The Daily News. MONDAY, JUNE 21, 1920. THE FINANCIAL POSITION.

Taranaki Daily News, 21 June 1920, Page 4

The Daily News. MONDAY, JUNE 21, 1920. THE FINANCIAL POSITION.

The custom of the chairman of s directors of the Bank of New Zea- ' land to give a general review of 1 the position, when addressing the ' shareholders at the annual meet- ' ing, is one that enlightens the community as to. how the Domin- 1 ion stapds financially and commercially. The review given by Mr. H, Beauchamp yesterday fully covers the whole of the ground, and the advice given is sound and appropriate. He says:— "The circumstances of the time demand that business men should rather take in sail than crowd on canvas, and all would be well advised not to stretch their financial commitments too far. . , , There are certain economic principles by which men and nations live and prosper, and never before, at least in living memory, was there such a need to bring back a full recognition of these principles. . . Diminished production, decreased thrift, and curtailed credit furnish the essential elements of a financial crisis, and such a crisis seems inevitable, in the not distant future, unless we abandon dreaming and settle down to work- and the practice of thrift." This conclusion is not merely the opinion of the chairman of the Bank; it is the mature judgment of all who study economical conditions as they are to-day, and it has been urged on the community by all the leading journals in the country. Beyond all question the Dominion has enjoyed a series of years of solid prosperity. In the last ten years the value of the exports has risen from £22,152,473 to £52,573,520, and in the six years 1914-19 the exports have exceeded the imports by £60,559,584, an average of over ten millions a year. The effect of this huge flow of money into'the Dominion has been to pile up deposits at the banks, the total of free and fixed deposits rising.from £24,030,250 in 1914 to £50,665,091 at March 31, 1920, the free deposits (current account balances) showing an increase equal to more than 150 per cent. It must be remembered, however, that during the last year the Government disbursed over eighteen million sterling in con-' • nection with repatriation, thus substantially increasing the bank deposits. It will be noted that the export figures relate to values and not to quantity, and it is remarkable that the enormous rise m value has been obtained by a less- . er output than in 1914 in several lines of produce, such as wool ' (2.9). butter (13.0), hides (12.0 The only item which shows a material increase is ' ' jienp coming next . I 1 ■ meat (7.0). It should be stated, however, that at the end of 191J there was in ■ sto [ e 722,232 lbs. of wool, which

would have converted the decrease to an increase, while' meat, which shows an increase of seven per cent., would have exhibited a larger percentage if the 2,107,672 cwt. in store had been exported in the ordinary way. Even taking the most favorable view of these figures it is evident that the average increases are not encouraging, and justify Mr. Beauchamp in stating:

"Unless a great deal more is accomplished, the pinch of hard times will be felt with some severity. The values of our products are declining, and, when the 'mperial purchasing scheme terminate!), a new set of conditions is hound to arise. . . Though some of our products may hold to something like their present values—dairy produce for instance—the general tendency is downwards, and should the decline be anything like 25 per cent., the situation would become one of some seriousness." This warning is emphasised by the chairman's remarks relative to the high prices given for land on which the greater part of the purchase money remains on mortgage. "Imagine," he says, "what would be the position of the mortgagor, thus heavily encumbered, in the event of a fall in the price of dairy produce of, say, 25 per cent." That the banks are alive to the contingency is evidenced by the fact that they are refusing advances to customers to enable them to

ray land at inflated prices, unless ! imple covering security is given. j Another reason for caution on the j part of the banks is that the con- 5 iitions of the money markets of ? the world point to the probability if scarcity of money and conse- j ijuent higher lending rates in the | not distant future. Mr. Beau- < [ihamp stresses the fact that on the j cessation of the commandeer, the ; producers will have to make the best arrangements they can for i financing and marketing their produce. Mr. Beauchamp's conclusions merit the earnest and serious consideration of all who are interested in the future welfare of the country. "Increase production and avoid extravagance," should, says this financial expert, be the slogan of the people of New Zealand. It is a good slogan. RECOGNITION OF MERIT. The award of the Hector medal to Mr. Stephenson Percy-Smith, F.R.G.S., of New Plymouth, for his services in connection with Polynesian ethnology an.l philology is highly merited. In this domain of research 110 living man has done more than Mr- Percy-Smith. To him it has been the work of a long life-tim';. Without zeal and love for it ha never could have accomplished so much as he has, in a field so full of interest and possibilities. He hs!s not spared himself, ami the results of his patient researches and painstaking and thorough labors will be of the utmost value to succeeding generations. His work is not appreciated a-; it deserves by the people of 10-day, b3cause they are as a whole too immersed in other things to bother about the Polynesian people: their origin and traditions, their histories, their customs, t.he:r mental characters and usages, their mythologies, industrial arts and languages. Yet to hve a complete knowledge of the land we live in it is necessary to know all this. It might justly be claimed that Mr. Percy-Smith has dedicated his life to gather, test and record as complete a knowledge as possible of New Zealand and the Pacific islands for the benefit of mankind. The tributes paid on Saturday to his self-sacrificing and patriotic efforts were thoroughly justified. The bestowal of the medal is a recognition of his services, but we could wish that the Government might long ago have seen its way to recommend to His Majesty the King that fitting recognition which his distinguished services to his country and the world so well merit. Scan the names of those thai have appeared in the Honors List of re cent years, and it will be found that th:

chief recommendations of the recipients have been political, and mostly party, services. Exceptions were those of m?n who had helped to provision an Antarctic expedition and to assist in the distribution, of New Zealand frozen meat! CoiOd such services as any of these have rendered the State compare, even in the slightest degree, with the invaluable work done by . our fellow citizen? Cectainly not. It might be argued that as honors are bestowed in this country it is really no honor to receive a decoration, but, be that as it may, Mr. Percy-Smi;:; has the satisfaction of knowing that the great value of his researches are fully appreciated by those who are in a position to estimate their immense value, and he can rest assured that he has done, and ;s doing, a work that will ensure for him an imperishable name on the scroll of notable and patriotic New Zealanders.