THE FALL IN CONSOLS.

New Zealand Herald, Volume XL, Issue 12415, 10 November 1903, Page 6

THE FALL IN CONSOLS.

' PANIC IN THE CITY. - PROSPECTS OF COLONIAL LOANS. ' [FROM OUR OWN CORRESPONDENT.] " London. October 2. 1 This week consols, looked upon as the best " gilt-edged security in the world, fell to the I lowest point they had ever reached during the last 37 years —to lower, in fact, than , during the Franco-German war. "Black > weeks" have been known before. But this ' week has been about as black as anything in living memory. For some time British Government securities had been falling. But. L when on Tuesday they went down to ££6 13-15 I per cent, there was a panic in the city. How- ' i ever, there has during the latter part of the i week been a recovery, and at the Bank of i England to-day it was reported that one bank ' [ had purchased £1,000,000 worth at 85.

I Though this is of course lower than the quo- ' tattoos, the purchase of such a huge parcel should ha vo the effect of steadying the market. Still these will have to be unloaded i later on at a profit: but that will mean that ! the pneo will be kept low for some time ' yet. I have discussed the matter with some , of the best banking authorities in London— ! who, moreover, have particular connection 1 with New Zealand and Australian banking— ' and they are confident that "the worst is past." "What will be the effect of the fall on . colonial stocksV" I asked one of these bankers. i "The effect cannot be but bad," was the ' ' reply. Victoria is to float a loan in January, and I learn that it is to be at 4? per cent. Probably, therefore, it will be a shoi-t issue/ ' to tide them over, or it may be an extension ' of existing bonds " " What does that mean should there be a New Zealand loan:,'" J inquired. j "There is not much prospect for that," said the gentleman referred to. "I do not j think there is the slightest chance for a I colonial loan until at least February. The ' great idea in the city is to prevent a further i rise in the bank rate, and the recent i purchase by the Hunk of England of several ; hundred thousand in gold may h&vc a steady- . i in;' effect on the marker,. ' But I. do not ! i sec a bright, spot for the colonic.'-; until, as I j 1 say, February." j ; Speaking at the half-yearly meeting of the ' I Hank of Australasia, yesterday, the chairman ' j (Sir E. Montagu-) Nelson) «aid they hud devoted £30,000 to writing down the consols held by the bank to £85 per cent. As to the future of consols, he was not going to prophesy, because he did not know, but, in speaking of the past, he might say that the object in writing down was not because they believed they were going to fall to 85, but, ' because they felt it was a safe figure; and i it was * theintercs-ts of the bank that th'ev i should bo written down., I