Nelson Evening Mail FRIDAY, JUNE 17, 1932 BANK CHAIRMAN’S REVIEW

Nelson Evening Mail, Volume LXVI, 17 June 1932, Page 4

Nelson Evening Mail FRIDAY, JUNE 17, 1932 BANK CHAIRMAN’S REVIEW

CRITICS of the banks are always to be found, in plenty. As Mr Oliver Nicholson said in his address at the annual meeting of the Bank of New Zealand to-day, those critics hold that the banks are to blame for many of the problems confronting the Dominions and the Empire to-day. Such criticism is obviously ill-founded. It surely does not require the assurance of the chairman of this bank for all thinking people to realise that the prosperity of the country is closely interwoven with the success of the banks. There may be some sus-piciously-minded people who will read into Mr Nicholson’s references to the Coalition Government and the measures it has adopted to restore financial stability fin undue political flavour. But, as the speaker emphasised, it is essential that there should always be a close cooperation between the Government and the banks in all schemes of financial policy if national difficulties capable of practical solution are to be surmounted as speedily as possible. It is well known that but for the resources and strength of the banks New Zealand to-day would have been in a much more deplorable state than it is. As we have remarked before, our banking position demonstrates that our leading bankers, uninfluenced by exigencies of purely party politics, and actuated solely by a desire to preserve a condition of sound finance in the interests of the banks

interests which coincide with the interests of the country and its financial stability —do not speak without the fullest consideration of all factors. Tf it would serve any good purpose we could quote from similar addresses of banks’ chairmen in past years to demonstrate the soundness of the conclusions arrived at, and of the advice given, as proved by developments since. These responsible officers, aided by long years of experience, speak dispassionately. and in the interests of the whole community, and their utterances, as is the case to-day, merit serious attention.

So far as the affairs of the Bank of New Zealand itself are concerned, a sound position is demonstrated despite losses due to the difficulties of the times —a tribute (o past management, as in the case of most of the other banks. But the affairs of the Bank of New Zealand are of less immediate concern for the purposes ot this article than the general financial and economic situation as dealt with in the Chairman’s address. The local causes of the Dominion’s present position are rightly stated by Mr Nicholson to be attributable to (1) a greatly reduced national income, and (2), an increased annual national expenditure. Witli full justification it is stressed that unless a. substantial improvement in wool prices sets in, and the prices for dairy produce improve, it is probable that adjustments will have to be made to a permanent lower level of land values to meet the conditions. Moreover, production costs will have to be further reduced, although the Government has already taken action in that direction. Summing up the essential requirements for rehabilitation, the Chairman states them to be: greatly reduced costs of production and increase in volume of our exports ; restricted public expenditure, bringing it- within the limits of the country's present- resources; the creation of a self-dependent rural community, largely by settlement on small holdings ; a reasonable further establishment of appropriate industries. This is all quite sound, but it may be expected that the Chairman will be subjected to some criticism for commending the Coalition Government —whose tenure of office ho describes as “a matter for congratulation”—upon the actions it has taken, actions which have been resented in some quarters. As the speaker points out, the lavish borrowing and extravagant expenditure of the past, were but the reflection of the people’s wishes. T lie people shared in the benefits arising during a period of inflation and prosperity, and should now face uncomplainingly and courageously the hardships resulting from deflation and adversity. This advice is timely, but probably not agreeable to some sections of the community. Mr Nicholson makes sympathetic reference to tlie Government’s task, and to the plight of the unemployed' for whom, he emphasises, sacrifices should be made ungrudgingly by all who have the necessary means. In conclusion the Chairman dwells again upon the need for national and private economies, the balancing of the National Budget within a reasonable period of years, the necessity for resolute courage and an unselfish spirit, and for the cultivation of a spirit of goodwill in all classes of the community —an appeal which we cordially endorse, tie trusts that the lesson of the depression will not be forgotten, and that work and thrift will replace the “somewhat extravagant style of expenditure which lias been the outstanding feature of past years.” Mr Nicholson’s address is not so lengthy as some we have had in recent years, and does not deal with so much detail, but it reveals that thorough grasp of the situation which is to be expected from such a source, and concludes with a hopeful note.