"SPEND LESS"

Evening Post, Volume CIX, Issue 28, 3 February 1930, Page 10

"SPEND LESS"

ECONOMIC CONDITIONS

SIR H. BEAUCHAMP'S VIEW

'Unwelcome change"

In the course of his address at the annual meeting of the Equitable Build- •- .ing and Investment Company of Wellington; Ltd., to-day, Sir Harold Beauchamp, chairman' of directors, made some' important, comments- on the prelent economic conditions of the Do- . minion. ; "When I addressed you- from this 'chair on Ist February-last year," said 'Sir 'Harold Bgauchamp, "I was con- ' strained to take an optimistic viow of ■ the; economic conditions of the Dominion, and I was justified in that. To- ■ day an unwelcome and drastic change has, unfortunately, occurred in the financial and trading conditions of the ' country. This is duo to the substantial fall in the prices of our primary products in1 the overseas markets. Wool, " meat, butter, cheese, sheepskins, tallow, and hemp are bringing'in Jess money ■than a year ago, and it is obvious that ■'the lcssenod: purchasing power, of our hard-working rural population, and other sections of the community, will ■ he reflected in,the finances and trade of'"tho Dominion during the current year. '■ . / "It is singular that primary products - in many other countries have also cloclined in value to a serious extent. Tea, : coffee, sugar, cotton, rubber,'1 copra, nitrates, tin, and other raw materials "have fallen, pointing to the probability ' of increased productidn coincident with a. lower purchasing power in E.urope. "The changed conditions are not reflected in the past export year, but the figures of the past quarter do indicate the trend. Taking the exports and inir ports of the Dominion for each of the ■past seven years to tho end of September, the position is as under:— ■ ... 'Year to ' Exports. Imports. Excess of. Soot 30. ■ *£ £ ' £' • ]923 .. 45.1T1.5G0 41,202,180 3,909,374* 19- V 4 . 49,433,267 48,034,454 1,398,813* '1923 .. 05,746,757 50,024,054 0,122,103* • 1920 ' ..-43,417,938 51,525,968 3.205,030t 1927 ' ... 45,845,343- 45,992,934 147,591t ' 192S \ 50 248,593 44,140,402 12,108,191* 1929 .. 56,174,333- 48,199,185 7,975,148* . ... 'Exports. flmports. "It will be observed that up to 30_th September, 1929, the figures are satisfactory; although last year's showing ;'was not as good as-in 1028 owing, to -the increase-in imports—the exports ..being:practically even in tho two years. ...The increase shown in imports last year over 1928 amounted to over four, millions,'to be exact, £4,058,753. With two such good export years, with purchasing power of the rural population at a ..comparatively high. level, an in-, crease in ; import's was justified; but, „unfortunately, nearly,- if not. quite, 50 jjer : cent. was in respect of the motor .trade*?:! have not the complete figures' for the' past year, but for the nine months,.to'the end of September there were 22,605 motor vehicles (not including, motor bicycles) imported, into the: Dominion, valued tat . £3,279,935, as compared with 11,215 vehicles, valued at' £1,681,311, in the corresponding nine months of 1928, an increase. -, of 11,390 vehicles, or over 100 per cent., and £1,593,624 in value, or very nearly ,100 per cent. It will, no . doubt, bo •• necessary t.o curtail imports in the cur-! rent..year, but-this should not affect general merchandiso to any serious ex-| tent; but tho imports of motor vehicles and accessories, will stand a good deal of curtailment. "The changed conditions of the for■eign. trade of the country, particularly during tho past three months, aro reilect'cd in the .deposits and advances of .the:.six trading banks.. The movements; .over a period of'years are shown in the table appended:— - December '' Deposits. Advances. Excess of 'quarter. . Advances. 1924 ;'. :-44,«70,'499 45,938,451' 1,259,955 1923 .. <1U,030,302 48,534,427. 2,024,003----1920 .. 44,230,1)50. 51,273,211 7,035,501 , 1327' '■•■■:.'•■-45',70i,057 49,759,001 4,055,G07 1925 .; 51,661,400 -48,101,104. 3,560,302-f 1929 .'..- 53,350,733 53,807,931 '• 451,198 fExcess of deposits. ■ ' . . "Tho excess of deposits of 34 millions in 1928 is turned into an excess of ad-, vnnecs of £.451,198. As compared with December, 1928, the-advances show an increase of £5,700,827, 'but of this amount' of additional credit obtained from Jthe-banks £.1,695,327 has been retained in the Dominion as shown by the increase in deposits, leaving £.4,011,500, -which has been apparently transferred overseas to pay for the increased imports, -.which,'-, as shown above,'.totalled £4,058,783, "What the shrinkage in income from exports will amount to this year can be only a, matter of guesswark, but there is every .indication that it will be substantial. Tho fall in wool has causeda good:deal of:loose talk of a pessimistic nature which is much to be doprceated. Wool, together- with , most of our other export products, is still realising better prices than before the war, but. the lesson"-to be learned from the falling markets is that we must readjust our ideas of values. It is probable that credit facilities will be strained somewhat and money rates may go, higher; indeed, that is already indicated by the Government placing a loan on the local market at 5A per cent, at, par, instead of 5-J.per cent., the rate at which the Government was .recently selling debentures over the counter. Personally, I, consider.the Government, sunder existing monetary conditions, could, not expect to raise money in the Dominion at less than the rate now . offered. The lending power, however, of this and other financial institutions will be adversely affected by the absorption of so-much money by tho State. It is admitted that tho prosperity of this country is chiefly dependent upon trading and industrial activity in • Great Britain, both '■ of which to-day are at a particularly low ebb. Until, therefore, a distinct 'improvement in these conditions occur, we must feel the repercussion in1 the Dominion. In- the meautiin'e,it behoves all classes of the com--ihunity to work harder, spend less on luxuries, and generally to readjust their method of living in such a manner as will enable, them to meet the loss '"favourable financial' conditions, with which we.are faced."