Finance, stocks, and Mining.

Free Lance, Volume III, Issue 122, 1 November 1902, Page 5

Finance, stocks, and Mining.

THERE is an expectation that money in the colonies will advance — that is to say, the lending rates will rise, and it is not an unreasonable deduction from the prevailing conditions. Nearly all tihe colonies are engaged in selling debentures over the counter, and some of the Australian Parliaments are getting Loan Bills through to further increase the pressure. Thus, Victoria is in want of another million sterling, and Queensland and West Australia are also in need cf funds, and New South Wales is steadih borrowing m the local markets * • • The London money market is adverse to colonial loans — as a matter of fact, the undei writers are in a baid way, because so much of the recent issues has been left on their hands The colonies are, m consequence, obliged to' borrow in their own markets.. Up to the nresent, the Australian States have been successful with 3 and 3^ per cent, debentures, but now the New Zealand Government is offering 4 per cent, debentures with four years' currency at pa,r This is a distinct rise in the rates, and the other colonies must follow suit * # * The effect of this must be to moo up all the idle credit. Those who have been content with -H P«r cent, mortgages, with all the trouble and risk involved, will no doubt now gladly take up tho Government debentures at 4 per cent. Thus money that would otherwise flow into trade channels, will be diverted into the State treasury to the disadvantage of trade. * * • Depositors who are only receiving 3 to 3\ pea- cent, for fixed deposits will be tempted into taking up these debentures This will lead to a withdrawal of bank deposits, and, as bankers are unwilling to release these, the deposit rates will have to be raised to stop the withdrawal. It follows, then, that bankers must advance their lending rates and there is where the general public will be hit. The movement is directly for the raising of rates, and tihe apprehension therefore that money may be dearer in the colonies looks probable. * • • Financial stringency is of neriodical occurrence, and a review of the past twenty years shows that the periods move m cycles. For five years or more there is a plethora of capital available for all sorts of investments, speculation runs high, values become inflated, then follows a period of distrust and discouragement everyone is anxious to realise, and in. the eager rush to sell values go down. All this has happened before, and will happen again. Still, the. colony is in a perfectly sound staY, and, even if bad weather should come along — and there is no si^i of it yet — it will be able to ride prosperously through it^. # # The wool sales are a long wav off. Still it is apparent that the next London sales will witness a slight advance in values. Merino wool is very firm, mainly becau c e an enormous shortage is expected m Australia Some authorities place this shortage at over two hundred thousand bales, but this seems hardly credible. Others, quite as well informed, entertain the opinion that the shortage will not be very pronounced, because there is a considerable quantity of dead wool. The probability of a shorts age is exercising a beneficial influence on the market, and if merino wool advances the movement will be reflected in orossbreds. There is thus some reason for hoping that New Zealand will will witness a slight advance at the next sales. * • • The frozen meat market appears to be unduly excited, and there is a further advance in values, the quotations at the close of last week being prett^ well the record. This is the sort of fluctuation that upsets the calculations of the keenest experts in the trade, and leads to a lot of discontent on the part of farmers. The present values cannot be maintained, for the prices are attractive enouah to induce heavy shipments from all exporting countries. Still farmers expect to realise approximately to the London rates, oblivious of the fact that a period of nigh three months must elapse before the sheep purchased to-day in the colony can i c marketed in London. » • • Three months makes a great difference to the frozen meat market, as the record of the past three months fulK

indicates The present high prices cannot be maintained. There must be a fall and he is a smait man who can say when the decline, will begin. Ihe uncertainty of the position will make the freezing companies oaretul, and this reserve will irritate the farmers who expect to profit by the boom in London prices. A steady level of prices is infinitely to be preferred to these inordinate vacations, which are trying alike to producer middleman, and consumer. • • • The pa&t month has been extremely dull in the sharemarket, and brokers complain of scant business. Buyers continue to offer full market rates for the favourite shares, but the holdeis arc indifferent Should the money market advance, the sharemarket will lose stieneth and the present flotations will not be maintained. If that view of the position holds good, the present ought to be a favourable time for selling. m m • Bank shares are quiet National Bank shares are offered at £4 2s 6d, with no declared buyers. New Zealands aie wanted at 63s 9d, but sellers ask bss 6d. Insurance shares are auiet with prices unchanged. Gas shares continue firm, and there are bids tor Lyttelton Gas at £6 6s, Palmerston North Gas at £4 ss, Port Chalmers Gab at 27s 9d. Wellington Gas shares changed hands at £19 ss. Christ church Gas shares are offered at £9 15s Gisborne Gas at 38s, and Hokitika Gas at 84s - Meat shares continue neglected. There are free sellers of Meat Exports but no buyers. Woollen shares aie «te>adv, Wellington Woollen shares beimg in firm demand at 84s, and 105s foi the respective issues. Manawatu Rails are in firm request, at 29s 6d sellers asking 31s , the prospective bonus of 2s per share is no doubt responsible for this firmness. Other shares call for no comment. * .* * The report and balance-sheet of , D.1.C., submitted to the annual meeting of shareholders, held in Dunedm last week, were very satisfactory. The turnover at each of the three branches was substantially greater than in the previous year, and the net profit amounted to £10,789 or £1886 more than .in 1901 This appears to be no flash in the pan, for the chairman was able to announce that since stock-tak-ing the business throughout has been more than maintained. * * » The profit at credit was dealt with . , follows — A dividend of 6 per cent and a bonus of 3^ P«r cent, to the shareholders, adding £3000 to the building sinking fund which now stands at £23,000, and carrying forward a larger sum than last year. This is eminently satisfactory not alone to the shareholders, but to the trading public also for the sounder the business the better wi.l the public fare. * • • The chairman took occasion to make pointed and. pleasant references to the Wellington branch. He said — "Our Wellington premises are now in every respect most convenient, and well appointed. There is a general consensus of opinion that no finer show-windows and no finer display of goods are to be seen either in this colony or Australia than are presented by the D I.C Wellington " Shake hands, Mr Corriean '