The Daily News. TUESDAY, DECEMBER 11, 1917. FINANCE AND THE WAR.

Taranaki Daily News, 11 December 1917, Page 4

The Daily News. TUESDAY, DECEMBER 11, 1917. FINANCE AND THE WAR.

The customary addresses by the oh airman of the Bank of New Zealand on the occasion of the half yearly meeting of shareholders are always well worth perusal, for they contain a general re> view of all matters affecting the world's monetary interests. On Friday, Mr. Harold .'?auchamp made another noteworthy contribution to his previous essays, and as we are getting near to the completion of three and a half years' war experiences and burdens, it was only natural that Mr. Beauchamp's remarks should be in the nature of a general review of the situation, and a particular pronouncement on the financial position. The contrast drawn between the discipline and organisation that has stood Germany in good stead, and the chaotic conditions resulting from Russian impotence makes a very striking object lesson for the world at large to ponder over. Much as we loathe trtrman methods and uniscrupulousness, we are bound to admit that her organisation has proved wonderfully successful. Although nearly the whole world is arrayed against Germany, her trade practically obliterated, her ports blockaded and her people sorely afflicted by scarcity of food and clothing, it ie her marvellous organisation and vast milii tary resources that has enabled her to [hold out against capitulation, with the j help of supplies from neutrals and loot I from conquered territories. On the other hand, Russia has had to be supplied with money and material to carry on the war and to win freedom from autocracy, only to be plunged into an inferno of strife —to be rent asunder by ' factions—the result of which is trcach. ery to her Allies and the prolongation of the war, her value to-day as a lighting machine being negligible. From a banker's standpoint such a collapse cannot be other than a world-wide disaster, in view of the colossal sums represented by war expenditure, irrespective of the vast losses inflicted on industries and commerce. What these huge losses amount to in the aggregate can only be roughly estimated. Britain alone had spent £5,534,527,000 up to September 22, 1917. American loans to the Allies before the United States entered the war amounted to over £470,000,000, and since she came in her authorised expenditure aggregates £4,400,000,000. Well ma.v Air. Beancliamp allude to the fact that in the early stages of the conflict the cost was amazing and bewildering, but we have now become accustomed to the outlay—to think and talk in millions and almost to regard the cost with indifference as compared with the value of the freedom to be purchased thereby. Needless to say, that the chairman of the Bank exercises his invariable caution in referring to the Dominion's ability to bear the financial strain, represented by loans already reaching over sixty-eight millions and the prospect of mere to come. The

maintaining of the high prices for our produce is the chief factor in this ability to bear the burden, and so far as can be reasonably inferred the outlook in this respect is promising, but he issues a warning as to the effect of the depletion of the reserves of floating capital, being followed by a period of dearer money. Nothing but high praise is bestowed on the raising of the twelve aillion loan, while Mr. Beauchamp considers it was a great financial feat for a small country to provide from its own resources thirty four millions for war purposes. No intelligent citizen will dispute this fact, just as there are not likely to be many outside banking circles who, like Mr. Beauchamp, will consider the banks are unduly taxed. His remarks on taxation are interesting, but can scarcely be called convincing. This is by no means remarkable con. sidering the diversity of views held on this subject. On one phase of this question, Mr. Beauchamp's remarks will certainly appeal to the producers. He says it has been suggested that if further im■posts are placed on J and and income, the result will be disastrous to the trado and industry of the Dominion, and he proceeds to contend that we can reasonably look to the customs to find a large share of any further income that may be required by the Government. On the whole the chairman's review was on sound lines and his references to Germany and the United' States were well chosen and. effective. Although there is no element of optimism in the speech there is no undue pessimism, and Mr. Beauchamp may be congratulated on his excellent review.