The Taihape Daily Times AND WAIMARINO ADVOCATE. MONDAY, DECEMBER 13, 1920. THE RETURN TO NORMAL CONDITIONS.

Taihape Daily Times, Volume XII, Issue 3651, 13 December 1920, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE.

MONDAY, DECEMBER 13, 1920. THE RETURN TO NORMAL CONDITIONS.

With which is incorporates “The Taihape Post and Wainmrino News ”

At the half-yearly meeting of the proprietors of the Bank of N«.-w Zealand, held last Friday morning, <he Chairman, after pointing out the fertilising effect of nearly £148,000,000 received for»primary products from the Imperial Government during the requisition period, remarked that the spell of prosperity was by no means wholly due to that aggregation of payments. He emphasised the fact that in addition to those millions •coming to New Zealand the "Government had borrowed upwards of another J£ 80,000,000, most of which had been spent locally. All cause for wonder at the orgy -of high prices and revels in luxury disappears when it is realised that from the commence- , intent of the commandeer till' last October, some £228,000,000 have passed into the communityfs hands, in one way or another, during that comparatively short period. Living has been fast, if not furious, and now a period of reaction has set in; the source of the gold stream is blocked and all efforts to re-open it have failed, but it is remarabkle how some pachydermatous people will persist in efforts to extract blood from petrified industry. A very great change, says Mr Beauchamp, has/ come about during the past few months, and the outlook generally is not favourable. The cry from all quarters is for money; the Government wants six millions; city councils want other millions; counties' and settlers generally must, have still more millions if the work of production is to be continued and increased in ' accordance with increased responsibilities. That there is a 'very large, volume of money awaiting investment is disclosed in banking figures quoted by Mr Beauchamp." Banking averages for the September quarter show that the amount received on fixed deposit was higher by over a million and a half than at September last year. There were then some sixteen millions' and a half tentatively held by banks on behalf of depositors, awaiting something better in the way of investment than the Government Soldier Settlement Loan, city, borough and county council loans at 5| per cent., the present rate of inaerest. On the other hand therehas been met, by banks, an unprecedented money hunger; the past quarters averages indicat- , ing that as against ' advances and discounts in the September quarter 1919 of some thirty millions, in 1920 they totalled upwards of thirty-nine millions. Free and fixed deposits tend to the view that there is. a class who have accumulated profits to invest while a large increase in advances and discounts makes it very clear thatN the demand for credit is rather greater tha n the volume for sale. If j that proves to be the case it will require something more than acts of parliament to keep the common mean of interests down to 5£ per cent. It is this disconcerting feature of the financial situation Mr Beauchamp is evidently desirous of impressing upon prospective borrowers, private and public. The figures quoted in the Bank Chairman's speech are obviously unchallengable, therefore they compel the utmost respect of every person and corporation seeking to purchase in the credit mart. He also undeniably indicates that every pupsestring in this Dominion must be drawn appreciably tigther as credit becomes dearer. To old colonists the increase of private debt will be alarming. During last year the excess of mortgages registered over mortgages paid off was considerably more than double those of the previous year, and when it is considered that inflated values of land are a strong factor in building up the difference, the figures j become really appalling. It should be patent to any and every man that farm land values in New Zealand cannot continue to exceed those of Britain. It does not pay to grow wheat on fifty pounds an acre land, and now farmers have it impressed upon them that neither can they grow wool profitably on such land. Tern- I porarily, land can be made profitable i by production of butter, but even the days of dear butter are approaching the time of numbering. Water will find its level-, and so will all produce from land gravitate to a parity value. It is the height of absurdity to assume that one acre of land can continue to earn £SO a year while an acre alongside it more intensivelyfarmed will only realise a maximum of £2O, It is imperative in their own vital interests that individually and collectively farmers should read,

mark,, learn, and inwardly digest what the Bank of New Zealaad chairman has endeavoured to place before them without assuming any didactic attitude. That his statement is couched in modest temperate .and carefully constructed sentences, is gg£>d reason why it should have the more interested and careful •consideration. He depicts the course of the wool slump from its first indication at the Antwerp sales last May, and the only ray of hope for something more than poverty prices is at present visible" in poverty-

stricken Europe, chiefly in Germany. But to secure whatever advantages are there offering depends upon farmers being able and prepared to give long credits, ean such credits be arranged ?It is impressed upon farmers that the quantity of wool they received £12,351,396 fox last year they will have to sell for £7,000,000 this year; over five and' a half millions less to be divided amongst wool-growers alone The market for frozen meat is heading the way wool has already gone; cheese is not in demand is virtually unsaleable, factories ara strongly advised to turn to butter production; hides and skins have gone the slump road with wool; wheat Mr Beauchamp has said little about; wheat is on distinctly thin ice, and present indications are that it will become quite impossible to rescue it from going down to a parity level with other primary productions. Starving populations in Europe have put their main effort into growing wheat, and wheat-growing countries have increased areas under wheat to the farthest possible limit in most cases, and it is equally remarkable- and gratifying that crops everywhere are amongst the most prolific ever raised. Frantic efforts are being made by farmers in America to combat the slump that continues in wheat values. There is more wheat visible than the people of the ' world can consume before other harvests' are available, and experts now consider it beyond doubt that prices will sink to somewhere about the pre-war level. It would be virtually unnatural if, with the undeniably increasing value of money, there was not proportionate tendency in commodities to take the oppos.te direction. Mr Beauchamp says plainly that an era of low prices is coming, not only with regard to the things we produce but also those in which our interest is that of consumers, but when adjustments of trade are again established they are likely to prove, of benefit to our, community and to our customers in distant lands. Dominion farmers are now in. the throes of this transition from war conditions to Conditions peculiar to times of peace, and with the hugely increased number of mortgages the farming community has to carry there is much need for every word of the Bank' Chairman's speech being given that deeply interested consideration it richly merits.