THE MONEY MARKET.

Otago Witness, Issue 2849, 21 October 1908, Page 15

THE MONEY MARKET.

-PROSPECT FOR THE FUTURE.

WELLINGTON, October 8. The New Zealand Trade Review, a I sound authority on finance, makes some : interesting comments on the present I stingency of the money' market. The following is worth quoting : " There is no appreciable change to be noted in the conditions prevailing in the money market !of the IXwniickwx, nor <1<? -we think that any material improvement is to be reasoni ably expected for some little time. Some sanguine authorities promise us an amelioration in these matters ■ within the next two or three months, but though I there may very well be some increase in ! the supply of money within that time, we fear it will be inconsiderable in comparison with the volume of demands pressing on th« market. As we have previously stated, the chief factors that have brought about the present stringency are (a) reduction in the value of j our exports ; (b) an extravagant .scale of imports; (c) absorption^ of local funds bythe Government and local governing : ibodies ; aid (d> land speculations leading to inflated valuations. As' to the first of these factors, the prospects for the current season axe still far from bright. Wool seems destined to rule at a low level during the realisation of the late clip, and the prospects of hemp are distinctly gloomy. At present the conditions of the dairy trade are most encouraging, but even if these are maintained to the end of the season, the loss on wool and hemp will far outstreach the gain from this source. As to the second factor, we fuDy expecfc to see a. curtailment in I the volume of importations during the current a-nd a few following quarters, thus helping importers to reduce excessive stocks. If, however, as is to be hoped, a period of thrift and economy, supervenes, the process of reducing stocks may prove a slow one. As *to the third i factor, it is clear that for a time recourse will have to be made to outside markets ' for any loans which it may be necessary to raise, and it is satisfactory to note that Sir Joseph Ward has stated that the new | £1,250.000 loan will not be raised in the ! Dominion. The inflated prices of land j may be expected to undergo serious reduction, but that may be followed by healthier conditions. It wiH not, in the meantime, helg the money market. The dairy eeason is now in full swing, and substantial sums will be brought into circulation as the batter and cheese comes forward for snipment. This and the i raising of the £1,250,000 loan, when the transaction is accomplished, will give a little ease to the position. We do not by any means take a. gloomy view of the situation, being convinced of the thorough soundness of the Dominion, but we feel •that nothing is to be gained by raising expectations that cannot be realised. New Zealand will right itself, but a reasonable time- most be- allowed for the l process. Banks, having raised their deposits rates, are naturally changing cor. respoodingly for advances. They axe moreover, confining their assistance to Rtrictly trading purposes, and are refusing and calling in advances on land- This is a wke and proper policy."