Finance Stocks and Mining

Free Lance, Volume III, Issue 113, 30 August 1902, Page 24

Finance Stocks and Mining

THERE appears to be some honour attached, to the one who suggested the State cheap money scheme, and the absurdity has been carried the length of petitioning Parliament foi suitable recognition. Just what the honour is it is hard to say, but Messrs. Fantham and Newlyn, who have each claimed the authorship of it, -find^ that no less a personage than Mr. G. G. Stead claims to have first mooted the idea, although he does not assert am originality for it. * • • It was not to the suggestion of any of the gentlemen named that the cheap money scheme owes its origin, but it is said to be due to a man in the Government Buildings in Wellington, and now very high up m the service. It was about 1890, when the late Mr. John Ballance was Premier, that the said civil servant prepared a memorandum on the subject. Mr. Balance was very strongly impressed with the feasibility of the scheme but, unfortunately, before he could give the matter due attention he was taken serious] v ill, and died. •v +■ +• Sir Joseph, then Mr. Ward, who held the portfolio of Postmaster-General, succeeded Mr. Ballance as Colonial Treasurer, and carried the Advances to Settlers Act through Parliament. The scheme, under the Act, differs materially from the original proposal of the civil servant, and some will be inclined to think that the latter was the better of the two. The civil servant, in his memorandum, suggested that the State should advance on mortgage on apnroved securities, and sell the mortgages under a State guarantee to capitalists in London. ♦ * * This scheme would not have necessitated anv very great expense in establishing a separate department, nor -"-et would leaseholds have been admitted as competent securities. However, the Government, of which Mr. Seddon had just assumed the Premiership, resolved upon the Act which is now the law. Thus it will be seen that, while others may have made bald suggestions that such a scheme should be formulated, the credit of putting a practicable and sound proposition before the Government, and which directly led to the passing of the Advances to Settlers Act, belongs to the civil servant. That, at any rate, is the storv. • * * The State Fire Insurance Bill is not to be proceeded with, and those who know anything of the subject will not be surprised at this turn of affairs. The Committee to whom the matter was referred called expert, evidence which must have convinced them that fireunderwriting, on the lines proposed in the Bill, was very dangerous.

The insurance companies operating in New Zealand have not had a pleasant time and the experience of the past few years has been most disastrous. The fire record continues to be very serious, although the general public never knows the full extent of the losses paid each month. Scores of fires where the losses range from £5 to £200 are seldom telegraphed to the par>ers although they axe reported in the country papers as matters of local interest. It is only the fires involving heavier losses than £200 that are wired to the newspapers through the Press Association. * * * The moral hazard is the most difficult problem that fire underwriters have to deal with, and the State is not likelv to do better than private individuals in this matter. The greatest assistance can be rendered by Parliament by enacting a Fire Inquiry Act, making it mandatory for an inquiry to be held into the cause' of every fire that occurs in the colonv. The publicity would tend to check the "fire-bugs." and also make underwriters and all those connected with the construction and care of buildings very careful. The abandonment of the State Fire Insurance Bill will be cheering news to underwriters and the holders of shares in our local companies. * * * The iron and steel wire manufacturers of England appear to be taking up the question of preferential trade within the Empire, for this is practically what is meant by the letter to the Premier of New South Wales. In the highlyprotected countries of Germany and America there is constant over-produc-tion, and if the markets were free

puces would fall, and the consumei would benefit. But, the maikete aie closed to outside competition, and the surplus productions of the United States and Germany aie shot into the British colonies. Under such conditions, British trade is bound to suffer, because the Yankees caai, and do, undercut, as it pays them to do so. They may, and probably do, make a loss on their exports, but when the whole out-turn for the year is taken into consideration, there is a substantial profit. The high prices obtained in the protected domestic market® leave a splendid margin of profit after the export losses have been deducted. It is this kind of competition that British manufacturers are asked to fight, and when they fail they are stigmatised as slow-going and conservative. The Britisher looks for a profit on his exports, the Yankee is content to make a loss. That is the position in a nutshell. To help the British to stem this unfair competition, the best thing to do is to make Yankee manufacturers submit to the same Customs duties that British goods have to pay when imported into the United States. In other words the colonies should treat the Yankees to a dose of their own physic. The colonies should do this in any case, because it is only by logic applied through the Customs House that Uncle Sam can be made to open his doors to colonial produce. If the markets were free our wool, hamp, and frozen lambs would meet with a aood demand in New York and other large American towns. * * * Meat has gone up another point, and the butchers promise a further advance in the near future. Plenty of excuses can be found for this new move, but it is as well to look at the other side. Butchers, if asked, will readily enough say that thev have not been making any profits for months past. That is the usual statement when prices are advanced, but, of course, it must be taken with a grain of salt. The butchers are doing well enough, and their profits are large enough to permit of renewing the industrial agreement with the employees. Were it otherwise, fresh proposals 1 would have engaged the Arbitration Court. The Australian market, which is said to be the direct cause of the local advance in prices, gives signs of collapsing. Prices have been high, and are still temptingly so, but the risks are very great. Another experience like that which befel the shipment per Whangape will ease off the export of live stock. Heavy shipments have gone forward this week, and the results of these will give a very good idea of what may be expected in the near future. The sharemarket is dull, and the sales reported are mostlv in miscellaneous stocks. Bank of New Zealand shares changed hands at 62s 6d , National Mortgage at 37s 6d ; New Zealand and River Plate Land Mortgage at 22s Lelyand and O'Brien Timber at 37s and New Zealand Candle at £9 10s. • • » Gas shares and Woollen shares are in firm request at late rates The annual balance-sheets of the woollen companies are now due, and this probably accounts for the activity of investors. The mining market calls for no special remark the dredging returns are, on the whole, satisfactory, but interest in the industry is confined to those holding shares in the dividend-paying concerns.