The Guardian And Evening Star, with which is in corporated the West Coast Times. TUESDAY, DECEMBER 15, 1925. PROVIDENCE.

Hokitika Guardian, 15 December 1925, Page 2

The Guardian And Evening Star, with which is in corporated the West Coast Times. TUESDAY, DECEMBER 15, 1925. PROVIDENCE.

Am. the hmmeial signs ol the times seem to p unt towards Hie neees-ity for toresighi in ordering Hie daily round, and lor a ei iisideralile degree ol provideme in providing lor the overcast days abend. The experts who watch the signs of supply and demand as the safest barometer of all to giisee possible financial happening.-, all advise mi ret nines., and frugality for the immediate future. Prices for commodities which form the staple sources of the inflow of wealth to New Zealand are depressed or falling. Tiie lines affected notably are wool, meat, flutter. and now comes news that the I timber export trade i.s being affected by a drop in prices. This shortening of income will have an all round effect, and demonstrates \ery plainly how general prosperity is affected by current prices for products. The less money comes into the Dominion the effect is general all round, and this is the first and essential economic lesson for all to understand, flood prices indicate brighter times, and reversely, lover prices cause more difficult times. With those signs plainly visible, it is wise to act with prudence, and by frugality begin t;> prepare to take care for the to-morrow of more difficult times. It is not a good season of the year lor this condition of affairs to arise, but it is well to recognise it all the same and prepare for it. The Government has the first- duty in this matter, in that it must prepare at once to me t the more difficult times ahead. The tightness of the money market means greater difficulty in borrowing, and restriction in that direction will lie good for the political position. Just now the Government is in an essentially strong position to enforce frugality. The Prime Minister has a backing which will see him through everything in reason, and a severe check on expenditure will not l:e harmful to the body politic, for there are the parliamentary votes available to back up a policy of rigid economy in administration. The time is very opportune for t-he Government to practice such a degree of rotrem Innent as it deems essential for tiie financial well-being of the country, and the way being thus open, a good stroke of statesmanship may Is 1 brought to pass. Local expenditure as well as general, should be on more frugal lines also, to face the more stringent financial situation which i.s arising. Local bodies throughout Xew Zealand are borrowing enormously of late for harbor improvements. hydro-electric works, roads and buildings. Much of this borrowed money is coining from abroad, and a great volume of interest, is going out of the Country annually. With the fall in pri:o> for our primary products, it will be more and more difficult to provide the payments due for loans. This applies both to the government and local bodies. Frugality all round is necessary at this juncture and big business men are being advised against the dangers of over importing at this crisis. The warning i.s therefore in good time tor all likely to be affected to take fair notice of. The advice so generally offered is to prepare for tighter times financially. With a period of difficulty, if net depression, abend, it would bo wise indeed to review the possible situation very intimately. and on that account all producers and business people would be well advised to take stock of the general financial situation, and realising the likely difficulties ahead, prepare for possible eventualities betimes.

Apropos the subject just referred to. it wps statod hv Sir Oeorge Elliott, chairman of directors, at the half-year-ly meet it) a of shareholders of the Bank of New Zealand that notwithstanding the lifting of the embargo, which was recently imposed on the floating of foreign and eolonfoi loann in Tendon.

it is difficult to get money there at the present moment except at n high rate of interest. In view of the depression of trade which prevails in Great Britain, the high taxation and the enormous public debt to America, it is doubtful if colonial Governments can look to Ixmdon with any confidence to supply their monetary wants for some time to come. It is doubtful, too. if America will supply our needs in the meantime, for it is <|iiite apparent that the American public was not enthusiastically interested in the last Australian loan floated there. Underwriters and speculators must have been left with a large proportion of it. for even quite recently every lending institution in this country was being offered large quantities of this Australian loan by American brokers. The difficulty in the immediate future of raising loans may he a blessing in disguise, if thereby a brake is pul on plllsI it- borrowing. Much of the recent expenditure of local bodies has been unwarranted. I lydro-eleet ric ret iculat ion schemes, "■•Specially those serving scattered populations, must for many venrs lie a burden on the ratepayers. There lias also lx on unjustifiable expenditure by harbour hoards desiring t.o encourage overseas shipping, upon harhoiira where the total export trade of the district, served would not, it the produce could lie held lip lor a year, completely I'd I one average-sized ship. As far as the flotation of loans is concerned, New Zealand "ill in the future have to depend upon her on u resources to a greater extent than has been the ca-c in the j.asl.; and unless hum issues arc carefully and judiciously spread, high rates ot interest. will have to he paid. Economy has been preached lor years, and it appears to Sir George Kllioll that it would he siiperlloiis to say much upon that subject to-day. There are signs of the times which may easily he read, and which at the moment indicate that economy will he forced on the pie I and local bodies whether they like it or not.