AS OTHERS SEE DOMINION

Southland Times, Issue 23953, 20 October 1939, Page 8

AS OTHERS SEE DOMINION

FINANCIAL POLICY OF N.Z.

OBSERVATIONS MADE BY MR W. GOODFELLOW

New Zealand today was regarded very much as a fool who, having squandered a considerable fortune, now could not pay his bills, said Mr William Goodfellow, managing director of Amalgamated Dairies Ltd., and the Challenge Phosphates Company Ltd., in an interview in Wellington on his return from an extended tour abroad. “I have,” he said, “decided to make this frank but rather unpleasant statement because I have seen my country as others see it overseas. I also resent very much the loss of our very excellent financial and commercial reputaMr Goodfellow was convinced that the country, and especially the farmers, would pay a very heavy price for our folly unless we were prepared to honour our agreements scrupulously, and keep our financial engagements in future. We depended more than any other country on our exports, and in consequence on the goodwill of the people of the United Kingdom.. “Surely these things go without saying,” Mr Goodfellow continued. “Our Government obviously requires expert financial guidance by experienced people, and if accepted confidence will slowly return, but it may take a decade to get back to where we were.

“Now that New Zealand is in a state of war,” Mr Goodfellow said, “the future financial arrangements are of supreme importance, and the costly mistakes of the recent past surely warrant the appointment of a financial advisory committee to Cabinet of the best men available.”

Mr Goodfellow stated that such experienced and proved men as Mr Leslie Lefeaux, Mr F, W. Dawson and Sir James Grose would be worthy of consideration. Such a committee of experts would relieve the Government of much anxiety, would create confidence and safeguard the all-important future financial stability of our country during the critical days to come. CREDIT AT LOW EBB It came as a shock to find New Zealand credit at such a low ebb, said Mr Goodfellow. For instance, New Zealand banknotes had practically no value outside the Dominion, and former New Zealanders and friends of the Dominion in London were very concerned indeed at the rapid deterioration of New Zealand’s financial “ position. One found a “fed-up” feeling of resentment frequently expressed by many large exporters who in the past had nothing but praise for our country. Optimistic statements by responsible Government representatives did more harm than good, Mr Goodfellow said, and in the opinion of many such statements were regarded as so much polical humbug, facts in regard to New Zealand finances being well known. For New Zealand of all countries deliberately to break the Ottawa agreement, which incidentally was very much to her advantage, resulted in considerable resentment and unfavourable comment by exporters. It was regarded as further evidence of our insincerity. Indeed, a fairly important section of British manufacturers were at one period so annoyed that they wanted the British Government to cancel the Ottawa agreement, due to New Zealand’s breach of contract. Had this demand been actively supported by the Federation of British Industries, the most powerful political and commercial organization in Great Britain, New Zealand today might have been paying the same tariff as Denmark, namely 15/- a cwt (IJd per lb) on butter, and 15 per cent, on cheese. Fortunately, the Federation of British Industries refused support in the meantime, and the outbreak of the European war had postponed further action. FOUR YEARS’ EXTRAVAGANCE “I am forced to the conclusion,” said Mr Goodfellow, “that our finances are in a deplorable condition. This is recognized in London and it is regarded as inexcusable and as a direct result of the four-year period of extravagant and wasteful expenditure. It is also fully recognized that if the present reckless financial policy is persisted in New Zealand will be unable to meet her overseas commitments in future. This was probably the main reason why Mr Nash found it impossible to renew the big £17,000,000 loan due in January next year even at a very high rate of interest. To prevent default the big banks, headed by the Bank of England, came to our rescue, but they insisted on the total repayment of the entire loan in sterling within five years.

“Our authorities in New Zealand are evidently unaware that security is more important in London than the rate of interest. Four years ago New Zealand had nearly £50,000,000 standing to its credit in London. Now we are down to bare boards and have no money to pay our trade bills. It is simply disgraceful, and so think London financial experts who know their job.” Mr Goodfellow said that our population in New Zealand was at a standstill and that farming, our main industry, was contracting after years of steadyexpansion, due to high costs. Every possible effort should be made to reduce rather than increase our public debts; otherwise we were only making it more and more difficult for our farmers to sell their produce in competition with other countries more economically governed. “I very much regret to say,” concluded Mr Goodfellow, “that New Zealand the world over has lost its excellent financial reputation and that in England the white-haired boy of the Empire family is in disgrace.”

“NEW ZEALAND WILL WIN THROUGH” REPLY TO MR GOODFELLOW BY PRIME MINISTER

The Prime Minister showed a return of his old vigour in controversy when replying briefly to Mr W. Goodfellow’s criticisms of the Dominion’s financial reputation overseas. “Mr Goodfellow’s statements are beneath contempt,” declared Mr Savage. “He seems to have joined up with that almost extinct race of political gasbags who were never happy except when decrying their own country at home and abroad; but New Zealand will win through in spite of what Mr Goodfellow and his friends have to say. He refers to our future financial engagements and thinks we need financial guidance to get us back where we were.

“It seems to me it was so-called expert financial guidance that landed us where we are; with about £100,000,600 of loan money falling due during the next 10 years for borrowing for which the present Government was in no way responsible. We inherited it from Mr Goodfellow’s political friends. We don’t need financial experts to tell us what it means.

“As for getting financial guidance

to get us back to where we were when this Government took office, I sincerely trust that the people of this country will see to it that nothing of th- sort happens, and that whatever guidance is necessary will be directed towards higher and nobler things. The present state 'of affairs can best be judged by comparing the living conditions of the people with what they were during the period of which Mr Goodfellow seems so proud.”