THE LONDON MONEY MARKET.

Otago Daily Times, Issue 6149, 24 October 1881, Page 2

THE LONDON MONEY MARKET.

The New Zealand Loan and Mercantile Agency Com pruiy (Limited) report, undur date oth September, v, follows :— 16 Tho uncertainty which existed at the date of ou ■• last issue by this route aa to :he likelihood of earl; ami extensive shipments of gold boinsr made from thi" a rapid fall in the i'ew York rate of exchange, an< the subsequent withdrawal of several amounts foi if. that qur.rter. On 18th ultimo the directors of thi :•' Bank of England raised the minimum rate of diseouni '.V from 'ii per cent., at which it hud stood since 2Stl April last, to 3 per cent., but a* this did not prcv< rl sullicicnt to check the drain to America the rate i)' was a week later advance*! to ■! per cent. Tin Baulcfl of France and liehrinm immediatelj s, thereafter notilied 1111 advance to the Fame of level, and on the following day tho Imperial Bank of Germany raised its rato to 6 pur cent. From tin figures subjoined it will bo seen that tho reserve at 1. tho Bank of England ia now only £12,579,060, a snir 'i which is considerably below the level of the corre--3 spondins; periods of tho two preceding years, and ». should it prove that the measures already taken foi •s. its protection aro inadequate, a further advance in b. tho Bank rato may speedily bo looked for. Tho Now s. York money markot is consequently watched witt great interest, as it seems probable that the main parl n . of any further trans-Atlantic demand for gold wii: o- have to be borne by this country, inasmuch aa thi , r , state of tho reserve of the Bank of France would ap. pear te preclude that institution from averting the n . drain to any considerable extent and thus repeating _ its policy of last year. In the absence of any conßide' 0- rable withdrawals for the United States during the past few days, tho markot here haa become somewhal easier, and to-day's rato for three months' bank bills rt is 3J to S§ per cent., for similar papor having fom months to run tho ratois3Jpercent., andforsixmonths 3} to 3j per cent. At the Stock Exchange settlement, which terminated on the 31st ultimo, the ratea charged for accommodation to the next account varied froir 4J to 5} por cent., according to the character of thf »• stocks lodged as security. For day-to-day monoy or c> English Government securities tho rato is now uoml nally, about 2J per cont. Four weekly returns of tho Bank of England have been published since our it-sue of 11th ultimo. W< j. note the following alterations: - The liabilities havi fallen from £31,050,347 to £31,C3G,5(i0, and tho resorvi i-. has declined from £13,829,100 to £12,579,000. The proportion of the latter account to the former has ac cordingly receded from -12J to 3CIJ per cent. Tho stocli )r of coin and bullion has considerably diminished, as ii standsnow at £23,517,301 as compared with £25,240,09^ on 3rd ultimo, whilst during the same period there has been a contraction in the active circulation frou- '• £27,007,525 to £26,G55,205. |. The external movements of gold, according to the '° returns published In the London Gazette, show thai ■* djring the four weeks last ended the total import' 5. amounted to £751,100 and the exports to £2,001,701. 1. (Tho Times, 27th August.) t, The event to-day in tho monoy market Ims boon J. tho advance of its rates by the Imperial Bank ol 1- Germany to 5 per cent, for discounts and 0 per cent, for advances. The leading banks of Eurmie—the '• Hank of England, tho Bank of France, and the Bank g of Germany—have thus raised their ratoa almost simultaneously, tho Bank of France by J per cent. 3i only, but the other two banks by 1 per cent. Among 3. the minor banks the Bank of Belgium also raised its »i rate yesterday. This general movement shows the importance attached in present circumstances to the '■ American bullion drain, and is significant ol '■ the _ scarcity of supplies to meet it, which is in contrast with the circumstances a year 'i ago and the year before, when similar drains comJ> meneed. To-day there haa been a comparatively Bmall '• withdrawal for export from tho Bank, hut the reason ia explained by the refusal of tho Bank to sell '• bar gold, so that some of the orders on American , account being for bar gold could not be executed. The ■'• amount actually withdrawn has been in sovereigns, and it ?s expeoted that when timo hag been given as 3> regards other orders to telegraph for instructions, withdrawals of sovereigns on American account will take place. There is a belief In 6omo quarters that tho fall in the American exchange, and tho consequent drain of bullion from Europe, aro partly tho result of 0. speculative manipulation in New York,'and that ease may return as suddenly as tho bullion drain has 1, sprung up; but, of courso, whilo the drain actually goes on, and American authorities seem all to be oxpecting its continuance, tho only safe courso is to act 1 as if it wero serious.