WELLINGTON NEWS

Hokitika Guardian, 21 December 1925, Page 4

WELLINGTON NEWS

DEARER, LOAN MONEY. (Special to “Guftrdirji”.) WELLINGTON, Dec. 18. It is becoming obvious that money will be dearer, indeed it lias already become so. It was stated some weeks ago that British capital was looking for a clear 5 per cent, oil Dominion loans. The New Zealand loan of £7,000,000 raised in London last .May was secured at less thail that rate but the underwriters had to find over 80 per cent, of the money. Since August last all borrowing Dominions have had to conform to the a per cent. rule. .Money will be dearer in London in the new year although the Bank of England discount rate is likely to drop next month. The New Zealand Government has already intimated its Intention of borrowing £5,000,000 in London in .May next and for this loan the rate of interest is certain to he 5 per cent. Therefore the Government in raising the rates for loans obtained from the Advances Department is taking the proper course, in this matter. L cannot he said that 5:1 per cent, is a high rate for Dose borrowing for home building to pay, nor yet is (i per cent, a high rate for redemption of mortgages. Local bodies are to pay 0 per cent, and this should have a .steadying effect on the, borrowing propensities L-lie j. The freedom with which they have been borrowing was condemned by the Chairman of the Bank of New of Zealand the other day. The effect of the advance announced by Government will he to make money dearer all round, hut it will not attract private capital into the mortgage business or into house building for rent, and yet houses lor rent are badly needed especially in the large cities. It is not everyone’s circumstances that permits of buying a home or of building a house with the assistance of the Advances Department; to many it would be inconvenient to own a house, and the roipiiroments of the people must be met in some way. (Speculative building was at one time a business in itsell, but when during the war flic State stopped in and imposed all sorts ol restrictions many of which are still in operation, and t.lio worst of those is the Rent Restriction Act. However, there may be violent economic changes in the now year which may induce the Government to stop interfering in commercial affairs and cease trying to control this, that and the other and checking private enterprise and speculation. Money will be dearer next year because it will he scarce.

THE GEAR MEAT COY. The Gear Meat Coy. may he said to he one of the model concerns in the meat freezing industry in New /calami. It has been well managed from its inception and apparently the very highest business ability lias been broilgbt- to bear on the development of the coy’s interests. The meeting of shareholders was belli in Wellington last week and Hie directors were.

able to present a very satisfactory balance-sheet notwithstanding the lact that the past season was one ot anxiety to freezing coy's executives. The companv paid the usual dividend and banns of 10 tier ten!. The secret of its present very sound financial position ha; been that'at all times t lie directors have wisely written down assets and built up reserves, .lust- what this means may he judged from the fact that the immense works at IVtone which are maintained in first-class condition and the palatial offices and retail shops in ilm oitv are valued in the balance-sheet at only £58,000. while their true value would probably he more than ten times that amount. During the past financial year the coy. distributed by way of bonus to the shareholders about half

a million sterling in 1! per cent, tax free Government stocks and bonds which of course deplete the visible reserves, hut the process of building up the general reserve fund has again begun and a substantial amount has been set aside for the purpose out of the year's profits. The Chairman of Directors, Air AV. 11. NI ill ward in reviewing the year's operations stated that one of tiie most pronounced changes in the meat market was the great disparity now apparent in the values ol lambs under liblh as compared with those over that weight. This ranges from Ltd to 2LI tier |h. which indicates the preference for light weights and he hoped that farmers would see the necessity of catering for these requirements. 'the Chairman fmthei stated that, over a million carcases of lamb would he in the stores in England at the end of the month. It is obvious that it will be a difiiciiL matter to do.'ir lliis accumulation wiili new season's lamb coming on tlie market. There is a I wavs the hope that lower prices wiil stimulate, the demand, blit the drop will mean heavy losses to the owners ot the meat.