ABNORMAL POSITION.

New Zealand Herald, Volume LXIX, Issue 21133, 16 March 1932, Page 7

ABNORMAL POSITION.

AUSTRALIAN MONEY MARKET. FUNDS LOGKED UP ON DEPOSIT. EFFECT OF HIGH EXCHANGE. Aa abnormal position has been created in tlio Australian money market by the high rate of exchange, which has locked up funds which otherwise would have been remitted abroad, states the Melbourne Argus. Much of this money has been offered to the banks on fixed deposit. Deposits also have been' increased by money which normally would have found its way into business, or have been invested in mortgages or other forms of security. Traders who usually work on overdrafts at tho banks have been realising stocks, and they arc now working with credit balances, and some are seeking to place- funds on fixed deposit. This surplus of funds has been the cause of the steady reduction of deposit rates which has occurred since June. Bankers are anxious that the money should flow back into industry. Legislation which has reduced rates of interest on Government loans, mortgages, and other fixed interestbearing securities has been partly responsible for the surplus of deposit funds, but now the rates quoted by tho banks may be low enough to induce depositors to seek other avenues of investment. It is improbable that much exchange money will be diverted from the banks, however, as holders will wish to transfer it- abroad at tho first opportunity, and 1 they may desire to keep their money free from the risk of market fluctuations, even it' the rate of interest earned is low. It is probable that the lower deposit rate? will cause some appreciation in prices quoted for Government securities, and the j fall in prices which has taken place 011 the Stock Exchange recently should be | checked. Lower rates of interest gencrj ally are of advantage to trade. The ultiI mate effect of the low rates quoted by the j banks) and the small returns available from investment in first-class securities, j should be to promote interest in industry and commerce as investors seek more profitable employment for their funds.

GOVERNMENT LOANS. STOCK EXCHANGE ACTION. TRANSACTIONS CUM COUPON. The possibility of legislation affecting interest on Government and other loans has caused the New Zealand Stock Exchange Association to revise its 'methods of quoting stocks and deblShtures on exchange. i : The following telegram,V<was received fioru Mr. Ilarman Reeves, president of the association, prior to the jnorning call 011 the Auckland Stock Exchange yesterday:—"As all other metropolitan exchanges agree that the present method of adjusting interest on Government and other loans is undesirable, in view of possible legislation, all transactions of this nature on and after Tuesday, March 15, are to be cum coupon without interest adjustment." The new arrangement means that prices quoted will include interest accrued to date of sale. Previously the arrangeniant was that prices represented the capital value of the debenture or stock apart from interest, the interest adjustment being made when the transfer is completed. The measure is interpreted as one of protection to buyers should any reduction in interest rates be announced after the purchase of stock and prior to the next interest payment. Under the prior arrangement the market has been reflecting the uncertainty felt regarding the Government's financial proposals. "Tho measure is only a tcmporaiy one brought about by abnormal circumstances," said Mr. J. W. Prater, vicechairman of tho Auckland Stock Ex- ( hange, yesterday. "The exchanges will revert to the old system, which gives a better indication of existing levels, as soon as a decision is reached by the Government." TALLOW MARKET STEADY. LATE QUOTATIONS RULE. The Department of Agriculture has received the following cablegram, dated March 14, from tho High Commissioner for New Zealand, London: — Tallow.—Spot market quiet*but steady., at about last, quotations. Little business has been done for shipment. Hemp.—The Manila market is steady after the decline. Moderate business has been done in "K" grade for FebruaryApril, March-May shipment, which sold at £l7 15s. Tlt'o sisal market is quietanil easier. No. 1 fair average quality for March-May shipment is quoted at £l4 10s. The New Zealand market is quiet with small business reported in common for March-April shipment at £ls 15s. Rejected offered at £l4 15s.

QUOTATIONS FOR SILVER. LONDON, March 11. Silver is quoted to-day at 18 7-16 d an on. spot and 18 9-16 cl forward, compared with 18 3-16 d and 18 5-16 d on Saturday. The quotation for silver at per standard ounce is 18 7-16 d, and at per fine ounce 19 7-Bd, compared with 17jd and 18 7-8 d on March 9. STOCK. SALES. 'J'ALLM A RUN LT PRICES. [BV XELIiGRAI'U. —OWN COP.RESrONDENT.] TAUM A RUN UI, Tuesday. The yarding at the Taumarunui stock sale to-day comprised l>oOO sheep and HO pigs. The sheep were all in good condition, but the bidding was not spirited and difficulty was experienced in disposing of half the yarding under the hammer. The usual large attendance of farmers and buyers was present from Te Kuiti, 'IV Awamutu, Cambridge mid Hamilton. Weancr pigs made from 3s (id to 5s (3d and best slips, 13s (id. (iood fat wethers made lis Bd, but two. foui and six-tooth wethers were hard to quit. Small wethers sold at 5s 3d, and best two aud four-tooth ewes, to 10a Id. VALUES AT KOl'U. Dalgety and Company. Limited, report having held a salo at Kopu on Monday. There was a small yarding of beef, which sold at late rates. Best young cows and heifers made from £3 17s tkl to £4 17s Oil; others, £3 to £3 15s; unfinished, XI 5s to £2; boner cows, 1-8 (3d to XI; others, 5s to 10s. Bulls mado froui £2 10a to £3; lighter, XI to £2 ss. A fair entry of sheep whs yurdod. Fat wethers made 123 lid; fat and forward lambs, 8s 6d; others. 7s 6d; store lambs, Gs 9d: small and cull lambs, 3s lOd to 4a sd. Only a few springers were yarded. Best heifers mado from £5 5s to £5 7s Cd; others. £3 15s; backward, £1 12a Od to £2. There was a heavy yarding of pips. Jjight porkers made from to £1 2s 6d; largo stores. 13s to 15s 6d; smaller, 8s to 12a; best weauers, Gs 6d to 7s; smaller, 4b.

LATE RATES AT RANGIRIRI. The Farmers' Co-operative Auctioneering Company. Limited, reports having held a stock sale at Kangiriri on Monday, when a number of cattle was yarded, late rates beins maintained throughout. Prices were Forward conditioned mixed-coloured three-year-old steers, £2 t.o £2 19s*. fat cows, £3 to. £3 ss; medium fat cows, £2 5s to £2 10s; lislitei- fat cows and heifers, ill 12s 0d to X2; forward conditioned cows. £1 to £1 10s- boner cows, 10s to 15s; Jersey heifers. £2 15s; bulls. 30s to £2 7» 6d: dairy cows, close to profit, £4 to £5; Jersey heifer calves, 22s 6d to £1 12s Gd.