WELLINGTON NEWS

Hokitika Guardian, 8 December 1925, Page 4

WELLINGTON NEWS

FINANCIAL DIFFICULTIES. (Special to “Guwdi«i ,, .l WELLINGTON, December 4. Sir Joseph Ward has not been given to talking flippantly on financial matters. nor can he lie accused of being a. pessimist. Those who know him best acclaim, him an optimist, and this chronic optimist sees financial trouble looming ahead. Money not merely is going to he dear, it is going to ho difficult to obtain at any rate of interest. All the plans of the Government and people of New Zealand are based on the belief that money will he cheap and abundant. The first indication that money will be dear was contained in a recent London message, which

stated that London financiers and capitalists now looked for a clear 5 per cent on overseas loans and those who have recently visited England and have had the opportunity of discussing matters with British hankers and linaneiers have returned impressed with the need for moderation in borrowing. It is perhaps useless asking the borrowers to moderate their demands, they must he compelled to do so and the measure 'il compulsion to he applied rests with the lenders. Abundant excuses can he raised for borrowing millions niton millions. The politician has merely to say that the money is wanted lor progres--ive public works ami he will get. the echo' sement ol* the public. As >ir Joseph remarked, with a serious position looming ahead the Dominion is committing itself to a development polity of enormous dimensions and counting upon its products remaining indeliii'icK at the present high prices. In pig;! Now Zealand raised Co,0(10,09!) a Loudon, in 1921. the amount was increased to £(>.000,000 and in 1927> there was a further increase to 07,000,000, and that, altogether apart from the local borrowing for the Advances io Settlers’ office. Heavy as are the com-

mitments of New Zealand, they are 1 1 idling compared with the borowing of the Australian Stales, where Labour Governments have developed a mania, h.i squandering public funds. London will lie forced to rest riel loans by raising the interest, rate and imposing conditions which would make borrowing a great trouble. It is evident that London has put off some applicants for loans until the new year when there is likely to he a great pressure for money. FA Id.ING PRODUCE PRICES. Commenting on produce prices Sir Joseph said that nothing was more certain than an all round drop in prices in the near future, which "ill place the Dominion’s balance of trade on the wrong side. The drop in prices has already begun. Wool, as we all know, is very much lower than at the worst sale of the past season. It was hoped that after the opening sale at Wellington that wool had stabilised at the lower level of values, and hope was strengthened by subsequent sales in the North Island, hut at the sale at Christchurch last Wednesday values declined. The sale lacked animation and crossbreds were Jd lower than prices Tilling in the North Island. The wool market has received its main support from Continental buyers hut they cannot he expected to operate indefinitely. Continental Inlying is slackening and values are easing. If we turn to mutton and lamb we find that prices are much lower. The market is very much depressed, and supplies are piling up in London. Confidence in the market is lacking, c.i.f. sales are difficult to make, if not impossible and the freezing companies are very anxious about the sit tuition. It is sale to say that fat wethers will he fully 12s Oil per head lower than they were twelve m.mill- ago and fir-t quality lambs will l-e tally 8s per head lower. The ini omes of the sheepfiiriners Ibis year must lie just about half what it was in the nilsl sea.-on and that must rend on the whole community. If we turn to butter there is every indication that there will he a serious collapse next month, indeed the market is beginning to si- now. and all because heavy - 1•)11 ■! 11 ■ • are being dumped I here. F >n ‘thine, luuu-vcr. inii-i l«* said for tlie Brit i-h eon-at 1 ier- who are now realising I hat they cannot continue to pay fancy prices for Dominion produets. When the produce year ends on September 30th. 1920, we will timl I liar the balance of I mile is against us.