COMMERCIAL NOTES.

Hawera & Normanby Star, Volume XLII, Issue XLII, 29 December 1923, Page 7

COMMERCIAL NOTES.

DOMINION RAILWAYS ADMINISTRATION.

EXCHANGE PROBLEMS

LONDON, Nov. 1. Australian banking circles in London were much interested in the statement publicly made that the cost cf transmitting funds to Australia had caused business offering in that country to- be declined. Bankers pointed out that while there had been a long-continued decline in the discount rate at which the Australian banks would buy bills drawn on Australia, recent declines m this rate had not been accompanied by any fall in the premium at which bankers in London sell drafts and cable transfers on Australia. The fact that the latter has remained unaltered while the buying rate has fallen is ascribed by bankers ±o the competition of the various Australian Governments, who are anxious to transfer the funds obtained in London by the issue of loans to Australia as quickly as possible. Large Government credits have been created of late in "London by thefie means, and in order to obtain the use of these credits in the Commonwealth the Government offer to sell cable drafts in Australia on London at suck high premiums that the banks in London find it impossible to sell remittances on Australia at finer rates. To lower their rates for selling drafts.and cable transfers in London on Australia would, at the present moment, it is stated, involve the banks in actual loss.

Some of the resolutions adopted at the quarterly meeting of the Association of British Chambers of Commerce closely affected shipping interests, and indicated the increasing interest which merchants have, of late, been taking in shipping affairs. A resolution, unanimously adopted, urging equality of treatment for the shipping of different nationalities really extends far beyond the economics of shipping, and, rightly, was dealt with by the InJperial Government in a resolution submitted by it 3 and approved at the meeting: of the Imperial Economic Conference last week. The present resolution indicates how strong is the support for the action of the Government by those who have had reason to study tbe difficulties which in recent years have been confronting the managers of British shipping. A resolution urging that an early place should be given to the Shipment Bill in the Government's programme of business for the new session of Parliament was also adopted unanimously. A. great merit of the measure is that it gives effect to an agreement between merchants and shipowners on matters which have been bones of contention for many years, and that it is a serious attempt to dispose of these issues among themselves, with the assistance- and full support of the law. A resolution urging a strengthening of the law with a view to the prevention of" pilferage of goods in transit also affects a subject in which merchants and ship-owners have common interests. A column of the Financial Times is devoted this week to a consideration of the New Zealand Railways Stotement for 1923. The writer of the article maintains that it is a striking example of the broad similarity of transportation problems the world over, and particularly of those applicable to railways. Here, no less than there, new areas are opened up without the prospect of a financial return until they have made possible increased commercial and passenger carrying. "One of the features of the New Zealand Railway Administration that will not be regarded with unmitigated satisfaction is the virtual subsidising of industry at the expense of transportation. Thus we find that last year many services were performed at less than'actual cost, which means .it the cost of other users and of the general taxpayer. For instance, lime for manuring farm lands was carried 4.506,500 ton miles for an average freight rate of a trifle over a farthing per ton per mile, and that butter, cheese, and road metal, the last for the benefit of motor competition, and entailing a loss of £50,000 per annum, were in much the same position. In many other instances, it is to be noted, exceptionally low rates, granted to assist in establishing industries which now are flourishing, still remain in force, although the need for such help is past. There is roo.'m for the tightening of the screw, here. The Minister is on the horr^ of a dilemma, for he stf>t/3s that tiny increase in freight rates would tend to divert more traffic to the roads. The beginning of the solution of the problem could be fouTid, we should imagine, in ceasing to subsidise flourishing and competitive > industries.,".