DOMINION FINANCE.

Otago Witness, Issue 3992, 16 September 1930, Page 21

DOMINION FINANCE.

VISIT OF SIR OTTO NIEMEYER. “SOMETHING MUST BE DONE.” WELLINGTON, September 8. With the object of discussing financial and economic problems of vital importance to the Dominion with the Government and representatives of the banks, Sir Otto Niemeyer, a high official of the Bank of England, arrived at Wellington this morning by the Makura from Sydney. He was accompanied by Mr R. M. Kershaw, liaison officer between the Bank of England and the other banks of the Empire. Dr T. E G. Gregory, Cassell professor of banking of the University of London, who is the economic adviser of the mission, arrived in Wellington last week. These distinguished financial authorities have come to New’ Zealand on the invitation of the Prime Minister (Mr G. W. Forbes) to confer with the Government in connection with the banking, currency and exchange problems of the Dominion. Sir Otto Niemeyer was welcomed on his arrival by Lieutenant J. C. Elworthy, R.N. (A.D.C. to his Excellency the Governor-General). Mr A. D. Park (Secretary of the Treasury). Mr R. E. Hayes (financial adviser to the Government), and Mr D. Ardell (representing the Minister of Internal Affairs). Sir Otto Niemeyer met the Acting Prime Minister (Mr E. A. Ransom) and his colleagues at a meeting of the Executive Council this morning. Owing to the fact that Professor Gregory is leaving Wellington for San Francisco by the Makura to-morrow. Sir Otto is devoting to-day to consultation with Professor Gregory. It should be noted that the object of the visit of Sir Otto Niemeyer is primarily for the purpose stated by the Acting Prime Minister—namely, to advise the Government in connection with the proposed legislation concerning banking, currency and exchange. It is hoped that time will ‘permit of his being able to see some of the interesting features of the Dominion prior to his return to Australia. During his stay in Wellington Sir Otto Niemeyer will be the guest of their Excellencies at Government House.

“As your Government has already announced,” remarked Sir Otto Niemeyer, on board the Makura, “ the primary object of my visit, which is being made at the invitation of the Prime Minister, is to confer with and advise the Government in regard to the banking, currency, and exchange problems of New Zealand. As was pointed out last week, the permanent banking legislation of New Zealand was largely suspended by the war regulations which are still in force and which are due for replacement.” Sir Otto Niemeyer made it quite clear that he had at present nothing to say for publication regarding his mission to the Dominion beyond a smiling remark that in respect to New Zealand’s banking legislation “ something will have to be done and that before very long.” He stated that he expected to remain in New Zealand for about two weeks before returning to Australia. Sir Otto Niemeyer, who has an international reputation in the world of finance, served for 20 years in the Biitish Treasury, of which he was for six years the head, and from which he resigned in 1927 to join the Bank of England. He has been a member of the Financial Committee of the League of Nations since 1922, and was its chairman in 1927. As he said in Melbourne recently, his work for the League has had to do with the financial and monetary reconstruction of several nations of Europe, notably Austria, Hungary, Greece, and Bulgaria. Austria especially, Sir Otto said, was in 1922 doomed to economic destruction. The League committee was able, by exceedingly drastic measures, to establish a plan which restored the Budget equilibrium in about six months. “ That equilibrium has never been disturbed since, and Austria is now a well-ordered and reasonably prosperous financial community.” That the economic position of Great Britain to-day was “ by no means as bad as it is painted.” was a definite pronouncement by Sir Otto Niemeyer when asked for his view. It was very easy to take exaggerated views one way or the other, but personal!}’ he was not at all pessimistic about the situation. There were some bad features, such as the unemployment figures of 2,090.000, and the depressed state of many of the “ heavy ” industries and the cotton industry. On the other hand, there were many other industries, including the motor trade, that were in a much better position. There had been a great deal of industrial development in recent years in the South of England. In addition, there had been a very great deal of what was known as the “rationalisation ” of industry, and this was still in progress. Taking everything into consideration, said Sir Otto, he was inclined to the view that public opinion in general was rather unduly pessimistic about the present position of Britain and her future.

Dealing briefly with the problem of gold and-its relation to commodity values. Sir Otto Niemeyer said the currency question was an international one that was most certainly capable of solution. “ I have always believed that there "is no alternative to the gold standard, but. of course, all that it does is to relate a whole series of countries to a single measuring rod, which is the value of gold. The gold standard itself does not fix the measuring rod. “ The gold problem could be dealt with in two ways—through the Bank of International Settlements or through the League of Nations,” Sir Otto Niemeyer said. “ Much progress has been made "towards co-operation between the banks ii? Europe, where distances are less and bankers are more closely connected, in the direction of co-operation between the central banks and the new Bank of International Settlements. _ This is a new venture, a new undertaking in which nearly all the central banks in the world are concerned. It is in the making, and we do not yet know what it will produce, but it is a more systematised effort at co-operation than there has been. So far co-operation has been a spasmodic and individual effort; but it has bwiwi; a little

more systematised, and no doubt that will spread to other countries. There was, however, said Sir Otto, room tor a great deal more co-operation, and also for a lot more central banks.” He declined to comment on the hugely increased gold holdings of the Bank of I'rance during the last 12 months. Regarding commodity prices he remarked that these were still falling throughout the world, and showed no signs of ceasing to fall The result, particularly in the_ case or Australia, was to be seen in th" prices of wheat and wool. It was difficult ductF any r * SC iD eithcr of theee P ro " i “ Of c c ° urse >” said Sir Otto. “ the problem of the export price of wheat is one that does not concern New Zealand, though you are, of course, very much interested in wool and dairy produce. New Zealand has two great advantages over Australia in that you have a very much more varied CtlOn n ° Noughts to contend

CHAMBER OF COMMERCE LUNCH. WELLINGTON, September 11. Sir Otto Niemever and Mr R. M Kershaw were guests of the Executive Committee of the Associated Chambers of Commerce at an informal lunch to-day. The executive is at present in Wellington preparing for the annual conference to be held at the Hermitage, Mount Cook, next month, and its members were of opinion that they might take the opportunity of placing views informally before Sir Otto. A lunch was arranged accordingly. ~ Speaking this evening, the president (Mr C. P. Agar, of Christchurch) explained that they had welcomed Sir Otto on behalf of the commercial community. Sir Otto had spoken in reply, but his remarks were, of course, not for publication. “It was quite an informal gathering,” said Mr Agar.

VISIT TO HOT SPRINGS. ROTORUA, September 14. Sir Otto Niemeyed arrived in Rotorua by car from Frankton just before noon yesterday. Accompanying him were Mr R. M. Kershaw (liaison officer), Mr P. Verschaffelt (Public Service Commissioner), Mr R. E. Hayes (financial adviser), Mr A. D. Park (Secretary to the Treasury), Mr F. B. Dwyer (accountant Internal Affairs Department), and Miss Wilson . (typiste). After lunch the party visited Whakarewarewa and the local sights, including the Fairy Springs, the School of Maori Arts and Crafts, the Maori Church, and the Government’s bath buildings and grounds. Sir Otto was greatly impressed with the sights. The party left for Waitomo, via Arapuni, to-day. It was arranged that the party should return to Wellington, arriving there at mid-day on Tuesday.