THE STATE OF TRADE.

New Zealand Herald, Volume XLV, Issue 13691, 6 March 1908, Page 6

THE STATE OF TRADE.

OUTLOOK FOR Til WINTER

SO.MI-; WELLINGTON OPINIONS

[IIV TM.I.I.ItAPII. — OWN* CO It RESPONDENT.]

Ellington, Thursday. The state of trade and the outlook for the coining . winter are being keenly discussed just now in commercial and financial circles. It is recognised that from the point of view of the general prosperity of the people there are se eral unfavourable omens, such as the fall in wool, frozen meat, hides, skins, tallow, and hemp, tha cessation of the export of dairy produce, the hardening tendency of the money markef, and the recent further increases in the prices of some of the necessaries of life. Several leading commercial and financial authorities were interviewed by a. New Zealand Herald representative, and asked to express their opinions on the state of trade and the outlook for the coining winter as affecting the community in general.

Mr. J. G. Harkness, president of the Wellington Chamber of Commerce and secretary of the National Dairy Association, said that there could be no question that the coining winter was going to be a fairly severe one. The loss of feed through drought and grass fires had been such that livestock of all kinds had been sold in all parts of the country, for a mere song. On the other hand, the late splendid rains, if followed by fine, warm weather, would result in a considerable growth of grass for autumn and winter. Mr. Harkness thought that the price of butter, which was now dropped to 1 IBs on the London market, would not increase again beyond that, figure, but might fall further. Consequently it, would pay the makers of butter to sell locally. He, therefore, anticipated that butter retained in the Dominion would meet requirements . In regard to the money market Mr. Harkness observed that certain financial institutions in Wellington which usually had large sums to lend had at the present ,time no funds available for the purpose. This fact, with the rise of the bank rate of interest, indicated a state of things that must give a check to industry, which would be felt by all classes. The Government, he said, should raise its- loans abroad and leave local capital for local requirements. A TIME FOR CAUTION. Mr. J. G. W. Aitken, M.P., said the prospects were not so good as they were i this time last year. In regard to the flax industry and .the recent fall in the price of hemp he did not see how flaxmillers could carry on at a profit, if they still had to pay the heavy royalties which they had lately been charged. The wool market was seriously affected by the financial situation. At Home the slocks held were not heavy, but the possible buyers hesitated, because they were not'sure of getting mpney from the banks on suitable terms. Thus the uncertainty of the money market was preventing the wool from going into manufactures. Money here was not so easy to obtain as it had been, and the conditions generally tended towards more unemployment than usual. AN OPTIMISTIC VIEW. The Hon. T. Kennedy Mac Donald, M.L.C., sounded quite a different note. He declared that the prospects for trade, locally at any rate,- were never brighter. The works to be carried out. in connection with the Wellington Harbour Board during the present year would involve an expenditure of between £250,000 and £300,000. Then there would be a large expenditure on the re-erection of Parliament Buildings, and the building of a. new residence for the Governor. The Gas Company, too, would be commencing its new works at Miramar. All these were extraordinary works, which would mean the circulation of enormous sums of money quite outside the regular run of business enterprises and city improvements. "All this talk about the fall in wool, and the rest ofjil," said Mr. Mac Donald, "is true up .to a certain point, but it cannot be gainsaid that the selling prices of all our agricultural products to-day are such as to yield a substantial profit to every grower." , NO CAUSE FOR ANXIETY. Mr. Harold Beauchamp said that the trade of the Dominion had been affected by the considerable fall in the values of wool, hemp, and other products. This, as well as the lengthened drought, and other causes, had ied to the storekeepers throughout- the country adopting a cautious policy in buying,.with the result that there had been a substantial contraction in the volume of trade. Still he thought there was no occasion for any real anxiety. "I would not, say that there is an actual scarcity fit money," continued Mr. Beauchamp, " but monetary institutions seem to be impressed with the idea that wouldbe borrowers should not be encouraged to purchase farm lands at the abnormal rates that have been ruling for some time past. As chairman of the Bank of New Zealand I have on more than one occasion drawn attention to the high land values which were based on the prices obtained for our leading products. I emphasised the fact that there was no assurance that these high prices would continue for any lengthened period, and that a tall would necessarily lie accompanied by a reduction in the Value of farm lands, and that if; now taking place." The hardening of the rate of interest in the Dominion, lie added, was due largely to the diminution in the value of our leading exports. He estimated that the shrinkage in wool would to not less than two millions sterling. This, spread over the community, must have an effect equivalent, to reducing the spending power of every man, woman, and child, by £2. This would not, however, be greatly accentuated by the high prices of some of the necessaries of life. THE LAND MARKET. From other sources the reporter learnt that there is virtually a suspension of business in real estate. Suburban land is dead, and there is very little doing in city land. The sharemarket also is quiescent.