A TRADE BANK

Dominion, Volume 10, Issue 2936, 23 November 1916, Page 6

A TRADE BANK

DETAILS OF IMPORTANT SCHEME

FACILITATING POST-WAR COMMERCE

Some information regarding the proposal to establish' a British Trado Bank, for the support of British enterprise after the war, has reached His Majesty's Trade Commissioner for New Zealand (Mr. R. W. Dalton). The proposal was brought forward by _ a committee appointed by the Imporial Board of Trade to consider the question of financial facilities for British commerce in the period of keen competition that is expected to follow' tho declaration of peace. The President of the Board of Trade had stated in tbo House of Commons that "additional institutions" might be required if tbo existing banks found it impracticable to provide increased _ facilities for industrial banking' business. Tho members of tbo committer included prominent Hanking authorities and financiers, and their recommendations aro likely to bo given legislative form by the Imperial Parliament. The British Trade Bank, as sketched liv. tho committee, will liavo a capital of £10,000,000. It will not accept deposits at call or short notice, and will only open current accounts for parties who are proposing to make -use* of the oversea facilities it will provide. It will have a foreign exchange department, and n credit department for the issue nf credits to parties at home and abroad. It will organiso an information bureau in close touch with the Commercial Intelligence Branch of the Board of Trade, and will establish agencies and branches in British and foreign countries as required. One of its important functions will be to cooperate with the merchant and tho manufacturer, possibly accepting risks upon joint account, and it will hecomo a centre for syndicate operations, availing itself of the special knowledge it will possess through its information bureau. The report of the committco emphasises the fact that tho existing British banks provide many of tho facilities required for the financing of Homo trade and large overseas contracts. The colonial banks and British banks in foreign countries "render immense assistance to British trade abroad." But the, facilities afforded l:y the_ existing hanks aro not fully coordinated, and do not cover all tbo ground. "We recognise," states the report, "that the British manufacturer may be frequently in want of financo of a kind which a British .joint-stock bank could not prudently provide, whereas tho German banks in particular seem to liavo been able to afford special assistance at the inception of undertakings of the most varied description, and to have laid themselves out for stimulating their promotion and carrying them through to a successful completion. ... A trade bank might in. many, ways bo beneficial to the development of British industry and manufactures. It might in certain cases, after careful examination, agreo to make advances for the extension of existing manufacturing plant, or perhaps for tlie amalgamation or co-ordination of certain works, so as to reduce the cost of production. It would assist these works to obtain orders abroad, and give them financial facilities for executing these orders. It should give a preference in -matters of finance or orders which aro to be executed in this country," An information department i s a very important part of tho scheme devised by tho committee. The trado bank must be prepared 'not merely to investigate propositions placed before it by manufacturers and merchants, but to , bring opportunities for trade under the notice of its customers, and to study intelligently the conditions prevailing in foreign and colonial markets. A large staff possessed of special qualifications would be required, and in this connection tho committee made some interesting remarks. It is fair to essume that women will in the future take a considerable share in purely clerical work," says the report, "and this fact will enable tlie institution to take fuller advantage-of the qualifications of its male staff to push its affairs in every quarter'of the globe, louths should not be engaged without a language qualification, and after a tew years' training they should be sent abroad. ... If industry is to be extended, it is essential that British products should be pushed, and manufacturers, merchants, and bankers must combine to push them. It is believed that this pushing could be assisted by the creation of a body of business young men in the way described. In this connection it is perhaps worth pointing out that at the close of the war there may be a considerable number of educated young men who will riot be willing to settle down again to the humdrum of an office, and' from these it should be possible to select a number who .would be desirous of going to tho colonies and foreign countries to push business on their own account. Government assistance might be given to these men, who would probably require the advance of some capital to enable them to make a start, and the Trade Bank might act as agent for the Government in this connection."

After some interesting references to the "syndicate" system, by which groups of hanks and commercial .houses in Germany and elsewhere co-operate iu the handling of big transactions, tho committee nrges that the Trade Bank should he established without delay. "Our enemies are sure to make at the earliest possible moment strenuous efforts to regain their position iu the world of commerce and finance," says the report, ''and it mar well be that when peace comes, unemployment may he rife at Home, unless new markets are exploited. It seems to us desirable, therefore, to ascertain _in advance the requirements of foreign countries, • and the wh'erea,bonfcs of Taw materials for our industries."