The Daily News. SATURDAY, DECEMBER 11, 1920. TRADE AND FINANCE OUTLOOK.

Taranaki Daily News, 11 December 1920, Page 4

The Daily News. SATURDAY, DECEMBER 11, 1920. TRADE AND FINANCE OUTLOOK.

The review of the trade and finance of the Dominion which is made half-yearly by the chairman of the Bank of New Zealand is always interesting and instructive, though it does not follow that his deductions can be accepted as a matter of course. It is not possible for anyone occupying, the position of Mr. Harold Beauchamp to be other than conservative—perhaps ultra-conservative —in liis views as well as his outlook. May be this does no real harm, especially in times like the present. The figures relating "to the transactions connected with the Dominion's trade, commerce and finance during the past halfyear, afford Mr. Beauchamp an excellent opportunity for moralising, as well as emphasising the far-seeing wisdom of the bank's policy. He demonstrates, apparently with much satisfaction, that the much criticised policy of the hank in holding so large a portion of its resources in London has prove of great service when (as was bound to occur sooner or later) the Dominion's exports were less than its imports, and he asserts that had not those funds been there, tie exchange situation of the last few weeks would not have been so easily met. All the same, the bank no doubt has done very well over this exchange, so the chairman may feel a double gratification. He has much to say on the evil of overimportation and the need for sitmulating production, particularly in view of "the substantial decline in value of most of our primary products." The position is* however, that the recent excess of imports over exports is really accidental, being due to accumulated and duplicated orders during the last two or three years, and the consequent rushing of these goods into the Dominion in order to relieve the financial stringency on the Home and other markets. If we take the ,figures for 1919 it will be seen there was an excess of the value of exports over imports amounting to over nineteen millions, while during the six years to last September, even after allowing for the unfavorable trade balance for the latest year, the excess totalled nearly fifty-one millions. Ihese figures do not justify pessimism, especially in view of the fact that the Dominion has Been borrowing locally and not on the London market. Admitting that the volume of goods exported may not have exhibited an increase, yet it. has been well maintained, and there is every prospect of an expansion that will in some measure offset reduced values. The banks have it in their power to check over-import-ation by a restricted policy, and there is very little doubt that power is being exercised. It must be ■said, however, that just now many importers cannot help themselves; they are simply compelled to accept what is sent. Mr. Beauchamp's advice-to stimulate production, expand exports and curtail imports is quite sound, and it has been given so often that there is no excuse for its not being generally known and appreciated. The wonderful prosperity enjoyed by the Dominion during the period subsequent, to the war has not demoralised the people, though the tendency to lavish expenditure has been in evidence. Mr. Beauchamp states that a very great change in the economic conditions has developed within the past few months, and he considers that the outlook is not so favorHblc as it, was. He points to the banking averages as giving striking evidence of this change as shown by the substantial increase in the advances and discounts, "also the increase in ' mortgages. These are due to temporary causes that will probably soon disappear, as in the case of exports and imports. That it will be necessary to finance the wool giowcrs,' and possibly the frozen

meat producers, is likely,, and that | course will involve a considerable additional amount of banking credit, possibly curtailing credit in other directions. No anxiety, however, need be felt on this head, especially by the banks, which have everything to gain by the move, while it must be remembered that the value of dairy produce exports'this coming season will certainly be a record —estimated by Mr. Beauchamp at about twelve million sterling. On the whole we are inclined to consider that the chairman of the bank is unduly pessimistic, and although the outlook may not on the whole be as bright as could be desired, yet with care and economy and confidence and courage the people of the Dominion have nothing to fear during the period which must elapse before produce recovers its normal value.