N.Z. CONDITIONS.

Star (Christchurch), Volume LXVI, Issue 20477, 1 December 1934, Page 19

N.Z. CONDITIONS.

Banking and Trade Developments.

Addressing the shareholders of the Bank of New South Wales in Sydney yesterday the president, Mr Thomas Buckland, made the following reference to conditions and developments in Dominion:

“In New Zealand the trends of the last twelve months have been similar to those revealed in Australia. Whereas Australians think of British quota policy mainly in terms of the threat which is involved for the meat industry, this problem presents itself to New Zealanders more in terms of butter. The principles involved, however, in the two cases are much the same. “The outstanding event in New Zealand economic life has indeed been the establishment of the Reserve Bank of New Zealand which began its operations on August 1. The establishment of a Reserve Bank should undoubtedly facilitate the closer co-ordination of the various parts of the economic structure of New Zealand. Experience has shown the value of reserve banking in other countries, though the machinery is still defective in some respects. It is obviously important that a central bank should keep in close touch with local conditions and with the requirements of trade, commerce and industry. Provided this condition is satisfied there is every reason, to believe that the new bank will have results for New Zealand no less satisfactory than those which have been enjoyed elsewhere. “It is of course desirable that extravagant expectations should not be formed of what a reserve bank will be able to do. A reserve bank cannot do everything, and even those things which it can do effectively in countries with highly organised money markets may be outside the range of possibility in countries like New Zealand where machinery of this kind is still rudimentary. But even when all cautious qualifications have been made, it remains true that the existence of a reserve bank will be an added strength to the banking system of New Zealand and a valuable contribution to the economic life of the Dominion. Trans-Tasman Trade. “It is natural that in the process of looking about for new markets, Australia and New Zealand should think first of encouraging trade between these two countries, which on account of their geographical situation are apparently well suited for close commercial relations. It is true that the types of production which flourish in the two countries are in many respects so similar that Australians and New Zealanders are more likely to find themselves competitors in external markets than customers purchasing each other’s goods. Nevertheless there is considerable scope for further extension of trans-Tasman trade which would be to the advantage of both Australia and New Zealand. It is not very profitable to attempt t 6 allocate blame for the reluctance which has frequently been shown to translate into effective action the protestations of common interest and interdependence which are common when Australian and New Zealand statesmen meet together in public. In both countries there are vested interests which naturally look askance at anything which seems likely to demand difficult adaptations on their part. It is important that public opinion generally should be well-informed so that the pressure of 1 vested interests shall not be given more attention than it deserves.