TOLLS ON BUSINESS.

Putaruru Press, Volume VII, Issue 295, 4 July 1929, Page 3

TOLLS ON BUSINESS.

(By Cosmopolitan). Sir George Elliot stated at the annual meeting of the Bank of hew Zealand that the Dominion was overtanked. Ke argues that trades and industries are overcrowded and thus provide little outlet for capital, 'therefore the legitimate demand for banking facilities has not kept pace with the increasing capital and reserves of the Bank of New Zealand. To use the money accumulated in this country more profitably (for the bank) British and Colonial securities worth some £17,000,000 have been bought.

Answering his own question as to a remedy for this state of affairs, Sir George says that a general increase in the customs tariff would simply create a suicidal boom, or, to use his own words, “ the last state would be worse than the first.” Instead he wisely suggests that “ for an increase in her population, for an improvement in her secondary industries, and for the filling of offices and warehouses in her somewhat overbuilt cities, New Zealand must surely look to an increase of her exportable primary products.” The chairman of the Bank of New Zealand then goes on to suggest action which the Government might take to relieve the situation, but being interested in banking it is obvious that lie is not likely to advise a course of action in regard to the bank itself, which, sooner or later, some government will be forced to carry out. This is using the country’s money for the sole benefit of the country.

It is an accepted axiom, not likely to be departed from, that certain essential services should be managed for the benefit of the people as a whole. In the railway, post and telegraph, hydro-electric, and other services, this policy is illustrated. Supporters of an extension of this nationalisation of services to banking cannot be anathematised as Bolsheviks or Socialists, for the bulk of these enactments were first put into force -long before a Labour Government was thought of as a possibility. The position really is that “ overbanking ” has resulted because New Zealand for the past two decades lias been an extremely profitable country for hanks to milk financially.

The large dividends and extraordinary watering of shares, especially with the Bank of New Zealand, proves this. Instead of performing ..he recessary modern function of oiling the wheels of business, banks have been bleeding industry and making millions of profit during the country's years cf direst stress. The situation is absurd in the extreme, and must of necessity he altered if the country is to be developed to its fullest extent. It is because we have i shut out eyes to such factors, and allowed Liberalism to become but a ' name, that the Labour movement has ' grown to the extent it has and at- j tracted the brains that it has done. !

Most people—with, of course, the j exception of bank shareholders—agree with the view that the pre- I sent situation is wrong, and it is I only when „ remedies are proposed I that differences occur. Some hate j the thought of nationalisation and ! rightly point to the railway service : as a warning example. Others feel I that there is something tremendous- j ly intricate in banking operations, I while others inanely ask: Where is I the money coming from to purchase • the Bank of New Zealand ? j

The last two objections are merely pit-falls to politically trap the unwary. In nationalisation all that Is necessary is to control the policy. The State already holds a controlling interest in the Bank of New Zealand, so there is no need to purchase. Nationalisation of detailed management always leads to political corruption and waste. Our railways reek of it. Those of Canada were the same until the people cried enough. Before Sir Edward Thornton was given charge, Canadian railways were in a shocking condition and a heavy charge on the State. Now they are on a profitable footing, superior to the privately-owned trans-continental lines, and recognised as one of the finest systems in the world. Canada’s railways are now nationalised in policy cnly, and completely divorced from political control. It is on these lines that the Bank 6f New Zealand should be run for the people’s benefit if the business of the country is to benefit to the fullest extent. There need he no misgivings in regard to “ confiscation,” or competition by enlarging the powers of the i

various Savings Banks, for shareholders in the Bank of New Zealand have had bigger recompense in wat- , ered stocks and huge dividends than any possible loss which could accrue from Government control in providing the cheapest possible money for industry and enterprise. Put in every day parlance the country’s present position is “ money, money everywhere, and not a pound to be had.” Too heavy a toll is being exacted from business, and one day the country will wake up and find a Labour Government may possibly have done more than is required. Then indeed may the last state be possibly worse than the first. Sir George is right when he says the surest road to success is by “ increasing the exportable primary products,” but he naturally prefers not to * recognise that one of his main hindrances to carrying this policy into effect is the toll demanded by banking institutions whose’ foremost function should be to provide cheap monev for the many, instead of clogging the wheels of industry for the benefit of the few.