The Dominion. MONDAY, AUGUST 14, 1911. WORDS OF WARNING.

Dominion, Volume 4, Issue 1205, 14 August 1911, Page 6

The Dominion. MONDAY, AUGUST 14, 1911. WORDS OF WARNING.

. When the Chairman of the Bank of New Zealand (Mr. Harold Beauchamp) heard that his repeated danger.signals and warnings of the need for private and public economy had alarmed the Ministry into putting up the Hon. T. Mackenzie to read him a lesson in the economies of commerce, he must. have been rather wearily amused. Uf far more importance is the fact that his last three Bank addresses have deeply impressed the business community. • The Chairman of the Otago Chamber of Commerce on Thursday, and the Chairman of the Auckland Chamber on Friday, both spoke in grave tone 3 upon what everybody who has no private axe to grind' knows very well is an undesirable state of affairs in the national economy. The Chairman of the Dunedin Chamber, Mr. G. R. Ritchie, who takes a hopeful view of the immediate outlook, laid stress upon the fact that while the exports for the year ended March 31 last had increased by only £30,000, the imports had increased by £2,600,000 odd. The position, he said, certainly called for caution, and ho went on to touch the intimate relation between this undesirable drift and the heavy borrowing policy of the Government.' "It is impossible," he- said, "to shut one's eyes to the fact that the annual borrowing by the Government has been very large, and this year is bigger than ever. This huge Government borrowing cannot fail to create an artificial prosperity for the time, and I have no doubt whatever is doing so, and that if it were largely reduced or stopped we should at once feel the 'shock of it in a very marked way." He proceeded to admit the legitimacy of moderate borrowing,, but this admission only serves to emphasise how largely fictitious is the prosperity when, after twenty years of Liberalism, the bottom would fall out.of the country, according to the Feme Minister, if borrowing ceased. Mn. Ritchie noted also the further turning of the trade balance two millions to the bad during the quarter ended Juno 30.

In his address to the Auckland Chamber the chairman, Mn. Leo Myers, quoted at some, length from Mr. Harold Ueauchajip's warning of a couple of months ago, and delivered a very useful homily on. overtrading. The tendency of private, municipal and national expenditure to increase had, ho said, so easily developed that it was the duty of responsible men to emphasise loudly the necessity for prudence and restraint. The financial stringency of three years ago could only be regarded by sensible people as a hint of what was possible at any time should there be a drop in the value of our staple products. "It appeared to him," the report of his speech proceeds, "that this was the right moment for' the Council of the Chamber of Commerce to give expression to

a note of warning- to the commercial community; for the figures already referred to would seem to clearly indicate overtrading was being generally indulged in. Now, the evil effect of overtrading was hardly noticeable during times of unusual prosperity such as they had passed through during the last decade. But that was just the time when the business community had to' keep their minds well balanced and recognise the necessity for exercising a considerable degree of prudence and caution. Communities, like individuals, were very apt to overlook the teachings of history, which clearly demonstrated that overtrading was the first cause of a weakness that became manifest when the pressure of necessity compelled the brake to be put on. A word of warning such as he had attempted to convey could not possibly militate against sound commercial progress." And what is the Government doing—what has it always done—in the face of clearly unbiased and indisputably sound and competent warnings from bank chairmen and presidents of Chambers of Commerce'! It cannot revile them as traitors and back-stabbers—it usually reserves that sort of language for The Dominion—but it does, and always has done, its best to persuade the public that there is no need for caution, no prospect that a single cloud will ever mar the blue skies, no need for anything but heavy borrowing and heavy spending. It drugs the country ever more heavily with loans, huger loans being necessary as the years pass; it denies plain facts; it shouts down every whisper of caution; and, in a word, proceeds recklessly to cozen the public into believing that it has found the secret of endless wealth. Why? Why does it imperil the nation's future, and <;he_ future of the great bulk of the individuals who make up the nation'? In whose interests does it seek to shout down the counsellors of prudence ? Obviously in its own interest only.