BASIC INDUSTRIES

Hokitika Guardian, 1 April 1930, Page 2

BASIC INDUSTRIES

FURTHER SUPPLIES OF 'CAPITAL NEEDED.

. “ Our great basic industries, cotton, iron, and steel, are all clamouring for further supplies of capital to instal new niaehnery to bring processes up to date and to effect such improvements and reorganisation as they c-ofidently hope will enable them to compete successfully in the markets of the world.” said Sir Ilarry Gosehen, at the annual meeting of the National Provincial Bank, one of the five leading joint banks in England. “Where is this capital to come from ? No one, I take it, would suggest that the banks should permanently find the money required for capital expenditure and lock up their resources in machinery and bricks and mortar. It never has been the policy of the English joint stock (banks to immobilise their funds in such investments, and I trust it never will be. Their function is to provide money for their customers’ current needs. . . .

“Capital for permanent investments must be found from the savings ( of the people, and ons is faced with ; the problem, is there a sufficient sum ! available from this source to meet the /that savings have shown an accumujlation each year, but with the high (Cost of living, heavy taxation, reduced profits and higher expenses in all directions, are the country’s savings at /the present time adequate for the purpose? We have been warned that the further improved social services, unbvuiployirieiit I>encfits, etc., wiv? again necessitate still higher taxation, and also tluf.t various duties which now produce recenue will be abandoned. Jn such an event their contribution o the national’ revenue must be replaced. No one would wisiiy to see the standard of these services reduced, although now generally on a Aiigher level—in spite of our greater finai'rpial sacrifices —than in other countries,-, but if we arc wise we shall cut our cbSvt according to our cloth. Can we babe- confidence that under the new conVlitions for which we have bad warning to be prepared, the savings of the people in this country will provide the larger sums required for industry? Tj will not attempt to answer the tiou, but it, is not surprising, . that many thoughtful people have inis’gi' - ings on the subject. Spending and saving arc not synonymous terms, and it would almost appear that we are inclined to dissipate our potential capital in unprofitable directions, a continuance of which policy can-only insult in encroachment on our national wealth.”