ECONOMIC PLANS

New Zealand Herald, Volume LXXIII, Issue 22603, 16 December 1936, Page 14

ECONOMIC PLANS

INTEREST IN DOMINION GOVERNMENT'S EXPERIMENTS COMMENT BY LONDON PAPER By Telegraph—Press Association—Copyright LONDON. Dec, I t Tho Midland Bank Review, in n lengthy article on the New Zealand economic experiments, states that the past year has seen crowded experimentation, the results of which will be highly instructive to the world.

New Zealand's heavy fixed debt charges and her dependence on agriculture explain the hard times during the depression, but by the time the present Government took office conditions were better. Experience alone will show how far the drastic banking changes, undertaken against the advice of the Governor of the Reserve Bank, will further economic recovery on stable monetary foundations. At present there seems little scope for any active open-market policy on the part of the Reserve Bank, but there is ample room for public borrowing if required. Whatever may be -said against the ambitious marketing plan it will undoubtedly contribute to orderly marketing if the world persists in ;ts attempts to produce prosperity b.y bilateral trade systems.

The Government's programme, however, to removo from trading banks a considerable part of their old-estab-lished means of livelihood may involve the imposing of higher charges elsewhere and the reducing of the facilities for customers.

The Review goes on to analyse the trade situation and considers that at the present level of import and export prices the balance of New Zealand's current payments and receipts is in a thoroughly healthy condition. Appreciation of the New Zealand pound in terms of sterling will not be easy while the process of active reflation and expansion is pursued. Indeed, hasty and over-ambitious steps to remove the premium 011 sterling might place the Government's programme in jeopardy. Neither in New Zealand nor anywhere else is it possible to walk backwards and forwards simultaneously. The Government enjoys a great advantage in that its schemes have been launched on an apparent rising tide of prosperity and prospects seem favourable for this continued movement underlying natural recovery. New Zealand's experience in the next few years may show much in respect of the most speedy and most practicable lines of economic and social advance.