A BANKING REVIEW

Evening Post, Volume CXI, Issue 144, 20 June 1931, Page 12

A BANKING REVIEW

Mr. William Watson's speech, as chairman of the annual meeting of the' Bank of New Zealand, yesterday,' covered a wide range. In addition to references made to the business of the Bank itself, he touched upon some controversial subjects, such as gold and currency, taxation generally and as applied to banks, exchange, production, and industry, and he particularly referred to trie dependence of .the wealth and welfare of the Dominion upon its husbandry; The speech was thoughtful, lucid, and comprehensive, and will no doubt be read with interest by all who follow the fortunes of the Dominion. But it: is upon the chairman's references to the agricultural and pastoral resources1 of the Dominion and their current values that most attention may be focused. The heavy drop in the values with much increased volume (wool excepted) of the country's exports is at the bottom of almost all our domestic troubles. There is' at least £10,000,000 less coming into the country this year than last year, and higher exchange has undoubtedly increased cost of living in so far as the price of imported goods is concerned, and, incidentally, of production, too, by enhancing the cost of articles manufactured and otherwise required in conducting the primary industries and by the primary producer. Taxation and rates have been'increased, and the former, it is feared, is likely to be heavier, with reduced income to meet'it. In addition, acute unemployment has made heavy inroads into public and private incomes, and may for some time continue to do so. <

That is the position that the banks as a whole have to face. It is admittedly difficult and likely .to ' remain so for some time to come. But New Zealand is not the only country whose products have depreciated in value, whose private assets have been drastically written down. What a speaker at the meeting of the Bank of New Zealand yesterday described as the "economic blizzard" has not left that institution scatheless. But the bankers here and in Australia, as study of their published returns and balance-sheets over the past few years "will show, foresaw the coming trouble. When it came it found them prepared for it, and well it was for the public, good that this was so. The banks as at present constituted cannot pull the world out of its present difficulties, but they can, and in their own interests «they probably will, put their united shoulders to the wheel. Mr. Watson refrained from reference to the still unpublished Niemeyer Report to the Government; but so far as he could go he made out a good case for the banking system of this Dominion, and supported his claim that "the system has met the needs of the country and enabled the banks to assist their customers in weathering the storm with the minima of illeffects."