MR. WESTGARTH'S ADDRESS TO THE CHAMBER OF COMMERCE AT MELBOURNE.

Lyttelton Times, Volume II, Issue 70, 8 May 1852, Page 6

MR. WESTGARTH'S ADDRESS TO THE CHAMBER OF COMMERCE AT MELBOURNE.

(Continued from our last tveek's paptf.) With regard to our commercial interests one of the most conspicuous features is the present state of The Exchange on London.—The circum- -~ stance that our principal exports are shipped, ''« not equally over the whole year, but during a particular season, and that not of very Ion«• duration, has hitherto caused a regular and considerable extreme in the rates of exchange on Europe. The influx of wool for example, during November to February, the demands for money against that produce, and the pressure of numerous bills drawn against the anticipated proceeds in Europe, and offered for discount to the banks and other buyers, have the usual effect upon the value of'these documents, that an overstocked market has upon the value of articles that form the components of the overstock. The extent of this periodical pressure during the four months above alluded to, has latterly approached towards a million sterling prior to the present season. No particular inconvenience- has ever been experienced, the imports having steadily crept on after the exports, and permitted of a beneficial adjustment of account by the aid of several banks of large means and undoubted credit in the community. But the sudden demands in this market, remote as it is from prompt monetary assistance, of a new unexpected and enormous' export produce, have caused, as might have been expected, an unprecedented effect. The value of gold exported in two months only, namely, in December and January last, was nearly a& great as that of the whole annual export of general produce from the colony previously. The enlarged applications to.the Banks hive produced the customary effect in all such cases. The exchange on London has increased to 10 per cent upon drafts at 30 days sight, and the rate of advance on gold has fallen from 555. and 50s. per ounce, to 40s. Much of the pressure is withdrawn by this charge, as many parties will now prefer to await returns from London for their gold consigned there, rather than accept of present advances of money under such disadvantages, or force sales atprices which this rate of exchange has reduced. The Banks might perhaps with impunity advance beyond the means they happen to possess on the spot, but they are certainly in this event liable for claims which might'be made upon them, and which if made they would, however solvent, be unable to satisfy, until after communication with returns from Britain. In so sudden an increase of wealth in a small community—of wealth which, like the gold, is in the form of exportable produce—there is for some time no other means of meeting the pressure but by an adequate supply of money. Had our present enormous gold produce come gradually upon us, there would have been already then a natural reciprocity of proportionate imports of necessary conveniences, elegancies, and luxuries to assist us in the business and enjoyment of life. But some time must now elapse ere the community can adjust itself to its new circumstances, and the great enlargement of its means. Imports adequate to the exports will gradually appear ; but in the meantime, to the extent in some„degree of the,. -<< difference, the necessities of commerce "will form a demand for money, The gold is transported to England, from whence it is returned to us in the form of coin. The risk, expenses, and delay are lost to the Colony, and experience hitherto has enabhlJ us to estimate this operation, with all its attendant agencies, at an average loss of not less than 20 per cent, As a saving in this respect, the advantages of a Colonial Mint have therefore not been unperceived. That privilege has not, however, been yet granted by law to the Colonies. Our Australian public are busily occupied with the consideration of the subject. With one rather sudden and important exception, no actual step has been taken in legislation or Government on this subject. The re-

cent enactment in our sister Colony, South Australia, is the exception I allude to, and requires some notice at our hands. South Australian Gold Act.—The object of this Act was to introduce, as nearly as possible, the benefits of a Mint into the Colony; viz., to give to the Australian gold the character of money, after its degree of purity had been officially assayed and indicated by a stamp. The value affixed, subject to a small assay in": expense, was £3 lis. per ounce, for a degraje^of purity equal to that of "standard gold." The propriety or otherwise of this measure has been a subject of difference. In the Coy lony itself, however, it appears to have found unanimous approval. All testimony seemed agieed that a great crisis had arrived there, by the sudden withdrawal of masses of the able bodied population, and the consequent arrest of most of the industrial pursuits. The colonists were not, as in Victoria, oppressed with an excess of gold demanding money. The gold was in the adjacent colony, and they were anxious to hold out inducements for its transference to themselves. Hence the disposition to affix to the gold a high value. £3 11 s. was the rate fixed upon in Adelaide, while, at the same time, the price was about £3 in Melbourne, and £3 3s. in Sydney. The purpose of this measure has undoubtedly, to some extent, been answered. It eases off the shock of the crisis. It is attracting gold largely to the Colony ; and the over valuation of the new currency, operating as a reduction in the price of merchandise in South Australia, an additional impetus has been given to the export business from that colony. But undoubtedly this reduction in price, an advantage to Victoria, is in proportion a loss to South Australia, although not perhaps immediately perceptible. An exchange must gradually settle against the latter colonyr, in her intercourse with adjacent settlements, to the extent of the over valuation of her new currency, as she must shortly perceive when, in ,-^iier turn, she may desire to effect purchases, or to remit ironey beyond her boundaries. The g<pld coinage cannot remain in free circulation unless s.t some higher valuation. The ingots may, by aid of law, be worth £3 lis. in Adelaide, but if they are worth only £3 in Melbourne, the coin, which is of equal value in both places, will be exported to Melbourne, and the gold ingots left in Adelaide. The disadvantages of the act will become more apparent when its period has arrived. There seemed to be gain at first: as is always the case, by an over-valued currency; but there now appears to be corresponding loss in a return to the former state. Loss is involved in the final resumption of payments in specie. The Banks have been ordered to issue their notes upon gold taken by them in exchange, at £3 lis. per ounce. If the price of gold continues at its present disproportioned rate in Melbourne, these' institutions must prepare for a storm of demands. But at length they must redeem these notes in sterling money, and then, having done so, they are left to dispose of the over-valued gold in the best way they can. Hitherto, in treating of this Act, I have dealt chiefly with the over-valuing of the gold ingots. This was probably the great attraction of the Bill. It is, however, an accident rather than the principle of the measure, as the valuation might have averaged much more exactly the current market value. The grand objection to the whole enactment, appears to me to consist in the uncertain position in which all commercial relations are placed by such sudden, extensive, arbitrary, aud unforeseen tampering with currencies. This uncertainty must at once confuse every calculation made by the capitalist f;:om without, and prevent or restrict those remedial operations which he might otherwise have advantageously pursued, and which the colony so urgently requires. Such temporary measures would undoubtedly have the effect of restoring for their season a par exchange on London; but in doing so, they would tend to retard the ultimate remedy. The chief stimulus to this remedy is tbe exchange itself, for an exchange on London, as at present, at 10 per cent discount, will soon attract to our market the restoratives of imported merchandise and money from the exhaustless reservoirs of Europe. For these various reasons, I venture to condemn this step, taken by our sister colony ; not holding it excusable even although a balance

of good might be made evident for an individual case. The Select Committee of the Legislature at Sydney, in reporting in December last, upon the question of a proposed Assay Office and Mint in New South Wales, remarked that the establishment of an Assay Office in this colony did not appear to be any important acquisition; but they expressed their views that the colony would be a decided gainer by the establishment of a local branch of the Royal Mint, for the coinage, at a certain charge, of the gold produce. The Banks and the Gold.—The Chamber was recently called upon, by request from without, to express its views as a commercial body upon the rumoured intention of the Colonial Banks to enter the market as purchasers of our new export. On this question you are aware that the Committee decided that mere rumoured intentions were not data on which to express any opinion, and they therefore declined to entertain the subject. A public meeting of the commercial and trading classes, held in this apartment, at which, as Chairman of the Committee I had the honour to preside, took this question into consideration, and framed a resolution, deprecating such a course as that which had been alleged. It appeared, on enquiry however, that these institutions had not contemplated operations of this character. They had been buying the gold indeed, but with the view of substituting it for their large reserves of coin, and thereby so far relieving, with advantage to themselves, no doubt, the pressure upon the public, from the inadequate supply of money. Prospects to present Interests.—The intelligence of the Australian gold discoveries appears to have directed some serious attention in Britain to the prospects of the wool market, and some speculation in wools had taken place upon the. news, in anticipation of a falling off in the usual supplies from this part of the world, which now form the principal portion of the wools imported into Britain. The importance of this trade to our Parent State may be judged of when it is stated that the wool from Australia now forms upwards of one half of the wools imported into Britain from all parts of the world. On this subject I may observe that the condition of the wools of this season is perhaps in many instances less favourable than for several past seasons, owing to the increased difficulties that have been experienced in procuring hands for washing and shearing the sheep at the most suitable period. The clip has also been brought down for shipment rather later this year than formerly. But with these exceptions we are aware that tbe scarcity and dearness of labour, caused by the attractions of the gold fields, have as yet but little, if at all, affected the quantity of wool exported during the season just now closing. In future, however, from this and from other causes connected with the gold-fields, some effect is to be apprehended. The increased expense of labour has been met by retrenchment and economy on the part of flockinasters, who are running their sheep into larger bodies, and dispensing with supernumerary shepherds and hutkeepers. These operations usually affect the ratio of increase of the stock, a proportion of the young, when the sheep are in large flocks, being liable to perish during lambing, from inadequate attention and assistance. Our anticipated great additional population also, which is already fast flowing into the colony, must gradually enact a change unfavourable to that facile extension of the wool produce which has hitherto characterised Australia and rapidly promoted her welfare —unfavorable, however, only from the fuller developement, and the higher destinies of the colony, when over many a tract of rich and available land, the human family will be substituted for the flocks and herds of the squatter. ?i'But on the other hand, we are not without considerations favourable to the extension of wool-growing. There are for example, the economic arrangements that may take place for the increase of the herbage, and for spreading the luxuriant superabundance of Springover other portions of the year. Hay-making and the sowing of artificial and more productive grasses areas vet unknown upon squatting stations, at least for pastoral purposes. Hitherto, in a thin population, scattered over an ample territory, necessity has not pressed upon the energies of ingenuity and invention, to cause a deflection from the customary routine.

The anticipated great increase of population, and consequently of demand upon the live stock for supplies of food, together with the ad - vance in the price of labour, are likely to operate in restricting the Tallow trade of this polony, a branch of business which, as the Statistical Returns embodied in this address will show, has hitherto exhibited a rapid and prosperous growth. (To be Continued.)