WELLINGTON NEWS

Hokitika Guardian, 21 April 1926, Page 4

WELLINGTON NEWS

A LITTLE ANXIOUS.

(Special to “ Guardian.”)

WELLINGTON, April 19

Many business men wbo have at last become fully seized of the economic position of the Dominion are getting a little anxious. It is recognised that at the moment the position is far from being serious, that is to Say it is governable. but efforts must be made to exercise control immediately. Owing to the adverse trade balance there has been an export of capital to what extent it is difficult to say, but flic banking figures indicate that the amount is substantial. The commercial and industrial classes as well as the producers whose working capital is represented by the free deposits have less money to operate upon by nearly three millions as compared with a year ago. This must result in. a halt being called in expenditure more especially if the tendency of imports is still in the direction of expansion.' A shortage of credit is inevitable, which will involve considerable hardships in many directions, There is also the probability that the Government may lie unable to borrow in London for several weeks to come. That would be a certainty il tin' coal crisis in England results: in a serious breach between the owners and the miners. While the loan operation may be postponed, the Government. will nevertheless require Hinds in London to meet obligations, and il the amount required cannot bo obtained by way of loan in the open market, the Government must borrow from the Hank of New Zealand which would further lessen the available credit. The Government- may of course secure a loan from the Hank of England, but that is unlikely, for if there is a coal crisis the Hank will endeavour to conserve all its resources to meet Hritain’s domestic requirements. The shortage of loan funds in New Zealand would have far-reaching and unpleasant elicits. We had a slight experience of it in the slump of 1920-21. There is bound to be keen competition for the funds that may be available and under the pressure ol competition, rates must] advance. High interest rates will check enterprise, especially in building of homes, and there will probably he a slackness in the real estate market. These are the prospects fin- tlm near future, but they need not' lie as had as they are forecasted liv some business men, if efforts are • made at once to rectify the mistakes. W'liat is urgently needed is that there should be a reasonable curtailment of imports. It. is necessary that the volume .of our imports should lie adjusted to have an economic relation to our exports. Hot' a country like New Zealand with a substantial foreign debt, an excess of exports over imports is imperative, .lust now it is the other way about. How to check the imports without causing a 100 serious disturbance is a problem, but il is believed in commercial circles that the key to Lilt* position is held by the banks. If the banU.s would raise the rates for overdrafts slightly, that would impose the necessary pressure, and cause importers tn modify their ideas of the quantity of merchandise necessary to be brought into the country. Hut whether the banks impose this check or not. imports must lie curtailed, and we will probably have some repetition of the experiences of 1920-21. NEXT WOOL SALES. The roster of sales for the next season has already been prepared by the New Zealand Woolbrokers’ Association and the dates have been endorsed by the Associations in the several selling centres, also by the buyers. There are good reasons for fixing the selling dates tints early, for it enables till' buyers, who nearly always return to their home towns to interview and to report to their principals, t make complete nrraiigomeiist for their return In New Zealand. The sales dales fixed lor l!i’_’o-27 season billow very closely those of the oast seasons, with the same number of sales at the several centres. It will be remembered that the Woolbrokers’ Association of Gisborne- has made repeated efforts to have sales held in that centre, but without success. .Since the beginning of the year another appeal was made, but the buyers definitely declined to attend ut Gisborne, notwithstanding that Ihe brokers have given an assurance tlicit adequate travelling facilities had been provided, and that storage existed for the proper display of the wool.