THE MONEY MARKET.

Dominion, Volume 1, Issue 194, 11 May 1908, Page 8

THE MONEY MARKET.

PRESENT POSITION ANALYSED. BORROWING IN THE DOMINION. VIEWS OP COMMERCIAL MEN. (BY TELEGRAPH—SPECIAL CORRESPONDENT). i.' '■ Auchlantl, May 9. . Tho "Herald," in a special article de- , voted to an 'analysis of the present financial position',-.thus . presents-the matter:—For somo.: time past signs of. a slight: stringency in the New-'Zealand money, market, as compared with' the extreme liuoyancy -of tho past' few'.years,; have; been spoken of hy those who'keep ; a caroful finger on tho financial piilse.- .Tho returns in'conncetion with the baiiks of'issiio' for tho first' quarter of this' "yeari' v in :% c'omparisbn ■ with tho corresponding''poripd.'ofTasi;'year, which havo re-, cently been published, would seem to indicate, .that' there'.-has.'been some justification •for the. occasional; warning' notes, that have beon, sounded..' ; 'An increase in advances of £2,990,763, and ..tho decrease of £140,817 in tk'e"; fixed''deposit's, aro -Uie most striking factsxbf6ught':put by'. tliese returns."*. There aro other.:circumstances and. figures, how-: ever, that- should.be taken into account in considering- the question-'of any shortage' of or real."- One point-is the largo aiid 'increasing business being done by the ,Goyernment\through the Post Office Savings' tank, and -other is the policy of; .'ldeal borrowing for ''public purposes in preference, to^,the" raising, of loans on the London, market.,. The deposits in tho Post Oflico Savings Bank havo of lato shown a very, marked' advancb,- they having increased from £6,350,013', in-"1901 to £9,953,266 in 1906.-A In,tho;lat'ter.-year, which is the, last tivolve imohths'for-wliich the official returns are available, tho- excess of deposits over withdr'awais r ;,no ;less , than'/ £1,000,050, as , compared : with';: £641,55? for.. 1905, and £171,769 for 1904. The deposits .with the private savings -banks 1 -havo also shown a. steady advance.^'"Tho,/;funds, of tho Post. ' Office sßs'nk.,are mainly "invested in. Government and'other public debentures, and apart from tlieso deposits a larao amount .of the peoplo's by , the Government" and the'lopal . bodies in conncc: I tion .with, their . loans, . l; The shrinkagc./disI'closed in returns'of the business of tho • tanks .of issue/ may/' thus not, unreaspnably bo taken- to., bo - duo'.more to. tho fact that the s money' is being cliver'ted into other channels than to a shortage of the eiroulat ijg medium, notwithstandirig the', influence' .that tho /recent fall - in..:'tho; prices of some: of , 'o'W'''^ple M admittedly/ had in' the/latter .direction.?!; ,i . A ~ r: >:■'ifcMasspy,;'j in. /his j,speech'.at Gisborno, -on;Tuesday;^night,'-'referred.'to tho quest'ion »of '; the. Government borrowing in the Dominion, and urged Stato' should go ,tp ( ; the, .Londoii. .^iarket'.' ; He, also stated -that; peiple/beingVencouraged to: invest their r'inoney.' ihl short-dated debentures, tho man- on the land: was*, being-compelled to pay u morb for. ,-hiS; .-moneyi"' was cn--1 dorsid ■ a J - number'' of-'representativo, commercial, -'men in,, v Auckland, . who were seen on' tho, /.subject ...by, %,," Herald" representative 'yesterday... {

,r : tho remark of .oho gontlemaii". well "versed in financial mhK ■ ters, ''.'that' 'bath' !"the' Gtovernnient and tho, local .-.bodies .\should; : 'keop off. tho, local market and/go: to (London.' I do not say there t| ia Government aiid; the lopal; authorities, .liepp 1 . on raising, tbeir loans,in-.tho Dominion: there is bound to be a stringency.■ ,-' .~/-- / /,, .. ./; Another ■ authority ; expressed ; a; similar v tiW^.and i 'doubt *that tho flargoi/amount of.,,..public borrowing" in 'the dominion:' had /a, tendoncy to, check'.'land -values, and thus to react upon tho. farmers /who desired The decrease of the bank deposits,-, notwithstanding' tho. rccent incroaso- J of' a half per cent, in the •interest pn, : bne'/and two, years'-depotits, must have some - offect/,on/ tho,/lending .powers of tho banks.v,/-There;seemed,: l)e' said, to ba a: tendency. on the' part, of tho banks !to discourage •. application\ 'for advances," ■ particularly for/ speculative purpose^' and .any/ new- business .that was accepted,was taken at higher rates than those which have /previously ruled.' He did not : "regard the position as one-.-' warranting ,'any^'.'-'alarm, but if money was- being applied! to one purpose, it .-sbuld' not, of - courso, bo .available' for another.

■ % A WELLINGTON OPINION. .- A' gentleman.'well informed in commercial circles,'iii conversation witli a representative of TnE Dominion, expressed tlio opinion that New: Zealand'was">not so far from' a timo_of depression as' most people seemed to think. ■Tho steel industry, ;he'remarked, was the pulse'of things commercial, and ho drew attention''to a recent-cablegram to the effect' .that, the -British 'shipbuilders were asking for. a.; reduction "in tho wages 1 to bo paid their employees.' Such-action-must have an effect oh the commercial world generally. Then the 'rcduood prico. of wpol, .frozen mutton-, hemp, . etc:,., must,; makof a,'considerable difference to the spending power ofthe people 'in' that so much ,less .money ; was., beiiig returned to tho country: for;;the, .product's' which wero sent home.; Tho financial crisis in America might. only.;hayp'been'temporajy,-but its effect was very'serious; while it .lasted. .VvMß.''i,W;-.. ; ON THE > ;"r 1 FINANCIAL'- OUTLOOK. Vlri a speech'at'Riversdalo on'Tliursday last Mr'. .-W.'- Eraser,'' M'.]}.," : touched on : 'tho'. financial;,'qutlook'.! Following is an extract from the, ■"■Mataura '/Ensign's " ; report,. of 1 ' his speech:—' : • '■ {The Premier was hypersensitive'in regard to criticism.touching on finance. -This should not bo'the case. 'Tho country oxpected fair -and -reason-able- criticism,- and such criticism was to tho advantage of everyone, including tho Treasurer , ; An overflowing treasury .was an ; indication-of - prosperity 'in the past-vnot', ofprosperity, .at ■ the moment or prosperity'during- the cuirent year. Look at the .trouble.fin: America; during October and November. 'There ; the! reveirao.was buoyant, there was a big surplus,: and yet the panic camo: like a-bolt out-of-the blue, with tho result that-3,000,000-,or, 4,000,000 men were oid of work,and .600,000 had left for Europe. Produce™ had been- forced to pour their VjrA% into tho markets'»and tako what they r/rM fiat, the litcol and, woollen mills had had to eime ilvt/n, and in.cdhscciuonco our wool >»') h% h'l suffered. -Tlio stocks of Manila JAW k> w (sacrificed for,the ono gecessity— fell,from £10 to £20, and Mx fell- in (sympathy. Tliih dct'Mf in OHf staplo • product;! had boon ■pr?m&A ■ but ;iooh-[wj|i(!(l; and what fffli'l 'bs tho I.oimtinfl.w.l)? Kor ono §>mz ihm wonPl lm £.1,00-1,000 lew to 'vhmrl- fe ti#w : '/mlwd ■ Mian last' y<»r. Ifo i'M Sf- ')>. 0' Ward li«d miflswl n opptninnttz in Xove-mlmr of wmiiding » wtM in Um eos-ii&i d fowli n not* woM Imvo Uom mm', hut )w «iid Um kt?uU9 mM mb jimbw moro than Win fnit'ia of # mm' He (Mr, did m,t /hntt tm mmm§ of tho tmntry, but Ik, 1i44 IM tiw ormnt ms mt tha limn U> .(>H( vn-. tilmiiltl rntJior tftkfl in s»)l- Mrmy wm ml Uw biinte etilm in ovmlmfts, ml mh tiki iiol.piflti to malm Ui'nip mmr, Boim of m jmms lin'l illmfol attoiition Ui tho fmiwhl pimjmiL mid Imd been toM thut Jhuy, v/r-ro ermfs/'tttinkiiw fmh 1" arid wm> nlitriflmts, Jh lift conviction in tlio p/mml mimlnm, hut amsideriil thcro wa« Kood reason to lm carßfiil, America would not rvmvut with a Imp mid i'abound, and a oafe-und-iiound polity wan what we wanted-