The Press. TUESDAY, MAY 9, 1905. THE MONEY MARKET.

Press, Volume LXII, Issue 12189, 9 May 1905, Page 4

The Press. TUESDAY, MAY 9, 1905. THE MONEY MARKET.

It' is announced that the Associated Banks in fhe colony have decided to reduce, on and after to-day, the rates of interest on fixed deposits for 12 and 24 months, by } per cent., making them 8 and $1 per cent, respectively. They have been enabled to do this owing to the money market having become appreciably easier, not only in England but in Australia. The Mother Country has at last begun to recover from the heavy drain caused by the expenditure for the Sooth African war, followed by a large increase in the amount of local borrowing for municipal and other purposes. Under normal ctrcametanoes the accumulation of, savings takes place in England on an enormous ecale, and the steady increase in the price of consols daring the last few months has shown with

baroraoter-like clearness the extent to which this accumulation has latterly been going on. In Australia the monetary position has become deoidedly easier, as the "Insurance and Banking Record " points out, owing*to tho larger proceeds of the wool clip, wheat, butter, etc., being* both available for* accumulation, and applicable to the reduction of advances. The Victorian banking returns for the last quarter, for example, showed the large increase in deposits of £1,867,000, while advances showed a reduction of £520,000. Taking advantage of the amount of money offered for investment the Melbourne Metropolitan Board of Works issued a 4 per cent, loan, with twenty-six years' and succeeded in placing it at an average of £99 6s 73d. We also learn that Mr Seddon, ever ready, it would seem, to pledge the credit of the colony in any quarter where money is to be raised, has been trying to borrow rather freely in Melbourne, presumably for publio works, in view of the coming elections. Should the present tendency in the direction of cheaper money continue, the price of investment stocks will advance, and land valuations are unlikely to recede from their present high level unless, of course, there should be a serious drop in the value of our staple products.