FINANCIAL STRINGENCY

Manawatu Herald, Volume XLIII, Issue 2304, 19 July 1921, Page 1

FINANCIAL STRINGENCY

“MAY LAST SIX MONTHS/'

REVIEW BY MR. BEAUCHAMP

MORE LOAN MONEY WANTED.

A statement of his views regarding the financial situation was made in Wellington on Tuesday last by Mr Harold Beauchamp, chairman of the Bank of New Zealand. “The position disclosed in the returns published by the banks for the quarter ended June 30th is exactly what might be anticipated,” he said. “The returns show an enormous increase in the advances and a simultaneous falling off in deposits, particularly in those to the credit of current accounts. We can look for no improvement in the financial position for some months to come, until, in fact, we get the benefit of the realisations of next season's produce. So far as 1 can see, the acute financial’stringency is likely to last for at least six months longer; and then any real improvement will be dependent, of course, upon the price.we are likely to get for our principal primary products. “To-day the most pleasing feature is the improvement in the value of cheese, and, to a less extent, inthe value of butter. This is due to the abnormal drought England is now experiencing, in consequence of which her supplies of milk have fallen off enormously. “As to wool, I note with considerable interest the criticisms that are being passed upon the action of the holders of wool in Australia in particular, in endeavouring to arbitrarily fixe the values. I have already indicated that, in my opinion, this action will not meet the present situation. I hold that our huge surplus supplies of wool can only lie realised by courageously meeting the market and selling at the best prices obtainable —in other words, by letting the price, or prices, be governed by the unfailing law of supply and demand. It seems to me that the quicker we can get our wool, particularly coarse crossbreds, into consumption at whatever price it will bring, the better for all concerned.

There is a notable Jalling-oil in the value of imports, and this will continue for a fairly lengthy period. In the meantime, active efforts are being made in all parts of the Dominion to realise existing stocks at prices in many eases below huddown values.

“If the English market is at all favourable,” he said in conclusion, “it would be a distinct advantage if the Prime Minister were able to arrange for the raising of further sums of money in London for the prosecution of much-needed works in this Dominion. Judging from the utterances of certain Ministers of the Crown, it would appear that tin* proceeds arising from the recent loan in London are not likely to be available for that purpose."