WELLINGTON NEWS

Hokitika Guardian, 26 June 1925, Page 4

WELLINGTON NEWS

ITALIAN HANK KATES. | (Special to “Guardian”.) WELLINGTON. June 21. The following short cahle message from London was published in obscure positions by most of tlm Press oi the Dominion on .Monday: I(> li* l l, in hunk rate has I raised to 7 per Who would ever think that Mich a message had any interest for the people of New Zealand, and bemuse we think it has no concern for us it was printed in small type and stowed nwiiv on a back page. Ask a hanker if there is any significance in i i 1.1 ..^.midK*

Ihe message, and lv would promptly reply that it had a good deal of signiGranee for us. A banker was questioned on the matter and he pointed out that the hank rate in Italy had been A> per rent for over two years, and the in-n-ease of 11 per cent was significant when read in eonjiinetiou with the cxchaime rate. The exchange on Tlonw a week ago was about 120 lire to the e sterling, the rate is now 133. Italian credit is falling and the rise in the bank is the logical result. The Italian incident by itself though important would not hate mattered a great deal, but taken in eon junction with other Continental European countries it was had. The hank rate in. l-'rance was raised to 7 per cent in December to help cheek the depreciation of the Irane, but the franc has refused to lie checked. Ibe depicciatjoit has gone on continuously and now 103 IViincs exchange for Cl. In Cor- . .... i ...l

m; iiiv the into i' f> per << -' nt :,Mll though the exchange rate is isiirly stable owing to tbo plan, conditions ill that country are precarious n> tv as shown liy the collapse of the Ktilines Trust mentioned curly this month. The trust was tillable to moot its liabilities abroad, am! could not raise money in the 1 idled Stales. Calmly review the position. Mere are three great Continental countries .suffering severely from financial strain. The purchasing powers of the nationals of the three countries must he very restricted, and that being so it is obvious that they cannot purchase foreign goods to any extent, hut must do business from hand to month. Hritain is feeling the effects as.ghown by the increase in unemployment now when it is summer time and one would suppose that more work would he ottering. f l he iinaneial strain in I'.nioji iniiv force uo money rates in London where for .soil"' time past the position has been regarded with some anxiety.

Now let US see how New Zealand is affected. Era nee, Germany and Italy are fairly large consumers of wool and it is obvious that if they are financially prostrate they cannot do much buying. The same oouutrms have also been developing a taste lor Irom-n meat, and if their financial position does not improve they must go back to eating horse, mmraroni and saner krouts. If money becomes dearer in London it will tend to cheek speculation and business will be done on a hand to mouth basis. I here is thus a great deal ot significance in the message that the Italian bank rate has licen raised to 7 per cent. PLENTY OK MONEY. The Auckland correspondent ol a Wellington paper reports that the head of a big Auckland business house states that trade is good. Purchasing power seems remarkably good. Prices have not come down much. .Men and

women are Inlying more expensive clothing. I’iggest increases are in salesof such things as pianos, gramophones, and high class furniture. All this may be dismissed as cheap advertising claptrap lor Auckland. It can be proved

in a very simple manner that there* is Met plenty of money in Auckland, anti here is tlie proof. The I’.O. Savings Hunk relnrns for tie* four months to April show that deposits in the Auckland postal d.'slrii i amounted to C 1.71 1.1011, and the withdrawals t* f 1.77 H, (> lb, that is the withdrawals exceeded the deposits hy CblP.'i. die* people no north have been living not. only well up to the full amount of their iueonio and like the famous Mr Mirawber they will presently discover the inconvenience of this. 'I ho Auckland postal district was the only one in the North l-and to show an excess of withdrawals. If under these eir-i-iinir>L:incos there is plenty of money in Auckland then there most he abundame of it in Wellington. for (he F.O. r ] * v iues Hank Iviures show deposits 1-2.:>7I,01:;, anil withdrawals C-. 1071.7< " an excess of deposits of L'l7i,'-MI. Some merchants cannot see further than their show windows, and as for forming and expressing an intelligent opinion on the economic conditions ol the country it is only one here and there who can do so. The tact is very few business men wive any consideration to statistics or economics or the psychology of trade, and it is therefore (piite I .•vend their (npueity to form a correct judgment of the current position or the outlook. It Generally happens too. that those who know the

least a limit the matter are the most emphatic in their opinions. Sir (tcorge I'.'lliet, Chairman of the Hank of Now Zealand, who is also an Aucklander, stated at tin* Hank meeting: “Any ndyi(t* as to the need for general economy is unpalatable. It has been given so often that I am afraid it falls on deal' cars. In Now Zealand there is not the slightest, doubt that, in private tile people are spending too much on imported luxuries, and it is time to call a halt and consider the position.” Hank officials know. They have their optics glued to the trade barometer.