THE MOVEMENT OF CAPITAL.

Press, Volume LXVII, Issue 14237, 28 December 1911, Page 7

THE MOVEMENT OF CAPITAL.

INTERVIEW WITH MR W WATSON.

(special to "the press.") WELLINGTON, December 27. Mr William Watson, a director of tho Bank of New Zealand, who has been touring the United Kingdom and the Continent, returned to Wellington to-day. In tho course of an interview with a "Post" reporter, Mr Watson had some interesting things to say about British capital and its movement. Ho spent much time in London, and there met men from all parts of tho world, wlrither British money flows and whence it returns. "New Zealand and Australia,"' said Mr Watson, "are not' at present very attractive to the British investor. Why? There might be some money found tor oil and things of that sort, but the investor finds z\ anore profitable outlet in the U.S.A., Canada, and above all in the Argentine. In the River Plato country the rates are 7 per cent, to 8 per cent., and there is not the slightest fear on tho part of investors, I found, as to tho stability of the Government or as to the safety of their security. There is an enormous outflow of British capital into the Argentine, and that country is making phenomenal progress. Why, you have your own .New Zealand and River Plato Company (which has practically all its interests in the Argentine) whoso £1 shares are now £2, and which pays its 9 per cent. No, I do not think there is, any use for New Zealand to go to London for money at present. This country, with Australia, is not considered to be a ! suitable field for investment of English capital. It may bo that other, outlets of capital are more attractive; it may be that there being sufficient money in this country for frs present needs, this field is not sufficiently profitable. To the Government belongs the credit of financially helping tho farmer, and -so there is plenty of money in tho country. With regard to the capital required for any new enterprises here or the extension of those already established (as also in Australia) such as, say, coal or timber, I do think that the Labour difficulties experienced, or likely to bo experienced, make it difficult for capital to come here for investment in su*ch undertakings. In the Argentine labour is cheaper and more abundant, and tho Government encourages tho investor's in developing the country. "Land is much cheaper in the Argentine than in New Zealand," Mr Watson added. "Land that would carry a fat cattle beast to the acre was thought dear at £8 to £10 an acre, whilo land of similar quality in New Zealand , would cost from £35 to £50 an acre. Considering what they paid for land and labour the Argentine dairy farmers were doing better than New Zealanders, -with their butter in London at 124s per cwt, as against ours at 129s per cwt. •, British investments in tho United States of America were taking the form of the purchase- of enormous estates by tho English nobility and gentry, who regard tho States as a safer place for capital investment than England. Canada attracted British investors in industrial as well as municipal and Government propositions."