WELLINGTON NEWS

Hokitika Guardian, 8 February 1929, Page 3

WELLINGTON NEWS

PROSPECTS OF TO-DAY. [Special To The Guardian ] WELLINGTON, February 7. Sir Harold Beauchamp, who besides being a director of the Bank of New Zealand, is chairman of directors 0. two or three companies, among others being the Equitable Building and In vestment Coy. of Wellington, Ltd. In the Stock Exchange share list this company comes under the heading ol “ Financial,” and so it, is, for evcr.\ building and investment company ha: to do with finance. Whilst most directors confine themselves at the annua' meeting to reviewing the affairs of the companies over which lliev preside, Sir Harold very rightly considers iL appropriate at such annual meetings t< briefly review the financial and economic: conditions of the Dominion; and be is well qualified to do so. At the annual meeting of the KquilaUl*' Building Society on the Ist inst., '’following bis usual procedure, he touched upon the trade of 11)28 in conjunction with the hanking returns and showed what a real service the banks rendered the .'community, although - in doing s they came in for a good deal ol undo served criticism and for some caustic remarks from ill-informed members ol Parliament. It was in .May 1927 that the bankraised their rates 'for overdrafts and they were constrained to do this be cause, owing to the heavy imports in 192(5 and the adverse trade balance of that vear the banks were hcavih drawn upon for accommodation and hank advances exceeded deposits over .£7,000,000. The object of the hank ir disturbing the rates was to check demands for accommodation and increase the volume of deposits, and both the rates for overdrafts and deposits were raised. In July last year the bank reduced rates, and as Sir H. Beauchamp remarked: “By their action they checked an alarming adverse trade balance and caused a proper equili brium to be established. V ben the banks realised that the trend of the Dominion’s oversea trade was following its normal course, which was not sufficiently dearly indicated until the balding returns for the second quarter o' the year were available, the banks promptly reduced their rates.” The stiffening of money rates forced traders and others to balance optimism with prudence and the result of the bank’s action is seen in the remarkable trade balance of over £11,009,000 last year in our favour. It would scarcely be reasonable to expect the current year to come up to the 1928 record, but all depends upon prices obtainable in overseas markets for' our primal' products. So far the indications ai< decidedly good, hut it is unwise to forecast because of the continued vari at ion in prices. During the past weewool prices receded and so did tin •prices of dairy produce and some grades of frozen meat. The variation* in the price factor during the past few years have been the cause of the booms and slumps that we have ox perienced. This feature of our foreign trade b shown bv the Government Statistician in the Year Book. June 30th is iukei as the close of the statistical year, as most of the Chambers ol Comineico consider September 30th more reasonable. The Statistician deals with 9-‘ per cent of our exports and these in elude wool, daily produce, frozen and preserved meat, sausage casings, bides ■ rabbit and sheepskins, flax, tallow, and kauri gum, gold and timber. 'I lie value of our exports of tlies commodities for the year ended June 30. 1914, and the value of the same classes of exports for the year to Jam 30th, 1925, was £50,231,652, hut r these items were taken at the 1913-1' level of prices, these exports would have realised £33,004,08(5, that valua tion lining £22,911,287, so that out n« the total increase of £27.320,3(55, : total of £10.092,799 is due to increase in prices. Its is this price gain tha cannot be relied upon. In 1922 the price gain was only £5.(544.883. and ir 1925 it was as much as £23,2(58,(581 in 192(5 it dropped to £14,030,371, in 1927 there was* a further drop if £11.423,4(59, while last year there win a substantial improvement to CI 7,22 1. 50(5. There is no stability about price and that is the trouble. The production of the primary products emuner ited expanded by about 44 per cent a* compared with 1913-14, and is equal t an average of slightly more than 3 pc cent, but this lias not been continuous. It is imperative that we make a spe rial effort to increase production, fo> this will mean real progress, and tber; is some hope of this being i the Government is giving special at ten tion to land settlement.