MONEY MARKET.

Hawera & Normanby Star, Volume XLII, Issue 7396, 24 February 1902, Page 4

MONEY MARKET.

(Mercantile Gazette.) We are getting well into the new year, and the gloomy predictions of those who were quite certain that money rates would rule high before the close of 1901 have not been verified. We ventured to suggest some months since that no reliable grounds existed for the belief that there would be any abnormal j rise here or in England. Eates have not risen, money has not been in great demand, nor do we see indications anywhere pointing to the probability of money being scarce and dear. At the same time, it must be remembered that disturbing influences arise from most obscure causes, and that, like some of Mr Wragge's storms, at the time when everything appears bright and clear the barometer occasionally suddenly falls, and from a quarter least expected havoc is wrought. » | In England there is no appearance of anything which should send money beyond present rates, except for a very short time; gold has come and gone freely, and exchange has ruled in favour of London. With regard to American finance, this has been specially noted, for, notwithstanding the immense sums of money payable to the States for grain and other produce by England, and to ' the tariff there which restricts exports from the United Kingdom, exchange has all the time been in favour of London. During the year 1901 many causes have been in operation which adversely affected the market. Tb.6 British Government, in fresh loans and increased taxation, have during 1901 raised but little short of £80,000,000 sterling. Of this, sixty millions is represented by new issues of consols, all of which were easily absorbed, and this at a time, it must be remembered, when the money market had to stand the strain caused by a substantial decline in the value of all classes of securities. On the top of this, the effect of the industrial collapse in Germany was not altogether unfelt in London, and although in the later stages the market obtained relief, through the gold accumulated in Germany, for trade that did not come, finding its way across the Channel, the reflexes from the first shock constituted a disturbing element that might have caused trouble had they come upon a market totally unprepared. Throughout the year France has been a Bteady purchaser of British bills, a fact which has to be considered in the possibility of a rise in the Patis rate, the effect of which would occasion large withdrawals of gold from the Bank of England. These different factors have caused bankers at Home to act with great caution, as a consequence of which operations have been restrained, and a larger amount than usual of the discount business has gone into the hands of foreign bankers. So far as the immediate future is concerned, no one can give any reliable forecast, but, in the absence of any special matter arising, money should be cheap. The enormous amount of British bills held in France is the one, at prosenf, disturbing factor, because the English money market must, in addition to local influences, be prepared for the consequences which arise from any considerable hardening of rates in Paris. Apart from that, the financial position in England is sound. America is not equally so ; there great prosperity is accompanied by tremendous speculations and over capitalisation, and, should that country experience, any serious financial strain, London could not possibly expect to wholly escape from being sympathetically affected for a time. This, however, is a contingency only; apart from that, general conditions are sound, and there is a feeling that the African war, now drawing to a close, will end one element that tends to stringency. The complex conditions that have affected the money market during 1901, without any very ill results, may in some other form be renewed this year ; but as during 1901 they left no great impressions upon rates, it is permissible to expect that, if they occur again, no more serious results will follow. Wo are sanguine that the year we have now entered upon will not be remarkable for stringency, and that while business will be good, no substantial variation in price of money is likely to occur.