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Hokitika Guardian, 18 June 1920, Page 2

In regard to matters financial many local bodies are finding already a difficulty in borrwing money at tile rate stipulated by Government, 5i per cent. In the case of a large loan in Christchurch the rate had to he advanced to 5’ percent, to attract capital. This gives point to the statement made at the Bank of New Zealand meeting at Wellington to-day that money is growing dearer. To some extent it is a healthy sign, as it indicates the swing of the pendulum the other way, and in the end should help to afford the relief the world is craving for. The abnormal issue of paper currency lias depleted the value of money, and if wo find it rising now in value, it is a sign that the con-

gestion is disappearing, and the inflation in value is to be welcomed. What will help further will be a restriction of credit, and this, too, is likely to come here, as it ha s already in America and at Home. Also, with the commandeer ceasing there will be less money flowing in, and this degree of stringency will further apprise money. The Government loan will counter-act these features to some extent, a s it will be in point of fact so much further credit within the country. The cost ol living is to be added to by the public taxes to help pay the increased wages to State employees, and general taxation will iu the aggregate he at a higher rate per capita than before. These reflections deaj with only one side of the ledger, and it is for the ‘statesmanship of tlie Government to discount them as far a s possible by frugality in manage- j ment and economy in administration. , For s ome indication along these lines he must await the disclosures of the Government policy which is so iar a Cabinet secret.

Thu obvious tiling to afford real relief to'the financial position is the stability of the industrial world. The demand for more wages and shorter hours is not going to help the country through the troublesmo times ahead. There are well intelitioned folk striving to reduce the cost of living, hut this cannot he done without getting down to bedrock. To that end one of two things has got to be brought to pass. The cost of production has to he reduced, or production increased without any corresponding increase of cost. The ideal cannot he achieved without working for it. No amount of make believe will suffice to produce the goods. That entails genuine work on genuine/lines. Hut how are the changes so much craved for to he brought to pass? That is largely in the hands of the financiers.' There is the restriction .of credit as a first necessity. Another desirable step is the reduction of the paper currency. While a third virtuous, step would be to cease or at all events materially curtail the country’s borrowing propensites. Selfreliance within ha s to be practiced. It .this were to come to pass, we should probably find many people unprepared for tiie tight times. That would be unfortunate; but so. it is for the patient when lie has to take unpleasant medicine to make himself well. Probably sooner than later this country will have n taste of the unpalatable, and the masses even With their high wages and shorter hours are not prepared for the emergency. Hut very different times are ahead, and the country should take its warning and act before it' is too late.