CHEAPER MONEY.

Poverty Bay Herald, Volume XLI, Issue 13300, 9 February 1914, Page 6

CHEAPER MONEY.

'London, Jan. 29. Money Was again cheaper yesterday. The directors ot the Bank of England reduced the rate of discount for best \ three months' bills by 1 per cent, to 3 J per cent. This is the third decline since January j 7th. Prior to that date the quotation ' stood at 5 pet cettt.;, and was then I lowered to 4| per cfent^, followed by a further fall of £ per cent, last week to < * per cent. ' Tlie lower discount rate caused a heavy outburst of buying on the London Stock .. Exchange .during the/ aftempon,-, ' arid "prices* for b'othfrinvesttaent "stocks and* mining shares' went ahead by-leaps and bounds. 'British 2A per cent. Consols advanced from £74 lis 3d to £76 ss. .< The decline m discount rates m London (states an Australian writer) en- -i hances the value abroad of bills drawn ' on London with long currencies, and the position of the exchanges i* thus modi- '. fied. To borrowing governments and others who desire' to raise capital, the change is^ altogether a welcome one, ! and the distinction which has attended the successful* 1 issue of the Victorian loan is ah indication of the change m the, market for securities of this class. The immediate, causes of the sudden ease do not clearly appear from the various cable advices. From the Bank of England figures it may be inferred that gold has been coming m somewhat freely from abroad. It is possible that some of the Egyptian gold exports diverted to London instead of to India, at the instance of the Indian Government, may have become available for the bank, instead of being* earmarked on account of the India Council. v Another possible cause of ease' may perhaps be found m certain French money which is being held m readiness for the various Continental loans about to be issued m Paris. The temporary presence of this money m the markets may have exercised a depressing influence on rates for the time being.