“RESTORE CONFIDENCE”

Hawke's Bay Tribune, Volume XXII, Issue 204, 12 August 1932, Page 8

“RESTORE CONFIDENCE”

AND CLOUDS WILL MELT AWAY 80ME MEANS TO BETTER DAYS. GOVERNOR-GENERAL’S VIEW. Christchurch, August 11. “Determination and optimism breed confidence, and confidence is the herald of prosperity,” said His Excellency the Governor-General, Lord Bledisloe, in an address today at a Royal Empire Society luncheon. His Excellency showed how lack of confidence was an obstacle to the return of prosperity, and described some factors which were responsible for the lack of confidence in the world to-day. “Restore con..adence,” said His Excellency, “and the clouds which now darken the industrial horizon will rapidly melt away. Lack of confidence is the reason why capital, which should be employed in reproductive labouremploying industry, is being drawn toward stagnant unproductive investment, or deposited to excess of requirements in various types ot banks. Ihe same reason prevents or retards customary non-exiravagant expenditure upon ordinary commodities, when such expenditure is imperatively needed and may be a good investment in saving the spender part of the heavy cost of unemployment arising out of slackness of trade.

“This lack of confidence may be engendered in different countries by many causes, including fear of war, high tariffs. Government competition with legitimate private enterprise, sudden fluctuation in money values, scarcity of the medium of commodity exchange, and industrial strife. Over several of these factors we have individually but little control, while others can be moulded as our judgment and vision dictate. Moreover, a sane and far-sighted policy in our domestic affairs aids materially in the solution of problems of wider scope. “Empire and world conferences are essential nowadays to the adjustment of financial and economic abnormalities and the smooth running of the machinery of industry and commerce, but unless this machinery is firmly bedded in national and individual sanity and economic wisdom such conferences are bound to prove abortive for the restoration of that confidence which is the hinge pin of industrial stability. What is done in the homes of our own people and in their council chambers is reflected in international conventions and conferences.

FUNCTION OF MONEY. “How few people who speak of money, whether as the reward of service or the price of goods,” remarked His Excellency, “realise that it has no intrinsic value in itself, but is merely a token or exchange ticket in the hands of a country’s consumers, that it originally came into use as a convenient substitute for the barter of goods and services for other goods or services and that if and when it fails to fulfil this useful function owing to insufficiency, hoarding, or any other cause, its justification as an instrument of commercial equity ceases. The virtue of monev is jn fact to be found not so much in its amount as in its purchasing value, and if this is to be maintained on an equitable basis the volume in actual circulation at any one time should be equivalent to the value of the goods on the market. Apart from shipping and other services and interest on investments, a country’s exports can only be paid for by its imports. If this balance is not maintained the whole system of international trade is thrown out of gear and a creditor nation possessed of a large portion of a depleted currency can insist upon payment of her debts on a higher scale than was originally contemplated. “Subject to a readjustment of world currency and a reasonable measure of preference in British markets,” His Excellency said, “the trade prospects for oversea British possessions are by no means unfavourable. In no less than 24 commodities record imports into Britain from such territories were reached in 1931, and in respect of many of them the increased turnover has more than made good the loss consequent upon their reduced value.”