OUR MELBOURNE LETTER.

Otago Witness, Issue 1911, 6 July 1888, Page 28

OUR MELBOURNE LETTER.

THE COMING LAND BOOM IN NEW

ZEALAND.

A MILLION AND A-HALF TO BE

INVESTED.

(From Our Own Correspondent.)

June 26.

It is pleasant to be the bearer of good news. The good people of New Zealand have been so long under the cloud of dullness and depression, which has grown blacker and blacker'year by'year.'that perhaps they begin to doubt whether it has any silver lining. But they may at least begin to hope for the dawn of better times. Everybody knows that Melbourne has grown prosperous through the inpouring of British capital, which has sought investment chiefly in land. And I am glad to be able to convey the news that a speculation in New Zealand lands is about to set in. In fact there is an impression here that you are to have a boom in property. A syndicate of Melbourne capitalits is being formed for the purpose of investing the sum of one million and a-half in your colony. The matter is thus referred to in the commercial columns of the Argus of Friday : —

We believe that Hpeculative attention is now being directed in Melbourne to New Zealand real property, which is so greatly depressed that values outside the principal towns are generally lower than they were 10 years ago. Such a depression can scarcely be expected to endure much longer in view of the splendid pastoral and agricultural advantages of New Zealand, as evidenced by the brief abstract of the exports from the colony which we gave on Tuesday morning. The average yield of wheat for the last harvest was 2Q\ bushels per acre, a figure which places New Zealand as second only to England in this respect. The immediate effect of an overflow of a million or a million and a-half sterling from the superabundant capital of Melbourne to New Zealand would be a great advance in values, which would relieve financial institutions there from the embarrassment occasioned by the present serious lock-up of their resources. I believo the Mercantile Finance, Trustees, and Agency Company of this city has the project in hand. This company is one of the new creations, but it has the most successful financial history for its so far brief existence of any company the Australian colonies has ever seen, It was formed about two years ago out of the business of accountants and financial agents then carried on by Messrs Andrew Lyell and Co. Mr Lyell is now out of the concern, leaving Mr . Howden, who was his partner, as manager. The shares are paid up to 255, and for the last two months their saleable value on the stook exchange has been from £9 to £10, and to-day they are quoted at about £9. It was just prior to the publica-" tion of the half - yearly balance sheet a week or so ago thatr they saw their highest price of over £10 4s, the anticipation of the enormous profits to be disclosed having caused some wild speculation. When the statement came out there was a fall, not because any disappointment was exhibited in the figures, but simply from the natural reaction ; but the fall is now recovering. The figures are astounding. The paid-up capital is only £2.50,000, and the half-year's total profit for distribution is £172,340. The shareholders receive a dividend of 30 per cent., with, a. bonus of 20, making a total of 50 per cent. ; £50,000 is added to the reserve fund, making it £150,000 ; a dividend reserve fund is created, to which £50,000 is placed ; whilst £25,000 is carried forward. The management intend during the coming halfyear to issue a fresh 100,000 shares at a premium of no less than £G 5s eaoh, and the proceeds, £625,000, will be added to the reserve fund. Original shareholders are thus in a delightful position, with shares on which they have paid up 25s standing in the market i\t £.9, and their company enriched by a stroke of the pen by £625,000. Quite recently the old-established business of C. and T. J. Ham, the famous land auctioneers, has been amalgamated with the company. This is the phenomenally successful company in connection with which the land investment in New Zealand is to be conducted. Mr B. J. Fink, who with Mr Bent, M.L.A., has been indulging in such leviathan land transactions during the past 12 or 18 months, has been elected chairman of the Mercantile Finance Company. In these letters from time to time details have been given of the character of the boom that has visited Melbourne; and if this flow of capital into New Zealand creates but a tithe of the prosperity, the colony will at last truly have a chance of progressing by leaps and bounds. Money has grown on the trees here for the last 12 months ; at any rate it is no exaggeration to say that land has been paved with gold. In this morning's Argus we read the following :— " An indication of the increase of late in the value of property on the south side of the Yarra has been afforded in the recent sale of a piece of land in Haig street, South Melbourne, with a frontage of 99ft. Less than three years ago it was purchased for £15 a foot, and it changed hands a few days ago at £115 a foot." There is an impression here that Auckland will be the first to feel the good effects of the approaching boom in New Zealand, for it is considered that that northern city has the biggest future before it. New Zealand, it .is considered, ip the best field 'fa Australasia for

investment. The long depression has brought land down far below its real value ; indeed itis known that even in the cities property is absolutely unsaleable. That a glorious future lies before the colony is certain. It has all the qualities that go to make a great country — climate, soil, minerals, and scenery. These things are recognised, and all that is wanted to send it forging ahead is capital. It is pretty certain that there will be additional sums forthcoming beyond the million and a-half now promised. Mr Bent and his fellow speculators appear to have bought up all the available blocks about Melbourne. They are turning their attention to country towns — Bacchus Marsh, Geelong, Lancefield, Colac. What there isto justify any expectation of a rise in property in such places is a mystery. In Melbourne the population increases at the rate of" over 20,000 a year ; in the country towns it is decreasing rather than otherwise, for the' set is steaaily towards the metropolis. Yet large blocks are changing hands every day 'in the country towns mentioned at tremendously enhanced prices. New Zealand will afford a new and much more enticing field for the investor than the country districts of this colony. There is a most undoubted impression here that the turning point-has at last been reached as regards the depression in your colony. You may expect a big crowd of tourists during the coming summer. So many people in this city have succeeded in making a few hundreds, to say nothing of a few thousands, during the boom that there will be scores who will indulge in a summer holiday. The beauties and delicious climate of New Zealand will be a strong attraction. It is to be hoped that the brighter times will have set in before the visitors arrive, for a trip to Dunedin, for instance, any time the last three years has been enough to give even a Melbournite the miserables.

In the commercial world much talk has been caused by the publication of what is the most "cheeky" thing in the way of prospectuses yet issued. This is the prospectus of a new exchange — which will fco Melbourne's fourth— to be called the Australasia. The promoters, the principal of whom is Mr J. S. Butters, have taken up 50,000 shares privately, and with unexampled coolness offer the public another 50,000 at a premium of 20s per share (the original value being 10s). That is to say, the promoters allege that they have put £25,000 into the venture, and they ask the public to pay £50,000 for the privilege of putting in another £25,000. This is a new departure even in these days of wild speculation. The press has designated ifc as a most impudent proposal, considering that the business has yet to be established — indeed, even started, — and that in the face of such strong opposition as three prior exchanges ; but in spite of press- criticism and much private comment in financial circles, the promoters announce that they intend going on, so we may conclude that they are receiving encouragement in the way of applications for shares.

The present letter, which deals with commercial topics, may fittingly be closed wilh the following : — " Notwithstanding the near approach of the half-yearly balancing, the Melbourne Clearing House leturns continue to bear witness to the extraordinary activity of business. The returns which appeared on Wednesday last showed that for the week ended 18th inst. the total clearance was £6,986,603 against £3,368,513 for the corresponding week of 1887. The total clearance since the beginning of the year compares as follows : January Ito June 18, 1889 ... £151.768,909 Do., do., 1887 ... 84,135,698 Increase ... ... £67,(333,301 This comparison alone would suffice to stamp the present year as a remarkable one in the financial history ol Melbomrne.