FINANCIAL POSITION.

Taranaki Daily News, 4 December 1920, Page 7

FINANCIAL POSITION.

MR. H. BEAUCHAMFS VIEWS. CAPITAL LEAVING THE COUNTRY. Before the Arbitration Court at Wellington on Monday, in connection with tlie application for the 9s' bonus, Mr. Harold Beauehamp, chairman of directors of the Bank of New Zealand, made a moat important statement on the financial position of the Dominion. At the outset, he said, we were passing through ono of the most serious phases in the history of the Dominion. During the war, he stated, we had taken the line of least resistance, every increase being passed on," with the result that we had piled up a huge indebtedness. "On March 31st, 1914, our public debt was £81,089,835, or £B4 2s 8d per head of the European population," he said, "and on March 31st, 1920, the debt stood at £193,913,191, or £lO5 3s lOd per head of the European population. Then, on March 31st, 1914, the revenue was £12,229,681 and the expenditure £11,825,804 as against £26,081,340 and £23,781924 respectively on March 31st of the present year. Pot the year ending March 31st next, the estimated revenue is set down at £27,712,700, and the estimated expenditure at £20,893,497. In the face of these very significant figures, it has to be remembered that the limit of titration is about reached. Even this has been indicated by the Prime Minister." Mr Beauehamp also pointed out that payments by way of pensions had increased from £473,300 in 1914 to £2 - 743,939 for the year ended March 31st last.

IMPORTS OVERTAKE EXPORTS. The financial stability of the country really rested on the balance of exports over imports, he said, and there should be a very wide margin between the two especially as we had no invisible exports. "But what is the position?" he 5!14 lft " For the y° ar ended December •list, 1914, our imports totalled £2l- - and our exports £26,263,925, and »no the fi S ures wero: Imports, £30,308,908; exports, .£52,573,520. In the flrst nine months of last year the imports were valued at £22,393,104, and the exports at £40,575,967, and in the flrst nine months of the present year the figures were: Imports £43,143 579- exports £35,159,037. It will be seen by comparing the figures for the nine months ended September, 1920, with the corresponding period in. 1919, that while the exports decreased during the period by about 13 per cent, the imports increased by about 92 per cent." •Referring to bank advances and deposits, Mr. Beauchamp quoted the following figures:— Advances. Deposits. ■., £ £ March 31,- 1914 23,666,750 24,030,249 March 31, 1920 32,042,043 50,685,091 Sept. 30, 1920 39,017,808 53,131,693 The increase in the deposits was considerably less than the expansion of the advances, he pointed out, and expressed the opinion that it was doubtful whether the deposits had been increased by fresh income; it was more likely that the increase followed naturally on the increase in bank advances, since it was well known that bank advances usually made bank deposits. The public were straining upon the , resources of the banks, both of New Zealand and Australia, to a great extent, and the institutions had reached that stage when it was almost impossible to bear a heavier burden than they were carrying to-day. In the year ended March 31st, 1915, mortgages totalling .'£19,269,021 were registered, and mortgages valued at £11,276,289 were discharged, and for the year ended March 31st, 1920, the figures were:—Registered, £48,442,900; discharged, £23,086,747; and for the six months to September 30th last: Registered, £38,208,962; discharged, £l7 527686

REPATRIATION OF SOLDIERS. Dealing with the repatriation of soldiers, Mr. Beauchamp said the total amount involved up to September 30th last was:—Discharged Soldiers' Settlement Act: To advances for stock and purchase of houses and private land, £16,040,200. Land for Settlement Act: (a) Capital value of 253 estates, comprising 334,093 acres, purchased, subdivided, and offered to soldiers, £4,017,332; (b) cost of 42 estates, comprising 153,180 acres, purchased and now being subdivided and prepared for settlement, £1,235,962. Repatriation Act: Financial assistance for establishment of businesses, for' purchase of furniture, tools, etc., and for sustenance, etc., £1,472,512—a grandjtotaKof £22,700,006. DECREASE IN VALUE OF EXPORTS. In conclusion, Mr. Beauchamp referred to the latest cabled information of a decrease in the value of wool, hides, skins, tallow, pelts, canned meats, cheese, hemp, rabbit skins, and oats, and said that the only hopeful news he had received was that butter had again beej commandoered by the Imperial authorities. The big drop in the price of cheese—which would mean an immediate loss of £2,ooo,ooo—was due to unemployment in England, and this would surely be followed by unemployment in this country unless there was true cooperation between Capital and Labor. "WE MUST PRODUCE MORE." Wc must produce more, at less cost, and so be enabled to compete successfully in the world's markets. Such was the position at present, that banks would not make advances except against funds in sight. In Auckland and elsewhere in the Dominion bonds were crammed with imported goods because the importers could not honor sight drafts, and so lift. In one instance lie knew of a case where goods were sold at 50 per cent, of! English cost. Never before, since the outbreak of war, had he observed greater anxiety on the part of commercial men to quit goods. If we could- only stimulate exports, and reduce imports, the tension would be relieved. He thought it would be unwise to place an additional strain, in the shape of the bonus, upon industries, in view of the financial condition of the country. DIVIDENDS AND DEPOSITS. To Mr. Reardon: The Bank of New Zealand had recently paid a dividenu of 10 per cent, on A preference shares, and 17* per cent, to holders of B preference shares and to the ordinary shareholders. Interest of 4 per cent, was paid on amounts deposited for two years. Asked if he thought this was fair, in view of the dividend of 17J per cent,,

Mr. Beauehamp said moat of the profit* of the bank were made outside of the Dominion. He denied that he was antagonistic to the workers, and contended that, on the contrary, I.e had the greati est sympathy for then'.. Even so, he had to recognise the fact that if wages were again increased, with the consequent rise in the price of commodities, the country, could not carry on. STIMULATE EXPORTS; CURTAIL » IMPORTS. ' ; To Mr. Blood worth: To stimulate our exports and curtail our imports would improve the financial position. If the A "go-slow" policy were dropped, we be better able to do the former. knew that, owing to the position capital was leaving the country recently, one company alone had £150,000 to Australia. Mr. statement could not possibly panic, because everyone knew the try was passing through a period ancial stringency. l^^H