COLONIAL BORROWING.

Evening Post, Volume LX, Issue 116, 13 November 1900, Page 4

COLONIAL BORROWING.

All through the year the London money market has not been in a state 'favourable to the reception of colonial loans. The Bank of England discount rate at the beginning of the year was 6 per cent., and steadily declined until 3 per cent, was touched, when West Australia, South Australia, and Queensland took advantage of the position and placed loans aggregating £3,400,U00, but' with results that were distinctly discouraging. Prior to that, New South Wales and New Zealand issued 4 per cent. Treasury Bills at fairly satisfactory prices. This check to borrowing in London has forced the colonies to make larger demands on the local capitalists, and it is a wingular fact that the^ colonies, of Victoria and New South Wales have found it cheaper to borrow in their respective capitals than in the great monetary centre of the world. This will be observed by a glance at the table appended: —

The explanation of this seems to be that the accumulation ot loanable credit has been greater than the demand for suoh credit in ■ the colonies ; consequently an outlet was necessary, and the loans of the several Governments were readily absorbed, even though the rate of interest was

relatively small. In London, on the oLher hand, there lias been a steady pressure for money, particularly on the pait of the Biitish Government, and as fast as credit.* were available they were absorbed, thus keeping the rate of interest fairly high. There has been chiving the year better scope for tho investment of funds in London than in the colonies, and with the stronger demand rates have been higher. That money has been cheaper in the colonies signifies that the channels for investment aro restricted, hence those who wish to find investment must take relatively lower rates-. xuoney, like water, will, however, find its own level, and if bettor rates are obtainable elsewhere, the flow of money will be in the direction, of greatest profit. In New Zealaaid the demands of municipalities have been somewhat large, but they have been readily met, while for the gold dredging industry largo credits have been demanded. The supply available for this class of enterprise was for a time exhausted, consequently there was witnessed a severe depression on the mining exchanges, and those who wanted money had to pay dearly in heavy discounts on the values of the shares. , *

Amount Lssued in London. Amount Per cent, received ££ s d Sew South Wales... 1,000,000 4 T.B. 99 10 . 0 Mew Zenkud ... 300,000 4 T.B. 100 7 G West Australia ...1,000,000 8 I.S. 93 12 9J South Australia ... 1.ij00.000 3 I.S. 94, 10 9 Jueensliuid ... 1,400,000 V I.S. 94 0 1 [ssued Locally. STew South Wales... '600.000 3fc T.B. 100 0 0 Victoria 600,000 3 I.S, 90 10 4 Sew South Waleß ... 500,000 SJ T.U. 100 1 7$ Sote.— T.B., Treasury Bills: 1.5.. Inscribed Stock.