THE MONEY MARKET.

Auckland Star, Volume LIX, Issue 78, 2 April 1928, Page 4

THE MONEY MARKET.

AUSTRALIAN FINANCE. AN OUTSPOKEN CRITIC. Concerning Australia's trade position as disclosed by the complete figures for 1927, the "Wild Cat" Monthly has the following comment: — "Publication of the complete trade figures for the second half of 1927 and comparison of them with the returns for the corresponding period of 1926 have led to optimistic statements that the position has improved. And it has improved in the sense that the patient is not sinking quite so fast. The six months' exports failed to pay for imports by £9,249,000, and no provision whatsoever was made to cover the "obligations abroad for interest and services," except by raising further loans abroad. If the half-year is an indication of what the whole year will be, the situation, as regards dealings in merchandise only, is better than in 1920-21, 192223, 1923-24 and 1926-27. But the year's trade balance, judged by the six months' figures, is going to be £58,000,000 worse than that of 1919-20. That was the last year in which Australia paid all its external obligations out of its own resources and had a surplus. Something similar took place about 1910.

"Unfortunately the occasional favourable trade balance, which was a very good balance even as late as 1919, is of very little importance now owing to the inordinate increase of external obligations. In the second half of 1927 loans floated abroad amounted to £27,000,000, and if the pace is maintained 1927-28 will be the record year for external borrowing. There was great lack of any large and definite public works policy, to explain these financial doiVigs, but as none of the money came here the adverse trade balance and the 'obligations abroad' furnished a whole volume of explanation in themselves. The 'obligations' were calculated at £23,200,000 for the year after the war, and are estimated at £34,000,000 for the current year. How the situation will be handled when they rise to forty or fifty millions per annum is a matter for conjecture. Doubtless the process of paying the creditor with his own money must end somewhere or lead to something, but there is a lack of precedent for the situation. The elaborate new sinking fund arrangements have no bearing on the case, it being impossible, unless the trade balance is repaired, to get any sinking fund to London or New York in any tangible shape whatsoever."

DAIRY PRODUCE. Messrs. A. H. Turnbull and Company have received the following cablegram from London, dated March 30:--Danish butter, 192/ to 194,/; New Zealand, unsa 1 ted butter, 170/ to 176/; salted, 168/ to 172/. The market is slow. New Zealand cheese, white and coloured, 98/ to 99/. The market is slow. Canadian cheese, white, 108/ to 112/; coloured, 104/ to 106/.

Mr. G. Paviour Smith has received the following cable from his London principals, Anglo-Continental Produce Co., dated March 31:—Xew Zealand butter, 168/ to 172/ per cwt. The markei is sick and lower prices may be expected until the end of May. Xew Zealand chees?: 98/ to 99/ cwt. NEW ZEALAND TAX-FREE STOCK. Some perturbation has been caused among Sydney investors in New Zealand stock issued in London because of assessments being made in two cases for income tax by the Dominion taxation authority (states the "Sydney Morning Herald"). The stock concerned is New Zealand Government 4% per cent inscribed stock issued at £95 in 1924. The prospectus, a copy of which has been courteously supplied us by the Assistant-Secretary to the New Zealand Treasury, states that New Zealand Government debentures and inscribed stock issued and payable in London, and the interest thereon, the property of persons not domiciled in New Zealand, are not, and will not, be subject to any taxes, duties, or levies by the Dominion. In each of the cases which has come under the notice of stockbrokers in Sydney of tax having been assessed protests were made. In one case the assessment was withdrawn. No doubt the assessment was issued in each case in the belief that the owner was domiciled in New Zealand, and ■"■hen it is pointed out that there is no domicile there the other assessment will also be withdrawn.