Hokitika Guardian & Evening Star WEDNESDAY, FEBRUARY 11th, 1920

Hokitika Guardian, 11 February 1920, Page 2

Hokitika Guardian & Evening Star WEDNESDAY, FEBRUARY 11th, 1920

THE FINANCIAL OUTLOOK. “It is undoubtedly a world-wide financial crisis that we are passing through at the present time 1 ,” stated Mr Harold Beauchamp, chairman of the Bank of New Zealand, in the course of a very interesting and informing interview with a New Zealand “Times ’ representative last week. “We seem to be reaching a critical stage,” he added hut one which was anticipated when, after the long war, the period of reconstruction came. 'Die difficulty, however,. kas been increased by the attitude—the unreasonable attitude, I think you might! say—that has been taken up by Labour, It seems to me that until we can get Labour and Capital to work in more complete harmony, we cannot look for any great improvement in the situation. So far as England is concerned, she has a magnificent opportunity of developing her overseas trade, because there is an abundance of orders waiting in all parts of the Empire for British manufactures ; and we are in a position to pay for them in kind, in the siiape of produce shipped from the overseas Dominions, so that the exchange question as between the British Dominions and the Mother Country is ope that occasions us no concern. It is when Britain and the Dominions commence to trade with outside countries such as the United States and Japan, which are now great creditor nations for the first time in their history, that our difficulty begins, Up fo flip present, through the magnificent credit which Great Britain has enjoyed, she ha* had n.p difficulty in procuring ail the goods from America that she requires, In that respect it is rather interesting to know fhftt up to a late date the United Slates bad supplied Great Britain, France and Italy, with money in the shape of loans and good*, to the value of something over two thou,“land million pounds. In addition, other countries, for goods and joaps, are indebted to the Cubed State s for something approximating one thousand million pounds. Thue all these credit# together amount fo <1 stupendous total of £3, 000,000,666. '11)15, on the basis of 5 per cent per annum, would mean an interest obligation front the debtor countries to the United States of £150,000,000 per annum. Just at tlie moment we are experiencing a difficulty in meeting flip obligation in respect to interest, and certain, ly a greater difficulty with regard to the capital indebtedness, for we are not exporting. (J ant speaking of Great Britain) goods of any real value to the United States. Nor is- Britain now in a position to tranfer securities thither or gold. That position to-day is reflected ip .the adverse rate of exchange which we saw published in the paper this morning—3.331 dollars to ,tlie pound sterling. In a. question of this kind I cannot see that the Bank of England can lend (my material assist- / a lice; that is to say, in Improving the

rate of exchange or in any way stabilising it. That is all a question of our being able by some method or other to reduce our indebtedness to America. As I pointed out in an interview I had with yog previously, there appears to be an iudispositiop on the part of America to extend further credit to Great Britain. At the same time that is going to have a very I serious effect upon the export trade of the United States; and I fancy it will only ,be a, question of time when the subject will be taken up by manufacturers and exporters in the States who will endeavour to devise some method by which they can continue t'o reap the rich harvest which they have gethered in European markets during the war.”