The Daily News. THURSDAY, DECEMBER 5, 1912. BANK CHAIRMAN'S ADDRESS.

Taranaki Daily News, Volume LV, Issue 170, 5 December 1912, Page 4

The Daily News. THURSDAY, DECEMBER 5, 1912. BANK CHAIRMAN'S ADDRESS.

The address of the chairman of the Bank of New Zealand to the half-yearly meeting yesterday, reported fully elsewhere in this issue, is. as usual, of an interesting nature, taking, as it again does, the form of a general review of the trade and monetary conditions, present and prospective, of the Dominion. Mr. Kennedy points out the facility with which financial conditions change in the colonies. Eighteen months ago there was a plethora of money awaiting investment; now the reverse condition obtains. Legitimate demands for accommodation the Bank confesses it is unable (o satisfy. Mr. Kennedy does not take a rosy view of the future. Very few bankers do as a rule. Their habits of caution frequently make them unconsciously pes simistic. Perhaps this state of ruind is not without its good effect in a community, like that of New Zealand, that has yet to learn and apply the lessons of prudence and thrift. Mr. Kennedy "sees nothing in the immediate outlook to warrant an expectation of an early return to easier conditions; indeed, there are not wanting indications that an even greater degree of stringency may be ahead." There is little doubt but that the fear of a major European war, arising from the present trouble in the Balkans, has caused financiers and investors the world over to draw in their horns. These gentry in many respects resemble the sensitive plant which closes its leaves at the approach of danger. Hence we find them looking askance at colonial or any other sort of securities at the moment. There are. happily, indications that the European atmosphere will soon be cleared, whereupon the London purses will doubtless again be opened. The state of the Dominion's trade and industries was never more prosperous than at present, nor the prospects more encouraging. For wool, dairy produce and meat, our staple exports, prices are at a high level, whilst for flax the outlook is also very bright. These facts are not overlooked by Mr. Kennedy, who quotes figures to show that for the month of October our exports were better by a third of a million, compared with October of last year. There is, however, a fly in the ointment. Whilst we are making gratifying headway in regard to our produce, we are spending too much money. This is shown by the steady increase in our imports. There must be a margin between j our exports and imports of from ■C4.000.000 to C 5.000.000 in order to -en- '

able us to pay our intero&t charges, and if this margin is narrowed, as it has boon (luring the past two years, the effect is felt throughout the Dominion. The present stringency would not be as marked as it is had we as a country been living more within out means during the past year or two. Now we are being forced to exercise more care and providence. Though the process may be uncongenial and entail some inconvenience, it will assuredly prove beneficial in the I long run. The Bank of New Zealand is going to ask the Government for authority to increase its capital. It should experience no difficulty in convincing the House of the desirability of the departure. This country is crying out for development, and this can only be accomplished by the expenditure of capital, which therefore should be welcomed and its introduction facilitated in every possible way. The country that erects barriers against the flow of capital into it is supremely foolish. Some of the restrictions New Zealand has imposed in this connection do no credit to our perspicuity or enterprise. We would let the Bank of New Zealand, or any other bank, established here or not, bring in as many millions as their English uncle will entrust them with. We notice the Bank of New Zealand, despite the very bad times its chairman speaks of. is still able to keep the wolf from the door, for it is paying a trifle of six per cent, for the half-year, after making liberal allowances for depreciation, reserve fund, etc.. a fact which forcibly illustrates the value of New Zealand as a hunting ground for banking institutions.