NEW ZEALAND’S OUTLOOK

Waipa Post, Volume XXIV, Issue 1440, 15 December 1923, Page 5

NEW ZEALAND’S OUTLOOK

FAYOCRABIE TRADE CONDITIONS

SEEN BY BANK CHAIRMAN.

(By Telegraph. Press Association.) WELLINGTON, Friday.

The tone of the speech of the chairman of the Bank of New Zealand at the half yearly meeting of the bank’s shareholders this morning was distinctly optimistic. He said in part that financial conditions in the Dominion have shown some improvement, though there is still much leeway to be made up. The weather during the winter and early spring was most unfavourable, but the last two months have been much betetr, and there is, at the moment, every prospect of a large output of product. Prices of staple products are quite satisfactory and those primary producers who purchased their land at fair prices, and who are not overburdened with debt, should do reasonably well. Owing to competition from overseas many of our secondary industries are somewhat inclined to languish. Only by increased efficiency and by the adoption of the latest methods in working, will our manufactui ers be able to cope successfully with the flood of importations. The large volume of imports during the last 12 months is causing some concern and, notwithstanding the lesson importers had in 1921-1922 there is sai dto be considerable overstocking. Articles of luxury, especially, have been imported to an extent that raises misgivings amongst those who recognise the necessity for strict economy in both public and private expenditure. Monetary conditions in London were until a few weeks back much about the same as they were six months ago. The disturbing influence of the general election has, however, brought about a fall in the value of gilt edged stocks and two important recent issues of New Zealand local body debentures were unfavourably received by the British public. In Australia, rates have hardened several of the State Government paying 5 h per cent, free of State and Federal income tax, for ten year loans. Bank overdraft rates there are practically the same as those in New Zealand.

In the Dominion, there is no shortage of funds for desirable investments. In the North Island, where a greater demand for money exists, rates for first class mortgages are from 6 to 61 per cent, while in the South Island the ruling rate is 6 per cent. Local bodies are in some instances paying 5£ per cent for loan issues, but in most cases 55 per cent is paid, and even at the latter figure large investtors are not buying freely. The increased income tax on debenture issues has undoubtedly affected these loans; 4£ per cent war loan stock, free of income tax, at present market prices gives a better return to most investors.

New Zealand is settling down to the even tenor of her way, and the difficulties of the past year or two that have been experienced by both the farming and the business communities should, in the long run, have a salutory effect.