THE MONEY MARKET.

Auckland Star, Volume LIX, Issue 306, 27 December 1928, Page 4

THE MONEY MARKET.

BANKING RETURNS.

Now that the Government Statistician is giving the main detail® of the banking business of the Dominion each month, we are much better supplied with information at) to financial conditions than previously. The banks still have an ample supply of fund* available for all requirement*, but naturally aa the season ad vancea the excess of deposits over advances is reducing. On July 2 the banks held £54,1)72,242 deposits, but by November 19 this total was reduced to £51,366,600, while on the other hand advances in the same period rose from £45,492,737 to £48.397,492. However, these are only the season movements to be expected aa exports have been light ill the period and were less than imports.

Baek to London. The "Financial Times," of October 10, remarks that the recent operation under which, aften an absence of some 23 years, the Province of Ontario reappeared as a borrower in the London market has aroused keen discussion, as a possible portent, in trans-Atlantic circles, both Canadian and United States. The incident is no bad advertisement for the London money market, whose decay has been forecast with tiresome reiteration liy the prophets of woe. During the past decade this country has not been able to compete with one whose war legacy was prosperity and bulging coffers, but times change. The far greater measure of stability which characterises' London is bound to tend gradually to attract old borrowers back again. £ AMERICAN SHARE BOOM. ■ Zk — THE RECENT COLLAPSE. ■■■ m j Recent cables provided brief particulars of the sensational break in dominant stocks on the. New York Stock Exchange. The correspondent of the "Sydney Morning Herald" supplies further particulars: Collapsing under the weight of the heaviest selling ever concentrated withm • two-hour Saturday session on the New York Exchange, 3,749,000 shares changed hands, the correspondent states, and stocks of all varieties and descri- on 3 lost ia excess of two billion doll- open market value, the Radio C i of America being the heaviest ;h a It point break, the Inter. Harvester Co., with 6H4 comh. , and losses of from five to 50 points being generally spread over the list. How badly thousands of speculators who indulged in the so-called Hoover maritet have been hit can be seen from the fact that 50 leading stocks have dropped in excess of 22 dollars per share since the high market get in on November 30. The hreak in the Radio Corporation particularly was demoralising, and Monday's market is looked forward to with considerable trepidation. The general prosperity of the year for Wall Street is indicated in »n estimate that 100,000,000 dollars will be distributed in bonuses to the staffs of the banks and brokerage and security houses during the Christmas season. It is known that one firm will pay a bonus of two years' salary to employees. The slump described by its correspondent, abates the Sydney paper, could scarcely be unexpected, following, as it did, a long period of intense inflation of values of •tocka and shares. Profit-taking operations, ss a sequel to an extended move of buying, would soon set prices tumbling, and weak holders would be shaken out rapidly as the reaction developed in an over-bought market. The share market has served as an outlet for exeess credit in the United States for several years now. As mentioned recently, brokers' loans to. the end, of October exceeded £ 1,000,000,000. Tha latest violent movement ia tlhe market was the culmination of pronounced buying, which marked the election of Mr. Hoover as President. That the supply of loans for Stock Exchange speculation was not inexhaustible was evidenced srhsn the demand for credit caused the rate for call money to touch 12 per eept.

MONEY IN AMERICA. I ——" l Concluding a discussion of the outJook tot- money the National Bank of Commerce, New York, says, under date Nov. 22:—"The total demand for credit while possibly slackening a little during the remainder of November is likely to be fairly well sustained to the end of the year. Additions to member bank reserve account through gold imports or further purchases of bills bv the reserve banks are likely to be fully offset by drains incident to currency demands. Because of the wide uae of funds for speculation the reserve banks are not expected to relax in their attitude; becauee of heavy indebtedness to reserve banks, and probably inwreasss in that indebtednss the member banks are not expected appreciably to relax jo their credit policy. The outlook ia for money rates to ease slightly during the remainder of November, but for firm conditions during December with rates remaining close to present levels."