The Tuapeka Times. AND Goldfields Reporter & Advertiser "Measures, not Men." WEDNESDAY, JUNE 28, 1920. COMMENTS AND CURRENT TOPICS

Tuapeka Times, Volume LIX, Issue 6754, 23 June 1920, Page 2

The Tuapeka Times. AND Goldfields Reporter & Advertiser "Measures, not Men." WEDNESDAY, JUNE 28, 1920. COMMENTS AND CURRENT TOPICS

The general mooting o£ tlio Bank of New Zealand always elicit nn interesting and infoi'mativo financial lecture from the chairman of directors, Mr H. Beauchamp, Wo learn from the latest of these lectures that the percentage of proilt this year accruing to overy fortunate shareholder in our chief borrowing and lending institution is £l7 10s. Banks nowadays make profit out of what they burrow as well as out of what they lend. The charges for kooping current accounts must amount to a tidy sum for the past year in the case of the Bank of Now Zoaland ; for tho froo deposits were no less than £34,814,896, that is, more than twice as much as tho fixed deposits, which amounted to £15,850,11)5. Once upon a lime, boforo Now Zealand became a Dominion, and when she was only a modest colony, banks used tn bo so thankful for money lodged with them that they charged nothing for keoping current accounts, In some cases, indeed, they puid interest for the privilege of investiug one's savings. Since those halcyon fluys, however, taught by sad experience, the banks have leavnod how superior in high finance is mutual aid and co-operation to cut-throat competition, and hnvo all adopted .vsound system of opening tho public oyster, so that, under any circumstances, a more or less copious rivulet of profit filters into tho banks all tho time money is being handled by them. Thus all through the strenuous times of the lute war, the banks have been paying flue dividends. Bank shares nowadays are bettor than gold mines, for in the latter the lead of gold often pinches out, but tho supply of bank paper seems inexhaustible.

According lo his wont on these occasions the Chairman of Directors of tho Bunk of Now Zealand enlarged on tho need for more production. He pointed out that, though the values of our chief exports had incensed enormously since the fateful year 1914, the volume of some of them Had actually decreased, notably wool, Latter, and hides, and where increases had tnkon place those were proportion;! '.c!y small. He told his hearers that wuol. meat, tallow, hides, and skins had already receded from the high level of prices readied since tho armistice was sijnoi in 11118, and that probably a further decline would occur, producing a sac of conditions full of difficult problems for bankers, business men, and producers. In tho case of wool especially the stock of raw material at the wooden mills greatly exceeded tho quantity that could bo'spun into thread and woven 1 into cloth within a reasonable tinw, and hankers, careful of their financial safety, were refusing advances to doubtful speculations the world over, so that there was not much fear of over-production of woollen cloth, and wool spinners were safo in pursuing the policy of operatm,; only from hand to mouth. So the chanrnma of tho Hank of New Zealand with one aide of his mouth exhorts each and all to produce, produce, produce, and with the other side informs each and all'that banks will not stimulate production by liborally advancing capital, Neither did ho slate that a banking company does not produce real woai'.h, but only halps to distribute it through tho medium of ornamental and stamped scraps of paper, and that tho mere fac: that n big financial institution like tho Bank of New Zealand is ablo to declare n dividond of J7J per cent carries with it tho nwisl that under present »onditions too much human energy is spent in unproductive distribution of the grotty decreased store of tho worH's wealth,

An interesting part of the discourso was that which siimraeiii-od the war loans raised by the Allies. From the table suppliod it appears that tho United Slates of America was the only belligerent that did not borrow outaido her own borders. With regard to lend.isg Mr H. Bauchnmp, liko oibor flnnncinl experts who instruct tho public, dtiwnot distinguish botwoen the capitalists who . lend and tho State which londs. Ho I talks about tho loans froui one Ally to % another Ally wichmit stating wbother any particular Govarnuioit allowed another Government to raise a loan within its territory, or raised tho money itsfclf and then lent it to its Ally, Take Enssia, for example. By the tublo wo mo informed sho owoo U.S.A. £35,000.000, the United Kingdom, £511,000,000, and France, £100,000,000. Am these- vast Minis owed to private capitalists, or to the respective Hownments of U.S.A., U.K., and Franco ? It would bo inoro satisfactory to know thess things than t" remain in doubt, fr.r when, as in tho case of Russia, a country in debt becomes a dofaultOT, tho money has boon advanced direct by the Government of the lending State tho revenue of that State suffers, and fresh taxation has to be imposed to irnko gooa the deficiency, whereas, if only private capitalists hava . lent tho money they mo the only persons who drcctly loss when tho borrow* nig State becomes a dSfaoltor. Mr H. lieauchamp states that the world's total National De'.l < have mounl.'d up by reason of the Vi'pc fr<mi £S,O;o.OOO,CCO • d I lie almost incredible amount of £02,000,U00.01iu. Supping tlo whole tuuisd ol uuiuuuKy on the uuifaco of till

earth to count as. two thousand u:illion individuals, which wc think is too lugh an estimate, every person living owes on an average £2O. Every unfortunate infant torn into this world of sin, sorrow and tangled finance is at once saddled with a debt of at least twenty six pounds incurred by the foolish quarrels of his progenitors. And most of the money has been spent in destroying wealth and the sources of wealth. Is it not time that international co-oper-ation became the rule in place of international competition. Surely it is time also for the international capitalist nn.l investor to perceive that world wars mean universal ruin, to himself, as well as to the vis: majority win have no money to n-vest in preparations for war, munitions of war, or the opernCoi'.s of warfare.

Mr Beauch'ri:p eiili'.c;a\i lis address with a disquisition on ihe disturbed relations between Labor and Capital. But, as usual, in his observat ; o»:i he was net, careful to distinguish between these abstractions, and the persons owning them, that, the labourers and the capitalists, investors, or employers. He ■very truly stated that "upon our national industry our whole national live depends. A certain standard of production united to a reasonable method of distribution arc the first requisites of a nation's physical and moral well-be-ing. We live by winning from Mature the means of life. Production is prerequisite to distribution, etc." Incontrovertible statements all of them, but how futile and indefinite ! What is the "certain standard of production?" What is a "reasonable method of distribution" ? Is it conducive to a high ' standard of production, and is it compatible with a reasonable method of distribution that a non-productive institution engaged merely in the work of facilitating exchange of wealth should pay an annual dividend of 17J per cent? Then Mr Bcauehanip goes on to advocate a national industrial conference between employers and employed, and to facilitate reasonable discussion, calls for more sanity on the part of Labour, meaning obviously by "Labour," employees. Now, how ean an accusation of partial insanity from one party to a controversy induce the other side to reason calmly on th« subject of dispute.