MONEY TOO EASY

Sun (Auckland), Volume III, Issue 695, 21 June 1929, Page 10

MONEY TOO EASY

LITTLE OUTLET FOR CAPITAL BANK’S COMPLAINT WELLINGTON, Today. “Many reasons have been recently brought forward to account for the present easy monetary conditions. While there may be some truth in them, the main explanation of the matter lies in the fact that, at the moment, there is little outlet for capital in new industrial enterprises.” Thus the explanation given by the directors of the Bank of New Zealand at the annual meeting held at Wellington today.

“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 overcrowded, 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,” they state. “Farmers state that, notwithstanding the number of persons unemployed, it is most difficult to obtain efficient labour, at anything like the wages they can afford to pay ; developmental work accordingly is being retarded.

“Under existing conditions our bank has too great a capital and reserves for the business offering. The legitimate demand for banking facilities has not kept pace with the increasing capital and reserves of the institution, and it is evident New Zealand at present is overbanked.”

What is the remedy for such a state of affairs? they ask. Would the imposition of a larger and more widespread Customs tariff effect a desired improvement? There is no doubt such a course would for a short time boom secondary industries, but the last state of these industries would probably be worse than the first, for the cost of living would immediately increase, and the great primary industry, on which the Government depends, would be seriously affected.

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 sur.ely look to an increase of her exportable primary products. Successful land settlement is the foundation on -which New Zealand rests. Nothing should be left undone by the Government that may in any direction foster primary industry.