FINANCE AND TRADE.

Taranaki Daily News, 26 April 1921, Page 7

FINANCE AND TRADE.

STABILITY OF MOTHERLAND. COMMENTS BY MR. BEAUCHAMP. NATIONAL PROBLEMS. Mr. Harold Beauchamp (chairman of the Bank, of New Zealand) made a most interesting statement to a New Zealand Times interviewer with regard to the influence of the British stirke upon trade and finance. “In spite of the apparently imminent strike of the Triple Alliance, which would have involved the loss of millions of pounds, the destruction of property of untold value and consequent misery to those dependent upon the breadwinners of Britain, it is gratifying,” . said Mr. Beauchamp, “to learn from a London cable dated the 16th instant, that there has been no panic on the Stock Exchange. Indeed, I note with satisfaction that the prices of gilt-edged securities, such as Government and municipal bonds and debentures, shares in banking and other financial corporations in Great Britain and her dependencies, have been well; maintained. That speaks volumes for the strength of the holders, and is an indication of the wealth of the Old Country. Furthermore, it suggests to my mind that, giv6n anything like the bringing about of more cordial relations between capital and labor and the recognition. by Germany of her obligations to the Allies, we should speedily see dispelled the dark clouds which to-day, in almost every part of the British Empire, are so visible on the commercial horizon.

IMPROVED INQUIRY FOR COLONIAL STOCKS. “In the cablegram to which I have referred mention is made of the improved inquiry for colonial stocks. This is confirmed by the success of the Auckland City Council in the over-subscription of its loan, issued at par, for £500,000 at 6| per cent., this loan as to /interest and principal being guaranteed by the New Zealand Government. Other public bodies in this Dominion will, it’ is understood, endeavor to raise sums also in London as soon as circumstances permit. Should they be successful, the benefit to this country by the introduction of new money will prove incalculable; and it will also greatly assist the banks in their exchange operations. For some time past it has been anticipated that the English Chancellor of the Exchequer could revert to the sale of Treasury bills by tender; so the announcement in the Times of his intention to do so does not come as a surprise. It suggests that money at short currencies for Government purposes can be raised under the rates lately ruling for Treasuries—namely, 6 . to 64 per cent.

WOOL POSITION IMPROVED. “As to wool, in which we in New Zealand are so deeply interested, there is unquestionably a ray of hope in the late rales of free wool, for which there has been good competition, especially on the part of foreigners. True, there has been no real enhancement in values; but the outstanding fact is that there is a visible sign of a resumption in the demand which has been so conspicuous by its absence during the past few weeks. With an improvement in industrial matters in Great Britain, we may reasonably look for an improvement in the prices of all our primary products. It is beyond question that our prosperity depends entirely upon the purchasing 1 power of the people in England, and until that expands we must be prepared to face adverse financial conditions here. Britain, in turn, must be in a position to compete with her manufacturers in the world’s markets.

HIGH COST OF PRODUCTION. “To-day she cannot do so, owing to the high cost of production incidental to abnormal wages, short hours of labor, and the go-slow policy. To emphasise what this nieans let me quote a speech delivered by the chairman of the Lancashire and Yorkshire Railway Company. In addressing the shareholders of that company on February 16 last, he said, inter alia: “The amount of wages paid during 1920 was £9,458,393, as compared with £2,796,755 In 1913, the average per head per week being 77s lid, compared with 27s 4d in 1913. To illustrate the effect of the shorter hours, I will refer to the drivers and firemen. Before the eighu-hours’ day the average normal hours were 10 per day, and of this forty minutes were taken in preparing the engine, taking it from the shed, and after the turn taking it back again. That left for revenue-earning purposes 93 per cent, of the turn. Under the present conditions. the ‘eight-hours’ day’ only leaves 6| hours for revenue-earning purposes, as against 9 hours 20 minutes previously, or a reduction of 28 per cent; and it is easy to see what a heavy increase in working costs this entails when we remember we have 1129 engines under steam per day.

COST OF LIVING FALLING. “There is abundant evidence of a reduction in the cost of living in Great Britain, chiefly through the steady and persistent fall in value of essential commodities; and we are meeting with a similar experience in New Zealand. Dealing with commodity prices, a writer in the Economist, under date February 19, 192'1, says: ‘The year 1920 saw the peak of commodity prices reached and passed. According to our index number the highest point was touched at the end of March, when the total reached was 8352. Since there has been a rapid decline, and at the end of the year the total had fallen to 5924.’ It is to be specially noted how rapidly metals are descending from the high altitude they occupied during war times. In commercial circles tihe value of metals, as it is well-known, is keenly watched, as metals have such an important bearing on the cost of .manufactured goods generally. In sympathy with the reduction in the prices of commodities, we must undoubtedly look for a fall in wages in every class of industry; and until that eventuates we shall not see an appreciable decline in the cost of living. Apparently that fact is fully realised by the mineowners in Great Britain, and by the Government of that country.”