NEW ZEALAND’S YEAR

Wanganui Chronicle, Volume LXXXIII, Issue 20150, 19 May 1928, Page 9

NEW ZEALAND’S YEAR

ECONOMIC CONDITIONS REVIEWED. *‘The Financial Times (London) issued on March 19 an elaborate ‘‘Banking Supplement,’’ and to this supplement Mr Richard W. Gibbs, who was acting chairman of the Bank of New Zealand during the absence of Sir George Elliott, contributed an interesting article on the progress made by the Dominion and the economic conditions. “Let it be remembered,’’ writes Mr Gibbs, “that New Zealand i s a small country—nevertheless the primary producers of New Zealand can claim to hold high rank in both the quantity and quality of its exports. In the cariy days flax was one of the chief products but cajinot now rank as of any great importance Gold production in those days was also an important industry, now reduced, however, to less than half a million sterling. The introduction of refrigeration facilities rapidly brought the meat and dairy produce within easy reach of tne world’s markets, and gave an impetus to those industries exceeding all expectation. Unfortunately, during the war the high prices for meat led to farmers’ companies and others erecting works fair in excess of requirements, and many of these, after maxing heavy losses came to a disastrous and untimely end leaving the more solid, the better managed and chiefly the proprietary wworks to carry on as before the war, the legitimate requirements of the trade. While in 1906 the total export of frozen meat was under £3,000,000 the value of the output has since quadrupled.’’ With respect to dairying, Mr Gibbs in his article says: “Last year was a lean one for our dairy farmers. The British coal strike reduced the demand materially and falling prices Ic4 to heavy reclamations. Added to this the control board introduced a system of price fixation which had speech*” to be abandoned to save an already critical situation. The present season has opened with much brighter pro-

spccts and not only is the output showing a considerable increase—nearly 19 per cent —but prices as compared with last year, arc for butter up to 175 s per cwt. as against 1505., and cheese 102 s. as against 86s. Needless to say that in a young country almost entirely dependent on its primary products | such a substantial advance is most welcome. Wool is another of New Zealand’s important products, on the price of which the prosperity of a large number c-f our settlers depends.” After dealing with forestry, Mr Gibbs thus refers to the secondary industries: “New Zealand’s scconckiry products do not loom large, but, never-1 theless are of sufficient importance to warrant notice in any article dealing with the economic conditions of the Dominion. Woollen mills, boot factories, motor engineering, printing and publishing, general engineering, cloth ing factories, brick, tile and pottery, chemical factories, coal mining, saw milling, and many others arc all doing important work and providing employ inent for New Zealanders, instead of New Zealand finding the wherewithal to import articles which our own people arc capable of manufacturing equally well.’’ With respect to banking, Air Gibbs writes: “The adverse movement in the banking figures as disclosed by the quarterly returns for the past two years called for a necessary adjustment in the rates of interest, an additional 4 per cent being offered for fixed deposits and the minimum rate for advances being largely at 7 per cent. This position was largely brought about by Government competition, through the Post Office Savings Bank 1 and; the activities of the Public Trust Office to attract deposits. Interest is ! allowed by the Post Office Saving | i Bank on deposits up to £5OOO. which ’ is generally considered to be exceeding : the scope of the recognised function-. • of a saving bank. The wrong step hav I ing once been taken, the Minister oi l Finance has a difficult task in now , making a reduction in the maximum amount, but he has intimated his inten- I tion of reducing it to £4OOO &t an eai-jy date, and as he realises the influence ; the Post Office rate must have on in- •

tercst rates generally, no d*oubt he will with a view of reducing the price of money, bring about further reduction.’ ’ Mr Gibbs also deals with the Pubbe Dept, general politics the Arbitration Act and Mr Amery’s visit, and concludes by saying: “T.he past year has been one of ‘marking time’ for most of our producers and business men. There has been over-competition in most lines of business. In country lands very few transactions have taken place, and land values are still, on the whole, too high. Notwithstanding these various drawbacks which arc transient, the position and finance of the Dominion are sound.’’