MONEY MARKET.

Manawatu Standard, Volume XLIX, Issue 236, 4 September 1929, Page 7

MONEY MARKET.

EVENTS IN LONDON. AUCKLAND BANKERS’ VIEWS. (By Telegraph.—Special to Standard.) AUCKLAND, Sept. 4. The cable reports of the finning of the London money market when referred to several bank managers in Auckland to-day drew from them the general observation that tho .New Zealand money market was not likely to be substantially affected, at least for some time to come. “Really we can only guess when speculating on the future effects of such a turn of events on the London market,” commented cue bank manager. He believed, however, that there would be little or no alteration in the bank rates in the Dominion. Alortgage money here was cheap and cheapening, so great was the surplus of funds aivaiting a first-class investment. , With another bank manager the necessity for converting £11,000,000 of Government loan money in November was discussed. He said that there appeared to be little doubt that the higher rates ruling in London would prompt tlio New Zealand Government to attempt to raise a substantial portion of the conversion loan in the Dominion. Already it appeared that the Government “had an eye” on the surpluses held by the larger banks in New Zealand. In Australia too many of the banks were holding large surpluses, quite likely in anticipation of the Prime Alinister, Air S. M. Bruce, calling upon the Commonwealth for loan money. It w r as difficult to forecast what might happen to the New Zealand money market in the next few months. It appeared, however, that there would be an ultimate tightening up, although as far as he was aware the Now Zealand banks were not restricting their advances in any way at the present time. Aloney in New- Zealand to-day, generally speaking, was cheaper than in England, a state of affairs that had not obtained since the war.

One thing that appeared certain, said a third manager, was that the mortgage rates in the Dominion would not be affected. The demand for sound investments was too great. It might not be entirely correct to say that money at the moment was cheaper in New Zealand than in Great Britain. One had to consider the different circumstances of the investor and the borrower in the two countries. In England the incidence of taxation was on a different scale, and merely to compare the market and the bank rates „ without taking that into consideration was to run the risk of arriving at a false conclusion.