THE MONEY MARKET.

Evening Star, Issue 14966, 28 August 1912, Page 7

THE MONEY MARKET.

WILL IT DIP ROTE ! CONTRARY OPINIONS. [Faoil OfR PaSUAMENTARV REPORTER.] WELLINOTON, August 28. Il the money market- likely to become less stringent? The Prime Minitser declared pcsitively for the more cheerful view when replying at the conclusion of the Financial Debate, but yesterday the lion. Mr Allen (Minister of Finance)" expressed a contrary view. He said that since the Financial Statement practically no clock had been converted, and if the market continued a# at present he could hold out very little hope of much in the way of conversion. Mr Mvers: The market is easier now! The Hon. Jss. Alien; .Not that I am aware of. The Prime Minister add so, and I should be glad to know that the Prime Minister's statement, is accurate, but I am net- quite sure on what grounds the Prime Minister made the statement. I have had no official information from the High Commissioner that there is an easing of the money market. SIR JOSEPH WARD'S VIEW. IMPORTANT REFERENCES TO UNDERWRITING. Sir Joseph Ward also gave his opinion on the controverted point. He look the view that the situation is not depressing. He always remembered, he said, that every year on the London Stock Exchange tliere was a fresh sum of nearly £400,000,000 for which investments had" to be found, and that probably two out of five people who underwrite our loans were formerly ordinary investors who had now become underwriters so as to get the benefit of the underwriting fee. These were managers of large insurance companies and other big investors. The result was that a large proportion of New Zealand loans were held by underwriters who were really private investors. He recognised how easy it- was to cry out against underwriting, but bo called the attention of the House to the fact that 70 per cent, of a Canadian 51 per cent. loan, was left in the hands of the underwriters, but Canada had not stopped borrowing. It- got last- year £101,000,000, as against £17,000,000 sent to Australasia. If New Zealand adopted the policy of throwing the large proportion of the loan investments upon the local public the result would be to force up an unnatural rate of interest, ■which, would have a damaging effect on the Government and the people. He believed the Minister of Finance would have no difficulty in renewing hk 5j per cent, loans for long periods As long as he did not object to the perfectly reasonable 1 per cent, underwriting fee.