BANKING & INDUSTRY

Hokitika Guardian, 28 June 1929, Page 8

BANKING & INDUSTRY

(Auckland Star). The address delivered li.v the chairman of the Bank of New Zealand at the annual meeting of its proprietors usually contains much interesting information and comment on the Bank’s financial affairs and on the industrial and commercial condition of the Dominion, and Sir G. Ediol’.s speech at Wellington yesterday was no exception to the rule. While we do not agree with all his inferences or conclusions, we think that Sir G. Elliot may fairly he congratulated not only on the success that the Bank has achieved under its present management, hut on the broad and comprenensive way in which he handled the questions, that he discussed and on the valuable suggestions that Jie made for the promotion of the Dominion’s financial and industrial prosperity. Of all the topics which Sir G. Elliot touched upon in his address, the subject most likely to interest his hearers, and to arouse discussion outside the meeting was his defence of the Bank’s policy in locking tin very large amounts of money in British and colonial stocks and securities. Afore than 3.17,0M,000 is thus invested, and Sir G. Elliot admits that this is much more than is needed to secure “a trong liquid position.” Everyone will admit that the Bank must keep a largo stock of assets m relatively liquid form, and that such investments as it

•fin make through tlio London Al.on;cy Alnrkct- arc more profitable than it can expect lucre. But apart from this neral argument. Sir G. Elliot tells ns that “it has been found impossible to obain in ihe Dominion anything like the volume of sound advance business that llie Bank had the means to deal with,” and therefore it is compelled to invest its money elsewhere. Wo may take this statement in conjunction with the assurance that “the demand for money is slack”; and together they suggest the natural question, “at what price?” We are by no means so sure as Sir G. Elliot Unit if money wore offered at lower rates by the Banks they would not find a ready response, backed by ample security. But perhaps we. ought to take these observations along with Sir r L. Elliot’s- significant ‘ remark that banking facilities in this country have ahead of legitimate demand, and that “.Vow Zealand at present is overbanked.”

The upshot of all tin’s is that, while the policy which Sir G. Elliot represents and defends is obviously a highly profitable one for tbo Bank’s shareholders, we are not .so certain that it ■eacts hie indicia llv upon ihe Dominion’s •on.merce and industry. In anothci ortion of Ins address he teds us*that ‘there i> little outlet for capital in lew industrial enterprises.” Is it not it least possible that if the Bank mule capital available lor investment icrc in large quantities at relatively ■aw rates industrial enterprise throughout the Dominion would at once take in a new lease of life? It may be •hat Sir G. E.liot has failed to realise he importance of secondary indusrics here, for he emphasises strongly .he immense value of our primary inlustries and tTic need for tlieir cx--ansion, through the promotion of land lettlemcnt Needless to say, we agree mtirelv with Sir G. Elliot on this last mint, and we hope that his sound and •easonahle advocacy of inter-imperial eciprocity may in due course secure he attention of the Imperial authoriies at Home.