THE FINANCIAL POSITION

Hokitika Guardian, 10 August 1928, Page 4

THE FINANCIAL POSITION

GREAT IMPROVEMENT. ABUNDANCE Op MONEY AVAILABLE. A AUCKLAND, Aug. 8. H “At the moment New Zealand is in a condition of financial ease,' and 1 bankers are in a .position to find prac- i ticnlly unlimited capital for the de-1 velopment of trade and industry, provided borrowers can furnish the no- ' cessary security.” In these words Sir .Harold Beauchamp, who is on a visit to Auckland, summed up the financial position of the country in an interview. Sir Harold said that in the past twelve months a remarkable alteration had been wrought in the fundamental economic conditions of the Dominion, which on the balance of exports and imports was £13,000,000 better off than it was a year ago. Speaking for the Bank of New Zealand, of which he had been a director for thirty years, lie had no hesitation in saying it could find at least £1,500,000 to £2,000,000 for legitimate enterprises on all classes of sound security. The high prices ruling tor first-class stocks iu public companies and for Government bonds clearly indicated the amount of money available for investment in the Dominion. Until recently there was little difficulty in securing 7 per cent ' for first-class mortgages, but to-day it ' was difficult to find an outlet for mon--1 ey at more than G to O.V per cent, ! while many investors iu public com--1 pany shares were quite content to accept a return of 5 per cent. Owing " to the alteration in conditions every--1 thing pointed to financial case in the 1 next year.

The position in Australia, where imports still exceeded exports and where financial equilibrium had not yet been restored, was not so good. For that reason money was much more in demand in the Commonwealth than in the Dominion. Like water, money found its own level, and, as higher rates could he obtained for it in Australia, it was reasonable to assume that some New Zealand capitalists would bo seeking remunerative investment oil the other side of the Tasman. THE FARMER, “A good deal is heard about the financial difficulties of the New Zealand farmer,” said Sir Harold, “but. as T have repeatedly pointed out, lie lias no difficulty in securing finance so long as he can offer adequate security.” In fact, the hulk of the hank’s advances had been made to farmers and farmers’ trading concerns, and unhappily often resulted in considerable losses owing to unsatisfactory fanning methods. Failure was due in no small measure to inclination, in spite of repeated warnings, to pay too much for land, basing its value on the peak prices of one. instead of tha I average of several seasons. Instance* had been provided in a recent statement in the “Herald” about land transactions in the Waikato, whereseveral land sales had been effected, on the strength of high produce valuer j last season, at £3 to 5 an acre more i than the land was realising a year ago. “T doubt whether it is prudent,” remarked Sir Harold.

The dairying outlook was very good and the value of exports of that industry in the 1928-20 season should approximate £19,009,093, while, giver, good climatic conditions in the next dairying year, they should touch £20.009,093, marking a notable achievement in primary production. Sir .Harold expressed his pleasure at noticing, particularly in North Auckland, from which he has just returned a disposition on the part of farmers to work smaller areas with a striking result in the improvement of the land, while the selection of a better type of dairy animal was tending to improved economic results. Vet everywhere there were too many farmers content to work for a hare existence after paving interest on capital, instead of aiming at and budgeting for a surplir each year with a view to extinguishing their liabilities. The great consideration extended to farmers by the lending institutions of the Dominion was all too little appreciated. WHAT HAS BEEN DONE.

Sir Harold cited examples of farms, some Crown land and some land held iu fee simple, east and west of the Wanganui River. Here occupiers of only a few years’ standing had had their mortgages written down 50 to 6.> per cent and all arrears ol interest written off. The Government also, in the effort to keep men on the land, had in other cases revalued liberally, rejnitted arrears of rent and lifted all rent charges for five or seven years to come. “I do not think that is sufficiently appreciated by the public, which lias beard so much about tile poor farmer, for whom, in fact, wo all have the greatest sympathy,” remarked Sir Harold. “I question whether there are more than 10 or 15 per cent of the farmers of the Dominion who are in Queer Street. The great hulk of them, owing to the good prices realised in recent years, are in a quite satisfactory position. Those who are expressing disappointment at the io suit of their applications made for advances to Rural Intermediate Credit Boards are, I think, of a clam that is not entitled to legitimate accommodation. There is ample money available for them, and everyone else, and for all description of enterprises which offer proper security.”