The War and New Zealand Finance.

Press, Volume L, Issue 15037, 4 August 1914, Page 8

The War and New Zealand Finance.

So far as the financial effect of the war on New Zealand is concerned, it is undeniable that a crisis like tho present, if it had to come, could not have struck us at a more favourable time. Most of our produce has not only been shipped, but actually delivered, and the producers havo been paid for it. They havo the benefit of a good season and high prices, and aro therefore in an unquestionably good position. Tho last banking returns show that the banks transacting business in the Dominion are ©xceedingjy strong both in this country and in London, as to coin and liquid reserves. The liabilities which would give, us most anxiety at such a time aro oversea liabilities, but those are fortunately very light, owing to the exceptional value of our exports. Both tho Government and the local bodies will have to hold off the London market for a time, and wo cannot bo too thankful, as we have before pointed out, that we have a prudent and far-seeing Minister of Finance in office, who has ordered his arrangements in advance so that for some months to como, at any rate, it will not bo necessary to approach the London money market. Even Sir Joseph Ward, .who a week or two ago was jibing at Mr Allen for borrowing before it was necessary, will now be as much relieved as tho rest of us that the Minister cf Finance acted on tho principle that it is better to be sure than sorry. Another cause for hearty congratulation, is tho fact that all the banks and a great financial institution like the Loan and Mercantile Agency, have recently practically doubled their capital. The re-arrangement of tho affairs of the Bank of New Zealand, apart from ".ts connexion with tho Government, has made it one of the strongest banking institutions in the world, and tho great Australian banks hold a practically impregnable position. Added to this is tho fact that trade in the Dominiois as a whole was never on a «mnder basis than it is at present, and our readers will see that our contention is amply justified, namely, that tho crisis finds New Zealand in tho best possible position to meet it. All that is necessary is for the public to realise these facts, and act with coolness and confidence. The policy for the banks to pursue at jmch a juncture is, while discouraging speculation and counselling their clients to husband their resources as far as possible, to continue to advance freely for all legitimate requirements. They are in a position to do this, and »ye have reason to believe that this is tho policy which will bo pursued.