NORTHERN ADVOCATE DAILY With which is incorporated the NORTHERN MAIL DAILY FRIDAY, JUNE 18, 1920. BANK OF NEW ZEALAND REPORT.

Northern Advocate, 18 June 1920, Page 2

NORTHERN ADVOCATE DAILY With which is incorporated the NORTHERN MAIL DAILY

FRIDAY, JUNE 18, 1920. BANK OF NEW ZEALAND REPORT.

Registered fox transmission through the post as a newspaper.

The report of Air Beauchamp, Chairman of Directors of the Bank of New Zealand, published elsewhere in this issue, could not possibly have come at a more opportune moment than now, appearing as it does just at a time when the public are iv most need of guidance.. Air Beauchamp has delivered many reports in his position as Chairman of Directors of the bank but the present one, to our mind, excels all previous publications of the kind and should commend itself to the earnest consideration of everyone. The optimis-tic-minded will no doubt take a different view from opinions expressed by Air Beauchamp, but that does not, however, alter the fact tha tho advice given, if followed will not land . nyone in difficulties. Specially instructive are the figures showing the banking returns. It will be seen that, compared with 1914, the total deposits have more than doubled, the reason given for so large an increase being due in great measure lo the disbursement of upwards of £18,000,000 by the Government in conru'Ction with the repatriation of soldiers and also to the fact that shipping facilities have enabled a larger quantity of produce to be realised upon by exportation. Glancing at the country's

given one very gratifying feature is the excess of our exports over imports, showing a balance of £22,264,612 in favour of the former for the year 1919. The highest for any previous year was in 1915 when the exports showed an excess of £10,772,102 over the imports. Carrying the analysis further Air Beauchamp shows that the excess for the last six averaged '£10,000,000 a year, but he adds that he would be a sanguine man who would affirm that similar conditions will prevail over the next ensuing six years. A continuance of such prosperity depended upon favourable world conditions, the prospects of which at the moment were not at all encouraging. Air Beauchamp then goes on to review the New Zealand revenue and expenditure, showing a siu*plus of the former over the latter of £2,299,415 which, added to the accumulated balance at 31st Afarch, 1919, of £15,239,561, makes a total of funds in hand of £17,538,976 of which sum £15,180,250 are in investment account. The report also deals extensively with* the European situation, war debts, the position of the United Sates of America, and paper currencies which pressure of space prohibits us from publishing in this issue. Dealing with the European situation the reports points out that the natural spirit of restlessness engendered by, and consequent upon the strain of Ihe five years of war, had not yet died down. Afanufacture in th. greater part of the Continent was almost at a standstill owing to the impossibility of securing raw materials. Tho position consequent upon heavy debt, high and oppressive taxation, scarcity and high price of commodities, excessive cost of ' living, hunger and starvation was already intolerable and could not last much longer. There was, however, a ray of hope in the fact that Belgium was making a serious effort to repair tho ravages of the war, that the inflated paper currency of the country had been reduced by 300,000,000 francs; that the public debt had been reduced, that the production of coal was now equal to the pre-war standard and that the industrial production generally was ranging from 35 to 60 per cent, of that of 1913. Dealing with war debts the report shows an inter idly indebtedness of approximately £3,985,000,000, the United States being a lender only. Mr Beauchamp points out that if tho exhausted nations of Eur.pe are to recover it is necessary that they should be helped with raw materials and large credit. The United State, wore in the best position to do this, but unfortunately there seemed to bo a feeling of indisposition on her part to afford help. Air Glass, secretary of the Treasury, in a statement made just prior to taking his seat in the United "States Senate declared that the Governments of the world must now get out of banking and trade, and that loans of Government to Government not only involved additional taxes or borrowings by the lending Government but also a continuance by the borrowing Government of con- '

commerce as disclosed by the figures rrol over private activities which only postponed sound solutions-" oi' the pi'oLloru. Ho declared that credits required tor economic restoration of trade must 1.0 supplied through private channels •i:id that Governments must assist in the restoration of confidence by the adoption of sound fiscal policies. Mr Beauchamp adds that if the United States persists in this attitude her aclion will recoil upon herself in 'o_s oi export trade, and as a matter of fuel her export Iradc for April showed a decline of 135,000,000 dollars compared with March figures, and already the rudiments of a grave financial crisis there were already noticeable iv the price slashing which had been forced upon the merchants and in the restriction of credit by the banks. The report shows that the world's paper currcrucy has increased COO per cent, since the beginning of the war, while tho gold reserve has only increased 40 por cent. Furthermore, it is stated that after the Napoleonic wars tne national debt of Great Britain was equal to £45 per head, while the average debt por head to-day was £178, nearly four times the burden laid upon the country after Napoleon's defeat. There were, of course, against this present debt some assets in the form of loans to the allies and the dominions, portions of which would have to be regarded as very doubtful debts. Assuming that £1,000,000,000 annually was required of Britain she was back . again at the Napoleonic standard of taxation. Under the heading "price levels," the report shows that in the Napoleonic war English prices rose 75 per cent, and took eight years to become normal again. In the American civil war prices rose 100 per cent, and took over twelve years to become normal, but how long it would take on this occasion to reach normality no one could forecast though the process of deflation had already set in owing to tho banks restricting credit. In the matter of regulating prices the following excellent advice is offered: —(I)** Exercise the strictest economy ih public and private expenditure. (2) Increase production to the utmost possible extent. (3) Encourage and develop every class of industry and discourage- all speculation. Air Beauchamp predicts a hastening to the return of more normal conditions if the above remedies are put generally into active operation. The rest of the report dealing with labour and capital, land values, immigration, money markets and the future of produce markets and trade are worthy of deep thought and earnest consideration.