Telephone 2200.

Free Lance, Volume IX, Issue 455, 20 March 1909, Page 14

Telephone 2200.

THE London, money market continues easy, and gold appears to be flowing into the Bank of England. Last week there was a gam of nearly a million sterling. The foreign, exchanges must now be operating in favour of London, to cause this substantial accretion, of the metal. At all events, it is very probable that the Bank of France is not now taking gold quite so fast as was the case in Jamiuary. The public deposits, however, are just two millions less than they were a year ago, and that points to the prospect of a heavy deficit. What this deficit will be is hard to say, but some of the London financial papers estimate that it will amount to as much as five millions sterling. The other deposits are comparatively small, and there appears to have been heavy borrowing from the bank. • • • There is sure to be some disturbance in the money market through the iieeds of the Chancellor of the Exchequer. The Budget estimates for the year will not be reached, and further taxation is imperative. Next week there are bound to be movements in the money market which will give some indication of the Budget prospects. It is a significant fact that British capitalists are avoiding investments in British securities, but are lending freely to foreigners. Locally, there is no change to report, but the immediate prospects are good. Next week the Manawatu Railway money will be liberated, at least, the greater portion of it, _ and that will undoubtedly ease the situation. The improvement in the wool market is also" a favourable feature, and presently there should be more loanable capital available for local borrowers. The position disclosed by the export and import returns for the curTent quarter will be interesting, and there is every reason to believe that there will be a further shrinkage in imports, with a possible gain in exports. • • • The excellent tone displayed at the current wool sales in London,, together with the firmness in prices, will be veiry cheering, to wool-growers in particular. The slump in wool is over, and we may now look for a steady improvement in values. As wool is the largest item in our exports, any increase in value .must have far-reaching and beneficial effects. It will help to ease the stringency of the monetary situation, as it will provide the hanks with more loanable credit. • • • Referring to the banks, it is regrettable that there should be so much misrepresentation regarding them. The statement that the banks are calling in overdrafts is only partly true. Where the securities have depreciated it is only natural that they should ask and insist upon the margin being rectified to meet the changed conditions. Furthermore, the banks have been caMed upon to refund deposits, and have been obliged to draw in fxoni others, but with all this the banks have made advances very freely, especially to traders and farmers. • • • It is also unfair to say that there is a banking monopoly. 7 All that the banks possess in the way of monopoly is the right to issue notes, which right was conferred on them by Parliament. No doubt, if another banking corporation were started Parliament would extend the right of note issue. This right is the prerogative of the State, and can only be delegated to a private concern by Act of Parliament. To accuse the banks of being monopolists because of the State reservation of note issue is childish. As a matter of fact, the banks have to meet a very great deal of competition for deposits and in the foreign exchanges. • • • The accounts of the Union Bank of Australia for the half-year ended August 31st, 1908, show that the net profit was £136,386, to which is added the balance brought forward, £36,058, making a total) of £172,444. The dividend and bonus together, equal to 14 per cent, per annum, absorb £105,000, the sum of £20 000 is transferred to reserve fund!, which is thus increased to £1,250.000, and, after appropriating £10,000 in reduction of bamk premises account, the balance, £o/ ,444, is carried forward. • • » The balance-sheet shows that the liabilities to the proprietors, including

capital paid up £1,500,000, rese-rye fund £1 250,000, and profit balance £142,444, amount to £2,892,444. Adding deposits £19,237,834, circulation £431,945, and bills payable and other liabilities £1,700 750, the balance-sheet total is £24,262,973. The assets include. Cash items, remittances, etc., £8,619,497; discounts, loans, etc., £15,058,830, premises, £584,640. » • • Investment shares are beginning to show a weakening tendency. The fact is investors can obtain other safe securities to yield them a better return tban. shares, and they are naturally accepting the alternative. _ Bank of New Zealand shares are easier, with sellers at £8 11s. National Bank shares had quittance at £5 3s, with, buyers offering £5 2s 6d, and sellers wanting £5 3s 6d. « • • Financial shares are quiet, and sales are effected only very occasionally. Wellington Investment, sellers ~\ Is 6d ; Wellington Trust and Loan, sellers £7 2s 6d: Wellington Deposit, sellers 9s; National Mortgage, sellers £2 15s . New Zealand Loan amd Mercantile, sellers 3s 3d ; New Zealand and River Plate, buyers £1 13s 3d. • • • Gas shares are in the main, neglected. The chief demand is for Wellington Gas shares, the £10 paid-up shares being wanted at £16 17s, and the .new issue at 12s 6d premium. Feilding Gas sha.res are in demand at £1. • • • Insura-nce shares are yery much neglected and the obvious increase in the fire loss will act as a detterent. National Insurance shares, buyers £1 8s 3d ; New Zealand Insurance, buyers £3 13s. • » * Meat shares are quiet and unchanged. Gear Meat 3 £1 paid, buyers £2 10s; Meat Export, £2 12s 6d paid, buyers £3 0s 6d. sellers £3 Is 6d. Woollen shares are quiet. Wellington Woollen, sellers £3 ex-dividend. • • «• In the miscellaneous section, business has been quiet for some time. Westport Coal, buyers £6 Is, sellers £6 3s ; Hikurangi Coal, buyers 17s ; Westport-Stockton CoaJ, buyers 8s 3d, sellers 8s 9d • Leyland and OBrien Timber, sellers £1 2s 9d ; New Zealand Portland Cement, buyers £1 14s 3d sellers £1 IP" Taranaki Petroleum, sellers 8s 6d • Sfoarkind's ordinary and preference, sellers 18s 6d ; Ward and Co. Brewery shares, sellers £4 17s 6d. • • • The mining market is quiet, and, except for some transactions in Talismans and 1 Waihis, there is really nothing doing. Several of the claims are very promising, but it takes a good deal just bow to encourage speculation. Waihi shares changed hands at £8 17s 6d, and Talismans sold at £2 6s.