AUSTRALIAN AFFAIRS

Dominion, Volume 9, Issue 2580, 30 September 1915, Page 8

AUSTRALIAN AFFAIRS

REVIEW BY MR. Q. BEAUCHAMP THE FINANCIAL SITUATION. i ■ Mr. Harold Beauchamp, chairman'of the Bank of New Zealand, returned from a visit to Australia by tho Manuka yesterday, and on being approached readily gave his 'views and impressions of things Australian. "Owing to ,the short time a't my disposal," said Mr. Bcauehamp, "I was only able to take a view of financial and commercial conditions as they affect New South Wales. In common with other Stages of the Commonwealth, Now Wales is feeling the effects of tho war and the late severe drought, and I heard many complaints as to the state of business and the tightening of money. Relief, however, will in a great measure be obtained if the next wheat harvost be as bountiful as many, experts -anticipate. Already, so far as New South Wales is concerned, the latter arc figuring on the yield being in the vicinity of 60,000,000 bushels. Allowing for 30,000,000 bushels being required for domestic consumption and for- seed, this would give an -exportable surplus of 30,000,000 bushels, which, taken at, say, 3s. 4d. per bushel, would give producers the haiidsomo roturn of £5,000,000—a most welcome addition to the natidnal ohest. _ There may be some difficulty in handling and moving _ a harvest such as this, owing to a scarcity of labour, railway trucks, and oversea steamers. To find bottoms for 30,000,000 bushels —New South Wales's contribution, of wheat only—it is calculated that between 350 and 400 steamers of average size would be required."

The Commonwealth Loan. "As you are aware, the late Com-, monwealth loan of £5,000,000 at.4J per cent, per annum, free of Federal and Stale income tax, wrs ail unqualified success—t'ho total subscriptions thereto amounting' -to over £13,000,000. Encouraged by tiliiis succciss, it is the intention of the Minister of Finance to shortly place another loan on the market for £15,000,000, or possibly more. It remains to he seen whether or not this large amount will be as readily assimilated by the Australian public. The diversion of such a large sura, ,or sums, of money, from the ordinary channels of employment is bound to have an appreciable effect on lending rates, which to-day rule from 5J to 6 per cent, per annum, according to amounts borrowed and nature 'of security. In a very few cases, gilt-edged mortgages have recently been renewed at 5 per cent, to 5} per cent., but now -no new money is available'at these rates. "As in the case of New Zealand, the Government is expected to continue the prosecution of public works, and it is exceedingly hard to impress ujwti taxpayers the necessity of tapering off, or discontinuing altogether during war time,' expenditure und&r this head. ■ ."The arrangement entered into between the New South AVales Governjr.ent 'and the Norton-Griffiths. Syndicate for the carrying out of cortain public works'in that State, is rouudly condemned by many people on the ground that the syndicate has by far I the better end of the bargain, and that the Government is paying, too doarly for its whistle. ■

1 Federal Note issue. "The Bank note issue proceeds right merrily. When the Federal Government originally undertook this, it will be remembered ; that up to the first £7,000,000 issued it was obligatory for the Treasury to hold gold and bullion to the extent of 25 per cent., and that over and above tlio sum of £7,000)000 there should be a gold backing of £ for £. 'Owing, however, to the exigencies of tho Federal and State Governments,' the last-named condition ha 6 gone by the board, and to-day the Federal Minister of Financo has tho right to issuo up to £50,000,000 with a 25 per.cent, gold backing.. Of this, there lias been circulated approximately £37,000,000, against which the Treasury holds gold'to the extent of 35 per cent.; and I. was given to understand that a strong attempt would |be made to preserve that' ratio of ; gold to paper as further issues of notes take''place. In .normal. times :it • is' thought:, that', an "'issue' of-£13,000,000 would sufScp. , I was informed that tho States have borrowed from the Federal Government .'£■15,000,000, on . which they' are paying ii per cent. liocal bodies are also paying 'the same rate, with a commission' of li per cent,., to the' Commonwealth Bank for arranging their finances. These loans, as to interest and principal, are repayable by instalments extending over pnrio'i? varying from 15 to 25 years. This I reg_ard an an excellent system, as It forces these public bodies to - periodically reduce their indebtedness.

Underground Railway. "Tlie question of an underground railway and the"-. erection of " a brid'go to connect tlie city, with North Sydney is still seriously discu6scd, these schemes would involve an expenditure of, it is estimated, £7,000,000. I should, however, imagine that they will be shelved [lending the resumption of normal, conditions. ' 'Each time I visit Sydney I am struck with its growth and the improvement in the character of its public and private buildings. The finest now approaching completion ifl that to bo occupied by the Commonwealth Bank on the conier immediately opposite the G.P.O. Mauy. other large buildings would be in 1 progress, but the erection of these' has bqen deferred owing to the war, and the uncertainty that exists as to the future value of money.

Trade With Japan. "Taking advantage of their opportunities, tlie Japanese are making a bold bid for the large section of trade formerly done by Germany in Australia, and, owing' to the quality and finish of their goods, I shall bo surprised if they do not secure a permanent footing in the Australasian markets. Whilst I was in Sydney, a Japanese steamer arrived with over ■1000 tons of general merchandise for ; that port, and several other steamers aro on tho way. To facilitate trade between Japan and Australia, a branch of the Yokohama Specie Bank—a very solid institutionhas just beeu opened in Sydney. No doubt Japan will bo equally energetic ir. developing trade with New Zealand, As that country is already a considerable purchaser from us of wool and other commodities, it sihould he greatjy to our- advantage to cultivate a close and permanent connection with her people."