MR BEAUCHAMP'S WARNING.

Otago Witness, Issue 2988, 21 June 1911, Page 42

MR BEAUCHAMP'S WARNING.

OPINION IN WELLINGTON. (From Ouk Own Co-respondent.) WELLINGTON, June 17. The importance of the warning given by Mr Beauchamp in his address at the bank meeting yesterday is very generally realised, even though the local Government organ endeavours to cast some doubt upon the correctness of his reasoning. " Mr Beauchamp's references to labour and capital,'' says the New Zealand Times, " are not likely to be found very helpful by either side. However, they embody a pious aspiration that may no doubt be looked upon as momentarily comforting to quite a number of excellent people. In pleading for ' a spirit of greater harmony,' Mr Beauchamp was really asking for what every captain of industry, great financier, labour agitator, and Socialist, are trying to secure. The trouble is that they are tearing each other's eyes out about the details of settlement, and, we fear, will continue to do so long after the Bank of New Zealand has reached its centenary, and despite the most earnest exhortation to work amicably together. We quite agree with Mr Beauchamp that the scope for the employment of capital in New Zealand is restricted, but the reason is certainly not because ' capitalists are nervous at the attitude of labour.' At least that i 6 not the sole reason. The price of investment stocks in New Zealand is against the theory. The main reasons for this restriction of scope are, we think, that the population is small, that municipal and State enterprise competes to some extent with private capital, and that new undertakings aro faced with the difficult problem of finding markets for the output. However, most people will be glad to hear from Mr Beauchamp that there is an abundance of money available in New Zealand, and derive some consolation from the knowledge that if the employment of capital is restricted in some directions it is not so in all, since the directors of the Bank of New Zealand are clearly able to supply a vast amount of money to very good effect." The Dominion says :—"This is the third time within 18 months that the chairman has felt it necesary to warn the public of the imperative need for economy and caution, and it is quite time that the public began to realise the meaning of these periodical interruptions of the Government's incessant decrying of the suggestion that there is a single reason why the country should not indulge itself to the very uttermost. Day after day some Minister or other is put up to expatiate upon the unparalleled state of prosperity, day by day the nation is invited to believe that the present and the future are magnificent beyond telling, day by day every resource of ingenuity and recklessness is bent to the encouragement of the idea that those who plead for economy and a shortening of sail are traitors and foolish pessimists, and day by day in blunt defiance of the facts the party in power denounces the statement that the legislation and administration of the last few years have alarmed capital and prevented its investment in those channels of industry which mean increased employment for workers and increased wealth for the country. It is only because of the huge borrowing of the Government and the false plenty that it produces that the public allows the interested pleadings of the Government to weigh fom» an instant against such grave warnings as those of Mr Beauchamp. The very last thing that a banker would dream of doing is the sounding of a warning note excepting under the most urgent pressure of circumstances. It is his function to credit and confidence by every legitimate means in his power. When, therefore, he feels constrained to issue a public plea for economy and caution we may all be sure that he does so out of a very urgent sense of duty. This is what gives a. special importance to Mr Beauchamp's speech. The Prime Minister was reported as having stated in London the other d»y that New Zealand is a fine -field for capital. Mr Beauchamp does not appear to think so, and capital itself expresses its opinion by remaining shy, and the public will have little hesitation in deciding whom it shall believe. There are signs tliat the public, drugged with loans though it has been for so many years, is realising the intrinsic danger of heavy borrowing and the extravagance it leads to, and is beginning to understand also why invested capital is the one great heading in the national statistics that does not show a large and steady growth." The Post says—" A comparison of the trade returns of 1910-11 with those of the previous year, read together with the banking advances and discounts for the March quarters of this and the previous year, will show that the figures suggest the exercise of caution and preparation for the stringency which Mr Beauchamp darkly hints at. So far as Wellington is concerned it does not eeem that any charge of extravagance can be sustained. Trade is certainly brighter than at this time last year, and there is no boom. Possibly Mr Beauchamp's warning is applicable elsewhere. Possibly less is to be read into his words than he intends. Presumably he has exercised the utmost care in framing his remarks, knowing how much weight is usually attached to the words of a banker on such an occasion as the annual meeting of a bank, for it is popularly supposed that sources of information are open to banks that are closed to other people. The coming year, Mr Beauchamp predicts, ' promises to be one of low prices.' No doubt he has well thought out what he says. _ At any rate he cannot be blamed for being over optimistic; indeed, some people may charge him with being as portentous as Cassandra, but the exercise of economy and caution which he preaches will no doubt be a safe policy to follow even if there be no more behind his speech than Lb apparent,"