Manawatu Daily Times Are We Living on Our Capital or Income?

Manawatu Times, Volume XLIX, Issue 3263, 5 February 1926, Page 6

Manawatu Daily Times Are We Living on Our Capital or Income?

Less than three months ago the “Times” had occasion to criticise Sir Harold Beauchamp and other armchair cxitics of financial and - agricultural conditions when reviewing conditions and prospects as prevailing at the time. On that occasion, Sir Harold was ultra-optimistic and apparently viewed the lot of the average New Zealand citizen and primary producer through rose-coloui’ed glasses. Since then Sir Harold has changed his opinion completely concerning the financial and agricultural outlook of the Doinion. Addressing the annual meeting of shareholders of the Equitable Building and Investment Company at Wellington on Monday, he indicated that the economic conditions of the country will necessitate very careful handling. He has discovered at, last that money in New Zealand will be both scarce and dear—-a fact which will not come as a great surprise to the average boinowef—unless he meant to convey the idea that it will become even scarcer and dearer than in the past. (ADVOCATING LOCAL BORROWING. Sir Harold Beauchamp has, at all times, been one of the most consistent advocates of local borrowing, but apparently there is still a possibility of his conversion. “Unless the Government and local bodies borrow largely outside the Dominion,” he told the meetin'g, “the demands on the Banks will be very pronounced.” When giving his views on this subject a few months ago at Auckland, Sir Harold gave, it as his considered opinion that the Government’s only safe policy was to borrow as much as possible in the local market. “In carrying out all necessary public works, ’ ’ he said, ‘ ‘ especially those contemplated by the Government I should like to see the loans for such works raised locally.” The “Times” had occasion at that time to disagree with the ex-chairman of the Bank of New Zealand when he said that “monetary coxxditions in the Dominions were on the whole distinctly easy.” The difficulties a majority of our farmers were, and still are, labouring under were stressed by us and we insisted that these difficulties, if not entirely due to the Government’s local borrowing, were at least greatly accentuated by the policy so persistently advocated by Sir Harold Beauchamp and his friends. It is, therefore, somewhat significant to find that an authority such as Sir Harold, has discovered a fact which for years has only been too obvious to the harassed farming community: that money in New Zealand is both scarce and dear. Commenting on the agricultural outlook, the same authority is again somewhat at sea. He stated that butter and cheese were realising lower prices than a year ago, while as a matter .of fact prices are decidedly higher. This is particularly the case with cheese, which has been fully 10/- per cwt., or Id per lb., better than last season. As to our butter, Sir Harold is evidently not aware of the fact that when large quantities reached the London market towards the end of December and the beginning of January last year, prices dropped to 156/-, and that it was five months, before they again reached 190/-. STRICTEST ECONOMY ESSENTIAL. Sir Harold is, no doubt, quite right in his estimates of wool and frozen meat, but unless something unforeseen happens in the world’s dairy markets, the higher prices ruling will more than compensate the dairy producers of the Dominion for the diminished production. He is on solid ground in his declaration that there is necessity for the strictest economy, but the solution of this problem must be found in the field of imports rather than in primary production. That there will be a serious decrease in the receipts from our exports is a certainty and an equivalent reduction of expenditure will become necessary unless the Government and people of New Zealand are prepared to live on their capital rather than their income. •