The Daily News SATURDAY, JUNE 20, 1931. THE OUTLOOK.

Taranaki Daily News, 20 June 1931, Page 6

The Daily News SATURDAY, JUNE 20, 1931. THE OUTLOOK.

For many years now the annual meeting of the Bank of New Zealand has been regarded as a far more important event than any ordinary .gathering of the proprietors of a business to discuss the success or otherwise of their own affairs. The Dominion as a shareholder in the bank is interested in the results of its operations, but it is not merely on that account that most people are glad to learn what happens at the meeting. They regard the bank, by reason of the magnitude of its dealings, as a financial barometer, and they look to the directors of the bank for advice and guidance in the conduct of everyday affairs. So it has become the practice for the chairman of directors to review the economic and financial condition of the Dominion and to indicate on broad lines the nature of the policy which he deems it prudent that individuals and the ■whole community should follow. The chairman’s address probably lias been awaited this year with more than the usual interest, for conditions are admittedly difficult, and yet the bank itself, as was disclosed a week or two ago in the published summary of its bal-ance-sheet, enjoyed such a measure of success during the year ended on March 31 last as to suggest that its directors would be able to offer some encouraging ideas. Perusal of the remarks made by Mr. William Watson at Wellington yesterday shows that he has fulfilled expectations, for his last tvord was that better times would assuredly come. With the caution natural to the holder of a very responsible position he did not venture to say when, nor did he suggest that he could offer a new remedy which would work miracles. He did the country a better service by emphasising the need for sober, earnest efforts to meet the prevailing circumstances in just those ways that every honest thinker is practising as well as preaching. Mr. Watson lays it down as a basic axiom that a return to the high prices commanded by produce a few years ago is “most unlikely.” ft. would therefore be the height of folly to sit down and wait for better times or in the hope that there would be another “boom” to carry on as before. What this country has -to realise is, as Mr. Watson says in plain language, that “values of our assets must be based on the competitive Value of our products in the markets of the world.” The land being “the basis and source of welfare in the Dominion,” the sale of the produce of the land must continue to be our principal source of income, and we must sell iat the best prices obtainable. We cannot control prices, nor have we anything to gain by withholding our produce from sale, for we need our annual income. We can make no progress unless we accept what we can get, and because what is offering is less than it was before we must, as Mr. Watson says, adjust our-standards of living accordingly. As a banker Mr. Watson knows that it is possible for a time to live on capital, as he says some people are doing, but he docs not suggest the continuance of that process. It is defensible only while readjustments are being made and, to use his simile, a new coat is being cut out of the available cloth. ‘ There are two means, he suggests, by which the quantity of available material may be increased—improved methods of farming and deflation of land values to an economic level —and these, of course, will be a natural part of the process of adjustment, during which, we are told quite frankly, “very many millions” will be written off existing values. That means nothing more nor less than that individually and nationally we must adopt a practice familiar enough in commerce—cut our losses and find as much compensation as wc can in a more cautious and economical use of the rest of our resources. “By wiser action and living within national means, better times will,” Mr. Watson declares, “assuredly come, and the sooner the action the sooner the result.” It is interesting to note that Sir Harold Beauchamp, to whom the Dominion is indebted for much sound advice during his long tenure of the chairmanship of the bank and since then, was good enough yesterday to supplement Mr. Watson’s address with equally encouraging remarks. Sir Harold broke fresh ground in expressing the opinion that if the United States would lower its tariff and release some of its gold and Great Britain would grant a measure of preference to the Dominion’s products, the situation would gradually improve. Undoubtedly the United States could do a great deal to help the world if it would, especially if it could be induced to accept a moratorium on war debts, and a preferential tariff in Great Britain would aid the Dominions to some extent. But such changes as these, if they are ever to be brought about, will be the outcome of long negotiation. We cannot afford to wait in the hope of such benefits turning up. Positive action is essential, and what is needed is an honest, united effort to adjust expenditure. until its conies within the income which is in sight.

DOMINION SHEEP RETURN'S. A reflection of the low prices obtained for wool and frozen mutton and lamb is seen in the interim sheep returns for the year ended last April. They show a decrease in flocks of 1,936,412, of which the North Island is responsible for 721,511 and the South Island for 1,214,201. Two thirds of the decline in numbers in the North Island was in the Gisborne-Hawke's Bay district, and Marlborough suffered least in the South Island. It is apparent that the development of sheep-farming has been arrested by the decline in prices for wool and meat, and while production has been at a standstill exports have been higher than ever. The increase in the number of carcases exported, 1,993,816, more than accounts for the lowered flocks, and of this increase 1,498,234 was due to the export of lambs. This explains why the decrease in flocks is highest in those districts that have specialised in fat Irnlb raising, while the economic conditions have obviously made it necessary to export lambs rather than keep up the size of flocks to grow wool. At the same time the lowered prices for frozen lamb have made it necessary to export more carcases to keep up the financial returns to growers. The reversion of smaller graziers to dairying on account of unsatisfactory prices for wool and meat is another' factor that has assisted in the reduction of the Dominion’s sheep population. The figures are none too pleasant. If exports of lamb are maintained at the same rate as last year a further diminution in flocks must be expected this year, yet unless svool prices recover it is difficult to see what other course is open to shcepfarmers. Neither the Taranaki nor the Auckland district showed a heavy decline last year, which is an indication that in the northern province as well as in Taranaki the dairying industry has outdistanced sheepfarming in importance. With decreased supplies available and competition from South America keener than ever the necessity for exporting none but the highest grade mutton and lam’b is imperative. Fortunately for the Dominion this seems to be fully recognised by those most concerned in this important industry.