THE New Zealand Mail. PUBLISHED WEEKLY. THURSDAY, JUNE 2, 1892. THE RISE IN COLONIAL STOCKS.

New Zealand Mail, Issue 1057, 2 June 1892, Page 22

THE New Zealand Mail. PUBLISHED WEEKLY. THURSDAY, JUNE 2, 1892. THE RISE IN COLONIAL STOCKS.

The rise in Colonial stocks which set in early this month has, as was prophesied by the financial experts, been maintained. That our quotations record from time to time ; for example on April the 28th the quotation for. our four per cents was 102, on May 6th it had risen to 104, and on May 19bh (the last date we have) the quotation was 105*. Equally remarkab’e is the story of the 3-1? per cents, which on the above dates were at 94J, 95-|, and 96*. These figures are part of a general movement upwards of the market, not being confined by any means to Colonial stocks, for there has also been a strong i-ise in Consols, from 96* on April 28bh to 97-J "on May 19bh, the intermediate quotation on May 6th being 97. So heavy a rise in Consols in such a short time in the absence of any special European reason, is an extraordinary proof of a general rise of stocks of all kinds. Australian stocks have, of course, participated in the benefit, but not to the same extent as ours, Some years ago our fours were behind Yictoria’s and New South Wales’ fours by a steady ten per cent ; and theii’ three and a lialfs were quoted at nearly the rates of our fours. Now when the rise came in the early part of the month, our three and a lialfs rose to L 95 10s, against Victoria’s quotations of L 95 103 to L 95 12s and New South Wales’ of L 95 12s to L 95 17s. Our fours by that time had advanced L2, and now the advance has reached L 3 10s while the total advance, of our three and a lialfs is L2. . Writing on the subject the Sydney Morning Herald in its issue of May 14th said that “ New Zealand now occupies the leading position.” That meant that on the recovery this Colony was leading fen days ago, and we have no doubt the lead lias been maintained if not increased. It is the first time in our history our stocks have compared so favourably with the Australian.

The Herald explains that the slower progress of the Australian recoveries is due to the handicap of the unplaced loans still lying in the hinds of syndicates. It is, of course, evident that, so soon as the prices reach a figure at which it will pay the syndicates to unload they will unload. Thus a large proportion of the four and a half million raised in September last was still in the hands of the banks, and as that money represented an average of L 94 7s 9d, the average price of the loan, it was probably all unloaded when the quotations reached L 95 17s ; the quotations of the present period being what few quotations were during the period of depression, genuine. In some degree this, no doubt, bears out the contention of the Herald that “it is the unsold stocks which keep down the prices.” But when the writer goes on to say that “New Zealand occupies a leading position, not because she is less heavily weighted with debt than her neighbours, bub because she has not lately been borrowing,” he certainly cannot be said to have covered the whole ground. The reason we have nob borrowed is more appreciated, we venture to hope, than its effect. The reason is increasing production, an increasing revenue, an increase of settlement. These signs of prosperity are absent from the Australian records, and their absence must help to make the Australian credit less than ours. The fact that we do not require to borrow money to pay our way—wfierein we are unlike the Australian Colonies —is a powerful reason, we make no doubt, for the greater progress of our stock quotations. The moral of this story of the Stock Exchange is, from the Australian point of view, almost painful. “If we keep off the market,” writes the Herald in conclusion, 11 when there is no demand for our stocks, we shall fare better when the time of improvement comes.” That means that the right course for Australia ’is not the path of self-denial and industrial production, by which New Zealand has reached the premier position, but the path of further borrowing. The only effect of the last season of scarcity is to make these incorrigible borrowers decide that they must borrow as much as they like whenever the pocket of the lender happens to be open. By simply increasing the borrowing in fat years Australian treasurers will provide for the lean ones, and the system of living on other people never being disturbed by the indecent clamour of bad times will become the permanent resource of a contented people under an administration of shoddy politicians. The weak point in the project is that the borrower’s purse is apt to be shut up by too frequent applications long before it is empty. Therefore the only road for Australia to follow towards prosperity and progress is the road New Zealand has fcrodderTfor the last few years.