OPTIMISM IN BRITAIN

Manawatu Standard, Volume LII, Issue 307, 25 November 1932, Page 2

OPTIMISM IN BRITAIN

FINANCE MINISTER IMPRESSED. WELLINGTON, Nov. 24. "There certainly seemed to be more optimism and confidence in Britain than in Canada or America. The outstanding success of the huge conversion loan was a magnificent demonstration of tho spirit and determination of the British public,” said Hon. W. Downie Stewart on his return from abroad to-day. “On the other hand, in Canada and America everyone seemed nervous and apprehensive. An American in New York said to me, ‘We are not accustomed to hard times and we don’t stand up to them in tho same dogged way the British do. We have over 10 million unemployed now, and by next winter we may have up to 16 million unemployed. What is to happen then no one knows.’

"I did not meet many industrialists in Britain, but those I did meet were cheerful and confident—particularly the motor traders and manufacturers.

“Many prophecies are being made of an optimistic nature, but as against that only the day I sailed a leading figure in tho financial world told me that in his opinion things will get worse beforo tney get better.” BANKING AUTHORITY’S OPINION Britain’s present financial outlook and the problems to be faced in promoting a world trade revival were also referred to by Sir Harold Beauchamp, director of the Bank of New Zealand, who was on the Rangitane from London. Ho believes that international debts stand in the way of a return to prosperity. "It was wonderful to see the complete alteration in financial matters in Britain since September 1931,” Sir Harold said. “Tho country was then on the brink of a financial precipice and had it not been for the formation of the National Government, one almost shudders to think what would have happened. "Treasury Bills were being issued to return to investors £4 10s and - even higher. When I left England, however, the British Government was issuing Bills to return from 8s Cd to 15s per cent. "This exemplifies the confidence in the British Government now shown by investors. It also illustrates the confidence shown by other countries who are finding temporary employment for their fun in London even at those lowrates.

"It must not be surmised, however, that this cheapness of money means an immediate return to prosperity. As I have said before, I see no prospect of real improvement until the question of international indebtedness is settled. "I am inclined to think that with the return of the Democratic Party in the United States a much more liberal view of the question of international indebtedness will be taken than was tile case under the Republican administration.” NEED FOR LOWER EXPENDITURE. Dealing with Britain’s outlook for the future, Sir Harold said that although confidence had been largely restored, much remained to be done, the next big task being to reduce expenditure. “A Budget of approximately £BOO- - (as compared with 200,000,000 in 1913-14) is beyond the country’s capacity under present conditions,” ho said. “The conversion of the 5 per cent. War Loan to a 3} per cent, basis will, after this year, effect a saving of about £23,000,000 per annum, but it is obvious that much more will have to be done. “In the Budget in April, 1931, the total amount required for service of the National Debt, etc., was £312,000,000, excluding payments to the National Debt Sinking Fund, and for the Supply Services £393,,000,000. Of this amount, £272,000,000 w r as on account of civil services, and it is the expenditure under this head which will have to be searchingly looked into. . “Britain’s National Debt at March 31, 1914, was over £661,000,000; at March last, it was approximately £7,434,000,000.