The Daily News SATURDAY, JUNE 18, 1932. NEW ZEALAND’S OUTLOOK.

Taranaki Daily News, 18 June 1932, Page 4

The Daily News SATURDAY, JUNE 18, 1932. NEW ZEALAND’S OUTLOOK.

On. two occasions in the year, when the annual and half-yearly meetings of its shareholders aie held, the chairman, of the Bank of New Zealand has the opportunity to give information to. the public as to existing conditions and advice as to '.the needs and prospects of the. future. lor a ilong time past it has been, the

practice of the successive chairmen to turn the opportunity to good account, and their addresses have been appreciated both for their clarity and for the caution which generally characterises the utterances of those upon whose shoulders rests the very grave responsibility of giving a lead to the , country in matters of finance, lhe chairman who addressed the shareholders at Wellington yesterday, Mr. Oliver Nicholson, obviously had a difficult task to perform. He has taken office in troublous times, and it is not hard to read between the lines of that portion of his speech relating to general conditions and deduce that he felt himself to be under a handicap. He could merely take the facts as they were and urge upon the Dominion the need to face them courageously and not without hope. His first concern was, of course, with the Dominion’s public business. Its present position he attributed to two definite causes, namely, a greatly reduced national income and an increased annual national expenditure. “We have,” he said, “less money from income wherewith to meet greatly increased public charges and standing debts.” The remedy Mr. Nicholson, in common with every other competent thinker, would apply is “restricted public expenditure under several headings, bringing Government expenditure within the limits of the country’s present resources.” That is one aspect of the problem to be solved —the one that New Zealand must deal with itself. As to the general outlook there is not a great deal that is new to be said. Mr. Nicholson mentions the plight of the sheep farmers and the dangerous position of the great industry in which they are engaged, but he is able to encourage, rather vaguely it is true, the hope that means of assisting them will be devised. So far as dairy produce is concerned he suggests the reduction of land values to a permanent lower level as the way to meet the low prices ruling. In the case of these important primary industries as in every department of activity he can only stress the need for the reduction of costs, and it is interesting and comforting to know that he would apply this principle to all charges. On the more positive side he advocates increased settlement on the land and also “yitalisation” of secondary industries —an objective clearly impossible of realisation while enterprise continues to be stifled by swingeing taxation —and he looks for development of trade through the decisions of the Ottawa Conference. There is, it may be said,, no thing very new in all this, but that is just the reason why Mr. Nicholson’s remarks are worth while. Speaking with a full sense of the responsibility of his position, he finds it impossible to suggest any short cut to a new era of prosperity, and it is his prudent restraint that gives his words their value. He realises that the world’s economic problems must be solved before all the troubles affecting New Zealand can be overcome, but he is not the man to suggest that we should simply fold our arms and wait for someone else to make things better for us. On the contrary, he declares emphatically that we can and should do a great deal for ourselves by practising nationally, locally and privately all reasonable and requisite economies, by the balancing of the national Budget within a reasonable period of years “from sources other than borrowing,” and by finding avenues of employment for those in need of it. Sacrifices must be made ungrudgingly and the position must be faced with a resolute courage and “an unselfish spirit.” This certainly is sound advice, but it is impossible to resist the thought that it would have come more convincingly from the chairman of the Bank of New Zealand if that institution had shown a stronger disposition than it has done during the past year to make sacrifices in an unselfish spirit. On the recommendation of their directors the shareholders yesterday authorised the payment of a dividend on ordinary shares of 14 1-3 per cent. The chairman was at some pains to justify this action, but with little success. Many of the shareholders, he said, were elderly people of limited means to whom every pound of income was of importance. There are, no doubt, very many other elderly people to whom every pound is important, but its importance has not enabled them to escape the general sacrifice, though they probably are far less favourably situated than the bank’s older shareholders, who have previously participated in very substantial distributions of profits. Nor did the chairman help matters by saying that “consideration must be given to the amount of 1 the effective funds of the shareholders employed in earning the distributable profit,” for those effective funds are, in part at any rate, the proceeds drawn from the public

of high charges for the bank’s services. And if there is any justification for the chairman’s assertion that “the net profits augmented by the sum taken from the amount carried forward in previous years represents a rate of interest not in excess of the ruling rate prevailing in the ordinary field of investments,” then it is high time the rate came down with a run. Until it does it will not be possible to believe that. the bank is facing present conditions in an unselfish spirit.