GOLD AND THE BANKS.

Taranaki Daily News, 1 June 1921, Page 6

GOLD AND THE BANKS.

“WE ARE ALL POORER BY THE WAR.” Lord Midleton, chairman of the Bank of Australasia, addressing shareholders on the trade position and gold-holding in London, remarked: Although Australian trade and the exchange position affect very largely the convenience, of the merchants involved, it had’'really had nothing to do with the stability either of customers or of the bank. "What has happened is this: That the great acceptability of --Australian exports following immediately on the Armistice, and especially with the increased facilities for freight, naturally were followed by imports on a large scale. Those imports have been carried to a point in excess of the money provided by exports, and in consequence there has been a, stringency, and the whole of the financing of the difference has fallen on the banks.” By quoting figures, Lord Midleton showed how great this change in the trend of affairs had been. The gravity of the situation, he remarked, had to some extent been increased by the decision of tht? Commonwealth Government that gold should not be exported. Jn times past, where there had been a balance of imports over exports, it had been met naturally and legitimately. by the exportation of gold, because Australia, being a gold-producing country, was always receiving fresh supplies in excess of her local requirements, but the situation had been altered by the decision of the Government. "1 think I am justified in saying,” he went on, “that we look upon the continued restriction on the exportation of gold —of our own gold for the bank’s own purposes —as being somewhat of a hardship. I am afraid the difficulty of exchange will go on untu the imports and exports of Australia are more closely bafanced. No- one would wish continuous borrowing on the part of Australia to make up the difference when imports exceed exports. There is, how/ ever, one very hopeful feature in this respect. This* year there are 100.000,000 bushels of wheat available for export, whereas the whole production of Australia last year was only 45,000,000 bushels: and, in addition, there exist large stocks of wool, which must be gradually liquidated, and that liquidation will greatly improve the position. All the same, I do nor think it will be taken amiss if we make the suggestion to our Australian friends that they, in common with the rest of the world, have to remember we are all the poorer, not the richer, for the ! war, and that there must be due economy and an effort towards production if the position is to be re-established.”