The Dominion. SATURDAY, JUNE 18, 1910. CONFIDENCE AND PROSPERITY

Dominion, Volume 3, Issue 846, 18 June 1910, Page 4

The Dominion. SATURDAY, JUNE 18, 1910. CONFIDENCE AND PROSPERITY

The annual meeting of shareholders of the Bank of New Zealand is always an interesting occasion. It is not only that the Bank is a sort of trade harometcr for the whole country, but the practice has grown" up of the chairman of the institution delivering a speech on lines which make it of quite as much interest to the general public as to the Bank's shareholders. Yesterday's meeting was no exception to this rule. Mr. Beauchajip's carefully-compiled address contains a great amount of information concerning many matters outside the Bank's transactions for the year; it proffers some wholesome advice and it touches on certain asSects of the industrial life of the lorninion with a quite dispassionate, but lirmly-expressed, conviction that "there is a fccljng of want of confidence prevalent in the community." There is nothing of the pessimist about the chairman's speech. He, on the whole, ha-s a very pleasant story to tell and he tells it very well. But like a sound and prudent man of business he docs not shut his eyes to facts, and when an unpleasant fact looms up in the pathway of progress he prefers to point out the obstacle to those concerned and endeavour, with their assistance, to find a means of removing it. The chief obstacle to-day to a return to the full tide of prosperity under which the.country flourished for,.so many years past until the set-back of a. little morn than a, year ago is the want of confidence referred to

by the chairman of the Bank. To quote from his speech: In. New Zealand to-day there Is an tumnilanco of loanablo credit, and yet, I am bound to say, there is a. feeling of want of confidence prevalent in the community. Money is not flowing into tlioso channels which should exist in every new country, • and which do exist in New Zealand. The financial situation is infinitely better than it was'a year ago, but that in itself is not sufficient. We want the capital available in the country to seek an outlet in industrial and, other enterprises. Tho spirit of enterprise is, however, wanting. To what this unsatisfactory state of things is to bo, attributed is a matter for speculation and conjecture. Politics are of course outsido tho province of an address such as this, but it is quite within tho scope of my 'remarks to note the existence of a condition of affairs so detrimental to the development, progress' and financial prosperity of the Dominion, leaving to others the task of seeking out tho cause and applying the remedy. New Zealand is a nation in the making, and requires all the capital it can command for its development. It should be careful to do nothing to make capital shy of entrusting itself within its borders. To give emphasis to his point, Me. Beauchamp quoted an extract from the speech of the vice-president of the Bank of Montreal to the shareholders at that Bank's annual meeting. _ The banker referred to, commenting on the increase in his Bank's deposits, stated that the largest part of this increase arose from money brought into Canada from other countries. He very naturally urged the importance of doing nothing by injudicious legislation, the exploitation of doubtful enterprises, or otherwise to stop, this flow of- capital. Almost everyone knows the tremendous development that is going on in Canada to-day, and this is carried out almost entirely with foreign capital. During five years Great Britain is stated to have lent Canada £121,000,000, of which sum £98,000,000 was publicly borrowed. The balance flowed in through various channels of investment, stimulated, of course, by the confidence felt, not merely in the future of Canada, but in the treatment that would be accorded those who invested their capital to develop its resources. Wo do not think that anyone seriously doubts the future of New Zealand. Its natural resources are so great that it is bound to "pull through" any ordinary,-dif-ficulties created by foolish government. But it is equally certain that its progress can bo seriously retarded by logislatioi-T'which unduly penalises capital and so prevents the free circulation of the means to devolop tho industries of-tho country. And who can say that encouragement of any kind has been given in recent years to capitalists to invest their money in New Zealand'? What encouragement has been given to enter on industrial enterprises •of any kind? Has not the atetudo of the Legislature had exactly the reverse effect?

He. Watson, one of the directors of the Bank of New Zealand, endorsed Mn. Beauchamp's views ae to the prevalence of a feeling of want of confidence; but Mr. Mamin Kennedy, another director, disagreed with him. Mk. Kennedy appeared to think that the labour legislation of the Government was .referred to as being at the bottom of the trouble mentioned by his colleagues, and announced himself as being in favour of tho legislation which prevented strikes. It is hardly worth while pointing out that the legislation in question does not prevent strikes. The question raised by Me. Kennedy is really a side-issue. It is not the actual effect of any legislation that has been passed that has made capital uneasy. It is the general attitude of the Government of the day towards capital that is at the bottom of the trouble. Not the fear of the present, but tho fear of the future. Only a few days ago we pointed to the utter foolishness of a Minister of the Crown at Auckland hinting at, if not threatening tho country with, the introduction of taxation of the "unearned increment! , on moie 'sweeping lines thae in Mng-,

land. Thiu sort of thing may bo nothing more than wild talk, but how is the capitalist to know this? While almost every other young country in the world welcomes capital with open arms, and properly regards it as part of its very life's blood, we in New Zealand, pandering to the "outcries of a Socialist minority, not merely treat capital with indifference, but openly discourage it. The speakers at yesterday's meeting of the Bank of New Zealand did not suggest any.means of restoring confidence amongst those who have the money to invest in industrial enterprises. The remedy, however, is simple enough. Let the Government of the day realise that those with capital should bo encouraged instead of threatened. Let those with money to invest be made to feel that they will receive fair treatment at the hands of the Legislature, and the cry of want of confidence will quickly be silenced. But unless this is done capital will continue shy, and industrial progress will be slow, for not only will New _ Zealand be passed over by the outside investor, but many of our own people will gradually transfer their capital _to lajids where it is welcomed. With so much room for the profitable investment of capital in the Dominion it is really amazing that our legislators have not long ere this striven earnestly to ensure that capital being forthcoming.