THE MONEY MARKET.

Hawera & Normanby Star, Volume XLVIII, Issue 8143, 15 December 1904, Page 2

THE MONEY MARKET.

In the course of an article on the money market, the New Zealand Trade Review ' heartily congratulates the Government on the pleasant surprise it gave the colony by securing the million loan on the London money market. But it criticises their | action in raising the deposit rates at the Post Office Savings Bank. It says it Wa ? an ., lU - ad^d and unfortunate step, and adds:— "As might have been most surely foreseen, this action was immediately • followed by a similar advance in the rates v of all the building societies, and this, a week later, by a like increase m the deposit rates of the banks, except that the two-years' rate of 4 per cent, remains unaltered. This, as we have indicated, was certain to be the result, as '- m the depleted state of the market no financial institution could afford to see ' the supply tampered with, but must neces sarily take- prompt measures to defend itself. Thus the Savings Bank funds are not likely to benefit while the price of money is made dearer all round, as an advance in deposit rates will necessarily be followed jsy increased terms fo»advances. The action of the Governme": is the more to be regretted in that ?t appears to be quite unnecessary. Noc only is there the raising of a State loaf) of a million, but there is every prospect of the wealth of the colony being substantially enhanced this season by fli<j realisation of our output of produce. Out chief Staples — wool, frozen meat, butter and hemp — are all realising excellent prices, while the output of gold is stea lily increasing. The rise in wool alone will add a large sum to our local funds. An increase of ljjd per lb. all round means an 'addition of over a million sterling, and there seems to be every prospect of this result being exceeded. Signs an not wanting of a revival of activity. Certainly in the building trade a renewal of briskness is manifest, and the demand for houses and office ' accommodation >s still active. A step of the' description taken by the Government when once adopted cannot be quickly retraced, and a rise in the price of money means a rheck upon enterprise and industrial energy. It is indeed to be regretted that a needless check should have been given to the progress of the colony."