently, little'money is likely to be invested in coalmining . ventures, FREEZING INDUSTRY, "The _ majority of the meat freezing companies are in mosjt unsatisfactory nnancial. conditions," Mr. Watson went on. "This is- due'largely to there being' v i many -work^ particularly in .the A;orfch Island, to undercapitalisation, t.) inexperienced management, and to failure to build up reserves whert times wore prosperous. Although in several instances shareholders have lost all the capital paid up, it must be borne in mind that far too often shareholders were paid .by their v companies much more for their. live stock than it was worth. Depositors with these particular companies lost Iheir. money i guarantors to the banks had" also ha^ to pay' up._ and even the secured creditors have suffered considerable loss. Several other companies are staggering on under loads of debt, and' it is difficult to sea how they are to escape liquidation unless some satisfactory merger of interests can be arranged. During the season just ending there has been strong competition from freezing companies and .exporters for sheep and lambs at remunerative prices to the' producer, and at the prices paid it must be a difficult matter for the purchasers' to make profit. The steady increase in wool values will help to some extent. The exceptionally dry season has been responsible for a large proportion of second-quality' Jambs reaching the freezing works. The market for beef shows no improvement, and it is evident that our frozen beef cannot, at the present time, compete successfully,with..the.chilled.beef of the Argentine. It is gratifying to note the great recovery in wool prices which has taken place during the last..- twelve months, with the demand for wool still unsatisfied. Although all - qualities ars wanted, the most satisfactory feature is tht' strong demand for medium and coarse wools, as these comprise tlie bulk or tl|e New Zealand clip. Another graafying featuro is the great expansion'in the export of wool to the' East, which, during the paEt year, amounted to approximately 200..000 bales .from Australia and New Zealand, as compared with say, 20 000 bales in 1914. Compared with values ruling twelve months ago crossbred wools show an increase in value of.approximately-50' per, cent, to JO per cent,., merinos and halfbreds 25 per cent, to 40 per cent.

DAIRYING CAUSING CONCERN.

"The position of the dairy produce' market is causing some concern. Although, owing, to -weather- conditions, the quantity exported so far' this season is not as great as last, heavy shipments have reached England during the last Jew months and have met with a poor' demand at reduced prices. Mainly'owing to the increasing quantities reaching the English markets'from other countries, it is probable that dairy farmers may have to accept lower 'prices lor their produce in the future, and this of course will be reflected in land values m tins' Dominion.. "flic Dairy Produce Control .Board recently formed is expected to improve marketing conditions,~.or, at any rate, to . see that tho interests or dairy farmers are" protected to the fullest extent possible. IMPORTED WHEAT.

Owing to the serious shortage ■ in the .wheat yield of the Dominion,' the government has arranged to make large Purchases in Australia. Much as itx is 'to be regretted that sufficient wheat is not produced in this country to-meet our requirements, it cannot he expected i a M t OU,r farmors .should grow wheat whilst their land can be put to more profitable use, 1h, 3 -wheat purchasa has intensified the acuteriess of the exchange position between the Dominion and Australia., ' -T, LAND PROBLEMS.'

Country lands ■ have no t changed hands to any great extent,, vendors1 , ideas of value still being much in excess lof those of prospective buyers. [Jnim- : proved or partialjy-improved bush lands iare not easily disposed of, not only hejcause of the present excessive cost of ! ""Provements, but a l so because of difficulties of financing such propositions, lenders bemg extremely shy of that claw; c£ security I n several districts in the ..North Island, improved bush country, unless well handled, has a pronounced tendency, to develop rubbishy growth and experience has shown that apart from that disability the 'quality of the pasture deteriorates .. few years | after it has first been sown. Where the plough can be used, that difficulty can- be overcome by its use, and by liberal manuring. Many deserving and industrious settlers who took up rough bush land without possessing the necessary. capital or credit to complete the required improvements and to adequately stock their properties have been obli"---d to abandon their holdings after years «<m, mg against adverse conditions, lhere is- no question that considerable areas of land., thrown open years ago by the Government-for settlement under, various leasehold tenures on what! were at the time considered reasonable! terms, should never have been grassed, in view of the greatly-increased cost of improvements, it would be but fair that there should bo not only a. revision •of the .rentals oE such properties, but also that an occupier should bo allowed to relinquish any unimproved portion of ;:he property, provided 'the latter.area w largo enough to support a ncttlsr

■when improvements can, if ever be effected at a reasonable figure. The settler who goes out into the wilderness to carve out a home for himself is ent'tled to every consideration—in a great many, cases it would pay to let him have the land for a mere trifle, subject to his making satisfactory improvements within a reasonable period, but he should not have the right, save in exceptional cases, to sell out. . ;

"As a rule, unimproved bush country should be handled only by men of ample means. On the other hand, some twenty years ago considerable areas of improved land were leased on terms which have enabled the fortunate lessees to-transfer at a handsome profit after allowing for the capital expended on further improvements.' CITY AND SUBUBBAN PRO-' " PERTIES. '• It. is desirable to sound a note of warning with regard to city and suburban properties which in some centres have changed hands at such high prices that,, whether the occupiers be owners or tenants, the rent charges are necessartly so great that success in business is rendered very difficult." " NO ONE SHOULD GO' SLOW." In concluding his remarks, Mr Watson said . "I believe wo may regard Uie. immediate butloek with equanimity 1/rices for some- of our most important products may decline, although dwin? the coming season there should atill be a considerable balance of trade in our favour. Many of our producers are carrying O n under adverse conditions; uu u their competitors abroad are having trouble also. It must not be forgotten that the great majority of our j settlers are in fair , circumstances,* and quite able, to withstand a fall in Value ot their assets and reduction ih income.' Had economy been practised during the years _ when phenomenal prices were received for our products, there wouldbe less grumbling to-day over the burden of taxation and the difficulty of getting an adequate return on capital HH r 6 mUr t , lo°k forward to » gradual deflation- of land values as the cure or the worst of the evils from which IL*Z Present suff e™g- Stabilisation at present values is out of the c^iifistion, sichtl yrli urge one and an ™i to io£» an' ■! -.^ important fact that economy in its wider sense Is absolutely necessary to.the welfare and prosperity of Oi» country. We have'in %7 Zel iand most., things suitable to healthy Me, but, unless our exports can b 0 prod> ced as cheaply as those of other coun™a UI^ esß *»■-avoid execs., of luxury m our imports, it stands to rea. son that considering our heavy obligations., ultimate prosperity will net be J m'hi, i° n° should;dle'or go slow n n V"° r jlng,- years' nd the fertility Ulned. We have one of the finest countries in the world; let us keep it so by &™ii 8-3£t:» to thoso who wm'in