COMMERCIAL & FINANCIAL.

Evening Post, Volume LVI, Issue 77, 28 September 1898, Page 4

COMMERCIAL & FINANCIAL.

Evening Post Office, Wednesday. THE MONEY MARKET. The advance in the discount rate of the Bank of England from 2i to 3 per cent, was not unexpected for several reasons. Towards the closo of the year London is called upon to finance the crops of Europe and America, which causes au active demand for money, with advancing rates. But the probablo cause of the present stringency is the fact that Europe is indebted to the United States on a trade balance for the year ending 30th June of over .£123,000,000, which cannot be entirely met by the transfer of marketable securities. A large portion has had to bo paid in gold, and the first movements of the metal towards New York began last month. From Australasia there has been drawn during the past two months .£930,000, and it is more than probable that largo supplies will be sont to San Francisco by tho mail steamers leaving each menth. This uiovf nient of the metal from the colonies is not important in itself, because gold is as muoh a product with us as wool and tallow, and so muoh of it as is not required locally must be sent elsewhere for sale. Besides this, the production of gold throughouG Australasia has expanded, and if a littla more of tho metal is demanded vi us than is usual, we can easily spare it. But the stress of shipment will sooner _>r later cause a hardening of rates in the c/lonies, a ch-cumstance which will not be regretted by baukors and capitalists. A feature of the present time is the fact that during this season the export of produce from Australasia wi^l be very large. In wheat alone the surplus in Australia is estimated at between 400,000 and 500,000 tons. This will tend to check or control gold shipments. At any rate, bankers will be able to manipui late the exchange with greater comfort.. If the American demand for gold is in any degree strong, Lhe Bank rate will not stop at 3 per cent. ; but the American position is not so dofined. Money is plentiful in the Eastern States, and the metal reserve of the Associated Banks is muoh larger than is necessary, while the Treasury holds considerably more than tho legal limit ; but America has scarcely got over the war with Spain. The new colonial possessions must be developed, the navy must be built up, and the army must be increased. The Americans will thus be able to find plenty of outlots for their funds. In the meantime a comparison of the metal reserve of the Bank of England for the past four weeks, with the figures of the corresponding periods of last year, will be interesting as affording some due to the future :—: —

The position is much weaker than it was last year, so that a further advance in the Bank rate may become necessary. Locally the money market is without variation, and it will be' some time before tho London disturbance is felt out here, if felt at all. The price of money in New Zealand stands as undert: — DEPOSITS. Three Six Twelve Months. Months. Months. Bank N.Z. 7 -. „ „ o«« o~« National Bank { I^°" 2^ 0 ' 3^ 0 ' Union Bank "i Bk Australasia > — 1$ p.c. 3 p.c, BankN.S.W. ) Discounts — Three months' bills, 5 to 7£ per cent. Overdrafts range from 6 to 7£ per cent., and the mortgage rates vary from 4 to 6 per cent., according to the nature of the security and the margin of safety. EXCHANGE BATES. Buying Selling Discount. Premium London —

The Bank of England figures for last week, compared with those of the corresponding date of last year, show as under :—: — Sept. 22, Sept. 24, 1898. 1897. Gold .£32,272.000 Publio deposits ... 9,321,000 8,974,000 Other deposits ... 36,702,00Q_ 39.500,000 Gov. securities ... 12,95y,0/rt>\13,430,000 Other securities ... 21,305,(M)0 >BQJLG2.OOO Reserve 23,495,080 2 050,000 Circulation ... 27,11Q,00frv 27,087,000 GOVERNMENT SKCURITl5r*^«^\ Imperial Consols at 109$ are lower T^nan they have ever been since the 22nd Atoril last, when war rumours were thick, and America and Spain were about to comimjhco hostilities. Comparing the quotations' for colonial Government securities with "those current twelve months ago, we have the following :— „ Sept. 22, Sept. 24, 1898. 1897.

It will be noted that the quotations, with one exception (South Australian 3 p.c), are lower this year. WOOL. The forecast of improved prices for merino and superior crossbred wools at the fifth series of London wool sales has been realised. For these classes the advance is equal to 5 per cent, on the closing rates of the July sales. The set of fashion lias caused a strong demand for fine wool, and with a comparative scarcity of supplies it is not surprising that prices should harden. The principal support is being given by the Home trade, the Americans being again conspicuous by their absence. The prices realised for the more important clips were as follows : — Waihira, 6Jd ; Moeraki, 8d ; Waitangi and Waipoa, 6id; Oreti, B£d; Ot'ekaike, 7fd; and Sir John Hall's merino, 9sd. It seems probable that a further advance will be recorded before the sales are brought to a close, and as a very large percentage of the offerings are of New Zealand growth, the position its satisfactory. # WHEAT. France will not require to import wheat this season, the Frenoh harvest being ample for home requirements. The European harvest generally lias been larger than in the past season, but the favourable feature as regards price is the fact that reserve stocks have shrunk considerably. There will be a good market for wheat this season, but it is scarcely to bo expected that the prices rnling at the time the Leiter " corner" was in operation will again be realised. It is doubtful, however, whether colonial wheat - growers will reap the full benefits of a buoyant market, because of tho higher freight rates that must prevail owing to the shortage of tonnage. This matter is receiving attention in the neighbouring colonies, and New Zealand exporters will need to look into tho I subject. The estimated l'equirements of the United Kingdom of foreign flour and wheat for this cereal year are about 425,000 quarters per week, or 176,808,000 bushels during the year. Towards this Australasia will, if the weather remains favourable, be able to contribute a fair proportion. The latest quotations, compared with those of corresponding date last year, stand as follows :— Sept. 22, Sept. 23,

THE TAXATION OP MORTGAGES. Mr. E. Balcombe Brown, in his letter published in our columns last week, showed very forcibly the injustice of the mortgage tax. Tho interest derived from mortgages is as much in the nature of income as interest obtained from deposits in the Post Office Savings Bank or from New Zealand Consols or dividends from share investments, and to penalise this form of income is a cmel injustice, because it affects widows and orphans r whose funds are invariably invested in uiort-

gago securities, such being 1 regarded as the safest for trust funds. Owing 1 to the fall iv interest rates the incomes derived from such a source have materially shrunk, and the tax falls most severoly on people who can scarcely afford it. -Capital and property are producing less for their owners, while labour, on tho other hand, is being bettor paid, and the fall in tho prices of the necessaries of lifo and even of luxuries gives to the labourer additional advantages. Li seeking to obtain a modification "of the mortgage tax nothing 1 more than the righting of a wrong and an injustice is asked. The Treasury can well afford to forego a portion of. this tax, and the Government ought to be urged to give the matter consideration.

Russiati cargoes Calfornian No. 1 No. lDuluth... 31/28/9 27/3G/9 39/43/3

I p.c. New South Wales ... JA- p.c. New South Wales.., i p.c. New South Wales ... t p.c. Victorian $£ p.c. Victorian Jfc p.c. South Australia^ ... J p.c. South Australian ... t p.c. Queensland 3£ p.c. Queensland... ... t p.c. New Zealand ... J& p.c. New Zealand $ p.c. New Zealand \% p.c. West Australian ... $£ p.c. Tasmanian ... 117* 106* 100 i 112^ 106 108 100 111 105f 116 107 98£ 105 107f 122| 108 101^ 113 108 111 99| 113£ 108 117 109 10U 109 110

On Demand ... At 30 days At 60 days At 90 days .., intercolonial— On Sydney .., On Melbourne ... On Brisbane ... On Adelaide On Hobart On Perth ... 5s p.c. 35s p.c, ... 10s p.c. 25s p.c, ... 15s p.c. 15s p.c, ... 25s p.c. 10s p.c, | 10s p.c. 10s p.o. J- 15s p.c. 15s p.c, ... 20s p.c. 20s p.o. .0

lept. )> 2 9 16 23 ... £32.749,000 ... 32,545,000 ... 32,479,000 ... 31,615,000 .£33,449,000 33,054.000 32,918,000 32,272,000