Hokitika Guardian & Evening Star TUESDAY, DECEMBER 7, 1920. THE OUTLOOK.

Hokitika Guardian, 7 December 1920, Page 2

Hokitika Guardian & Evening Star TUESDAY, DECEMBER 7, 1920. THE OUTLOOK.

Quite apart from th e merits of the case that has occupied the Arbitration Court during last week, there are sideissues legitimately open to consideration which the Lyttelton Times refers to in an interesting way. Mr Harold Beauchamp’s statement on the financial condition of the country, and the outlook has naturally, it says, attracted a I great deal of attention, partly from the subject matter of his evidence and partly because he holds a high position in the financial commercial world. The Times is inclined to think that it would be easy to be more depressed by what Mr Beauchamp said than all the facts warrant. It is true that at the present time N«w Zealand’s external trading ■ account shows the very unusual condition of a balanoe of imports over exports. This in a debtor country is, of course, a. balance on the wrong side, and as such it has to be taken into account. But it must also be borne in j mind that this present condition is bo'th abnormal and temporary and that it follows a long period of the opposite state of affairs. While the excess of imports over exports in.the year ended j last September amounted to £3,466,000 this was due not to any slump in exports but to a remarkable hnd unexpected avalanche of imports. Ab most people are aware, orders which importers had ’ong regarded as diend or cancelled have been filled during the last few months, so that import figures have become excessively swollen; but an ex- , animation of the classes of imports re- ; veals a high purchasing power on the part of the public, especially for many classes of goodn that could bo done without, and that would be done without if New Zealand was short of cash. Moreover, just as one swallow does not make a summer, neither does one year showing an unfavourable trading balance necessarily spell depression. In the year ended September 1919, for instance there was an excess of exports over imports amounting in value to £19,212,600, which should be sufficient to counteract quite a long spell of the other-things. During the six years ended last September New Zealand’s favourable trade balance, after deducting the unfavourable balance for the latest year, was no less than £50,765,000, or an average of just- on 8} millions per annum, compared with a total in the preceding six years of £15,558,000 or 2J millions per annum. Add to this the very important fact that the Dominion’s increase of indebtedness outside the country during the war period and after has been considerably less than normal, both as to Government and private borrowing, and we have substantial evidence to show that it is too soon to become pessimistic. The war brought great prosperity which nobody did expect would continue after the cause of it had discontinued. The bottom is not falling out of the country, rior is it threatening to fall out, simply because the value of war profits is diminishing. In the last two years the value of exports has averaged some 47J millions, ns against a little more than 21J millions in each of the two years immediately preceding the war. Production has kept up well and so have prices, and we put forward for the consolation of the people who may have been persuaded just lately into a melancholy mood the large and important fact that according to the returns thought np to last September, New Zealand’s exports were worth more than double the value of her exports just prior to the war. One of the principal bulwarks that safeguard the Dominion against the consequence of falling prices—which as we say, were bound to fall, and, we may add, are not likely to drop below what Is payable—is tho fact that for more than five years borrowing has been mainly within New Zealand. The greater part of the

interest on indebtedness is now cHstri-] bated to our own citizens The adoption of the policy of local borrowing is now absolutely the saviour of the situation. As to the general outlook, we believe there are no grounds for pessimism and that while the current, or lot us hope it may be said, the recentterrific rate of importations may cause temporary embarrassments, the Dominion ip likely to a reasonable measure of prosperity. The taxpayers will however, probably be called upon to assist some of the soldier settlers who, under an unwis- policy have been placed on land the value of which was based upon conditions that no sane persons could have regarded as anything but accidental and ephemeral.

It is mentioned as a thought for the times to-day that for the first time in its history the deposits at the Hokitika Savings Bank, now aggregate over £IOO,OOO. This substantial deposit at once established the popularity of the institution, but what is more gratifying still, affords excellent evidence of the general prosperity of the district, and indicates that a strain of thrift is being regularly practiced by a considerable section of the community. This is very gratifying. It is well known of course that wages are now high, as a consequence of the increased, cost of living, hut with the depositors at the local bank it is not a case of the cost of j high living, for by their thrift they are ; . putting aside money for any emergency | which might arise later through lack of employment, reduced wages, or other consequence which in the cycle of time is likely to overtake communities as well as individuals. There has been a pleasing tendency nil .over the Dominion to- ' wards thrift. Mostly we hear, the to--1 talisator investments, being railed 'against as evidence of the thriftlessness !of the people, and not enough said about the thrift of.the people which is demonstrated by the deposits in the savings bank of the country, postal and ! general. For instance in regard to Post ■ Office savings banks the total amount jto credit of depositors, practically I doubled itself during the duration of j the war. In 1914 there were £19,048,- ' 029 to the credit of depositors and last [year (1919) the figures to credit are 'given as at £38,393,131. In general savings banks rthere were to credit at last return, £3,557,895. These figures do not take into acdount the vejry large sum which lias been invested by savings bank depositors in war loans and war certificates. This money saved through thrift will run into many i millions also, so that it is not all waste which is going on. The growth of the deposits in the savings hank is a. sure sign of the general prosperity. The accumulation of the money is also an added strength to a district, and the

volume of the figures both locally and generally indicates that the people are careful and economical and are showing the right kind of interest in their own future by preparing in advance for whatever fortune has in store for them.

Regarding the alleged waste of money through gambling on the totalisator, the Auckland “Star” has quoted a local person who refers to money “being thrown away” at the rate of three-quar-ters of a million per month through the totalisator. It is said that in twentyeight years the people have paid in fiftyeight and a half millions to the totalisation, and this is stigmatised as “sheer eoonomic waste.” It is not “waste”, because the money is not lost, nor does it represent fifty eight and a half million pounds, in separate notes. Much of the money is invested and reinvested over and over again ad lib, while in any case the bulk of the money, nearly ninety per cent, is returned direct to the public. The money which goes into the totalisator is there hut a few minutes. No Sooner is ‘a race run, than the money, less the commission for Handling it, is being repaid again, and by the time this process is over, another event is on," and the moiiey again begins to flow into the totalisator, not in “waste”, but by way of investment. The money so invested is lai'gely money to spare invested in the hope of securing a good return. Someone of course has got.to lose that others ■might win, but this is part of the deal well understood by speculators, and the result of the day’s transactions are viewed cheerfully. Whilfe all, this is going on, and the public generally are enjoying the sport, win or lose, the Government is extracting so much revenue from the .proceedings. The Clubs draw a certain percentage also, but this has to be returned again to the horse owners in stakes, so that there is not any ultimate profit for the clubs. But the Government receive a substantial “cut” for nothing. Last year the amount payable from the totalisator was about £700,000, all of which 'was collected automatically through the clubs. The amount became revenue, and to that large extent reduced the need for extra taxation! One way and another, therefore, whatever went into the totalisator came out again very promptly, and was quickly 'distributed over public and Government, thus clearly showing that there was “no economic waste.” The money would continue to serve some good purpose, while at the same time its spending afforded sport, and pastime, to an enormous number of people.-