COMMERCIAL & FINANCIAL

Evening Post, Volume XCII, Issue 52, 30 August 1916, Page 4

COMMERCIAL & FINANCIAL

Evening Post, Wednesday

The effects of the flotation of tho War Loan of £8,000,000 in tho Dominion, or rathor of tho subscript-ion to it, approximately £9,500,000, aro not expected to be seen at the moment upon the amount of loanable money at tho disposal of the banks and other lending institutions. Of course, the transfer of 60 large a sum (or a substantial proportion of it) from private account to Government account, must bo apparent sooner or lator. _ A large amount of tho money will re-circu-late in tho Dominion itself, thus finding its way back into the banks in tho form of fixed deposits and current accounts. Still, there will be a, temporary displacement of private funds, and the tendency may bo for some difficulty in obtaining accommodation. It is understood that all tho banks have subscribed to tho loan iv equal proportions according to their assets and liabilities, but there is this difference between the Australian and New "Zealand institutions: that the former have subscribed in addition to th'j three Commonwealth Joans.

Thq banks in this country arc now practically compelled to conserve their gold, and to issue notee, upon which taxation is collected, their other taxation has been materially increased, and their lending rates arc 'practically half par cent, lower than in Australia. How long, with the diversion of a large amount of money otherwise loanable to the public divertad to (ho New Zealand War Loan, the- banks will continue their present, lending rates is a matter of conjecture. With tho high prices being returned for butter and cheese, and the prospective remunerative returns from wool during the coming season, and tho internal expenditure of a large amount of the loan money, there 'ought to bo a considerable amount of money available for general purposes. At. any rate, no shortage should be experienced. Tho effect of /the War Loan flotation on the investment market, as revealed by local Stock Exchange quotations, is not, apparent at the moment. Prices of all gilt-edg-ed stocks are well maintained. The effects of t,l>o last great, Commonwealth \Var Loan upon the Sydney market is likewise not observable. Messrs. T. J. Thompson and Sons report for August that, "this has been a fairly distinctly favourable month for the holders of our investments. The rise has been general, and in some few instances rather prominent. Generally, too, there has been more business. It haa been a relief to get. tho third issue- of the Commonwealth War Loan out of hand with n subscription "of over £22,000,000—0ne which will be increased with the final figures, to bo expected early in September. The amount is, we consider, altogether satisfactory, having- regard to previous subscriptions. . . . Tho three issues of tho War Loan account, for £58,000,000, and. then there is the increased taxation and voluntary subscriptions to War Funds to be accounted for, and the whole extend to nearly £15 per head of the entire population. . . . Of course, this third issue will oat somewhat into the fourth issue, which, according to precedent, should be looked for next February. The ten monthly instalments have attracted many, and such payments will be only partially made by February next But, at any rate, the general public_ have come forward moro largely on this occasion, and tho t.imo will como when our War Stock will bo tho most extensively dealt in security on Australian markets."

FREIGHT INCREASES.-FreighU o-.v hemp and tow exported from New Zoaland have made a. substantial rise during the week. For hemp the new rate is £10 per ton, and for tow £15 per ton. The rises in the freight of hemp (and correspondingly with tow) during the past, three years are as follow:—1st October, 1913, £4 5s per ton: Ist November, 1914, £3 5s per ton;' 15th May, 1915, £4 per ton; 2nd February, 1916, £7 per ton; Ist September, 1916, £10 per ton. For November, 1914, May and October, 1915, a war surchargo of 25 per cent, was added to the freights; for February and September, 1916, the freights were net—no war surcharge. Other freight increases are believed to be pending.

HARDWARE —British manufacturers are finding it difficult to preserve their rolations with New Zealand importing houses, and a good deal of give and take is called for on both sides by tho peculiar circumstance brought, about by the war. A light is thrown on tho subject by J. Edwin Wall and Sons, Birmingham, in their letter dated 7th July. They state : — 'As wo forecasted previously, finished iron and steel continue to appreciate in valuo and become more and more difficult 01 delivery; in fact it- U now next to impossible to obtain stcei in a.nv form. The Minister of Munitions has "put an embargo on every rolling mill in tho country. They are prphibited from railing anything without a permit from the Minister of _ Munitions, which they have to obtain direct, and at tho moment no permits are being issued at all. Wo ourselves havo several hundreds of tons placed with manufacturers for which permits cannot be obtained, notwithstanding that the New Zealand Government, through its High Commissioner in London, is urgently supporting our applications in three instances. Even when we havo secured the permit to 10H, our difficulties are by no means over. Subsequently wo have to apply for a liconso to ship from tho War Trado Department, Our experience of this department is that they are making a strong effort to maintain the old traditions of the War Offico. We find it most difficult to get intelligent attention from these officials

We are led to expect that the position will bo easier iv a month's time, arid that we may then' look for more freedom. We still continue to receive: notices of advances on nil sorts of manufactured articles in the hardware trade. It is common for cutlery manufacturers particularly to invoice up orders incomplete, with an intimation that their stocks are cleared of the missing items, and that at the present time they,cannot say when t-hoy will bo able to resume manufacture."

HEMP—Tho increase in freights has had a corresponding oflect upon the f.o.b. prices of hemp, which to-day are approximately as follow: —Good fair grade, £35 10s per ton; high fair. £34 10s; low, £33 10s. Tow: No. 1, £11 per ton; No. 2, £10; No. 3, £9. Production is well maintained and tho woather is improving. Tho domand is generally good.

WOOL.—There will be an offering .of about 2700 bales of wool at the local enles to be held hore on Friday. Of this quantity 20p0 bales will be crurch-ings. There is considerable uncertainty still as to what the Dominion Government or the linporial Government, will do as regards tho requisition (if any) of colonial wool, and consequently no one who oan speak authoritatively of tho market feels in a position to definitely say what the prospects are. The opinion is held that if anything is commandeered it will not be ot this end, but will take tho form of fixing a. price for tops in the United Kingdom. In any case, it would eccm that the value of the wool will only bo revealed in the sale-room. The Sydney Morning Herald, in commenting on the situation, describes tho prospects of tho approaching Australian wool-seLling sea-son as far from bright. If the price of the manufactured woollon article, tops or cloth, be fixed, the prices for tho raw material must correspondingly be affected. "Will the Imperial or Commonwealth Governmenttake control of the new soason'6 wool clip? That is tho question to which every woolbroker in Australia wants an answer/ observes the Herald. "It is Mt that Mr. Hughes should make an announcement immediately. If tho wool sales arc to be allowed to proceed as usual, Hie present disconcerting rumours should bo denied, and if, on tho other hand, the rumours are based on fact, Mr. TTuslie* should como boldly forward and ola-tc the Government's intentions." At n- riveting of the Sydney Wool-selling I'rokcr*' Association, the TolloM-infr resolution was unaniniouMy adopted:— "That l.hif. n-:'^oinlion i-- opposed to Ihe comiSiar.decring of tli-3 clip! voices auoli cour-r-o is nccosjaxy in Impsnal intorttts,1-'- Es-

ports from' London continue to refer to the proposed "Government control."

DAIRY 'PRODUCE.—The demand for outputs of both butter and cheese continues keen. For the che&se a« much as 9|d per pound for the whole output is reported as having been made- and 9jd refused. Butter is also in strong demand for September shipment at 17-AcJ, and tor the season 16^<I has been mentioned. An increase in the price of butter for consumption in New Zealand of at least Id per pound is- believed to be inevitable. The British Board of Trade has published returns throwing some light upon the- destination of food exports from Sweden, Denmark, and Holland, from which one cause of high prices for NewZealand butter is to bo inferred. The period is for the first half of the current year, compared with the corresponding first six months of 1914 and 1915, and the imports of butter arc as follow: —

1916. 1915. 1914. Cwt. Cwt. CVt. Sweden 954 72,499 182,773 Holland 2,596 34,419" 581,172 Denmark 531,172 815,038 918,941 Tho_ Dutch paper In-en Uitvoor furnishes statistics which show the extent to which exports of butter, cheese, oggs, and meat were diverted from Britain to Germany for tho period January to May, 1916, compared with tho pre-war period January to May, 1914. Tho Dutch Government intervened in the interests of the rxjople, thus arresting tho ■wholesajo depletion, of local' markets by producers in order that they might socure the famine prices offered by Germany. Tho table is in ton.? of 1000 kilos (22001b):----.T- Ja.n.Hay. May. 1914. 1916. Butter—To England 2,495 63 To Germany 5,860 14,805 Cheese—To France 1,310 423 ToGormany .5,708 34,520 Tho Dutch meat export* to England in tho period batoro the war amounted (beef, mutton, pork) to 26,708 tons, and to Germany 4254 tons, in 1914. In the 1916 period the figures for meat alone were as follow: —To England, 268 tons; to Germany, 25,036 tons. GENEttAL GOODS.—Additional reports are to- hand of the failure- of the British Columbia salmon pack. Greek currants for this market aro likely to rule exceedingly high in priof, but good stocks of all Mildura. pudding fruits o.re understood to be held iv the Dominion. Tin-plates are in a peculiar position. Fairly large stocks' are held, but there is a heavy consumption of plates by New Zealand meat packers ,and preservers, and it is hoped that the British Government will relax its prohibition of exports of plates in so far as the British dominions are concerned.