The Wanganui Chronicle. TUESDAY, JUNE 20, 1939. DISTRESS SIGNALS IN LONDON

Wanganui Chronicle, Volume 83, Issue 143, 20 June 1939, Page 6

The Wanganui Chronicle. TUESDAY, JUNE 20, 1939. DISTRESS SIGNALS IN LONDON

| HE difficillLcs w. iiieli confront Mi. Xa.sii in London are serious diftieidlies. They constitute a country enjoying a high income from exports finding itself without .funds in London to meet iix engagements. Mr. Nash, realising that lie could not mem Parliament, with the shadow of financial difficulties hanging i he a cloud over the Dominion, rushed lo London in the nope nf securing succour from somebody. Evidently he has mm succeeded, and fin: articles which, are. appearing in such m-vspa pels as Reynolds' News and the .Daily Herald are clearly mieiidcd tn cloak the failure of Mr. Nash in London. W'hal. is ilie position which eon fronts .Mr. Nash in London' I ndet'liis direction and control he has allow ed the finaiieial condition of iliis Dominion to go from one of exceptional soundness in one of exceptional weakness. All the lime he was aware that lie had to meet, a redempl ion or a conversion of over L 17.000.000 of London money at the end of the current year. The Dominion has been overspending, and it can be said that in that, overspending the United Kingdom has had a share of the benefits, but the people of Ihe Uniied Kingdom are. entitled to point oi;i that for every penny that, was spent in the United Kingdom full value was delivered, so there is no obligation resling upon ihe United Kingdom in the transaction. Slime w hen lias an individual, a firm or a country improved ils credit status by spending its capital at a high rate” Mr. Nash, having carried New Zealand along file road of the Kake’s Progress, and proclaiming it the while to be a. virtue, now finds that lie is unable to negotiate a transaction in respect to the forthcoming maturity of the loan. There are two obvious reasons for this: One. it is too soon yet to be able to say what the position will be in December, and it is not possible in the ordinary way to secure a price for a run version of a loan until within two months or six weeks of tiie loan falling due. The second reason is that there is no indication that the. policy of overspending will be discontinued, resulting in even a higher level of costs in the Dominion than now obtains, arid a. reduction in the quantities of our exports and a consequent reduction in the income from such exports. Willi these possibilities in view it is clear that X'ew Zealand's ability to meet her overseas obligations in I lie future is subject to a discount. Now whose work is this ’ Is it the work of Ihe London financiers ’ They have had not hi ng io dn with if. They don’t even come into the picture. The statement of Reynolds’ News that “ I’arliameiit can foia-e the Chancellor, Sir John Simon, and Ihe Governor of tiie Dank oil England, Sir Montagu Norman, to give New Zealand a square, deal.'' is wide of tiie mark, because New Zealand never borrowed the loan in question from neither the British Government, nor from the Bank of England. The money was borrowed on the open market from average individual and institutional investors. Tliesc people, having witnessed the deterioration of their security, want their money back as promised by New Zealand when tiie money was borrowed. It was Mr. Nash’s job to see that this Dominion was in shape either to repay the money if it was called for, or to reborrow the money needed for such of tiie loan as v. as not renewed. He did neither t iie one, nor the other, and having failed in his duty as Minister of Finance, he is not. being helped now by a political propaganda effort of misleading statements in London to-day.