Company News N.Z. MONETARY POLICY

Press, Volume XCV, Issue 28269, 6 May 1957, Page 14

Company News N.Z. MONETARY POLICY

Dunlop Chairman Urges Restraint

The balance of payments problem was only one of a number of visible consequences of inflation, against which New Zealand, in common with other countries, had had to battle in the post-war period, said the chairman of Dunlop New Zealand. Ltd., Mr G. Phillip Proctor, at the annual meeting of the company in Wellington. The commercial community had welcomed a policy designed to stabilise money values. Danger arose, however, where credit restraint was too vigorously enforced, or too long applied, and tended, as a result, to curb the enterprise and initiative of those contributing to the expansion of the country’s economy.

There must be periods of readjustment, when great ecqnomic activity was associated with rapid industrial growth, as was the case in New Zealand. Such periods provided industry with the opportunity for self-discipline. The levelling off of consumer demand to be expected from a shrinkage of credit or volume of money in circulation usually encouraged more competitive market conditions, which in turn stimulated the individual manufacturer to reexamine costs, selling prices, quality and. above all, service to the customer. Harmful Effects Possible The danger was that credit restraint. too long or too severely applied, could create conditions harmful to industry, in particular by depressing consumer demand to a point where economic production was jeopardised. “It is sometimes overlooked.” said Mr Proctor, “that in our small market apparently stable trading conditions can disappear overnight. thus adding to the difficulties which the manufacturer faces in planning ahead to meet the needs of our growing population. It is earnestly hoped that the Government, in 1957, will watch this aspect of the country’s economy and apply the credit restrictions wisely.” N.Z. Newspapers.—Recommended annual dividend has been raised from 6 to 7 per cent. The directors recommend payment of a final dividend of 8d a share, making Is 2d a share (compared with Is a share last year). Ex dividend date is May 21. —(PA.)