DOMINION FINANCE.

Lyttelton Times, Volume CXVII, Issue 17329, 18 November 1916, Page 6

DOMINION FINANCE.

CONDITIONS AFTER WAR. FUTURE LIABILITIES. THE NEED FOR ECONOMY. The matter of the Dominion’s financial condition at the present time, and the probable difficulties of the period of readjustment which would have to be faced on the conclusion of the war, formed the subject of an interview with Mr Harold Beauchamp, c.bairmau of directors of the Bank of New Zealand, which is published in the “Now Zealand Herald.” “ It is an extremely difficult matter to forecast with any degree of certainty the exact conditions likely to arise,'’ Mr Beauchamp remarked, “for so much , depends on the war’s duration, and England’s position when it is over. So far as New Zealand is concerned, it is, at the present time, in a condition of great financial prosperity, brought about by tbo abnormal prices we are obtaining for all descriptions of produce.” These prices, explained Mr Beauchamp, ensured a very wide margin between exports and imports, the halance. of wade this year in favour ot New Zealand being estimated at approximately £13,000,000. INCREASE IN NATIONAL DEBT. This fact, in Mr Beauchamp's opinion, unquestionably accounted in large measure for the success of the recent war loan, which had been raised from the savings or the profits of the public. At the same time a heavy drop in the prices of our primary products must tie anticipated when war was over, _ moreparticularly in regard to wool, frozen meat and dairy products. The steady increase of the nitional debt was also referred to by Mr Beauchamp. “We must bear in mind that fact that according to recent estimates we are increasing our national debt at the rate of one million pounds per month. If the war continues for another year or eighteen months, I think it is reasonable to assume that the national debt will be increased to _ not less than £20.001!,000. On the basis or 4} per cont interest, that means an addition to the annual charge for interest of £950,000 per annum. FINANCIAL AID FROM ENGLAND. The possibility of obtaining financial aid from England on the cessation of hostilities was considered by Mr Beauchamp to be very slight. “ I think we cannot look to England to provide us with money for the development of public works for some years tq come," Ho declared, “ and if this opinion prove correct, we shall naturally have to look to our own resources for money for the carrying on of public works. With a narrow margin between imports and exports, I fear we shall not he able to do much more than provide interest on our public and private indebtedness. To-day it. is certain that we have raised money for' the prosecution of the war at 4j. per cent per annum, whereas England is paying as high as 6 per cent for her treasury Bills.” In the past, Mr Beauchamp said, Britain had been a leading, creditor nation, but she was now in the unfortunate position of being a debtor nation, the United States having taken her place in this respect. The possibilities of Britain’s trade expansion were also touched upon. “Of course.” said Air Beauchamp, “if there be a large expansion of trade in the United Kingdom, and si.me means be devised whereby England will have o. greater command over the markets, especially in her overseas dominions, than she enjoyed' before the war, her financial recovery will be more rapid. This, however, in the meantime, is only a matter of mere speculation.” A WARNING NOTE. Referring to the urgent need for economy, not only in England, but in every part of the Empire, Mr Beauchamp said, “ Statesmen in the Old Country are continually emphasising the necessity for stricter economy in all walks of life. For example. I read in the “Herald” this morning that, the War Savings. Committee states that a./' meatless ’ day .would resuit in a saving to the nation amounting to £500.000 a week. That seems to suggest the advantage of this country also pursuing a policy of greater economy, with a view to preparing for the rainy day which must inevitably follow if the war ho unduly prolonged.” The fact should also le borne in mind that the Dominion would have to face very heavy liabilities in respect of the payment of pensions, and in the maintenance of a vory large body of returned soldiers, who, ow,ing to their physical condition would not be in a position to contribute to the national wealth in the . matter of labour. “Things are going very well with us just now,” repeated Mr Beauchamp, “but it would certainly be unwiso for us to take too much for granted as regards the future, for we cannot tell what problems we may have to face later on.”