Poverty Bay Herald AND East Coast News Letter. PUBLISHED EVERY EVENING. SATURDAY, FEBRUARY 1, 1879.

Poverty Bay Herald, Volume VI, Issue 615, 1 February 1879, Page 2

Poverty Bay Herald AND East Coast News Letter. PUBLISHED EVERY EVENING. SATURDAY, FEBRUARY 1, 1879.

If we come to review the last few months, anent the progress of the Colony in both Islands, one of the most marked features will be found in the excited speculation in land. It does not appear to have mattered much where the land has been situated, or what might be its producing value. It has been sufficient for speculators if it can be cut up into small sections, or laid off in fancy townships, and find purchasers. It is not too much to say that land in the City of Wellington for instance and its immediate vicinity has been sold for three or four times its actual value, and fetched prices which will probably never be seen again. The same with rural (.lands both in the North and South Islands. Blocks purchased, say at LI or L2 an acre a few years ago, have been forced ar-

tificially toLIO or LI 2 even where the land is not of special value. In Canterbury and Otago the greed for land has induced speculations of a leviathan character, and it seemed as if the whole available capital of the country was to be locked up in huge tracts of land which in most instances could not be expected to yield a fair interest on the money invested for many years to come. In Canterbury and "Wellington land auction sales have greatly decreased in number, and a veiy many of these have had to be withdrawn, prices not reaching the expectations of vendors. No doubt this has been caused by the restrictive policy of the banks, who find they cannot any longer give unlimited accommodation for speculations on land. Probably the greater number of the heavy transactions in land during the last year have been money borrowed from the banks, and so long as the speculator could count upon bank advances, there was no limited to his enterprise. Becent events in the banking world have however,, operated as a great cautionary lesson to our local banks and the danger of locking up vast sums in securities not readily realizable has been so far recognised that the " screw" has ' been applied and dealings in land are rapidly falling back to their normal bona fide condition. The effects of this sudden move on the part of the banks must be seriously felt in the ranks of the speculators, many of whom find themselves in the possession of vast estates purchased with money borrowed at a high rate of ' interest, and for which they cannot now obtain near the price they paid. As in most cases they will be compelled to realise, it may confidently be expected that before long land property will fall in value. This fact, and the unhealthy aspect which land speculation has presented for some time, is admitted by all the public journals in those district where fever has been at the highest, and private information corroborates the opinion that the Colony is on the eve of a severe monetary crisis. The Otago Daily Times, in its commercial article of the 10th inst, makes the following remarks : — At the present moment there is somewhat of a lull in the operation of the money market. When fuller news of the late disastrous failures at home was received here, high authorities deprecated the idea of any unfavorable effects being produced, beyond a momentary depression ; but daily experience teaches us that the vibrations of so sensitive a machine as the money market cannot be wholly controlled by the most careful forethought. It may seem strange that the value of an acre of land in New Zealand should be affected by a commercial failure in Glasgow, but such is proved to the case. The value of land here lately has been almost entirely regulated by the amount of advance that could be secured on. it, and the effect of the tightening of the purse-strings is to lower the price of the commodity. Upon the same subject the LyHelton Times says : — The fall in the price of wool and grain is also a serious diminution of the profits of our great industries. The drought which in Canterbury we have lately suffered has in advance aggravated the injury to our farmers. There has been, moreover, in many parts of both islands an unhealthy and excessive speculation in land. The system pursued has been a vicious circle of purchase and sale on private credit : not of legitimate transactions in cash for the purpose of settlement, but gambling speculations with fictitious capital for hazardous winnings, Health in the human frame cannot be permanently maintained by stimulants, and the welfare of the body politic depends upon something more substantial than speculative gains. As Colonists, we are not sitting round a card-table, but we are engaged in making two blades grow where only one grew before. The present year, as it grows older, will, if we mistake not its tendency, do much to dispel unnatural excitement, and will at the same time reveal and concentrate our natural strength. The process may be painful in individual cases, but upon the whole it will certainly be advantageous. In sacrificing show to reality, we may not look bo well, but we shall in fact be better.