WELLINGTON NEWS

Hokitika Guardian, 29 June 1929, Page 2

WELLINGTON NEWS

OVER-STJPPLY OP CAPITAL. (Special Correspondent). WELLINGTON, June 26. The Chairman of the Bank of New Zealand. (Sir George Elliot) made some interesting remarks respecting the supply/of capital and the trend of investments, and atlhough there was nothing nes in what he said, still his remarks give emphasis to what has already been said by various authorities. The banks are flush of money, as was disclosed in the last b liking returns;'and banking conditions are easy. One reason for this, according to Sir George, is 'lhc fact that at the moment there is little outlet for capital in new industrial enterprises, and, he added: “ If you consider the condition of the trades and industries that you are connected with you will come to the conclusion that most of them are over-crowded, competition being out of all proportion to the business offering; few are working to their full capacity, many burdened by excessive expenses are just making both ends meet.” The truth of this must be apparent to everyone, but what is the remedy . People rushed into business just after the war when profiteering was an easy game, despite the laws, and now’ that people are unable to afford the fancy prices of the immediate pre-war postwar period many traders and others find' themselves walking the road to the Bankruptcy Court. Ever , since 1921 the number of bankruptcies has been on a large scale. Recently’ there has been a tendency,,-for the number to shrink, but that is probably only temporary, for a good many more traders and others must be squeezed out before there is. any approach to the

normal. ; Difficulty in finding local investments lias forced the price of local stocks and shares up to a figure which shows hut a small interest return. Under normal conditions money should he going into the development of the country, that it "is not doing so Bpells lack of confidence. People seem nervous to promote new industries* ,aud so money ,is

going into shares; arid. even ijvith re- % spect to capnot, get all they want in the Doipinion and so they are buy’ing the shares, of Australian companies, and as most of these companies do not maintain a sharp register in the. Dominion, ' the credit is^ transferred to Australia. All shares appear to be too high and apart from banks and insurance companies, many ,< of ' .the Australian companies are in for a-very bad time. TTie economic conditions in the Commonwealth are extremely, bad and they are bound to be worse before they are better. Some of the very best of the Australian companies will feel the pinch, and it would not be surprising to see share values of these recede. Sir Geo. Elliot also dealt with tariffs and preference, and said that the New Zealand Government should approach tha.'Jmperial authorities as to the possibility to more logical and more scientific Customs Tariff arrangements between the outlying dominions, the Crown Colonies and the Mother Country, and Sir George visualises great benefits for the United Kingdom and the Dominions “ if the British Government could see its way to reduce existing duties on certain products and impose small duties on: iforeign-grown bee/; muton, lamb, fruit, butter, wool, et&,” in other words a tax on food, which will never be tolerated.

is said by one authority that Great Britain lives by exchange to a greater extent than any other country, pearly 30 per cent of the value of the gobds and services produced in Great Britain are exported in exchange for imports. Indeed, the physical resources of the United Kingdom could not maintain a population of 47 millions in any* other way—still less so that the comparatively high standard of living enjoyed to-day. The Conservative Baldwin Government owes its defeat largely to “safeguarding,” and those McKenna duties will he repealed by the rlew .Socialist Government. ; London’s business has been built on international trade and the international connections in finance and credit that trade has brought with it, for, as the “Economist” say's: “To lend money to all the world and then try to re-

strict our -imports is to invite all our debtors to repudiate their obligations by,.making it difficult and expensive for them to pay their debts by the only means by which international debts can be finally paid, namely, by the delivery of goods and services.” Britain does not want a scientific tariff but as much free trade as it is possible to obtain.