IS CAPITAL SCARCE?

Evening Post, Volume CIX, Issue 119, 23 May 1925, Page 6

IS CAPITAL SCARCE?

London underwriting houses appear to be having some substantial amounts left on their hands. A few days ago they were unable to dispose of more than 15 per cent, of the New Zealand Loan of £7,000,000, attractive as its terms were to investors. To-day it is cabled that they are carrying 75 per cent, of a London County Council loan, of which the amount and terms are not stated; and it is reported that they have already made themselves responsible for a New South Wales State 5 per cent, loan of £6,500,000, issued at £98i per cent. These transactions would suggest that capital is becoming scarce in the London market or that the investor is holding out for bigger and better returns than offered by the issues above referred to. The London County Council is spongelike in its absorption of money, and that is a fact deeply impressed on the mind of.the investor. New South Wales indebtedness apart from its participation in Commonwealth obligations is enormous (over £42,000,000 on the Sydney register alone); but New Zealand stands well in London. Even so, the underwriter's were left with 85 per cent, of the £7,000,000 loan just floated, and the stock was quoted at £l 10s per cent, discount. "The Economist," in reviewing London capital issues for the first quarter of 1925, remarked, "Borrowings by British Possessions are smaller than a year ago, and the amount raised for use in foreign countries has fallen to less than £3,000,000, that is, for the March quarter of 1925, when compared with the corresponding quarter of 1924, when it was but £3,150,200. On the other hand, the British domestic requirements were greater. The indications seem perfectly plain, seen from this distance, that London has not the money to lend, or, if it has, it wants more for it than formerly. If this assumption is correct, then it is time for the Dominion Government and other borrowers to cut their coats according to the cloth at their disposal.

That the jury should take no notice of defendant's convictions by a Magistrate, was the suggestion made by Mr. Richmond during his address at the Auckland Supreme Court, in an action for damages arising out of a fatal motor accident. "Magistrates," he said, "are frequently wrong; the Supreme Court is sometimes wrong; the Court of Appeal is seldom wrong, and the Privy Council is never wrong—because there is no higher Court."

Men from other parts of New Zealand who come to Dunedin on Exhibition business express themselves as surprised at the vastness of the scheme and its forwardness (states "The Post's" Ounedin correspondent). Captain M. I! .Ylacdonak], of Wellington, was evidently impressed, and before leaving spoke of his intention to try to induce Wellington lolk to consent to Hie enlargement of thai province's display. There" seems reason to suppose that'the sister provinwji mil apply far morG frpac6 iiim Kill ha SUjujbfii. . - ■ '