WELLINGTON NEWS

Hokitika Guardian, 18 July 1928, Page 1

WELLINGTON NEWS

DEDUCTIONS FROM STATISTICS

(Special to " Guardian.”)

WELLINGTON, July 16,

In a previous article the banking and trade returns were briefly dealt with, and it is now proposed to see what inferences can he drawn from the figures. For the year ended June 30 the exports totalled £55,619,285, and the imports £43,497,942, so that the exports exceeded the imports by the substaninl sum of £12,121,343, in other words in ,the course of the twelve months we sold more to foreign countries than we bought from them, so that on balance we were £12,121,343 to the good, and the question is what became of the money, how was it disposed of? The banking returns give us some idea Of the dispersion of the funds. The first concern has been to repay as much as possible the debt due to the banks so as to save the high overdraft rate.

Bank advances, which include discounts, at the end of June, amounted to £45,420,955, while at the end of' .June last year the total was £50,753,100, so that it is obvious that the banks have been repaid £5,320,151, then there are the free and fixed deposits. According to the bank returned the free deposits or current balances totalled £25,357,145 as against £24,741,202 in the previous year, an increase of £615,883. Tlie fixed deposits amounted to £27,589,988 against £21.749,104, an increase of £5,810,884. If these three items are added together thus £5,320,151 plus £015,583 plus £5,840,BS4, the total is £11,782,920 or only £338,423 less than the amount ol\ the balance of‘trade of £l2, L 21.343. In normal times the bulk of the increase in the deposits would have been available for commercial purposes and for the development oi the country and most of the money would have been held liquid, that is the current account balances would have Leon larger. On ..ns occasion the surplus lias gone mainly into fixed deposits for these show an increase of £5,840,884 as against the small increase of £(>15,583 shown by the free deposits. The meaning of the fixed deposits is that the owners of the money have tied up some for fixed periods and cannot be used for commercial or industrial enterprises.

It may be urged that the increase in the rates for deposits offered by flic banks in May of last year is responsible for the expansion in the fixed deposits, but that of course is absurd. Tho increase in the rate was only 10s per cent, and that could not have been the main or only cause for an increase of £5,840,834 in the deposits. No doubt some deposits were attracted by the higher rate, hut not all. For an .explanation it is unfortunate that we must turn to the political arena.

It is a generally admitted that business people have lost all faith in the present Government which has foisted more socialistic legislation on the country than any previous ‘Government, and the formation of the “Nineteen Hundred and Twenty-Eight Committee ” with the vigorous articles emanating from that body emphasises the distrustof the business community. The argument of the shrewd business man and capitalist is somewhat after this style: The Coates Government has rightly or wrongly lost the confidence of the people and the Coates party will most likely be defeated at the General Election. If the Coates Government goes out, who comes in? The United Party is an unknown quantity and at present leaderless ; at the moment the logical and only possible successors to the Coates Government must be drawn from the Labour Party, and if this reasoning is sound, what will he the position of the capitalist and industrialist? The Labour Party is definitely pledged to Socialism and can enforce any socialistic measure without passing any fresh legislation, for ample authority exists in the Board of Trade Act to enable a socialistic government to carry out its designs. At the instigation of the Minister of Industries and Commerce the Government has power for the establishment of fixed or maximum or minimum prices or rates for any class of goods oi seivices; for the prohibiton, regulation, or control of differential prices or rates for goods or services, or the differentinl treatment of different persons m respect of goods or services, etc. With such power a Socialistic Government can work a world of mischief, therefore capital is being held in a readily liquid form so that it can speedily he removed. With the advent of the Labour Government there will he a flight of capital and there is nothing surer.