THE MONEY MARKET

Press, Volume L, Issue 14883, 24 January 1914, Page 7

THE MONEY MARKET

SIR JOSEPH WARD'S VIEWS. i»-ECUL » "THE *8M9.") WELLINGTON. January 23. Sir Joseph Ward gave a "Post"' reporter an interview to-day on loans and borrowing generally, having special reference to tho cosing of the money market in London, a≤ indicated by the over-subscription of the Victorian loan. '"I am not in the least surprised at tho positiou disclosed in connexion with the recent Victorian loan," said Sir Joseph. "1 have held all through, and have expressed myself *o ou more than one occasion, that it was ridiculous to suppose, with tho largo accumulations of money on in the Old Country, that by any unnatural or forced process a rate oi interest higher than ttit 1 normal ouo could bo maintained tor lonj;. and it shows the advisability ol this country not lushing into lung-dated loans ut a heavy coot to the country. For instance, if «tho seventy millions ot money that the French contemplated raiding « snort time- ago had been put upon the market, the great bulk of it would have I>h.-ii subscribed by French investors, and it would scarcely have appreciably atfocted the London market, excepting so far as investors could temporarily use it to try to get the best rates they could in* other directions. I rei>ej;t what 1 hay« so often said, that the ordinary.accumulation-of frosli moneys for investment through tho London Stock Exchange varied between 300 and -400 millions a year, and no one who has studied tho fluctuations of the L«»i.»Jou money market, tor tho last twenty-five years Van do other than recognise that tho knowledge of tho principal investors, or, rather, the important channels through which investments are made oji behalf of email investors, does not make thorn realise that they cannot got their investments out it they attempt to keep up a higher rate of interest than can induce those wanting money to relieve them of the enormous animal accumulations that are going on. The Continental countries have, of course, in recent times, had tho disturbing effect upon the financial world, because the most experienced statesmen and diplomatists in the Old Land wero uncertain as to where it was eoiiig to end, or what developments might take place. This uncertainty has passed, and but for the feverish activity going on in a few of tho principal countries of the world in the matter of building ahead for naval purposes, money would como back to a lowerrnte than has been tho case for the last few years. How far tho change in the London money market can affect the money market here is not easy to forecast, lhat depends upon circumstances which obviously to the people of experience in this country must have a material effect upon this important matter here, lhere is one thing quite clear to my mind, namely, that care should be exercised in not committing New Zealand in its public loans over too long a period of years; the more so, of course, ir a high rate of interest has to bo paid for our loans. It is quite clear to my mind, as it must be to others, that the higher the rate the country pays, the higher tho average rate that will prevail for ordinary investments in JVew Zealand, and that, of course adversely affects business of all kinds "