FINANCE AND TRADE

Hokitika Guardian, 23 April 1921, Page 1

FINANCE AND TRADE

STABILITY OF MOTHERLAND

Mr Harold Beauchamp (chairman of the Bank of New Zealand) made a most interesting statement to a “Times” interviewer with regard to the influence of the British strike upon trade and finance.

“In spite of the apparently imminent strike of the Triple Alliance,” which would have involved the loss of millions of pounds, the destruction of property of untold value, and consequent misery to those dependent upon tho breadwinners of Britain, it is gratifying,” said Mr Beauchamp, “to learn from a Ijondon cable, dated the 16th inst. that there has been no panic on tho Stock Exchange. Indeed, I note with satisfaction that the prices of giltedged securities, such as Government and municipal bonds and debentures, shares in hanking, and other financial corporations in Great Britain and hei dependencies, have been well-maintain-ed. That speaks volumes for . the strength of the holders, and is an indication of the wealth of the Old Country. Furthermore, it suggests to my mind that, given anything like tho bringing about of more cordial relations between capital and labour and the recognition by Germany of her obligations to the Allies, we should speedily see dispelled tho dark clouds which today, in almost every part of the British Empire. are so visible on the commerent horizon. IMPBOYED INQUIRY FOR COLONIAL STOCKS. “Tn the cablegram to which I have referred mention is made of tho improved inquiry for colonial stocks. This is confirmed by the success of the Auckland City Council in the over-subscript-ion of its loan, issued at par, for £500,000 at 61 per cent, this loan as to 'interest and principle, being guaranteed by the New Zealand Government. Other public bodies in this Dominion will, it is understood, endeavour to raise sums also in London as soon as circumstances permit. Should they be successful, tho l>enefit to this country by the introduction of new money will prove incalculable; and it will also greatly assist the banks in their exchange operations. For some time past it Ims been anticipated that the English Chancellor of tho Exchequer could revert to the sale of Treasury hills by tender: so tho announcement in the ‘Times” this morning of his intention to do so does not come as a surprise. It suggests that money at short currencies for Government purpose can he raised under the rates lately ruling for Treasuries.- Namely, 6 to 6.V per cent. WOOL POSITION IMPROVED.

“As to wool, in which we in New Zealand are so deeply interested, tlieio is unquestionably a ray of hope in the late sales of free wool, for which there has been good competition, especially on the part of foreigners. True, there lias been uo real enhancement in values; hut the outstanding fact is that there is a visible sign of a resumption in the demand which lias been so conspicuous by its absence during the past few weeks. With an improvement in industrial matters in Great Britain, we may reasonably look for an improvement in the prices of all our primary products. It is beyond question that our prosperity depends entirely upon the purchasing-power of the people in England, and until that expands we must he prepared to face adverse financial conditions here. Britain, in turn, must be in a, position to compete with her manufactures in the world’s markets.

HIGH COST OF PRODUCTION. “To-day she cannot do so, owing t< the high cost of production incidental to abnormal wages, short hours of labour, and the go-slow policy. To emphasise what this means let me quote a .speech delivered by the chairman ol the Lancashire and Yorkshire •••adv.-c-

conip any. In addressing the shareholders of that company on February 16th last, ho said, inter alia. ‘The amount of wages paid during 1920 was £9,458,393 ns compared with £2.796,755 in 191 •’ the average per head per week being 77s lid., compared with 27s 4d in 1913. To illustrate the effect of the shorter hours, T will refer to the drivers and firemen. Before the eight-hours day the average normal hours were 10 per day, and of this forty minutes were taken in preparing the engine, taking it from the shed, and after the turn taking it back again. That loft for rev-enue-earning purposes 93 per cent of the turn. Under present conditions, the ‘eight-hours’ day only leaves 6] hours for revenue-earning purposes, as agarost 9 hours 20 minutes previously, or a reduction of 28 per cent and it is easy to see what a heavy increase in working costs this entails when we remember we have 1129 engines under steam per day. COST OF LIVING FALLING.

“There is abundant evidence of a reduction in the cost of living in Great Britain, chiefly through the steady and persistent fall in value of essential commodities; and we are meeting with a ■similar cxpeirience in New Zealand. Dealing with eommodity prices, a writer in the ‘Economist,’ under date February 19th.,1921, says: “The -car 1920 saw the peak of commodity prices ; reached and passed. According to our index number and the highest point "/as touched at the end of March, when Hie total reached was 8352. Since then there has been a rapid decline, and at tile end of the year the total had fallen to 5294. It is to he specially no'cd how rapidly metals are descending from the high altitude they occupied during 1 war times. In commercial circles the value of metals, as it is well known, is keenly watched, as metals have nicli an important bearing on the cost of manufactured goods generally. In sym- ■ pathy with the reduction in the prices of commodities, we must undoubtedly look for a fall ir. wages in every class of industry; "nd until that event:i. ? > * l