The Daily News. TUESDAY, DECEMBER 16, 1924. BORROWING LOCALLY.

Taranaki Daily News, 16 December 1924, Page 6

The Daily News. TUESDAY, DECEMBER 16, 1924. BORROWING LOCALLY.

The customary half-yearly reviews of the Dominion’s trade and finance operations that are made by the chairman of the Bank of New Zealand always create attention on the part of those concerned in the welfare of the country. The remarks made at the half-yearly meeting of the bank last Friday proved no exception to the rule. On the whole, Mr. W. Watson (-acting-chair-man) appeared to be in an optimistic mood as to the outlook for the Dominion’s produce, as he estimated (and estimates from that quarter are invariably on the Conservative side) that, at the close of the present season, this country will be ten millions sterling better off than at the commencement. Exactly what he meant by that is none too clear. Literally speaking it may indicate that the present season’s output is estimated to produce ten millions. At the same time the remark is' capable of being construed as indicating that the output of produce will be worth ten millions more than that of the previous season. The context lends colour to the latter view, because it is on the strength of this ten millions that Mr. Watson expressed the opinion that, if the Government requires to borrow money, it should be possible to raise a loan in the Dominion, without unduly disturbing local financial conditions. He admits that a somewhat higher rate of interest would have to be paid for loan money raised in New Zealand, but that there would be a saving in exchange and the cost of flotation and administration. While there may reasonably exist a difference of opinion as to the saving in flotation cost, there must be a consensus of opinion that one of the chief points of such a policy would be that the interest was kept in the Dominion. On the other hand, the question naturally arises as to how much of this ten millions would be actually available for loans to the Government. It has to be remembered that on the expiry of the moratorium it is anticipated that the financing of primary industries will once again be a legitimate avenue for the employment of capital, which is also likely to be required for other industrial purposes and for assisting to exploit the resources of the Dominion. Moreover, the men on the land have again and again been advised to strengthen their position when funds were available, so as to enable them to have no fear of the future should their produce meet adverse markets. There is much soundness in that advice, which would materially advance the welfare of the farmers. With that useful. knowledge of human nature which is gained by the head of a large banking concern like that of the Bank of New Zealand, Mr. Watson envisages the possibility of this ten millions tempting some of the producers to “speculate in land on the present high prices of pro-

I ducts.” The experience of the Ipast ought to have proved suffi'ciently minatory to prevent further folly in this direction, and no doubt it would, but for the Ifact that speculation is a sort of 'dementia that has a potent spell lon a very large portion of humanity, because the desire to get rich 'quickly is very widespread, and (no amount of reiteration of will prevent either the .moderate speculators or the plungers from burning their (fingers in this insane manner. Reverting to the wisdom, or otherwise, of raising Government loans locally, ideas may differ materially. There can be no question that it would be a good thing for this country if the producers, on the strength of this ten millions, were to < combine and make their future absolutely (assured, because competition is •increasing and its effect must inevitably be adverse to high (prices in the near future. By (conserving their finances and bringing their land to the highest possible state of fruition, and by ! acquiring the best class of stock ■to suit the overseas markets, and generally adopting the most economic measures, they would be acting more wisely than by subscribing to Government Joans. It is not so much the present as the future that needs the most consideration.