A BANKER’S SURVEY

Otago Daily Times, Issue 22742, 30 November 1935, Page 12

A BANKER’S SURVEY

The speech delivered yesterday by Sir Thomas Buckland, president of the Bank of New South Wales, at the annual meeting of that institution, was devoted in large part to the consideration of industrial, financial and economic conditions in Australia concerning which a feeling of hopefulness was expressed —qualified, however, by a reference to developments that cannot be ignored. As the economic position in Australia, as in New Zealand, is necessarily governed more or less by the conditions that prevail overseas, a survey of the situation that is presented abroad is of importance. And here the policy of economic nationalism, which has, as a defensive measure, extended from one country to another until it has now been almost generally adopted, obtrudes itself as a check upon, and obstacle to, the restoration of industrial activity to a level that would stimulate a process of world recovery. Sir Thomas Buckland is driven, therefore, to the conclusion that it would be unsafe to assume that substantial improvement in world conditions is to be expected in the near future. As he observes further, such industrial activity as may be associated with the expenditure of public funds upon the provision of increased armaments is not of a class that can be regarded with satisfaction. Moreover, he pertinently points out that the measure of self-sufficiency that has been attained by nations through the erection of barriers against the exchange of commodities has been procured at the cost of a lowering of the standard of living in the countries concerned. The view is offered by Sir Thomas Buckland that the best hope of reversing the trend towards economic nationalism lies in some agreement upon the question of monetary stability. That depreciated currencies and fluctuating exchanges operate most adversely upon world conditions seems obvious. But any effort to promote a stabilisation of currencies is in present circumstances not met with the encouragement that might be expected. In the circumstances, as Sir Thomas Buckland said, industry and trade have been placed in a dilemma from which they can be extricated only by a return of sanity in world economic relations. Sir Thomas Buckland’s review of New Zealand conditions, which are, because of the extent of the operations of the institution in the Dominion, of direct interest to shareholders in the Bank of New South Wales, included a statement that there is little virtue in the National Government’s policy of reducing the public debt. The suggestion seems to be that an increase in the annual interest charge, through an expansion of the public debt, would

be of greater practical value than a policy of heavy taxation and debt recovery. Taxation is severely heavy in New Zealand and one of the points in the programme of the party which is coming into power that will have recommended it to numbers of electors is its declamation against fresh taxation. How the party’s programme is to be carried into effect without recourse to taxation is one of the problems for tbe solution of which we must look to Mr Savage. But the view that is expressed by Sir Thomas Buckland on the subject of borrowing by the Dominion hardly impresses us. As it is, a legacy of public indebtedness of almost crushing volume is being bequeathed to posterity.