Untitled

Hokitika Guardian, 5 September 1924, Page 2

Onk of the results of re-equipping Germany with a stable currency and providing it with funds to extend its industries will be greater world's competition. Alieady some English steelmakers are uttering warnings of the rivalry to which British enterprises are likely to be subjected now the reconmciidations ol the Dawes (ommitlee have been adopted. 1 In* general good lias to Ik* looked at. From that standpoint the reopening of the Coni in to trade and commerce on the nsec lines, together with the goodw ill -' should develop when trade letters a:c removed should oll'set any losses due to individual industrial competition. In addition, it lias to I e show n that the ability of the English manufacturer to meet world's compel it ion is so afl.-v----ted that lie cannot adjust bimsell to what will virtually be a return to prewar conditions. The question arising out of the present agreement, over which anxiety lias been shown, is whether the safeguards that have been provided by the Dawes ('ommitlee I" ciimiic the payment "I the animal <■ m llibiilions of Germany abroad, will be effective. Tile fear is expressed that if reliamc is to be plated n| on maintaining the gold standard in Germany a sharp dellation will result, and will depress general conditions ill that country. On the other band, if the currency is not to be on a gold basis scope tor inflation may cxi-t. which once begun may endanger the whole .scheme. The Westminster Bank especially emphasises lisks in this direction, for should there be any depreciation, as the final annual payment, by Germany lias to be in gold marks, a heavier burden than was contemplated will be placed upon the people of that nation.

Tim Prime .Minister of New Zealand is reported to he perturbed at money leaving New Zealand for investment in Australia (says the “Sydney Morning Herald”). He is seeking methods of pievontion. If money is leaving Nev. Zealand it is because Australia, in spite of a high cost of transfer, offers a better return on investment. The rate of interest in Australia is higher than the rate in New Zealand. Should Mr .Massey attempt any embargo the effort will be to restrict trade between the two countries, and any such restriction would cause New Zealand far greater harm than it would Australia. Australian balances in New Zealand are extremely large, because the balance of trade is so greatly in favour of Australia. Money invested from New Zealand would make exchange from -sew Zealand to Australia still dearer. That would lie a factor against investment from New Zealand, since it is to be remembered that it is not that Australia is seeking loan money in Now Zealand, but that. New Zealand money is seeking investment in Australia. Tn the former case Australia would pay the.cost of exchange. As it is, it is the New Zealand investor w.lio has to pay the cost. Mr Massey is seeking to prevent money leaving New Zealand so that it can lie advanced on broad acres. The term has such a line ring aliout it. But if lie wants money invested in broad acres it can only lie on condition that lie insures broad acres producing sufficient to return adequate interest on capital. The British manufacturer complains that British capital is invested abroad whereas it should be invested in British industry. What would Mr Massey say if the British Uovernment were to take steps to prevent British ca'itnl lieing invested in New Zealand? AVhv will the politician interfere with business? The interference always ends in disaster, but the politician puts the blame not on Ids shoulders, but on the shoulders of those whom lie iniures.