COMMERCIAL OUTLOOK.

Taranaki Daily News, 13 January 1921, Page 2

COMMERCIAL OUTLOOK.

FINANCE IN DOMINION. NO OCCASION FOR PESSIMISM. The financial and commercial outlook of the Dominion was reviewed in an interview by a financial authority in Auckland. 4 The position, at present, he was not so promising as it had been at the beginning of the previous year. Thia was due to the depreciation in value of some of our primary products, such aa wool and hides, and the fact that much of New Zealand’s wool clip was at present unsaleable. Thia meant that there would be a considerable diminution of national revenue for the coming year, and money would be scarcer than it had been during the war years, when there was a steady and assured income for all our chief primary products. Another factor that had to be considered in the commercial world at present, he said, was the heavy imports that had taken place during the past year. The majority of the commercial houses were overstocked, owing to orders in England having been duplicated. A considerable amount of money in excess of what had been anticipated, therefore, had to be found to pay for the national revenue and the great increase in imports was bound to have a considerable effect on the money market, and interest rates would probably have to be increased.

DAIRY PRODUCE, AND MEAT.

On the other hand there appeared to be no cause for pessimism. The dairy products of the country were being sold at high prices, and small farmers generally should experience a record year. Meat was also realising satisfactory prices, and the outlook for the frozen meat industry was excellent. Everything considered New Zealand had come through the difficult war period remarkably well, and was only now experiencing a little of the trouble caused by the reconstruction or re-establishment of old conditions. This trouble was merely temporary, as far as New Zealand was concerned. Ours was a producing country, and our chief exports were commodities that were readily saleable, and usually were not subject to great or sudden market fluctuations. Dealing with the position generally, he. expressed the opinion that as soon as the continental countries were in a position to purchase wool and other raw materials, the small cloud on our financial horizon would disappear. The effect of the recent heavy imports, he added, should be overcome within the next few months.

MONEY FOR INVESTMENT

There appeared to be no shortage of money for investment. Any legitimate new enterprises were sure of accommodation, while capital could always be found for investment on mortgage. With regard to the raising of money for. public purposes, it was difficult to predict what would occ'ur. 'He understood that the government loan for the repatriation of soldiers had been fairly well subscribed, but local bodies woujd find it impossible to rarise money at\fij per cent., when other gilt-edged securities were to be obtained at higher rates of interest. There should be no ere** difficulty m adjusting the matter, as the money for such w£s in the country. The enterprise of local bodies in regard to expenditure of works was restricted, in common with private expenditure, by the high cost of labor and materials, and the difficulty of importing requisites. This restriction perhaps, was not a drawback', as obviously this was a time - when only really essential works should be undertaken.

PLENTY OF FREE CASH.

The large Christmas trade in the shops and the great increase in money invested on the totalisa.tor at the late meetings, indicated that a great deal of money was now in the hands of the spending classes. Last year the soldiers’ gratuities were freely spent during the holiday period. This year without any such unusual addition, the spending power of the working people appeared to be greater than ever. Formerly the free cash of the country was chiefly in the possession of the capitalists, who utilised by investments, and in those of thrifty people, whose indication was to guard it, if not to hoard. The earning power of the people —particularly of families—was much greater now than it had been in the past. Wages were high, and there was abundance of work for all classes. It was common for the girl members of a fair ; lv now to work and earn substantial salaries. This relieved the heads of the family of considerable financial responsibility, and provided a great deal more money for spending than formerly had been the ease. Referring to the future of the Dornin--ion, the speaker said more population was urgently required. Rapid development was necessary in order to adequately increase production in all directions. With this accomplished, and by the exercise of, proper thrift and industry, one could confidently look forward to a continiiance of the Dominion’s prosperity.