MONEY FLOWING TO AUSTRALIA

Hawera Star, Volume XLVIII, 15 August 1924, Page 5

MONEY FLOWING TO AUSTRALIA

PREMIER URGES DISCOURAGEMENT. (By Telegraph—Special to Star.) WELLINGTON, Aug. 14. The Prime Minister in the House today said that Mr Young (Hamilton) had raised a serious question in regard to allegations that certain Australian banks and other financial institutions doing business in New Zealand and making considerable profits within the Dominion were sending large sums of money abroad. Mr Massey said that lie was aware that certain local bodies had been able to borrow money from Australian institutions doing business in New Zealand, but the money was New Zealand money. It could not be termed Australian money until it had been sent to Australia and exchjmge paid. The exchange was a serious matter. At present he was aware that New Zealand money was going to Australia, but not in large sums. The adverse exchange was working to our advantage in that respect. He admitted that, while the sums were small, they were in the aggregate quite a lot. ‘ A member: What do you call small sums ? r.uil' *j3 ssey . : Anything from £5 to ±,IOO. lliat is only a rough shot. I nave been assured semi-officially that during the last few months £250,080 has been sent from New Zealand to Australia for investment in Australia by way of the money order office. I doTH’t know what we can do, but it u ill bo necessary to take some steps to l ?vL Uia^ e anything in that direction. lhe Hon. Mr Hanan: Would that not bo dangerous? There would lie retaliation. The Premier replied that he did not think so. The position was somewhat serious. Mention had been made by Mr 1 oung of very large sums of money being sent from New Zealand r? 1 p; - y , su 6 ar - Seeing that the Colonial Sugar Company was an Australian company, the Premier’s opinion was that we paid for the sugar into Australian banks and it was for them to make the necessary arrangements. * Mi* Ybung; I am assured Ivy one responsible authority that we do pay the exchange, ' Mr Massey said that he was not sure. It was sometimes forgotten that «e were buying large quantities of wheat from Australia (the Hon. Mr Duddo: And potatoes). Exchange has to be paid, and it means a serious in--crease in cost, The Premier added that he knew something about those who were borrowing from Australian institutions. They had to pay their interest in Australia, plus exchange, and so with the principal later on. Mr Young: The interest received in Australia will be worth more than its race value, for the exchange is in Australia’s favour.

Mr Massey said that one fact was clear, and that was that money was dearer 111 Australia than here. He regretted exceedingly that so much money had gone out of New Zealand tor coal when we had enough for centuries to come..