THE Wairarapa Age MORNING DAILY. THURSDAY, DECEMBER 18, 1924. AN INTERNAL LOAN.

Wairarapa Age, 18 December 1924, Page 4

THE Wairarapa Age MORNING DAILY. THURSDAY, DECEMBER 18, 1924. AN INTERNAL LOAN.

It is estimated by the acting-chairman of directors of the Bank of New Zealand that New Zealand will, at the conclusion of the present season, be better off to tho extent of £10,000,000 than at the commencement of the season. In these circumstances Mr Watson suggests that if the Government were to seek to raise a loan in the Dominion it could do so without disturbing local conditions. It is not so long ago that the idea of a domestic loan, was frowned upon in financial circles, as being detrimental to trade and diverting into the coffers of the Government money that was needed elsewhere. Things have changed very materially since then. The balance of trade has swung largely in our favour, but there is a fly in the ointment in the shape of a very high rate of exchange on the transfer of money to New Zealand. As the wool season passes there will be a very considerable amount of new money in the Dominion, and a domestic loan would, as Mr Watson says, “certainly tend to steady the exchange market.” The problem Of exchange is exercising the minds of exporters to a very considerable extent, just as at other periods it has exercised the minds of the importers. Most of them may be quite unable to understand the position, and probably many regard the whole of the exchange transactions as part of a dark the part of the banks to extort exorbitant profits out of the traders. The exchange problem is a very intricate one, complicated as far as New Zealand is concerned by financial conditions in Australia. It is common ground that borrowing within New Zealand instead of in London would have a tendency to ease the position, and that will undoubtedly be taken into consideration by Mr Massey in deciding where to raise his next loan.