THE DOMINION'S PROS. PERITY

Otago Daily Times, Issue 14212, 13 May 1908, Page 3

THE DOMINION'S PROS. PERITY

A CHECK PREDICTED.

(Per Ukited Pjiess Association.)

cmusTeamicii. May i 2. ihe Lyttellon Times states this morning that there is a very strong feeling amongst financial men in Chriatchureh that the remarkable prosperity which New Zealand has enjoyed for 15 years will receive a. check, and tha-t the cheek will come before tne end of this year. There is no doubt that the. banks a«s feeling the strain of the tightening of the money market; tlio sums of money that they'have- to lend have been greatly restricted. It is known that in some cases they have asked good clients, ivitJi excellent security, to help them by leaning upon them as little as possible. One C'hristchurcli financier, who notes all Iho tendencies of the money market, says that the Dominion will havo some fairly stringent times beforo it is much older. Ho believes that the full force cf the change will be felt in four or five jnontha, and then he says: "AVe will go through comparatively hard times for a year or so." While he is convinced that there will bo a temporary check, lib sees no reason why the Dominion should not get back into gocd years later on. Ho places confidence in Ihe North Island, where large a.ron 3 of Maori land will bo opened up. He docs not know how long it will lake to open up these lands, but he thinks that it should be done soon. When the operation is complete, and settlement is given an impetus, thero ought to bo a return of the old prosperity. In tho meantime," he says, "individuals will suffer. Amongst these there will probably be some landowners. During the 15 prosperous years many landowners who were

ouco in poor circumstances, have made their positions good. They have paid off their mortgagee, and in some cases haw saved money. They will not bo greatly affected, but those who have bought land during the past six months at valuations based on the high prices for wool will suffer, and amongst these thero may be included men with limited means, who havo taken up sections opened f or settlement by the Government. It is expected that a slight, fall in tho value of land in the cities will also take place. According to tho Mercantile Gazette, the comparatively slight tightening of the bank rate of interest that ha<? taken place lias already affected property. Land agents state that sellers are forced to accept lower rates than formerly, and they find it much harder to bring about a sale than thoy did 12 months ago. There scorns to be no means of averting the stringency. There is tint, sufficient money available for the banks' operations, and there is a strong opinion that if the Government went to the. London market just now it would get a rebuff.

There is notliing particularly novel in the opinion expressed by our northern contemporary—indeed, for months past the financial situation lias been carefully watched by merchants and others engaged in commercial pursuits. Indeed, the note sounded in business circles generally is ono of caution, but without anything approaching a panic.

ISo far as Otag'o and Southland arc concerned trado is admittedly on a sound basis. Of course, now its at any time, thero aro what arc technically known as "bad marks," and firms which in their eagerness to increase thoir turnover, run risks in dealing with this class, sooner or later pay the penalty of their rashness, but this is one of the ordinary incidents of trade.

The opinion is generally held that sooner or later the reflx of the American financial disturbance will bo telt to a greater or les.w extent in tho Dominion; but against this must be sot' the fact that the higher values obtaining in most linos of produce and merchandise precludes speculative buying; this business is largely confined to immediate demands, and operations aro kept within safe limits'.

Against tho drop in the price of wool, which undoubtedly represents a considerable shrinkage in the revenue of the Dominion, may be set tho high price ruling for cereals and dairy produce, and the fact that the farming community generally has had quite a number of good seasons. The situation may briefly be summed up by saying that, so long as caution and carefulness continue to Co the dominant notes in the commercial world, there is no reason for undue pessimism. And Jbo natural buoya.noy of tho Dominion may be trusted to steer the people through what, if reckless speculation were- prevalent, might possibly lead to a fierier, of financial disasters.