The Daily News. MONDAY, APRIL 17, 1922. THE MONETARY POSITION.

Taranaki Daily News, 17 April 1922, Page 4

The Daily News. MONDAY, APRIL 17, 1922. THE MONETARY POSITION.

To the majority of the community, although money is a 'matter of vital concern, especially in times like the present, it can hardly be expected that anything but passing interest is awakened by the masses of figures included in the banking returns. Yet these returns constitute an unerring financial barometer, on the fluctuations of which, good, bad, indifferent and normal conditions depend, and which have a farreaching effect, directly and indirectly. on the whole community. What the people in every country are eagerly, though none too intelligently, awaiting is for the financial barometer to indicate “set fair,” and this cannot happen by a miracle, because it needs general heln by wise economy, industrial effort, a certain amount of self-sacrifice and whole-hearted co-operation. Money, as is well known, is of two kinds—metallic and paper—of a standard value in normal times. The greater the volume of paper currency; ' the less is the value of the metallic, and that is one reason why the sovereign has been rendered of less value than before the war. another reason being the inflated value of what money can buy, hence the intimate connection between money and the cost of living. wages and other dominant matters of individual and national life. A war that has cost the world something like two hundred thousand millions sterling. and left a legacy of annual liabilities to meet totalling many more millions, is bound to entail heavy burdens. It is certainly surprising to find that, instead of being crushed by such a weight, the British Empire is gradually and surely regaining financial health and strength. So far as New Zealand is concerned, notwithstanding the temporary setback in the values of primary produce, the banking returns for the quarter ending March 31 of the current year exhibit a fair improvement in the monetary position. The effect of the lower values for produce is seen in the drop of seven millions in deposits during the last twelve months, while last quarter there was a decrease of about a million in the advances. These two movements are taken as an indication of a return to the normal price level, but it will be noted that the paper currency exhibits a slight increase for the last quarter over that of the preceding three months. This, however, is counter-balanced by the increase of coin and bullion held by the banks, though the public rarely get a glimpse of the gold which constitutes the standard currency. The really disturbing features connected with the decreases in advances are the high rates of interest charged, and the aftermath of the land gamble, and until these are adjusted it would be foolish to expect trade to regain its former briskness. The banks, cannot justify their high rate of interest. They are simply taking advantage of the necessities of the people. They should be prepared to assist in the financial and economic rehabilitation of the country and accept reasonable rates for money instead of exacting the highest possible rates and making things thereby more difficult than ever for producers and traders. It is just probable that, as in the Homeland, so is it in the Dominion, namely, the main factor in bringing down the prices of goods is the widespread necessity among traders for turning over their money quickly in these days of financial stringency. The fact that last quarter’s banking returns point to a move in the right direction is, so far. satisfactory, and it is to be hoped it will continue. Those who study financial matters are now turning their attention to what is happening at the Genoa Conference, and hoping that the result of the deliberations will be such as to prepare the way for the rehabilitation of Europe, for until that urgent'work is accomplished it is futile to expect the advent ' of normal times. Meanwhile evfcry nation can help, but not

a certain amount of sacrifice, and the end in view is well' worth making that sacrifice.