EFFECT OF THE MONETARY CRISIS IN THE SOUTH.

New Zealand Herald, Volume XVI, Issue 5350, 9 January 1879, Page 2

EFFECT OF THE MONETARY CRISIS IN THE SOUTH.

[per "herald" special wire.] I DtTXEDi-i, Wednesday. | The Otago Daily Times, in an article on the money market, says :—" At the present moment there is somewhat of a lull in the operations of the . money market. When fuller news of the late disastrous failures at home was received here, high authorities deprecated the idea of any unfavourable effects being produced beyond a momentary depression, but daily experience teaches as that the vibrations of so sensitive a machine as the money market cannot be wholly .controlled by the most careful forethought. It may seem strange that the value of an acre in New Zealand should be affected by a commercial failure in. Glasgow, but such is proved to be the case. The value of land here lately has been a'most entirely regulated by the amounts of the advances that could be secured on it, and the effect of the tightening of tho purse-strings is to lower the price of the commodity. A few months ago the fever in land speculating was fostered by the liberal advances granted to purchasers, and now, when securities are being more carefully weighed, the reaction ha set in, and it is no exaggeration to say that the marketable value of land is depreciated to the extent of one-half. At thepresent moment money i 3 both tight and dear ; for advances on first class freehold security for moderate amounts and Bhort dates, 9 and 10 per cent, are freely offered, while for large sums at long terms S per cent, is the maximum-accepted from lending companies, whose advances are regulated by the reciprocal advantages derived from the change of wool and produce. Money is not so difficult to obtain, but from those whose business is confined to advancing loans on freehold security, pure and simple, the needful is doled out with a wide margin. Money is at the same time plentiful enough for mercantile operations, but the system of overimporting which has prevailed for the last year or two, has shut out any chance of a fair profit to the importer, and, in many instances, has barely left sufficient margin to pay interest on capital employed. There is also considerable depression in the share market "