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Hokitika Guardian, 19 October 1929, Page 4

Theke is at present evidence of a stringency in the financial world, and die effect will be : felt in most countries. The rise in the Bank rate at Home reflects all round the world, and' particularly with those countries in direct financial intercourse 'with Great Britain. The stiffening of the rate has an adverse effect on trade which is impeded when money is dearer. In the case fff the Nbw Zealand overseas trade, so much is done with Britain,' that the financial position is of close concern •to this: Dominion. It was well, for instance, that Sir Joseph Ward Was able to finalise his" recent loan transactions at Home just in ad*t ,vance of the tightening of the money market. Had jhe not done so, the monetary cost would have been very much heavier. ' As it is, the Dominion has to foot a greater interest bill, but an u.e si.me me escape from even a larger impost v'as fortunate. New Zealand is i not in a bad' position hn-> an dally to meet the present stringency in the money market.. The bank returns at the close of the September quarter, disclosed a healthy condition or affairs off the whole, and should enable. the country to pass through the period without serious stress. This is fortunate indeed, for at the' moment there is the fear the stringency is riot ikely to pass soon. In the Lnited States as well as in England, there has been a rise in the money market, . and dearer credit will limit operations generally. This,is not too promising for New Zealand with the wool sales opening soon. Prices are l.kely to decline, which in the aggregate means a lessened flow of wealth into the country for the Wool clip. Dairy, produce in the aggregate, owing to the bad weather in the North Island, is ten per cent, or more below 7 last year’s output, which also reduces the monetary returns to New Zealand. The lower level of prices , likely for wool, while it will not be an unusual circumstance, will assist in creating 'a more difficult position, and in that respect tne reserves in the banks will meantime help general credit, but it is not the most assured way of securing buoyant prosperity—diving on reserves. The country needs increased production, more so when price levels fall or credit is dearer, and the Government should turn its fullest attention in helping more production, and assisting all legitimate trading and manufacturing. New .Zealand’s position, however, is at least much better and brighter than some other countries, and there is that to be thankful for, but it is none the less necessary to grapple , courageously with . the difficult situation now developing.